Analyze a construction company’s backlog by checking what the company counts as awarded work, how likely and when that work is to convert into revenue, and whether the contractor can deliver it at an acceptable margin. Then examine how it selects bids, allocates contract risk, and manages the labor, materials, schedule, and customer issues that can undermine a project. A large or growing backlog is not, by itself, proof of future revenue or profit.
Start by defining what the company calls backlog
Backlog is a company-reported measure, not automatically a standardized total that can be compared across contractors. Read the issuer’s definition in its latest annual or quarterly filing before interpreting the headline balance. Check what qualifies for inclusion and whether the work is signed, funded, awaiting a notice to proceed, represented by a letter of intent, or otherwise uncertain. Also look for cancellation, deferral, and scope-change terms.
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The difference between categories can be material. For example, Construction Partners’ second-quarter 2026 Form 10-Q reports signed contracts separately from letters of intent and issued contracts. That is more informative than treating the entire total as equally firm. The filing also warns that backlog is not a guarantee of future revenue or profitability; cancellations, scope changes, permitting delays, and deferred start dates can affect realization.
Do not substitute backlog for remaining performance obligations (RPO). Primoris’ 2025 Form 10-K explains that companies calculate backlog differently and distinguishes its backlog categories from RPO. If a contractor reports both, compare each measure using its own definition rather than combining them.
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Read the figures with their dates and definitions
These company disclosures illustrate why a backlog number needs context. They cover different companies, reporting dates, and categories; they are not an industry ranking or a like-for-like comparison.
| Company and filing | Reported measure | How to interpret it |
|---|---|---|
| Tutor Perini, 2025 Form 10-K | Total backlog was $20.56 billion at December 31, 2025, versus $18.67 billion at December 31, 2024. The company estimated about $6 billion, or 29%, of year-end backlog would be recognized as 2026 revenue. | The recognition amount is a company estimate for 2026, not a guarantee. Tutor Perini says its backlog includes a project after a contract award or definitive written award notice when major uncertainties, such as adequate funding, are resolved. |
| Construction Partners, 2026 second-quarter Form 10-Q | At June 30, 2026, total backlog was $866 million: $701 million in signed contracts and $165 million in letters of intent or issued contracts. | The filing separates signed work from the less-final categories. Keep those categories distinct when assessing commitment. |
| Granite Construction, 2025 Annual Report | At December 31, 2025, unearned revenue comprised 34.6% fixed-price, 56.9% fixed-unit-price, and 8.5% other contract types. | This is Granite’s contract-type mix in unearned revenue, not a general industry mix or a directly interchangeable backlog measure. |
Test backlog conversion and composition
Reconcile the roll-forward
Follow the bridge from opening backlog to closing backlog: opening balance, plus new awards and adjustments, less revenue recognized, equals ending balance. Investigate any adjustments the company includes and whether its presentation makes them clear. A rising balance can mean awards are outpacing revenue burn; it does not establish that the new work is profitable, ready to start, or easy to staff.
In its 2025 Form 10-K, Tutor Perini reports a roll-forward in which $18.67 billion of opening backlog, $7.43 billion in new awards, and $5.54 billion of revenue recognized resulted in $20.56 billion of ending backlog. The company says most Civil backlog typically converts over three to five years, while Building and Specialty Contractors backlog typically converts over one to three years; some large projects take longer. Those time frames describe Tutor Perini’s segments, not a universal construction-industry schedule.
Check timing, concentration, and work mix
Look for an estimate of the portion expected to become revenue over the next 12 months, start dates, and the amount extending across multiple years. Then examine whether the work is concentrated in a few large projects, customers, markets, segments, or joint ventures. Concentration can make the total more sensitive to one delayed start, cancellation, dispute, or change in customer funding.
Compare backlog growth with revenue, operating cash flow, margins, and disclosures about contract changes. A large balance can include work with long timelines or unresolved execution demands. Backlog dollars alone do not tell you the expected margin, cash-collection timing, or likelihood of completing a project on schedule.
Assess bid quality, not just the number of wins
Bid volume and win rates say little about the quality of the work unless you know what assumptions and selection criteria sit behind them. Look for evidence that management weighs its ability to execute profitably and has a bid/no-bid process, rather than pursuing awards without regard to capacity or risk.
MasTec’s 2025 Annual Report lists factors used in bid pricing that include job complexity, experience with similar work, weather and seasonality, competition, site conditions, safety, owner reputation, availability of labor, materials and fuel, location, and completion dates. Granite’s 2025 Annual Report describes bid/no-bid considerations including personnel, procurement method, competition, prior experience with the work and owner, local resources and partnerships, equipment, project size and duration, complexity, and expected profitability. Granite also describes contract review that may lead to negotiation, a bid/no-bid decision, insurance, or pricing mitigation.
For a particular award or portfolio, test whether the estimate accounts for:
- Complete scope, design maturity, site conditions, permits, and owner readiness.
- Labor availability and productivity assumptions, subcontractor pricing and capacity, and equipment needs.
- Material and fuel costs, escalation exposure, seasonal constraints, and the validity period of supplier quotations.
- Schedule feasibility, concurrent workload, and any delay penalties or incentives.
- Expected margin and the contractor’s experience with similar work and customers.
Ask whether the company has the project-management capacity, workforce, equipment, and subcontractor support to deliver new awards alongside its existing workload. Bidding activity and awards can vary materially from period to period, as Granite notes in its annual report.
Understand which risks the contract assigns to the contractor
Contract form affects who bears cost, quantity, and scope uncertainty; the label alone does not establish that a project is low-risk.
- Fixed-price: The contractor generally faces the risk that its costs exceed the budgeted amount, reducing project profit. Check how scope changes, inflation, and delays are handled.
- Fixed-unit-price: The customer bears quantity risk under the terms described by Granite, but the contractor can still face higher unit costs unless the contract provides otherwise.
- Other forms: Read the actual payment, escalation, change-order, and claims provisions. Do not infer the risk allocation from a broad category alone.
Delivery method also affects when design, scope, and price uncertainty is resolved. Granite describes bid-build, design-build, construction management/general contractor (CM/GC), construction management at-risk (CMAR), and progressive design-build. Design may be incomplete when a design-build bid is submitted; in CM/GC or CMAR, the contractor may participate during design and negotiate construction work as design advances. These arrangements change the process and timing of decisions, but the delivery method alone does not guarantee a better risk outcome. Review the specific contract and the project’s maturity.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Look for execution risks that can erode margin or delay revenue
Use project commentary, risk disclosures, change-order information, margin trends, and claims discussion to test whether the contractor’s assumptions are holding up. Granite’s annual report identifies risks including labor and material cost changes; subcontractor cost, availability, or performance; delays caused by owners or weather; productivity shortfalls; design changes and complexity; equipment or material availability; site conditions that differ from bid assumptions; scope-change costs; claims and back charges; project duration; worker skills; and the customer’s ability to administer the contract.
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| Risk area | What to inspect in filings or project updates |
|---|---|
| Costs and supply | Whether labor, material, fuel, equipment, and subcontractor costs are tracking estimates; whether escalation provisions or supplier terms protect the contractor for the project’s duration. |
| Schedule and productivity | Delays, weather exposure, labor availability, actual productivity, extended overhead, and whether start dates or completion assumptions have changed. |
| Design, scope, and site | Design maturity, changed requirements, unexpected site conditions, and whether added work is approved and priced through enforceable change orders. |
| Claims and counterparties | Disputes, back charges, claim recoveries, payment delays, and signs that the owner can administer the contract and meet its obligations. |
Pass-through protections are contract-specific. Construction Partners’ 2025 Annual Report says the company seeks supplier “not to exceed” quotations and, on longer projects, provisions that can adjust prices to mitigate material-price changes. That is a disclosed practice by one company, not a guarantee that every contractor or project is protected. Check whether escalation clauses apply, which inputs they cover, and whether supplier quotes remain valid for the work period.
Compare contractors on consistent terms
Use the same reporting date where possible, and keep each company’s definition attached to its figures. A useful comparison checks these dimensions rather than ranking firms by headline backlog alone:
- Commitment: Separate executed or funded work from letters of intent, low bids, unsigned awards, and other preliminary categories.
- Conversion: Compare expected near-term revenue, start dates, project duration, and cancellation or deferral terms.
- Movement: Reconcile awards and adjustments against revenue recognized in the backlog roll-forward.
- Concentration: Review major projects, customers, geographies, end markets, segments, and joint ventures.
- Selection and capacity: Assess bid discipline, project experience, expected margins, workforce, equipment, subcontractors, and concurrent workload.
- Risk allocation and outcomes: Examine contract form, escalation and change-order rights, claims, project-margin trends, cash collection, schedule performance, and loss provisions where disclosed.
Use the target company’s latest filings for current figures. Definitions, portfolios, estimates, and project conditions change, so a historical backlog balance should not be treated as a current forecast.
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