Cardinal Infrastructure Group Inc. (NASDAQ:CDNL) stock plunged Thursday after the company withdrew its full-year forecast following significant project cost revisions and a sharp decline in profitability.

The infrastructure services company reported weaker margins, a quarterly loss and rising project costs despite strong revenue growth.

Project Costs Hit Profitability

Adjusted EBITDA fell to $8.5 million from $21.4 million a year earlier. Adjusted EBITDA margin dropped to 4.2% from 17.5%.

The 13.3-percentage-point margin decline reflected several challenges.

Project cost estimate revisions reduced margins by 6.5 percentage points. Residential pricing pressure and lower initial commercial and industrial project margins accounted for another 3.6 percentage points.

Higher fuel and transportation costs reduced margins by 3.5 percentage points.

Cardinal recorded $13.2 million in cost estimate revisions, primarily tied to projects in the Carolinas.

Ten projects accounted for 61% of those revisions, while just three represented 50%.

The company posted a net loss of $11 million, compared with net income of $10.1 million a year earlier.

CEO Jeremy Spivey called the results "unacceptable" and announced tighter project oversight, improved cost controls and an independent review of estimating practices as Cardinal works to restore profitability.

Cardinal also plans to bring in an independent adviser to review its estimating and project management processes.

Revenue Jumps 65% Despite Margin Pressure

Revenue surged 65.1% year over year to $201.9 million, including $23.9 million in organic growth. Backlog reached $815.5 million, up 26.2% year over year.

Cardinal ended the quarter with $335 million in cash and $136.5 million in net cash.

Operating cash flow totaled $30.3 million during the first nine months of 2026, while capital expenditures reached $41.6 million.

The board also authorized up to $50 million in Class A share repurchases over the next 12 months.

Cardinal Withdraws 2026 Forecast

Cardinal withdrew its 2026 revenue and adjusted EBITDA margin forecasts, citing significant project cost revisions and efforts to improve forecasting accuracy.

Management expects adjusted EBITDA to improve sequentially in the fourth quarter but did not issue revised financial forecasts.

Acquisition Delayed, CFO to Exit

Cardinal postponed its proposed Hughes Brothers acquisition to focus on improving existing operations. However, management still considers the deal a strategic fit.

Chief Financial Officer Michael Rowe will step down but remain during the transition.

The company hired Spencer Stuart to lead the search for his successor.

CDNL Price Action: Cardinal Infrastructure shares were down 61.27% at $5.80 at the time of publication on Thursday, according to market data.