Everus Construction Group, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights:

• Jeff highlighted second quarter revenue increased 31% driven by E&M and T&D strength, EBITDA up 36% with 30 basis point margin improvement. Backlog at $3 billion, up 24% y-o-y. Focus on 4EVER strategy for talent attraction/retainment, with record revenue in Q2.
• Max provided revenue details ($921.5M, +31% y-o-y), EBITDA details, backlog at $3B, balance sheet info (unrestricted cash $64.5M, gross debt $292.5M, CapEx $31.6M H1 2025). Raised 2025 guidance: revenue $3B-$3.4B, EBITDA $240M-$255M.

Segment Performance:

• Electrical and Mechanical (E&M): Second quarter revenues increased 42% to $713.6 million. EBITDA was $63.7 million, up 53%, with an EBITDA margin of 8.9% (up 70 basis points from Q2 2024). Revenue contribution from E&M was significant, driven by growth in data center submarket.
• Transmission and Distribution (T&D): Second quarter revenues were $212.4 million, up 3%. T&D EBITDA was $30.4 million, up 19%, with an EBITDA margin of 14.3% (up 200 basis points from Q2 2024). Growth was seen in transportation and utility end markets, with underground activity leading in utility.

Guidance:

• Raised 2025 revenue guidance to $3 billion to $3.4 billion (previously $3B-$3.1B) and EBITDA to $240 million to $255 million (previously $210M-$225M).
• Midpoint of updated revenue forecast represents 18% growth, EBITDA 21% growth, adjusting for incremental costs. Mentions margin consistency and project mix impact on second half outlook.

Risks: No specific detailed risk factors discussed in the transcript, but potential timing issues with project execution and comps in the back half of the year could impact performance.

Q: Brent Thielman asked about capability to continue converting backlog and filling holes with book-and-burn work.

A: Jeff responded that timing is key, they get on projects early, are well-positioned as partners, and continue to add headcount.

Q: Ian Zaffino asked about weather impact in T&D and hospitality outlook.

A: Jeff said no weather impact in Q2, saw uptick in hospitality backlog in Vegas, well-positioned to execute complex projects there.

Q: Peter Englert asked about gross margins tied to prefab and sustainability.

A: Jeff discussed prefab's role in safety, schedule, and margin uplift, continuing to invest in prefab facilities.

Q: Brian Brophy asked about book-to-bill and large projects in T&D.

A: Jeff said book-to-bill reflects backlog lumpiness, year-to-date is 1.1; Max added on growth rates, noting tempered growth in back half due to comps and project mix.

Q: Brent Thielman asked about M&A pipeline and cash flow.

A: Jeff mentioned hiring Tim Snevis for corporate development, looking for M&A opportunities; Max added focus on organic growth and right inorganic opportunities, feeling good about cash flow conversion in back half.