MasTec, Inc. Q2 FY2025 earnings call

Management Statement and Operational Highlights

• Revenue and EBITDA: Exceeded revenue guidance, met EBITDA expectation, beat EPS guidance. Non-pipeline business EBITDA increased 42% year-over-year, revenue up 26%.
• Backlog and Book-to-Bill: Total company backlog up 23% year-over-year, book-to-bill ratio in Q2 was 1.2x. Sequential backlog growth included 11% increase from Clean Energy and Infrastructure.
• Segment-Specific: Communications saw strong top and bottom line growth, Power Delivery on track to meet full-year targets, Clean Energy and Infrastructure had double-digit revenue growth and increased backlog. Pipeline Infrastructure had revenue beat but challenged by prior year's MVP project.
• Investments: Added nearly 4,000 new team members, investing in people and equipment to scale for future growth across all segments.

Segment Performance

• Communications: Second quarter revenue up 40% year-over-year, adjusted EBITDA grew 55%, backlog increased sequentially to a record $5 billion. Revenue contribution from Communications was strong with a 40% year-over-year increase.
• Power Delivery: Second quarter revenues increased 20% year-over-year, slightly beat forecast, backlog was up about 14% versus Q2 2024. Revenue contribution from Power Delivery was 20% year-over-year growth.
• Clean Energy and Infrastructure: Second quarter revenue grew 20% year-over-year, adjusted EBITDA nearly doubled from $47.3 million to $83.3 million, backlog was up 11% to a new record level of $4.9 billion. Revenue contribution from Clean Energy and Infrastructure was 20% year-over-year growth.
• Pipeline Infrastructure: Revenue declined 6% year-over-year, EBITDA dropped, but pipeline revenue was well higher than guidance. Backlog development was more muted versus Q1 but new awards totaled over $450 million. Revenue contribution from Pipeline Infrastructure saw a 6% year-over-year decline.

Guidance

• Raised 2025 annual revenue guidance to $13.9 billion to $14 billion, EBITDA guidance to $1.130 billion to $1.160 billion, and EPS guidance midpoint to $6.34 per share.
• Expect sequential revenue growth in Q3, further backlog growth in H2 2025. Net cash flow from operations expected to be $700 million to $750 million for 2025.
• Mid-term outlook includes optimism for margin improvement and continued growth across segments.

Risks

• Macro uncertainties from policy and geopolitical environment.
• Impact of MVP project completion on pipeline segment year-over-year comparisons.
• Timing and execution risks related to large project awards and investments to support future growth.

Question and Answer

Q: Follow up on clean energy comments, customer feedback and activity during the quarter.

A: Bookings in Q1 and Q2 had nothing to do with the bill, strong plan for 2025 and 2026 with customers' plans for '25 and '26 ongoing.

Q: Thoughts on power delivery bookings timing and focus projects.

A: Focus on all aspects of power delivery, expect strong second half, positioning in market is fantastic with plans to be a player on big projects and day-to-day business.

Q: Expectations for margins in 2026 and beyond.

A: Bullish on all segments, pipeline historically highest margin, aiming for double-digit margins long term with confidence in achieving it through business mix and execution.