MYR GROUP INC. Q1 FY2025 earnings call

• Solid financial results in Q1 2025 with revenues up 2.2%, gross margin up, net income up, and backlog higher.
• T&D segment saw revenue decrease but improved margin due to higher-margin projects; C&I segment had revenue increase and improved margin with strong market performance in core markets like data centers, healthcare, etc.
• Bidding activity healthy in both segments driven by electrification demand; T&D benefited from utility infrastructure investments; C&I won projects in various sectors including data centers, healthcare, and clean energy.

For the T&D segment, first quarter 2025 revenues were $462 million, a decrease of 5.8% compared to the same period last year. Transmission revenues were $270 million, down $44 million, while distribution revenues were $192 million, up $16 million. Work under master service agreements accounted for approximately 60% of T&D revenues. The T&D operating income margin was 7.8% in Q1 2025 compared to 6.1% in the same period last year. For the C&I segment, Q1 2025 revenues were $372 million, an increase of 14.4% year-over-year. The C&I operating income margin was 4.7% in Q1 2025 versus 3.5% in the prior year. Backlog as of March 31, 2025, was $2.64 billion, with $873 million for the T&D segment and $1.77 billion for the C&I segment.

• Revenue growth expected with organic growth and potential acquisitions.
• Margin target of mid-range (7% to 10.5%) for the year remains in sight.
• Share repurchase balanced with organic growth and acquisition opportunities, with focus on balancing capital allocation for organic growth and right acquisitions.

• Impact of tariffs and inflation on project costs and feasibility.
• Uncertainty around timing and impact of clean energy project roll-offs.
• DSO below historic average and payment term negotiations as potential headwinds.

Q: On C&I backlog and macro impacts, what's the status?

A: Still having very active conversations with clients, no pullback seen to date, and market remains positive going forward.

Q: Share repurchase and capital allocation priorities?

A: Prioritize growth through organic growth and acquisitions, balancing capital allocation between organic growth, acquisitions, and share repurchase.

Q: T&D margin and future targets?

A: Expect to be in the mid-range of the 7% to 10.5% margin target for the year, with nothing changing from previous expectations.

Q: Details on the Virginia transmission award?

A: It's a midsized project, client not disclosing much, project will burn through this year, and any large project revenue won now will affect 2026 revenue.

Q: Impact of tariffs on C&I margins?

A: Uncertain at this time, monitoring closely, newer contracts have stronger language, but expecting to remain in mid-range margin profiles while watching developments closely.