MYR GROUP INC. Q2 FY2025 earnings call

• Steady second quarter performance due to strong customer relationships, operational consistency, and market presence. Awarded several master service agreements, expanding relationships with key customers. Bidding activity remains healthy driven by demand for electricity and modern technologies. Emphasis on grid modernization is a strong market driver. - Kelly provided detailed financials: second quarter revenues $900 million, up 8.6% yoy; net income $27 million vs. net loss $15 million last year; EBITDA $56 million vs. negative $5 million last year. - Brian Stern discussed T&D segment's steady results, winning a 5-year design-build electric distribution master service agreement with Xcel Energy, and other MSAs, along with transmission and substation work across the country. - Don Egan talked about C&I segment's steady results, healthy bidding activity in core markets, contract award of Phase 1 of a large-scale data center project, and wins in aerospace, healthcare, higher education, battery storage, transportation, and manufacturing.

For the second quarter of 2025, MYR Group's T&D segment had revenues of $506 million, an increase of 10% compared to the same period last year. Transmission revenues were $305 million and Distribution revenues were $201 million, with distribution revenues up $25 million and transmission up $23 million. Work performed under master service agreements accounted for approximately 60% of T&D revenues. The C&I segment had revenues of $394 million, an increase of 6% compared to the same period last year, primarily due to growth in fixed price contracts. Gross margin for the second quarter was 11.5% compared to 4.9% last year. T&D operating income margin was 8% vs. an operating loss margin of 1.8% last year. C&I operating income margin was 5.6% vs. 0.4% last year. Total backlog as of June 30, 2025, was $2.64 billion, 4% higher than a year ago, with $927 million in T&D backlog and $1.72 billion in C&I backlog.

• Full-year high single-digit growth expected for T&D and C&I segments, excluding solar. - Continues to monitor market conditions and make right capital expenditure decisions to prepare for incoming work.

• Forward-looking statements involve risks and uncertainties discussed in annual reports, Form 10-Q, etc. - Tariffs and supply chain issues could impact projects, though Don Egan mentioned no significant schedule extensions yet but clients are acting to secure long lead equipment.

Q: Sangita Jain asked about the new MSA with Xcel Energy, whether it was new scope and if there was displacement.

A: Richard S. Swartz said it's new scope, additional to existing MSAs, no displacement.

Q: Sangita Jain followed up on C&I backlog being down sequentially.

A: Richard S. Swartz said it's due to normal progression of work, backlog is lumpy.

Q: Atidrip Modak asked about business footprint expansion and MSA philosophy.

A: Richard S. Swartz said they like MSA work but also bid work, continuing to expand where possible.

Q: Atidrip Modak asked about labor requirements and margin impact of new MSAs.

A: Richard S. Swartz said they self-perform 100% of electrical work, focus on training and recruitment, and look for tuck-in acquisitions.

Q: Justin P. Hauke asked about solar work revenue contribution.

A: Kelly Michelle Huntington said solar was 10% of T&D revenues last year, declined to 4% in fourth quarter and further in first/second quarters, C&I solar is a core market but not dominant.

Q: Justin P. Hauke asked about capital allocation outlook.

A: Richard S. Swartz said they're disciplined in finding the right acquisition, balance between M&A, buybacks, and organic growth.

Q: Jonathan Paul Braatz asked about CapEx spending to meet demand.

A: Richard S. Swartz said they monitor CapEx, make right calls on equipment and personnel, balancing to prepare for work.

Q: Jonathan Paul Braatz asked about C&I projects and supply chain.

A: Don A. Egan said haven't seen many schedule extensions, but clients are securing long lead equipment to prevent delays.

Q: Brian Brophy asked about T&D growth outlook.

A: Kelly Michelle Huntington said they still see full-year high single-digit growth expected, excluding solar, with market environment strong but quarterly revenues variable due to timing.