MYR Group Inc. Q4 FY2025 earnings call

Rick Swartz started by summarizing fourth quarter and full year results. Kelly Huntington provided detailed financial review. Brian Stern discussed T&D segment's steady results, healthy bidding activity, and opportunities in transmission market. Don Egan talked about CNI segment's solid results, steady bidding activity, and opportunities in data centers and infrastructure related construction. Rick Swartz concluded with pride in performance and commitment to safely executing projects and supporting customers.

For the year ended December 31st, 2025, MYR Group had record annual revenues of $3.7 billion. Fourth quarter 2025 revenues were $974 million, up 17% from the same period last year. T&D revenues were $531 million, up 18%, with transmission at $330 million (+$64M) and distribution at $201 million (+$17M). CNI revenues were $443 million, a record high, up 17%. Gross margin was 11.4% in Q4 2025 vs 10.4% in Q4 2024. P&D operating income margin was 7.4% in Q4 2025 vs 6.7% in Q4 2024. T&I operating income margin was 6.6% in Q4 2025 vs 3.9% in Q4 2024. CNI operating income margin was positively impacted but offset by project inefficiencies. Backlog as of Dec 31, 2025 was $2.8 billion, up 9.6% from prior year, with $1.0 billion for TMD and $1.8 billion for CNI.

Management expects operating within the mid part of T&D and C&I margin profile. Anticipates 10-ish percent growth in both segments and overall company. First quarter revenues expected to trend above full year rate of about 10% growth due to easier comp compared to rest of the year. Prioritize capital allocation to growth, including organic growth and acquisitions, and use share repurchases opportunistically.

Forward-looking statements involve risks and uncertainties. Weather can impact T&D business, especially in select areas. Permitting can push projects out. Timing of project roll-outs is a risk as it's about when projects are built not if. 90% of business is return clientele, but still need to evaluate new opportunities and manage risks associated with them.

Q: Thoughts on large transmission market and 2027 revenue potential.

A: In good conversations with clients, expect to capture work burning in 2027.

Q: Cash flow strength and components.

A: Driven by lower DSOs, mid-50s vs historical 70, due to getting beyond problem projects and large fixed price work on CNI.

Q: T&D backlog components.

A: Larger projects like data centers have longer durations.

Q: C&I margin and 2026 operating margin target.

A: Operating in mid part of margin profile, expecting 10-ish percent growth in segments.

Q: Backlog components and data center work.

A: Backlog diversified, conversations with customers beyond 2027.

Q: Capital allocation strategy 2026.

A: Prioritize growth opportunities, use share repurchases opportunistically.

Q: Large transmission awards impact on business.

A: Additive to growth, focus on efficiency to enhance margins.

Q: Pricing, geography, and backlog diversification.

A: Select client list, market varies by geography, backlog diversified.

Q: 2026 puts and takes and T&D risks.

A: Weather and timing of projects are risks, backlog diversified.

Q: Staffing selectivity and acquisition philosophy.

A: Focus on return clientele, strategic acquisition screens for CNI include geographic fit and end markets, T&D focuses on electrical contractors and ancillary services.

Q: Revenue growth capacity and risk profile.

A: Capable of more growth but focused on controlled growth and de-risking projects