Q4 2022 Primoris Services Corp Earnings Call

Speaker 1: . . . . . . .

Speaker 2: Ladies and gentlemen, thank you for standing by. My name is Brent and I will be your conference operator today. At this time, I would like to welcome everyone to the Primoris Services Corporation, Force Quarter and Full Year 2022 earnings conference call.

Speaker 2: All lines have been placed on mute to prevent any background noise.

Speaker 2: After the speakers remarks, there will be a question and answer session. If you would like to ask a question at that time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. It is now my pleasure to turn today's call over to Mr. Blake Holcomb.

Speaker 2: Vice President of Investor Relations, sir, please go ahead.

Speaker 3: Good morning and welcome to the Morris 4th Corps in 4 year 2022 earnings conference call. Join me today with prepared comments, our Tom McCormick, President and Chief Executive Officer and Kim Dodgin, Chief Financial Officer.

Speaker 3: Before we begin, I would like to make everyone aware of certain language contained in our safe harbor statement. The company cautions that certain statements made during this call are forward-looking and subject to various risks and uncertainties. Actual results may differ materially from our projections and expectations. These risks and uncertainties are discussed in a report file with...

Speaker 3: financial measures. A reconciliation of the non-GAAP financial measures are available on the investor's section of our website and in our fourth quarter and full year 2022 earnings press release, which was issued yesterday. I would now like to turn the call over to Tom McCormick.

Speaker 4: Thank you.

Speaker 3: Good morning and thank you for joining us today to discuss our fourth quarter and full year 2022 results and our business outlook for 2023.

Speaker 3: The more it's achieved a record year in 2022 with revenue, backlog, and that income all achieving new highs at year-end. We grew our revenue to $4.4 billion, about more than 26% from 2021, with 15% being more yet.

Speaker 3: The growth was driven by our energy renewable segment, which was up 48%.

Speaker 3: primarily driven by the utility scale solar market and their utility segment, which was up 22% from the previous year Driven by the expansion of our communication services as well as the acquisition of PLH That income was up 15% from 2021 to $133 million

Speaker 3: And our VAT ETS increases the $2.47 per fully diluted share, marking the sixth consecutive year of ETS growth.

Speaker 3: We enter 2022 with just over $4 billion in backlog that serve as the foundation for our revenue growth during the year.

Speaker 3: Now as we begin 2023, we have expanded our back along to $5.5 billion, an increase of over 36%, which puts us on the right track to continue our growth trajectory.

Speaker 3: These and other successes were achieved despite facing numerous challenges for our business in 2022. We face economic uncertainty from the escalating or new frame.

Speaker 3: Linguering impacts in Asia from the global pandemic. Fuelling wage escalation in supply chain constraints, all the which we were able to overcome to deliver profitable growth.

Speaker 3: Now, let's look at the three segments in detail. In our utility segment, we face significant challenges from fuel and labor escalation, particularly in the first half of the year. Thank you.

Speaker 3: However, we were spotted quickly by negotiating with clients to recruit bad costs and finish the second half of the year with improved margins.

Speaker 3: We are continuing to renegotiate our MSAs in 2023 with other customers and the ways that we will see continued margin improvement in the segment as the year progresses. We were also able to build on our communications and power delivery service offerings with the acquisitions of B-TOM and PL-Lite.

Speaker 3: Become with a smaller strategic acquisition that supplemented our communication services with new customers in the rapidly growing central Texas region.

Speaker 5: Just closing on PLA in August of 2022.

Speaker 5: We have been busy integrating them into our operations and we are on track with our plan. In part due to PLH being a cultural fit for more, we have been successful in retaining their top talent.

Speaker 5: These employees will help maintain key relationships and preserve the safe, reliable operations that complement the other strategic attributes of the deal.

Speaker 5: As of today, we have made good progress integrating the various PLA entities across our utilities, energy, renewables, and pipeline segments.

Speaker 5: This includes the significant portion of the human resources, safety, fleet.

Speaker 5: Finance and marketing functions, particularly to our power delivery and gas utilities businesses.

Speaker 5: Some parts of the integration process, such as information technology and certain union operations, will continue to be work through in the coming quarters.

Speaker 5: But from a customer facing a project standpoint.

Speaker 5: PLH will seamlessly operate alongside the rest of the remorse by the NQ-1.

Speaker 5: And we will begin to realize estimated annualized synergies of over $10 million to the beginning of Q2. We are excited to have the PLH team on board and value their contributions toward meeting the goals of our organization.

Speaker 5: Power delivery and communications will remain two areas we plan to continue to build our side and scope. We have made some big entries into these markets the past several years with PLHN Future. We remain confident these markets are well positioned to benefit from multi-year tailwinds and billions of dollars invested across all the markets we serve. We will continue to build our side and scope.

Speaker 5: Through a combination of acquisitions and continuous operation improvement, as well as through education and training, we expect a further our reputation as one of the top specialty contractors in North America.

Speaker 5: Looking at the pipeline service segment, while we expected to see a decline in 2022, following strong years in 2020 and 2021, the industry-wide headwinds, including fuel and large projects sanctioned and permitted, led to results falling below the expectations we had at the onset of the year.

Speaker 5: However, we secured a large pipeline project in third quarter, valued it more than $120 million to help set us on a course back to profitability going into 2023. For the combination of discipline dexcusion and a more constructive outlook for the Texas and Louisiana Shell markets.

Speaker 5: We are optimistic that we are beginning to emerge from the troppiness of business.

Speaker 5: The Energy Renewable segment had another breakout year in 2022, achieving 41% organic revenue growth and 12% growth margins. This was driven by the rapid expansion of both our solar EPC business as well as the industrial business, which implemented key performance improvement initiatives to boost margins.

Speaker 5: Expanding on utility scale solar EPC, we were able to achieve 85% top line growth in 2022, despite being partially impacted by supply chain issues, what's module delivery.

Speaker 5: While some of our customers experience modularized, the business demonstrated the capability to adapt and overcome the slowdowns to beat their business plan.

Speaker 5: We have roughly $1.3 billion in backlog to start 2023, and current indications from our customers are the issues with the supply modules are expected to alleviate in the back half of the year.

Speaker 5: There's progress being made on the importation of solar modules with a proper chain of custody documentation to allow them entry into the United States. Additionally, many of our customers have already secured domestic supply or are investing in domestic manufacturing of modules to ensure their products are able to move forward, as well as to take advantage in the coming years of the inflation reduction act legislation, recently signed into law.

Speaker 5: In fact, we currently have over a billion dollars of projects in the award or contracting stage, and a number of bids on projects made is over $3.6 billion. We expect that a significant number of these projects will be added to our backlog in the coming years, which will further extend our backlog of projects as far as 2026.

Speaker 5: These are encouraging signs that we believe will continue to drive more opportunities in large and small utility scale solar projects.

Speaker 5: To this end, we are growing seven more large utility scale project teams and small scale teams in 2023 to meet this growing demand.

Speaker 5: Through organic growth and acquisitions, we continue to take significant steps to reposition from more strong term success in higher growth, higher margin end markets across our segments.

Speaker 5: These markets are poised to benefit from the multi-year product and public sector investment required to meet the growing infrastructure needs in the areas we serve.

Speaker 5: For more, this is a different company than what five years ago, and we are confident that we are moving in the right direction.

Speaker 5: We have transitioned from a big project in Dusterville, heavy civil and pipeline company to one with a greater emphasis on specialty contracting for less-receased smaller projects and MSA contracts with less lumpiness and revenue and earnings. Given the shift in our business mix towards electric grid transformation.

Speaker 5: renewables and expanding communications access. We made the decision to merge our pipeline services segment into our energy renewable segment to form our new energy segment, the effect of January 1st, 2023.

Going forward, the two for more segments, utilities and energy will each represent approximately half of our trouble revenue.

These segments will better reflect the scope of our operations in the markets we serve. Promorphism has never been better positioned to make the demands of North America's growing and ever changing needs and energy transformation, generation and delivery. Now I'll hand it over to Ken for more on our financial results.

Thanks Tom and good morning everyone. Let me begin with our key operating metrics for the fourth quarter and the full year and then I'll discuss our balance sheet cash flows and backlog. Then I'll wrap up with our initial outlet for 2023.

Our fourth quarter revenue was 1.3 billion, an increase of 445 million or 50% compared to the prior year. The increase was primarily given by substantial growth in our energy renewable segment, which was up 272 million from the prior year, and the acquisitions of PLH and BCOM, which contributed 228 million. Gross profit from fourth quarter also improved to 153 million.

H and BCOM contributing 144.6 million partially offset by lower gas utility revenue.

Our legacy utility operations experience severe cold weather in the upper Midwest that slowed down operations compared to the prior year.

Gross profit was approximately 70 million and increased to 34% compared to the prior year. And gross margins were 12.1% up from 11.7% in the prior year driven by favorable makes of communications and power delivery work.

Energy and renewables, revenue increased 272 million compared to the prior year on the continued strength of our renewables business increased industrial activity in California and the Gulf Coast.

and PLA for the Contributed 56 Million.

Gross profit more than double to 80 million and gross margins increased to 12.4% compared to 10.4% in the prior year. Gross profit and gross margin benefited from higher margin renewables work including some project closeouts.

2021 was negatively impacted by higher cost associated with an LNG project. Our pipeline services revenue came in at 111 million for the quarter and increased 39 million from prior year. This was driven primarily by 27 million from PLH and the kickoff of a large pipeline project in Texas, Syria quarter.

Gross profit was 4 million or 3.4 percent due to lower volume. For the flow year 2022, revenue grew 923 million to a little over 4.4 billion and gross profit increased by 40 million or approximately 10 percent primarily due to our energy and renewable segment as well as contributions from PLH and BigGon.

Looking at the segments, utilities gross profit increased by roughly 24 million or 13% primarily due to our acquisitions which contributed 26 million. This is partially all set by lower gross margins than our legacy utilities business.

Gross margins were 10.4% due to the challenges we faced in the first half of the year associated with fuel and weight inflation. Energy and renewables gross profit increased almost 103 million or 68% compared to the prior year. This is primarily due to 88 million organic gross profit improvement from higher solar and industrial revenue.

and 15 million from BLH.

Gross margins increased to 12.41% this year compared to 10.7% in the prior year. This is mainly due to our favorable mix from renewables and the improved industrial margins.

And our pipeline services segment finished the year with a negative growth profit of 6.7 million compared to growth profit of 80 million in the prior year.

This is primarily resulted in low revenues, the impact of project losses in the first quarter, under absorption of overhead costs, and some large project closeouts in 2021. These challenges were partially offset by the addition of PLH.

SGNA expense in the fourth quarter was almost 91 million compared to 57 million in the prior year. For the full year, SGNA was 282 million or 6.4% of revenue down from 6.6% in the prior year. But the fourth quarter and full year SGNA increases can be primarily attributed to incremental expense related to the acquisitions of PLH and Begon.

In 2023, we again expect our SGN 83 down to the low 6% range as we complete the anti-cagration at PLH and eliminate duplicate overhead costs.

That interest expense in the fourth quarter was 18.6 million compared to 4.3 million in the prior year. The increase was primarily due to higher average step balances from our acquisitions and higher interest rates.

In January of 2023, we entered into a new interest rate swap on 300 million of our variable rate debt. This enabled us to reduce our sensitivity to further rate changes by fixing our interest rate at 4.1% plus an applicable margin.

Our effective tax rate was 16.5% for 2022. The lower rate was driven by the use of capital losses to offset capital gains, the temporary change allowing full deductibility of per-deam expenses to 2022, and R&D tax credits.

We expect our effective tax rate to return to 28% in 2023, but this may vary depending on the midst of states and what we work. Operating cash flows in the fourth quarter were 185 million and the flow here there were 83 million. The increase in operating cash flows were driven by improvements in working capital, offset by growth.

Turning to CapAX, we invested 19 million in the fourth quarter and 95 million during the full year. This was down from 134 million in 2021, which included a hundred 19 million in construction equipment to support growth in our renewables and utility businesses.

We expect our capital spending to be 80 to 100 million in 2023, which includes 40 to 60 million for equipment. Looking at the balance sheet liquidity, we pay down 50 million on our revolver in Q4 and still in the year with almost 249 million of cash. The bar in capacity under a wall was roughly 178 million, providing a total available liquidity.

consistent operating results in cash flows in order to meet our capital allocation objectives.

These include supporting continued organic growth, paying down debt, and opportunistically pursuing acquisitions that align with our growth strategy.

We expect that our e-brewed-tod growth in 2023 and 2024 combined with debt paydown will move us closer to our goal of near two times leverage by the end of 2024. Moving on to backlog, we close the year with a record 5.5 billion in backlog and increase in 1.5 billion or 37 percent compared to the prior year with 570 million of the increase coming from acquisition.

Fixed backlog was nearly 3.6 billion and increasing 1.1 billion for the year, or 44%, primarily due to our growth in renewables.

MSA backlog was up 25% or 384 million to just over 1.9 billion. I will wrap up with our earnings guidance for 2023. We expect our earnings for fully-deleted share to be in the $2.10 to $2.30 range. While our operating income should grow over 20% in 2023, this will be more than offset by our increased interest expense and our tax rate reverting back to 28%. Our adjusted EPS has estimated being the range of $2.50 to $2.30.

to score clearly our lowest quarter of the year for both revenue and net income. In fact, net income is often negative in Q-undermen by winter weather that permits our utility of goods from working and delay as the start of certain projects. We are also expecting our solar revenues to follow a similar trajectory in 2023 as it did in 2022 with approximately 40% expected in the first half of the year.

and the remaining 60% in the back half of the year based on the timing of projects. And finally, effective January 1st of 2023, we are now reporting under two segments, utilities and energy, as Tom mentioned. Utilities will be the same as it has been, comprised of our power delivery, communications, and gas utilities businesses.

The new energy segment will be the combination of our previous pipeline services segment and our energy renewable segment. This change follows the direction of our end markets and our strategic focus going forward. And with that, I'll turn it back over to Tom. Thank you, Kim. As we progress into 2023, I'm excited about the future of promores. We have a solid foundation to build on with $5.5 billion of backlog. Our end markets are expected to see continued tailwinds from federal legislative actions and other investments required to secure the energy needs of North America in the coming decades. We are a company focused on growth and will continue to see additional revenue streams both organically and organically in order to increase the scope and scale of our operations.

However, the way we grow will center around improved performance and profitability and delivering the results expected from us by our shareholders. I am proud of the where employees have responded to recent macroeconomic challenges and believe we have the right teams in place to become a leader in the industry for serving our customers as well as financial success.

In our utility segment, profitable growth will mean continued success in our communications business, and deploying our gas and power delivery equipment in personnel to the areas and customers, where they can perform most efficiently and profitably. In our energy segment, it will mean consistent and disciplined execution of our industrial contracts and the broadening of our renewables portfolio. We see exciting opportunities for new revenue streams and battery storage.

operations and maintenance work and high voltage substation work, all of which will complement our rapidly growing solar business and our natural progression for ???ores with our ability to bring different expertise across segments and businesses to serve our clients. In each and every one of our businesses, it will require our leaders to critically evaluate, and in some cases, turn down projects, potentially customers, that may present a risk to profitability that outweighs the reward of revenue growth. We are committed to showing this discernment in discipline regarding where, for which customers, and for which projects we deploy our highly skilled labor force.

In closing, I am optimistic about the future for more. We have exceptional employees who exhibit our core values each and every day and make for more a great place to work. We deliver outstanding services to our customers to help them reach their objectives and we have the right strategic priorities in place to successfully execute on our backlog of projects to the benefit of our clients, shareholders, employees, and the communities we serve.

And with that, I'll now open it up for questions. At this time, I would like to remind everyone in order to ask a question, press the star, follow button number one on your telephone keypad. Your first question comes from the line of lead Jagoda with CJS securities. Your line is open. Hi, good morning. Good morning, Bob.

So just starting with the solar or energy segment and solar in particular, can you break out the solar revenue from Q4 and then talk to the book to Bill and solar and how we should think about that metric for the balance of 2023?

Yes, we normally don't break that out, but it was one of the strongest quarters yet. Hold on, please. Maybe that exact amount of for solar.

In the quarter solar revenue was that 320 million. And then do you have any info on the book to bill and then how we should think about that in terms of do we think we have the same level of backlog at the end of 2023 more?

build on the strength and take us into 2024. So I expect us to end 2023 with probably as much, if not more backlogues we're ending 2022. If you look at the numbers that they have under contractly and what they have in LNTP, what they've been told that they are so sourced on.

By the end of 2023 they should have workbook that will take them into the start of 2026. Is that how it's? It does and then Tom I know you've spoken to it in the past. How do you envision solar growing in 2023 on a year-over-year basis from 22?

I think what you're going to see is they're going to grow somewhere between the three to 400, maybe it's high, $500 million a year. So, they become bigger, becomes that percentage drops a little bit, but they're going to be in that $300 to $500 million a year, right? Got it. And then Ken, just looking at the SGNA and Q4, it was a bunch higher in dollars and as a percent of sales versus where we were modeling. Is there anything in there that's one time in nature? And how should we think about SGNA dollars as we enter 2023 versus the levels that you had in Q4? Yeah, there were a few one-time costs related to PLH as we can...

Thank you. Good morning.

a nice quarter. I guess you mentioned their expected expectation that some of the supply chain will ease over the course of the year. I guess to what extent is your plan actually depend on further improvement in the supply chain or what have you assumed on a penalty?

and materials, both in solar and for the rest of your business. I would say for 2023 we have pretty much sure to supply for the panels. If something happens it would be a surprise. We've aligned ourselves with projects and clients for a backup that makes up this year's work.

They have security of supply. So it would be, we don't need any improvement for this year. It would be something maybe into next year, although you're seeing, we're seeing that ease already with the imports and panels with the right documentation. Now we're seeing that pick up a little bit. And we're also seeing clients find other sources, US sources and actually investing in, perhaps manufacturing, no modules. Now that won't help them in early 2024, but I'd say the projects that we have right now through 2023 and maybe even the front half of 2024, we're pretty much confident that the modules are going to be there.

Okay, that's great. And then you've started to build up a couple of quarters of consistency here, which is nice to see. Where would you say is the biggest execution uncertainty in your plan for 2023? And what are you doing to proactively manage that uncertainty or risk? I like our biggest risk is always execution on our budget.

not worried about the renewables group and the electric power delivery is actually doing pretty well and with the talent that we brought in I think we're going to see marked improvement. Our biggest risk still is is pipeline going to come out of the trough. Are we going to we have a good management team in there? We've made some changes and we've added some talent there as well.

I think this group is going to be very disappointed. It's, and they're seeing quite a bit of bit work, but is, is that work going to be realized and is it going to be executed? Some of it going to be executed this year. That's probably our biggest risk. Now, it's a small part of our business, but that's probably the biggest risk. Okay, thank you very much. Your next question comes from line of Sean Eastman with Keybank Capital Markets. Your line is open. Thank you very much.

Hi, this is Alex, I'm Sean, this morning. Thanks for taking our questions. So very good cash flow in the fourth quarter. I know you guys are expecting it to come, but probably more so in the first quarter. So maybe a bit earlier than expected here. But is there anything that happened there? And how should we think about operating cash flow in 2023? Will this be up or down year over year? Or is there a good conversion ratio to think about? Yeah, Alex. I mean, Q4 had a benefit of a couple of things.

We had some more capital improvements in terms of payments from our customers. We also signed a couple of new larger projects during the quarter, which had some upfront payments. So that definitely helped. We actually pulled, I think we pulled a little bit of cash flow from Q1 of this year back into Q4 as a result of the timing of signing those projects.

So it was good and we're going to kept continuing to watch it as we go forward. With respect to 2023, you know, cash flow from operations, I'm expected to be in the $150 million range. As we continue to grow, we're going to have to invest in working capital. We're going to hopefully have less solar materials that we've got to, you know, pre-buy up front.

but we're still watching that closely, depending on how that releases. But it should be a good year for us, but it's going to be seasonally weighted the same as it was in 2022. And then I just wanted to ask about your communications business. Like I just wanted to ask where you're seeing the most activity. Is it rural and art off? Is it fiber to the home? Is it 5G spectrum deployment? Just just any thoughts there would be super helpful? It's probably across the board. It's most a lot of it's in fiber, a lot of it's in 5G. We're seeing growth, a lot of growth in Texas in the various other markets that we're in, but Texas is a big market for us.

So I'd say across that board it's 5G and then fiber. Lot of fiber deployments. Your next question comes from a line of Adam Cellheimer with Thompson Davis. Your line is open. Hey, good morning guys, great quarter. Hey, within solar, do you feel like you're seeing a benefit from the IRA yet or is that still on the come? I think we're seeing a benefit of the anticipation of what's going to come with the IRAs. It gets more, it gets defined. Our clients are very excited about the opportunities it creates for them and some of them are actually moving forward on those in anticipation of it.

Okay. Has it slowed some of the downed all just at a curiosity? No. It is definitely not. That's for sure. It's almost like renewables on steroids. I think some of our guys have liked it, liking it too. There's a lot of opportunity after that. Why do you think you guys have been a little bit more successful than the competition and building that business? Profitably, too. The margins have been great. Yeah, I mean, I don't know what our competitions do. So I won't speak to that, but I don't know what our competitions do. We're very disciplined about how we execute our work before we deploy a team onto a project. We actually, they shadow a project team on a current project that goes through a lot of training. We said expectations. We have metrics that we measure almost daily so we can track performance. We're very careful about how we hire and who we hire and what positions they take. And we're very careful about what clients we do work with in terms of those contracts. And then I think about some of the things that we do have to do with our clients. So we're certainly for us as we get involved early in the estimating and scoping.

or contracts out there, you're still operating under that, you know, you think are opportunities to address kind of better terms over the course of 23. Yeah, good question, Brett. I mean, the short answer is, you know, it's a mixture of both, right? We had, we did have to see the benefit in the fourth quarter.

You know, the contract negotiations with clearly a good mix of work in the quarter as well. The term of the margins a little bit higher, but I'll tell you with respect to that, our work is not done. I think we talked a little bit about this last quarter, but we have a little bit more work to do on our legacy contracts and then we inherited some work with PLH because they were a little bit behind us in terms of renegotiating those contracts. I couldn't give you the percentage breakout, but yeah, we're hopeful that as we work through that over the course of 2023, not only with the rest of our contracts, but with the ones we inherited with PLH, that we'll be able to see some more benefit. Now that said, you know, Q1 is going to be a typical Q1 for us, a much lower margin, just because of the timing of work and the seasonality.

Okay, appreciate that Ken. And then this might be for Tom, but how are you going to work into manage the pipeline business in terms of size going forward? Is there sort of a revenue number out there that you see a sort of a cap for the business or you want to be a cap for the business just given how you're kind of refocusing toward some of the other areas of the company? I'll be surprised to see that business grow more in 4,500 million revenue a year.

I think it's a good size, that'd be a good size for us. You know, we are overhead in those businesses. We talk about the business unit overhead is low. So it doesn't cost a lot to carry it. We can get them through some downturn when they do that. They don't, if they make the right decisions. But I don't see us having a big push. You may see a jump based on a large project award tied to carbon capture or something like that. But on average it'd be less than 500 million. Okay. And just lastly, can I'm sorry if you said it, but just the target.

leverage objectives by the end of the year. And I guess also you know any sort of specific debt reduction objectives by kind of year in 2023. Yeah, by the end of 23 we're targeting to be kind of in the two and a half range plus or minus. And it's going to be predominantly through schedule principal payments and then other debt extra principal payments and debt pay down we're able to make with cash flow from operations.

objectives by the end of the year and I guess also you know any sort of specific debt reduction objectives by kind of year end 2023. Yeah by the end of 23 we're targeting to be you know kind of in the two and a half range plus or minus and it's going to be predominantly through scheduled principal payments and then other debt extra principal payments and debt pay down we're able to make with cash with operations. Okay very good thanks guys.

Your next question is from the line of Bill Dizzellum with Titan Capital Management. Your line is open. Tom, in your opening remarks, you made reference to having line of sight on the solar business through 2026. I didn't catch if you were saying you had line of sight on strength through 2026 or actual growth over that time period. Would you please provide clarification on what you were trying to say there? Yeah, I'll tell you. We're tracking about just under $9 billion of projects that we're pursuing that are in various stages of being better contracted with the clients that we have history with and experience and relationships with that'll take us through 2026. So we have right now under contract, I think our backlog is about 1.3 billion, but we have a number of projects that are NLNTP. If I say assume the total value of the contract.

Not the LNT, the televalue of those projects we either have under contact or LNTP is 2.8, 2.6 billion dollars. We have another 1.7 billion dollars of projects that we were told to wear sole sores. And then there's another 3 or 4 billion dollars of projects that were bidding that would take us all the way through 2026. So there's roughly 8 billion dollars that were in various stages of the work. Comfortable, we're going to win our share of that work. If we do, that'll fill us up. We're filled for 2023. We're already actually working on building backlog in 2024, but that would take us through the balance of 24 and 25 and into 26. And do you see each and every year?

from 23 through 26 as growing, or do you see a period where that solar revenue ends up flattening out? Well I see it growing but as I said earlier it's going to grow in a pace of roughly 300 to 400 million maybe maybe as much as 500 million a year for us.

And that does flatten out over time as that business continues to be bigger. But I don't think I don't see a whole lot behind. I mean, that's not that they didn't have tailwinds or an interior to the end of the decade. But we just don't look that far in advance. It's something new for us even to look and start making commitments right now for work that's going to happen two years in advance for us. No, thank you for that clarification. Again, if you would like to ask a question, press star followed button number one on your telephone keypad. Your next question is from the line of Jerry Revit with Goldman Sachs. Your line is open. Hi, thanks for the question. This is Chloe Williams on for Jerry.

most of the growth is going to come from power delivery communications.

Thanks for now, pass it on. There are no further questions at this time. I will now turn the call back over to the President and Chief Executive Officer, Mr. Tom McCormick.

Thanks for now pass it on. There are no further questions at this time. I will now turn the call back over to the president and Chief Executive Officer Mr. Tom McCormick. Thank you, operator.

I want to thank all of our employees and crew members for their dedication and hard work. Their focus on safety and quality execution makes the positive impact on the customers and communities we serve and makes Pomeros a great company. And thank you to those who joined us today. We appreciate your time and interest in Pomeros. Have a good day. Ladies and gentlemen, thank you for participating. This concludes today's conference call. You may now disconnect. Thank you.