Q1 2024 MasTec Inc Earnings Call

Operator: Welcome to MasTec's first quarter 2024 earnings conference call initially broadcast on Friday, May 3, 2024. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to our host, Mark Lewis, MasTec's Vice President of Investor Relations. Mark. Thanks, Matt.

Welcome to mass Teck's first quarter 'twenty 'twenty four earnings conference call. Initially broadcast on Friday May 3rd 2024, Let me remind participants that today's call is being recorded at this time I'd like to turn the call over to our host Marc Lewis math text Vice President.

Marc Lewis: Investor Relations Mark Thanks.

Mark Lewis: Thanks Maddy, and good morning everyone. Welcome to MasTec's first quarterly call. The following statement is made pursuant to the safe harbor for forward-looking statements described in the Private Security Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking, such as statements regarding MaStec's future results, plans, and anticipated trends in the industries where we operate. These forward-looking statements are the company's expectations on the day of the initial broadcast of this conference call, and the company does not undertake to update these expectations based on subsequent events or knowledge.

Marc Lewis: Thanks, Mary and good morning, everyone welcome to <unk> first quarter call the.

Speaker Change: The following statements made pursuant to the safe Harbor for forward looking statements describe in the private Securities Litigation Reform Act.

Speaker Change: 95.

Speaker Change: These communications, we may make certain statements that are forward looking statements regarding future results plans and anticipated kras in the industries, where we operate these forward looking statements are the company's expectations on the day initial broadcast of this conference call and the company does not undertake to update these exploration base based on subsequent events or knowledge.

Mark Lewis: These risks, uncertainties, and assumptions are detailed in our press releases and filings with the SEC. Should one or more of our risks or uncertainties materialize, or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in this call.

Speaker Change: Various risks uncertainties and assumptions are detailed in our press releases and filings with the SEC should one or more of our risks or uncertainties.

Speaker Change: Here lies or should any of our underlying assumptions prove incorrect actual results may differ significantly from results expressed or implied in this call.

Mark Lewis: In today's remarks by management, we will be discussing adjusted financial metrics reconciled in yesterday's press releases and supporting schedules. In addition, we may use certain non-GAAP financial measures in this call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP measure can be found in our earnings press release. Please note that we have two additional documents associated with today's webcast, which, along with our earnings press release, can be found on the Investors Events and Presentations page of our website at mastec.com. There is a companion presentation with information and analytics on the Corbett Extended and a guidance summary to assist in developing your financial models going forward. Both PDF files are available for download.

Speaker Change: In today's remarks by management.

Speaker Change: Discussing adjusted financial metrics are reconciled in yesterday's press releases and supporting schedules. In addition, we may use certain non-GAAP financial measures in this call a reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP measure can be found in our earnings press release.

Speaker Change: Please note that we have two additional documents associated with todays webcast, which along with our earnings press release can be found on the investors events and presentations page of our website at <unk> Dot com.

Speaker Change: There was a companion presentation with information and analytics on the quarter just ended and again a summary.

Speaker Change: In developing your financial models going forward, both PDF out her available for download with US today, we have Jose Mas, our CEO and call debacle, our EVP and Chief Financial Officer. The format of the call will be opening remarks and analysis by Jose followed by a detailed financial review from Paul. These discussions will be followed by a question actually premium we expect to call.

Mark Lewis: With us today, we have Jose Mas, our CEO, and Paul Dimarco, our EVP and Chief Financial Officer. The format of the call will be opening remarks and analysis by Jose, followed by a detailed financial review from Paul. The discussion will be followed by a question and answer period, and we expect the call to last about 60 minutes. We have a lot of important things to talk about today, so I'll turn the call over to Jose so we can get going.

Speaker Change: The last about 60 minutes, we have a lot of important things to talk about today, So I'll turn the call over to Jose showing gigawatt Jose.

Jose Mas: Thanks Mark.

Jose Mas: Good morning, and welcome to MasTec's 2024 first quarter call. Today I'll be reviewing our first quarter results, as well as providing my outlook for the markets we serve. First, some first quarter highlights.

Jose Mas: Good morning, and welcome to <unk> 2024 first quarter call.

Jose Mas: Today I'll be reviewing our first quarter results as well as providing my outlook for the markets. We served.

Jose Mas: Revenue for the quarter was $2,687,000,000, up 4% organically year over year. Adjusted EBITDA was $157 million, a 54% year-over-year increase. Adjusted earnings per share was negative 13 cents, 35 cents better than consensus, and backlog at quarter end was $12.8 billion, a $430 million sequential increase.

Jose Mas: First some first quarter highlights.

Jose Mas: Revenue for the quarter was $2 billion $687 million up 4% organically year over year.

Jose Mas: Adjusted EBITDA was $157 million.

Jose Mas: 54% year over year increase.

Jose Mas: Adjusted earnings per share was negative <unk> 13.

Jose Mas: 35, <unk> better than consensus.

Jose Mas: And backlog at quarter end was $12 8 billion or $430 million sequential increase.

Jose Mas: In summary, results were better than guidance across all segments. I'm proud to say this was a very clean quarter, segments performed as expected or better, and cash flow, as expected, was strong. I think this is an excellent indication of what we expect for the balance of the year. I'd like to walk through a number of positive developments that I believe will have a significant impact on our ability to grow both revenue and earnings.

Speaker Change: In summary.

Speaker Change: <unk> were better than guidance across all segments.

Proud to say this was a very clean quarter.

Speaker Change: Segments performed as expected or better and cash flow as expected was strong.

Speaker Change: This is an excellent indication of what we expect for the balance of the year.

Speaker Change: I'd like to walk through a number of positive developments that I believe will have a significant impact on our ability to grow both revenue and earnings.

Jose Mas: As we announced on our last call, in our communications segment, we significantly expanded our relationship with our biggest customer, AT&T. AT&T expanded both our scope and geographic territory in our core wireless work. This expansion, coupled with their announcement of a complete swap-out of Nokia equipment for Ericsson equipment over a five-year period, is expected to significantly increase our wireless business over the next few years. While we'll see some impact during the first half of this year, it will mostly be site acquisition and engineering work. The work we are doing now is what is creating a workable backlog for the second half of the year. So our visibility is excellent.

Speaker Change: As we announced on our last call and our communications segment, we significantly expanded our relationship with our biggest customer AT&T.

Speaker Change: AT&T expanded both our scope and geographic territory on our core wireless work.

Speaker Change: This expansion coupled with their announcement of a complete swap out of Nokia equipment to Ericsson equipment over a five year period is expected to significantly increase our wireless business over the next few years.

Speaker Change: Well, we'll see some impact during the first half of this year it will mostly be site acquisition and engineering work.

The work we are doing now is what is creating workable backlog for the second half of the year.

Speaker Change: So our visibility is excellent.

Jose Mas: In addition, we continue to see very strong demand for our wireline services. We expanded our customer base during the first quarter and are very encouraged about the optimism of our customers related to BEADS funding. Demand for connectivity and information requires a significant investment in our nation's broadband infrastructure. The advancement of data collection requires networks with low latency and high speed.

Speaker Change: In addition, we continue to see very strong demand for our wireline services.

Speaker Change: We expanded our customer base during the first quarter and are very encouraged about the optimism of our customers related to beads funding.

Speaker Change: Demand for connectivity and information requires a significant investment in our nation's broadband infrastructure.

Speaker Change: The advancement of data collection requires networks with low latency and high speed.

Jose Mas: We're also encouraged about T-Mobile's recent announcement of its investment in fiber infrastructure. Through a joint venture, T-Mobile will be an anchor tenant and investor in a large nationwide fiber network. This transaction demonstrates the importance of carriers owning and controlling their infrastructure as demand for moving data significantly increases. Our communications backlog reached a record level in the first quarter, and we're off to a great start this year. Our oil and gas pipeline segment overperformed, as revenues and EBITDA both came in higher than estimates.

Speaker Change: We're also encouraged about T. Mobiles recent announcement of its investment in fiber infrastructure.

Speaker Change: Through a joint venture T mobile will be an anchor tenant and investor and a large nationwide fiber network. This.

Speaker Change: This transaction demonstrates the importance of carriers owning and controlling their infrastructure as demand for moving data significantly increases.

Speaker Change: Our communications backlog total reached a record level in the first quarter and we're off to a great start this year.

Speaker Change: Our oil and gas pipeline segment over performed as revenues and EBITDA both came in higher than estimates.

Jose Mas: While Paul will cover it later, we've increased our full-year expectations for this segment for both revenue and EBITDA. While backlog is down, demand is actually very strong. We expect this segment to return to a more book and burn cadence as it relies less on larger projects.

Speaker Change: While Paul will cover later, we've increased our full year expectations for this segment for both revenue and EBITDA.

Speaker Change: While backlog is down demand is actually very strong.

Paul: We expect this segment to return to a more book and burn cadence as it relies less on larger projects.

Jose Mas: We are confident in the visibility we have in this segment for the next few years, and we've been surprised by the potential that gas fire generation has relative to powering industrial and manufacturing facilities, as well as data centers. Having good visibility over a multi-year time frame is very different than where we've been in the last few years, and it gives us a lot of confidence in our business and in power delivery. Conversations throughout the quarter centered around the long-term expected load growth our customers are beginning to experience. With the level of activity being experienced by industrial and manufacturing growth, coupled with the proliferation of data centers, the ability to power these facilities is becoming the most important issue.

Paul: We are confident in the visibility we have in this segment for the next few years and we've been surprised with the potential that gas fired generation has relative to powering industrial and manufacturing facilities as well as data centers.

Paul: Having good visibility over a multiyear timeframe is very different than where we've been in the last few years and it gives us a lot of confidence in our business.

Paul: In power delivery.

Paul: Conversations throughout the quarter centered around the long term expected load growth our customers are beginning to experience.

Paul: With the level of activity being experienced by industrial and manufacturing growth coupled with the proliferation of data centers the ability to power. These facilities is becoming the most important issue.

Jose Mas: While we've talked about some short-term pressure as utility customers manage their distribution transmission budgets based on need and the regulatory environment, our expectation is that there is a need for significant investment in our country's electrical grid to meet the growing demand. We have seen a significant uptick in transmission-related opportunities and expect that trend to continue. Backlog in this segment was up slightly sequentially, and we expect strong backlog growth for the balance of the year.

Paul: While we've talked about some short term pressure as utility customers manage their distribution transmission budget based on need and the regulatory environment.

Paul: Our expectation is there is a need for significant investment in our country's electrical grid to meet the growing demand.

Paul: We have seen a significant uptick in transmission related opportunities and expect that trend to continue.

Paul: Backlog in this segment was up slightly sequentially and we expect strong backlog growth for the balance of the year.

Jose Mas: Finally, in our clean energy and infrastructure segment, margins were in line with our expectations for the first quarter. Backlog was up about $400 million sequentially, and projects under limited notice to proceed exceeded $2 billion, much of which we expect to convert to backlog in the coming quarters.

Paul: Finally in our clean energy and infrastructure segment margins were in line with our expectations for the first quarter.

Paul: Backlog was up about $400 million sequentially and projects under limited notice to proceed exceeded $2 billion much of which we expect to convert to backlog in the coming quarters.

Jose Mas: Renewable demand is very strong, and our visibility is greatly improved versus last year. Renewables will be a key driver of added generation to help meet the needs of our country's load growth, and we believe we are very well positioned to take advantage of this growth. I've talked about load growth a lot today, and obviously, one of the drivers of that is the expected growth of the data center market. While data centers will create significant opportunities for us in both our clean energy and power delivery segments in the form of increased renewables, transmission, substation, and battery storage, data centers will also have a positive impact on our communications business as more data is transmitted.

Paul: Renewable demand is very strong and our visibility is greatly improved versus last year.

Paul: Renewables will be a key driver of added generation to help meet the needs of our country's load growth and we believe we are very well positioned to take advantage of this growth.

Paul: I've talked about load growth a lot today, and obviously one of the drivers of that as the expected growth of the data center market.

Paul: While data centers will create significant opportunities for us in both our clean energy and power delivery segments in the form of increased renewables transmission substation and battery storage data centers will also have a positive impact on our communications business as more data is transmitted.

Jose Mas: But what we didn't expect was the potential that data centers would have on our infrastructure business. As a reminder, with the combination of IEA and MasTec's legacy infrastructure business, MasTec has significant geographic diversity in the civil space. We spent a lot of time understanding the needs of data center builders and the potential opportunity that exists for MasTec. To date, we've actually completed over $150 million in data center infrastructure work and currently have approximately $200 million in backlog to complete. In addition, we have approximately $1 billion in identified RFPs we expect to bid on this year.

Paul: But what we didn't expect was the potential of the data centers have on our infrastructure business.

As a reminder, with the combination of IEA and Maas fixed legacy infrastructure business Mostek has significant geographic diversity in the civil space.

Paul: We spent a lot of time understanding the needs of data center builders and the potential opportunity that exists from us.

Paul: To date, we've actually completed over $150 million in data center infrastructure work and currently have approximately $200 million in backlog to complete.

Paul: In addition, we have approximately $1 billion in identified Rfps, we expect to bid this year.

Jose Mas: While we won't win it all, we believe we are uniquely positioned to provide data center builders with a package that includes assistance with connecting to the power grid, infrastructure required for communications, and site and civil work on the front end of their build outs. While we are still early in understanding the full potential of this opportunity, we recognize its potential impact. In summary, I strongly believe that the investments we've made in the last few years to build scale along our vertical offerings will translate to not only strong levels of revenue growth but the ability to meaningfully improve margins. I want to emphasize that point.

Paul: While we won't win at all we believe we are uniquely positioned to provide data center builders with a package that includes assistance on connecting to the power grid infrastructure.

Paul: Infrastructure required for communications and site in civil work on the front end of their build outs.

While still early in understanding the full potential of this opportunity.

Paul: We recognize the potential impact.

Paul: In summary, I strongly believe that the investments we've made in the last few years to build scale, along our vertical offerings will translate to not only strong levels of revenue growth, but the ability to meaningfully improve margins.

Paul Dimarco: I believe the most successful companies in our space are those that have the scale to meet our customers' demand. Our customers' projects have significantly increased in size, scope, and complexity, and there is no question that our customers want to simplify and work with fewer partners. I believe that over the last few years, our biggest accomplishment has been to position ourselves as one of only a few partners that are viewed throughout our industry as a partner whose workforce, size, and scale affords it the ability to take on any project.

Paul: I want to emphasize that thought I believe the most successful companies in our space are those that have the scale to meet our customers' demands.

Paul: Our customers' projects have significantly increased in size scope and complexity and there is no question that our customers want to simplify and work with less partners.

Paul: I believe that over the last few years, our biggest accomplishment has been to position ourselves as one of only a few partners that skewed throughout our industry as a partner, whose workforce size and scale affords us the capabilities to take on any project.

Paul Dimarco: While I'm proud of that accomplishment, I also understand the need for this advantageous positioning to be reflected in our financial results. While I am optimistic that today's results begin to demonstrate this, I also recognize we have great potential to improve margins. I'm excited to see what the future holds for MasTec. I'd like to take this opportunity to thank the men and women of MasTec. I'm honored and privileged to lead such a great group.

Paul: While I'm proud of that accomplishment I also understand the need for this advantageous positioning to be reflected in our financial results.

Paul: While I am optimistic that today's results begin to demonstrate this I also recognize.

Paul: <unk>, we have great potential to improve margins.

Paul: I am excited to see what the future holds for master.

I'd like to take this opportunity to thank the men and women of Mastec.

Paul: I am honored and privileged to lead such a great group.

Paul Dimarco: The men and women of MasTec are committed to the values of safety, environmental stewardship, integrity, and honesty, and to providing our customers a great quality project at the best value. These traits have been recognized by our customers, and it's because of our people's great work that we've been able to position ourselves for continued growth and success. I'll now turn the call over to Paul for our financial review.

Paul: The men and women of Mastec are committed to the values of safety environmental stewardship integrity honesty and in providing our customers a great quality project at the best value.

Paul: These traits have been recognized by our customers and it's because of our People's great work that we've been able to position ourselves for continued growth and success.

Paul: I'll now turn the call over to Paul for our financial review Paul.

Paul Dimarco: Thank you, Jose, and good morning, everyone. To begin, I will give you a few first quarter highlights. Revenue of $2.7 billion was a record for Q1, exceeding guidance by approximately $60 million. Adjusted EBITDA of $157 million exceeded guidance by $27 million, with margins 90 basis points ahead of expectation. We outperformed our earnings guidance in every segment, which I will cover in more detail later. Adjusted loss per share was $0.13, exceeding guidance by $0.35, driven primarily by adjusted EBITDA B.

Paul: Thank you Jose and good morning, everyone to begin a few first quarter highlights.

Paul: Revenue of $2 7 billion was a record for Q1 exceeding guidance by approximately $60 million.

Paul: Adjusted EBITDA of a $157 million exceeded guidance by $27 million with margin 90 basis points ahead of expectations.

Paul: We outperformed our earnings guidance in every segment, which I will cover in more detail later.

Paul: Adjusted loss per share was <unk> 13 exceeding guidance by <unk> 35.

Paul: Driven primarily by the adjusted EBITDA beat.

Paul Dimarco: We generated approximately $110 million of cashflow from operations in this quarter, starting the year off on a positive pace. This brings our trailing 12-month total cash flow from operations to almost $900 million, comparable to the adjusted EBITDA earned over the same period. We reduced net debt by 70 million in Q1, and net leverage also declined to 2.7 times.

Paul: We generated approximately $110 million of cash flow from operations in this quarter sorry.

Paul: Starting the year off on a positive pace.

Paul: This brings our trailing 12 month total cash flow from operations to almost $900 million.

Paul: Comparable to the adjusted EBITDA earned over the same period.

Paul: We reduced net debt by $70 million in Q1, and net leverage also declined to two seven times.

Paul Dimarco: Eighteen month backlog at Q1 totaled $12.8 billion, an increase of $430 million from year end, despite the significant revenue earned on MVP in Q1. We saw clean energy backlog grow by almost $400 million in the quarter, while communications backlog increased by $170 million to a new record level. While year-over-year backlog decreased, normalizing for the impact of the current pipeline project mix and our reduced emphasis on industrial projects would result in approximately $200 million of growth versus last year's first quarter.

Paul: 18 month backlog in Q1 totaled $12 8 billion, an increase of $430 million from year end. Despite the significant revenue earned on MVP in Q1.

Paul: With our clean energy backlog grew by almost $400 million in the quarter, while communications backlog increased by $170 million to a new record level.

Paul: While year over year backlog decreased normalizing for the impact of current pipeline project mix.

Paul: And our reduced emphasis on industrial projects will result in approximately $200 million of growth versus last year's first quarter.

Paul Dimarco: Lastly, as we announced yesterday, we are raising our four-year outlook, which I will cover in more detail shortly. Now, I'd like to discuss our segment performance and expectations. First quarter pipeline segment revenue was $634 million, with adjusted EBITDA of $93 million, or 14.6%. We continue to have strong performance in this segment, with lower than anticipated contributions of cost plus work, dropping margins higher than our guidance. We now expect 2024 pipeline segment revenue to reach $2 billion, a $100 million increase from our prior guidance. Adjusted EBITDA margins are still expected to be in the mid-teens, improving 100 to 150 basis points versus 2023.

Paul: Lastly, as we announced yesterday, we are raising our full year outlook, which I'll cover in more detail shortly.

Paul: Now I'd like to cover our segment performance and expectations.

Paul: First quarter pipeline segment revenue was $634 million with adjusted EBITDA of $93 million or 14, 6%.

We continue to have strong performance in this segment with lower than anticipated contributions of cost plus work driving margins higher than our guidance.

Paul: We now expect 2024 pipeline segment revenue to reach $2 billion, a $100 million increase from our prior guidance.

Paul: Adjusted EBITDA margins are still expected to be in the mid teens, improving 100 to 150 basis points versus 2023.

Paul Dimarco: Second quarter revenue should be approximately $600 million with an adjusted EBITDA margin in the high teens and likely our highest margin quarter for the year. First quarter communications revenue was $733 million with an adjusted EBITDA margin of 6.7%, both slightly ahead of our guidance. This year is shaping up consistently with our original forecast as we capitalize on the strong demand for both wireline and wireless construction services.

Second quarter revenue should approximate should be approximately $600 million with adjusted EBITDA margin in the high teens and likely our highest margin quarter for the year.

Paul: First quarter Communications revenue was $733 million with adjusted EBITDA margin of six 7% both slightly ahead of our guidance.

Paul: This year is shaping up consistently with our original forecast as we capitalize on the strong demand for both wireline and wireless construction services.

Paul Dimarco: Full year segment guidance remains unchanged with revenue of $3.5 billion and adjusted EBITDA margins in the high single digits, improving versus 2023. For the second quarter, we anticipate revenue will be approximately $825 million, with adjusted EBITDA margins in line with the full year estimates. As we mentioned previously, we expect to begin realizing the benefits of vendor consolidation in the wireless industry during the second half of 2024 and be fully ramped up in 2025, as evidenced by the continued backlog growth in this segment, which now stands at $5.8 billion, a new record.

Full year segment guidance remains unchanged with revenue of $3 5 billion and adjusted EBITDA margins in the high single digits improving versus 2023.

Paul: For the second quarter, we anticipate revenue will be approximately $825 million with adjusted EBITDA margins in line with our full year estimate.

As we mentioned previously we expect to begin realizing the benefits of vendor consolidation in the wireless industry. During the second half of 2024 and be fully ramped in 2025.

Paul: As evidenced by the continued backlog growth in this segment, which now stands at $5 8 billion a new record.

Paul Dimarco: First quarter power delivery segment revenue was $571 million, and adjusted EBITDA margin was 4.8%. Revenue was slightly ahead of our expectations as mild winter weather allowed for some pull-forward of Q2 work, particularly in the central region. For the full year, we now expect power delivery revenue and adjusted EBITDA margins to be roughly in line with the prior year, but slightly lower than our prior forecast. Full year revenue continues to be impacted by project deferrals from our utility customers in Illinois while they await a ruling on the revised rate case proposal. And we now expect a delayed start to certain transmission projects, pushing revenue into 2025.

Paul: First quarter power delivery segment revenue was $571 million and adjusted EBITDA margin was four 8%.

Paul: Revenue was slightly ahead of our expectations as mild winter weather allowed for some pull forward of Q2 work, particularly in the central region.

Paul: For the full year, we now expect power delivery revenue and adjusted EBITDA margins to be roughly in line with the prior year.

Paul: But slightly lower revenue than our previous prior forecast.

Paul: Full year revenue continues to be impacted by project deferrals from our utility customers in Illinois.

Paul: While they await a ruling on the revised rate case proposals.

We now expect the delayed start to certain transmission projects pushing revenue into 2025.

Paul Dimarco: Second quarter revenue is forecasted at $650 million, with adjusted EBITDA margins in the high single digits. First quarter clean energy and infrastructure segment revenue was $753 million, slightly below our guidance, with adjusted EBITDA margins of 2.7%. Although revenue in the quarter was impacted by timing on certain infrastructure projects that we expect to make up in subsequent quarters, backlog grew by almost $400 million in Q1, and we expect strong bookings in the second quarter to continue this trend.

Paul: Second quarter revenue was forecasted at $650 million with adjusted EBITDA margins in the high single digits.

Paul: First quarter clean energy and infrastructure segment revenue was $753 million slightly below our guidance with adjusted EBITDA margins of two 7%.

Paul: Revenue in the quarter was impacted by timing on certain infrastructure projects that we expect to make up in subsequent quarters.

Paul: Backlog grew by almost $400 million in Q1, and we expect strong bookings in the second quarter to continue this trend.

Paul Dimarco: Our full-year clean energy segment guidance remains unchanged at $4.4 billion of revenue with mid-single-digit adjusted EBITDA margins. Second quarter segment revenue is forecasted to be $1,025,000,000, with adjusted EBITDA margins in line with 2023 second quarter. On a consolidated basis, full-year revenue is now expected to be $12.55 billion, with adjusted EBITDA of $975 million. This incorporates the Q&A performance and our consistent expectations for the balance of the year. We expect second-quarter revenue to be $3.1 billion, with adjusted EBITDA of $260 million, or 8.4%.

Paul: Our full year clean energy segment guidance remains unchanged at $4 $4 billion of revenue with mid single digit adjusted EBITDA margins.

Paul: Second quarter segment revenue is forecasted to be $1.025 billion with adjusted EBITDA margins in line with 2023 second quarter.

Paul: On a consolidated basis full year revenue is now expected to be $12 $5 5 billion.

Paul: With adjusted EBITDA of $975 million.

Paul: This incorporates the Q1 outperformance and are consistent expectations for the balance of the year.

Paul: We expect second quarter revenue to be $3 1 billion with adjusted EBITDA of $260 million or eight 4%.

Paul Dimarco: We now expect adjusted EPS to be $2.95 for the full year and $0.88 for the second quarter. Our full year at JustCDPS Outlook represents a 50% improvement versus 2023. Our Q2 guidance represents 8% revenue growth year-over-year and 15% sequentially from Q1. This sequential growth will likely drive incremental working capital investment and put pressure on cash flow in the second quarter. However, our full year outlook for cash flow from operations remains unchanged at approximately $550 million.

Paul: We now expect adjusted EPS to be $2 95 for the full year and <unk> 88 for the second quarter.

Paul: Our full year adjusted EPS outlook represents a 50% improvement versus 2023.

Paul: Our Q2 guidance represents 8% revenue growth year over year, and 15% sequentially from Q1.

Paul: The sequential growth will likely drive incremental working capital investment and put pressure on cash flow in the second quarter. However, our full year outlook for cash flow from operations remains unchanged at approximately $550 million.

Paul Dimarco: There is no change in our outlook for the cadence of the year, with expected year-over-year growth continuing in the third quarter and Q4 roughly flat to last year, without any contribution from MVP. Our due leveraging efforts remain on track with net leverage of 2.7 times for Q1 and our outlook for year end. We're reaching the low two times right now.

Paul: There is no change in our outlook for the cadence of the year with expected year over year growth continuing in the third quarter and Q4, roughly flat to last year without any contribution from MVP.

Paul: Our deleveraging efforts remain on track with net leverage of two seven times for Q1, and our outlook for year end.

Paul: Reaching the low two times range.

Paul Dimarco: As a reminder, we posted a guidance summary to the investor relations section of our website that summarizes our outlook and provides additional data points for modeling purposes. Now, I'll turn the call over to the operator for Q&A. Thank you.

Speaker Change: As a reminder, we posted our guidance summary to the Investor Relations section of our website that summarizes our outlook and provides additional data points for modeling purposes, I will now turn the call over to the operator for Q&A.

Operator: Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Please ask only one question and one related follow-up question before getting back in the queue. Again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will take our first question from Andy Kaplowitz of Citigroup.

Speaker Change: Thank you if you would like to ask a question. Please signal by pressing star one on your telephone keypad. If you are using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment. Please ask only one question and one related follow up question before getting back in the queue.

Speaker Change: You again press star one to ask a question, we'll pause for just a moment to allow everyone an opportunity to signal for questions.

Speaker Change: Okay.

Speaker Change: We will take our first question from Andy Kaplowitz with Citigroup.

Andrew Alec Kaplowitz: Good morning, everyone.

Andrew Alec Kaplowitz: Good morning, Andy.

Andrew Alec Kaplowitz: Jose, just focusing on the billion dollars of infrastructure opportunities within data centers from the 200 million you have in backlog, did you begin to see an acceleration of this work in Q1? Will that accelerate from here?

Andrew Alec Kaplowitz: Jose just focusing on the $1 billion of infrastructure opportunities within data centers from $200 million you have in backlog did you begin to see an acceleration of this work in Q1 will that accelerate from here and then maybe backing up Mastec has had big cycles before.

Jose Mas: And then maybe backing up, MasTec has had big cycles before, you know, moved to 4 or 5G, big pipeline cycles. How would you characterize the data center opportunity for MasTec versus other cycles? And to your point on margin, I think data centers could drive a hard bargain. So how do you protect MasTec? Deliver a good margin on the

Andrew Alec Kaplowitz: Move to four or five big pipeline cycles, how would you characterize the datacenter opportunity for mastec versus other cycles and to your point on margin I think data centers customers could drive a hard bargain. So how do you protect moss tank can deliver good margin on this work.

Jose Mas: Yeah, Andy, so a couple things. I think, you know, probably... At some point last year, we had, you know, a lot of people within MasTec beginning to talk about what they were seeing in data centers. I don't think as an organization we truly understood what was coming. I think it became a lot clearer earlier this year as we began to see and read about, you know, what all the hyperscalers were saying and a lot of the data center builders were saying.

Speaker Change: Yeah, Andy So a couple of things I think.

Speaker Change: Probably.

Speaker Change: At some point last year, we had a lot of people within modestly beginning to talk about what they were seeing in Datacenters I don't think as an organization. We truly understood what was coming I think it became a lot clear earlier this year as we began to see and read about.

Speaker Change: All the hyperscale or as we're seeing in a lot of the data centers builders were saying.

Jose Mas: It's still an industry that's in flux, right? The way data centers are being built and the type of data centers that are being built are changing before our eyes as they go from more cloud-based data centers to AI-based data centers. There are tremendous opportunities for MasTec, and I think we've definitely seen a massive acceleration in the opportunity pipeline. I think, you know, we're looking at a lot of different areas within the data center to work in where we think the margins are acceptable and within the kind of guidelines that we put out across our different segments of what our expectations are, and we would expect to be able to hit those kind of margins in that world as well.

Speaker Change: It's still an industry thats influx right. The way data centers are being built and the type of data centers that are being built are changing before our eyes right as they go for more cloud based datacenters to AI based data centers.

Speaker Change: Tremendous opportunities for Mastec, I think we've definitely seen a massive acceleration in the opportunity pipeline.

Speaker Change: I think we.

Speaker Change: We're looking at a lot of different areas within the data center to work and where we think the margins are acceptable and within the guidelines that we've put out across our different segments of what our expectations are and we would expect to be able to hit those kind of margins in that world as well.

Jose Mas: Guy, maybe just focusing on communications. I know you mentioned that work for the new contracts starts in the first half and ramps up in the second half. But, you know, maybe talk about your visibility to the ramp-up in Q2 and into the second half. Do you need the markets themselves to continue to get better? Or do you kind of have enough of your own contracts to sort of get to the numbers that you're given? And that's what we tried to really cover in the...

Speaker Change: Got it and then maybe just focusing on communications.

Speaker Change: I know you mentioned work for the new contracts starts in the first half and ramps up in the second half, but maybe talk about your visibility to the ramp in Q2 and into the second half.

Speaker Change: Do you need the markets themselves to continue to get better or do you kind of have enough of sort of your own contracts to sort of get to the numbers that you have given us.

Jose Mas: And that's what we tried to cover in the prepared remarks, right, to say, you know, our customers, it's actually somewhat remarkable, right, our customers actually want us to go faster. For us, our ability to hit our second-half numbers is all about what we're able to engineer in the first half, right? So it's on us, right, to the extent that we can get stuff done. The work's going to be there for us in Q2 because we're almost self-generating the work based on the initial work that we're doing. That's what gives us so much confidence this year going into the second half. Historically, we haven't been in that position where we kind of control our own destiny.

Speaker Change: And Thats, what we tried.

Speaker Change: To really cover in the prepared remarks, right as to say.

Speaker Change: Our customers.

Speaker Change: It's actually somewhat remarkable brought our customers actually want us to go faster.

Speaker Change: For us our ability to hit our second half numbers are all about what we're able to engineer in the first half right. So it's on US right to the extent that that we can get stuff done. The work is going to be there for us in Q2, because we're self where almost self generating the work based on the initial work that we're doing that's what gives us so much confidence this year going into the second half.

Speaker Change: Eric we haven't been in that position, where we kind of control our own destiny. We're tracking that closely we feel really good about where we're at we feel really good about what we're going to have available to us to do in the second half and I can tell you. We've got just really strong confidence around our second half numbers in communications.

Jose Mas: We're tracking it closely. We feel really good about where we are. We feel really good about what we're going to have available to us to do in the second half. And I can tell you we've got really strong confidence around our second half numbers and communications.

Speaker Change: Appreciate the color Jose.

Jose Mas: Thanks, Andy.

Alexander John Rygiel: We will take our next question from Alex Riegel with Bea Riley.

Jose Mas: We will take our next question from Alex Rygiel with B Riley.

Jose Mas: Thank you. Good morning, gentlemen. Good morning, Alex. Jose, as it relates to EBITDA margins, can you remind us sort of what your internal targets are over the next few years on an aggregate basis, and then maybe highlight by segment where you see the greatest opportunities to see notable margin expansion?

Alexander John Rygiel: Thank you and good morning, gentlemen.

Alexander John Rygiel: Good morning, Alex.

Alexander John Rygiel: Jose as it relates to EBITDA margins can you remind us sort of what's your internal targets are over the next few years on a on an aggregate basis and then maybe highlight.

Alexander John Rygiel: Segment, where you see the greatest opportunities to see notable margin expansion.

Jose Mas: Yeah, so let's start. I mean, with what we've historically said, some of what we're experiencing, right? I think, you know, let's start with oil and gas, because it obviously outperformed in the quarter. I think our visibility around revenue in oil and gas is actually really solidified for us, not just for the balance of 2024. But actually, as we look at 25 and 26, and have had a lot of conversations with customers about their plans, we feel really good that, you know, we're going to be in that mid double-digit area. We've consistently been at, you know, at 15 or better for a long time.

Jose Mas: Yes, so let's start with what we've historically said some of what we're experiencing right I think.

Jose Mas: Let's start with oil and gas because it obviously outperformed in the quarter I think our visibility around the revenue in oil and gas is actually really solidified for us not just for the balance of 2024, but actually as we look at 25 and 26.

Jose Mas: Lot of conversations with customers about their plans.

We feel really good that we're going to be in that mid double digit.

Jose Mas: Area, we've consistently been at 15 or better for a long time, and I think that we're going to be able to maintain that for a longer period of time.

Jose Mas: And I think that we're going to be able to maintain that for a longer period of time. And that's great visibility to have versus where we were in the last couple years. When we talked about, you know, clean energy and infrastructure getting into those high single digits, this year in 24, we have got to get into the mid single digits, a lot of things are changing in that business, our visibility is dramatically better than it was last year.

Jose Mas: And thats, great visibility to add versus where we've been in the last couple of years.

Jose Mas: When we've talked about.

Jose Mas: Clean energy and infrastructure is getting into those high single digits.

Jose Mas: This year in 'twenty four we got to get into the mid single digits. A lot of things are changing in that business. Our visibility is dramatically better than it was last year.

Jose Mas: As we grow the business as we get rid of all of the challenged projects that we've had over the over the course of the last year I think we'll begin to demonstrate that in the second half I think margins will be.

Jose Mas: As we grow the business and get rid of all of the challenge projects that we've had over the course of the last year, I think we'll begin to demonstrate that in the second half. I think margins will be a lot better in the second half than they will be in the first half, just based on the flow of work that we see, both from a volume perspective and the types of projects we're on. Power delivery in the longer term, you know, we know it's a double digit business.

Jose Mas: Lot better in the second half and there will be in the first half just based on the flow of work that we see both from a volume perspective and the types of projects we're on power.

Jose Mas: Power delivery longer term, we know it's a double digit business our goal is to.

Jose Mas: As to be in the high single digits this year and in telecom.

Jose Mas: Historically, we've been in that 12% margin or better over a period of time, we think during this cycle. We get back there will be just at about double digits for the year within our plans in 2024, So I think.

Jose Mas: Our goal is to, you know, be in the high single digits this year. And in telecom, you know, historically, we've been in that, you know, 12% margin or better over a period of time. We think during this cycle, we get back there, and we'll be just at about double digits for the year within our plans in 2024. So I think, you know, look, we came off a really tough year in 23, we knew that, and we're confident about our ability to show a lot of improvement in 24.

Jose Mas: Look we came off a really tough year in 'twenty three we knew that we're confident in our ability about our ability to show a lot of improvement in 'twenty four but we're not we're not celebrating 2024, you're right. We know it's kind of.

Jose Mas: A building year for us and one that we think towards the tail end of the year as we're coming out of the year, we're going to demonstrate our ability to generate much higher margins, which should bode really well for 25 and beyond.

Jose Mas: But we're not, you know, we're not celebrating 2024 here, right? We know it's kind of a building year for us and one that, you know, we think towards the tail end of the year, as we're coming out of the year, we want to demonstrate our ability to generate much higher margins, which should bode really well for 25 and beyond.

Jose Mas: And secondly, obviously, there's been a lot of excitement around AI and hyperscale data centers and the onshoring of energy-intensive high-tech manufacturing. And it clearly sounds like you are on the cusp of sort of a convergence of many of your service offerings, up to these customer categories. Can you expand a little bit upon how you are going to market to sell all those various service offerings? Unknown Speaker Alex, you make a great point, and it's one that, you know, we probably...

Jose Mas: And secondly, obviously, there's been a lot of excitement around AI and Hyperscale data centers onshoring.

Jose Mas: Energy intend to high Tech manufacturing and it clearly sounds like you are on the cusp of sort of a convergence.

Jose Mas: Many of your service offerings.

Jose Mas: To these customer categories can you expand a little bit upon how you are going to market to sell all of those various service offerings.

Jose Mas: Alex, you make a great point, and it's one that, you know, we probably didn't expect, right? when you look at the differences in our business. The fact that, you know, our infrastructure and civil business could have so much overlap with what we're going to see in power delivery and even telecom and how we bring that all together and how we sell that as a service to, you know, not just hyperscalers but actually the builders of the data centers.

Jose Mas: Alex you can make a great point and it's one that we probably didn't expect right. When you look at the differences in our business.

Jose Mas: The fact that our infrastructure and civil business could have so much overlap with what we're going to see in power delivery and even telecom and how we bring that altogether and how we saw that as a service to.

Jose Mas: Just hyperscale or is that actually the builders of the data centers. There's a lot of co locate data center builders out there as well.

Jose Mas: There are a lot of co-located data center builders out there as well. I think, you know, that's really what we've been working on in the first quarter is truly identifying the market, understanding what the potential is for MasTec, where are areas in that that we're currently not working on that we could be working on, and I think you'll see us be a lot more deliberate about that. Today we've kind of got, you know, a lot of different people working on it, and I think you're going to see a consolidated effort on MasTec's part to attack the industry under one umbrella and one service offering.

Jose Mas: I think that's really what we've been working on in the first quarter is truly identifying the market understand what the potential is for mostek where are areas in that that we're currently not working that we could be working.

Jose Mas: And I think I think youll see us be a lot more deliberate about that.

Jose Mas: Today, we've kind of got a lot of different people working on it and I think youre going to see a consolidated effort on <unk> part to attack the industry under under one umbrella and one service offering.

Speaker Change: That's great. Thank you.

Speaker Change: Thanks, Alex.

Sangita Jain: We will take our next question from Sangita Jain with KeyBank.

Speaker Change: We will take our next question from Sangeeta Jain with Keybanc.

Jose Mas: Yeah, thank you for taking my question. So I have one on communications. Jose, clearly you're seeing momentum on both the wireless and the wireline side. Does your breakdown stay 50-50 as both of these ramp up, or do you think that skews in either direction based on your conversations with your customers?

Sangita Jain: Yes. Thank you for taking my question. So I had one on communications Jose clearly you're seeing momentum in both the wireless and the wireline side.

Sangita Jain: Jeff does your breakdown, Steve 50, 50 as both of these ramp up or do you think that skews in either direction based on your conversations with your customers.

Sangita Jain: Yes, Sangita, good morning. I think... What's changed in the last few years for MasTec is WireLine has become a much bigger percentage of our total telecom business. And if you look at telecom today, WireLine is actually slightly bigger than our wireless business. I think WireLine is going to continue to grow, for sure. It's where a lot of the opportunity has been for the last few years, and we see so much more going forward.

Speaker Change: Asking you to good morning, I think.

Speaker Change: What's changed in the last few years for Mostek as wireline became a much bigger percentage of our total telecom business and if you look at the telecom today wireline.

Is actually slightly bigger than our wireless business I think wireline is going to continue to grow for sure it's where a lot of the opportunity has been for the last few years and we see so much more going forward, but I think the acceleration of the wireless business with the specific awards that we've gotten not necessarily because the market is getting a lot bigger but because of.

Sangita Jain: But I think the acceleration of the wireless business with the specific awards that we've gotten, not necessarily because the market is getting a lot bigger, but because of our ability to win market share, I think it has the potential to get close to a 50-50 share again.

Speaker Change: Our ability to win market share I think it has the potential of getting close to a 50 50 share again.

Jose Mas: Unknown Attendee Thank you, Chris. That's helpful. And if I can follow up with one on the transmission project that Paul mentioned, maybe moving to 2025, I just want to make sure I understand, is that connected to the comment delay, or is that a different project?

Speaker Change: Great that's helpful and if I can follow up with one on the transmission project.

Speaker Change: Maybe moving to 2025 I just wanted to make sure I understand is that connected to the comment delay or is that different.

Speaker Change: Catherine project.

Jose Mas: No, they are separate projects from ComEd.

Catherine: No separate projects from comment.

Jose Mas: And can you elaborate on what is causing that debate? Is it just general permitting or something else?

Catherine: Hi.

Catherine: Can you elaborate on what is causing that debate agenda permitting or something else.

Jose Mas: Yeah, just the general cadence for our customer of getting that project shovel ready.

Catherine: Just the general cadence of our customer of getting that project to shove already.

Jose Mas: I think you have a couple different things going on, right? We talked last quarter about the fact that the Illinois utilities that were impacted by the ruling were shifting dollars from distribution to transmission. We're still seeing that. As we look at our guidance for the year, we haven't made big assumptions around our ability to win on the back end of that because a lot of that hasn't come out yet, or it's in the process of coming out.

Speaker Change: I think you have a couple of different things right.

Speaker Change: Last quarter about the fact that the Illinois utilities that were impacted by the ruling we're shifting dollars from distribution to transmission, we're still seeing that as we look at our guidance for the year, we havent made big assumptions around our ability to win on the back end of that because a lot of that hasnt come out yet or is in the process of coming out we feel we're in a great position to win that.

Jose Mas: We feel we're in a great position to win that, but we haven't included it in our guidance for the balance of the year. So I think Paul's referencing larger transmission projects. There's an enormous amount of smaller transmission work around the country that's becoming available, and I think we've been very conservative around our assumptions about what we're actually going to win and complete in 2024.

Speaker Change: But we haven't included it in in our guidance for the balance of the year.

Speaker Change: So I think I think pause referencing larger transmission project. There is an enormous amount of smaller transmission work around the country Thats, becoming available and I think we've been very conservative around our assumptions about what we're actually going to kind of win and complete in 2024.

Jose Mas: That's what happened. Thank you so much. Thank you.

Speaker Change: Well. Thank you so much thank.

Jose Mas: Thank you. Thanks, Sangita.

Speaker Change: Thank you thanks Judah.

Jamie Lyn Cook: We will take our next question from Jamie Cook with Truist Security.

Speaker Change: We will take our next question from Jamie Cook with tourists Securities.

Jose Mas: Hey, good morning, guys. Nice quarter.

Jamie Lyn Cook: Hey, good morning, guys nice quarter.

Jamie Lyn Cook: Jay I guess my first.

Jamie Lyn Cook: My first question.

Jamie Lyn Cook: <unk> always been good at sort of being opportunistic on M&A and you know.

Jamie Lyn Cook: Identify adjacent growth markets pretty early.

Jose Mas: Jose, I guess my first question is, you've always been good at sort of being opportunistic in M&A and, you know, identifying adjacent growth markets pretty early. And it's just interesting your comments sort of on data centers. So I'm wondering with your balance sheet, you know, by the end of the year, getting back to, you know, your leverage ratio at two times, and you look at the opportunity in data. Are there ways that you could improve your competitive positioning through inorganic opportunities?

Jamie Lyn Cook: Interesting your comments around data centers, so I'm wondering with your balance sheet.

Jamie Lyn Cook: The end of the year getting back to your leverage ratio at two times and you look at the opportunity <unk> data.

Jose Mas: Or do you think you can attack this market organically? And then just your thoughts there. So I'm just trying to understand if you think your win rate should accelerate over time, the size of the projects that you're comfortable with, and how we should think about margins on these larger transmission projects over time. Not in 2024, Jose.

Jamie Lyn Cook: Are there ways that you could.

Jamie Lyn Cook: Improve your competitive positioning through inorganic opportunities or do you think like you can attack this market organically and then.

Speaker Change: Just here.

Speaker Change: Your your thoughts thoughts there and then I guess just.

Second question just on large transmission projects.

Speaker Change: Longer term in the competitive environment with can you just talk to what youre seeing from a competitive landscape theres not a lot of players out there that can do large transmission work. So I'm just trying to understand if you think your win rate.

Speaker Change: Should accelerate over time the size of the projects that youre comfortable with and how we should think about margins on these larger transmission projects over time not not in 2020 for Jose.

Speaker Change: And longer term thank you.

Jose Mas: I'm thinking longer term. Thank you. Yeah, so a couple things. Let me kind of

Jose Mas: Yeah, so a couple things. Let me kind of bifurcate the question.

Speaker Change: Yes, so a couple of things let me, let me kind of bifurcate. The question. So I feel like the the first part of your question was a little bit of a drop question, but I'll go ahead and answer it.

Jose Mas: So I feel like the first part of your question was a little bit of a trap question, but I'll go ahead and answer it. I think we're really comfortable with where our leverage profile is. I think we've made, you know, drastic improvements. We feel great about our cash flow profile. We feel really good about where leverage ratios are going. So, I mean, our balance sheet, we think, is in great shape. So to the earlier question, we think we have, if we needed to or if we wanted to, we think we have the ability to do some things, although, you know, we're very committed to our capital structure and really keeping our investment grade status and everything that we've been saying for quarters, right?

I think we're really comfortable around where our leverage profile is.

Speaker Change: We've made drastic improvements we feel great about our cash flow profile, we feel really good about where leverage ratios are going so I mean, our balance sheet. We think is in great shape. So.

To the earlier question, we think we have if we needed to or if we wanted to we think we have the ability to do some things, although we're very committed to our capital structure.

Speaker Change: And really keeping our investment grade status and everything that we've been saying for a quarters right I think that the short answer to the question is if there if the right opportunity came that we think.

Jose Mas: I think that, you know, the short answer to the question is, if the right opportunity came that positions us differently or better within what we think is going to be an unbelievable opportunity, then we would consider doing things. It's an active market. Part of our analysis, as we've looked at what the market looks like and what the needs are, we have looked for, you know, we have seen things that we're in favor of, necessarily not, you know, fully engaged in, or feel we have all of the right resources to compete appropriately on some of those opportunities.

Speaker Change: Positions us differently or better within what we think is going to be just an unbelievable opportunity then we would consider doing things.

Speaker Change: As an active market par.

Part of our analysis as we've looked at what the market looks like or what the needs are and we have looked for we have seen things.

Necessarily not full.

Speaker Change: Fully engaged in or fuel we have.

Speaker Change: All of the right resources to compete appropriately on some of those opportunities. So so.

Jose Mas: So, you know, it's a big maybe, right? To your second question on transmission, I think the market is going to be unbelievable. I think there's going to be a ton of work. I think we will win our share. And I think the margin expectations around that work will be, you know, solidly in the double digits.

It's a big maybe right.

Speaker Change: To your second question on transmission I think the market is going to be unbelievable I think theres going to be a tunnel work I think we will win our share and I think the margin expectations around that work will be solidly in the double digits.

Speaker Change: Thank you.

Speaker Change: Thanks, Jamie.

Speaker Change: Oh.

Brian Daniel Brophy: We will take our next question from Brian Brophy with Stiefel.

Speaker Change: We will take our next question from Brian Brophy with Stifel.

Brian Daniel Brophy: Yeah, thanks. Good morning, everybody.

Brian Daniel Brophy: Yes. Thanks, Good morning, everybody just curious your latest thoughts on need funding.

Jose Mas: Just curious, your latest thoughts on need funding? When when should we expect it to start impacting revenue? Are you still thinking think this is a 2025 event or any concerns of delays there? Thanks.

Brian Daniel Brophy: When we when should we expect that to start impacting revenue are you still thinking singing. This is 2025 event or any concerns of delays there. Thanks.

Brian Daniel Brophy: No, we expect it to definitely hit 25. We expect to see awards in 24 relative to it. We have customers that have tremendous confidence in their ability to get, you know, certain things funded. And they're already, many of them are already talking to us about specific projects that would kick off, you know, maybe as early as the latter, latter part of 24, but for sure in 25.

Brian Daniel Brophy: No we expect it to definitely hit 25, we expect to see awards in 'twenty four relative to it we have customers that have tremendous confidence in their ability to get certain things funded and there are already many of those were already talking to us about specific projects.

Jose Mas: Got it. That's helpful.

Brian Daniel Brophy: That would kick off.

Brian Daniel Brophy: Maybe as early as the latter latter part of 'twenty four but for sure in 'twenty five.

Brian Daniel Brophy: And then on the oil and gas guidance. You guys are now at the higher end of that $1.5 to $2 billion range that you've talked about. How sustainable do you think this level of revenue is, and when might we start seeing some benefits from things like carbon capture? Thanks.

Brian Daniel Brophy: Got it that's helpful and then on the oil and gas guidance you guys are now at the higher end of that one $5 billion to $2 billion range that you've talked about how sustainable do you think this level of revenue as and when will we start seeing some benefits from things like carbon capture.

Jose Mas: We feel again, I mean, as we look at 25 and 26, we think it's a we can maintain current levels without much opportunity around CO2. You know, I think CO2 will play a part of it. To the extent that that grows, I think we'll have further opportunities to grow that business over time.

Speaker Change: We feel.

Speaker Change: I mean, as we looked at 25% and 26, we think we can maintain current levels without much.

Speaker Change: Opportunity around <unk>.

Speaker Change: <unk> will play a part of it to the extent that that grows I think we will have further opportunities to grow that business over time.

Brian Daniel Brophy: Great, thanks. I'll pass it on. Thanks, Brian.

Speaker Change: Great. Thanks, I'll pass it on thanks.

Speaker Change: Thanks, Brian.

Steven Fisher: We will take our next question from Steven Fisher with UBS.

Speaker Change: We will take our next question from Steven Fisher with UBS.

Jose Mas: Thanks, good morning. Good morning. How confident are you in the ramp up to the $260 million of adjusted EBITDA in Q2? Kind of how de-risked do you think that number is? And then thinking more broadly about the full year, you talked to Andy about communications in the second half. I'm just curious, more broadly for the whole company, what are the biggest things you need to have happen to hit the full year goals in the second half?

Steven Fisher: Thanks, Good morning.

Steven Fisher: Okay.

Steven Fisher: Yes.

Steven Fisher: Good morning, how confident are you in the ramp up.

Steven Fisher: The $260 million of adjusted EBITDA in Q2 kind of how de risk do you think that number is and then.

Steven Fisher: Thinking more broadly about the full year.

You talked to Andy about about communications in the second half I'm, just curious about more broadly for the whole company. What are the biggest things you need to have happened to hit the full year goals in the second half.

Steven Fisher: Sure, Steve. So I think, look, we had a solid beat in Q1. We left Q2 exactly as we had it originally. We feel very confident in our ability to hit it. I think we lived through a really tough year in 2023, as everybody knows. We never want to be in that position again. And we talked extensively about being in a position to not only hit our numbers but, hopefully, beat them consistently over time. And that's not just our view for what hopefully happens in Q2, but it's our view for what happens for the full year.

Speaker Change: Sure Steve So I think look we had a solid beat in Q1, we left you to exactly like we had it originally.

Speaker Change: We feel very confident.

Steve: And our ability to hit it I think we lived a really tough year in 2023 as everybody knows we never want to be in that position again, and we talked extensively about being in a position to not only hit our numbers, but hopefully beat them consistently over time and that's not just our view for what hopefully happens in Q2, but its our view for what happens for the full year.

Jose Mas: Okay, and then if I could just follow up on the solar side of clean energy, how smoothly would you say that piece of the business is running at this point? You know, has the work obviously had good bookings in the quarter? You know, is the whole regulatory process, you know, kind of transitioning to execution, running smoothly? And how far out are you booking work at this point? So it's a good question, Steve, for us. I mean, it's

Speaker Change: Okay, and then just follow up on the solar side of clean energy, how smoothly would you say that piece of the business is running at this point.

Speaker Change: As the work obviously you had good bookings in the quarter.

Speaker Change: Is the the whole regulatory process kind of in transitioning the execution running smoothly and how far out are.

Are you booking work at this point.

Steven Fisher: So it's a good question Steve, for us, it's like a different world. We feel so much better about our business. We feel so much better about who we understand, what our customers are, what our projects are, the risks. You know, again, 23 was a really tough year, particularly in that area. We learned a lot of lessons.

Speaker Change: So it's a good question Steve for Us I mean.

Speaker Change: It's like a different world, we feel so much better about our business, we feel so much better about.

Speaker Change: What we understand who our customers are what our projects are the risks.

Speaker Change: <unk>.

Speaker Change: Again, 23 was a really tough year, particularly in that area. We learned a lot of lessons I think we've applied them well and.

Speaker Change: 24, so I think we have a high level of confidence.

Jose Mas: I think we've applied them well in 24. So I think we have a high level of confidence. There's no question that, you know, we're building significant backlog that not only impacts 24 but gives us tremendous opportunity for growth in 25. You know, as we convert some of those projects we've been talking about into backlog, it's, it's, it's not even what it means for 24.

Speaker Change: There's no question that we're building a significant backlog that not only impacts 24, but gives us tremendous opportunity for growth in 'twenty five.

Speaker Change: As we convert some of those projects we've been talking about in the backlog it's.

Speaker Change: Yeah.

Speaker Change: It's not even what it means for 'twenty for us.

Jose Mas: The level of growth we're going to be able to show for 2025 is substantial. You know, we think we've really de-risked our customer portfolio. I know there's a lot of talk out there about, you know, potentially other investigations relative to solar and circumventions and things like that. And we think we've insulated ourselves as well as we could. So, you know, we're really confident about, again, not just what this year and the balance of this year mean to our solar business, but what it means in the long term.

Speaker Change: The level of growth, we're going to be able to show for 'twenty five we think is substantial.

Speaker Change: We we think we've really de risked our customer portfolio I know theres a lot of talk out there about.

Speaker Change: And potentially other investigations relative to solar and sort of conventions and things like that and we think we've insulated ourselves as well as we could.

Speaker Change: So we're really confident about again not just with this year and the balance of this year I mean, so our solar business, but what it means in the long term.

Speaker Change: Terrific. Thank you.

Speaker Change: Thanks, Steve.

Speaker Change: Okay.

Brent Edward Thielman: We will have our next question from Brent Thielman with D.A. Davidson.

Speaker Change: We will have our next question from Brent Thielman with D. A Davidson.

Jose Mas: Hey, thanks. Hey, Jose, just back on clean energy. Would you ever look at the opportunity in industrial projects? Again, just considering all the load demand, seems like there should be more pull on gas facilities. Curious about your thoughts.

Brent Edward Thielman: Alright, great. Thanks.

Brent Edward Thielman: Hey, Jose just back on clean energy.

Brent Edward Thielman: Would you ever look at the opportunity in industrial projects again, just considering all the low demand. It seems like there should be more pull on gas facilities I'm curious your thoughts there.

Brent Edward Thielman: So I mean, we're not out of the market, but we've de-emphasized the market, so it's going to be a much smaller business for us today than it was. I mean, if you, you know, in Paul's prepared remarks, he talked about year-over-year backlog in clean energy, that, obviously, it looks down year-over-year, but when you normalize it for our decisions around industrial, it The industrial work that we're doing today is predominantly cost plus, so we think that you know we're comfortable around that contract structure because we don't have a ton of risk with the complexity of some of these projects. So, to the extent that we can continue to deliver and our customers feel that we can give them value doing that, we'll continue to do it.

Jose Mas: So I mean, we're not out of the market, we deemphasize the market. So it's going to be a much smaller business for us today than it has been I mean, if you.

Jose Mas: <unk> prepared remarks, he talked about year over year backlog in clean energy that obviously, it looks down year over year, but when you normalize it for our decisions around industrial it's actually up the industrial work that we're doing today is predominantly it's all cost plus so we think that we're comfortable around that contract structure, because we don't have its on a rig.

Jose Mas: Risks with the complexity of some of these projects so to the extent that we can continue to deliver on our customers' steel we can give them value doing that we'll continue to do it as you said we're in.

Brent Edward Thielman: As you said, we're in an incredible market today. There's a ton of activity out there, and there's, you know, the supply of labor is short, so to the extent that we can help our customers meet their needs, we're going to do it.

Jose Mas: It's an incredible market today, there is a ton of activity out there and there is.

The supply of labor is short so to the extent that we can help our customers meet their needs we're going to do it.

Jose Mas: Okay, and then just on the updated view for power delivery this year, I guess I just want to get a sense of how much conservatism that might be factoring in given the movement here. Is the outlook contingent still on certain things falling into place? Or does this feel pretty flushed out? Look, I think we talked about

Speaker Change: Okay, and then just on the updated view for power delivery. This year I guess I just wanted to get a sense of how much conservatism that might be factoring that given given the movement here.

Speaker Change: The outlook contingent.

Speaker Change: Still on certain things falling into place there or is it still pretty flushed out.

Speaker Change: Okay.

Jose Mas: Look, I think we talked about it last time on our last call; the decisions in Illinois impacted our business on the distribution side pretty significantly, kind of eating away at the growth that we expected for the year so that the growth is compensating for the slow down there. Those companies have publicly said they're moving that distribution capex to transmission.

Speaker Change: Look I think we talked about it last time on our <unk>.

Speaker Change: Last call, we the decisions in Illinois impacted our business on the distribution side pretty significantly kind of ate away at the growth that we expected for the year. So the growth is compensating the slow down there those companies have publicly said, they're moving that distribution capex of transmission.

Jose Mas: We've, you know, we have very moderate assumptions around what we will get relative to that in the numbers that we have. So we do think that if that plays out the way they've said, that's going to provide, you know, really nice upside for us in that segment. Our storm expectations for the balance of the year are very low. And, you know, it's expected to be an active storm season. We have no idea what the reality of that will be.

Speaker Change: We have very moderate assumptions around what we will get relative to that and the numbers that we have.

Speaker Change: So we do think that if that plays out the way they've said that's going to provide.

Speaker Change: Really nice upside for us in that segment are storm.

Speaker Change: Expectations for the balance of the year are very muted.

Speaker Change: It is expected to be in active storm season, we have no idea what the reality of that will be that provides quite frankly tremendous upside to that unit. If that season comes in as normal as a normal season would last year wasn't so we've kind of replicated what we saw last year. So we do think that we've got a very achievable plan and.

Jose Mas: That provides, you know, quite frankly, tremendous upside to that unit if that season comes in as normal as a normal season would last year. So we've kind of replicated what we saw last year. So we do think that, you know, we've got a very achievable plan. And hopefully, if things play out well, we, you know, hopefully we can deliver a much better result than what we've said. OK, thank you. Thanks, Brent. We will take our next one.

Speaker Change: If things play are well.

Speaker Change: Hopefully, we deliver much better results than what we've said.

Speaker Change: Okay. Thank you.

Speaker Change: Thanks, Brian.

Speaker Change: Yes.

Brent Edward Thielman: We will take our next question from Adam Thalhimer with Thompson. Hey, good morning, guys. Nice quarter and good to see the stock over 100. Thanks, Seth.

Speaker Change: We will take our next question from Adam <unk> with Thompson Davis.

Adam: Hey, good morning, guys nice quarter and good to see the stock over 100 again.

Adam: Thanks, Ed.

Adam: The T mobile I was kind of surprised you mentioned that can you talk about the fiber opportunity there.

Adam: If youre well positioned and win some work might start.

Adam Robert Thalhimer: You know, we've been hearing rumors for a long time that T-Mobile was going to try to build its own fiber network to support its wireless business. I think we saw it in their announcements.

Adam: We've been hearing rumors for a long time that T mobile was going to try to build their own fiber network to support their wireless the.

Adam: The wireless business I think we saw it in their announcements.

Jose Mas: They're actually trying a couple different things, but their latest announcement is a joint venture with UQT where they're going to buy Lumos and be a key tenant and owner of that asset. We think that that further shifts the wireless business into one where all the carriers are going to own their networks. It's a very important part of the business, and when you look at their announcement, it's not just about them using that network.

Adam: They're actually trying a couple of different things, but their latest announcement is a joint venture with EQT, where theyre going to buy low most and be a key tenant and owner of that asset.

Adam: That that shifts.

Adam: The further shifts the wireless business into seeing one where all of the carriers are going to run their networks. It's a very important part of the business and when you. When you look at their announcement, it's not just about them using that network. It's about continuing to build out that network. So we do feel we're well positioned we have a good relationship with them.

Jose Mas: It's about continuing to build out that network. So we do feel we're well positioned. We have a good relationship with them, and I think it could meaningfully impact our business over a long period of time.

And I think that could it could meaningfully impact our business over a long period of time.

Adam: And then Paul your Q1 cash from Ops was way above my forecast, but you didn't raise the annual guide can you is that some conservatism or can you just touch on that please.

Paul Dimarco: Now, you know, listen, last quarter, I said I thought we were modeling that we stay in the high 70s from a DSO perspective, and, you know, with the growth, particularly in the middle quarters, that's what's going to drive a lot of the cash flow. So we kind of, we're in that range for Q1. You know, we're optimistic; there are some opportunities for improvement there. But, you know, a lot of it's just timing. We'll probably consume some, some working capital in Q2 and Q3. And there should be some release in Q4, which is kind of in line with the cadence of revenue.

Adam: No.

Adam: Last quarter I said.

Paul: We're modeling that would stay in the high 70 from a DSO perspective.

Paul: And with the with the growth, particularly in the middle quarters, that's what's going to drive a lot of the cash flow.

So we kind of were in that range for Q1.

Paul: We are optimistic there are some opportunities for improvement there, but a lot of it's just timing.

Paul: Probably consumes some.

Paul: Some working capital in Q2, and Q3 and there should be some release in Q4, just kind of in line with the cadence of revenue.

Speaker Change: Okay. Thanks, guys.

Thanks, Adam.

Speaker Change: Okay.

Justin P. Hauke: We will take our next question from Justin Hauke with Robert W. Barrett.

Speaker Change: We will take our next question from Justin Hockey with Robert W. Baird.

Unknown Attendee: Unknown Attendee Thanks guys, to ask about oil and gas. You said you're expecting it to be more kind of book and burn type work going forward, less large projects, but you know, there are some larger traditional Permian lines that have made some news and are coming to market for the first time since 2014-2015. I know you talked about the newer, Unknown Attendee, Steven Fisher, Brett Castelli, Sangita Jain, MasTec Inc. Sue, or is it kind of intentional to move towards this more book and burn work there? Well, Justin, we would

Justin Hockey: Thank you guys.

Justin Hockey: In oil and gas.

Justin Hockey: You said, you're expecting it to be more kind of book and burn type work going forward less large projects, but yes. There are some larger kind of traditional Permian lines that have made some news we are coming to market.

Justin Hockey: For the first time since <unk>.

Justin Hockey: In 2014, 2015, I know you talked about newer.

Justin Hockey: It seems like hydrogen, but I guess, what's your outlook for for Big pipe there that's still something that.

Justin Hockey: Zero or is it kind of intentional to move towards this more book and burn work there.

Jose Mas: Well, Justin, we would consider that book and burn. Those aren't projects that get awarded with, you know, you know, those projects don't get awarded. You know, a year in advance or six months in advance; those projects are being awarded, you know, relatively close to start time. Those projects tend to be much shorter in duration because it's a lot easier to work in those areas.

Justin Hockey: Well, Justin we would we wouldn't we would consider that book and burn those aren't projects that get awarded with.

Justin Hockey: Those projects don't get awarded.

Justin Hockey: In advance of six months in advance those projects are being awarded relatively close to start time.

Justin Hockey: Those projects tend to be much shorter in duration, because it's a lot easier to work in those areas. So that's part of what we consider our book and burn business. It's greatly enhanced from where it has been a lot of it's a lot of what you're reading is what we talked to our customer customers about we think we're in great positions, especially in those markets to be very successful.

Jose Mas: So that's part of what we consider our book and burn business. It's greatly enhanced from where it was. A lot of it's, you know, a lot of what you're reading is what we talk to our customers about. We think we're in great positions, especially in those markets, to be very successful. So that's part of what's driving our optimism.

Justin Hockey: So thats part of whats driving our optimism.

Okay.

Justin Hockey: <unk>.

Unknown Attendee: Unknown Attendee, in the power delivery business, we've seen some of your competitors invest in some manufacturing capacity in there to deal with some of the speed to market on some of these long lead time issues. Is that something your customers are, Unknown Attendee, Steven Fisher, Brett Castelli, Sangita Jain, MasTec Inc. playing in that?

Speaker Change: Second question.

Speaker Change: In the power delivery business.

We've seen some of your competitors buy some manufacturing capacity in there to deal with.

Speaker Change: Some of the speed to market on some of these long lead time issues is that something.

Your customers are.

Speaker Change: So for you to bring to market is that you get something you'd want to move into ours.

Speaker Change: <unk> can outside of <unk>.

Speaker Change: Playing in that market.

Jose Mas: I don't think we need to own it, but I don't think it's bad to own it either. I just think it could be a different model, right?

Speaker Change: I don't think we need to own it.

Speaker Change: I don't think it's bad to own it either I just think it's could be a different model right I think what youre going to see us.

Jose Mas: I think what you're going to see is that we have a lot of relationships in place. We would love to, you know, over time, be able to build more exclusivity around those relationships as it relates to, you know, third-party builders of stuff. But I think it's interesting. It's been, you know, an interesting dynamic in the marketplace. I think our customers are really sophisticated in how they shop and what they buy.

Speaker Change: I think we have a lot of relationships in place.

Speaker Change: We would love to over time be able to build more exclusivity around those relationships as it relates to third party builders of stuff.

Speaker Change: But I think it's interesting it's been an interesting dynamic in the marketplace.

Speaker Change: I think our customers are really sophisticated in how they buy and what they buy.

Jose Mas: I think they're very smart. And, you know, to the extent that we can add value, we will. But I, you know, historically, especially for the majors, they've kind of bifurcated those buy decisions, and I don't expect that to change.

Speaker Change: I think they're very smart and to the extent that we can add value we will.

Jose Mas: We do not have any further questions in the queue. I would like to turn the call back to Jose Mas for closing remarks.

Historically.

Especially for the majors, they've kind of bifurcated those buy decisions and I don't expect that to change.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: We do not have any further questions in the queue I would like to turn the call back to Jose Mas for closing remarks. So.

Jose Mas: So, just like to thank everybody for participating today, and we look forward to updating you on our second quarter call in a few months. Thank you.

Operator: This concludes today's call. Thank you for your participation. You may now disconnect.

Jose Mas: So just like to thank everybody for participating today, and we look forward to updating you on our second quarter call in a few months. Thank you.

Speaker Change: This concludes today's call. Thank you for your participation you may now disconnect.

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