Q4 2024 Primoris Services Corp Earnings Call

Okay.

Unknown Executive: Ladies and gentlemen, thank you for standing by.

Abby: Ladies and gentlemen, thank you for standing by my name is Abby and I'll be your conference operator today.

Abby: My name is Abby and I'll be your conference operator today.

Abby: At this time, I would like to welcome everyone to the Primoris Services Corporation, fourth quarter and full year 2024 conference call and webcast. All lines have been placed on mute to prevent any background noise.

Abby: At this time I would like to welcome everyone to the promoter service Services Corporation fourth quarter and full year 2024 conference call and webcast.

Abby: All lines have been placed on mute to prevent any background noise. After.

Abby: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press the star key followed by the number one on your telephone keypad. If you would like to withdraw your question, press star 1 a second time. Thank you.

Abby: The speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time simply press. The star key followed by the number one on your telephone keypad.

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Thank you and I would now like to turn the conference over to Blake Holcomb, Vice President Investor Relations you may begin.

Blake Holcomb: And I would now like to turn the conference over to Blake Holcomb, Vice President, Investor Relations. You may begin. Good morning and welcome to the Memorials fourth quarter and full year 2024 earnings conference call. Joining me today with prepared comments are Tom McCormick, President and Chief Executive Officer and Ken Dodgen, Chief Financial Officer.

Blake Holcomb: Good morning, and walk us a little more as fourth quarter and full year 2024 earnings conference call.

Speaker Change: Joining me today with prepared comments are Tom Mccormick, President and Chief Executive Officer, and Ken Dodgen, Chief Financial Officer before we begin I would like to make everyone aware of certain language contained in our safe Harbor statement.

Blake Holcomb: Before we begin, I would like to make everyone aware of certain language contained in our safe harbor state. The company cautions that certain statements made during this call are forward-looking and are subject to various risks and uncertainties. Actual results may differ materially from our projections and expectations. These risks and uncertainties are discussed in our reports filed with the SBA. Our forward-looking statements represent our outlook only as of today, February 25th, 2025. We disclaim any obligation to update these statements except as may be required by law.

Speaker Change: The company cautions that certain statements made during this call are forward looking and are subject to various risks and uncertainties.

Speaker Change: Actual results may differ materially from our projections and expectations.

Speaker Change: These risks and uncertainties are discussed in our reports filed with the SEC.

Speaker Change: Our forward looking statements represent our outlook only as of today February 25 2025.

Speaker Change: We disclaim any obligation to update these statements except as may be required by law.

Blake Holcomb: In addition, during this conference call, we will make reference to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures are available on the investor section of our website and in our fourth quarter and full year 2024 earnings press release, which was issued yesterday.

Speaker Change: In addition, during this conference call, we will make reference to certain non-GAAP financial measures.

Speaker Change: A reconciliation of these non-GAAP financial measures are available on the investors section of our website and in our fourth quarter and full year 2024 earnings press release, which was issued yesterday.

Thomas McCormick: I would now like to turn the call over to Thomas. Thank you, Blake. Good morning and thank you for joining us today to discuss our fourth quarter and full year 2024 results and our initial outlook for 2025. The Morris has a strong finish to 2024 that drove our best year in the company's history for revenue, earnings, backlog, and cash flow from operations. 2016 we've grown revenue and operating income each year by transforming Primoris into the company it is today. Over the past eight years, we've expanded into the solar, power delivery and communications markets through strategic acquisitions, which are some of the fastest growing in our service portfolio.

Tom Mccourt: I would now like to turn the call over to Tom Mccourt.

Tom Mccourt: Thank you Blake.

Tom Mccourt: Good morning, and thank you for joining us today to discuss our fourth quarter and full year 2024 results and our initial outlook for 2025.

Tom Mccourt: But more as a strong finish to 2024 that drove our best year in the company's history for revenue earnings backlog and cash flow from operations.

Tom Mccourt: Since 2016, we've grown revenue and operating income each year, while transforming for Morris into the company. It is today.

Tom Mccourt: Over the past eight years, we've expanded into the solar power delivery and communications markets through strategic acquisitions, which are some of the fastest growing in our service portfolio.

Thomas McCormick: We have also continued to execute well in our foundational business. which have been critical to our success in growing profitability, backlog, and cash. We finished the year with $11.9 billion in total backlog, which was driven by our booking more than $7.7 billion of new work during the pandemic. This is more than $1.2 billion, we're 18% ahead of our goal. This is a credit to our business development teams as well as our project teams whose commitment to safe and high quality project execution. has led to high customer satisfaction and strong mutually beneficial relations. I also want to recognize the Primoris employees that enabled us to achieve record cash flow from operations in 2020.

Tom Mccourt: We have also continued to execute well on our foundational businesses, which have been critical to our success in growing profitability backlog and cash flow.

Tom Mccourt: Yeah.

Tom Mccourt: We finished the year with a $11 9 billion in total backlog, which was driven by our booking more than seven $7 billion of new work during the year.

Tom Mccourt: This was more than $1 $2 billion or 18% ahead of our goal for the year.

Tom Mccourt: This is a credit to our business development teams as well as our project teams, whose commitment to safe and high quality project execution has led to high customer satisfaction and strong mutually beneficial relationships.

Tom Mccourt: I also want to recognize the <unk> employees that enabled us to achieve record cash flow from operations in 2024 generating more than $500 million was a significant milestone for our company and a key part of our strategy that we have been emphasizing over the past couple of years.

Thomas McCormick: Generating more than $500 million was a significant milestone for our company.

Thomas McCormick: The key part of our strategy that we have been emphasizing over the past couple of... Approving the consistency of our cash flow is a responsibility that our employees have taken ownership of, and we are seeing the results. Whether it's up front payments from customers to procure equipment materials and mobilize on a project. or improving our process for timely and accurate billings and collections, their efforts are clearly having an impact. I want to thank them all for their commitment in this important area of emphasis.

Tom Mccourt: Improving the consistency of our cash flows of responsibility that our employees have taken ownership of and we are seeing the results.

Tom Mccourt: Whether it's upfront payments from customers to procure equipment materials and mobilize on a project or.

Tom Mccourt: Or improving our process for timely and accurate billings and collections their efforts are clearly having an impact.

Tom Mccourt: I want to thank them all for their commitment in this important area of emphasis from force.

Thomas McCormick: Our record results in 2024 demonstrate that we have positioned Primoris as a premier solutions provider with a broad geographic footprint and the technical expertise to meet the needs of our customers. Our customers are leaders in the development, expansion, and modernization of infrastructure in North Carolina. Emerging technologies, increased electrification of industry, and a growing interest in onshoring critical aspects of the supply chain are driving a demand for power generation that hasn't been seen in decades. While much of the focus has been on the power demands of data centers, and rightfully so, A significant amount of demand is expected to come from other industrial, commercial, and residential power generation.

Tom Mccourt: Our record results in 2024 demonstrate that we are positioned for Morris has a premier solutions provider with a broad geographic footprint and the technical expertise to meet the needs of our customers.

Tom Mccourt: Our customers are leaders in the development expansion and modernization of infrastructure in North America.

Tom Mccourt: Emerging technologies increased electrification of industry and a growing interest in onshore and critical aspects of the supply chain are driving demand for power generation that hasnt been seen in decades.

Tom Mccourt: While much of the focus has been on the power demands of data centers and rightfully. So.

Tom Mccourt: A significant amount of demand is expected to come from other industrial commercial and residential power generation needs.

Thomas McCormick: Our view is that these trends will continue to require an extensive amount of generation from a wide range of sources, and Primoris will play an important role in helping meet this demand safely, efficiently, and with the highest quality possible.

Tom Mccourt: Our view is that these trends will continue to require an extensive amount of generation from a wide range of sources and for Morris will play an important role in helping meet this demand safely efficiently and with the highest quality possible.

Thomas McCormick: Regarding our safety performance, we had another great year with a total recordable incident rate well below the average in our industry and our company targets. This was accomplished despite working more than 37 million work hours during the pandemic. I want to congratulate and thank our employees in the field and in our offices across North America for their commitment to keep one another safe while helping our clients achieve their business goals.

Tom Mccourt: Regarding our safety performance, we had another great year with a total recordable incident rate well below the average in our industry and our company target.

Tom Mccourt: This was accomplished despite working more than 37 million work hours during the year.

Tom Mccourt: I want to congratulate and thank our employees in the field and in our offices across North America for their commitment to keep one another safe, while helping our clients achieve their business goals.

Thomas McCormick: I am convinced that our safety performance is an integral part of maintaining strong customer relationships and attracting talent to join the Now let's look at our operating segment performance. In the utility segment, revenues for the year were up slightly, primarily driven by growth in communications and a strong second half of the year in gas operations. Power delivery was down slightly compared to the prior year as we had Primarily due to a $100 million substation project that we completed in... We made the decision to focus our transmission and substation resources toward our renewables projects, which led to an increase in inter-segment revenue.

Tom Mccourt: I am convinced that our safety performance is an integral part of maintaining strong customer relationships and attracting talent to join the <unk> team.

Now, let's look at our operating segment performance in more detail.

Tom Mccourt: In the utility segment revenues for the year were up slightly primarily driven by growth in communications and a strong second half of the year and gas operations.

Tom Mccourt: Power delivery was down slightly compared to the prior year as we anticipated primarily due to a $100 million substation project that we completed in 2023.

Tom Mccourt: We made the decision to focus our transmission and substation resources toward our renewables projects, which led to an increase in inter segment revenue at the same time, we grew utilities MSA revenue by 10% from the prior year.

Thomas McCormick: At the same time, we grew utilities MSA revenue by 10% from the prior year. We remain committed to growing our mix of project work, specifically in power delivery as it will lead to a more balanced mix of project and MSA revenue and improved While the utility segment revenue was up modestly, we significantly improved margins compared to the prior year. This was driven by a more active storm season in the second half of the year, as well as by improved productivity and power delivery. Leadership across the organization has done a great job of aligning our resources toward customers and markets where we see the most while de-emphasizing some areas that pose more of a challenge to efficiency and profitability.

Tom Mccourt: We remain committed to growing our mix of project work specifically in power delivery as it will lead to a more balanced mix of project in MSA revenue and improve margins.

Tom Mccourt: While the utility segment revenue was up modestly we significantly improved margins compared to the prior year.

Tom Mccourt: This was driven by a more active storm season in the second half of the year as well as by improved productivity and power delivery.

Tom Mccourt: Leadership across the organization has done a great job of aligning our resources toward our customers in markets, where we see the most opportunity.

Tom Mccourt: While deemphasizing some areas that pose more of a challenge to efficiency and profitability.

Thomas McCormick: We also benefited from several rate case decisions that drove increased spend in some markets toward the end of the year, had several new MSA contracts renewed at higher rates. Included in MSA with our largest power delivery customer that went into effect on January 1st is helping our progress toward further margin improvement in 2025. In gas operations, we continue to execute well and maintain solid margins, despite the overall slow growth in the market the past couple of years. We did see some pickup late in the year with favorable weather and the rate case decisions we mentioned last quarter, providing support to the business as we move further into the Communications grew double digits in 2024 due to an expanding revenue base from data centers and traditional investments in fiber to the home.

Tom Mccourt: We also benefited from several rate case decisions that drove increased spend in some markets towards the end of the year had several new MSA contracts renewed at higher rates.

Tom Mccourt: This included an MSA with our largest power delivery customer that went into effect on January one of this year that should help in our progress toward further margin improvement in 2025 and going forward.

Tom Mccourt: And gas operations, we continued to execute well and maintained solid margins. Despite the overall slow growth in the market the past couple of years.

We did see some pick up late in the year with favorable weather and the rate case decisions, we mentioned last quarter, providing support to the business as we move further into 2025.

Tom Mccourt: Communications grew double digits in 2024 due to an expanding revenue base from data centers and traditional investments in fiber to the home.

Thomas McCormick: The growth in the market and our skilled labor force have provided an opportunity to be more selective with customers and products. This dynamic will allow us to continue delivering solid margins and improve our cash conversion the coming years as it did in 2020. Turning to the energy segment, we grew revenue over 20% largely due to another strong year in the renewables business that was partially offset by lower pipeline We had anticipated a lower year in pipeline activity after work we picked up during 2023 drove revenue and margins higher, but we also faced some performance challenges that weighed on margins late in the year.

Tom Mccourt: The growth in the market and our skilled labor force that provided an opportunity to be more selective with customers and projects.

Tom Mccourt: This dynamic will allow us to continue delivering solid margins and improve our cash conversion in the coming years as it did in 2024.

Tom Mccourt: Okay.

Tom Mccourt: Turning to the energy segment, we grew revenue over 20% largely due to another strong year in the renewables business that was partially offset by lower pipeline activity.

Tom Mccourt: We had anticipated a lower year in pipeline activity. After work, we picked up during 2023 drove revenue and margins higher but we also faced some performance challenges that weighed on margins late in the year.

Thomas McCormick: bidding market for pipeline also remains low and extremely competitive. However, we are optimistic that an increase in LNG production and natural gas power generation could lead to more projects being awarded in 2020. We believe that if this trend plays out and we see improvement in the federal permitting process, our pipeline business could begin to see a pickup in activity by the end of this year and heading into 2020. Industrial construction also had a great year of operational performance and book. including the two projects we mentioned during the third quarter call. We had excellent performance on several gas generation projects during the year and are seeing more opportunities to bid and win.

Tom Mccourt: Bidding market for pipeline also remains slow and extremely competitive.

Tom Mccourt: However, we are optimistic that an increase in LNG production and natural gas power generation could lead to more projects being awarded in 2025.

Tom Mccourt: We believe that if this trend plays out and we see improving the federal permitting process, our pipeline business could begin to see a pickup in activity by the end of this year and heading into 2026.

Tom Mccourt: Industrial construction also had a great year of operational performance and bookings, including the two projects we mentioned during the third quarter call.

Tom Mccourt: We had excellent performance on several gas generation projects during the year and are seeing more opportunities to bid and win work.

Thomas McCormick: We expect to see more opportunities in the coming quarters, but will remain disciplined in the types of projects we pursue. We have been a consistent performer in the construction of natural gas power generation projects over the years. We continue to target opportunities that fit well within our capabilities. We've brought in additional talent that will allow us to manage more projects while staying disciplined in the scope of projects we take on to ensure that we pursue profitability over revenue. The heavy civil business had another solid year 2024 as well, booking several new projects at higher margins and benefiting our cash flow through upfront mobilization.

Tom Mccourt: We expect to see more opportunities in the coming quarters, but will remain disciplined in the types of projects. We pursue we have been a consistent performer and the construction of natural gas power generation projects over the years and will continue to target opportunities that fit well within our capabilities.

Tom Mccourt: We have brought in additional talent that will allow us to manage more projects, while staying disciplined on the scope of projects, we take on to ensure that we pursue profitability over revenue growth.

The heavy civil business had another solid year of 2024 as well looking several new projects at higher margins and benefiting our cash flow through upfront mobilization payments.

Thomas McCormick: Although typically a lower margin business, the team has consistently performed very well in their execution, which has enabled them to improve margin.

Tom Mccourt: Although typically a lower margin business. The team has consistently performed very well in their execution, which has enabled them to improve margins from last year.

Thomas McCormick: In 2024, we also took meaningful steps on our strategic plan to divest or unwind certain businesses or service lines that we viewed as sub-scale, low-margin, or non-corporate promoters going forward. While these actions will create roughly $160 million revenue headwind in 2025, we should see a benefit in operating This will also allow our management teams to allocate their time and resources to other areas of the organization. Wrapping up the segment with renewables, we had another impressive year of growth, approaching almost $2 billion in revenue in 2020. We also booked nearly $900 million of backlog in the fourth quarter to close out the year with approximately $3.1 billion.

Tom Mccourt: In 2024, we also took meaningful steps on our strategic plan to divest or unwind certain businesses or service lines that we viewed as subscale low margin or non core for more going forward.

Tom Mccourt: While these actions will create roughly $160 million revenue headwind in 2025, we should see a benefit in operating margins.

Tom Mccourt: This will also allow our management teams to allocate their time and resources to other areas of their businesses.

Tom Mccourt: Wrapping up the segment with renewables, we had another impressive year of growth approaching almost $2 billion in revenue in 2024.

Tom Mccourt: We also booked nearly $900 million of backlog in the fourth quarter to close out the year with approximately $3 1 billion.

Thomas McCormick: Citing our target for the year and setting another all time high. These results included contributions from the products and services that complement our solar including Premier PV, Battery Storage, and O&M, which are approaching 10% of renewables revenue. The demand for our solar services remains high and we continue to look to add quality teams and new customers. Our proven track record, the strength of our client relationship. and rapidly expanding ancillary solar businesses provides us the ability to have ongoing success in renewable. Despite some near-term uncertainty in the market. Much of the uncertainty in renewables and in other parts of Primoris' businesses centers around a rapidly changing trade and regulatory environment.

Leading our target for the year and setting another all time high for the business.

Tom Mccourt: These results included contributions from the products and services that complement our solar EPC business, including Premier PV battery storage and O&M, which are approaching 10% of renewables revenue.

Tom Mccourt: The demand for our solar services remains high and we continue to look to add quality teams and new customers.

Tom Mccourt: Our proven track record the strength of our client relationships and rapidly expanding ancillary solar businesses provides us the ability to have ongoing success in renewables. Despite some near term uncertainty in the market.

Tom Mccourt: Most of the uncertainty in renewables and in other parts of <unk> businesses centers around a rapidly changing trade and regulatory environment.

Thomas McCormick: The impact of tariffs on the supply chain for key electric components, metals, or other materials that are more reliant on imports could present a headwind. depending on the scope and direction. Based on our conversations with customers across our service lines, we do not anticipate that the currently proposed tariffs or regulatory changes will have a meaningful impact on our expectations. The majority of the inflationary impacts from tariffs could be passed through to the customer, and items we procure that could be subject to tariffs are unlikely to have a material impact on the total cost of the project.

Tom Mccourt: The impact of tariffs on our supply chain for key electric components metals or other materials that are more reliant on imports to present, a headwind depending on the scope and duration.

Tom Mccourt: Based on our conversations with customers across our service lines, we do not anticipate that the currently proposed tariffs or regulatory changes will have a meaningful impact on our expectations for 2025.

Tom Mccourt: Majority of the inflationary impacts from tariffs could be passed through to the customer and honest, we procure that could be subject to tariffs are unlikely to have a material impact on the total cost of the projects.

Thomas McCormick: However, we will continue to engage with our customers in order to better understand how their plans could potentially change based on changes to tariff or regulatory policy. We will be better equipped to assess the potential impacts and adjust our plans accordingly when there is more clarification on these policies.

Tom Mccourt: However, we will continue to engage with our customers in order to better understand how their plans could potentially change based on changes to tariff or regulatory policy.

Tom Mccourt: We will be better equipped to assess the potential impacts and adjust our plans accordingly, when there is more clarification on these policies in the meantime, there can be volatility in our quarterly bookings in the first half of the year.

Thomas McCormick: In the meantime, there could be volatility in our quarterly bookings in the first half Overall, Primoris has had an outstanding year of 20 set us on a great trajectory toward achieving our. We have an extensive backlog of projects across our businesses and have the experienced teams necessary for us to deliver successful results for our customers. Many of our services, including power delivery, renewables and power generation, remain in high demand, particularly in Texas where we have a strong The Texas market is growing rapidly. The most recent report from the Electric Reliability Council of Texas suggests a significant amount of additional generation resources will be needed to meet the demand.

Tom Mccourt: Overall, Morris and an outstanding year in 2024 to set us on a great trajectory toward achieving our 2026 goals.

Tom Mccourt: We have an extensive backlog of projects across our businesses and have the experienced teams necessary for us to deliver successful results for our customers.

Tom Mccourt: Many of our services, including power delivery renewables and power generation remain in high demand, particularly in Texas, where we have a strong position.

Tom Mccourt: The Texas market is growing rapidly and the most recent report from the electric reliability Council of Texas suggests a significant amount of additional generation resources will be needed to meet the demand.

Thomas McCormick: This could potentially lead to an expansion of the Texas Energy Fund in the upcoming legislative session to help facilitate the billions of dollars of investment in power generation and transmission that could be required. To summarize, it is our view that the demand for our services should continue to grow over the next... While there could be inflationary pressure on certain items our customers procure for the projects we construct, we feel confident that the market will be able to adapt to any changes to meet the infrastructure demands of the growing North American economy.

Tom Mccourt: This could potentially lead to an expansion of the Texas Energy fund in the upcoming legislative session to help facilitate one billions of dollars of investment in power generation and transmission that could be required.

Tom Mccourt: To summarize it is our view that the demand for our services should continue to grow over the next several years.

Tom Mccourt: While there could be inflationary pressure on certain items, our customers procure for the projects. We construct we feel confident that the market will be able to adapt to any changes to meet the infrastructure demands of the growing North American economy.

Ken Dodgen: Now I'll hand it over to Ken for more on our financial... Thanks, Tom, and good morning, everyone. Our fourth quarter revenue was $1.7 billion, an increase of $226 million, or 15% compared to the prior year. The increase was driven by growth in both the utilities and energy sector. Gross profit for the fourth quarter improved $28 million or 18% to about $185 million, driven by higher revenue and improved margins in the utility. Overall, gross margins improved 10.6% compared to 10.3% in the prior Turning now to our segments, utility segment revenue was up nearly $88 million compared to the prior year.

Tom Mccourt: Now I'll hand, it over to Ken for more on our financial results.

Ken Dodgen: Thanks, Tom and good morning, everyone. Our fourth quarter revenue was $1 7 billion, an increase of $226 million or 15% compared to the prior year.

The increase was driven by growth in both the utilities and energy segments gross profit for the fourth quarter improved to $28 million or 18% to about $185 million driven by higher revenue and improved margins in the utility segment overall gross margins improved two 6% compared to $10.

Ken Dodgen: 3% in the prior year.

Ken Dodgen: Turning now to our segments utility segment revenue was up nearly $88 million compared to the prior year. The growth was across all business lines and driven by favorable weather and increased customer activity, particularly in gas and communications compared to the prior year.

Ken Dodgen: The growth was across all business lines and driven by favorable weather and increased customer activity, particularly in gas and communications, compared to the prior year. Gross profit increased approximately 38 million or 88% compared to the prior year, driven by higher revenue and gross margin. Gross margins were 12.1% up from 7.4% in the prior year. The increase was driven by favorable weather conditions, which enabled some of our gas crews to work later into the quarter. and approximately 9 million of incremental gross profit from storm restoration work in the power delivery. excluding the storm work, we still saw healthy improvements in both gross profit and gross margins.

Ken Dodgen: Gross profit increased approximately $38 million or 88% compared to the prior year driven by higher revenue and gross margins.

Ken Dodgen: Gross margins were 12, 1% up from seven 4% in the prior year.

Ken Dodgen: The increase was driven by favorable weather conditions, which enabled some of our gas crews to work later into the quarter.

Ken Dodgen: And approximately $9 million of incremental gross profit from storm restoration work in the power delivery business.

Ken Dodgen: Excluding the storm work, we still saw healthy improvements in both gross profit and gross margins for the quarter.

Ken Dodgen: Energy Segment Revenue increased $148 million compared to the prior year, primarily due to growth in our renewables and industrial business. partially offset by lower pipeline. Gross profit decreased $9.5 million or 8% compared to the prior year, as lower gross margins offset the higher revenue. Gross margins fell to 9.5% compared to 12% in the prior year due to fewer project closeouts in renewables this quarter. Lower Pipeline Revenue and Profit. and some weather impacts that delayed progress on certain industrial and renewables.

Ken Dodgen: Energy segment revenue increased $148 million compared to the prior year, primarily due to growth in our renewables and industrial businesses, partially offset by lower pipeline revenue.

Ken Dodgen: Gross profit decreased to $9 5 million or 8% compared to the prior year as lower gross margins offset the higher revenue gross margins fell to nine 5% compared to 12% in the prior year due to fewer project closeouts in renewables this quarter lower pipeline revenue and profit and some.

Ken Dodgen: Weather impacts that delayed progress on certain industrial and renewables projects.

Ken Dodgen: For the full year 2024, revenue is up 650 million to a little less than 6.4 billion, primarily driven by growth in our energy Gross profit increased by $116 million, or approximately 20%. primarily driven by higher revenue and improved productivity and margins in our utilities. Looking at our segments for the year, utilities revenue was up slightly this year, primarily due to communications growth, partially offset by a decline in power delivery revenue. The power delivery decline is due to a large substation project in the prior year that didn't repeat. Gross profit increased 51 million or 25% due to improved gross margins and about 30 million of gross profit from stormwater.

Ken Dodgen: For the full year 2024 revenue was up $650 million to a little less than $6 4 billion, primarily driven by growth in our energy segment.

Ken Dodgen: Gross profit increased by $116 million or approximately 20%.

Speaker Change: Primarily driven by higher revenue and improved productivity and margins in our utility segment.

Speaker Change: Looking at our segments for the year utilities revenue was up slightly this year, primarily due to communications growth, partially offset by a decline in power delivery revenue.

Speaker Change: The power delivery decline is due to a large substation project in the prior year that didn't repeat this year.

Speaker Change: Gross profit increased $51 million or 25% due to improved gross margins and about $30 million of gross profit from storm work.

Ken Dodgen: Gross margins improved to 10.6%, up from 8.6% in the prior year. Excluding the storm benefit, gross margins were still higher, driven by improved productivity across power, gas, and communication. We are pleased with the progress we have made in productivity and aligning our skilled workforce with the right customers in the right market.

Speaker Change: Gross margins improved to 10, 6% up from eight 6% in the prior year.

Speaker Change: Excluding the storm benefit gross margins were still higher driven by improved productivity across power gas and communications. We are pleased with the progress we've made in productivity and aligning our skilled workforce with the right customers in the right markets. We're looking forward to continued margin improvement in 2025 and 2026 as we laid out.

Ken Dodgen: We're looking forward to continued margin improvement in 2025 and 2026, as we laid out in our three-year plan last year. Energy revenue grew by $686 million this year, primarily driven by growth in our renewables and industrial business. partially offset by decline in pipeline. Renewables grew over $650 million in 2024 as it completed some jobs early and accelerated about $250 million of revenue growth from 2025 into 2024. Gross profit increased over $64 million or 17% compared to the prior year, primarily due to higher revenue, partially offset by a small decline in gross margins to 11% from 11.4% in the prior year.

Speaker Change: In our three year plan last year.

Speaker Change: Energy revenue grew by $686 million this year, primarily driven by growth in our renewables and industrial businesses, partially offset by a decline in pipeline revenue.

Speaker Change: Renewables grew over $650 million in 2024 as it completed some jobs early and accelerated about $250 million of revenue growth from 2025 into 2024.

Speaker Change: Gross profit increased over $64 million or 17% compared to the prior year, primarily due to higher revenue, partially offset by a small decline in gross margins to 11% from 11, 4% in the prior year.

Ken Dodgen: The gross margin decline was mainly due to higher margins on a pipeline project in the prior year that did not.

The gross margin decline was mainly due to higher margins on a pipeline project in the prior year that did not repeat.

Ken Dodgen: The E&A expense in the fourth quarter increased by almost $16 million to just under $97 million compared to $81 million in the prior year. The increase was primarily driven by higher personnel costs and incentive compensation related to improved operational performance. For the full year, SG&A was 6% of revenue, up slightly from 5.8% in the prior year, but in line with our expectations. We expect our SG&A will be around 6% for the full year of 2020. Net interest expense in the fourth quarter was $12 million compared to nearly $22 million in the prior year, and full-year net interest expense was down almost $13 million from the prior year to just over $65 million.

Speaker Change: SG&A expense in the fourth quarter increased by almost $16 million to just under $97 million compared to $81 million in the prior year.

Speaker Change: The increase was primarily driven by higher personnel costs and incentive compensation related to improved operational performance.

For the full year SG&A was 6% of revenue up slightly from five 8% in the prior year, but in line with our expectations.

Speaker Change: We expect our SG&A will be around 6% for the full year of 2025.

Speaker Change: Net interest expense in the fourth quarter was $12 million compared to nearly $22 million in the prior year and full year net interest expense was down almost 13 million from the prior year to just over $65 million.

Ken Dodgen: These decreases were due to lower average debt balances and lower interest rates, along with higher interest income. We paid down an incremental $150 million on our term loan in Q4, and another $100 million in January 2025. We expect interest expense for 2025 to be between 44 and 48. Our effective tax rate remained at 29% and we expect it to be 29% for 2025, but it may vary depending on the mix of states in which we operate.

Speaker Change: These decreases were due to lower average debt balances and lower interest rates along with higher interest income.

Speaker Change: We paid down an incremental $150 million on our term loan in Q4 and another $100 million in January 2025.

Speaker Change: We expect interest expense for 2025 to be between 44% and $48 million.

Speaker Change: Our effective tax rate remained at 29% and we expect it to be 29% for 2025, but it may vary depending on the mix of states in which we operate.

Ken Dodgen: Operating cash flows in the fourth quarter were approximately $298 million and for the full year operating cash flows were more than $508 million, both records for Primoris. The full year cash from operations represents an increase of almost $310 million versus the prior year. The increase in operating cash flows was driven by improvements in contract assets due to our ongoing working capital improvement initiatives, particularly our billing and collection. Additionally, upfront procurement and mobilization payments from customers due to a strong year of bookings and renewables contributed to the rise in contract liabilities. Of note, our energy segment had approximately $100 million of Q1 2025 customer payments that were received in Q4.

Speaker Change: Operating cash flows in the fourth quarter were approximately $298 million for the full year operating cash flows of more than $508 million both records for Morris.

Speaker Change: The full year cash from operations, representing an increase of almost $310 million versus the prior year.

Speaker Change: The increase in operating cash flows was driven by improvements in contract assets due to our ongoing working capital improvement initiatives, particularly our billing and collection efforts. Additionally.

Speaker Change: Additionally, upfront procurement and mobilization payments from customers due to a strong year of bookings and renewables contributed to the rise in contract liabilities.

Speaker Change: Of note our energy segment had approximately $100 million of Q1 2025 customer payments that were received in Q4 as a result, I expect cash flow from operations to normalize in 2025 to some degree and be in the $200 million to $225 million range.

Ken Dodgen: As a result, I expect cash flow from operations to normalize in 2025 to some degree and be in the $200 to $225 million range.

Ken Dodgen: Turning to CapEx, we invested $23.6 million in the fourth quarter and $126.6 million during the full year. This was up from $103 million in 2023, primarily due to increased spend on facilities. We expect our total CapEx in 2025 will be in the 90 to $110 million range with equipment accounting for $60 to $80 million. Looking at the balance sheet and liquidity, we ended the year with cash of $456 million, up from $218 million at the end of 2023. Total long term debt was $735 million and net debt was $279 million, lowering our trailing 12 month net debt to EBITDA ratio to 0.7, well ahead of our 2026 goal of 1.5 times Overall, our balance sheet is in a great position and remain strong as we continue to improve our cash.

Speaker Change: Turning to Capex, we invested $23 6 million in the fourth quarter and $126 6 million during the full year. This was up from $103 million in 2023, primarily due to increased spend on facilities.

Speaker Change: We expect our total capex in 2025 will be in the $90 million to $110 million range with equipment accounting for $60 million to $80 million of that.

Speaker Change: Looking at the balance sheet and liquidity, we ended the year with cash of $456 million up from $218 million at the end of 2023.

Speaker Change: Total long term debt was $735 million and net debt was $279 million lowering our trailing 12 month net debt to EBITDA ratio to 0.7, well ahead of our 2026 goal of one five times EBITDA.

Speaker Change: Overall, our balance sheet is in great position and remains strong as we continue to improve our cash flow. We believe that we are financially well equipped to allocate capital to grow the business organically expand product and service lines or be opportunistic with acquisitions should we identify targets that meet our strategic and financial metrics.

Ken Dodgen: We believe that we are financially well equipped to allocate capital to grow the business, organically expand product and service lines, or be opportunistic with acquisition should we identify targets that meet our strategic and financial needs.

Ken Dodgen: Moving on to backlog, we grew total backlog to $11.9 billion, an increase of just under $1 billion from the prior year. This was driven primarily by strong bookings in our energy segment, particularly in renewables, heavy civil, and industrial construction, including natural gas power generation. Total MSA backlog was up slightly as a 7% increase in utility segment MSA backlog was partially offset by a decrease in pipeline. Similarly, our 12-month backlog increased by 417 million, or 9% driven by the increased fixed backlog in the energy sector.

Speaker Change: Moving onto backlog, we grew total backlog to $11 9 billion, an increase of just under $1 billion from the prior year.

Speaker Change: This was driven primarily by strong bookings in our energy segment, particularly in renewables heavy civil and industrial construction, including natural gas power generation projects.

Speaker Change: Total MSA backlog was up slightly as a 7% increase in utility segment MSA backlog was partially offset by a decrease in pipeline MSA backlog.

Speaker Change: Similarly, our 12 month backlog increased by $417 million or 9% driven by the increased fixed backlog and the energy segment.

Ken Dodgen: I will wrap up with our earnings guidance for 2025. We expect earnings per fully diluted share to be between 370 and 390 and our adjusted EPS to be between 420 and 440 per share, both representing double digit percent growth from 2024 at the mid Both EPS and adjusted EPS are expected to be driven by higher operating income and a decrease in Our adjusted EBITDA guidance is 440 to 460 million for 2025.

Speaker Change: I will wrap up with our earnings guidance for 2025, we expect earnings per fully diluted share to be between $3 70, and $3 90, and our adjusted EPS to be between $4 20, and $4 40 per share both representing double digit percent growth from 2024 at the midpoint.

Speaker Change: <unk> EPS and adjusted EPS are expected to be driven by higher operating income and a decrease in interest expense.

Speaker Change: Our adjusted EBITDA guidance is $440 million to $460 million for 2025, I want to point out that this guidance does not include any potential benefits from storm restoration work like we had in 2024.

Ken Dodgen: I want to point out that this guidance does not include any potential benefits from storm restoration work like we had in 2024.

Ken Dodgen: As Tom mentioned, we also wound down or divested businesses that contributed close to $160 million in 2024 revenue that collectively lost about $3 million of EBITDA. So while our rate of revenue growth will be lower than 2024, we expect to see improvements in gross profit and adjusted EBITDA in 2023.

Speaker Change: As Tom mentioned, we also wound down our divested businesses that contributed close to a $160 million in 2020 for revenue that collectively lost about $3 million of EBITDA. So while our rate of revenue growth will be lower than 2024, we expect to see improvements in gross profit and adjusted EBITDA in 2025.

Ken Dodgen: As a reminder, our first quarter is typically our lowest quarter of the year for both revenue and net income due to seasonality, which primarily impacts our utility. As a result, we expect our utility segment margins to be in the 9% to 11% range for the full year, with Q1 in the 6% to 8% range. And for our energy segment, we expect gross margins to be in the 10 to 12% range for the full year.

Speaker Change: As a reminder, our first quarter is typically our lowest quarter of the year for both revenue and net income due to seasonality, which primarily impacts our utility segment.

Speaker Change: As a result, we expect our utility segment margins to be in the 9% to 11% range for the full year with Q1 in the 6% to 8% range.

Speaker Change: And for our energy segment, we expect gross margins to be in the 10% to 12% range for the full year.

Thomas McCormick: And with that, I'll turn it back over to Tom. Thank you, Ken. Before we open the call up for your questions, I'd like to reiterate some of the key takeaways from our prepared comments. First, I'm extremely proud of the Primoris team and the work that we accomplished in 2024 to achieve our record earnings, backlog, and cash We emphasize with our teams the need to remain focused on improving profitability and cash flow, and that is exactly... continuing to operate safely. Their efforts have provided us the opportunity to continue to strengthen our balance sheet and position us to have the resources to keep growing.

Tom: And with that I'll turn it back over to Tom.

Speaker Change: Thanks again.

Speaker Change: When we open the call up for your questions I'd like to reiterate some of the key takeaways from our prepared comments today.

Speaker Change: First I'm extremely proud of the <unk> team and the work that we accomplished in 2020 forward to achieve our record earnings backlog and cash flow.

Speaker Change: We emphasize with our teams and the need to remain focused on improving profitability and cash flow and that is exactly what they did while continuing to operate safely and efficiently.

Speaker Change: Their efforts have provided us the opportunity to continue to strengthen our balance sheet and position us to have the resources to keep growing the business.

Thomas McCormick: Second, we are excited about the opportunities that lay ahead of us. Growth Markets of Power Delivery. We are also encouraged by the increase in opportunities we are seeing in communications and natural gas power. The amount of infrastructure investment required for the United States to be a leader in emerging technologies like artificial intelligence and meeting the increasing energy demand while making progress toward a more diverse mix of energy sources is significant. We believe Primoris has an important role to play in meeting the needs of our customers and communities.

Speaker Change: Second we are excited about the opportunities that lay ahead of us in our strategic growth markets of power delivery in renewables. We are also encouraged by the increase in opportunities. We are seeing in communications and natural gas power generation.

Speaker Change: The amount of infrastructure investment required for the United States to be a leader in emerging technologies like artificial intelligence and meeting the increasing energy demand, while making progress toward a more diverse mix of energy sources and significance.

Speaker Change: We believe for Morris has an important role to play in meeting the needs of our customers and communities.

Thomas McCormick: Lastly, we are confident in our ability to adapt to changes in our service markets and be prepared for potential challenges. We have demonstrated success in managing tariffs and supply chain disruptions in the past and believe we will be able to manage the current environment as well. Through appropriate planning, exercising discipline in the projects we target and aligning ourselves with the right customer. We have a great opportunity to build on our success. Pleased as we are with our 2024 results, I believe the best days for Primoris lie ahead. continue to press toward our 2026 goals.

Speaker Change: Lastly, we are confident in our ability to adapt to changes in our service markets and be prepared for potential challenges. We have demonstrated success in managing tariffs and supply chain disruptions in the past and believe we will be able to manage the current environment as well.

Speaker Change: Through appropriate planning exercising discipline in our projects, we target and aligning ourselves with the right customers, we have a great opportunity to build on our success.

Speaker Change: As pleased as we are with our 2024 results I believe the best days for Morris Lie ahead of US as we continue to press toward our 2026 goals and beyond.

Speaker Change: And with that I'll now open it up for your questions.

Abby: With that, I'll now open it up for your questions. And we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join. If you would like to withdraw your question, simply press star 1 a second. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. To be able to take as many questions as possible, we ask that you please limit yourself to one question and one follow-up.

Speaker Change: Thank you.

And we will now begin the question and answer session.

Speaker Change: If you have dialed in and we would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue.

Speaker Change: If you would like to withdraw your question simply press Star one a second time.

Speaker Change: If you are called upon to ask your question and our listening BS speaker phone on your device. Please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: You may have we'll take as many questions as possible we ask that.

Speaker Change: Please limit yourself to one question and one follow up if you have additional follow ups you may rejoin the queue and we will take them as time allows.

Abby: If you have additional follow-ups, you may rejoin the queue and we will take them as time allows. Again, it is star one if you would like to join the queue.

Speaker Change: Again, it is star one if you would like to join the queue.

Steven Fisher: And your first question comes from the line of Steven Fisher with UBS. Your line is open. Thanks very much and congratulations on a really strong year. You know, you touched upon, Tom, a lot of the different solar angles going through. Maybe just sort of high level, can you talk about how you see the growth rate for solar evolving over the next couple of years? You know, how booked are you for 2025 and 2026 and the confidence in that? And sort of what's the embedded growth rate you think you can still do? You know, do you have that $300 to $500 million of additional revenues per year?

Speaker Change: And your first question comes from the line of Steven Fisher with UBS. Your line is open.

Speaker Change: Yes.

Steven Fisher: Thanks, very much and congratulations on a really strong year.

Speaker Change: You touched upon Tom.

Speaker Change: What are the different solar angle is going through maybe just sort of high level can you talk about how you see the growth rate for first solar evolving over the next couple of years.

Speaker Change: How booked are you for 25, and 26 and the confidence in that.

Speaker Change: What's the embedded growth rate do you think you can still do.

Do you have that $3 million to $500 million of additional revenues per year.

Thomas McCormick: How do you see the solar trajectory from here?

Speaker Change: How do you see the solar trajectory from here.

Thomas McCormick: So Steve, this year, obviously, it's going to be, you know, we pulled some of that 2025 into late 2024, so this year will be a little bit down on that, probably the $300 to $400 million range that we had. But what we are seeing is we're also seeing, with respect to EPC solar, but we are seeing some uptick in BESS, and we are seeing some uptick in Premier PV and O&M, so that'll make up for some of that. We should be able to keep that in the, The upper two, $300 to $400 million range over those years, but you're going to see more of that become part of, best become part of that in Premier PV, solar in the years to come, still looks pretty solid.

Speaker Change: So.

Speaker Change: Steve This year, obviously, it is going to be we pulled some of that the 2025 into 'twenty in late 2024. So this year be a little bit down on that probably a $3 million to $400 million range that we had but what we are seeing is we're also seeing with respect to EPC.

Speaker Change: Solar, but we are seeing some uptick in <unk>.

Speaker Change: And we are seeing some uptake taking premier PV and O&M, so that will make up for some of that we should be able to keep that and.

Speaker Change: The upper two $300 million to $400 million range over those years, but you're going to see more of that become.

Speaker Change: <unk> become part of that and Premier PV solar in the years to come still looks pretty solid 2025 is pretty book there may be a little room for us to start some work.

Thomas McCormick: 2025 is pretty booked. There may be a little room for us to start some work in the fourth quarter, but more than likely, it's pretty much booked. 2026, I'm not sure what percentage we're booked, but we've got a lot of this work is carrying into 2026, and actually some of this work is carrying into 2027.

Speaker Change: In the fourth quarter, but.

Speaker Change: More likely that it's pretty much but 2026 I'm not sure what percentage of our book We've got a lot of this work is carrying into 2026 and actually some of this work is carrying into 2027.

Speaker Change: Okay.

Speaker Change: And then maybe just shifting to some of the other segments can you just maybe give us a sense of the growth rates that you have embedded in it.

Speaker Change: Industrial and heavy civil power delivery telecom gas and if you can't put certain numbers around it maybe just sort of rank where.

Speaker Change: Where are you seeing that relative.

Speaker Change: Faster growth ones theyre going to be in 'twenty five.

Thomas McCormick: Yeah, Steve, I think it's going to be kind of a mixed bag. I don't think much has changed in our view, despite the uncertainty in the markets right now. I think we're still expecting gas to be kind of low single digit, power delivery to be mid single digit, and communications to be mid to upper single digit, similar to what we saw in 2024. Industrial is going to be low to mid single digit as well. We picked up nicely in 2024. We expect that's going to moderate a little bit in 2025, as we just focus on executing the projects that we won.

Steve: Yes, Steve.

Steve: I think it's going to be kind of a mixed bag I don't think much has changed in our view despite the uncertainty in the markets right now.

Steve: I think we're still expecting.

Steve: The gas to be kind of low single digit.

Steve: Power delivery to be mid single digit and communications to be mid to upper single digit.

Steve: Similar to what we saw in 2024.

Steve: Industrial industrial is going to be low to mid single digit as well we picked up nicely in 2024, we expect that's going to moderate a little bit 25, as we just focus on executing the projects that we won.

Unknown Executive: Heavy civil is going to be flat. Pipeline is probably going to be flat this year as well. Terrific.

Steve: Heavy civil is going to be flat pipeline is probably going to be flat this year as well.

Unknown Executive: Thank you very much.

Speaker Change: Perfect. Thank you very much.

Will: And your next question comes from the line of Lee Jagoda with CJS Securities. Your line is open. Hi, this is Will on for Lee.

Speaker Change: And your next question comes from the line of Lee Jagoda with CJS Securities. Your line is open.

Speaker Change: Hi. This is will on for Lee can you give us some more detail around what drove that much stronger than expected margins in utilities in Q4, as well as energy margins in the high single digits, which we havent seen since early 2023.

Ken Dodgen: Can you give us some more detail around what you're of the much stronger than expected margins in utilities in Q4, as well as energy margins in the high single digits, which we haven't seen since early 2023? And are any of the items likely to linger into 2025 before normalizing? Thank you. Yeah, on utilities, the biggest driver was the storm work we had in the quarter, almost nine million, but even X the storm work, margins were still up. And that was most directly just related to improved productivity. And we just had good weather that impacted our gas business, enabled us to work farther into Q4 than normal.

Speaker Change: And are any of the items likely to linger into 2025 before normalizing. Thank you.

Speaker Change: Yes.

Speaker Change: On utilities.

Speaker Change: The biggest driver was the biggest driver was the storm work, we had in the quarter almost $9 million, but even ex the storm work margins were still up and that was most directly related to improved productivity.

Speaker Change: And we just had good weather.

Speaker Change: Impacted our gas business enabled us to work further into Q4 than normal so our seasonality was not truncated nearly as aggressively as it has been in some prior years.

Ken Dodgen: So our seasonality was not truncated nearly as aggressively as it has been in some prior years.

Ken Dodgen: And I apologize, Will, what was your other question? I'm also in regards to, you know, energy margins in the high single which we haven't seen since 2010. Oh, just for the quarter. Yeah, that was because of higher margins last year because of a pipeline project. But then this year, we just had some weather impacts, it was mostly just rain, it wasn't necessarily named storms or anything like that. It just impacted our productivity a little bit. And so we're expecting that to just normalize into the 10 to 12% range, going into Q1 and throughout all of 25.

Speaker Change: I apologize what was your other question.

Speaker Change: Also in regards to that.

Speaker Change: Energy margins in the high single digits.

We haven't seen since 2023.

Speaker Change: Oh, just for the quarter, yes.

Speaker Change: That was because of higher margins last year because of a pipeline project, but then this year. We just had some weather impacts. It was mostly just reigned it wasn't necessarily named storms or anything like that.

Speaker Change: It just impacted our productivity a little bit and so we're expecting that to just not normalize into the 10% to 12% range going into Q1 and throughout all of 'twenty five Ken one of the things one of the thing to add is you had fewer project closeouts in renewables as well.

Ken Dodgen: Yeah, Kim, one of the things, one of the things that is yet fewer project closeouts and renewables as well. That's right, which we've typically had in past years. That's very helpful. Thank you.

Speaker Change: Which would typically had in past years.

Speaker Change: Yes.

Speaker Change: That's very helpful. Thank you.

Speaker Change: Okay.

Sanjita Jain: And your next question comes from the line of Sanjita Jain with KeyBank. Your line is open. Hi, good morning. Thank you for taking my questions.

Speaker Change: And your next question comes from the line of Sanjay Jain with Keybanc. Your line is open.

Sanjay Jain: Hi, Good morning. Thank you for taking my question so on the renewables.

Thomas McCormick: So on the renewables question that you got previously, can you elaborate if there was a function of safe harboring maybe that led to the 4Q jump in revenues and the backlog and the discussions that you may be having with your customers with regards to the puts and takes on the IRA modifications and tariffs maybe? Yeah. The conversations we've had with our clients is right now our clients are still pretty are well funded. They have not. They have not given us any indications that they're going to slow down. They have a portfolio of projects that they want to execute.

Speaker Change: Question is that you got previously can you elaborate.

Speaker Change: If the if there was a function of safe harboring maybe that led to the four Q jumped in revenues.

Speaker Change: And the backlog and.

Speaker Change: The discussions that you may be having with your customers just as to the puts and takes on the IAA modifications in Texas maybe.

Speaker Change: Yes, yes.

Speaker Change: The conversations we've had with our clients is right now our clients are still pretty are well funded they have not.

Speaker Change: They have given.

Given us any indication that theyre going to slow down they have a portfolio of progress that they want to execute we could see some of the safe harboring this year, maybe been a little bit benefit from that.

Thomas McCormick: We could see some of the safe harboring this year, maybe a little bit benefit from that. But, you know, right now, the way a lot of them see it is they're waiting to see what this legislation is going to look like at the end, because there's still early days in a lot of it. So they're just moving forward with the projects we have in 2025.

Speaker Change: But.

Speaker Change: Right now the way a lot of them seen as they're waiting to see what this legislation is going to look like at the end because theres still early days and a lot of it. So they are just moving forward with the projects. We have in 2025 I think it's something comes of that good good or bad we will probably see it in 2026.

Thomas McCormick: I think if something comes of that, good or bad, we'll probably see it in 2026. Okay, appreciate that.

Speaker Change: Okay I appreciate that.

Thomas McCormick: And on the comment in your press release about the multiple natural gas power generation projects. Can you help us with more details on these maybe project sizes, the states where you're seeing these and if any of them are related to the Texas Energy Fund yet? We've got a couple in Texas. We've got one in Oklahoma. We've got some in California. They're anywhere probably from $70 million to $300 million. I'm looking at Ken for acknowledgement. All those projects are in the field. And we're looking probably at another four or five. It really just depends on security of surety of supply for the clients on the turbines and the equipment because they supply it.

Speaker Change: Comment in your press release about the multiple natural gas power generation projects.

Speaker Change: Can you help us with more details on these maybe project sizes, the states, where you're seeing these and if any of them are related to the Texas Energy fund yet.

Speaker Change: Well, we've got we've got a couple of taxes, we got one in Oklahoma, We got southern California, there anywhere probably from $70 million.

Speaker Change: $300 million Im looking again for acknowledgment.

Speaker Change: They are all those projects are in the field.

Speaker Change: And we were looking probably another four or five it really just depends on security of surety of supply for the clients on the turbines on the equipment because they supply they provide all that equipment on.

Thomas McCormick: They provide all that equipment on the future projects and what their timing might be. But those projects are all underway right now and they're going pretty well. Extremely well actually. Okay, appreciate the response and thank you.

Speaker Change: On the future projects and what their timing might be but those projects are all underway right now and they are going pretty well extremely well actually.

Speaker Change: Okay I appreciate the responses. Thank you.

Joseph Osho: And your next question comes from the line of Joseph Osho with Guggenheim Partners, your line. Good morning, everybody. Thanks for taking my questions. I have two.

Joseph Osha: And your next question comes from the line of Joseph Osha with Guggenheim Partners. Your line is open.

Joseph Osha: Good morning, everybody. Thanks for taking my questions I have two first looking at that very strong cash flow outcome in Q4.

Ken Dodgen: First, looking at that very strong cash flow outcome in Q4, some of that may have kind of been one time, but I'm wondering what that tells us about, you know, how we should think about operating in pre-cash flow going forward. Thanks. Yeah, Joe, look, it was a really good quarter. We had about 100 million pulled forward from Q1 of this year. So that was helpful. And the rest was just driven by really two things. First of all, good upfront customer payments related to contracts that were signed in both Q3 and Q4. And the strongest, the contracts that had the most, the best upfront payments for us are our renewables contracts.

Joseph Osha: Some of that May have kind of been onetime, but I'm wondering what that tells us about the.

Joseph Osha: How we should think about operating and free cash flow going forward. Thanks.

Joseph Osha: Okay.

Joseph Osha: Yes, Joe look it was a really good quarter, we had about $100 million pulled forward from Q1 of this year. So that was helpful and the rest was just.

Joseph Osha: Driven by really two things first of all.

Joseph Osha: Good upfront customer payments related to contracts that were signed in both Q3 and Q4.

Joseph Osha: And the strongest the contracts that add the most the best upfront payments for US are our renewables contracts and second behind that is our heavy civil contracts, but renewables was the big driver this quarter.

Ken Dodgen: And second behind that is our heavy civil contracts. But renewables was the big driver this quarter. And then secondly, it was just good financial performance. You know, Joe, we talked about this in the past. We put some initiatives in place starting about a year ago to work on improving our AR and our CIE. And this quarter, we started seeing some of the benefits of that. And we expect to continue to gradually see benefits from that as we move through 25 and 26. So feeling really good about the initial progress, and we're going to continue to work on it.

Joseph Osha: And then secondly, it was just good financial performance.

Joseph Osha: Joe we talked about this in the past we put some initiatives in place starting about a year ago to work on improving our our NRC I E.

Joseph Osha: This quarter, we started seeing some of the benefits of that and.

Joseph Osha: And we expect to continue to gradually see benefits from that as we move through 'twenty five and 26, so feeling really good about the initial progress and we're going to continue to work on it and Thats. The reason were but because of that $100 million got pulled in from 2025 Thats. The reason were kind of going to kind of normalize in the 20% to $200 million to $225 million range.

Ken Dodgen: And that's the reason we're, but because of that 100 million that got pulled in from 2025, that's the reason we're kind of going to kind of normalize in the 20 to 200 to $225 million range in 25. Okay, thank you.

Joseph Osha: <unk> 25.

Speaker Change: Okay. Thank you and then my other question is relates to DSS specifically what are you. What are you hearing regarding the impact of tariffs on that business because obviously the.

Ken Dodgen: And then my other question is relates to DESS specifically. What are you hearing regarding the impact of tariffs on that business? Because obviously, the sell element of those projects is very tariff sensitive. Are any of your customers talking to you about their tariff concerns in that area specifically? I think they're pretty much in a wait-and-see right now for the projects we have under contract. They've bought that gear, so they're not really worried about that going forward. Again, I think it would probably be something that may affect projects in 2026, but a lot of what we hear, they're hearing the same thing.

Speaker Change: The sale element of those projects is very tariff sensitive or any of your customers talking to you about their tariff concerns in that area specifically.

Speaker Change: I think they're pretty much in a wait and see right now for the projects we have under contract. They bought those that gear. So theyre not really worried about that going forward again, I think it would probably be something that may affect <unk>.

Speaker Change: Projects in 2026th but a lot of it what we hear they are hearing the same thing a lot of this is a negotiation employed by our government. So they just youre going to charge us. The tariff went our youth charge you want so theyre really just sitting there in a wait and see kind of mode.

Ken Dodgen: A lot of this is a negotiation employed by our government, so they're just, you know, you're going to charge us a tariff, we're going to charge you one, so they're really just sitting there in a wait-and-see kind of mode.

Ken Dodgen: And I'm slowing down our bidding and our pricing to work for our clients, I can tell you that. Okay, that's great.

Speaker Change: It's an ongoing down on being in our pricing to work for our clients I can tell you that.

Speaker Change: Okay. That's great. Thank you for the answers.

Adam Thalhimer: Thank you for the And your next question comes from the line of Adam Thalhimer with Thompson Davis. Your line is open. Hey, good morning, guys. Congrats on the strong Q4. I guess the question I've gotten most from clients is on the EBITDA guidance for 2025, you guys for two or three years now have exceeded the initial guidance range for the year. And I'm just curious, what are the puts and takes within the EBITDA guidance? What could push you towards the high end or the low end? Yeah, hey, Adam. Look, a number of different things to be honest with you.

Speaker Change: And your next question comes from the line of Adam <unk> with Thompson Davis Your line is open.

Adam: Hey, good morning, guys. Congrats on the strong Q4.

Speaker Change: I guess the question I've gotten most from clients is on the EBITDA guidance for.

Speaker Change: 2025, you guys for two years or three years now have exceeded the.

Speaker Change: Initial guidance range for the year and I'm just curious what are the puts and takes within the EBITDA guidance with what could push you towards the high end or the low end.

Yes, Hey, Adam look.

Speaker Change: A number of different things to be honest with you.

Ken Dodgen: There's always a little bit of risk in our business just because we're in construction, but with respect to the upper end of the range, and maybe even exceeding that range, storm work is obviously one of the keys. We never put storm work in our guidance, yet we had essentially 30 million of EBITDA benefit related to storm work in 2024. I think continued strong closeouts in renewables and in renewables projects will be a potential driver to the upside. Same thing for power delivery projects. And then lastly, if we can just continue to drive higher power delivery margins, as we continue to work on improving and streamlining those operations.

Speaker Change: Theres always a little bit of risk in our business just because we are in construction, but with respect to the upper end of the range and maybe even exceeding that range storm work is obviously one of the keys, we never put storm work in our guidance, we had essentially $30 million of EBITDA benefit related to storm work in 2024.

Speaker Change: I think continued.

Speaker Change: Strong closeouts in renewables and.

Speaker Change: And.

Speaker Change: In renewables projects.

Speaker Change: A potential driver to the upside same thing for power delivery projects and then lastly, if we can just continue to drive higher power delivery margins as we continue to work on improving and streamlining those operations.

Ken Dodgen: Okay.

Speaker Change: Okay.

Ken Dodgen: And then I wanted to ask about the communications market. That seems like it's a bright spot in terms of growth. Curious what you're seeing there in terms of data centers and fiber to the home. Well, we're seeing a lot of opportunity. One thing, we've seen such an uptick in that work with clients that we work with that we've been able to actually be fairly selective in picking our clients, to have reasonable payment terms and margin expectations for their contractors. There's quite a bit of work associated with these data centers that we're being given the opportunity to look at and perform, and then you've got the fiber rings around cities, and then the fiber to home.

Speaker Change: And then I wanted to ask about the communications market that seems like it's a.

Speaker Change: A bright spot in terms of growth.

Speaker Change: Curious what youre seeing there in terms of data centers and fiber to the home demand.

Speaker Change: Well.

Speaker Change: Seeing a lot of opportunity one thing we've seen such an uptick in that in that work with clients that we work with that we've been able to do to actually be fairly selective in picking our clients that reasonable payment terms and margin expectations for the contractors, there's quite a bit of work associated with these data centers that were being given the opportune.

Speaker Change: To look at and performance.

Speaker Change: Fiber rings around cities, and then fiber to home Theres, just a lot of opportunity there that we're that we're actually being able to price a bid for our various client so the.

Thomas McCormick: There's just a lot of opportunity there that we're actually being able to price and bid for our various clients. So, the outlook for the year is very good.

Outlook for the year is very good.

Unknown Executive: Thanks, guys.

Speaker Change: Thanks, guys.

Brent Thielman: And your next question comes from the line of Brent Thielman with DA Davidson. Your line is Thanks.

Speaker Change: And your next question comes from the line of Brent Thielman with D. A Davidson your line is open.

Brent Thielman: Hey, Thanks, good morning, guys.

Thomas McCormick: Good morning, guys. Tom, you talked about shifting transmission resources in support of these renewables projects. I was wondering if that's more isolated to the projects you're working on. Is that becoming more of a prerequisite to compete? And if so, does that mean you need to allocate more of those resources going forward toward renewables? Really, Brent, we have a number of renewables projects that have substations and interconnect work on them that we're self-performing more and more of that work. There was a time when our clients were giving that work to third parties and managing it under separate contracts.

Brent Thielman: Tom you talked about shifting transmission resources and supported.

Speaker Change: Renewables projects I was wondering if thats.

Speaker Change: More isolated to the projects Youre working on is that becoming more of a prerequisite to compete and if so does that mean you need to allocate more of those resources going forward towards renewables.

Speaker Change: Really we have we have a number of renewables projects that have substations and interconnect work on them that there were self performing more and more of that work. There was a time when our clients were giving that work to third parties and managing it under separate contracts more and more of our clients are seeing that they can they can put that under our contract.

Thomas McCormick: More and more of our clients are seeing that they can put that under our contract, and then they have a one-stop shop or EPC that can do the total project build-out for them. It actually allows us to focus and build on the competencies in that group and expand what their capabilities are. We're working to improve margins and power delivery across the board, so being able to focus it with that group right there and do that work internally and demonstrate and build that skill set up, it's just an opportunity for us. Okay, but Tom, you don't see that as handicapping your ability to kind of ramp up the power delivery.

Speaker Change: And then I have a one stop shop of our EPC that can do total project. The total project build out for them.

Speaker Change: Actually allows us to focus and build on the competencies in that group and we expand what their capabilities are so we're working to improve margins in power delivery across the board so being able to focus it with that group right, there and do that work internally and demonstrate that and build that skill set up.

Speaker Change: It's just an opportunity for us.

Speaker Change: Okay, but Tom you don't see that as handicapping your ability to kind of ramp up the power delivery.

Thomas McCormick: Transmission work and power delivery moving forward, because you've got those resources allocated to this project. Absolutely not. We don't see it as a problem at all. It's just a building block for us and we're actually adding resources and building capabilities within that group right now to step out. So, you'll see us step out on some projects this year that are not associated with renewables work and we'll continue to build on that. Got it.

Speaker Change: Transmission work in power delivery moving forward, because you've got those sources allocated to those projects.

Speaker Change: Absolutely not if we don't see it as a problem at all it's just a building block for us and we're actually adding resources and building capabilities within that group right now to step out so you'll see us step out on some projects. This year that are not associated with renewables work and it will continue to build on that.

Speaker Change: Got it and then Tom on pipeline.

Thomas McCormick: And then, Tom, on pipeline, I mean, your comments on activity potentially picking up later in the year, I just was curious what you're hearing from customers. Do we need to see more regulatory reform in order to motivate that? Or do you think the actions sort of today, maybe along with just more confidence? of your customers right now under new administration. Is that enough to get projects moving again? Well, I think what's getting projects moving is you're starting to see some, you know, from a regulatory standpoint, maybe you see some LNG projects start being discussed and talked about or expansion of LNG facilities, you know, if you're going to build power generation, the natural gas power generation, you're going to have to get gas to those facilities or increase the line sizes for those facilities.

Speaker Change: Comments on activity potentially picking up later in the year.

Speaker Change: Im curious what youre hearing from customers do we.

Speaker Change: Do we need to see more regulatory reform in order to motivate that or do you think the actions to date, maybe along with just more confidence.

Speaker Change: Do your customers right now under New administration is that enough to get projects moving again.

Speaker Change: Well I think it was getting projects moving as youre starting to see some.

Speaker Change: From a regulatory standpoint, maybe you see some LNG projects start being discussed and talked about our expansion of LNG facilities.

Speaker Change: Going to build power generation natural gas power generation, you are going to have to get gas to those facilities or to increase the line sizes for those facilities a lot of thats driving those discussions and then you've got it.

Thomas McCormick: A lot of that's driving those discussions. And then you got to, you know, then you start thinking about what's the timing of those facilities coming online, because obviously you have to have gas, the facility, the pipeline to facility before you can start commissioning and starting it up. So a lot of that is driving that right now. Got it.

Speaker Change: So you start thinking about what's the timing of those facilities coming online is obviously you have to have gas to the facility of the pipeline to the facility before you can start commissioning and starting it up so a lot of that is driving that right now.

Speaker Change: Yes.

Speaker Change: Got it thank you.

Unknown Executive: Thank you.

Jerry Revich: And your next question comes from the line of Jerry Revich with Goldman Sachs. Hi, good morning.

Speaker Change: And your next question comes from the line of Jerry Revich with Goldman Sachs. Your line is open.

Speaker Change: Hi, Good morning, this is Adam on for Gary today.

Adam: This is Adam on for Jerry today. Utilities margins, I think we're 10.6% in 2024. And I know you had some weather benefits supporting those results, but it sounds like you'll benefit next year from several rate case decisions in the second half of the year and another one in 1Q. So how are you thinking about the potential to hit the high end of the 9 to 11% margin target there? Yeah, Adam, it's it's something we're seeing where we think is more and more likely, you know, historically, we've kind of been in the nine to 11% range with, but really kind of really in the high nines.

Speaker Change: Utilities margins I think were 10, 6% in 2024 and I know you had some weather benefit supporting those results, but it sounds like Youll benefit next year from several rate.

Speaker Change: Case decisions.

In the second half of the year and another one in <unk>. So how are you thinking about the potential to hit the high end of the 9% to 11% margin target there.

Adam: Yes, Adam.

Adam: It's something we're seeing.

Adam: We think as more and more likely.

Adam: Historically, we've kind of been in the 9% to 11% range with but really kind of really in the high nines. This year, we're expecting margins to trip up into the teens, probably low to mid tens if we can execute well and maybe even go above that if we get the benefit of some good storm work during the year.

Ken Dodgen: This year, we're expecting margins to, you know, trip up into the 10s, probably low to mid 10s, if we can execute well, and maybe even a little above that if we get the benefit of some good storm work during the year. Great.

Adam: Great and then on solar can you just update us on your crew count and how much you expect the crew count to grow this year.

Thomas McCormick: And then on solar, can you just update us on your crew count and how much you expect the crew count to grow this year? So teams, if I'm going to be, let Blake correct me, I think we're at 18 teams. We're building our 19th team right now, and we'll continue to build teams. We really don't have, we have a target for, our goal focus this year is going to be to continue to work on improving those margins, because we've seen a little bit of downturn on that, primarily weather driven, and so we're going to focus on.

Speaker Change: So teams.

Speaker Change: And when can we let Blake correct me I think we are at 18 teams. We are building our 19th team right now and we will continue to build teams. We really don't have we have a target for our Gulf focus this year is going to be to continue to.

Speaker Change: Work on improving those margins because.

Speaker Change: We've seen a little bit of downturn on that primarily weather driven.

Speaker Change: And so we're going to focus on.

Thomas McCormick: adding at least probably one or two more clients and adding another team. And if we can add more teams, but the A-teams, the quality teams, then you can see us go as high as 2021. But our focus is on continuing to build and train high-quality teams and then take on more work. You've got to understand now, a team on a project, a solar project, can manage a project anywhere from $70 million to $400 or $500 million. So the span of what they can generate and what that calculates to with respect to revenue is quite broad.

Speaker Change: Adding at least probably one or two more clients and adding another team and if we can add more teams, but the.

Speaker Change: Atms the quality games would then you could see it go as high as 2021.

Speaker Change: Our focus is on build continuing to be built and trained high quality teams and then take on more work you've got to understand how a team on our projects solar project and manage the project anywhere from 70 million to $4 $500 million. So the span of what they can generate a what that result.

Speaker Change: Calculates to with respect to revenue is is quite broad.

Unknown Executive: Great.

Speaker Change: Great. Thanks, so much.

Unknown Executive: Thanks so much.

Drew Chamberlain: And your next question comes from the line of Drew Chamberlain with J.P. Morgan. Your line is open. Yeah, good morning, and thank you for taking the questions.

Joy Chamberlain: And your next question comes from the line of Joy Chamberlain with Jpmorgan. Your line is open.

Joy Chamberlain: Yes, good morning, and thank you for taking the questions start on the renewable side.

Thomas McCormick: Can you start on the renewable side on the auxiliary segments and just kind of see if you can provide any color on how much of the backlog is made up of auxiliary segments and how much you expect for revenue in 2025 there? Yeah, Drew, I don't have backlog broken out here, but from a revenue standpoint, it's going to be about 10% again. We're expecting revenue to continue to grow in that segment to about another 10% this year, and the auxiliary business units, again, are going to be about 10% of that.

Speaker Change: The auxiliary segmenting just kind of.

Speaker Change: If you can provide any color on how much of the backlog is made up of auxiliary segment and how.

Speaker Change: How much do you expect for our revenue in 2025 there.

Speaker Change: Yes, I don't have backlog.

Speaker Change: Broken out here, but from a revenue standpoint, it's going to be about 10% again, we're expecting revenue.

Speaker Change: To continue to grow.

Speaker Change: In that segment.

Speaker Change: Another 10%.

Speaker Change: This year and the auxiliary business units again are going to be about 10% of that.

Speaker Change: Yes, I appreciate that and then.

Speaker Change: Lastly.

Speaker Change: Appreciate the slide in the back of the deck that showed that showed the results versus the targets.

Speaker Change: At the analyst day, and obviously, obviously some really good progress there can you just update us on.

Speaker Change: Your latest thoughts around those targets and whether there may be somewhat stale or if they are one offs and really strong 2024 that just pulling some things forward or how.

Speaker Change: How youre thinking about that going forward.

Thomas McCormick: Well, one, I think we're, I would tell you we're pretty much on or a little bit ahead of plan for what we said we were going to achieve by the end of 2026. And we're actually looking at where now where we're going to go and we're going to take the company and what will be in 2027. So I'm comfortable with where we are. I think we're going to get there maybe a little bit ahead of schedule. But but I think that's a it's still a good plan moving forward.

Speaker Change: Well, one I think were I would tell you we're pretty much on are a little bit ahead of plan for what we said we're going to achieve by the end of 2026, and we're actually looking at we're at now where we're going to go and we're going to take the company and what will be in 2027, so I'm comfortable with where we are.

Speaker Change: I think we're going to get there maybe a little bit ahead of schedule.

Speaker Change: But I think thats still a good plan moving forward, but we're refreshing that plan looking a year further out.

Unknown Executive: But we're refreshing that plan looking a year further out. Okay, thank you.

Speaker Change: Okay. Thank you.

Justin: And your next question comes from the line of Julio Romero with Sidoti. Your line is open. Good morning, this is Justin on for Julio. Thank you for taking So on cashflow, could you elaborate on the key drivers? Capital Results, and share your thoughts on the lower cash conversion cycle in Fiscal 25. Yeah, Justin, I think I touched on this a little bit earlier, but essentially it was, you know, really good upfront customer payments during the year, in particular in Q3 and Q4, and it was continued improvement in our unbilled revenue and the timing to converting it to AR and then collecting on AR as well.

Speaker Change: Your next question comes from the line of Julio Romero with Sidoti Your line is open.

Speaker Change: Good morning. This is Justin on for <unk>. Thank you for taking questions.

Speaker Change: Okay.

Speaker Change: So on cash flow could you elaborate on the key drivers behind working capital results and share your thoughts on the lowered cash conversion cycle in fiscal 'twenty.

Speaker Change: Yes, Justin.

Speaker Change: I think I touched on this a little bit earlier, but essentially it was.

Speaker Change: Really good upfront customer payments during the year, particularly in Q3 and Q4.

Speaker Change: And it was continued improvement in our Unbilled revenue and the timing to converting it to AAR and then collecting on AAR as well so.

Ken Dodgen: So, and between that and pulling forward about $100 million of cash payments from customers at their election, you know, we see 2025 normalizing back to $200 to $225 million. Great, thanks for the color there.

Speaker Change: And.

Speaker Change: That and pulling forward about $100 million of cash payments from customers at their election, we see 2025 normalizing back to $200 million to $225 million.

Speaker Change: Great. Thanks for the color there.

Thomas McCormick: and then on Guidance. Within the growing need for infrastructure investments, could you rank some of the end markets in terms of strength and has that changed up or down recently? Yeah, I don't think we've seen any change. I think it's been fairly consistent to what we've been talking about for the past year or two, which is renewables, empowered delivery behind those. I think it's communications and natural gas generation now, especially over the course of the past year with the strengthening of the gas generation markets. And that's one that's really you got to look at is probably going to have a five plus year run on it, if not longer, just because of how long it'll take to Order the turbines, get them in and get those built out.

And then on guidance.

Speaker Change: Within the growing need for infrastructure investments could you rank some of the end markets in terms of strength.

Speaker Change: That changed up or down recently.

Speaker Change: Yes, I don't think we've seen any change I think it's been fairly consistent to what we've been talking about for the past year or two which is renewables and power delivery behind those I think it's communications and natural gas generation now, especially over the course of the past year with the strengthening of the cash generation markets and Thats.

The one that is really you got to look at it is probably going to have.

Speaker Change: Five year, plus five plus year run on it if not longer just because of how long it will take two.

Speaker Change: Or the turbines get them in and get those built out so thats kind of nice tailwind on that market.

Thomas McCormick: So that's kind of nice tailwinds on that market.

Unknown Executive: Great, thanks. That's all for me.

Speaker Change: Great. Thanks, that's all for me.

Julian DeMoulin-Smith: And as a reminder, it is star one if you would like to ask a question, and your next question comes from the line of Julian DeMoulin-Smith with Jeffries, your line Hi, good morning.

Speaker Change: And as a reminder, the star one if you would like to ask a question.

Speaker Change: And your next question comes from the line of Julien Dumoulin Smith with Jefferies. Your line is open.

Speaker Change: Hi, good morning, its actually Brian Russo on for Julien.

Brian Russo: It's actually Brian Russo on for Drew Lynn. Hey, just to follow up on the commentary on your Texas footprint in particular gas fire generation. What is your competitive position and strength like that? You seem very optimistic about capturing a lot of that expected growth in generation infrastructure. One, we have the expertise internal to the business now, so we have the experience building simple cycle power generation facilities and other facilities for power generation, and a lot, we have a lot of craft in Texas that has that same experience. So it's I think that the market is going to have such a high demand, there's only a few contractors in this market that actually have that ability, that capability, and that expertise.

Speaker Change: Sure.

Speaker Change: Hey, just to follow up on the commentary on your Texas footprint in particular gas fired generation.

Speaker Change: Well.

Speaker Change: As your competitive position and strength like that so you seem very optimistic about capturing a lot of that expected growth and generation infrastructure.

Speaker Change: One we have we have the expertise internally to the business now so we have the experienced building simple cycle power generation facilities.

Speaker Change: And other facilities for power generation.

Speaker Change: And a lot we have a lot of craft in Texas that has that same experience. So it's.

Speaker Change: I think the market is going to have such a high demand and there is only a few contractors in this market that actually have that ability that capability and that expertise. So I guess my my confidence level is based on the fact, we're going to win our share I don't want to win it all I wanted to be careful about how much work I take automate sure were successfully execute safely with the highest quality meat.

Thomas McCormick: So I guess my confidence level is based on the fact that we're going to win our share. I don't want to win it all. I want to be careful about how much work I take on to make sure we're successful, we execute safely and with the highest quality, meeting our clients' needs.

Speaker Change: Our clients needs, but there is enough work out there for us to get our fair share of the market and to probably for it to go for three or four or five years or beyond.

Thomas McCormick: But there's enough work out there for us to get our fair share of the market and probably for it to go for three or four or five years or beyond.

Unknown Executive: Okay, great.

Speaker Change: Okay, great and what could actually which end market can drive you at or above your 2026 targets and specifically in the utility segment, which is where I think you're forecasting the most margin expansion to drive the overall profitability of the company.

Thomas McCormick: And what could actually, which end market can drive you at or above your 2026 targets and specifically in the utility segment, which is where I think you're forecasting the most margin expansion to drive the overall profitability of the company? Yeah, I think it's going to be really one of two areas. It's either going to be communications or power delivery or both. We continue to see strength, as Tom talked about, in communications, in particular around fiber loops and data centers. And so if that continues and continues to strengthen during 2025, there could be some potential upside there.

Speaker Change: Yes, I think it's going to be really one or two areas, it's either going to be communications or power delivery or both we've seen we continue to see strength as Tom talked about in communications.

Speaker Change: Particular around fiber loops, and Datacenters and so if that continues and continues to strengthen during 2025, there could be some potential upside there on the power delivery side I think it's continued strong execution, improving our productivity there I think.

Thomas McCormick: On the power delivery side, I think it's continued strong execution, improving our productivity there. I think it's increasing our mix of project work there. And lastly, it's the opportunity to pick up some storm work that we don't have in our guidance.

Speaker Change: Increasing our mix of project work, there and lastly, it's the opportunity to pick up some storm work that we don't have in our guidance.

Thomas McCormick: Okay, great. And then just lastly, when you do shift resources from power delivery to solar, I assume Margin Enhancing. Well, to be clear, it's to pick up specific scope that solar doesn't have the capability to do. It's building the substations, the interconnect, or the transmission associated with those facilities. So it's very specific to the skill sets of the power delivery craft, and yes, they do make good margins in executing that work.

Speaker Change: Okay, Great and then just lastly, when you do shift resources from power delivery to solar.

Speaker Change: Soon.

Speaker Change: It is margin enhancing.

Speaker Change: Well to be clear is to pick a specific scope that solar doesn't have the capability to do it is building the substations to interconnect or the transmission associated with those facilities. So it's very specific to the skill sets of the power delivery craft and yes, and then they do make they do make good margins in executing that work.

Thomas McCormick: Okay, great.

Speaker Change: Okay, great. Thank you very much.

Unknown Executive: Thank you very much.

Thomas McCormick: And this concludes our question and answer session.

Speaker Change: And this concludes our question and answer session I will now turn the conference back over to Mr. Tom Mccormick for closing remarks.

Thomas McCormick: I will now turn the conference back over to Mr. Tom McCormick for closing. Thank you, Abby. I want to again congratulate our employees who contributed to a great year in 2024. I'm proud of the men and women of Primoris for their safety, operational, and financial performance, and I'm excited to see them build on this success in 2025. Thank you to those who joined us today. We appreciate your time and interest in Primoris, and we look forward to updating you on the business next quarter. And ladies and gentlemen, this concludes today's call and we thank you for your participation.

Tom McCormick: Thank you Abby I want to again congratulate our employees, who contributed to a great year in 2024.

Tom McCormick: I'm proud of the men and women of Morris for their safety operational and financial performance and I'm excited to see them build on the success in 2025.

Tom McCormick: Thank you to those who joined US today, we appreciate your time and interest in for Morris and we look forward to updating you on our business next quarter.

Tom McCormick: And ladies and gentlemen, this concludes today's call and we thank you for your participation you may now disconnect.

Unknown Executive: You may now disconnect.

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