MasTec, Inc. Aktie

Good morning, everyone, and welcome to MasTec's 2026 Investor Day. Thanks for coming. We have a packed room today, and I appreciate everybody's attendance.

First, a housekeeping. Everybody's favorite, the safe harbor statement. We have today, we're going to be talking about forward-looking statements. which relate to MasTec's expectations and trends in the industry in areas where we operate. These expectations may be varied based on subsequent risks or changes in circumstances beyond today. Our forward-looking statements are only available and accurate as of today. So anything that happens subsequent is subject to the rest that are disclosed in detail in our 10-K, our 10-Q and our subsequent SEC filings. Please make note of those.

There is a presentation for the webcast audience that will be posted as soon as the live presentation is over this afternoon. So you can download that after that. But let's get started. Today's agenda, we're going to have a lot of great speakers I think you're going to meet some people you haven't met before. We're going to have, [indiscernible] starting us off with a little overview of his comments and then we're going to have Bob Apple. Many of you have not met Bob Apple. He's our COO for the last 21 years. He's assembled a great team, and we're going to have a discussion with 6 of those presidents later in the day.

The first group of group presidents is going to be communications, our power delivery in our pipeline, then we'll have a Q&A session after that. We'll have a short break, and then we will follow up with our Clean Energy and Industrial Infrastructure group. So we'll talk about several things there, but it's going to be a great day, and we're excited to have you here.

I mean, I've been with MasTec. This is my 25th year in Investor Relations. It's been a phenomenal ride. It's a great time to come back and be talking about MasTec. So much is happening as it affects all of our businesses. We're really hitting on all cylinders. So it's really a great time for MasTec. When I started in April 1 of 2002, the market cap of the company was $100 million. This week, it's $33.5 billion, which is a 335x increase. The stock was $2.55 when I started. It was last week, we hit an all-time high 441, and we still have a lot of juice in the story. So we're excited about what we have to talk about today. And I'm going to turn the call over to -- I mean, the presentation over to Jose Mas, our CEO.

Good morning, and welcome. So first of all, thank you for being here with us today. I know you've taken out a few hours of your day to hopefully learn a little bit more about MasTec, our story. We're excited to be able to present it to you. I think one of the really interesting parts of today is a lot of you get to spend a lot of time with me and Paul, either at conferences or one-on-ones, but you don't get to spend a lot of time with the rest of the MasTec team. So we've got a pretty extensive team here today. They're going to be around all day. There's going to be a lunch after. So I encourage you, if you get time, please introduce yourself please get to know them, ask them about their business as many of them will present. So you'll hear from them. But if you get a chance to spend some one on one time with them, I think it will be extremely valuable.

Why did we decide to do today's Investor Day? Because we really haven't done 1 in a long time. And other than just doing an Investor Day, there's a reason there's a purpose, right? And for me, I've been in this business a long time. I've been CEO of MasTec since 2007. And I view today as a generational opportunity. I view today as a once-in-a-lifetime opportunity for myself and our company. And I say that because I think that's how strong and durable the market that we're in is today, which to me is I have almost a hard time believing that we've spent the last almost 20 years building a company, and it's all coming together as we speak.

Today, you're going to hear from a lot of people, they're specific businesses and why they're excited and I hope at the end of the day, you feel the same way that I do. Today isn't just about financials. You hear that in all our calls. We do a lot of disclosures on our financials. It's more about learning about the company. What makes MasTec different? What's our desire to win, our hunger, where does that come from? What's the soul of MasTec, I hope you get that today. I hope you feel why we think we're different, what we think makes us different to learn a little bit about our strategy. But most importantly, to really get to know our people because it's our greatest asset as a company.

Let me be clear, the greatest asset that MasTec has isn't our financials or our equipment, it's our people. The people that you'll meet and the nearly 40,000 people that we get to represent. Let's move into our slides. Today, MasTec, we view ourselves as a platform of diversified businesses, participating in the greatest infrastructure cycle in U.S. modern history. That's where I think we are.

At a time where as a company, we feel we have tremendous opportunities to expand our margins. We've done a good job. We're just getting started with respect to that. And again, as we think about today, Again, while it's not about financials, we're going to lay out some targets, and I hope what you come away with is our confidence and our conviction around those targets. We feel really good about where the business is today. let me go back. Today, we participate and we're going to talk about 3 specific and 3 of the largest infrastructure cycles in U.S. history, and they include AI-driven power demand. We're going to talk a lot about that today. Broadband universalization -- within our comms business, we're going to talk a lot about that and where we see that going and everything, energy transition related because I think it touches all of MasTec.

But I think what gets lost in our story is we're doing this, and we're participating in these cycles, while our internal margin story is only halfway through a multiyear inflection. And I think that's important because not only is the business doing great, but we're at a point where our margin capacity and growth is only beginning. What makes us different. We've been perceived as a cyclical contractor for a long time, our whole industry. Today, we view ourselves as a scarce, scaled infrastructure capacity platform, what all those big words mean, right? And with that, we got growing multiyear backlog meaningful operating leverage. So a highlight.

What does that mean? While all of our segments are different, and we often get asked, why are you in pipeline versus power delivery or comms, what makes these businesses come together. What are we good at? And we think we have expertise first and foremost, in managing projects. We think we have expertise in building a great workforce of skilled craft labor, and deploying them at scale, scale, very important. It's what very few have nationwide scale. We think we're good at seeing trends in our business where capital inflow is coming and being able to deploy resources to take advantage of that.

From our origins and telecom, to our growth into industrial and infrastructure, renewables, pipelines and all things energy and most recently, including data centers. MasTec can perform any project for any customer anywhere, based on that increased capacity platform we've built. That's the opportunity that MasTec sits in today. Let's talk about how we got here, and let's talk about our roots a little bit because I think to understand MasTec, you need to understand our story. You need to understand what motivates us, what drives us, what makes our culture different than others.

My father came to this country in search of freedom and a better life. It was a [indiscernible] immigrant, penniless, unable to speak to language -- he eventually found a company called Church & Tower, which is what became MasTec. The story is core to our values. It drives our hunger to win, our hunger to excel. We know we've been giving an incredible opportunity in life. We want to make the best of it. We talk about giving every MasTec team member the same opportunity that my father had. You come to MasTec, you improve your life of your family. To me, from all of our speakers today, including myself, -- that is our greatest responsibility to make sure that everybody that comes in the MasTec has the opportunity to build a better life for them, for their family and achieve their full potential and their own American dream. That drives the culture of MasTec. We talk about that all the time.

And in doing that, we recognize and we appreciate the greatness of this country because MasTec is the reflection of the American dream. And we live in an incredible country, in my opinion, the greatest on earth. And that's important to us, and it's important that we talk about our story to our internal people and to our shareholders. You'll see the years -- we started here in 1969. In 2018, it was the first time we were named to the Fortune 500 list, which was an incredible moment for our company.

And when we did that, we actually took out an ad in the magazine I think back then, they were still printing you still like people actually still had a copy of the magazine. But we took out an ad and the ad is the one that you see here up to the right. And I want to read what we put in that ad because I really believe that it gives you the sense of who MasTec is and it was a letter. And the letter was written by me, signed by me in the bottom, the title of letter said only in America, and it reads, since you might not be able to see it. fleeing the tyranny of Caminis Cuba. My mother and father came to this country in the 1960s with nothing more than their faith in God, a thirst for Freedom and a strong work ethic. They spoke no English, they had no money and lacked any business connections to help launch their new life.

My father struggled to provide from my mother my brothers and me, working as a stevedore, a shoe salesman and a milkman while learning the language. His tenacity and determination ultimately led him to found MasTec. Only in America could this penniless immigrant stream lead to a Fortune 500 company. While we are proud of this achievement, the real celebration is one of America, which welcomed our parents and gave our family and MasTec the opportunity to flourish and prosper. MasTec is the American dream. On behalf of my family, and at the time, the almost 20,000 MasTec members today, the 40,000 MasTec members, we thank this great country for giving us the opportunity to succeed. God Bless America.

Again, I read that because I do think it's core to our culture, to our people, what makes people stay at MasTec, what makes people want to be at MasTec? A huge driver of how we feel, a huge driver of our desire to win of our hunger of how we want to keep achieving great things. So how have we done? We had this incredible opportunity. What do we make of it? So let's start with some historical facts. You'll see that and again, this is since 2007, so it was a year that I had the opportunity to become CEO of the business. We've taken revenues from just under $900 million, and we've guided revenues for 2026 of $17.5 million. We've taken EBITDA from just under $60 million to this year, expected $1.5 billion. We've taken EPS from $0.48 to this year's expected $8.79. Why am I showing you this?

One, obviously, we're very proud of our results. But two, I really believe that MasTec and more importantly, our industry in general, I think our success gets overlooked. I think there are a few industries and companies that over a 20-year period can deliver 17% to 19% CAGR over a 20-year period, and we've done that.

More importantly and more excitingly is the fact that we're entering the greatest time in our industry. Let's talk about the more recent history of MasTec because I do think MasTec is a very different company today than it was in 2020. And in 2020, we were coming out that we were starting in the pandemic. 2019 was a record year for MasTec at the time, primarily driven by our pipeline business. Our pipeline business represented nearly 50% of our EBITDA as a company. Pandemic hits, obviously, the thought is we're never going to need another pipeline again. We have the entire energy world going to decarbonization. The green energy deal comes alive. And the truth is that MasTec is a fringe player at the time. We're a niche player in the energy market. So we worked really hard during 2021, 2022 and 2023 of further diversifying our business, expanding our resources and making energy and all things energy transition a much bigger part of our story. And this is where we are, $6.3 billion in revenue in 2020, $17.5 million in 2026.

More importantly, our standing in those businesses the perception of Mastek within the Energy business today is radically different. I think we are clearly viewed today as the #2 player across all things energy. Now where we want to be. Because believe me, we want to be #1. But clearly, from a niche player in 2020 to a top player in 2026.

Let's talk about why MasTec wins. What makes Mastek different? What are our strengths, competitive advantages, let's call them moats. And it starts with a skilled labor resource. Parts with our people on the field. It is our most important asset by far, and we'll get into that. Our fleet is important. We have nearly a $4 billion fleet at MasTec that we can deploy at scale nationally. Scale and national platform, it's an incredibly important competitive advantage of MasTec. And we've built that over a very long period of time.

And finally, we have incredible partners. Our customers, we have partners. And I view all 4 of these as huge competitive advantages. Let's dive into each one of them for a second. Let's talk about our people, nearly 40,000 people. We can scale this workforce. We've got great supervision, great management. We've got people that have been here a long time. And as I was thinking of how I could describe this, I actually looked for a word. And I found the word called inimitable -- and I got to be honest with you, I had no idea what the word was. But I'm going to give you the definition because maybe some of you don't know what it is either. Maybe some of you are smarter than me and you know the word well. But the definition is that it's so good or unusual. It's almost impossible to copy, inimitable.

Ladies and gentlemen, today, I feel that our workforce is inimitable. It is the strength of our company. It is what drives our business. For a long time, in our business, labor was viewed as a commoditized product. Labor was viewed as a commodity. Well, let me tell you, I didn't happen anymore. Labor is at the core of everything that we do. It is the most important asset at MasTec, and we feel great about our ability to train, to bring on board and to deploy labor at scale.

Equipment, $3.5 billion fleet, somebody invests $3.5 billion, can they replicate our fleet, maybe, but it would take them decades. Because aside from the money, it's the relationships that we've built. It's the vendors that we have. It's where we stack. When we need a piece of equipment, we're getting it before anybody else. So as the market grows, -- we're going to be at the top of the line with our key vendors making commitments, labor, equipment, massive competitive advantage. The size and the cost of our fleet at book value originally right, is a huge competitive advantage.

Let's talk about our partners. We enjoy incredible relationships across all of our different segments and lines of businesses with customers that we've been with for 60, 70 years. We have a number of alliance agreements. We sit down with our partners, and we plan for the future. not for a job next month, not for a job next year, but for a decade long cycle of what their plans are, of how we're engaged, of how we can help them. That is also very different today in MasTec than it's historically been. And we're proud of that. We're also proud that once upon a time, when I started as CEO of this company, 50% of our revenues came from 1 customer, 50% from 1 customer. Today, our top 10 customers make less than 30 -- make up less than 35% of our total business. We have incredible customer diversification. We have incredible customer strengths and our average tenure with customers is long and sticky and that's important.

Let's talk about our scale. This is the map of where MasTec has offices. We have over 800 locations nationwide. I'll put this map up against anybody. Our ability to execute for customers anywhere they are at any time is almost unmatched. -- again, massive competitive advantage. What's next? What's our next most important investment that we're making on MasTec. It's the onboarding of the next generation of skilled labor. And we do it a little different. We do it through 35 different training centers across the country that are mapped here today for you. We put thousands of people through those training classes.

In the first quarter, year-over-year, 26 to 25, we grew by 6,000 people. Sequentially, we grew by 2,000 people. We do that. Sometimes, we hire people that are already experienced and don't go through long periods of training. But many times, we put people through full training courses. We hire, we train them, we get them ready and then we deploy them. That's our strength. That's what we do well. We have a national apprenticeship program that's certified by the U.S. Department of Labor also very important because it gives us the ability to get grants and to offset some of the investment that we have to make in our own people. So we're excited about this. We think we do this well. We think this is an important part of our future.

So why is all that important? We talk about skilled workforce, moats, scale, equipment training. Why does any of this matter? Because we're entering the largest growth cycle in our company's history. It matters now more than ever. So this slide is today what we view in 2026 as our total addressable market. As you'll see, we think we operate in a market that $685 billion in 2026. You'll see that of that, we only represented $14.3 million. These are '25 numbers. Our market share is 2%. So what does that tell us? It tells us, a, that we're still in a highly fragmented business. And we have multiple different opportunities. Our market is growing. Yes, that's going to create a lot of opportunities. But -- there are other opportunities to win market share, to consolidate. And even more importantly, I would argue and one of the reasons why we're so excited is where we see TAM going. That $685 billion that we see today, we think is over $1 trillion a year by 2030.

Every one of those segments is represented. I'm not going to go through them all in all those boxes. Every segment we expect to have significant total addressable market between now and 2030. Accumulated over the time frame up to 2030, we see $4.6 trillion in our total addressable market of MasTec services. It gets us really excited. I'd like to talk a little bit about what's driving that total addressable market growth, but I don't want to be repetitive because all of these individual sections in this chart, they're going to be talked about by our leaders. They're going to go into a lot of depth into what's driving the businesses. But I would like to touch on some highlights. In our Industrial and Infrastructure business, we built an incredible platform over the years, something that business that, quite frankly, we weren't even in that long ago. And yet today, we're a serious player on all things civil. When we look about industrial and we see what's happening with gas-fired generation and what's coming, we think we're in the middle of that. We'll talk about it today.

We're going to talk about our general buildings and data center group, which is a more relatively newer part of the MasTec story and all that's happening there. Data centers is obvious. We'll spend time on that today, mission-critical work, airports, hospitals. It's a different MasTec today. And the beauty of this business that we'll also get into is we can grow this business at scale with very few people. You will see the history of their growth over their short time frame and how many people they had to do it with. And you'll see the revenue per employee in that business, it's shocking. So we can deploy this business at scale with few people anywhere in the world.

We're going to talk about our renewables business. our wind business, solar business, storage business, the trends that are happening in that business, how that's still an extremely cost competitive power generation source, not just now but in the future, well beyond 2030.

We're going to talk about our power delivery business and the opportunities there related to distribution, transmission, substation, system hardening, the growth to meet the incredible power demand that we see. We're going to talk about our communications business. The fact we see data growing at almost doubling between now and 2030, we're going to talk about middle mile and fiber builds and beads and interconnectivity of data centers, which are a lot of the drivers that are driving that business.

Then we're going to talk about our pipeline business, both from a historical context of where it's been and more importantly, where it's going, and how the outview and the outlook in that business has dramatically changed in just a few short years. Very exciting for us.

I'd like to talk a little bit about what joins our business together. What creates the opportunity for MasTec that's outsized? And many times, the segments that you'll hear from today work on joint projects. There will be a project that has opportunities for multiple entities within MasTec, but nowhere, nowhere is that better explained or seen today than in data centers. So I'd like to highlight a data center as a multidimensional project opportunity for MasTec. And we're going to start with general construction and the ability to program manage an entire job, which we'll get into more details later.

But when we think about those projects, they require civil infrastructure Somebody has to come in, they have to clear the land, they have to build the roads. They have to build the pads. Somebody's got to build the substation on site. They got to run the power, the communications, the water to the buildings, somebody builds the buildings. All of those things, MasTec touches from our Civil Group upfront, to our power delivery team delivering power, our communications team, delivering connectivity, our pipeline group, providing gas for gas-fired generation of future data centers who are General Buildings Group. That's hopefully going to build a lot of this. So it is the perfect project.

Quite frankly, when I think about how the business has changed and where we sit today, I feel like we built this company for this opportunity. There has never been an opportunity in the history of MasTec that fully integrates our services the way a data center can. And we're just getting started there. Very exciting. So what does this all mean? I know everybody wants to talk a little bit about numbers. So we decided today to put our first look, and Paul is going to cover this in a lot of detail later of what we think our 2028 numbers look like.

Why are we picking 2028? A, because we want to create a baseline. A lot of our analysts in the room have a wide range of numbers for 2028. We wanted to create the floor. So I think the growth beyond '28 is massive and great. The answer is yes. But everybody could have a different view on that as to what that rate should be. But as of '28, we've talked about conviction and confidence in numbers. We have high conviction and confidence in these numbers.

More importantly, more importantly, these are organic numbers. This is what we expect to generate in 2028 organically, no M&A, $22 billion in revenue, $2.2 billion in adjusted EBITDA and $15 or better of EPS. No M&A. We're going to come back to that later.

When we think about our history, where we're at and where we're going, this is phenomenal. Again, this more than doubles almost triples our EPS from 2025.

So to conclude my opening remarks. Today, we view ourselves as a scarce scaled infrastructure capacity platform, doesn't matter what we do in a market that's growing at a level we could never have imagined before with growth, durability and consistency. Our projections are rooted in our backlog, not just the backlog that you see, not just the numbers that we represent, but all of the other conversations we're having with our customers. about their plans, their long-term look, verbal awards, expected awards, expected bids, pretty incredible what's happening. We're just as excited about the margin opportunity that exists before us because through that growth, we will leverage our business. We will find ways to get better. We've proven it.

We are going to have an incredible opportunity for capital deployment, which we will also talk about later which will become a very important part of our story. So I couldn't be more excited about where MasTec stands today. Couldn't be more excited about the path that we've taken and where we sit, and I 100% -- without a doubt in my mind, today, believe that for MasTec, the best is yet to come.

So with that, I would like to bring up Bob Apple, our Chief Operating Officer. And as Mark said earlier, Bob has been our COO during my entire tenure as CEO of MasTec. And many of you haven't had a chance to meet him. You haven't had a lot of spend a lot of time because he's focused on running the business. So we purposely have kept our operators away from investors. It's not their job. Their job is to run the business and to build a machine that excels. And Bob has done that over a long period of his career. So today, you get to spend some time with Bob and our rest of our leaders. Thank you very much.

Good morning. So I'll get the honored to introduce our 6 operating group presidents. But before I do that, I'd like to touch on our philosophy and operating our philosophy and leadership and our philosophy and safety. A little bit about my story. I'm the United States [indiscernible] Academy graduate. My father is an Academy graduate, word-war 2 Hero. His only brother was Academy graduate, Killed in the [indiscernible] war and a son that he never knew grew up with me and my cousin and I went to the Naval Academy together and graduated together. And I'm proud to say that my Nephew's son is entering the Academy this summer.

I always wanted to be a marine fighter pilot. So 10% of the class go become marines. I was commissioned a second tenant. I went to inventory school, and I went on to Army Airborne school and eventually to flight school. And in Flight School, I learned my first leadership lesson, which was take a chance on somebody, you might be surprised. I had plenty of mentors in flight school that took a chance on me and I graduated as a fighter pilot and entered my first gun squadron in El Toro, California. And flew F4 as a Board [indiscernible]. I was selected naval fighter weapons school, Top Gun. I graduated from Top Gun, [indiscernible] and some of our classified programs.

I'm a WTI weapon tactics instructor and a low altitude tactics instructor. And one of my greatest honors was I was selected 1 of 5 pilots in the fleet. -- to work with the engineers at McDonald Douglas for the man in the loop design of the F-18. And I flew the first F-18 to its first [indiscernible] first [indiscernible], Coral Sea. I retired Lieutenant Colonel, made the transition to industry. It was relatively easy for me because I joined Hughes Electronics and Hughes made most of the weapon system of the F-18. I was a program manager and their classified programs. And then I got the opportunity to run [indiscernible] for them. And when I finish there, I ran DIRECTV operations.

I joined MasTec, as Jose said, 21 years ago. I've also been an independent outside director for another Fortune 500 company and Chairman of the Board of that company for 5 years, operating, leadership and safety. Operating philosophy for us is pretty straightforward. It's line management. We believe that our group presidents need to own their market, own their customer and own their project performance. As you know, we report publicly in segments, but a segment could have multiple group presidents inside it, and you'll see that today with clean energy and infrastructure where we have 5 -- 3 group presidents.

Leadership. It's my favorite expression again. You heard Jose say that we create opportunities for our team. That's why we believe we're the employer of choice. Take a chance on somebody. You might be surprised. We have 4 key leadership traits gratitude, focus, comradery and goals. Gratitude for us is the most important. We wake up every day grateful for our families, grateful for our loved ones, grateful for our teammates, grateful for our company and grateful for our country. We focus on what's important every day, the team, project execution. And one of my other favorite expressions is don't give up runway because you can't ever get it back.

We build comradery because we believe the safest teams are those that care about each other. And we set goals, not only professional goals, we set personal goals. Safety. Safety is the responsibility of everybody, but it starts with leadership. Strong safety practices drive better outcomes in cost, schedule and quality. It's embedded in how we plan our work. It's embedded in how we measure risk and it's embedded in everything we do in that company, project performance.

Throughout my career, I've seen the impact of high-performance teams. And I'm going to introduce you to that high-performance team, MasTec's leadership team, seasoned operational executives with deep market experience and execution experience. We challenge each other to be exceptional, like steel, sharpened steel. The key to MasTec's execution and financial performance is the operating presidents that I have the privilege of introducing to you. Exact McGuire, power delivery, Rick wars, communications, Bobby boutique pipeline infrastructure. And in our Clean Energy and Infrastructure segment, we have Mark Hellstrom, Infrastructure and Industrial. We have Mike Russell renewables and we have many Garcia Tonon, General buildings.

With that, please welcome Zach McGuire.

Thank you, Bob. Good morning. I'm Zach McGuire. I have the honor to lead power delivery from MasTec. Prior to power delivery, I ran our install-to-the-home business that really helped fuel the diversification strategy from MasTec over the past couple of decades. I was tapped on the shoulder 5 years ago to lead power delivery. And really, the transition worked because the fundamentals of the business are the same. It's a people business. We just happen to build infrastructure.

At MasTec, we protect our people, we protect our customers and we protect our business. We spent a lot of time connecting our strategy to our operations. that enables us to grow the business in this ever-changing market. It's really simple. We build strong teams, complete projects on schedule and most importantly, safely. We are scaled to lead, built to execute and positioned to grow and expand our margins over the long term. So let me walk you through today. why we are set for long-term profitable growth. We are not just participating in a market. We are helping shape it.

We are positioned directly where the capital is flowing today. The demand in power delivery is massive. We are in the midst of a generational shift driven by electrification, data center demand load growth demand and large EPC projects across the nation. Not to mention the fact we are still replacing antiquated 1950 technology nationwide. We're not reliant on one single service, one single customer or 1 end market. The demand intersects perfectly with our capabilities. We have a travel-ready workforce that can be deployed where needed, when needed.

And so today, I'm going to walk you through why power delivery is a compelling business. Today, we are scaled and have true national reach. We are the clear #2 player in the market, as Jose mentioned, with over 12,000 employees, working for almost every major utility. We have strong brand recognition with deep customer relationships. We provide many services for our customers that include distribution, transmission, substation construction, vegetation management, national and regional storm response, traffic control, access and clearing, engineering and professional services and environmental management, just to name a few. This makes us intentionally diversified in power delivery. Our size, scale and operating platform allows us to grow our market share.

So let's talk a little bit about where the spend is coming from. A couple of years -- several years ago, we expanded beyond our traditional utility customers. to include developers and hyperscalers. Their rapid build-out is accelerating the power demand and more importantly, the grid investment.

As you can see, we haven't seen this type of load growth since the 1950s and 1960s. This has allowed us to expand where and how we win work today. The 5-year outlook starting back in 2025, is massive, $1 trillion. But what's more important than that is 75% of that spend is flowing to the work we know the best and do -- and perform for our customers every single day. But we are in the midst of a long-term investment cycle with clear visibility into the future demand.

Now how did we get here? The pandemic really, as Jose mentioned, really reshaped the entire energy landscape. We made a deliberate decision to step in and grow our power delivery business. Back in 2021, we did about $600 million in revenue in power delivery, mainly regional. Through a series of strategic acquisitions, we woke up in 2022 at over $3 billion in revenue. It was extremely important that we integrate those companies, their cultures, their process and procedures and their people to create MasTec power delivery today. What I'm very, very proud of. is this growth as it translated into an annualized 10% growth rate, almost all organic to the nearly $5 billion we'll do this year.

The scale has also allowed us to pursue large EPC projects across the United States. Our Greenlink project in Nevada is a very good example of that. I'll come back to that a little later. So why us? I've already talked about this, but I want to reiterate a couple of key points. We are scaled. Our scale has allowed us to compete for large EPC projects nationwide. We used to just do the construction, but now we can provide full turnkey solutions that include procurement and engineering as well.

Our deep multi-decade customer relationships are very strong. Our travel ready workforce both the workforce, both union and nonunion could be deployed anywhere nationwide. Our nationwide training facilities support our delivery at scale. These come together to unlock the true potential of MasTec. Now let me tell you what we work on to improve our margins. Margin expansion is all about operational execution. But there's also some other areas we focus on. First, starting with project controls. We were able to improve visibility and drive productivity through strong project controls. Second, deploying our fleet efficiently drives better asset utilization. Third, growing our distribution work, which is our bread and butter, provides stable work for our employees and consistent profits.

And lastly, given our capabilities, we're able to be very selective on the EPC projects we pursue. So we're not just chasing volume. We're winning the right work to expand our margins. So now let me take you back to Greenlink. I'm going to show you a quick video of the work that men and women at MasTec do every single day.

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That's where the rubber meets road. Every time I see a video like that or more importantly, visit our job sites -- it's just -- I'm so impressed and proud of the hard work that all the men and women at MasTec do every single day, and that's exactly what keeps us all going.

So back to -- I want to take you back to the Greenlink project. The Greenlink project in Nevada for MasTec was a landmark project. The largest transmission line awarded to date in the United States, over 700 miles of transmission, 12 substations. And one of the substations we're working on is over 356 acres, the second largest substation ever built in North America. This is a job that we couldn't even pursue just a couple of years ago, let alone win.

We invested a lot of time upfront with our customer, which led us to win an MSA contract and build trust over time. Now we are their trusted partner on a multiyear complex transmission project. This isn't a onetime win for MasTec. This is a repeatable, competitive advantage, a direct result of the platform that we have built in power delivery. So what I want to leave you with today is we are in an unprecedented market. We are perfectly positioned to deliver for our customers and our shareholders.

As I mentioned before, we are scaled to lead, built to execute and position for the long term. Thank you very much. I would now like to introduce Rick Suarez that heads up our Communications Group.

All right. Good morning. All right. Well, there are a lot of unfamiliar faces here, but you all must be very important because Paul told me we had to wear suits today to meet with you all. But -- so let me spend a little bit of time introducing myself to -- again, I'm Rick Suarez, I got the pleasure and the honor of leading the communications group here at MasTec. I'll tell you my career in communications started, I would say back when I was 13 years old, right? Because I was delivering the nightly newspaper every night after junior high school, trying to earn a buck to help my family who work human immigrants as well, try to make it through, right?

But through that hussel and over time, ultimately was able to go to college and get a degree and landed a job at a company called Bell South. And Bell South, as you know, is now AT&T, but I started out as an outside plant engineer. And for those of you that don't know telecom and also plant engineers, the one that plans the routes, builds the designs for the infrastructure and to work prints to construction to go bring fiber to your home or whatever it may be at the time. And I learned very quickly at Bell South, right, that I wanted to know more and more and more. So I went from engineering to planning to construction management, actually met Jose back in 1995 when I was a construction manager, and he had the MSA for the Broward area. So they got to build what we designed on the construction side.

And together during that time, and we're actually doing fiber to the home. It was fiber to the curb, which was the prelude to where we are today. And it was challenging, right? Same as today, price points had to be right, production had to be right. And together, we engineered what was really novel at Bell South because we were the only territory that actually hit the targets financially and hit the targets on production. Through that went through all the ranks, just did about every operational role in the phone company was doing the transformation for call centers at Bell South headquarters when AT&T purchased Bell South, and that had some golden handcuffs on me, so I was shipped over to the Northeast to run the territory for AT&T.

And then I actually rotated back when AT&T decided to go functional and they built what they call C&E, construction and engineering. And that organization was going to be the organization that combine their wireless and wireline operations. So I was doing that and then during that cycle, MasTec bought a company named Nsoro who had just won some contracts with AT&T to do fiber turnkey builds in mostly the Southeast area. And that gave me the opportunity to reconnect with Jose again because we've had a few challenges. And then at that point, he was tired of me and he basically said, look, we're complaining and come out here and run this division for us and see if you can do better. So 15 years later, I'm still here, so I guess I'm doing okay. But it's been an incredible journey that I'm very proud of this team for.

So look, today, I'm going to hit 4 key items. I'm not going to spend a lot of time on this first slide because I will talk through them as I go through the slides. But just like Zach, right, I feel we're an incredible period and I've seen it all, right? I've seen additional line growth. I've seen DSL. I've seen, right, the coming of wireless and now we're in a whole different I would say, Stratosphere in terms of what's driving this digital workforce, this digital environment that's just putting so much strain on the network, and we're so well positioned to be able to take it.

So let me just get into that a little bit. So I start with 2011 because that's the time frame, right, where I joined the company. And at the time, you can see we were a regional company, basically did wireless in the Southeast. We had a wireline entity in the, I'm going to say, the -- great Lakes area and did some microwave work in the Desert Southwest. So coming from AT&T, which is a national player, right, we start to set the strategy of saying, if we're really going to be a dominant player in the telecom space, first, we've got to grow footprint. So we set a journey that led through a lot of acquisitions of small companies to start to stitch together the map, I'm going to say, key areas where growth was and is today, so that we can actually compete in a more compelling way than just being a regional player.

Then one of the things we saw, right, is if you just play in the construction space, it was pretty commoditized, very competitive. We're a Fortune 500 company competing with local companies with regional companies, we really needed to bring more value than just construction services. So we layered in, right? At that point, what we call RF services, radio frequency. So in the world of wireless, the engineers, RF engineers, right? So we bought into a company to get RF engineering nationwide to get integration services. That's basically commissioning the nodes and wireless into the customers' networks. We got into structural engineering to be able to do the fortification of the cell sites, site acquisition because all of this requires permitting, right, at a national scale.

And then the last thing we really needed was outside plant engineering because we were just doing construction on the wireline side. So we bought into Byers Engineering, which was a national company doing wireline OSP. So that got us planning, got us engineering, got us permitting, on the engineering side and ultimately gave us kind of where we are today, right, the ability to do full turnkey services as an integrator for all of our customers. And that journey took us to where we were with the $3.3 billion.

So let me just give you a snapshot. So you look at us today, this is just for 2025. There are some real interesting points here, right? Number one, we did -- we passed 940,000 living units with fiber. When you think of some of my customers today, that's more than their plan for a year. right? So we are building out fiber capacity in the marketplace that today, depending on what data you look, right, it's about 50% of the nation is penetrated with fiber, still incredible upside to that, but we've built the muscle memory to do that turnkey today. Jose talked about workforce. Like I told you, I'm an immigrant myself, right? My family took pride in the [indiscernible] story as well. But it really is about our people.

So what makes us different from some of our competitors is we actually enjoy and value having the workforce under us, right? We have workforce -- we even have workforce in India that's MasTec workforce to handle a lot of our RF and back office capacity. But today, right, the reason we can capture work and do it with quality is because we control a good base of the worker in there. And that worker just like Rick wars can start in Seattle, right? If we want to move to Miami, we got work in Miami. If they want to grow in the company, hopefully, they'll replace me because there's going to come a time where I need someone to replace me, but it can happen in my communications group.

So why should you be excited, right, about what we've built and kind of where we are today in the industry? Well, I can tell you, right? I just walked you through the road map that got us to being able to have the capabilities nationwide to have the vertical support services needed to be able to provide turnkey services to our clients at a time where we're moving from MSA book and burn to project work. So more and more of our wins in the last 2 to 3 years, right, are all multiyear projects, multimillion dollar projects that require engineering, that require construction, and in some cases, even supply chain in terms of managing product for the clients. We have the workforce. We have the training center. I think Jose shared with you the training centers, ours of the Mastek Academy or construction because in a world where everybody is competing for construction resources, you look at the skill sets of our folks my folks are going to work in Zach's business, his folks can work in the pipeline business. So you really have to be able to tool your resources and give them a glide path so that they know where they can go from a succession standpoint.

So we train. We train hard because we want to control the quality of our business, and we want to make sure that our employees are safe. And then for our division, what's also, I think very important is we're a unified brand. So many of the competitors that I deal with today are company A in the West Coast and their company B in the Southwest and they are company C, right. When you look at the Communications Group, we are MasTec communications from coast to coast top to bottom. And the reason that's important is our customers are national customers. So we want to give them a very unified experience. We want to be consistent regardless of where we are working for them in the nation because you get held to the standards of your lowest performing market. right? So when you're doing the volume that we do, you have to protect the business, and that's important for us.

All right. So what makes me really excited and if you look at the line chart on the left, right, that gives you the visual of how broadband capacity and demand is growing in the business prices top line as the consumer spend, I would say, in terms of broadband. What's really interesting when you start to look at this is when you look at the light blue line, right, that's the AI demand on the network. So every one of you, you're clicking your computers today, you're looking at your phones, you make me smile, right? When you're a home and you connect every device in your house to your WiFi, you make me smile, right?

When you use every app that you got on your phone, you make me spin. Why -- you're sucking up bandwidth, right? And that bandwidth is what's growing at almost an exponential rate. And when you think about what AI is happening, which means the network is strange and it needs more and more capacity. That's what's driving, right, the business today and the investments today is the fact that you look at long haul, those networks are 30 years old, right? There's even multi-mode fiber in some of those long-haul networks. They will not stand, right, the data infrastructure needs of tomorrow. I already told you, fiber-to-the-home households passed we're about 50% there, and there's more to come.

So again, keep getting connected, keep buying smart devices, smart homes, smart cars, because all that means is that our segment is going to be hot for a long time. I put a note on the bottom, I showed you the map of what we built. Last year alone, we grew 31% organically as a business. And even with that amount of growth, our EBITDA improved by 1 point. right? So that tells me, right? It gives me confidence that what we put in place now has the ability to scale and take on volume with not much more incremental cost. Another point that may not be as obvious, and you're all analysts, right? So you all read the headlines, and you've seen the investments that have happened over the last year, 1.5 years, where all the key players are really doubling down because they all see that they need to have really macro level scale at a national level.

So you've seen AT&T, [indiscernible] fiber by the DISH spectrum on the wireless side. You see Verizon buying Frontier, right? T-Mobile now all of a sudden is really hot in the fiber space through partnerships and joint ventures. And Charter recently, right, made the -- they're working through the Cox acquisition. They're all buying for that national scale national volume. And what is -- and you say, okay, well, what does that mean for us, right, which is what I'd like to think about when I look at these things is those investments are going to need to drive synergies in their business.

And what we're seeing from them today is they're realizing that they got to get their operating costs down because ARPU, right, is pretty flat in that space. So they're looking for ways to leverage good partners that have the skills that they process today to offload that kind of work. So for us, it means more turnkey projects, it means more planning, more evaluations. Again, we're doing things today on our side that I was doing on the AT&T side years ago.

So as I say, we joke about stickiness as a positive things. As these relationships grow and the volume and the breadth of work that we do, it puts us in a much better position to be at the table when we're talking about what they need next versus just answering RFPs.

So to sum it up, right, I would say there's 3 key categories that for us are very important that we're deep into. Fiber-to-the-home,part of the base that we have today. that continues to grow, right? Because again, before it was the traditional carriers that we work for, but today, we work for a lot of private equity firms that are trying to build up a portfolio of living units to ultimately, at some point, I'm sure, flip them to the carriers. So we're working for them. For them, the scope is always or almost always full scope because they're not trying to build resources in the marketplace. They're not trying to hire crews and folks, they want to get those assets built at the turn rate that they need, and we're working for them. We're just getting into bead. And I think you all know about bed, right, which is federal government fund $42 billion strong. Most of that has already been allocated through awards that have been done in the marketplace. That's just beginning, right?

We're just starting the planning, the engineering phase of bead and B2B here 5 to 7 years at least. And there's an interesting component to be because it's not just the $42 billion right? It's the incremental spend that those MSOs and carriers have to invest to be able to connect that to their network and to capture the fringe that fits from that bead, right? So 42 turns into we'll see, but it will be a lot more than 42.

And then we got hyperscalers, right? And what's beautiful about that today is, again, that network is 30-plus years old. So today, it's driving an incredible investment. We got private equity in that space, trying to build routes for diversity to existing centers. We have awards like -- and I'll share with you [indiscernible] in a little bit, where there are big deals being done today to really reinforce and bring fiber, the fiber capacity that's going to be needed for the years to come on that space.

These are large projects. These are multiyear projects, multistate projects, right, where you're building infrastructure, you need a strong balance sheet, you need bonding capacity really puts us again in a great place to be able to go through there.

So I mentioned Lumin. And I got a video for you, so I'm not going to tell you too much there. But what I'll say is relationships matter. We're in this game because the relationships that we built with partners when we were at Sprint. So the person leading this business unit was somebody that was a SoftBank that we worked with at Sprint and we built a lasting relationship. So we're at the table because reputation matters.

Secondly, right, we were able to leverage what we built on the wireless side of the house because when you think about in-line amplifiers or these big shelters where you regenerate the fiber because you're going from coast to coast, there are hundreds of these being built for all these runs today. They require power, they require land, infrastructure build, roads, Well, what do we do on the wireless side? We built new site builds. We built over 900 new site builds in 2025.

So we're using our wireless project managers, our program management capabilities from wireless to build those ILA shelters for Lumen. No one was able to do that. We got that work in all 3 regions. -- most of the awards that were given were giving as regional awards. We got them across the nation.

And then over pull, all right? So we got the West for -- over pool, challenging project, legacy network that needs a lot of rebuild but -- and we're working through that well. But rather than me tell you kind of how well we're doing with our customers, I'll let our customers speak for us.

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That's what energizes us, right? To be able to take on projects like that as a team, right? And I'll tell you, I mean, I have an incredible team, all the leaders on my team are folks that came from the ground ranks down up. They have the relationships with clients, the trust with clients, right? And then the workforce as proud of the work they do.

But look, we're not resting on our laurels, right, because we know it is a very competitive marketplace. And for a company like ours, we're held to the highest standards being a publicly traded company. So we're always trying to innovate as a team to make sure that we're competitive tomorrow that we're competitive 3 years from now. So we're in the game. We're looking at what in our business we can do to make us even more efficient so that we can focus on the frontline organization. So we've embraced AI. We got AI engines today right, that we're developing and growing to be able to handle the back office side of the operation. If you think about the business last year, we did over 300,000 transactions, and that average transaction was roughly $15,000 to $16,000, all those required pictures as builds, right, scope of work. So just think about the amount of back office that it takes to sort of get to the point where you can invoice that work and keep your DSOs in check.

So we're using AI agents today to start to put that data together for us and package it so that we can spend the money, again, more in the field as we grow the business and be able to handle more capacity in the back office. Quality is critically important as well, right? So you think about how far we're working, where we're working in the organization. We're relying on subcontractors in some cases, our own in-house crews. We really want to be able to inspect 100% of the work, which is very challenging. So now we're training AI agents on picture quality. So as you place a handhold, we're taking those pictures, passing them through the AI agents so that we can get to a 90%-plus confidence rate so that those pictures, as they're uploaded daily can be inspected through the agents, the fallout, go out to quality inspectors and get the crews to either fix it ideally that same day. but at worse than next day so that we're not doing multiple dispatches, again, a real efficiency drain in our business when you have to go back 2 and 3x.

And then what's ultimately important is you can put 1 brand out there. But how do you make that unified experience consistent? And then we -- so what we've done there is we put program management tools with project management body behind it, so that we're reporting analytics, we're providing customer schedules, and we're not debating whether our data is right or their data is wrong because we're singing off the same sheet of music. And that lose these projects together because we could have multiple crews and multiple states working for one client, and we want to make sure that, that is as consistent as possible.

So, yes. Am I excited about where we are today, [indiscernible], right? I mean is this runway long? Absolutely, right? And shame on you if you're not investing in MasTec. So thank you very much.

With that, I want to introduce Mr. [indiscernible]. You're going to treat coming for you here. [indiscernible].

Thank you, Rick. Very nice presentation, nice video. Welcome, everyone. Like Rick, this is really not my thing. I bought this for my son's wedding, I thought I'd never wear it again. here I am. Well, I thought maybe 1 time I would wear you can think about where that might be. But Anyway, welcome Bobby Poteet, I am the President of Precision Pipeline. I'm a second-generation pipeliner with 45 years experience in the industry. During that time, I have worked through all types of cycles, all types of conditions, periods of rapid expansion, challenging downturns and everything in between. I joined Precision Pipeline in the fall of 2006 and was heavily involved in the MasTec's acquisition of Precision in the fall of 2009.

I've remained with the company since acquisition, some 16 years ago, which speaks volumes about the culture, the leadership and the long-term vision of MasTec. And since acquisition, our group has grown from a regional player in the midstream markets to the #1 pipeline contractor in North America. And I'm going to show you guys a little quick video of what some of our capabilities are.

[Presentation]

That video was from Mountain Valley project as well as the Line 3 project. And we'll talk about the Mountain Valley project a little bit later on. Over the course of the last 16 years, through both organic growth and strategic acquisitions. I'm proud to say that today, we are the #1 contractor -- pipeline contractor in North America. So I'd like each one of you to think about that for a moment. Number one is like in your personal life and your professional life, everything that you've been #1 at -- anything you've been #1 at, how proud you are that, how much time you put in to get there and the sacrifices you made to do that. That's the way we feel.

You ask yourself now what's next? Well, we're going to work just as hard to maintain that guaranteed to what Bob Apple says, we're not -- that's not some runway we're willing to give up. So lots of good things yet to come. The pipeline industry like many infrastructure sectors and is inherently cyclical. Our group doesn't react to cycles we plan for them. Having worked through multiple cycles over my 4.5 decades, you can tell with that. I can say with confidence that we are in the early stages of the largest pipeline expansion in my history, and we are perfectly positioned to capitalize on all opportunities that lie ahead. With our scale, our large equipment fleet and long-standing customer relationships, we plan to take advantage of those growth opportunities.

So a few key backs. You can read those and digest them a little bit. But one of the things I'll say is that what I truly believe sets us apart and what gives us the confidence in our ability to execute is our organization. To be the #1 pipeline contractor in North America, you have to have great people. You need access to the largest and best maintained pipeline fleet of equipment available in North America and a means to mobilize that quickly.

Outside the growth of our long-haul and midstream pipeline services for which we have installed over 13,000 miles of large diameter pipe, another one to think about 13,000 miles, so I'd ask you guys to think about that for a moment. standing here today, 13,000 miles, where does that get you? Probably no wrong answers, but where it's good. Yes, any other. No, I'm doing this because my CFO says I have to throw some numbers in there somewhere. So we'll ask him, what does it get us? Halfway around Earth, yes. Over halfway around -- so quite the accomplishment that we've able to do as being a partner with MasTec.

So -- and to be able to do that, Yes. So in addition to that, we have a diverse portfolio of services. Some of the items that we bolted on are gas and water distribution, gas and water transmission work and we have entered the carbon capture pipeline facility sector. And we're also enhancing our pipeline integrity and maintenance group as we're seeing that group elevate and lots of work coming here due to the aging pipelines.

Why customers choose MasTec? In addition to great people, a large equipment fleet and very experienced and equally as how important we do our work. Our clients consistently choose us not only for our capability, but for our values. We built a strong safety culture that puts our people above all else. When we are deeply committed to environmental compliance, ensuring that our work meets or exceeds regulatory requirements and we take pride in maintaining a strong social license, meaning being a good neighbor in the communities we are working in.

These principles are not just part of our messaging. They are embedded in our operations and are a key reason why clients continue to trust us with their most challenging projects. Leadership depth, fleet strategy and labor scalability. One of our greatest competitive advantages is our team. We have built real big -- we have built real bit strength across our organization. We have experienced leadership, a skilled workforce and a pipeline of talent that allows us to scale without compromising safety, quality and execution. Beyond that, our fleet is readily available to mobilize and support a national workforce.

With our leadership bench strength, large fleet of equipment and access to a national workforce, we're in a great position to scale into even higher revenue projects in the years ahead. owning assets is pretty critical to what we do, specialized equipment in the pipeline business. In addition to our labor workforce, we have invested heavily into our equipment. And recently, added capacity to our large trencher fleet, which will give us even more competitive advantages in the industry.

Owning our fleet provides us the ability to improve our scheduling and execution control in supports multi-segment deliveries. This large burst fleet also allows us to tackle projects across a variety of terrain, including mountains, wetlands, environmentally sensitive areas deserts and even urban environments. For anyone looking to construct a large-scale pipeline project, I believe they would have to consider our group simply due to the size of our fleet.

I think as Jose said, could be -- it could be replicated, but it will take decades to do it. So back to the video. Mountain Valley Pipeline project was a very important project to us probably one of the most challenging projects we have completed to date. It consisted of 303 miles of FERC-regulated pipeline through West Virginia and Virginia. Our portion of that project was 234 miles or 7 spreads working concurrently. The job was plagued with both regulatory and environmental hurdles from the onset. The project was scheduled for 12 months of construction, and it took 6 years to complete, and we have masked 23 million man hours doing that. So another number for you $23 million Think about that and how you would relate that something that you'd take $23 million, break it down to what? So we'll go back to Albert. Albert, what would you say?

One person working 40 hours a week, 52 weeks of the year. It will take him over 11,000 years to hit that number. We deployed 5,500 people at peak 4,500 of those, we mobilized in a 6-week period. We provided uninterrupted service from a leadership standpoint and an equipment standpoint to our customers during this during this 6-year period, then therefore, showing again our commitment to our customer and reinforces our reputation in the industry.

Key takeaways. Operating as the #1 pipeline contractor. I told you we're proud of that. How many times have I mentioned it, my apologies, but it's something that our group is very proud of. They have worked very hard. They've sacrificed. So -- this is not only for us, it's for them. So in closing, I want to emphasize that over the past 18 months, strong indications that the next growth cycle have been apparent.

Our bidding activity is up significantly. And even more exciting is our budgeting for long-haul large-scale projects is at historic levels. What we've always said if the work is there, we'll get our fair share of it. So it appears everything is aligning and the work will be there. This combination is important. Tells us that increased bidding tells us that activity is accelerating in the short term, while the growth in long-haul large-scale projects point to demand over a multiyear horizon, not just the short term. So I want to emphasize that we are entering the next phase from a position of strength, experience and preparedness. We've seen the onset of growth cycles before. We know how to navigate them successfully.

With the increase in market activity, a strong operational foundation, we are perfectly positioned to take on a greater market share, resulting in increasing profits for the future years to come. And to Jose's word, I think for our pipeline group, the best is yet to come, and we're very excited about it and very glad you guys are a part of it. So thank you. I'd like to call Marc Lewis up to bring us to our Q&A session.

All right. We're going to have a Q&A session for the group presidents that were in the last presentation, and Jose will be up here as well. [Operator Instructions]

Andy Kaplowitz, Citigroup. So Jose, I got to ask you, like, I think you said when you talked about the $22 billion that it's a floor. I just want to make sure I heard you correctly. And then is that because it's just a conservative guide? Or is it because you don't have acquisitions and because when I think about your CAGR over the next couple of years, is low double digits, but you did 17 forever, and this is the best cycle ever. So how do I think about that?

Yes. So the purpose of that was just a tease, right? And I think you're going to get Paul's presentation later where he's going to get into depth in our numbers. So just -- I know everybody here, part of what you wanted was to get a number. Why are you having the Investor Day? What numbers are you going to post. I think that was the question I got the most before we started today. So the idea around that is you guys have a lot of numbers for '28. We wanted to create a baseline, again, where we have enormous conviction. That number does not include M&A. We're going to talk about that extensively later and what that could do to the number. Obviously, we have no intention of putting out a number that we feel is too aggressive today. So I'm not going to say it's a conservative number, but I would hope it to be a conservative number as we come out into '28. Fair.

Liam Burke, B. Riley. Rick, I had a question for you. You were talking about moving from an MSA book and burn platform to a multiyear project platform. How do you envision the -- that part of your business developing as you move to the larger projects?

Look, when I mentioned it a little bit earlier, but if you think about the base of the business, look, MSA is always going to be important in a part of the business because you want to be able, once you build out, stay in the geography and manage the -- what I call the break fix and the maintenance aspect -- but when you think of the pipeline of what we bid, what we're waiting for awards for, and we're looking forward in the business, it's the bulk of it is project level work. So I do think it will become more of what we'll be doing in the next 3 years than certainly the MSA work.

Let me add to that because I do think it's a great question. To Rick's point, MSA isn't going anywhere. -- key portion of our work. When we think about our wireless business, it's pretty much all MSA-driven outside of technological changes, right, when we're going from 4G to 5G or LTE or whatever it may be. But let's think about the work that's coming in telecom. .

And I think we covered it well, right? We've got all these hyperscalers that are building data centers that require connectivity. And then you have all these customers chasing that work. Our customers are chasing that work, -- so they want to be the provider to that data center to build. Now think about the historical companies in our space. Think about how big they are, how bureaucratic at times that they can be, how long it takes them to build the plan from start to finish.

If they try to win that work in the way that they've always built their networks, they will not win. They will not succeed. The beauty of it, they know it. So they're coming to companies like MasTec with a completely different business model, a business model that gives us the opportunity to completely turnkey builds on their behalf. So when Rick talks about projects, it's very different than the project to the past. We're actually reshaping the way we think the comms business is going to contract in the future. And I don't want to speak for them, but I think that's I know he's super excited about that. I know he's involved in a bunch of those. But the way that they're contracting our business is going to change and not to use the same word, but it's going to make it stickier because they're going to depend on us to do all of their business, not just a piece of their business. So I think it's actually a great trend that's happening within his business.

All right. Thanks for having this. It's been very informative. Great Analyst Day. John, thank you, [indiscernible] Iowa. I guess I wanted to ask, as part of doing more of what is your partners moving up the value chain. The permitting, the regulatory approval that's needed. That's like one of the biggest hurdles for transmissions, for getting the distribution grid working there -- approved, so you can start work on that. I know this is probably more applicable for the Zach, but Bobby also trying to touch about with the pipeline there in terms of the environmental and the regulatory -- or how much are you moving working with your partners in terms of securing the approvals that has been a roadblock for many of the projects. .

And then secondary for -- I guess, for Rick, you're talking about working -- this is the second question, sorry, working with your partners in terms of the expansion of new technology. I'm just curious, are you working with them in terms of decommissioning of legacy technology, like I was talking with Verizon, and they still have like around 100,000 customers on DSL.

You want to start, Rick, with the second part of the question?

Sure. I mean, I can start with the second part. The answer is yes, right? Like when you think about the T-Mobile Sprint purchase, right, -- we did a lot of the decommissioning of the old Sprint network that wouldn't integrate with the T-Mobile network.

There is some noise out there in the industry today about talking about how back to the carriers, right, in the MSOs, how do they decommission their legacy network because much of the drag in cost is operating that wireline network that's been there in the past that has union labor tied to it and a very small subscriber base tied to it. So there's a combination of things at play there. One is copper reclamation. And that's sort of been using -- that's like the banner being used to say copper is commanding a premium today. Well, let's groom off that copper network, put folks on the fiber network. We're working with carriers today to actually doing the frame verifications, the grooming sheets to cut the customers off the old network and then doing the copper extraction.

So that's probably the biggest piece that's going on today that I think will continue, just about everybody, right, Lumen, AT&T, Charter, everybody's talking about how do they decommission that legacy network, the switches that are tied behind that. All of that is activity. We rarely talk about what we do inside, right? So we have TV contracts today. where we decommission switches where we activate, do a lot of the rack and stack work for. So those teams are busy as well, doing a lot of that sort of extracting of the old networks, the old power grids that they had, things like that. So an opportunity going forward.

And I'll let them at anything they want to permitting, but just generally because I do think it's important. And there's issues, right? Permitting is a difficult function that our customers have to deal with. But in today's world, the good thing is government understands the power issue that exists. They understand that AI is the growth engine that's going to really drive our economy to the next level, right? It's the one thing in this country that everybody believes in. So -- at the end of the day, government is supportive of most of the activities we're doing in a very different way than it historically has. And while they haven't changed legislation and there's not -- there hasn't been a permitting reform bill passed there's an understanding of it. And I think today's process is a little bit easier than it was under the previous administration, just because of the rhetoric and the support that it has generated. Anything you want to add to that or.

I think the big thing we do is do partner with our partners upfront and get involved as early as possible, right, adding the engineering services. So it's something that needs to be done on the very front end of the project. And then also working with the local some of the local permitting offices in these states. And we have those local relationships that actually can really help move things along from time to time. So something that we're very, very focused on because obviously, if we don't have the permit, we can do the work.

We got time for 3 more questions. I'll start with Manish back here, and then we're going to do Steve and then Justin. .

Manish Somaiya from Cantor. Two questions. Maybe, Jose, if you can just help us get there. One is on your forecast that you gave out through '28. How much of the federal funding is incorporated in that guidance through '28 and then secondly, on the competitive landscape, obviously, the market TAM is huge. The opportunities are huge. Market share is small. So maybe if you can just help us understand what the competitive landscape looks like from new or incumbents.

Yes. I mean government funding, really the only things that come to mind are what's happening with beads and the potential that they may have -- and I'd argue that we probably have very little built into beads even through '28 because I think starting. We're going to know a lot more soon. And when you think about renewables and where all of the regulatory issues land and renewable, we have incredible runway today to 2030. I think we're very confident of that. So I don't think there's anything between now and '28 from a -- and that's really the only things I'd say, impact us in a significant way from federal legislation or dollars. So I think we're fairly insulated from that. We're much more B2B driven, which I think the economy is what drives it.

And the second part about competition is, look, we -- again, we've -- we're super proud of the platform we built. We -- I don't think that somebody coming into our space today has the time or the resources to be able to compete at scale. It's not to say that nobody is going to compete, somebody might come in. You're always going to have customers that are looking for lowest dollar, right? There's a subset of customers that are very driven by budget and the truth is that they may not be the best customers for us, right? We're not necessarily looking to work for whoever wants to find the cheapest alternative. We're trying to find customers and work with our customers and partners who have long-term plans with lots of projects over a long period of time, and that's where we're going to commit our resources and our people. And I think in that world, the competition is very limited.

We're going to go to Steve.

Thank you, Steve Fisher, UBS. I think this is for Bobby, but probably has that ability to the others. You talked about the importance of having the specialized that's differentiator. I'm curious to what extent there's still an opportunity to manage the costs of having a fleet to maintain some flexibility, building on the question about permitting, timing obviously shifts around in these projects all the time. Are you able to advance the management of your fleet while having a specialized but also being a little bit more flexible to manage costs so that it helps your margins. That's one question.

The second one is on the power delivery side, you talked about building up not only scale, but the national footprint. I'm curious how the national footprint, in particular, helps you win business? Or is that more ability to manage personnel around projects and keeping the utilization up?

Jose, you want to take the first part of that?

Sure. Look, I think the beauty of Bobby's business is in very short order. We hope that I have enough fleet. That's how strong that market is. We have the biggest fleet in America by far. We have the capabilities of significantly increasing revenues with our current fleet, significantly increasing revenues. And we sit here today when we think about '28 and '29, worried that we might not have enough fleet. What an awesome problem to have. What an awesome problem to have. So what are we doing? So really specialized equipment like rock trenching, which is probably one of the most important assets that he has, last year, before the cycle started, -- we bought the largest manufacturer of rock trenching equipment in the country, maybe the world.

We bought the asset. We now own that rock trenching company, and we're building rock trenches that everybody buys. And we will have to decide whether we want to keep selling that to everybody or we will only consume them internally. Those are the kind of things that we're thinking about long-term on our asset side. Bobby has a sheet. He would never share it with you. But it goes out through, I don't know, what is it, 2032, '33 and it's every project that he's talking about, layered in by year what he thinks he's going to do. That's the level of detail that we're talking to our customers about. Some of those projects will definitely fall out. If they don't, the numbers are staggering, staggering. So we hope to be in a position where we don't have enough fleet. That will be a great day for us to, but it's going to take some time.

Justin?

Yes. Justin Hauke with Baird. Thank you very much for hosting this. So a lot of stats that I hadn't seen before. One of the themes you talked about is how craft labor is no longer a commodity. And I think the market is clearly kind of showing that in terms of capital moving from more professional services to more craft labor. And you talked about you have 35 training facilities, and you could have told me we have 5, and I really don't know what the context is behind that. So maybe you could just elaborate a little bit on that training capabilities and what you've guys done over the last couple of years because I know you've expanded your labor force by a lot.

Yes. No. I mean I can speak for the communications group. And like you saw, our workforce is nearing 9,000 at this point in time. So what we've done is we've made hubs in key markets, so like in Texas and Lewisville, in Florida and South Florida and Tennessee. And so we've picked key markets where density we've already attained density there because we know we'll have to keep restaffing. And then we have our own trainers that are focused on the right skills, be it fiber splicing, line construction, underground construction. And then we've taken it one step further, and we created partnerships with junior colleges and colleges, leveraging state funds to be able to build like in South Florida, we just did the ribbon-cutting well, it was about a year ago. where now we have Miami Dade College having a broadband training course for folks coming in, we supply all the content for the training.

We tooled their pull barn. We put all the equipment in there, and then we get first dibs on folks coming through that training program. So we got that going in Florida. We're getting it going out today in Texas. We're doing one in Seattle. We're going to do one in Northern California because then we're using government money, right, to basically do the training that we need and then we're able to pick from that crop right, and put those folks to work right away. So it's not just the in-house training, but it's also how do we augment that.

We're not wanting to go to lineman schools and where everybody else goes to try to find people. we're trying to build communications workers, and we're doing it using our sort of methodology.

I think I would actually add on the union side. We worked very closely with the unions and Nika to make sure that we bring new people into the trade as well, right? So we have a -- we're double breasted, so we have union and nonunion, -- so as Rick mentioned. We also have the MasTec Institute that we partnered directly with [indiscernible] in Chicago as an example to grow local workforce in the Chicagoland area as an example. We do that throughout the United States.

We got time for 1 more question if anybody has another question. Alex.

Alex Regal with Texas Capital. Rick, I think you disclosed that you -- last year, you had 30 new customers -- can you give us a little bit of background on that? And as you look out over the next couple of years, how important is new customers to your organic growth versus your legacy customers?

I would say they're very important to the incremental growth in the business, right? Our legacy, our core customers, we're going to protect them fiercely because that's the base of the work that we have today. And they are playing in that space as well. But like I mentioned, you think about just the wireline space alone, right? It was -- there was a time where we just worked for AT&T, we did a little work for Verizon and Comcast. Well, now from the private equity side of the house alone, we're working with almost I have to get you the exact number, but it's almost 14 different clients that are out there seeing trepid of the world, the [indiscernible] of the world, that they're up. They've picked their territory. They got agreements with the companies like T-Mobile and with AT&T and others, and they're building out networks.

And they -- when you look at our lift for the next, I'm going to say, 3 to 5 years, Much of that is coming from them because they have very specific build plans as long as their living unit cost targets stay in line, they're going to be building out for some time because those portfolios don't get interesting until they have tens of thousands of clients behind that, that they can then pull up and sell. So that's a big part of our future. And the same is happening on the hyperscaler side, which is really interesting, where, again, I guess they see the demand, and they want to get to the routes first. So I would say, on the hyperscaler side today, we have more new customers than existing customers that we're doing work for.

I think we can squeeze 1 more quick question in with Philip.

Phil Shen with ROTH Capital Partners. Thanks for hosting the event. Jose, you talked about the 2028 $22 billion being a floor being conservative. What would it take for the upside Bobby talked about -- and you talked about the sheet through 2032. So just give us a sense for what the upside is beyond these segments? And does it require M&A? And what opportunities you might see there? .

Yes. We're just early in the presentation. So we decided to do this Q&A at a midpoint, probably not the best time. If you just give us to the end of the presentation, you can ask it again. I think we're going to answer a lot of that in the second part of the day. So you don't mind just waiting, I know Jamie had her hand up forever. So Jamie, would you glad to ask a question.

I guess 2 questions. One, just within power delivery. Can you talk about what you think your opportunity is on 765 kV? I know a lot of the spend is with AEP and the 1 of your peers has an agreement with them. So just wondering if you're bidding on anything and how you can frame that opportunity? And then I guess my second question to you, Jose, not so much on the numbers. But as I look about your ability to serve the customer, there are areas that you're not in? And I'm just -- whether it be really gas power generation, mechanical, electrical, -- like there's a lot of markets, maybe you need to build out the water civil business. So I'm just trying to think about M&A from that front, not so much from numbers, but strategically. And then do you also need to do acquisitions to continue to grow the labor? I understand you have 35 training facilities, but like to keep that 6k CAGR, or whatever you've been growing the -- your employee base, like do we need inorganic to supplement your organic training?

Yes. On the 765 front, we are working closely with our customers and customers that are in the midst of bidding those projects and developing those projects today. Actually, I think the last 765 job that was built in the United States, I think it was about 2018 that actually 1 of our subsidiaries, EasySource actually completed -- but we have experience in 765. And so we're really looking forward to those opportunities that come down the pike.

So on the second part, we are going to talk M&A later. So I don't want to get ahead of it. A lot of the things that you touched on are coming from the next few presentations. But let's talk about training because that one maybe not so much. We added 2,000 people sequentially. If we did that every quarter, we could add easily. We're pretty confident of that. I think, obviously, there's a need for more skilled labor. We're going to fill it. But I also think that part of the beauty in our growth expectations and profile is we're going to be able to grow without the need for a massive number of people. And you'll hear about that after the break, you're going to hear about some of our businesses that we can grow at scale with few resources. That's a really nice complement to have because it really allows us to juice the growth story without completely depending on thousands and thousands of people having to be added to the organization.

That's going to happen anyway. But in addition to that, we've got a really good growth story that doesn't require tons of bodies. We'll get into that later too. So with that, let's I think we'll do a 10- to 15-minute break.

Let's get back here about 10:50.

Thanks, everybody.

[Break]

All right. So now we're going to get started with the next couple of speakers. The next 3 that you'll hear from, as you heard from Bob earlier are all from our Clean Energy and Infrastructure segment. So let me maybe take a step back because we report this as a full segment on our financials on our quarterly reviews. But today, you're going to hear from 3 different speakers where we split the business up in 3 different areas. So just to refresh your memories. The first is industrial and infrastructure. The second is renewables and the third is general buildings. And you'll hear from each of those. So we'd like to start with Mark Alstrom, who runs our infrastructure and industrial business in MasTec. Come on up, Mark. .

Thanks, Jose. Hopefully, we've got some coffee and I don't put you sleep in the next 10 minutes. I'm Mark [indiscernible], I run the infrastructure and industrial practice for MasTec. I'm very proud to be here. There's a group that's grown quite significantly in the last 5 years, and I'm happy to lead it. A little bit about myself. I grew up in the construction family, my dad among our bulk contractors. By that did small remodels, house improvements, I learned electrical, plumbing, framing, finish carpentry from a young age, my uncle built community stores, restaurants, truck stops. And I learned at a very young age, the value of planning your work, having here, all your tools, equipment and supply is ready to go. That was something that really stuck with me as I watch my uncle and my father work. And in today's where we call that preconstruction planning.

We have over 300 projects in the business that I manage. And every one of those projects every day has a plan of the day meeting where we get organized and go and go to work. At the end of the day, we come in, we measure how we did, and we go out and get planning to execute it again the next day. After college, I worked for a large company at a time called Morrison Knutson, one of the bigger companies in the country at the time. And I had the great privilege of working rostering of project management on large environmental mining infrastructure projects, highway and bridge projects. Back in the early 2000s was part of the design build wave of work that came in and alternative delivery, and we built large projects in California, Colorado and Utah.

Have also been part of several large acquisitions, which helped me prepare me from my role at MasTec today. Here's our key messages. You've heard it a lot today, and you'll keep hearing it. I've been in this business over 40 years. This is some of the strongest -- the market demand we see in power generation infrastructure is something that I've never seen in my entire career. So you're going to hear this a lot and the market we're in to have really strong tailwinds behind it. Over the past 5 years, we've matured our operations, our operating platforms and our leadership to win and successfully execute large projects, including alternative delivery projects.

We've got a proven track record of growing organically by investing in the companies we acquire to provide key equipment, training, operating platforms and leadership to expand our reach. And this strategy has resulted in higher margins for us in the past 3 years, and we see more margin expansion opportunity ahead. Quick snapshot of the business. You can see our CAGR for revenue growth, 48%. The 57% backlog means we're growing and will continue to grow. We're growing faster every year. What this demonstration to me is that we can acquire and integrate and expand our services to customers with the companies we acquire. The growth rate has been great in both the infrastructure and industrial business. And so the question -- I hope to ads for you today is why would you invest in this business? I hope you can tell I would say that you're sold by the time I step off the stage.

Here's our infrastructure and industrial key growth strategy and key initiatives. The summary level for each one of the markets that we participate in, we've got a focused growth plan and objectives so we can expand our footprint and expand our business in each of the 4 markets that we serve. The power and environmental markets that we serve are not really regional. We follow our customers wherever they go. Our infrastructure market is one that's regional and our water business is regional as well. So we're going to grow those by region, and I'll talk about those in just a few minutes.

So a little bit of how we got here. In 2020, I joined the company in 2021 very -- quite a small business, quite a small practice, just under $300 million today. We're about $1.9 billion. We've acquired 9 companies. We've expanded geographic footprint, and we've grown organically. We now like our sister segments. We operate in union and nonunit environments. And you can see the growth rate.

I'll give you an example of how did we grow the business. So in the Southwest, we acquired a company about 5 years ago, primarily highway and bridge contractor. And what we did from that point is we acquired more assets, asphalt paving capabilities, asphalt and concrete production capabilities, and now we provide asphalt and concrete most of our own projects. We've also expanded from Arizona to Texas and New Mexico. That is something we plan to replicate in our union and our Southeast business as well, and we're actively doing that as we speak.

So the gas-fired power market, that Jose talked about it. I mean the numbers are just staggering. If you look at 2 of the big transmission providers, ERCOT and PJM they've got 154 gigawatts of new capacity and then in interconnection queues. To give you some perspective, other than Salt Lake City. City [indiscernible] 3.5 million people. They burned 4 gigawatts of power. As the data center was just announced last week in FoxElder County, Utah, is going to generate when it's built out 9 gigawatts of power -- that's double the entire population of Utah at one data center. And that's not the biggest one. There's another 1 in Texas that's going to -- it's 15 gigawatts when it gets built out. So the numbers, it's really hard to wrap your head around the opportunity for gas-fired power generation in the U.S. It is really historical right now.

Our focus in this market is on simple cycle projects and reciprocating internal combustion engines or ricin projects as we call them. So if you've never seen a repricing engine, I imagine your car engine the size of a 2-bedroom house that generates 10 to 20 megawatts of power and clients bundle these together, typically produce 50 to 250 megawatts of power, and we've built over 100 of these engines and installed over 100 of these. I was at our -- one of our simple cycle projects last week. And then we've got really seasoned executives there. We've got a lot of young people. There are some really smart people that are working on their jobs. And when I sat down with the crew, I said if there was any place I can -- if I was starting a micro right now, it would be right to hear in this business. There is no end inside of the growth of this. There's very few competitors. It's technical and it's something we can do and we do well. And so I could not be more bullish on our market and our position in this market.

We currently have 3 active projects, power generation space. I expect to double this in the next 18 months. And we will grow this business as fast as we can execute. We can certainly take on more work and put ourselves at risk, but we will not do that. I have seen this movie before, and it's not going to happen, okay? We know what the risks are. We know how to manage the risk. I'm super bullish about this market. This slide shows the water market and the growth in the U.S. water infrastructure spending. We are one of the largest water pipeline contractors in the country. Texas, the second bullet there, #2 and fastest-growing market CapEx. And you can see it's expected to reach $14 billion annual spend by 2030. Why is that important to us? We just acquired a company called McKee Utility. McKee is already resident in Texas. They work in Oklahoma, Texas and Arkansas. And we're really excited about the growth potential they have.

So what do they get by joining Mastek, -- they just recently joined us. So there's a lot of alternative delivery is in the water space, where municipalities use what they call a CMGC or alternative delivery where they hire a contractor to do a whole program of work a 100 miles of 96-inch pipeline work, okay? And so that contractor might build a part of it and they'll manage the rest of it. The key utility does not have the alternative delivery experience. But my sister companies do. And so we will partner with them, we're going to qualify them, and we're going to go and execute that work. We had a strategy session on that last week. We're super excited about the potential of McKee and growing this pipeline business.

Another area we work together, you're going to hear from Maari to non pretty soon about the Buildings Group. He's doing wastewater treatment plant work. That's another avenue where we can work together across our segments across our groups. Coal combustion residuals -- many of you probably haven't heard what this is. So the CCR market is the cleanup of legacy coal-fired power plant Colas, which is highly toxic. Most of these have been built near waterways. So the EPA passed legislation some years back to protect the waterways and required the power plant legacy providers to clean this up. Some of that has been handed to the states at this point, but it's a very strong market for us. The CCR market is a specialty business. requiring specialized equipment, some robotic equipment and technical know-how. We have a few competitors in this market, which is really great for us.

We started this business in the Southeast. We've been in this business for decades, primarily in Alabama and Georgia. We've now expanded that work to Arizona, but the strategy here is to focus on Illinois and Indiana. You can see by the slide, the dark color means the density of projects why we're going to Indiana and Illinois. It's the home of our union business. We have resources, unit agreements, management in that area. We're going to capture a large share of that market.

Transportation Infrastructure is the largest operations in I&I supported by long-term federal and state funding over the past 5 years. We've expanded our footprint in all the regions by investing in key leadership, equipment and resource systems to mature the business. So as we mature the business, what does that mean? We can take on larger projects -- we've added more people with more experience. We've stepped up some small projects to large projects and now we're doing alternative delivery projects. The alternative delivery projects are attracted to us because there's 3 competitors typically and the margins are higher than the traditional bid-build work where we might see 8 or 9 competitors, alternative delivery, we see typically -- and because of the complexity, we do get a little bit higher margins in those. So what's the outcome of all this in the Southwest region. We've doubled the [indiscernible] and earnings in the past 4 years in the Southeast. We've quadrupled revenue and earnings in the past 3 years. So this is a really fantastic anchor market for us that has long-term tailwinds and long-term funding behind it.

Case study. So this is our largest alternative delivery transportation project to date, the Golden Glades interchange. This is a project for the Florida Department of Transportation and joint venture. We've got -- it's a rebuilt 6 highway interchange in 32 bridges. And how do we derive value from this project. So -- we can go to when we win the project, we go to [indiscernible], and we say, okay, we've got these ideas on how to improve the schedule or reduce the cost in the job. And from that, we've developed enough cost savings initiatives to take 2 years off the schedule of this job.

So what does do first, obviously, we're going to save a lot of overhead when we finished 2 years earlier, so we're going to make more money on the job. And in addition to that, we get incentives from FDA for opening a ramp early, reducing lane closures and finishing early for parts of the job. This is a really great job for us. We now anticipate finishing 2 years early. And now, I'll show you a video on the project.

[Presentation]

That's the kind of stuff that gets me really excited. And I'm much more comfortable in [indiscernible] I am in the suit.

To reiterate our key messages. Obviously, historic demand in power and infrastructure in our business, strong strong tailwinds and funding with us. We matured our business and our operating platforms to take on and successfully execute larger opportunities. We've got a proven track record of growing organically by investing in our companies and in leadership to expand our reach. And we've had increasing margins in the past 3 years, and I see upside in the future.

I'd now like to introduce Mike Russell, who leads our renewables business.

Thanks, Mark, and still good morning to everybody. One thing I get really excited about when I watch this, and I know we've got a room full of investors in the room, but -- those of us at MasTec are builders and the opportunity that we have at MasTec right now to build and then the current environment that we have is extremely exciting for those of us that have built a career -- and as you'll hear my story, you'll understand why that excites me so much. So Mike Rose, I'm the President of MasTec Renewables, a little bit about me as a product of Randy and Maryland engineering school in Northern Indiana, I was always destined to follow in my father's footstep.

My dad carved out a career in heavy industry. And while visiting the heavy industry -- heavy industrial facilities that he managed at a young age, a passion to build was born. I'm also a second-generation college athlete, which drives competitive energy in all things. I channel that energy today into leading MasTec renewables. After completing my engineering studies at the University of Alabama and Huntsville and Birmingham, I embarked on a 30-year progressive career in construction, focused on building power plants, petrochemical and other heavy industrial facilities.

So my first foray into renewables was in 2008, while building a state-of-the-art biomass project in Conyers, Georgia, Fast forward to my time at MasTec where I started an executive role in the fall of '21 with the [indiscernible] operating company. And as Bob mentioned earlier, he takes chances on people to see what they can do. Bob took a chance on me and by the summer I had full leadership of that operating company at Wanzik. A year later, my responsibility expanded to include the leadership of MasTec Renewables after post acquisition of IEA and white construction.

Who we are? MasTec Renewables is a premier builder of utility scale wind, solar and battery energy storage projects. What do I want you to hear today? As a renewable EPC, we are benefiting from record power generation demand, coupled with the lowest cost, fastest to grid solution. We're going to hit on that a couple of times today, lowest-cost facets to grid solutions. Our organization is focused on large projects that are showing high growth in all 3 of our EPC markets. We have strategically aligned ourselves with key customers to yield multiyear pipeline and revenue visibility and from contracting discipline to leveraging innovation, we are focused on continuous improvement of our project delivery.

To understand where we are, it is important to understand the journey that got us here. In 2008, MasTec acquired Wanzik, the operating company. MasTec started in the Renewables business with the acquisition of Wanzik out of Fargo, North Dakota in 2008. Over the next 14 years, that organization grew into the premier wind EPC in the nation and organically started a solar EPC business. In October 22, we acquired the IEA companies. This expanded our capabilities to new markets through the union business of White and the IEA Best Group and increased the size and scale of the MasTec capabilities in open shop wind and solar and our renewable services business.

Our goal now was to figure out how we deliver in our newly minted mission for MasTec Renewables of delivering safe and profitable results. To achieve our mission, we focus the organization on a few key areas that remain our focus and journey today. Number one, in-depth knowledge of our market and alignment with key customers. This was extremely important for us to be secure with our backlog we identified market trends and focused our efforts on who was building, aligned ourselves with those developers and utilities that matched our criteria for success.

Number two, contracting discipline, -- we focused on disciplined contracting, cash flow and risk understanding on those projects. And then third, continuous operational improvement. We capitalize on the combined organization size and knowledge identified weak areas and work to improve then we rinse and repeat. In the last 3 years, this focused effort has delivered the following 11 consecutive quarters of backlog growth. I am extremely proud of that metric, 11 consecutive underopted quarters of backlog growth and then our improved project delivery, risk avoidance and our financial outcomes.

Here's a snapshot of who we are today. You guys can read the slide and understand the metrics, but a couple of key things I want to point out. $3.1 billion in backlog. This is fully contracted work. We have fully contracted line of sight to that $3.1 billion work going on. 80% of our revenue is from repeat customers and 53-plus gigawatts of installed renewable power. Currently, we're under construction or in some phase of construction on 6 gigawatts at any particular time. Our growth strategy moving forward, supporting customers with our services business, leveraging our mature wind business and capitalizing on the repower cycle, prioritizing utility scale solar and co-located storage, capitalizing on the best market growth and expanding our Tier 1 customer programs and repeat awards.

As I mentioned earlier, as demonstrated by this levelized cost of energy, we are building the lowest cost and fastest to market power generation facilities. Clearly, the market is positioned to support our growth. I'm going to speak a little bit now to the different segments of what supports MasTec renewables. We are uniquely positioned and have built a business to capitalize on an unprecedented call for power. We are answering that call. I would like to start with a smaller but important part of the offering I'm excited about where the business is headed.

We talk about the significant increase in gigawatts installed in the renewable space. coupled with the aging fleet of wind and solar facilities. The story behind the story is the operational requirements of those facilities that require similar technical expertise as our EPC teams. Through our structured customer alignment efforts, we have been successful with generating a large service opportunity post COD, Storm and catastrophic event remediation, major component replacement, small repower scopes and electrical service and upgrades.

In the last 2 years, we have signed 15 new MSAs to generate consistent revenue. We have expanded our service offerings to support the customer request. This has yielded year-over-year revenue growth in the business of 20% with an opportunity increase of 50%.

Next is our wind EPC. As we sit here today, MasTec is the largest wind EPC by market share in the United States. Bobby talks about being #1, our wind business is #1 as well. We are also confident despite some political headwinds that this business remains strong. Why are we confident? Numerous projects are progressing despite perceived headwinds. Owners and projects plagued with permitting challenges. In most cases, still are bullish on moving forward and continue to invest money anticipating permit resolution.

Market Intel is that TSAs are being signed and availability is strong from the major OEMs. Wind remains a fast to grid option, a significant competitive advantage is the barrier of entry into the wind EPC marketplace. 3 major players hold 90% of that market, 3. The barrier of entry is a tall one and MasTec Renewables has over 50 years of successful project delivery experience across our 3 renewable entities.

Speak a little solar. Mega-solar project size has grown 2x to 3x over the last 3 years. MasTec positioned as one of the few builders of mega scale solar projects. We are focused on projects in areas where we can be successful. We continue to mature our delivery offering and solar has the largest opportunity to benefit from innovation and technology, which I'll touch on here in a few minutes.

As our third of these 3 major EPC offerings, battery energy storage business is well positioned to capitalize on the surge and market opportunity. MasTec has assembled a talented scalable team of professionals, leading leading our best market. We have grown that business from a single project 3 years ago to a large book of business that includes 10 large-scale ongoing projects and multiple 1 gigawatt hour plus projects and engineering currently. We grew from 1 project 3 years ago to where we are today in that business. The MasTec Best team has prepared for this growth. wave from its inception and organically grown our delivery team size and capability.

I mentioned at the beginning, leveraging innovation and continuous improvement. I want you to think for a second about a power plant control room or the -- an airport control center with all the computers and all the people looking at data and acting on that data real time. We have stood up a similar setup for our projects that we call our operational support center. This isn't a replacement for the -- this is not a replacement for the traditional project delivery model. It is a value-added.

We gather real-time information from the field in the form of inputs like daily reports, schedule updates, weather conditions and drone flights. This information is evaluated by a group of subject matter experts across all projects in support of field operations. Daily meetings are held with each site from this analysis and field feedback to affect the decisions on all fronts. We are experiencing improvement in multiple areas from constraint recognition to resource allocation and equipment utilization.

We anticipate continued success as we refine this delivery model. If you think about the growth of the solar market or the growth of the renewables business, how do you grow at scale when you have -- when you're resource constrained. This is one of the ways that we are that we are growing at scale and we're ensuring that we're delivering consistent project results.

As everybody, I want to show you guys a little bit about how we build.

[Presentation]

In closing, I want to recap my message on MasTec Renewables. As we all know, the current demand is at an all-time high and Mastek Renewables is well positioned to capitalize on that demand. Our focus aligns with our size and scale across all 3 EPC delivery platforms, all at or above project sizes of 200 megawatts.

The alignment with our customers as they get projects built and we have future visibility remains a key strategy. And finally, our focus on continuous improvement through innovation and delivery discipline will enable stronger project delivery. Thank you. And I would now like to introduce Manny GT, who's our President of our General Buildings Group.

Thanks, Mike. Good morning. I'm Manny Garcia-Tunon, President of General Building. My message today is simple but powerful. General building is becoming a construction management growth engine that helps MasTec win larger, more complex infrastructure projects. We do not just build structures. We're often at the point where more of MasTec comes together. We do that because we can orchestrate MasTec's full platform under one construction manager.

When that happens, we increased visibility, revenue and margin capture. And because our model is construction management, we can scale more rapidly and more selectively, and those high-growth infrastructure sectors where MasTec's capabilities really matter. Now I got to tell you, -- the reason why we're able to capture that enhancement and that scalability makes sense when you consider that by virtue of the model being construction management, a lot of our projects are programmatic -- so we get to enjoy a high client retention rate, much more so than a traditional general contractor.

If you look at our pipeline and our work in process today, you'll find that over 80% of it is from repeat business. That's incredibly powerful when you consider win rates moving forward. And that's happening during a $1 billion a year run rate. And how we're able to achieve that today is really grounded and where we come from. You see my family's engineering and construction legacy began in cube of the 1940s, where my grandfather who was one hell of an engineer, also owned one of the largest steel fabricators in the country. And he was doing design and build work for some of the largest American companies on the island at the time. companies like Firestone, Gulf and Western and Glidden, which is a paint factory that you see behind me.

He was doing design build work decades before the industry even knew a design build was. He flecainism in 1960 and eventually came to the United States where in 1979, together with my father, they founded Lamartec. Based on our principle, which today, I call informed construction, what does that mean? It means that you understand the needs of your customers so intimately that you get involved in the design to better inform what you're going to build for them to solve their needs. MasTec acquired Lamartic in 2018 and for the last 8 years, it's been the foundation of this General Buildings Group. Now I'm a proud third generation in my family business. But I'm even more proud to tell you that today as a MasTec company, my 2 children are both fourth generation.

Now I'm not sharing the story with you just to talk about nostology. I've got 2 important takeaways. Number one, where does our work at the come? Well, as you've heard before, -- it comes from the fact that we're children of immigrants who sacrificed everything, just so they could raise their family and work and live in freedom. And that's not something you take for granted. The second key takeaway is understanding where our operational DNA comes from. Well, it comes from my father and my grandfather. You specialize -- you ensure that you have depth of knowledge and subject matter expertise, which in construction means you have in-house design capabilities, and you focus on operational excellence. It's that same discipline that built that business that we've used to build general buildings today. And the proof of that evolution is on this slide.

Since MasTec acquired Lumartec in 2018, our business has grown from $60 million in revenue to $1.2 billion. Our backlog has increased from $50 million to over $1.5 billion. Our employee count went from around 70 to over 375 team members. And our largest projects went from $22 million to $700 million. That's not just growth in size. That's growth in relevance because today, MasTec has a construction management capability where it didn't have it before. And it also proves that the model can scale and it can scale for 3 reasons that I can think of very quickly. Number one, relationship driven, as we mentioned before. Number two, we're selective. And number three, we're capital-light. I cannot tell you how important that is and how much of a is a distinguishing factor that is versus construction managers.

Because we are not asset constrained, we have a lot of flexibility. We're flexible in terms of geography because we can travel anywhere. We're not limited. And we're flexible in terms of balance sheet impact. You see we don't have to invest a lot of dollars to chase every incremental dollar of growth in revenue. We don't have to. We don't deploy fleet. We don't deploy the boots on the ground. We deploy project execution leadership and that travels very well. And when you combine that with MasTec self-perform capabilities throughout the country, that's the force multiplier.

Being selective is also important when it comes to scale, to Marc's point before. Why is that? We have a very robust no-go criteria in general building, which means that we turn away a lot of work. And still, we've got billions of dollars right now in active pipeline estimates and projects that we're negotiating because the needs are so insatiable. So for us, scaling does not equal growth at any cost. It equals disciplined expansion in markets where MasTec's capabilities really matter and can change the economics.

So let's talk about what those market sectors are. With our question, and you've heard it, if you've heard 1 of 100 times, data centers and mission-critical is our fastest growth pillar. Jose mentioned the number of $725 billion of TAM in the next 5 years. That might actually be short based on what we're seeing. But right now, general building, Lemartec is building about $1 billion of data center projects right now between turnkey construction management and subcontracting work as well. And we've got over $5 billion of pipeline just in data centers right now. And all of it's not 80% of it, all of it is repeat business.

Transportation is another big growth pillar for us. There's $90 billion identified of TAM coming up in the next several years. What I find most interesting about this one, and this is kind of like serendipity, but it had a big percentage of that, $14 billion is in Miami International Airport. Now we're not just a local contractor. But you got to admit, $14 billion coming down the pike in our backyard, that gives us a tremendous advantage. And if you want proof of that, we just won $1 billion of work between the port and the airport last year. And after securing the $1 billion that we have right now in the books, we won another project. And the next project for Miami International Airport is coming out this year. That one might be $1 billion in and of itself. So yes, this is personal for me as a Miami boy, and I promise you that we're going to do everything that we have to do to win that project or you're going to have to kill me as simple as that.

Sports & Entertainment is another very interesting market sector for us. We're selective here. Why? Because we're attracted to sports and entertainment projects that are more, how shall we say, like district level projects. Why? Because they're more complex, and they allow us to bring other Mastek entities into the mix. And that's really the calling card. I would say our #1 investor claim is that that we're different. We're unique in the respect that we're not a traditional general contractor. Don't look at us as a GC because we're not that. We're a construction manager that is integrated inside of MasTec's self-performed ecosystem. That means that we orchestrate civil and sight and utility and connectivity and substations and power.

And as I mentioned before, when you have that, you have higher visibility. You can increase your revenue and increase your margin. That's incredibly, incredibly powerful for us because a win for general buildings creates a sort of pull-through for the rest of MasTec, right? We can expand Mastek's capability on one campus. And nowhere can you see that more clearly, than on a data center campus, like this picture that you have right here.

Your typical data center campus, whether it's cloud or AI, it's going to have a substation. It's going to have transmission coming in. It has fiber connectivity. It's got civil. It's got site work. You name it, not to mention the buildings themselves. These are not just one scope projects for MasTec anymore. They require integrated delivery. And the beauty of it is that when a client hires MasTec as opposed to hiring anybody else. When they hire MasTec, they see one integrated project as opposed to 5 or 6 separate scopes of work.

So for us, increasing revenue and increasing margin is not a factor of pricing or estimating like a traditional GC would do. For us, it's about how we deliver that project and how much of that project we control. I've got more examples. Here's another data center project. As ever in the data center world, I can't tell you what client it is, but I can't tell you where it is. What I can tell you is that it's in the middle of nowhere USA. This is remote. But this because of MasTec is an advantage for us.

You want to talk about remote construction, go to one of Mike's solar or wind farms or go to one of Bobby's pipeline projects or one of Zach's transmission projects. These guys have been delivering billions of dollars of construction in remote areas for decades and general building is the beneficiary of that experience, and we deployed that experience wherever we go build because we're not limited. This project, in particular, is 168-megawatt AI data center, 500,000 square foot building divided into 4 data halls and a beautiful 2-story office in the front, and there are multiple MasTec groups in that photo.

And it's not just limited to data centers. We talk a lot about it, but it's not just limited to data centers. In transportation, this is our $600 million new terminal expansion. The beautiful thing about this example is that we're not just construction manager. Now we're tying back to the operational DNA I talked about. Here, we're design builders. And when you control the design as well as the construction, you have far better control over the economic outcome and the success of the project in general.

This project has 6 gates. It has aprons, it has new baggage reclaim systems. It has passenger walkways. It's an absolutely phenomenal project to kick off a $14 billion CIP with the airport. But this one, this is our [indiscernible] resistance. I got to tell you. This is the newly branded new stadium, which we completed on April 4, not by April 4, on April 4, which is opening day. It's going to be very difficult for me to just tell you one thing about this project, about the success of this experience. It's going to be very difficult. But if I had to sum it up in one way, I would say it's this. It takes all of 30 months to build a professional sports stadium of this magnitude and this complexity and this level of quality, it takes all of 30 months.

There might be a small handful of other contractors in the country that can pull that off. But not a single one of them has ever done this in 16 months the way we did, and I'm damn proud of that. And I'm also proud about this 90-second video that you're about to see that shows some of the work.

[Presentation]

If I had one takeaway that I'd like to leave you with after this section, I would say it's this. General building is different. We're not a general contractor. Don't look at us that way. We're a construction manager that brings together all of MasTec capabilities on one campus. Look, I know that wholesale likes to joke about the fact that if I had it my way, I have you all believing that MasTec is all about general buildings. And I can joke back and tell him that he's not wrong. But the fact of the matter is that when you look at what all of these guys are doing with the tens of thousands of team members that are building billions of dollars of infrastructure projects in the country, better than anybody else. It's the other way around. General building is all about MasTec. And that, to his point, is part of what makes MasTec inevitable.

Thank you. Now I'd like to introduce to you our Executive Vice President and CFO; Paul Dimarco, who's going to share some pretty exciting figures with you.

Okay. Well, good morning still, I think. Thank you all for being here. We really appreciate the time invested in and spending the morning with us today. And I'd really also like to thank the group Presidents. It is a lot of work. As I mentioned it earlier, right? They've got a lot they need to do, spending the weeks and months ahead of this preparing for this event, was a distraction, but they've done a great job. I hope you learned a lot about MasTec, about our culture, about the quality of our people and to give you more confidence in the message that Jose and I get to deliver to you in our various interactions.

I've been with MasTec for almost 20 years. started in finance, a treasurer for a long time, CFO of the power delivery business for about 1.5 years honored to help support the 20 years of growth that we've had under Jose and Bob's leadership and I'm really excited for the finance team to lead them and help support Bob and all the group presidents on this unprecedented opportunity that we have in front of us.

I'm going to take you through a little bit more of the financial outlook. Thank you for holding the questions until there's upcoming Q&A. We'll have plenty of time for -- to dig into all of it. But I want you to take away a couple of things, right? This is an organic growth projection. Everything we're sharing is only based on the organic opportunities we have in front of us, right? We will deliver accelerating growth through the financial statements. EBITDA will grow faster than earnings than revenue, EPS will grow faster than EBITDA. And we'll explain to you why. We will expand our return on invested capital to levels that we think will put us back at the top of the peer group, and we're going to generate a lot of cash that we will deliberately redeploy into the company to give us even more opportunity across this time frame.

Jose covered the transformation in detail, but I want to add a couple of things, right? The balance of revenue and profitability that we have today is unmatched in our industry. We are the most diverse contractor in the United States, and we have incredible balance across our earnings profile. Each of our 4 segments individually makes up between 27% and 30% of our consolidated EBITDA. That incredible balance is a strength. We are exposed to all of the major macro infrastructure themes playing out in our country today, but we are not over-indexed to any single one of them. We have multiple drivers for growth. we're diverse across the types of power we build, the types of infrastructure we build, and we will continue to be able to capitalize on those opportunities as different things get emphasized by our partners' customers.

I want to touch on the '26 guidance quickly. We have really high confidence in these results. Really proud that we beat Q1, raised the full year. Again, this growth is vast majority is organic. We've talked about the 2 acquisitions we did, 1 in Q4, another in the first quarter, contributing about $500 million of top line growth, about high single digits. And again, 60 basis points of margin expansion year-over-year, accelerating EPS growth with 34% growth with the $8.79 earnings per share compared to $6.55 last year. But again, really high confidence in this. and we're being really selective around the work that we're choosing to execute.

The '26 outlook and our longer-term forecast are all grounded in our backlog strength. You can see the growth over the last six periods, including topping $20 billion here in the first quarter. It's been broad-based across the groups. We talked about renewables. Mike mentioned, Jose mentioned the alliance agreements consecutive quarters of backlog growth, billions of dollars of work beyond the 18-month period between LNPs and contracted work, and we're talking about jobs well into the end of this decade and into the future beyond that with our clients today. The infrastructure side, some of the most durable demand we have, think about the highway infrastructure everywhere you are. You can't step a foot in the city without running some type of road construction. That holds true in Miami. It holds true in the Southeast. It shows who in the Southwest. That work will be there for decades, and we are one of the permanent players in that space.

Throwing power generation, now [indiscernible] interested in the water -- we feel really good about how that infrastructure market will play out for the foreseeable future. The thing that I love about the General Buildings Group on top of everything that Manny shared very eloquently, is how many multistage projects we see, whether it's a $14 billion capital improvement program at the airport in Miami or a data center that's Phase 1 of 5, right? The ability to work for a repeat client sometimes replicating the first design multiple times just drives more execution performance, more efficiency and better outcomes. Very durable demand and a really high opportunity from that retention to continue to grow.

And then in comms, I think this is really an underappreciated part of the story by the broader investment community. You heard about the multiple drivers from Rick of durable demand. And you heard about the changing landscape from those clients, right? We used to have challenges with some of our telecommunications providers about share of wallet, right? They were concerned about contractors having too much having too much exposure to a given contractor. That's no longer the case. Why? Because of our size, because of our decades of partnership, because of how we've shown them year in and year out, project by project, that we're trying to build for them what they need with high quality at a fair price. So there's great drivers, but the industry backdrop is changing, too. So we're one of the few people that can deliver to them what they need.

Power delivery, nondiscretionary recurring utility CapEx. On top of that, Zack talked about large EPC. These jobs, whether it's Greenlink or SunZia, they were designed in the 2010s to address problems that are still on their networks today. They're not there to address the stress from all this load growth. They're addressing problems of the prior decade, and we're just now getting them in the ground. There will be in another enormous wave of projects to address all of the inefficiencies that are being built with this scramble for power delivery for power generation demand today, which will continue to be selective around but levered our expertise to grow.

Pipeline has always been flat in recent years, but you heard Bobby's excitement. Bidding is up significantly, longer-term visibility. More importantly, when we're looking at budgetary submissions, I think he said to me the other day, it's up 200%. That's staggering, right? So long-term planning by our clients is up 200%. And really gives us good confidence in the visibility of the cycle. We've talked about backlog progression in that space being somewhat different than other businesses, but we feel incredibly confident in our outlook there.

Reminder again, this is an 18-month number, a lot of work beyond this, and you should expect to see continued backlog growth from MasTec for the foreseeable future. Touch on balance sheet liquidity really quickly. Leverage is well within our policy of below 2x. Frankly, our recent performance, and we look at the trends, we're starting to push towards some of the ratios that would move us to a higher ratings category from most of the agencies. And we think the scale and financial flexibility and our profile is a real differentiator. There are very, very few firms that have the size, scale and financial capabilities of MasTec. Customers have confidence in that. Our people have confidence in that, and we think we'll be very successful in utilizing that flexibility to the benefit of our shareholders.

No near-term maturities, as you can see from the maturity profile on the bottom left. So anything is going to be opportunistic in the near term from a capital raise perspective. So let's get into the value creation, right? It all starts with our ability to deliver the organic growth opportunity that's in front of us. Jose touched on it, right? We think we've built an incredible platform to deploy the resources that we have, people, equipment, expertise at scale for our clients.

Our markets are huge. They're growing. They're fragmented, right? We will grow faster than the market because we will continue to take share because of what our customers are asking us to do and our ability to deliver it for them. That scale, our growth opportunity is exciting. We have an incredible margin profile opportunity as well. Jose mentioned, right, we are just in the middle of our margin expansion from the strategic diversification. I'll touch on the drivers a little bit more later. That profitability is going to drive significant free cash flow generation, billions of dollars that we will continue to be disciplined in how we reinvest in the business. We will focus on returns. The organic growth is the priority, but the balance will shift, right? The organic growth is very efficient, and it's going to be a lot of money that we have to deploy. We'll talk about how we see that mix changing in the years ahead. And then we reinvest that in the business, and we continue to fuel that engine.

So on the revenue side, We talked about $22 billion. That equates to 15% organic revenue CAGR for 2025 to 2028. We think that's an incredibly strong outcome at the scale of MasTec today. Double digits across every segment with, call it, low to mid-double digits in power delivery and communications and high teens and clean energy and pipeline infrastructure. Largest TAM amongst the peer set, almost $5 trillion over the next 5 years because of our diversification, because of the markets that we're strategically exposed to, we think we've got the best-in-class opportunity to grow this business organically. We're really confident in this outlook. And again, we expect to continue to take share.

We're really proud of this growth profile. We think this growth opportunity at scale coupled with the ability to expand margins is a unique and incredibly compelling investment thesis. We have multiple levers today to expand margins. Scale is easy, right? We will get operating leverage on back office. But more importantly, with more project activity with better visibility, brings better utilization of our people and our equipment. That is an incredibly important aspect of outcomes. When Bobby's pipeline business performs at its best, it's because we're moving people and equipment effectively and efficiently from 1 job to the next. We don't have extended periods of downtime. We don't have big project overlaps that cause us to have to rent other equipment or subcontracts some initial work, predictability and visibility of timing of projects is key to outcomes. And we think with the vision that we have, the opportunity in front of us, we'll continue to drive more margin profile there.

Operational maturity. It's easy to look at 2020 to 2025 or 2026 and think that, that was a simple process. Mike really understated the lift that he did, bringing our legacy business, which was a $2 billion renewable contractor, a little bit less than that in total for the segment, I'd say $1 billion renewables. We acquired $1 billion of renewables. That was a merger, right, with all the challenges of a merger. Mike brought it together, unified, the operations. Now we've got 1 MasTec Renewables, right? Those operating companies you mentioned, we don't talk about those. Those are vehicles for execution, right? We talked about MasTec Renewables. That's what the customer here, and Mike did a huge lift with that. but it's still relatively new. He's operating in multiple ERP environments as is Zach, right? That's hard to do, right? We're fixing that. We'll produce better outcomes over time, but it's still relatively immature. So we've got a great opportunity to improve consistency of execution as we mature operationally, which we think is unique to us because we're in all the markets we want to be in, but the new MasTec is still relatively young. So we think we've got a ton of opportunity in front of us there.

I mentioned systems. Some of you heard me talk about what we're doing to try to bring better information, more timely, more accurate, more actionable to all of our operators that allows them to make better decisions that allows them to improve outcomes, allows them to be more efficient and effective for the people on the ground. That's another really important driver. Mix. Not only with the shift in mix to higher percentage of revenue from our pipeline segment in the years ahead, which is obviously our highest margin segment. But these types of national turnkey programmatic builds that our customer are asking us to do. You've heard it from almost every group President these prevent more margin opportunities for us. Because of the lower competitive dynamic, less folks that can work with that and our ability to continue to drive better outcomes for our clients.

And you heard a lot people talk about project selection, right? We have the scarce resource. Where we deploy our people and our equipment is critical, right? We're not chasing revenue. We are trying to find the right customers to partner with, to meet their infrastructure objectives, where it's mutually beneficial, right? We are trying to get their processes built but also ask for some things in exchange. How can we plan better? How can we have better visibility around deploying our people? How can we have the right risk allocation, right? We take risks that we can control. If we can't control it, we find a way to contract around it or we find a different partner to work with. It's a really important part of our margin profile. And this is a lot of drivers. So they don't all have to go perfect, right? But we do think that over the next 2 years, we can get to double digits at least 10% adjusted EBITDA on that $22 billion of revenue. That's a 25% CAGR from 25 to 2028, 10% higher than the revenue CAGR alone with multiple drivers that we feel really good about being able to unlock.

No change in the margin expectations by segment with comms and power delivery, achieving low double digits. Clean energy infrastructure, high single digits at the minimum and pipeline infrastructure, we expect them to be able to consistently be in the high teens. We saw in the ability to exceed those levels for pipeline and we hope we're able to exceed all of these targets across the segments as we move through this forecast period.

When we turn to EPS, the $15 per share of adjusted diluted EPS in 2028 equates to a 30% compound annual growth rate from 2025. So on top of the revenue growth on top of the margin expansion, we also think that we'll be able to scale on depreciation and interest, depreciation partly, it's mixed. We talked about some of the growth that's coming from asset-light parts of the company, but it's also about utilization, driving down depreciation as a percentage of revenue. On the interest side, this is an organic model, right? So we're deleveraging here. Interest is going down. We'll talk about capital deployment in a second, but that's another driver. We have assumed a higher tax rate than '25 and higher noncontrolling interest, which is a drag that, coupled with no buybacks are assumed in this model all give us further upside to these EPS numbers.

So when the questions earlier around why did you describe this as a floor, right? We're talking about what we think the base business can do today with multiple opportunities, multiple drivers for expansion of margins and other ways to accelerate EPS. So we're really proud of this outlook, and we think it's a very achievable level commensurate with the opportunity set that's in front of us.

Return on invested capital is something that we tried to be really intentional about over the past 3 years. I think for a long time, it was in our DNA. We just weren't as overt with our discussions around it. So what have we done? We focused on internal education and I've mentioned this to many of you, internal education, internal target setting and now we're ready to share what we think are external -- some external targets based on the outlook that's in front of us as well. It starts with the profitability expansion, right? We're going to grow organically. That is an incredible driver of return expansion, right?

Yes, there's investment in working capital and fixed assets, but the returns you get from organic growth are multiples over even the best M&A. We will continue to prioritize that and make sure we're putting our operators in a position to capture all those opportunities that their partners bring to them. Capital efficiency is critically important, right? We have it with the operating -- with the organic growth opportunity -- as we look at M&A, the valuation, the post-acquisition organic growth that we can achieve with those businesses, the capital intensity of those businesses, those are important characteristics to make sure we can continue to bring in companies that meet and exceed our return threshold so that we can expand returns post acquisition as well.

So when we put all that together, we talked about eclipsing our WACC in 2025. I talked about 100 basis points of margin expansion in the first quarter on a 12-month basis. We think we can expand over 600 basis points to north of 16% by 2028. Through the organic growth opportunity and continue the continued discipline around capital deployment. The goal is that best-in-class returns. We had it in 2019. We expect to be there again. We think this is an important barometer around our efficiency and deploying capital. It's not the only metric. But we think it's important to show that we're taking the capital that we're entrusted with and redeploying it effectively into the business and into the end markets that we serve.

So to summarize, all the targets on 1 page. And I'm going to speak a little bit more to our confidence in these, right? The revenue target with our backlog with the largest total addressable market in the peer set and everything that's going on in those markets, the fragmented markets that we operate in, we feel really strong about the ability to deliver 50% compound annual growth over the next 3 years. We'll accelerate that with the margin drivers that we have delivering at a minimum of 25% adjusted EBITDA CAGR over that same time frame, and we expect to get to $15 per share of EPS by 2028 at a minimum.

From that, we expect to generate at least $3 billion of free cash flow cumulatively over that time frame with a conservative 55% to 60% conversion of adjusted EBITDA. So now I'll turn to capital deployment for a little bit. This is a snapshot of what we did over the last 5 years, deployed about $3 billion, $2 billion to M&A, roughly $700 million to operating capital, mainly fixed assets and about $200 million of share repurchases. I talked about the priorities remaining the same, right? Organic growth will be the priority. But we've intentionally deemphasized M&A over the last couple of years. Why? We had a lot of integration to do, right? Had a little bit of deleveraging at the early part of the strategic transformation. But then it was about let operators work, right? We didn't want to distract them. We're at a point now with where the maturity of the business is, yes, there's still opportunity there, but we've got it organized the way we want, we're performing for our customers. And the capital that we're going to generate, we think we can be more forward leaning on M&A. Jose is going to talk more about this in a second.

But we think we're at a really important inflection point in our strategic outlook where we can support the organic growth of the business, but we will deploy capital to M&A in a very similar framework as you've seen over the 20 years that Jose has led this business. It's going to be disciplined. It's going to be focused on good management teams, people like Bobby, that we hope are here, almost 2 decades later, which there's multiple examples of across the company. And to be things that get us into markets like water, that we think are underpenetrated, and we have a unique opportunity to grow at a faster pace than other parts of the industries.

On top of that, when we think just from a debt capacity perspective, we'll have another $2 billion of debt capacity staying below 2x for a total of $5 billion of capital without any equity that we can deploy under our current financial framework over the next 3 years. With the level of the valuations that we bought companies, again, over that almost 20-year time from the Jose [indiscernible] business, think about the earnings power of that capital, right? We'll talk about the recent deals. I think the deals over the time frame really speak for themselves in terms of performance. Jose is going to give a lot more color there in a second. But we think $5 billion at the low to high single-digit multiples that we paid historically, is an incredible value driver from MasTec and our shareholders in a relatively short time frame.

We're going to -- we don't need to do deals. So we can be very selective in the types of firms that we're going to acquire. Leverage could fluctuate down below our 1.5x to 2x target because we're not going to chase opportunities, but we have this capital available to us, to be disciplined with and to, again, drive long-term shareholder value.

So with that, I'm going to wrap up. I really just want to focus on the confidence we have, both in '26 and the remaining period of our outlook profile. We'll be really disciplined around value creation. We're focused on the long term, focus on disciplined capital deployment and focus on taking advantage of these organic opportunities out in front of us. Really want to thank everyone for being here. This is a big effort to put on. So again, thanks to the group presidents and all the folks that really help make this happen on the broader MasTec team. But I really want to thank you for your interest.

And with that, I'll turn it over to Jose for some additional remarks. Jose.

All right. So are you excited yet? After listening to all this, I'm so excited that I think I'm even going to buy more shares. In all seriousness, sitting there because I usually get to talk a lot, but just listen into the story. I grew up in this business. It was a family business when I was a kid. We were tens of millions of dollar company growing up in South Florida to watch where this company has come, became CEO in 2007. Back then, over 50% of our revenue was with one customer, DIRECTV. And to be able to just kind of soak it all in today and see the incredible diversity that we've created, the markets that we're in, the potential of those markets that we're in, it's not lost on me. And going back to earlier comments, only in America. With that, let me deep dive into what Paul talked about. Some of these questions came up during our first questions. First Q&A session. Paul just showed you a slide. That said, we're going to generate $3 billion of free cash flow over the next 3 years. And we're going to have an additional $2 billion of capacity relative to our targeted debt profile. That's $5 billion of capital that will be available to MasTec.

And let me be clear, so nobody leaves here, misunderstanding what we're saying. We will deploy it. We will deploy and most likely in M&A. So how have we done? Let's talk about our M&A because if we're going to have that kind of capital ready to deploy, what do we look like? Historically, left part of the chart, all the way from 2007, deployed $5 billion and 71 acquisitions. Long time, too many years, 20 years, let's forget about it.

Let's talk about what we've done since 2021. Paul had it on his chart earlier, you might have missed it, $2.1 billion in capital allocated to M&A from '21 to '25, albeit in a time where we have been very intentional about saying we're not going to do a lot of M&A. We're going to focus on our organic growth story. We're going to integrate the acquisitions that we made, especially in '21 and '22, and we're going to maximize margins integrate and be in a position to have the opportunities that we have today. That's been the backdrop for us, at least at MasTec for the last 5 years. We've been vocal about it. We weren't going to grow really focus post '22 on integrating the acquisitions we made. We've got a little more active at the end of '25 again.

So how do we do? Because there's a perception and MasTec didn't do great in the last few acquisitions. That's the perception that exists with many of our shareholders and analysts. And I want to put that to bed today, because that $2.1 billion of acquisitions that we spent in the first year generated $292 million of margins. or 5.7%. Those are the companies that we bought in year 1 of MasTec owning them. We did have issues, especially with IA, we had issues, but those were the numbers. I spent $2.1 billion to generate $292 million of margins of 5.7%, what's in our guidance today for 2026 for those same companies. Those same exact companies less than 5 years later, those entities are going to generate $612 million of EBITDA and having improved margins from 5.7% to 8.7%.

So I would argue that our deployment of capital on M&A over the last 5 years as good or better than anybody. Might not be purely evident because we don't give out all that detail, but we thought it was important enough to share with you because we do plan on spending a significant amount of capital in the coming years. This, we're super proud of. We are super proud of this slide. 109% growth from those companies in earnings, 300 basis points of margins.

Organically, just as important because we talked about our organic growth. We did 109 in these acquisitions. We did 200% organic growth in EBITDA in our organic businesses. So our organic business has outperformed the acquisitions that we made, not a bad thing, and we saw a 160 basis point improvement in those same deals. So we're good at this. We're going to find the right deals that fit MasTec, and we're going to take advantage of the growth opportunities that they offer us.

So to conclude for today, I am convinced that this is a once-in-a-lifetime opportunity. This is a generational moment for MasTec. We've done some incredible things as a company, what's before us is even better. We have built the most scaled, diversified infrastructure capacity platform to capitalize at scale, 3 of the largest infrastructure opportunity cycles in U.S. modern history. I truly believe that. And we're doing it at a time where we have tremendous improvement -- margin improvement capabilities ahead of us. I know you're going to ask us all about the numbers after this based on what I'm saying, but we believe this, right? This is an incredible position that we sit at.

A couple of thoughts to leave you with. Labor is at the core of everything. It really is a differentiator. And our ability to deploy labor at scale makes us different. I want to thank all of you for being here with us today. You've spent hours listening to the MasTec story. I hope you got learned a little bit more about our company, again, not just the numbers, but what makes us tick. I want to thank all the MasTec people that are here. This isn't their gig. They're not used to coming up here and speaking to investors. They like running their businesses, operating their businesses, which is what we want them to do.

And if I leave you with one thought, A number of years ago, we had a guest speaker at one of our leadership meetings. And his name was Jim Lernegan. Jim arena was a college basketball coach, who had just gotten the job at the University of Miami. He was 68 years old. You had coach at George Mason. He got a job at the University of Miami, ACC, Best College Conference in basketball, we could argue that, but it's at the time, for sure, it was the best conference in basketball and he was 68 and he gave a presentation in Massecand he said, I am more excited than I've ever been in my life at 68. And he said, I asked all of you, and I challenge all of you. Are you at the beginning? Or are you at the end. So let's unravel that a little bit because I think that's a very personal question to everybody in this room. Are you at the beginning of your career? Or are you at the end of your career? And it has nothing to do with age. It has everything to do with desire, motivation and what you want to get.

So under that, I can promise you. Me personally, MasTec as a whole, we are at the beginning of our story. With all of the success we've had, and it's not lost on me, we are only getting started. So I look forward to being able to come back in a couple of years, yet another Mastek Investor Day, hopefully, at the beginning of 2028, so we can show you and we can measure ourselves to these projections that we've put out. But again, thank you for being with us. Super excited.

And I think now I'm going to ask Marc to come back up, and we're going to open it up for Q&A. Thank you.

That's a hard act to follow. I have some questions here. And just while we're gathering here for the people on the webcast, all the presentation material has just been posted to the website for MasTec so you can download those PDF files today.

Let's see, Marc.

Marc Bianchi with TD Cowen. You talked about the natural gas business that you guys run there. And I'm curious, out of the $1.9 billion of revenue that you showed, how much of that is related to that effort? And maybe you could talk a little bit about the types of projects because we're hearing a lot about distributed power projects that are going to work with data centers perhaps behind the meter or maybe in a quasi behind-the-meter type of arrangement. How much of that is what you're doing? And how do you see sort of the runway on that? Because a lot of people wonder maybe these are bridge solutions once the grid becomes available to satisfy this business is not going to be as attractive.

I don't think we've disclosed that.

So let me -- I'm little hesitant on what I'll answer, but about 10% to 20% of our revenue related to the numbers that he posted are on that type of work just to kind of give you a framework.

The second part of your question is, so the behind-the-meter opportunities we see are just -- I mean, in the past 3 years, we've seen the transition of behind the meter from we thought it was all going to be an island generating itself its own power then it moved through a wave to oh, we're going to be connected to the grid and now it's moved back to -- we see developers looking at just pure behind-the-meter opportunities. There is a substantial amount of those opportunities.

The one I talked about in Utah earlier, that's a completely behind-the-meter solution. There are dozens of those across the country. We're tracking 10 active ones now where we've been prequalified and putting in qualified pricing for 3 of them we've done just in the past 2 weeks for those types of projects.

Now our focus, like I said before, is reciprocating into peaking power plants or simple cycle projects. We're not in the combined cycle business yet. There's a lot of that work -- that power that would be combined cycle. But it's a -- if you wanted to buy a large turbine today you're over 3 years out to get that work. So we're going to fill that gap in the meantime.

So Mark, can you explain to everybody, I'm sure most know, but just in case you don't what is the difference with the combined cycle project? What is the difference?

Sure. So combined cycle -- simple cycle project has a single turbine, generates power and exhaust the gas basically. In the combined cycle, it's got 2 turbines, one picks up the gas and steam generates has a steam generator on the back end of it. The difference in complexity is about fivefold between a simple cycle and combined cycle right? It's a much, much higher level of complexity in a combined cycle environment.

Maybe just the second part of the question I asked was just the runway on this. Is it a bridge opportunity that ultimately dries up because everybody can ultimately get connected to the grid? Or do you think that this type of sort of behind the meter continues well into the 2030s in terms of continuing to add?

Yes. My own opinion is that -- so utilities don't have incentives to build a whole bunch of power -- new build for data centers. Why? Because they have to charge the rate payers for that. So what I think the balance is that the developers are going to build the behind-the-meter power so they're going to pay for that asset, then they're going to generate additional power and sell that to the grid.

So I think that's the win-win that we can see that can happen. Almost all of the behind-the-meter schemes have excess power that they're going to sell to the grid so the utilities get something for that. That's what we're seeing right now. As far as the end of it, I can't see the end of where spend is right now. We just -- it's tremendous. We can't see it stopping. I mean the numbers are staggering.

Pass the mic back to Phil.

Philip Shen with ROTH Capital Partners. Jose, Paul, I wanted to come back to my earlier question, $22 billion, 2028. And earlier, I think Jose mentioned you're growing the company at 2,000 people a quarter, right? So you run that out through 2028. From today's revenue per employee, you're roughly maybe $435,000 per employee. You go out to 2028 with your $22 billion, that implies maybe $385,000 per employee. So I got to think that there's some conservatism in here. If you apply that same revenue per employee, you get to $24 billion. So I was wondering if you might be able to comment on just how conservative things might be and what the upside might be?

$22 billion, $24 billion? Look, I think we laid out a number, again, that we have tremendous conviction and confidence in. We're not going to sit here and say we've sandbagged you either, right? If you look at '26 earnings to '28 on EPS, it's a 75% increase in 2 years. So that's nothing to sneeze at. With that said, is that our expectation to finish at that number? The answer is no because on top of that, we will deploy capital in M&A. That will be a significant part of our story in the next 2 years. So I guarantee you the $22 billion and the [ 2,200 ] are probably wrong, right? We know that. And it is conservative, and we know we can achieve it, right? And that's why we're so confident in putting it out.

And to be honest, most of the analysts, if not all of them, the numbers for '28 were below that. So what we wanted to do was level set it and say, look, start here. This doesn't end in '28 for goodness sake. This is just getting started, right? So make whatever assumptions you want on growth beyond '28, but let's start at the same base. Let's not have people way too low in '28, building off that or vice versa, right? Let's set the base for '28, and then let's work on where we think we get to in outer years.

Thanks, Jose. Next question is for Mike on renewables. Tax equity pause, we've heard a fair amount about that. There's potential for some skinny guidance from treasury to kind of clear that maybe coming out this summer. I wanted to see if you guys are seeing any of this with your customers, what they might be saying, what kind of potential impacts it could be or there could be on the renewables backlog?

Yes. So I appreciate the question. We have, as I mentioned to you earlier, we have had some conversation with our customers to that regard. They are bullish on where we are going to get. There's a pause with that investment cycle to a degree, but we're continuing with investment on those particular projects from engineering and moving the projects forward. So everybody that we're talking to and all of our customers are still very keen on these projects are all moving forward, and they will resolve any tax equity issues that exist today.

Andy.

Andy Keppel, Citigroup. So maybe this is for Paul or Jose. Like Paul, you mentioned the multiples in the past you paid were in the single digits. But what would you assume you could buy companies at today? And if I use round numbers, let's say, I said a 10 multiple, right? So I use that $5 billion, I could buy $500 million of EBITDA. Are we saying we could add like $4 or $5 to EPS by 2028? And maybe just one related, like would you prefer many bolt-ons or a larger deal or 2? Like what's the thought process there?

So look, we're not going to lay out expected multiples because that wouldn't make any sense to do today. Your math, right, the $500 million of EBITDA represents $5 of EPS. So that's kind of -- that's the math, right? So if we deployed $5 billion in M&A and we did it at your scale, which hopefully we would do better, we would -- that would generate an additional $5 of EPS. Whether we deploy it all in that time frame or not, we'll see, right? I think when we get into the types of deals, if you didn't get the sense for it, everybody is pretty excited about their business across the board at MasTec.

We have tremendous opportunities. We have opportunities for consolidation within our space. We have opportunities for new markets. We have opportunities for parallel verticals. There are a lot of things that we're looking at. We do not think it is a huge milestone to have to deploy capital today. We don't think it will be difficult to find the right companies that fit to allow us to deploy capital. So I expect that you'll see us be active in '26. Obviously, to the level of activity, we'll see how some of these deals shake out.

Maybe just a quick follow-up on data center. So like I think you mentioned $5 billion of pipeline. You've got $1 billion approximately now. So how do we think about that versus 2028 because obviously there's still a lot more work than just $5 billion out there, too? Like so how do you proceed? Because I know it's not a new business for you, but some of these customers are difficult. So like how do you proceed going forward? And should we think it could be a much bigger business in '28 or at least what did you put into the financial model?

We expect that it will be because the opportunities -- and again, a lot of that pipeline or most of that pipeline is. Repeat clients. And so we're gearing up for an incredible amount of growth in that sector. Sometimes you look at these numbers and you wonder like, are they real, but the reality is that they very much are because the need is insatiable. And MasTec, as clients continue to understand what we bring together from this platform perspective, it's like this gravitas that really just attracts people to that. And so I don't know that I want to give predictions as to where we'll be in the data center space, but it will definitely be our largest market sector of the 3 in terms of general buildings.

And we probably do not have that in our '28 numbers. No. So the expectation that we've created today probably does not represent what Manny just said. The opportunity is there, right? And remember, a little bit of a different margin profile to the extent that he can bring in more of the self-perform dramatically changes that margin profile. But if that plays out, then yes. And that will be a key driver as to why the 22% was too conservative.

Adam.

Adam Thalhimer at Thompson, Davis. Great presentation. I wanted to press a little bit more also on M&A. A lot of your competitors have made mechanical, electrical plumbing acquisitions. Curious if that's interesting to you? What end markets are attractive? I think at one point, somebody mentioned water.

Yes. So maybe touching on water first. We closed the Big Water acquisition at the end of the year. We think we've really repositioned ourselves in that market. Super excited about what that means. In terms of mechanical, electrical, look, it's obviously an area that's of interest. I think with the recent data center wins, it kind of changes our outlook a little bit on that. We've been a little more hesitant to do those kind of deals historically.

We can spend a lot of time talking about that. I won't just now. But obviously, with the opportunities that we see on the program management for data centers, that becomes a much more interesting opportunity for us because of how easily that would fit into the MasTec story.

Over on the right wing.

Ati Modak, Goldman Sachs. Paul, you mentioned market share growth as a strategy going forward, you expect to take market share. Can you talk about what that looks like across the various segments? And where does it make sense to possibly think about organic versus inorganic as we think about that trend?

Yes. I mean I think Jose talked a lot about the inorganic side of it. So I mean, we're open to acquisitions in any of the segments, which would obviously add to the share. I think my comments are really more around how our customers are engaging with us, right? So whether it's from the communications side or the power delivery side, we have opportunities. That consolidation drives cost out, right? These are really fragmented markets. There's a lot of regional procurement. There's a lot of diversification of contractors on the same system.

Adding that together under one execution platform allows us to deliver cost at a lower cost -- deliver work at a lower cost per unit. That's valuable to a utility that is trying to focus on their rate base or to a communications provider, right, that has, as Rick said, a relatively fixed revenue per user. So we think we can get it because of the dynamics, because of our scale and our ability to leverage that additional work and share to drive cost out for our customer. But yes, I think there's inorganic opportunities as well.

Jamie, on the end.

Jamie Cook, Truist Securities. I guess, Jose, recognizing the tremendous growth opportunity that's ahead of you with growth also comes risk. So I'm just wondering what parameters you will use to manage risk for the company over the next couple of years, whether it's through fixed price exposure as these projects get larger? Do you feel like you need to joint venture with other contractors? Or how many large contracts would you be willing to take on one time? And then just two, like M&A in the sector, understanding your EBITDA has grown, but others have been less successful, just parameters around managing risk around M&A.

I think managing risk is at the core of everything that we do. And I think all of them talked about it in their presentations. Each one of our business leaders is super focused on risk. We often are asked about price and escalating prices in this environment. And our answer is always before we escalate price, we're derisking. And that's probably been the biggest shift within our industry over the last 5 years is the fact that contracts have derisked. We are able to share more of the risk with customers before we hit price. That's really important because we think that really impacts margin attainability.

I think that, look, right wrong or indifferent, my family is the largest shareholder in MasTec. We're in this with every one of our investors. We have no interest in exposing ourselves to undue risk. We obviously want to take advantage of the opportunities that are before us. The truth is we don't have to, right? Organically, we're going to do just fine. But the opportunities in my mind are too good and too great to pass up. So we'll do everything with risk in mind, with derisking every situation that we have.

When we talk about -- and we've been asked this a lot over the course of the last few months, why aren't you guys more focused on combined cycle? And it's what Mark talked about, right? There's a level of complexity there that is vastly different from simple cycle and RICE engines. And it all comes down to -- you have multiple technologies. So when one of them fails, it's very difficult to figure out whose fault it was. And ultimately, as the primary contractor, you're responsible for all of the subset of what made that plant work.

So when they go well, they're great projects. When they go bad, they're really bad projects. So your contract structure has to be great. And if it ever gets to that point where we think it's completely derisked, we would look at it more. But in our risk appetite today, it's just not there. We don't think we need it, right? We think we've got plenty of opportunities to grow. So I think that's an example of where we wanted to derisk.

Let me give you another example. Last year, when we won Greenlink, we had some permitting issues early on in the Greenlink project. It was a big part of our 2025 growth plan. But yet, we didn't miss any earnings. We still grew. We still had nice growth. We still had nice margin expansion because we had a good contract, right? And we were protected from things that historically we might not have been as protected from. So yes, it is a key element of everything that we do. So very important to our growth.

Steve here.

Steve Fisher, UBS. Just really to follow up on that last point. I'm curious, maybe, Paul, this might be for you. In terms of what data are you getting now that helps you manage the ongoing operational projects as you're doing more and more bigger things, what data do you get that you're analyzing to help the operations? And there was an imaging discussion about the operational support center, I think, Mike, that was yours. Is that something that's used across the business? Or what are the tools you have to actually manage the operational risk?

I mean, so from your first question, the main tools on a big project are understanding what your production is relative to your cost. So call it earned value. And there, we have it everywhere. It's not as consistent as it can be, right? So like in Mike's business, he has 2 different systems supporting him. We have one process on part of the business, one on another. It makes it harder to compare and over time across projects, like that's an opportunity to make it more streamlined and more efficient.

So we're looking at that everywhere. That's how you know, right? I expected to spend 2 weeks and $2 million doing this activity. Did it take me longer or shorter? Did it cost me more or less for that level of production? That is the key metric to understand if your costs are accurate, if your production is driving the results that you expect. So that's what's the core of it is making it more consistent, more comparable, feeding it back into estimating more consistently.

So if you underestimated a cost on a subset of projects, now you know on the future ones, these exact same activities, we actually performed a little bit better or worse, how can we better inform those go-forward pursuits. That's the goal. That's what it's moving towards. And they can do that today. It's just more work, right, because there's some inconsistency because of the multiple environments.

I would say to your second question, one of the luxuries that renewables has is how many -- how many active solar projects do you have?

30.

Yes, 30, right? So that's a lot more than with a lot of the very similar activities going on at any given point in time than Zach would have on transmission jobs where there can be a lot of different types of structures, foundations, you name it, right? Similar with pipeline, they're in a much more lower quantity environment. Their jobs are -- they don't have 30 jobs going on, right? So Mike's business, because of the number of projects of very similar execution parameters really lends itself to that centralized center of excellence. Probably some opportunities in other businesses, but not as concentrated. So there hasn't been as much focus yet. I don't know, Mike, maybe you could talk about...

Let me jump in for a second. So to answer your question, and to capitalize on what Paul said, why we do things a little differently across all of MasTec, and this has been -- Bob has been the driver behind this. We are very focused on project controls across all of our groups. And that is something that all of us will shake our head at because we are laser-focused on it. That is, in essence, what you're talking about. Each group may do it differently, but the focus is the same. It is dialed in on project controls to improve delivery. And I think you heard that from -- in a different way from each one of us today.

Yes. If you look at the reciprocating engines that we built, we've installed over 100 of them. So why are we good at it? Because we've done 100 of them, right? We know what the unit rates are. We know what we know how to procure them. We know how to install them. We know what our productivity is, and we can very accurately estimate and measure that productivity. We measure productivity every day across every project that we have, right? We roll it up every week. We compare it against our schedules and our productivity to see where we are. It's a discipline that we all have.

And it's one that we continually try to improve upon. And for your work, right, I mean, in the infrastructure space, we build roads, bridges, utilities. So we do this work constantly. We have a lot of data on what we can execute and what rates and what productivity we can execute. So we know this work. We know it well. And so expanding that business, for example, into an adjacent market following a customer or going to adjacent geography, we have a lot of confidence we can do that and still make good money on it.

Manish.

My questions are for Paul and for Jose. Three questions. One is the $22 billion target that you laid out for '28. How much of that is based on recurring versus new business? If you can give us a sense for that? Second, I think on the M&A slide that you talked about the 300 bps of margin improvement. If you can also help us understand how much of that was cost synergies versus revenue synergies? And then lastly, on the ROIC, you have a 9.6% return in '25 going to 16%. If you can help us understand how each of the segments stack up currently and which segments need to do kind of the more of the work of the push to get to that 16%.

Okay. So on MSA versus project work, I would expect us to be in that 40%, 45% range over the -- it might ebb and flow a little bit from there, depending on what General Buildings does, timing of different projects work on the communications side, but I still think that's a reasonable range based on the makeup of the business.

Second question around the expansion. Very little was cost synergies. Henkels was really the only business that we had a significant restructuring of the back office. And frankly, it wasn't about revenue. It was about effectiveness of execution, right? It wasn't about driving cost out. It was about doing work better, more effectively, more consistently and producing better results, just better productivity. That was the primary driver, some with the timing that we talked about, better visibility has driven better profitability like in the renewables business, for example, through IEA. But again, outside of Henkels, none of it was about a major restructuring.

Internally, we don't look at ROIC for the segments. We look at a derivative called operating return on capital because what do they need? They need working capital and they need fixed assets. So we try to strip out the things that they can't control. That's obviously a different bar. All the businesses are penciling today. Candidly, clean energy infrastructure is the highest because of the relatively low capital intensity from a fixed asset perspective and across infrastructure and renewables. And for most of General Buildings, the cash flow profile from a working capital perspective is very low, to many cases, negative because of mobilization payments and ways to keep the projects cash flow positive.

So in some businesses, they actually have negative investment because the working capital profile is so good. Pipeline is more of a function of utilization. So when things are humming, they're really high. Right now, they're kind of right around the hurdle. Comms is about at the hurdle. Power Delivery, actually, they need -- internally, they're the lowest segment today. They're going to be that utilization about margin expansion. They're probably a little bit below our internal hurdle on the operating return on capital metric today. But we think with the outlook, the margin expansion that we see and the focus that you heard from Zach around fleet utilization, they're going to be where they need to be in pretty short order.

Here, Jonathan.

Jonathan Kees at Daiwa Securities. I have a question for Mike and a question for Jose. Mike, I just want to double-click on what you had mentioned. You had said that contrary to what you may have heard, things are going really well with renewables, with wind. And I guess I wanted to see if you could expand on that. I mean it sounds like basically you see disregard the headlines. I mean, it's quite knowledgeable that -- or it's quite stated in public fact that the current administration has immense to stain for windmills, for wind power. And then solar right now, anything that touches federal land gets extra level of scrutiny. So I just want to get more information on that.

Yes. I just want to clarify what I said. As we look at the wind market, it is exciting for what we have today and where we're going, right? There are challenges, but the renewables market has always gone through challenges from a regulatory perspective. This is not any different than any challenges we experienced in '22 or '24, and here we are again. What I am seeing, though, is despite those challenges, we still are increasing our A, market share and B projects that we're building. The customers that we are -- have line of sight to their future pipeline that we are in direct conversation with, they bring those concerns to us, and we work through them and understand the timing that they may impact, but they're still investing in those projects in the go forward.

So we have line of sight to projects that are out in '27, '28, '29 that we're talking about from a wind perspective that we're confident will go and we will overcome this current regulatory cycle and we'll be there when the time comes. So where it stands today, we have a large backlog and where we see the future going from a wind perspective is there as well.

From a solar perspective, we try to stay away from solar projects that are dedicated for BLM land, just as a rule of thumb. When we look at how we go after projects, and I mentioned this, we are very selective about where we build because of 2 things. One is we don't want to waste time or investment into a project that will not go. And two, we can be really successful in certain geographic areas. And in other areas, it's more challenging for us. So one of our key criteria for a no-go is if it's based on BLM land, to answer your question.

And my other question for Jose is your enthusiasm, your passion for your company, your market opportunities are great, and we can all see that and certainly is infectious here for people listening in, I would think. I think you're also a big picture person and you're kind of grounded in terms of your expectations, what you see as your opportunity. I heard you're saying you derisk stuff and you try to share the risks. So I guess stepping back, looking at the big picture view, what keeps you up at night? What are some risks that are not project specific, but stuff that maybe beyond what's on your 10-K, what you could say could really come in and mess up your plans?

Yes. Look, we don't know, right? And I say that this answer would be different. Over 20 years, the answer would have changed a lot many times. A lot of times you're worried about the market. A lot of times you're worried about execution. I'm not worried about those today. Market is going to be fine. If given the opportunity, we're going to execute fine. It's the unknowns, right? To date, the war hasn't impacted us, only in fuel prices, right? I would imagine that I think this war will ultimately play itself out. But back of my mind, if that escalated even further, what does it mean to our business?

We live in an administration that could wake up tomorrow and just say whatever they want and change something, right? That's a risk. I think we're cognizant and mindful about derisking that ahead of time, right? So when we talk about -- I think Mike really underplayed the work that he put in to know his customers, know each and every project, know the risk of every project, right? When you're working with customers who are on the fringe, who have a project that just barely gets by. And yes, it's a great project. We can make good money on it, but there's a chance that a couple of things could go wrong. But we derisked ourselves of those. So we used to have a lot of that. We don't barely have any of that today, right?

So we're really centered on the fact that we got good customers, good projects, big balance sheets. The tax equity question came up. We have a bunch of customers who don't care about tax equity anymore. What a great position to be in. That's not where we were, right? So I think we've done a lot to preempt the potential issues that could exist.

I think we have one question here.

Steve Fleishman, Wolfe Research. Two questions. First, just you mentioned the rock crusher business you bought is dealing with constraints that you see in the future. Any other things like that in across your businesses that you see worth calling out? And then secondly, just on the data center opportunity, maybe you could talk to -- well, maybe not 1 million of them, but there's a lot out there and maybe not everybody has got necessarily the likelihood of getting done or the credit and things. Just how are you differentiating what to work on and make sure you've got the credit and the likelihood of things getting done?

Yes. So on the rock trenching question, look, I think there's always things that we're looking for as a business and things have changed. 5 years ago, there was a lot of issues with supply chain. That's improved. To the extent that we find areas where we think there's going to be a constraint and we need to get ahead of it, we will consider making investments in those. We haven't. The one that we've kind of identified in our pipeline business is the rock trenching, which is why we did it. We did it more than a year ago, well ahead of the cycle. I think it's going to be -- I think it's going to prove out to be incredible for us that we did it. So we're not against doing those things, but don't today feel the need to absolutely have to do any of them.

Two, I'm going to let Manny answer the second part of the question, but I would like to chime in. If Manny gave you the number for everything that we're looking at, it would be bigger than MasTec, right? It would be bigger than MasTec. So the biggest challenge that we have is doing exactly what you said, right, is understanding the customer. So everything that we learned in renewables as to how to really understand whether a project was real or not, we've applied to the data center business.

So there's a lot of questions you ask upfront. Do you own the land? Or do you have an option on the land? It sounds really trivial. It sounds like a really trivial question. Most people don't own the land. They have an option on the land, and they're trying to figure out if they can put the scheme together to ultimately buy the land. That's red flag #1. Because if you don't own the land, then there's a chance you might -- you haven't put the capital in, right? Your hard capital is not in yet. Do you have power? Or do you have a letter that the utility is giving you telling you that they will give you power at some point in time? And if you count up all the letters that exist for power out there, we don't have enough power, right?

So there's all these intricacies in each one of these projects that you have to know in depth to qualify that project. So when Manny talks about the $5 billion that he talked about, those are qualified. Those are real. We may not get them all, but they're with current customers that we're currently working for that are real. What do you want to add?

Yes. No, I think you nailed it. Look, there's more money out there to spend on data centers than there is actual power to fuel these data centers. So I think that's the real differentiating factor like Jose said. We get a lot of calls from people that have the land, but then you start digging deep and understand whether or not they own it or not. That's criteria number one.

Criteria number two, that power, well, MasTec is better prepared than just about anybody to really go in and dive deep and figure out if what they're claiming is real or if it's not. And a lot of times, it's not. And so when I mentioned that we had -- we can scale because we have a strict no-go criteria, it sounds counterintuitive, but it's not because it helps us to focus where we have a much higher probability of winning because the people that we have qualified, they've got the land, they've got the power, and they've got the money.

And that's really the only thing that matters for us. So that's kind of -- I probably didn't do a good enough job explaining that when I was talking about our no-go process, but it is precisely what Jose is talking about.

Okay. All right. Brian.

Brian Russo with Jefferies. Can you just talk about the labor constraints that you're seeing across the end markets? Where is it most acute? I don't really think it was called out as necessarily a margin driver. But how do you build that into maybe your bidding or contract terms that, in theory, could lead to higher margins and drive to what you're trying to accomplish?

General statement before they answer, I think that you didn't hear a lot about labor shortages, labor issues. We talked a lot about training. We talked a lot about upskilling and bringing people into the workforce. But I think it's very telling that we sit here today, and we don't view labor as a huge issue relative to shortages. We think there's labor available. We think that MasTec is an employer of choice. We think we can draw people better than most. So all of that is important, but we don't view it today as a regulator on our ability to grow. Any of you want to chime in?

We have -- in the industrial practice, we have a roster of about 1,200 people that have worked for us in the past 5 years, which we keep tabs on. And we don't employ all those 1,200 right now, but we've got a strong roster of folks. I mean the highest demand folks right now are electricians, right? Rates have gone up certainly. We haven't had any trouble staffing them. We have loyal folks that follow us. They know they're coming to work for a company that takes care of them. And that's one of the ways we address it in the industrial practice.

Yes. So speaking for renewables, I'll touch on what Rick said and also what Zach said. We also have workforce development centers, and we've gotten ahead of this many years ago to set ourselves up for the growth that we expected to come during the boom with the IRA and then what has come since then. We've been working towards this end result or this end platform since then. And we are positioning our projects with our clients. We turn away projects if it's an area that we don't think we can be ultimately successful.

And one of the criteria is, do we have an existing labor force in that area that we've been successful with. And we're developing mass labor forces in the key pocket areas where we want to build and where our clients want to build. So to Jose's point about line of sight to where the projects are going to be built and where our customers are going to be built, that was an intended consequence of that alliance or that alignment is we understand where their pockets of projects are, and we've built workforces in that area to avoid having a situation future state.

I'm going to speak to the General Building part. So our labor, if you will, is different than everybody else in MasTec, right? And Jose mentioned it before in the sense that if any one of these guys gets a $1 billion project and they need to deploy 1,000 people to do the transmission lines or the mills or whatever the case may be, General Building can get a $1 billion project and manage it with 70 people, right? So it's different.

That said, what we're finding is that a lot of people want to come work for us. And I think it's to the point that you just heard. You know that we're an employer of choice. We're offering good opportunities inside of MasTec. And frankly, from the general building perspective, we can say it, right? We have some sexy projects that we're doing that people want to be a part of. That stadium for one, terminals, the data centers. I think people are starting to understand what this platform means, and they want to be a part of it.

So a lot more growth to come and a lot more specialty work. Again, I just want to reiterate what Bob is always talking about from an operational perspective. That project controls, it's like it's the security blanket that we use to go to sleep at night, and we sleep peacefully because of project controls. And so for us, we train the people that we have in-house to understand project controls and to be able to step in at any moment because that's really what drives our business from a risk mitigation perspective.

Okay. I see one more question.

Maheep Mandloi from Mizuho. One question just on data centers. Since you have a view from what your customers are seeing or the industry is doing, where do you see the bottlenecks? Is it more on access to pipelines or power equipment or EPC crews booking them well in advance? Where do you see the issues for the industry for growing in this space?

Yes. So power, right? That's the bottom line. So number one, the grid cannot accommodate the power that's necessary. And number two, when you start thinking about power generation behind the meter, there's an issue with supply chain with regards to the equipment that's needed. So Mark addressed how MasTec is preparing itself to be able to meet that need now whilst that equipment is on the way. And so that is by far the bottleneck.

What used to happen, what's interesting is this, look, 15 years ago, the hyperscalers were out there buying a land. They did their studies as far as what land had the best access to power from the grid, and they went out and they did that. And then contractors went out and they started building for hyperscalers at that level, okay? Then what ended up happening is that the demand was so voracious, right, insatiable that then you started getting this level of developers that said, I'll take the risk, and I'll go out and I'll find the land that can be entitled and can get powered. I'll buy it, I'll go ahead and invest in it, I'll spend it and then you lease it from me.

And what ended up happening is that all of a sudden, over years, these developers started like calcifying, if you will, in their ways the way that hyperscalers did because they started getting into this model that they really didn't want to get away from. So then you have a lot of contractors that are building for Tier 1 developers that are very much stuck in their way. Now there's Tier 2 developers that we're seeing, which is tremendous opportunity. People that have opportunities that come up with ways to make things faster, more efficient from a delivery standpoint, they might skid mount their equipment to try to make them plug and play and whatnot. And they're saying, we're going to develop it ourselves.

So we're seeing this tiered developer approach, right, which provides more and more opportunity. And then from a geographic perspective, what AI is doing is those primary areas of focus where data centers had to be clustered, that's not necessary anymore. So now you're seeing a lot of data centers in very, very remote locations. So when you put all of that together, the opportunity is incredible. The bottleneck is power. But I think we're better positioned than anybody else to answer all of that, I think.

Okay. One more. Brian.

Brian Brophy at Stifel. I appreciate you guys doing this. I know we talked about 2028 targets, but realistically, how far does your visibility go out at this point? And as we think about different segments, are any of them longer or any of them shorter? Any outliers to point out in terms of that visibility?

I mean they're definitely not shorter. I think that if we had to argue what's the lowest visibility, you could probably point to Mike in renewables just because the tax credits expire in 2030. Now you put a chart up there that was really important, which was levelized cost. Levelized cost, solar and wind are still super competitive even without tax credits. So I think that there's going to be some questions about what happens to renewables post 2030. I think ultimately, we will get something. But even if we don't, they'll be cost competitive and nothing is going to happen to the business.

Outside of that, right, comms, well beyond '30. Industrial and infrastructure, well beyond '30, data centers, well beyond '30. pipelines way beyond '30, right? So I think we've got incredible long-term visibility, better than we've ever had. It's durable. It's growing. It's compounding. Like it is -- I hope you got the sense of it. Like even for us that have been in this for a long time, it's somewhat hard to believe. And again, we've been building for 20 years a platform that has now put us in this position to take advantage, again, of what I think is a generational once-in-a-lifetime opportunity. It's massive.

All right. Thanks, everybody. We have lunch out back so we can gather around. Thank you.

Thank you.

Thank you for standing by, and welcome to MasTec's First Quarter 2026 Financial Results Conference Call. I want to remind participants that today's call is being recorded. I'd now like to turn the call over to Mark Lewis for some opening comments.

Thank you, Lisa, and good morning, everyone, and thanks for joining us for MasTec's first quarter conference call. Joining me today are Jose Mas, Chief Executive Officer; and Paul Dimarco, our CFO.

We have prepared slides to supplement our remarks today, which are posted on MasTec's website under the Investors tab and through the webcast link this morning. There is also a companion document with information analytics on the quarter and a guide summary to assist in financial modeling. Please read the forward-looking statement disclaimer contained in the slides accompanying this call.

During this call will make certain forward-looking statements regarding our plans and expectations about the future as of the date of this call. [indiscernible] statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially from our forward-looking statements. Our Form 10-K, as updated by our current and periodic reports and filings includes a detailed discussion of risks and uncertainties that may cause such differences. Additionally, in today's remarks, we'll be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules.

We may also use certain non-GAAP financial measures on this call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings press release, slides or companion documents. We had another great quarter to start the year, and let's get into it. I will now turn the call over to Jose. Jose?

Thanks, Mark. Good morning, and welcome to MasTec's 2026 First Quarter Call. Today, I'll be reviewing our first quarter results as well as providing my outlook for the markets we serve. First, some first quarter highlights. Revenue for the quarter was $3.829 million up 34% year-over-year. Adjusted EBITDA was $284 million, a 73% year-over-year increase. Adjusted earnings per share was $1.39, a 174% year-over-year increase and backlog at quarter end was $20.3 billion a $1.4 billion sequential increase and a new record level. In summary, we delivered a great quarter. In fact, the strongest first quarter in our history setting new highs across virtually every key metric.

Revenue, EBITDA and EPS were all above guidance, with strong year-over-year double-digit growth. EBITDA margins improved 170 basis points versus last year first quarter and total company book-to-bill was 1.4x, setting yet another backlog record. 2026 should be a great year, and I'm excited about the momentum we are building as we look ahead to 2027 and beyond. Maybe more importantly, when you step back from the quarter, what we're seeing across our end markets continues to reinforce our confidence in the longer-term opportunity in front of us.

The amount of investment going into critical infrastructure right now is significant and is being driven by some very durable trends, whether that's AI and data centers, grid reliability, energy demands, critical infrastructure or connectivity. And the way we're positioned at MasTec we're right in the middle of all of that. On the telecom side, we feel really good about where we are. The fundamentals continue to improve driven by strong growth in total data usage.

Aggregate U.S. data consumption is estimated to almost double by 2030. This growth is fueled by increasing demand for streaming video, cloud computing, gaming and connected devices. The rapid expansion in total network traffic underscores durable demand and significant long-term growth potential. At the same time, you've got the next wave of investment coming from bead funding, which will support rural broadband and middle mile builds over the next several years. But the biggest shift we're seeing is around data center interconnectivity.

AI is driving a level of demand for fiber capacity, redundancy and low latency that we haven't seen before. connecting data centers both long haul and metro is becoming a major driver of spend, and we think that creates a multiyear opportunity measured in the tens of billions of dollars. In power delivery, the visibility remains strong. We're in the middle of a multiyear investment cycle in the grid. Utilities are spending heavily on transmission, system hardening, and reliability, and that's being driven by both aging infrastructure and increasing demand.

A big part of that demand is coming from AI and data centers, which could drive up to 12% of total U.S. electricity consumption by the end of the decade. That kind of growth requires significant expansion of the grid, new transmission lines substations and upgrades across the system. So when you combine load growth, resilience and energy transition, it creates a long duration, highly visible opportunity set and we think we're really well positioned there.

Power delivery revenue for the quarter was up 16% and EBITDA was up 40% and book-to-bill was 1.6x, and with backlog increasing over $600 million sequentially. In Clean Energy and Infrastructure, what's really making a difference is the platform we've built across renewables, civil industrial and general building. Our renewable revenue was up over 60% year-over-year and margins improved 70 basis points. In our industrial and infrastructure markets, we're seeing significant opportunities tied to critical infrastructure, including gas-fired generation, civil construction and general building permission-critical projects Data center development is a big part of that. Each one of those projects require significant site work, power infrastructure and ongoing expansion, and that plays directly into our capabilities.

Our recent turnkey data center award is progressing very well. The demand for both the skill set that MasTec has developed in construction management, coupled with the capabilities we have in civil power, telecom and maintenance provides us the opportunity to exponentially grow this part of our business. As the opportunity for full turnkey services matures, we continue to look for ways to increase our self-perform capabilities and improve margins. Clean Energy & Infrastructure segment revenues increased 45% year-over-year EBITDA was up 56% and segment backlog increased sequentially by over $770 million, representing a book-to-bill of 1.6x.

On the pipeline side, the fundamentals are also very solid. For the quarter, pipeline segment revenue was up 92% year-over-year and EBITDA more than tripled. There's a growing need for natural gas infrastructure particularly to support gas-fired generation, which remains critical for reliability as power demand increases. And at the same time, global LNG demand continues to grow, driving investment in export infrastructure and related pipelines, both domestically and internationally. So we see this as a business with good visibility and steady demand going forward.

Our reported backlog is not fully representative of the potential as it only includes signed contracts. Based on current negotiations and verbal awards, our visibility in this segment is as strong as it's ever been, and we expect strong long-term growth. In closing, we delivered an exceptional start to 2026 and with record performance across revenue, profitability and backlog.

These results reflect strong execution across the business and the strength of our diversified platform. More importantly, the long-term fundamentals across all of our end markets remain highly compelling from AI-driven data center growth and telecom demand to grid modernization, energy infrastructure and pipeline opportunities, the scale and durability of investment continue to grow. We believe MasTec is uniquely positioned at the center of these critical infrastructure trends with the capabilities, customer relationships and backlog to drive sustained growth.

Given our strong performance and momentum, we are increasing our full year guidance. We now expect revenue of $17.5 billion, adjusted EBITDA of $1.5 billion and earnings per share of $8.79, representing year-over-year growth of 22%, 30% and 34%, respectively. With strong visibility, accelerating demand and meaningful momentum across our segments, we are confident in our outlook for 2026 and and increasingly optimistic about the opportunities ahead in 2027 and beyond. I'd like to take a moment to thank the men and women at MasTec, it is both an honor and a privilege to lead such an outstanding team. Our people are deeply committed to the values that define us, safety, environmental stewardship, integrity and honesty while consistently delivering high-quality projects at the best possible value for our customers. These principles have not been unnoticed.

Our customers recognize and appreciate the dedication and excellence our team brings to every project. It is through the hard work and commitment of our people that we have positioned ourselves for continued growth and long-term success. I'd like to thank you for your continued support. And I'll now turn the call over to Paul for our financial review. Paul?

Thank you, Jose, and good morning. We are pleased with the momentum built by our first quarter results and the continued trend of improved first quarter performance. This has been a focused effort in recent years and 2026 marks the best first quarter in MasTec history. Off of our strong start, we now expect to generate almost 45% of our full year EBITDA in the first half of 2026, implying markedly lower seasonality than our business has experienced historically.

Our Q1 results represent record levels of first quarter revenue, adjusted EBITDA, EPS and backlog. Year-over-year, we drove meaningful growth with revenue up 34%, adjusted EBITDA up 73% and 174% and backlog by 28%. We continue to see strong customer demand for MasTec's broad service offerings and expertise to meet their infrastructure development goals. Our customers continue to show high confidence in MasTec seeking deeper integration and partnership through alliance agreements, sole-sourced contracts and a desire for MasTec to provide turnkey services on strategic infrastructure builds. This is particularly apparent when speed and execution certainty are critical. Our scale, expertise and focus on mutually beneficial outcomes are key components driving this confidence.

Now I'll share some further details on our first quarter segment performance and our outlook. Our Communications segment had a good start to the year, generating revenue of $802 million, growing 18% year-over-year and 7% ahead of expectations. EBITDA margins were about 100 basis points below last year's first quarter, negatively impacted by cost to exit certain markets in our [indiscernible] fulfillment business. Communications backlog in the first quarter was up slightly from year-end and 12% year-over-year to another record level. We continue to see strong broad-based demand for wireline services with customers engaging for multiyear turnkey opportunities.

Our second quarter communications outlook calls for $875 million of revenue, with EBITDA margins slightly higher than 2025 in the low double digits. We also expect to achieve double-digit EBITDA margins for the remainder of the year. resulting in approximately 70 basis points of margin expansion versus 2025.

First quarter power delivery results exceeded our guidance by 10% of revenue and 21% in EBITDA with solid execution to start the year, resulting in 12 basis points of EBITDA margin expansion year-over-year. Most notable in the quarter was the continued backlog strength with a 1.6x book-to-bill driving backlog to a new record of $6.2 billion. We saw a number of new contracts executed in Q1 and as well as expanded scope on some existing projects. Regarding Greenlink, our client resolved the transmission permitting review earlier than anticipated, and we are now operating across the full contractual scope. This is one of the factors driving our revenue guidance higher to approximately $4.8 billion or 14% year-over-year growth.

Full year EBITDA margins remain on track to approach double digits and are trending higher than our prior guidance. We continue to expect year-over-year margin expansion in each quarter for power delivery with 60 to 70 basis points of margin expansion for Q2 specifically. Our Pipeline segment had a terrific first quarter, generating $682 million of revenue, almost doubling year-over-year with EBITDA margins of 21%.

Margins exceeded our guidance by 165 basis points and increased 270 basis points sequentially. It is important to note that broader pipeline construction demand is still developing, and we are generating these margin results in a competitive environment. Unquestionably, we are executing at a high level. delivering high-quality projects ahead of schedule for our clients. These positive outcomes further illustrate MasTec's position as the leader in this space and will continue to be a differentiating factor as the cycle develops. For the second quarter, we expect revenue of $600 million with EBITDA margins in the high teens, slightly below the first quarter result.

Full year margins are still forecasted in the mid-teens, but trending higher with the first half performance. We are currently taking a conservative view around second half project timing and productivity while we firm up specific resource allocations. Longer term, we continue to see an unprecedented level of project activity and remain very bullish on the opportunity set for this segment in the years ahead.

Clean Energy and Infrastructure also started the year off strong, delivering over $1.3 billion of revenue, up 45% year-over-year almost 10% ahead of our guidance. EBITDA margins of 6.7% expanded 50 basis points from Q1 of 2025, and we generated 56% EBITDA growth. Renewables and general buildings both contributed to the revenue beat with year-over-year growth of 63% and 166%, respectively. While our recent acquisitions were solid contributors to the quarter, organically, we still generated over 30% year-over-year growth.

Backlog continued to develop nicely, reaching another record level of $7.3 billion. This represents a total book-to-bill of 1.6x, inclusive of 1.3x organically. Infrastructure led to backlog development, but renewables also extended its streak to 11 consecutive quarters of lag growth. Demand continues to be robust across the business verticals, leading us to increase our full year revenue guidance to approximately $6.7 billion, up $325 million or 5% higher than previous forecasts. EBITDA margins are still forecasted in the high single digits, comparable year-over-year, largely due to the higher mix of General building activity in 2026.

Q2 revenue is expected to increase almost 50% year-over-year to $1.7 billion, with EBITDA margins also comparable to 20,25 second quarter. We generated cash flow from operations of $99 million in the first quarter with higher revenue levels versus guidance, driving additional working capital investment. We also saw DSOs increased to 72 days versus 65 days at year-end resulting in lower cash conversion than anticipated. We expect DSOs to trend back to the mid-60s over the course of the year.

Our liquidity stands at approximately $1.8 billion and net leverage of 1.8x is well within the terms of our financial policy and criteria to maintain our investment-grade ratings. Our improved Q1 performance, coupled with continued capital efficiency led to further growth of return on invested capital, expanding almost 100 basis points from year-end to over 10%.

We expect this trend to continue, and we'll share more thoughts regarding ROIC targets at our upcoming Investor Day. Moving to our consolidated 2026 guidance. We are raising our full year guidance to reflect the first quarter beat and our improving outlook for the remainder of 2026. We now expect revenue of $17.5 billion or 22% growth year-over-year and 3% higher than our prior forecast. For adjusted EBITDA, we are now forecasting $1.5 billion or an 8.6% margin with a $50 million increase, representing a 10% margin flow-through on the increased revenue outlook.

Adjusted EPS is forecast to be $8.79, an increase of almost 35% year-over-year and 5% ahead of our prior guidance. Our cash flow from operations outlook remains unchanged, expecting to exceed $1 billion for 2026. We are increasing our net cash capital expenditure forecast to about $220 million to support the additional revenue growth. Our second quarter outlook reflects another strong quarter of year-over-year growth across all of our major financial metrics, with revenue, adjusted EBITDA and EPS growing 21%, 38% and 47%, respectively.

Adjusted EBITDA margins are expected to expand by over 100 basis points compared to the second quarter of 2025. Lastly, I want to remind you that MasTec will be hosting Investor Day on May 12, which will also be webcast live via a link at MasTec Investor site. We are excited to introduce additional members of our operational management team to the investment community and provide a medium-term financial outlook. This concludes our prepared remarks. I'll now turn the call over to the operator for Q&A.

[Operator Instructions] And our first question today will be coming from the line of Alex Rygiel of [indiscernible] Capital Securities.

Jose, congratulations to you and your team on another outstanding quarter. In the context of profit margins, growth at MasTec has been very impressive. And now with backlog up 28% year-over-year. Can you talk about how pricing and/or contract terms are changing? And is there a point where price and contract terms become more important to the company rather than volume?

So Alex, I think it's a great question. I think we've been talking about the momentum of the business over the course of the last year. We've obviously seen it in our backlog growth, right? If you -- I think backlog in '25 was up about $4.5 billion. We're up another $1.4 billion this quarter. I think in the last 2 quarters alone, we're up around $3.5 billion. So I would argue that a lot of the improvements that we've seen in the business from a pricing perspective, obviously, from a growth perspective, haven't really even started hitting our financials yet, right? I think we're just at the beginning of seeing some of the improvements that we saw in '25 relative to backlog and repricing, and I think that will play through the balance of '26 and into '27. So I definitely think it's something to pay attention to. We feel really good about what we have in backlog. We feel really good about ability to not just grow our revenue, but I think we've talked about margins a lot, and our intention is to improve them on a segment by segment level. We know we have a lot of opportunity there, and we're looking forward to delivering on that.

Excellent. And then as it relates to the pipeline market, which appears poised for kind of notable upside. Can you comment on the competitive environment there and how you're positioned? It sounds like it's a little bit more of a 2027 opportunity from a P&L standpoint, but maybe talk about the time line here over the next few years.

Sure. So nothing's changed. I think going into this year, we said we'd expect it to do about $2.5 billion we knew we would be somewhat constrained because a lot of projects were going to be pending materials that we're going to take a long time to come online. So we've always said we thought '27 was a significant growth year for us. We're really happy with the way we started '26. And we do think there's some potential at the back end of 26 to maybe bring in some projects and hopefully be a little bit different than what we've been saying. But right now, -- we're very bullish on '27 and beyond. We've talked about getting to historical highs in revenue. So I mean we feel great about all of that. I think to the beginning of the question, which was the competitive landscape in the business, there's no question that post pandemic, we saw companies -- we saw some companies fail. We saw some companies disappear completely. We saw others deemphasize the pipeline business. So I think the competitive landscape today really benefits MasTec. We never -- we continue to invest in the business. We kept our strongest people. I think we've rebuilt. So I think we're in a great position to not just win the market share in the past, but to actually increase our market share throughout the cycle.

And our next question will be coming from the line of Andy Kaplowitz of Citigroup.

I'd be curious about your thoughts on this cycle versus others. Your backlog, as you know, is almost -- is up almost 30% year-over-year, and that's what pipeline backlog being down. We know you think pipeline earnings will be stronger going forward. So I think you expect to grow EPS now mid-30s this year. You're starting to think about that kind of growth being sustainable in '27? And do you think it will be pipeline leading earnings growth or actually one of your other segments such as Clean Energy?

Yes. So lots of questions in there, Andy. I'd start by saying, look, the momentum of our business is incredible. I think that comparing it to past cycles. I've been CEO since 2007. I can't remember a time where every business was just humming right, where everything just -- everything just had great opportunities in front of it, where we see backlog growing across the board where we see momentum actually increasing. So I think from a total business perspective, it's just as good as I've ever seen. And quite frankly, I would only expect it to get better. We're going to have a great year across the board on every financial metric. I think we've got our Investor Day on May 12, where we're going to lay out some longer-term targets we're really bullish about what we think we can accomplish in the mid- to long term. And we're excited. We spent so much time, whether it's on these conference calls or at investor conferences talking about either the previous quarter or the next quarter or the current year. And we're looking forward to having a day where we can lay out a little bit of a longer-term vision and really give you some long-term targets that I think everybody is going to really feel good about.

Okay. So then I'll ask you a quick follow-up. So just you positively surprised pretty much every quarter in communications over the last few quarters. But I think you raised '26 communications revenue guidance by even less than you beat in Q1. So is it just conservatism? Or do you continue to see the momentum moving forward across most of your communication businesses?

Yes, I'd say a couple of things. I think Paul laid out in his script, we took some onetime charges there that impacted margins by about 100 basis points, if not it kind of would have been flat with last year. When we look at the balance of the year, I mean, we're guided to $17.5 billion number. It was an ice round figure. I don't think you should take anything into the back end -- back half communications guidance. We have plenty of opportunity there. And hopefully, we'll continue with our goal of at least meeting, but if not beating expectations on a quarter-by-quarter basis.

And our next question is coming from the line of Steven Fisher of UBS.

Congratulations, Jose, you mentioned that you're seeing potential for exponential growth. And I think it was the -- essentially the data center piece of clean energy and infrastructure. To what extent do you think this is going to be the main narrative for the Clean Energy segment going forward? And how much will natural gas plants be part of that?

So I'd say a couple of things. When we look at -- we kind of look at our Clean Energy and Infrastructure business and break it out in roughly 4 buckets, right? So we've got renewables. We've got our industrial business, which would include any new power generation, conventional power generation. We've got our infrastructure business, which is a lot of what we're doing on the Civil side. And then we've got our general Buildings Group, which is what has really been focused on both critical infrastructure and the data center subset. So I would say, if you look at backlog, every one of those had a backlog increase in the first quarter relative to sequential backlog growth. So we're feeling good about all 4 of them. Obviously, the data center opportunity subset is massive, and it's 1 that I think will play a big role in MasTec's future. What we found, we're on 1 job currently. What we found is it's an incredible opportunity for us. We bring a really unique skill set that I think many are interested in. We have an incredible number of opportunities that we're going through right now that I think will develop. So we feel good about that part, but we -- quite frankly, we feel good about the whole business. I think we've been really adamant about what our position is on power generation on the conventional side. historically done a lot of simple cycle where haven't done a lot of CCGT work. And we feel good about that. There's a tremendous amount of opportunity of demand. It will be a part of our growth story. It won't be the leading part of our growth story, but it will definitely be a part of our growth story, and I think we're well exposed to all of it.

That's great. And then on the power delivery side, I wonder if you could just talk about transmission opportunities for bookings. I'm curious to what extent are customers coming to you looking for skill sets and capacity sort of versus putting out a more competitive process? And sort of what's the timing of sort of next major bookings for you?

We're really excited about the growth in backlog in our power delivery this quarter, right? Book-to-bill, over a $600 million backlog increase broad-based, no major projects kind of pushed that way. From a major project perspective, we're seeing more activity than we ever have. I think we're in a great position. I think the fact that we're working Greenlink and our success on Greenlink has really positioned us differently across the industry. So couldn't be more excited about the opportunities that are on the way and I think we're really well positioned. So that will be a big part of our story on a go-forward basis.

Our next question will be coming from the line of Brian Brophy of Stifel.

Congrats on the nice quarter. Just wanted to ask on CE&I. Obviously, awards there were pretty healthy. Just any color on where the source of strength is coming from when I think across your clean energy, civil, street highway businesses? Or were there any additional GC awards in the quarter? And then you talked about having about $4 billion of projects under LNTP in that segment. Did that come down with the backlog build here? Or does that remain elevated still?

Yes. So just to reiterate on the last question, because it was similar, right? On our Clean Energy and Infrastructure business, right, in all 4 buckets backlog increased, I think, maybe in general buildings we were flat. So to the point of it being data center driven, it was not. It was really made up from the other 3 parts of the business. I would say that our LNTP work is either at the same number or it's actually increased. So I think we feel really good about our potential to continue building backlog in renewables through the balance of the year. and for sure for the segment. So I would expect Clean Energy and Infrastructure backlog to be a lot higher by the end of the year than it is today. It may not be every single quarter, but we feel really good about what we'll end the year. And again, momentum is just really, really strong today.

Yes, that's great. I appreciate the color there. And then just a big picture question on the GC business. When you think about the opportunity in terms of size and scale, how are you thinking about it in terms of number of projects you can take on and kind of size of project ranges you're looking at?

It's a great question. And by the way, it's the beauty of the business that we're in. And I think we'll elaborate a lot on this on our Investor Day. But the beauty of a turnkey data center site is the number of people that it actually takes on the construction management side is relatively limited. So we can stand up groups relatively quickly to meet our customers' needs, right? On the self-perform side, it's a little different because you need a lot of craft. And in some cases, we're really well positioned. And then maybe in some geographies, we're not. But from a pure construction management perspective, with a relatively small group of people, you can actually do some incredible work on behalf of the customer. And that's really what we've been working on. We've been working about building our resources there. I think we're super well positioned. I think we can take a significant number of projects on concurrently. We're working towards that. And I think, again, I think at our Investor Day, we'll get into a lot more details on that.

The next question is coming from the line of [indiscernible] Goldman Sachs.

Can you talk about what you're seeing on the long-haul transmission line opportunities through the next few years? You've previously talked about M&A to add capability for a third simultaneous line there. I'm curious how that thought process is progressing? What are you seeing in the market? And what should we expect?

I think that a couple of things. I think we've done a great job of organically growing that side of the business. We've really focused on it in the last 4 or 5 years. Obviously, Greenlink was a solid culmination of that to kind of really prove to ourselves into the industry that we had made significant inroads in that market. Again, the opportunity subset there is incredible right now. I think the industry is going to substantially grow. And again, I think we're super well positioned there. We are not -- we do not feel that we need to make an M&A transaction in that market to kind of reach the goals that we have internally. But it's definitely an area where if the right opportunity arose, we would definitely pay attention and consider it. But right now, we feel good about where we are, how we're positioned and our ability to win.

And then maybe one for Paul. You mentioned lower seasonality than previous years. Can you give us more color on the structural element that's driving that going forward? Obviously, Q1 performance was great, but I would love to know how you're thinking about the structural elements here

A lot of it is just around project timing and working with our customers to promote higher productivity and access the projects that are executing through the end of the year. That was a big focus. The weather helped out a little bit, weather it was a little bit mild in most of the parts most areas we operate. But overall, it's just being proactive and really working with our clients to try to promote opportunities for us to keep our crews and our equipment productive. It balances out. It makes the peak to the summer months, more efficient, and we're excited about how it will benefit the business in this year and the years ahead.

And our next question is coming from the line of Jamie Cook of Truist Securities.

Congrats on the next quarter and excited about May 12. I guess, Jose, a couple of questions. one, as we're thinking about the opportunity that you're going to lay out, how much do you want to differentiate, i.e., MasTec is largely an organic growth story versus relying on M&A or joint venture, maybe you need to do that to manage risk or get into markets -- adjacent markets in a proper way. I guess my second question on that is just sort of you have so much growth in front of you. To what degree are you prioritizing the type of growth that you want in that for MasTec, it's not growth for the sake of growth, but it's more growth for the sake of where you can generate the best margin or return.

Sure. Thanks, Jamie. I'd say a couple of things. First, let's talk about organic growth versus M&A. I think MasTec was in a unique position post pandemic, where we really tried to focus on certain core diversification into the energy markets. I think we did that in 2022, '23. I obviously, those were big acquisitions for us at the time. We said very vocally that we were going to focus on organic growth. We were going to focus on really making our balance sheet a lot healthier and being in a position to put ourselves in a position to do whatever we wanted. And I think we've accomplished that. So I think that was [indiscernible] our goal. We had levered up a little bit on those acquisitions. We wanted to bring leverage back down. We wanted to fully integrate those acquisitions. We wanted to make sure they were performing at a high level. And I think today, we sit here and it's -- we can check the box. We've done that. We're excited about that. I think you're seeing the beginning of those results, I don't even think we've seen all of those results flow through our financials yet. So we're excited about that. We're also excited about what M&A has meant to our business over a really long period of time. We've had a lot of growth via M&A since -- at least in my term as CEO since 2007, we bought some incredible companies. And I think you saw us be more active at the end of '25, right? We bought what we thought [indiscernible] 2 incredible companies in 2 market segments that we think have tremendous long-term potential and growth opportunities. They're both here just over a quarter. We're excited to have them. They've been fantastic additions to MasTec. But the truth is there's a lot more. And we've said we're going to focus more on M&A. There are a ton of opportunities out there, a lot of which we really like. and they're very strategic, right? We're looking at our business in a way of which to figure out where are the areas that we want to grow as a business, where are the internal opportunities that we have relative to the workforce that we have and then where do we need to go outside and try to find some help to either bolster whether it's a geographic area or an area of work. So I do think you're going to see us be a lot more active in M&A for sure than we've been in the last couple of years. I think we started that in the fourth quarter of '25 and I think you'll see that continue throughout '26. With all that said, I mean, today, we feel good about the segments that we're in. We think all of the segments offer us solid growth potential. And more importantly, I think we've got the management teams within each of those businesses to handle the level of growth. So where I would be concerned on growth isn't necessarily on capital allocation. because I think some of these, quite frankly, aren't even that capital intensive, some or more. I think we feel good about the return profile of each, but where it becomes really important for us is to understand that we have the leadership strength to be able to deliver on that growth and deliver the optimal margins on that growth. And today, I think we're more than equipped to take on multiple areas of growth, multiple businesses of growth. And I think we're just really starting to enjoy that. I think we've worked really hard over a really long period to put ourselves in the position that we are today. And I think it's time to kind of enjoy the fruits of our labor and to take advantage of those growth opportunities and execute on them. So I don't really see us jumping into a lot of new businesses, but quite frankly, I see us really trying to expand the ones that we're in and take advantage of the opportunities within those.

And the next question is coming from the line of Sangita Jain of KeyBanc.

Can I ask one question given Jose, how you said demand is inflecting so strongly in all your segments. Last year, you were resourcing in pipelines and communications as the demand emerges, how do you feel right now about the ability to keep resourcing upwards to meet the demand, whether it's labor or other facilities that you need? Is that getting harder?

So Sangita. So a couple of things I'd say. I'd say we're -- at the end of the day, we're a people business, right? It's what differentiates us. It's what makes us who we are. I think it's a critical element. It's an irreplaceable asset. Nobody can replicate the workforce that we've built, right, especially trying to come in. So it's one of our big moats. It's important to us. It's something that we keep building on -- when we look at just pure numbers, right, I think we're up about 6,000 people year-over-year. We're up just under 2,000 sequentially. So it's -- quite frankly, it's a machine, right? We're constantly adding people. We're constantly adding resources. We're constantly manning to the opportunities that are in front of us. It's part of what makes us good at where we're at. It's critical to our success in the long term. And it's something that we're not just investing in, but we think we're good at. So we'll continue to do that. I think that there's been periods where obviously the hiring impacts margins because you're going from a slower period to a period where you're a lot busier. I think the business is much more consistent today. I just think it's part of the business. We'll continue to grow. We'll continue to grow into the demand. and then hopefully benefit from the margin opportunities that are associated with that.

Great. That's helpful. And then just a quick follow-up on your communications revenue guide. You guys referred to be maybe emerging over time and being conservative in your second half outlook? Can you tell us if there is any bad factored into your back half? Or is there still an optionality in the second half?

I think we've got some design built in, but I don't think we have a lot of construction built in, so there's some revenues, but I think it has a really meaningful impact to '27.

Our next question will be coming from the line of Liam Burke of B. Riley Securities.

Jose, you talked in your prepared comments about the step-up in demand for telecom on data center interconnectivity. Are you seeing more of that activity on the long haul or on the local loop of the network?

I think both, right? I think you've got different types of dissenters. I think you've got a lot of our customers chasing that business. So I think it will make some customers more competitive than other is the vastness of their infrastructure. So depending on the client, it will be more specific to one or the other, but I think both will have substantial growth over time, and we're seeing opportunities across both of those.

Great. And on [indiscernible], a nice step up in margin. Is that just better terms of the negotiations? Or are you just seeing the advantages of your scale?

Well, I think it starts with better execution, and then it gets into obviously, all of the opportunities that the business has the relative to the size and the growth. But at the end of the day, it's -- a lot of it is our execution. Again, we made significant investments in '21, '22 to really grow that business. And I think now a lot of the fruits of those efforts over many years of hard work are starting to pay off.

And our next question is coming from the line of Maheep Mandloi of Mizuho.

Maybe just a quick one on the gas pipeline and [indiscernible] just talked about a little bit demand over there. But when are you expecting the orders to kind of flow in on those for next year or after that?

Yes. So it hasn't really changed. I think that we've got an enormous amount of confidence relative to the conversations we're having with our customers, whether they're verbal awards that we have or the expectations from our customers have laid out to us on what we're going to build. So for us, right, when we look at '27, we think we've got our plate is pretty full as it is. When those turn into contracts and 1 thing we can report on the backlog is a different story. So it's -- and that's why we keep talking about backlog isn't really representative in that market today. It will be at some point, it's coming. It's close. It will probably be towards the latter half of 2026. But I can tell you that our visibility today in the '27 and beyond is fantastic.

Our next question is coming from the line of Justin Hauke of Baird.

Great. So I guess I just wanted to get a little more clarity on the guidance. I mean, clearly, the first quarter came in much better than what you were expecting revenue by 10% and earnings by like 40%. But in the full year, flowing through a lot less than that. And I know 1Q is seasonally the lines, but you're also having a lot less seasonality than you had historically. So just trying to understand kind of what's underpinning the conservatism as you look at the balance of the year versus what you did in the first quarter?

Well, Justin, I think that a couple of things I'd say is that's what we did. We kind of pushed the beat in Q1 through guide through the year. didn't necessarily reforecast the balance of the year. I think that's -- there's a lot of concerts built into that. Obviously, we haven't taken into account that, that acceleration in the business is going to continue throughout the 3 quarters. And hopefully, we can deliver on that, and that will be the source of our beats throughout the balance of the year. But I think that's how we looked at it, right? So not a lot more science than that. I think we've got our Investor Day coming up on May 12, where we're going to lay out, I think, a much longer-term vision, and we're excited about how the rest of the year can play out for us. So I wouldn't read too much into it. I think we're pretty excited. I don't I think we took each of the areas where we beat and we kind of pushed it through the year. And obviously, if the opportunities continue to exist across all those segments, then we will do better than what we're seeing.

All right. I kind of figured that's what you would say and looking forward to the Analyst Day, too. I guess the second question, just understanding on the communications side, the exiting from the install-to-the-home market, was that something you guys were expecting? And then I guess the corollary to it is that all done? So the cost that you took that's all contained in the quarter? Or is that something that's going to kind of continue throughout the year?

We don't expect any more to continue throughout the year. I'd say we're still in that business, so we're not out of the business. So let me be maybe a little more clear on what that is. we've had a relationship with DIRECTV as far back as I can remember. And I actually think this is a remarkable story at MasTec. I became CEO in 2007. At the time, DIRECTV was almost 50% of revenues. Last year, DIRECTV was less than 1%. So I think that the fact that what we've been able to do the business -- to the business over the course of the last 19 years, has been phenomenal. It was a business that at its peak, reached almost $700 million in revenue. And again, it was less than 1% of revenues last year. We see challenges in our business at times, right? We had a customer that was -- it was all pay television service, satellite driven. Obviously, the Internet took off streaming video took off the business changed. And I actually think that's part of the beauty of MasTec, right? We took a business that was such a major part of our financial performance a long time ago. We were able to adapt in the business. We were actually able to help our customers with other technologies like everything that happened relative to fiber and Internet and we were able to offset that decline over a period of time. I think what gets lost in our story a lot is the fact that we've done an amazing job growing our telecom business over many years, especially over the last few years in an environment where that business massively declined from $700 million to a negligible number. So I think this year, we kind of exited a number of markets. It's a small business. And we took some charges in Q1 that represented about 100 basis points. Quite frankly, we probably could have redeem. We decided not to and it is what it is. So we're thankful for that relationship. We're still going to work for them in any way that we can. We're still going to support them and help them in any way that we can. But I think it's a great reflection of the way that MasTec has matured in the business that we've come and the fact that we've been able to overcome something like that over such a long period and done it with a ton of success.

And our next question is coming from the line of Manish Somaiya of Cantor.

Jose, can you remind us what is the mix between maintenance and new projects for your pipeline business? And what I'm trying to figure out is how I should think about the incremental upside to backlog. I mean, obviously, the backlog right now is about $1.3 billion out of the $20.3 billion. So I'm just trying to get a sense for that as well.

Yes, I don't have an exact number, but I would tell you is a few years back when the business looked doom and gloom post-pandemic, we said that we thought the bottom run rate would be $1.5 billion to $1.8 billion. did that based on predominantly a maintenance-driven business, so I'd still argue that that's kind of the range and the balance is project driven. So I don't have an exact breakout today, but I would argue that that's pretty close. So I think that -- as you think about future projects, it will be the growth off of that base.

Right. And obviously, Q1, the business did exceptionally well, favorable outlook for '26. How should I think about '27 in terms of reaching or exceeding your prior peak margins in that business?

Yes. I think the opportunity is there. I mean, if I was sitting here today and I was having to guide for '27, I would say we'll do $2.5 billion this year. I would feel super comfortable that we're going to do 3 or better, and I think we have an outside chance to get to historical levels, which are 3.5% as early as '27. And I think that's what we've been saying over the last couple of quarters.

Right. And then just on capital allocation with leverage approaching low ones how are you thinking between deleveraging even further bolt-on acquisitions, repurchases? If you could just shed some light on that.

I think based on the growth opportunities that we have in front of us, I do think you're going to see us be more active in M&A. And I think that's where you'll see deployment of capital.

Our next question is coming from the line of Brian Russo of Jefferies.

Just assuming Greenlink North commences construction also next year, combined with the smaller project that I believe is supposed to commence mid-year this year. Do you have the capacity to handle more than those 2 projects combined in 2027, just to tie into your comments that you don't need to grow that side of the business organically to competitively bid on new projects?

Absolutely.

Okay. Okay. Great. And then just a follow-up on the M&A question. Could you be any more specific on target markets, assuming nothing in power delivery target markets, that you see the most opportunity for MasTec in particular? And would you be interested in MEP at all to kind of round out that turnkey solution for the data centers.

Yes. Look, I don't want to get ahead of myself again. I think that at our Investor Day, we're going to walk through strategy a lot more than what we normally do. I think from that, you'll be able to attain the types of things that we're looking at. again, it's broad-based. I think at the end of the day, we're still opportunistic driven, right? I don't think -- somebody asked the question earlier, I think it was Jamie are we chasing revenue. We're not. So for us, it's strategic. I think that we've got some really good opportunities in front of us. I don't really want to kind of tip my hand on that, but I feel like we're in a good spot. I felt like the 2 acquisitions that we made at the end of last year have been really beneficiary to MasTec. And I think we have a number more that we can make that would really help our company.

Our next question is coming from the line of Mark Bianchi of TD Cowen.

I guess, first on the communications progression from here. you're quite precise on what the margin improvement is going to be for the year. But I don't know if you want to put any precision on second quarter, but the way it looks to me like the margin improvement year-over-year may need to accelerate in the back half. That's right. Could you just maybe walk us through that? Is that just sort of getting to absorbing some of those earlier costs that you have? Or is there spinouts going on there?

I think that's exactly right. So in '25, again, we had phenomenal organic growth in '25. I think it was 34% on a year-over-year basis. We entered a lot of new markets. We opened a lot of new offices. I think those offices are beginning to mature. I think we'll see the significant impact of that maturity in the second half of the year. That's why we're so comfortable of really calling for a higher profile margin in the second half of the year, and that's exactly how we expect it to play out. I think considering if you would normalize Q1 for for our charges and we kind of look at what's happening in Q2, we feel really good that the progression of that is taking shape and are very confident in being able to say that.

Okay. Great. And the last one is for Paul. This isn't a big increase, but the CapEx number ticked up just a little bit. Could you talk about what's going on there? And maybe more broadly, how we should be thinking about kind of capital intensity for the business going forward?

And I said in the comments, it's truly just about the additional growth we see not just in 2016 but in the years ahead. So I mean, that's our primary objective around capital allocation is supporting organic growth and fixed assets is a big piece of that. So still relatively low, particularly where we've been historically. So we're still very comfortable with that level of capital intensity, but really just just focusing on supporting the demand that we see and the needs of our customers.

And our next question is coming from the line of Philip Shen of ROTH Capital Partners.

Congrats on the great quarter. Wanted to check in on the renewables comments you made visibility you said is a strongest it's ever been. Momentum is strong. You said as well. And so I wanted to check in with you also on this tax equity pause by 4 major banks were what, 4 months into the year. And this has kind of become a bit of a topic. And I know '26 is not impacted because it's a Section 48 year. But for 2027, I think more projects might depend on 48. So I was wondering if you could give us a little bit more color on that really strong outlook vis-a-vis this tax equity pause and to what degree have you guys kind of gone through your portfolio and check in with customers to make sure that the exposure here is modest, if any, at all?

Look, I think that's the big change in our business over the longer period. I think we've done a great job at aligning ourselves with key customers, understanding their business understanding what their risks are, right? So I think we've managed that really well. We feel really comfortable about our book of business for '27. And as we generally think about it for the market, I would also add the following because I do think it's important, right? We are in the middle of an unbelievable opportunity of growth as a country relative to so much of this critical infrastructure. Power is the cog in the wheel. Everybody knows it. Everybody is talking about it. The administration knows, the President knows that everybody knows it. So while obviously, we're going to get a lot of noise at the end of the day, issues like this have to be fixed because if not, it has much, much greater implications. And I have a high level of confidence that the things that need to be done to fix issues like this will happen irrespective of that, that was a general comment for the industry. I feel good about our portfolio. But just seeing what's happening in Washington, seeing how they're reacting to certain things. I promise you that renewables are an incredibly important part of the story in the near to midterm, and they understand that, and they will do what they have to do to make sure that, that doesn't delay meaningful investment in this country.

and then as a follow-up on that topic, one thing I've been trying to track is this LNTP to NTP time frame when it comes to solar and in renewables. And so for you guys, what is that typical time line with customers. When they sign LNTP, is it typically 6 to 7 months before you guys go [indiscernible] or is it maybe 9 months? Just every EPC has a different kind of average based on geographic mix and so forth. So I was curious kind of where you guys sit.

Yes. I think it depends on the customer, right? Some customers you have alliance agreement with other you're just doing specific projects. So I think that's fairly different between the two. We don't go to backlog until financial close on the project. A lot of times is late in the cycle of that project. So some could be open longer than others. But again, it's an important metric for us because it gives us visibility into what we're going to book into new work over time. But I don't think -- I would say the majority of it, if not all of it, is by less than a year.

Our next question is coming from the line of Adam Thalhimer of Thompson.

Data center connectivity, you said that was tens of billions of dollars. Is that the labor component and therefore, the opportunity for MasTec? And has that started? Or is that more 2027?

I think it started, right? I mean we've announced and back, I want to say maybe even at the end of '24, our first award relative to a customer that had gone after that work and specifically won a project around it. I think this is a really long cycle. I think there's going to be an enormous amount of work that happens across the country. Obviously, data center construction is really a cycle that's just starting. So we feel good about it. We think that is a MasTec TAM number. So it's just a massive opportunity.

And then quickly on pipeline. Are you seeing book and burn projects that could come in for the back half of '26, but just not putting that into guidance until you have them in hand.

I mean we have a portion of our business, it's all book and burn. So we would expect to have -- I mean there is some book and burn built into our guidance. Thus, our backlog levels don't fully support the full year anyway, right? So we need some book and burn, but that's a normal part of the business, and we will -- we definitely feel good about that. And so to the question, right, to the, I guess, broader question, which is there are opportunities for more book and burn to improve even what we're saying. I think the short answer to that is yes.

And our next question is from the line of [indiscernible] of Wolfe Research.

I just wanted to ask, with President Trump approving [indiscernible] pipeline yesterday, like beyond a specific project, do you see this approval approving project activity or just more derisking project pipeline that's already in your funnel?

I think this President has been very vocal about his desire to see infrastructure built, specialty pipelines. So I think that if any project is brought to him that he has the potential to influence he will. And I think that's a good thing for the industry.

Okay. And as a follow-up, can you just provide any color on the type of pipeline work that's been driving the margins? Like is it pricing, execution, project mix? And how does that evolve as you return to peak pipeline revenues?

Yes. Look, I don't think there was anything abnormal about our margin execution in Q1, right? We've had plenty of quarters where we've done as well. So I think that's just a moment in time where you had good utilization, you had a lot of work, and you were able to perform it at a high level. So we're obviously not guiding to that for the balance of the year, but we would hope that -- we can continue to deliver on that. Again, utilization is a key driver there, but we had a good quarter, and hopefully, that will continue.

This concludes today's Q&A session. I would like to turn the call back over to Jose for closing remarks. Please go ahead.

Thank you. I'd just like to thank everybody for participating today. in to remind everybody we've got our Investor Day on May 12 in New York. We hope you can make it. And we look forward to updating you on our second quarter call in a few months. Thank you.

Thank you all for participating in today's program. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Q4 2025 MasTec, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Chris Mecray, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining us for MasTec's Fourth Quarter and Full Year 2025 Financial Results Conference Call. Joining me today are Jose Mas, Chief Executive Officer; and Paul Dimarco, Chief Financial Officer. We have prepared slides to supplement our remarks, which are posted on MasTec's website under the Investors tab and through the webcast link. There's also a companion document with information and analytics on the quarter and a guide summary to assist in financial modeling.

Please read the forward-looking disclaimer contained in the slides accompanying this call. During this call, we'll make forward-looking statements regarding our plans and expectations about the future as of the date of this call. Because these statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially from our forward-looking statements. Our Form 10-K includes a detailed discussion of risks and uncertainties that may cause such differences.

In today's remarks, we'll be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules. We may also use certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measures can be found in our earnings press release, slides or companion document.

I'll now turn the call over to Jose.

Thanks, Chris. Good morning, and welcome to MasTec's Fourth Quarter Earnings Call. First, some quarterly and full year highlights. Revenue for the quarter was just shy of $4 billion, a 16% year-over-year increase, bringing the full year to $14.3 billion, also a 16% increase for 2025 and a new record high. Adjusted EBITDA was $338 million in the fourth quarter, a 25% year-over-year increase, which was an acceleration from the 20% growth in the third quarter. We exceeded guidance with strong operating execution across the segments. Full year EBITDA of $1.15 billion was an increase of 14% from the prior year. Adjusted earnings per share was $2.07, a 44% increase versus $1.44 in the prior year quarter.

In summary, we exceeded guidance again in revenue, EBITDA and EPS, highlighting another strong execution quarter and year for MasTec. This strong result is in part a testament to the scale and diversification MasTec has achieved over time, and we are excited about our outlook for 2026 and beyond given the clear long-term positive market conditions across all of the end markets we serve. While I'm proud of our financial results, I'd like to highlight a few positive developments both in the fourth quarter and in early 2026.

First, it's important to highlight our significant backlog growth. On a full year basis, backlog was up over $4.5 billion, a 33% annual increase. Sequentially, backlog was up over $2 billion, representing a 1.6x book-to-bill. More importantly, we see our business and the opportunities in front of us accelerating. As impressive as the total number is to me, I'm more excited about the backlog mix. While every segment was up considerably year-over-year, our Pipeline segment saw backlog slightly dropped sequentially. Yet I would argue that our visibility in that segment is as good as it's ever been.

While we expect double-digit growth in 2026 in our Pipeline segment, we have been very vocal about our expected growth acceleration of that business in 2027 and beyond. Reaching and hopefully surpassing historical high revenues in that segment. That potential, coupled with the continued backlog growth across all of our non-pipeline segments, position MasTec for considerable long-term multiyear growth. Our long-term visibility is better than it's ever been. And coupled with the margin opportunities we have, MasTec is in a great position to deliver consistent long-term earnings growth.

I'm also pleased to report that included in our fourth quarter backlog growth, there is nearly $1 billion of data center-related work. These awards include the type of work we've been doing over recent years and also include our first construction management agreement of a turnkey site. While most of the work on that project, which started in the fourth quarter, will be subcontracted, the opportunity for MasTec will be our ability to self-perform a greater scope of work on future jobs.

Demand for both the skill set that MasTec has developed in construction management, coupled with the capabilities we have in civil, power, telecom and maintenance provides us the opportunity to exponentially grow this part of our business. We believe these opportunities are a result of our customer solution approach where we can provide a range of services from full-scale EPC to a specific function on any project.

In addition to our backlog growth, while we have focused heavily on organic growth over the last couple of years, our strong cash flow generation gives us the ability to allocate capital to further enhance our growth profile. Accordingly, I'd like to welcome the NV2A family to MasTec, which we acquired during the fourth quarter. NV2A is a construction management services firm whose principles we have known for decades. With the preeminent reputation for construction management of complex commercial projects and well known for its work on aviation and seaport projects. Prior to the acquisition, NV2A was our joint venture partner on our $600 million Miami airport expansion project, which is the first phase of an estimated $9 billion construction program. NV2A deepens our expertise in construction management capabilities as we grow this sector, including data centers and other mission-critical facilities.

During the first quarter of 2026, MasTec also acquired McKee Utility Contractors, a third-generation family business and leading water infrastructure service provider. We believe water infrastructure is another structurally growing theme and are very excited about both McKee's near- and long-term prospects. I'd like to welcome the McKee family to MasTec.

These deals complement and enhance our existing infrastructure capabilities and represent exactly the type of transactions that we target over time. Firms led by strong management teams who see the value in joining MasTec to scale their platform and enhance the solutions they can offer customers. We are excited to welcome our new partners to the MasTec family and expect them to hit the ground running and contribute to MasTec's near-term success.

Turning to some segment highlights. In our Communications segment, fourth quarter revenue increased 23% year-over-year and EBITDA increased 16%, all organic, bringing our full year growth rates for revenue and EBITDA to 32% and 41%. The telecommunications infrastructure market continues to evolve. With MasTec's customers pivoting rapidly with significant investments to support broadband delivery to enable enhanced artificial applications while still working actively to support residential and commercial customer demand for broadband access via wired fiber optic and wireless mobility delivery notes.

Fourth quarter revenue was solidly above plan, including contributions from multiple top customers with robust funding for infrastructure deployment nationally, including upside in both wireless and wireline construction. The margin rate for the quarter was moderately below our expectations due largely to ongoing start-up costs on certain programs. We are confident that the trajectory of profit rates will be positive in 2026, in part due to the maturity in new programs and initiatives during the coming year.

Turning to Power Delivery. Fourth quarter segment revenues increased 13% year-over-year and EBITDA grew by 9%, all organic. EBITDA margins were moderately below prior year at 8.2% versus 8.5% in the fourth quarter of 2024, which included mix headwinds from lack of storm-related revenue in '25 and lower-than-planned Greenlink project volumes due to permitting-related delays that persisted through year-end. Regardless, we are pleased with overall Power Delivery results for the full year of 2025, where we saw 16% top line growth and solid 12% EBITDA growth despite those headwinds. We have strong confidence in the Power Delivery market outlook and for our ability to deliver strong growth in 2026.

Fourth quarter backlog for Power Delivery increased an impressive 17% versus the prior year and 9% from the third quarter, ending the year at $5.6 billion, which is a new MasTec record and continues a positive trend of unbroken backlog increases in Power Delivery since the third quarter of 2023. Additionally, and probably most importantly, during the first quarter, we received the go-ahead to restart the portion of the Greenlink project that had been stalled by permitting delays. This restart is happening earlier than we anticipated and coupled with last quarter's announcement that our transmission and substation group was awarded its second largest project ever, it provides us great visibility and confidence in achieving strong double-digit organic growth in this segment.

Turning to our Clean Energy and Infrastructure segment. Fourth quarter revenue and EBITDA were slightly ahead of our expectations in the quarter. For the full year, revenue growth was a strong 15% and EBITDA margins grew by 110 basis points to 7.4% versus 6.3% in the prior year. Total Clean Energy and Infrastructure backlog at year-end increased 30% sequentially to $6.5 billion, which is also a step change of 53% higher than the prior year and book-to-bill was 2.1x. For the Renewables group, we saw a 10th straight sequential increase in backlog, which increased by double digits in the fourth quarter.

Turning to our Pipeline Infrastructure segment. We saw revenue increase 50% year-over-year for the quarter as business volumes continued to ramp sequentially since the first quarter of 2025, including an uptick from third quarter's typically seasonally strong period. Also as expected, fourth quarter saw continued sequential margin improvement with an 18.5% margin, representing a 310 basis point lift from the third quarter on strong operating execution and overall positive business mix. Finishing the year strong, we have confidence that 2026 will see further increases in both volume and profit dollars, and we are really excited about the market opportunity in pipeline for years to come.

I said last quarter that I expect 2026 to be a solid growth year versus 2025, and our guidance includes this assumption. I remain even more excited, however, about the volume opportunities developing for 2027 based on current capacity planning discussions with our customers. With that, I'll reiterate that we are very pleased with both our fourth quarter and full year results, and we're excited about the outlook for this year given the breadth of demand drivers for MasTec's businesses.

While last year was successful overall, we remain committed to margin optimization on our existing business base, and our 2026 guidance reflects this. We assume double-digit margins in Communications this year, around 100 basis point improvement in both Power Delivery and Pipeline and fairly stable margins in Clean Energy and Infrastructure even with the inclusion of significant construction management volume in that segment this year. So further improvement in the core margins there as well. We're excited about the opportunity for MasTec and our investors over the coming years, and thank you for your continued interest and participation.

As always, our success as a company depends first on the commitment and dedication of our team. And I'd like to thank the entire MasTec team for their continued embrace to our corporate values of safety, environmental stewardship, integrity and honesty, and for their focus on serving our customers with integrity and diligence to ensure great results. We win together.

I will now turn the call over to Paul for our financial review.

Thank you, Jose, and good morning. As Jose mentioned, we are pleased with our strong fourth quarter results, driven by continued organic revenue strength and solid execution across our operating segments. Looking ahead, our customers are increasingly relying on MasTec's broad service offerings to meet their rapidly expanding infrastructure development goals, giving us high confidence in the growth trajectory that we are outlining today in guidance for 2026. What's really compelling for us now is that our customer growth and investment plans intersects across virtually all of MasTec's businesses, and this reinforces our positive outlook.

Now a few more notes on the fourth quarter and 2025 segment performance. Our Communications segment continued its trajectory of strong revenue growth in the fourth quarter, exceeding guidance by $139 million, with 23% year-over-year growth for Q4 and 32% for the full year. This was driven by broad-based strength across both wireless and wireline and included some contribution from middle-mile work that we expect to further develop positively into 2026 and beyond.

Fourth quarter EBITDA margin was 8.5%, a slight pullback from last year's 9% result, reflecting our prior comments on the short-term impact of ramping new business volume. We are confident that these investments mature they will translate to positive margin outcomes as reflected in our initial 2026 guidance with double-digit Communications margins. Despite ongoing growth this year, we are beginning to mature some of these new businesses that came on stream in 2025.

Fourth quarter Communications backlog totaled $5.5 billion, which is an 8% sequential increase and a notable 20% year-over-year increase. Clearly, growth visibility is strong and continues to improve. The telecommunications end market broadly has numerous demand drivers and our focus is on being selective with the opportunities we pursue to optimize returns. Success for MasTec is no longer a function of just volume sourcing, but increasingly a focus on growth management.

In that regard, as we grow our Communications service offerings, we are careful to nurture our legacy customer relationships while creating the space to serve new customers and new opportunities. This includes both residential and commercial end-user markets and making sure we are allocating resources efficiently.

Jose provided a good overview of our Power Delivery performance that I won't repeat, but I would add a couple of points. First, we see a clear path to margin expansion in 2026 and currently expect year-over-year margin expansion in each quarter. Our base utility and distribution business continues to perform well providing a solid foundation on which we can build operating leverage as volume grows. Second, our Power Delivery segment is contributing meaningfully to our support of data center infrastructure, working for utility clients, data center developers and hyperscalers on this front. We also expect Power Delivery to be a key beneficiary of our new role leading turnkey data center construction.

In the Clean Energy and Infrastructure segment, total Q4 revenue of $1.3 billion represented a 2% increase from the prior year, inclusive of solid double-digit growth in the Renewables business and slightly exceeded our segment guidance. Infrastructure and Industrial revenue was also in line with expectations, and we saw significant new business development for this group during the quarter to provide a very notable volume pivot for 2026.

On a full year basis, revenue for CE&I was $4.7 billion or a 15% year-over-year growth rate, including even stronger Renewables growth for the year. Fourth quarter CE&I EBITDA margin was in line with our expectations at 7.2% and but somewhat lower than 8.3% in the prior year, which benefited from favorable project closeouts in our Industrial business that were not repeated in 2025. Renewables margin was stable sequentially and up slightly year-over-year as expected at the high single-digit levels, while Industrial and Infrastructure also saw solid overall performance.

As Jose noted, CE&I saw a step function increase in backlog during the fourth quarter, reflecting significant contract signings across the segment. Infrastructure drove the 2.1x book-to-bill achieved in the quarter with multiple large project wins including the data center general contractor award discussed by Jose. These projects are expected to deliver substantial revenue contribution in 2026, also now factored into our guidance. The data center projects will be executed under our general buildings vertical, still within the CE&I segment, but we may refer to this group's results more specifically in the future.

Renewables also continued its impressive streak of backlog growth which now stands at over $3 billion for the 18-month period. Our visibility for Renewables project activity extends much further with projects under contract for work beyond the next 18 months or under limited notice to proceed totaling over $4 billion incremental to our backlog. Although acquired backlog contributed approximately $300 million to the year-end CE&I totals, organic book-to-bill was still an impressive 1.9x.

Regarding the Pipeline Infrastructure segment, fourth quarter revenue of $644 million represented our highest quarter in the past 2 years. We finished the year with $2.1 billion in total revenue for the segment, which was notably stronger than our initial guide of $1.8 billion as the business inflected positively earlier in the year. EBITDA for the quarter of $119 million was driven by strong overall execution and project mix. Fourth quarter EBITDA margin of 18.5% is indicative of the steady-state margins this segment is able to generate in an expansion cycle.

Regarding our overall progress with margins, we are pleased to have finished at a consolidated margin of 8% for 2025 with our non-pipeline segment generating margins of 8.2% versus 7.6% in 2024. As a reminder, full year 2025 margins reflected a slower start to the year, particularly in Pipeline as well as certain headwinds we noted in the back half, particularly with Power Delivery. We still accomplished a strong outcome last year and met our guidance objectives which we regard as a testament to our focus on execution and the strategic diversification and scale of MasTec. Everything doesn't have to go right in every period to deliver on our overall goals.

We have highlighted a midterm goal of double-digit consolidated EBITDA margins, and we are pleased that 2025 sets us up positively for further margin performance in 2026. As a side note, we are adding meaningful volumes from construction management contracts, including the new data center business we won in the fourth quarter. This business mix represents lower margin, but a high return on capital opportunity that we are very proud to execute. We also expect to subcontract many of the construction activities internally at margins comparable to work perform with external clients. We will work to provide some level of visibility into the margin progression of the base business from 2025 to the extent that our mix evolves materially going forward.

In addition to the margin expansion efforts over the past few years, we've highlighted our increased focus on return on invested capital and we are proud to see this metric meet our weighted average cost of capital hurdle for the first time since 2021. We believe the growth and margin expansion opportunities presented by our portfolio of service offerings, coupled with disciplined capital allocation, will continue to drive returns higher in the years ahead.

We generated cash flow from operations of $373 million in the fourth quarter and free cash flow of $306 million in the period, bringing the full year total to $546 million and $342 million, respectively. This was somewhat below guidance due primarily to our revenue beat for the quarter and associated working capital investment as well as higher capital expenditures also to support accelerated growth.

We ended the year with total liquidity of approximately $2.1 billion and net leverage of 1.7x, well within the terms of our financial policy and criteria to maintain our investment-grade credit ratings. We are pleased that our strong balance sheet provides us ample flexibility to pursue a disciplined return-focused capital allocation strategy. We plan to support our best-in-class organic growth opportunities, execute opportunistic and accretive acquisitions that complement our existing service lines, and deploy capital to share repurchases opportunistically as it has been our long-standing practice. We believe the recent M&A transactions are consistent with this approach and our multi-decade track record of solid M&A execution.

Moving to our 2026 guidance. Our supplemental guidance document for segment and other financial details is now posted to our IR website. For 2026 full year, we expect revenue of $17 billion or about 19% growth this year on top of the 16% growth produced in 2025. Notably, organic growth is still expected in the mid-teens. Our 2026 revenue profile includes strong results from all segments with meaningful growth in CE&I of around 35%, driven in part by the expansion of our data center work. Pipeline Infrastructure is expected to grow revenue by 17%, Power Delivery about 11%, and Communications just under double digits, coming off the approximately 30% organic growth achieved in 2025.

For adjusted EBITDA, we are forecasting $1.45 billion or an 8.5% margin, representing 26% year-over-year profit growth and 50 basis points of margin expansion on a consolidated basis. This reflects margins of low double digits for Communications, mid-teens for Pipeline Infrastructure, approaching double digits for Power Delivery and fairly steady margin in the high single digits for CE&I, with improving Renewables margin performance, offset by the higher percentage of construction management services. Adjusted EPS is forecast to be $8.40, an increase of almost 30% versus the $6.55 in 2025. Our guidance assumes acquisitions contribute approximately $500 million of revenue at high single-digit EBITDA margins for 2026.

Cash flow from operations is anticipated to exceed $1 billion for 2026, consistent with our stated target of 70% EBITDA conversion. We expect about $200 million of net cash capital expenditures for 2026 as we continue to procure additional equipment to support planned growth. Our 2026 first quarter outlook reflects the concerted efforts we've made to continue to improve Q1 performance, with revenue expected to grow by 22% and adjusted EBITDA margin of just over 7%, 130 basis points higher year-over-year. We currently expect sequential revenue growth from Q2 and Q3, followed by the typical seasonal revenue decline in the fourth quarter. Q2 and Q3 should be our highest adjusted EBITDA margin quarters for the year. This concludes our prepared remarks.

I'll now turn the call over to the operator for Q&A.

[Operator Instructions] And our first question will come from Julien Dumoulin-Smith of Jefferies.

It's Brian Russo on for Julien. I was just wondering if you could elaborate on the new language on Power Delivery segment approaching double-digit margins. What initiatives are ongoing to get there? Is it enhanced MSA or project work? Or is it just a contribution of these higher-margin transmission projects?

We'd be consistent that we think the goal for our Power Delivery segment is double-digit margins. So this is just a continued progress towards that. There's been a lot of focus on execution of the base business, which, as I mentioned, is performing well. And then we had some starts and stops last year that obviously caused some efficiency and erode some of the margin appreciation that's achievable. So we're not foreseeing those this year. We think the base business has continues to perform well. We think we'll get operating leverage as some of the larger projects begin to materialize in a more meaningful way. And we think it's the natural step towards our stated goal of consistent double-digit margins for the segment.

Okay. Great. And then just second on CE&I and the turnkey data center project. Could you elaborate? You mentioned $1 billion, but over what time frame and who's kind of the -- who is the customer? And is this kind of the first of many to come?

Yes, sure. So a couple of things. The $1 billion was not all the turnkey job. So we've been doing a lot of other data center work, right? So we've really focused on our civil power infrastructure businesses that have been doing data center work for years. So hundreds of millions of the $1 billion were related to that. Obviously, the turnkey site helped move that. We're not in a position to be able to disclose much details around the project or the customer. We expect that job to be concluded in 2027. So between '26 and '27, those revenues will be earned. And we do think it will -- as the job progresses, we think there's tremendous opportunity for us to continue to grow on that type of business, and we think the market for that right now is incredibly strong.

And our next question will be coming from the line of Andy Kaplowitz of Citi.

Jose, so it seems like you're still as or more confident regarding your Pipeline business, but Obviously, as you said, it's going to be more book and burn moving forward. So just did you see any delays in terms of project timing versus what you've been thinking? And then on the margin side given the second half '25 performance in Pipeline and the higher estimated revenue in '26, isn't mid-teens margins for '26 conservative, if the market kind of develops as you think?

Yes, I'll start with the second part of the question, right? I think we've always guided mid-teens in our Pipeline business. I think that's the appropriate level to come out with the guide. I think we've our objective is to beat that. I think historically, we've outperformed that. And hopefully, the opportunity is there to do it again.

As it relates to revenue with Pipeline, I'd argue that our visibility is actually improving. So to me, the number of opportunities the number of verbal awards, a number of negotiations that we're in the middle of, I think every quarter that passes, our confidence just grows in our ability to continue to grow that business and see a really much longer term of elevated levels than we probably initially expected.

That's helpful, Jose. And obviously, you're still putting up strong growth in Communications and expected to do so in '26. When you think about breaking down that growth between sort of traditional fiber-to-the-home, do you have anything in BEADs for '26? And how should we be thinking about that fiber to the data center opportunity or middle-mile broadband? Is that also getting to be bigger than you expected? And is that in '26 at all?

Short answer is yes, right? I think breaking it down, we don't have tons of BEADs built into '26. I think BEADs -- I think what we're seeing there is we're becoming more bullish on BEADs. I think BEADs is going to be much larger than we had originally anticipated, and the opportunity is going to be larger for us, but I think that will predominantly be '27. One of the opportunities that we have is that some of that stuff does push into '26. That could be very constructive to the business.

But look, we're seeing every one of our customers pursue multiple business strategies. Obviously, everything that's happening around data centers and connectivity to data centers is an important driver for that. We're getting our share of that, and we think that the market is growing substantially for that as well. So very broad-based, the opportunities. We had an incredible year of growth in 2025. We're assuming a more moderate growth profile in '26. But if -- we were surprised in Q4 with the level of activity, I think we significant-- I think revenues were about 20% higher than what we guided for Q4. So got a lot of good opportunity to outperform in '26.

And our next question will be coming from the line of Jamie Cook of Truist Securities.

Congratulations on multiple fronts. I guess two questions for you, Jose. The first question is just the visibility that you have beyond the 18-month backlog that you report. I'm just trying to understand how great that is and which segments do you have above-average visibility?

And then I guess my second question, I think on the call, you mentioned that you saw the Pipeline business being able to achieve or exceed prior peak, which I think was $3.5 billion. Under what time frame do you think that would be reasonable?

Sure. Thank you, Jamie, a couple of things. I'd say, maybe with the last part of the question first, we've talked about hitting historical highs in Pipeline revenue as early as 2027. So in the near term, again, we see that business shaping up incredibly well. When we think about backlog in general, right, I think Paul alluded in his prepared remarks about the $4 billion of notice to proceeds that we have in Renewables that aren't in backlog, right? So we actually have more in LNTPs than we do in actual backlog, which is a remarkable statistic.

And I think that visibility is amazing, right? I think even within stated backlog, we have projects. I think we won our largest project ever in the Renewables business at the end of last year. Only a portion of that project is in backlog, only the 18-month portion of it. When we think about Comms and what we're currently seeing in BEADs and the potential there, I think it's going to lead to significant backlog expansion as we think about '26 in Power Delivery, the level of transmission jobs that we're seeing and the demand for transmission is just off the charts, which I think is going to also lead to some pretty sizable increases in backlog as the year progresses.

So overall, when we look at all the segments, we're just really optimistic, again, not just about '26, but what the future holds.

Our next question will be coming from the line of Philip Shen of ROTH Capital Partners.

Congrats on the great results here. I wanted to talk about Greenlink and to get a little bit more color there. Jose, could you share like the relief that you got, was that all that you're looking for, meaning this project is a full go now? Or are there other milestones that we should be thinking about in terms of permitting relief or milestones in general?

Sure. So on Greenlink, in 2025, obviously, the first portion that we really started on ended up being delayed with permitting. Those permits have been fully cleared. So the beauty of that is we get to go back to work on that initial phase that we were supposed to start. It's a long-term job. So not all permits are in. So there are some permits for the lighter part of the jobs that still have to come in. I think the level of confidence around those, especially with clearing this issue has increased significantly. So we feel really good about the progress on that job, what we think needs to happen for us to ultimately complete that on time.

And I think this is just -- again, it happened a little bit earlier than we thought in the year. So we're excited about it. And I think it bodes really well for, again, not just '26, but how that job is going to set up for the next few years.

Great. Jose, and then back on the data center job. Of the $1 billion, how much do you think you guys self-perform versus outsource? And then just as a follow-up, how much more is there behind this? I know you may have touched upon this a little bit earlier, but do you think we could see more of these $1 billion general contractor jobs later this year? Or do you think we have to wait until next year?

Yes. So a couple of things. I'd say that, again, you take the $1 billion, you break it out between what we've historically done, which is a couple of hundred million. I would say all of that is self-perform, which is the work that we've been doing. When you look at the balance of that on this particular project, we were brought in kind of late where a lot of the -- the actual work functions had been selected with different contractors, so we kind of took them over. So our ability to self-perform on this first project was somewhat limited.

Again, we think one of the beauties of this is we think we've got a huge competitive advantage. And we're one of the very few contractors in the U.S. that has significant experience in construction management and civil and power and telecom and maintenance and all of the attributes that you need to make up a data center job. So I think that customers are beginning to see that. We're getting a lot of opportunities related to full turnkey work with the ability to self-perform, which really changes the margin profile of those jobs on a go-forward basis. I think we're going to responsibly grow into it. This is hopefully the first of many, and we do expect further wins in 2026.

Our next question will be coming from Sangita Jain of KeyBanc Capital Markets.

Can I ask a question on the large transmission project that you booked in the fourth quarter? Can you help us with some details on how long you think that project will take to burn? I know for Greenlink, the target was 4 years. I'm just trying to see if this is a similar duration or shorter?

Sangita, so it's a smaller project. It will be a shorter duration. It starts probably the second part of the summer in this year, and it will probably go for about 2 years.

Got it. Helpful. And then on a broader level, can I just ask about margins? Your revenue growth has obviously been very strong. I know margins are expanding, but they are kind of lagging your expectations. So I'm wondering if there's a structural barrier that prevents operating leverage from coming through? Is this labor productivity? Or I don't want to prejudge, I want -- but I would love some color from you.

Yes. Look, we've talked a lot about it during the year. I think one of the challenges, which I think is one of the positives as well, right, is that most of our growth in 2025 was organic. And when you grow organically, it takes a lot to open new offices to build, to grow your workforce base to invest in not just working capital, but in the equipment necessary to grow. So we think we've put up a mid-teens growth rate, both for '25 and even on an organic basis, what we expect in '26, even if you back out the acquisitions in '26, we're expecting mid-teens organic growth in our business.

Those create challenges. They create challenges to optimize margins in a particular period. I think as we get bigger, and we see some of those initial businesses start to mature, which we're already seeing, margins kind of take care of themselves. So we're very bullish about our ability to improve our margins in things like telecom, which quite frankly, again, we beat fourth quarter revenue by 20% versus our guidance, which is just again another remarkable number, but that slightly impacted margins negatively, right?

When we look at what happened in Power Delivery this year with some of the things that we were expecting to happen on Greenlink and didn't come through, and slightly impacted the margin capabilities we had in that business. But when you look at '26 guidance for both of those strong growth years from a margin perspective in both of those. Our Clean Energy and Infrastructure business, right? I think, is progressing incredibly well. We were up 110 basis points on a year-over-year basis from '24 to '25. If you take the base business, we're expecting further margin gains in '26, but it's offset by some of the construction management and data centers.

And then when you look at Pipeline, right, it's all a function of size and how we're going to build up to where we think we can get to. If you take just Pipeline growth, if we get back to historical highs in revenues, quite frankly, it almost -- because of the mix, it almost takes us to double digits as a total company. Now total company margins on the longer term are going to be somewhat dependent on mix, are going to be somewhat dependent on how much we grow certain portions of our business and where they land. And we're paying a lot of attention to that, right? And we're really trying to maximize the returns on our investment and our ability to execute at a high level.

But look, we're -- as happy and as excited we are about the revenue growth story, we are super focused on the margin improvements across the company. And I think we've got real potential. I think we've got real potential to significantly impact those. And I think that creates as much, if not more value than the revenue growth that we're going to have.

Our next question will be coming from the line of Steven Fisher of UBS.

Congrats on a successful 2025. And just a follow-up on Sangita's question there, but keep it more specifically focused to the Communications segment. Could you just give a little bit more detail on the better margin expectations you have there? I know you mentioned about certain elements of the business that are maturing. Can you talk about which aspects of the Comms opportunities are seeing that maturing? Is that overpull work? Or is it the BEAD work? Or I guess you say, you don't have a lot in there. But what are the key initiatives that you're talking about that could really help margins? And what are you doing with the hiring in the Comms business? Because it seems like maybe some of the absorption there is maybe a bit of a drag.

Yes, Steve, I would push back a little bit, right? Because I would say if we look at Comms in 2025, the business was up on a full year basis, we were up 32% in revenue organically. The most mature business in MasTec, the longest business in MasTec was up 32% organically in revenue in 2025, and margins improved 60 basis points year-over-year, on 32% growth. Now yes, we would have liked to have seen margins improve more. There's no question about it, but we still saw improvement. When you look at '26 guidance versus where we ended up in '25, we've got just shy of 100 basis point improvement in that business yet again on what will be strong growth.

So I'd argue that we've done a really good job of managing the growth and improving margins along the way. But this is where we've made significant investment, opened new offices, and it takes time for some of those businesses to mature. We're starting to see the maturity of those businesses. We're starting to see the improvement of those margins, which is why on a year-over-year basis, margins improved 60 basis points. Yes, fourth quarter was a little lighter than we expected. But again, we beat revenue expectations there by 20% versus what we guided.

So I think we're well on our way. I think the business mix is perfect. I think we've got, again, tremendous opportunities for -- I think -- and by the way, we talked about BEADs being a huge opportunity going forward. I think we see that in '27. I think we have yet another really, really strong growth year in '27, probably much stronger than '26 because of what's going to happen in BEADs. But we're super focused on margin appreciation there. I think we delivered some of that in '25, and we'll deliver more of that in '26.

Okay. That's fair. And then just in terms of the overall 2026 plan and how it's covered in backlog, obviously, you had some really good backlog growth here. Just curious how well covered do you think on your 2026 plan. You are covered at the moment. Where do you think you still need to see more bookings? I know we've talked about in the Pipeline business, it's sort of closer to the burn when you book it. But just kind of what still has to happen to kind of deliver the plan?

I mean when we look back for the last as far back as I can remember, I don't think we've ever been in a better position going into a year based on revenue guidance versus where we stand with backlog. So I would argue that this is -- I'm not going to use the word conservative, but I think this is one of the best big plans that we've got relative to what our revenue expectations are with what we currently have in hand.

And our next question will be coming from the line of Justin Hauke of Baird.

Great. I've got one more on the margin questions. I guess, just to add to the mix. But overall, you're calling for 50 basis points of margin expansion. I guess I was just curious, I mean, you're going to tell me all your segments are going to see expansion this year. But is there anything in particular, mix-wise, I would say, some higher and some lower, given the moving pieces, maybe the construction management stuff on the data center work that you said is lower margin. Just anything to kind of help think about the trajectory in '26 at the segments?

Yes. So again, I mean, we expect Comms and Power Delivery to be up on a year-over-year basis. From a margin, I think we've been very specific as to what the opportunities are in '25 versus -- or '26 versus what it was in '25. The Pipeline business is obviously growing. Again, we have a step change function there in '27 from a revenue perspective. So while margins will be good in '25, they won't be optimal because we're making a lot of investments -- or I'm sorry, in '26 as we'll be making a lot of investments into what's coming in '27. So that's kind of why we've guided to where we've guided.

And then when we think about Clean Energy and Infrastructure, I mean we're not -- that's probably the one business where we're not calling out margin appreciation on a year-over-year basis, it's more flattish. While the base business is improving, the construction management business will be a drag on that relative to the total margins of the segment. So I think keeping margins there flattish is a good story with the opportunity of further growing our self-perform opportunities around that new business and then enhancing margins through that. So I think that's how '26 is going to shake out.

Perfect. No, that's helpful. My second one is a pretty easy one here, but I just want to clarify, in the guidance, there's a big uptick in the non-controlling interest. I assume that's the water, wastewater acquisition you did post quarter, but I just wanted to clarify that there wasn't anything else that was driving that?

That's the change for '26, yes.

Our next question will be coming from Ati Modak of Goldman Sachs.

Jose, can you talk about the vision you have with these acquisitions, the NV2A, how that integrates into the data center market? And then the decision to step into water infrastructure, what's your vision with that with -- how big is it today? How big could it get? And should we expect you to remain acquisitive in these areas?

Yes. So let's start with NV2A. Obviously, well known to us. They were our partner on a big project we currently have. It was an opportunity that presented itself where one of the partners was interested in selling and that started a dialogue where we ended up deciding to acquire the entire business. Tremendous opportunities on the current projects we have with the relative size of what those projects will be in the future. That in and of itself made an enormous amount of sense for us to pursue those acquisitions.

And then I think as that develops, obviously, some of these other construction management opportunities presented themselves, and we think they have incredible depth and strength and bring a lot to the table that are going to help us there as well. So we think fundamentally, just based on their base and historical business, it was a great deal. And when you look at all the compliments that we get in addition to that, we think it's going to be a fantastic deal for MasTec.

On the water side, look, we think water is a theme that's going to grow like crazy. I think we're going to have all kinds of issues this year with some of the snow patterns and where they fell and where there's going to be a lot of markets that are going to have water issues. A lot of what we're seeing around data centers across the country are demanding more water use, which is forcing municipalities to rethink about how they're providing water and the revenue opportunity for them to provide water into new projects.

When we look at their business, they've had tremendous growth. But quite frankly, when you look at their outlook and the opportunities that they're chasing, it's just their growth potential is probably as good or better than anything else we have in all of MasTec. And we're going to support them and help them achieve that, and we're super excited. We think that it's a great management team that's built a great company, and we're really looking forward to supporting them. I think that as, again, we think it's a great theme as the theme develops, as we get a better understanding of that market, I think there's going to be a lot more opportunities there to grow off of.

Very helpful, Jose. And then what would you highlight in terms of the expectations we should have with the Investor Day in May?

Look, we're excited to do it. We haven't done one in a really long time. I think we're going to talk a lot more about longer-term outlooks, maybe longer-term targets relative to what we do on these calls. So we're excited to do that. You're going to get an opportunity to meet a significant portion of our management team and really understand how we're thinking about the mid and long term as a business.

And our next question will be coming from Manish Somaiya of Cantor Fitzgerald.

Jose, first question for you. You gave us your margin outlook for '26. And I was wondering when you look at your daily, weekly dashboard, what are some of the things that you're looking at by segment to ensure that everything is on track?

Yes. Look, at the end of the day, our business isn't that complicated, right? Everything starts at a field level. It starts with the widget that's getting installed. And our ability to enhance the productivity of those widgets is what really changes profitability as an entity. So how we measure and how we incent at that level is the most important thing that we do as a company. I think Paul has talked a lot about a lot of the technological advancements that we're trying to make to further provide better information, more real-time information, which I think makes a big difference.

But that's our team's focus every single day. And I think that, again, we've got a lot of balls in the air. We're growing very rapidly from a top line perspective, but we can't take our eye off what makes us money each and every single day. And I think our team is doing a great job of being focused on that and are really trying to improve that on a day-to-day basis.

Second question for you and Paul. Paul, maybe if you can just help us bridge the operating cash flow from '25 to '26. And then Jose, obviously, you're guiding to leverage in the low 1s. How should we think about capital allocation between obviously, tuck-in acquisitions as well as share buybacks and other sort of initiatives you might have?

Yes. So on the operating cash flow question, Manish, it's really just going to follow the cadence of revenue growth. And we expect to have, as I mentioned, sequential growth in Q2 and Q3, followed by a falloff in Q4. We're not assuming any major change in DSO from year-end at 65 days for '25. And so it's just the expectation around working capital investment relative to the revenue generation and the year-over-year impact really from Q4 '25 to Q4 '26 is a big piece of that.

So there's not a major change in our expectations from where we finished the year. It's just about timing of current expectations of revenue timing that drives the $1 billion of cash flow from operations. And again, it's consistent with what we stated that for a long time is that we think we can do 70% EBITDA conversion to operating cash flow consistently. This year, the growth and the timing of the growth, put a little bit of headwind on that, and we think it normalizes in '26.

Yes. And maybe to the second part of the question, I'd say, look, first and foremost, we're focused on taking advantage of the organic growth opportunities in front of us and investing in those. I think that when we think about really adding to the platform of MasTec and bringing in partners, there's tremendous opportunity, right? I think there's so much demand in our industry today that our ability to meet it enhances with looking at M&A, and I think we're going to continue to do that.

I think we took a period of a couple of years post some very large acquisitions for us in INTREN, Henkels & McCoy and IEA, where a lot of our focus was consumed on the integration of those acquisitions. I think that's well past us. I think we've demonstrated that. And I think that we're in a position today where we can take that on and really make that additive to MasTec. So if anything, I think you'll see us be more acquisitive rather than less and for sure, more than the last couple of years, it's been part of our story since inception and something that you'll probably see us do more regularly than you have in the last couple of years.

Any specific segment, Jose, as far as tuck-ins?

Yes. Look, there's -- again, I think there's areas of every segment that we're in that we think makes sense for us. So it's measuring the opportunity, quite frankly, versus being opportunistic in those. So the values are also high, right? People's expectations of values have increased significantly. So finding the right balance between those two is what we're going to try to achieve at MasTec.

Next question will be coming from Joseph Osha of Goldman Sachs -- I'm sorry, Guggenheim Partners.

Hello, can you hear me?

Yes, we can hear you.

Two questions. Following a little bit on some previous one, looking at the data center opportunity in particular. I'm wondering if there are any particular skill sets or capabilities you feel like you might want to fill in. And then looking at Communications, there's been some wireless infrastructure rip and replace in that segment in the past. I'm wondering how much of that is there going forward or whether we're mostly looking at FTTH and obviously BEAD in '27?

Yes. So a couple of things. On the data center side, obviously, we don't have the functions today to self-perform everything. But I think that we have the ability to self-perform a lot more than most, which I think, again, gives us a tremendous advantage. To the extent that the opportunity is there to consider doing more there we would. On the wireless side, I think we're in the midst of that rip and replace for our large customer. I think we're going to see a lot more deployment starting in '27 relative to new spectrum, which is going to help that industry considerably. So we're still as excited about wireless as we've always been.

And our next question will be coming from Brian Brophy of Stifel.

I guess I'll just go with a quick one. CapEx is notably lower than a year ago. Can you talk about the drivers there? The '26 expectation, excuse me, is notably lower than a year ago.

Yes. I mean I think it's just a function of where the growth is coming from. We talked about investing a lot in pipeline ahead of the cycle. A lot of the jobs we're working on right now kicked off in the back half of '25, and we're procuring equipment related to those. Our Clean Energy segment, where we're seeing the highest growth in 2026 is the least capital intensive. So some of it is just a function of that. We're obviously prepared to continue to invest. That's our view today. And to the extent that project needs or demand opportunities that require more CapEx, we've got the flexibility to do it.

Next question will be coming from the line of Mark Strouse of JPMorgan.

Maybe just on that last point on Renewables. Clearly, you're seeing very strong growth. Just curious, can you talk about your market share, your win rates? Is this a function of kind of just the number of opportunities increasing? Or do you think kind of a function of projects getting bigger and more complex that you're taking share as well?

I think it's a little bit all of the above. Again, coming off of the IEA acquisition, we took a lot of time to really focus our efforts around going after customers that we thought we could build meaningful relationships with that would matter over time. And I think we've done that. We've got alliance agreements now with what we think are some of the best developers in the business that have long-term plans that are very solid, and our ability to have integrated within their systems and really build an expectation of both our labor and their work over a long period of time gives us tremendous visibility. So I think that's helped us, right? I think today, we're a top-tier contractor for both wind and solar. And we're very bullish about the long term of that business.

Obviously, at times, it becomes very political. We think there's tremendous visibility through 2030. And we think that when we're -- as we see the prices and what some of the new generation is pricing out, we actually think that Renewables are going to be competitive on a price basis long after 2030. So we think it's a great market. We think it's a market that's got tremendous potential. And again, as Paul alluded to earlier, we've got a ton of what we would call shadow backlog, which is backlog, we know we're going to convert. So we actually think backlog in that business could increase in '26.

And our next question will be coming from the line of Liam Burke of B. Riley Securities.

Jose, your projects have become larger and more complex. Are you seeing less competition and better more favorable terms as you renegotiate or enter into some project agreements?

Well, I think the whole industry is, right? I think customers understand the challenges that they face relative to labor. I think, obviously, we've always said we think terms improve before pricing does, and I think we've seen terms improve considerably over the last few years. And I expect that to continue. And as we're all dealing with the demand, I think pricing is also getting better. So I think we're in a good place as an industry.

Great. And really quickly, you highlighted middle-mile activity in the telecom segment. Is that data center driven? Or is that -- what is driving that activity?

Yes. Look, I think our customers are looking to grow. Our customers are looking for all the opportunities in front of them. So some of it is data center driven, some of it is onshoring driven. There's lots of demand for connectivity. And to the extent that our customers win that demand, it requires large infrastructure build-outs for them, and that's kind of what we're talking about.

And our last question will be coming from Maheep Mandloi of Mizuho.

Congratulations on the quarter here. Maybe just two quick ones. First, just on Communications, is there any way to kind of dissect how much of that would be exposed to office buildings or commercial customers? And secondly, on M&A, you kind of laid out pretty well on previous questions here, but just curious if you have any thoughts on building some of the equipment yourself, which might be in tight supply in the market again?

Yes. So relative to office buildings and commercial buildings, obviously, those are customers of our customers. So I think we're not -- I don't think that's been a key driver of the business. I don't think there's been large expansions of either of those in the country over the last couple of years. But obviously, connectivity is important for everybody. And to the extent that anybody needs connectivity, it's a potential customer for our customers. From an M&A perspective, look, we haven't looked at getting into manufacturing. We think our business has been strong. We have really strong demand and really good partners that can support us in that. So we haven't seen the need to do that.

And I would now like to turn the conference back to Chris Mecray for closing remarks.

All right. Thank you, everybody. That concludes today's call. Thanks for participating. And as a reminder, please visit our Investor Relations website for a replay and transcript which will be posted when available. Have a great day.

And this concludes today's program. Thank you for participating. You may now disconnect.

Hello, and thank you for standing by. Welcome to MasTec's Third Quarter 2025 Earnings Conference Call. [Operator Instructions]

I would now like to hand the conference over to Chris Mecray. You may begin.

Good morning, and thank you for joining us for MasTec's Third Quarter 2025 Financial Results Conference Call. Joining me today are Jose Mas, Chief Executive Officer; and Paul Dimarco, Chief Financial Officer. We have prepared slides to supplement our remarks, which are posted on MasTec's website under the Investors tab and to the webcast link. There's also a companion document with information and analytics on the quarter and a guidance summary to assist in financial modeling.

Please read the forward-looking statement disclaimer contained in the slides accompanying this call. During this call, we'll make forward-looking statements regarding our plans and expectations about the future as of the date of this call. Because these statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially from our forward-looking statements. Our Form 10-K, as updated by current and periodic reports, includes a detailed discussion of risks and uncertainties that may cause such differences.

In today's remarks, we'll be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules. We may also use certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measures can be found in our earnings press release, slides or companion documents.

I'll now turn the call over to Jose.

Thanks, Chris. Good morning, and welcome to MasTec's 2025 Third Quarter Call. First, some third quarter highlights. Revenue for the quarter was just shy of $4 billion, a 22% year-over-year increase. Adjusted EBITDA was $374 million, a 20% year-over-year increase, and this growth performance was the highest level since the first quarter of 2024. Adjusted earnings per share was $2.48, ahead of consensus by nearly $0.20. And despite a revenue record quarter, backlog at quarter end was $16.8 billion, a roughly $325 million sequential increase, with every segment delivering backlog growth.

In summary, we exceeded guidance across each of our revenue, EBITDA and EPS metrics, representing a strong period of execution for MasTec. This strong result is, in part, a testament to the scale and diversification we have achieved for MasTec over time, and we are excited about our outlook for the balance of the year and beyond, given clearly positive market conditions across all end markets we serve.

I'd like to point out some further highlights about our quarter. Our Communication segment grew revenues 33% year-over-year. And EBITDA increased 38%, all organic. And EBITDA margins for the segment improved 40 basis points compared to last year's third quarter. Our Clean Energy and Infrastructure segment grew revenue by 20% year-over-year, and EBITDA improved 36%, virtually all organic. EBITDA margins for the segment improved 100 basis points compared to last year.

Our Power Delivery segment grew revenue 17% year-over-year, and EBITDA increased 21%, all organic. EBITDA margins for the segment improved 30 basis points compared to last year despite a difficult year-over-year storm emergency response comparison that tends to be very profitable. These 3 segments make up our nonpipeline segments, which grew revenues by 22% for the third quarter compared to last year, EBITDA by 31% and achieved a 60 basis point improvement in EBITDA margins, again, virtually all organic. We highlight this because of the significant investments we've made to diversify our business and position us to participate and benefit from the changing landscape of both power generation and delivery. Our solid execution across these segments, coupled with the expectations of significantly improved pipeline market as natural gas plays a much larger role in future energy generation, position MasTec for continued growth and strong financial performance.

MasTec's total backlog remained very healthy in the third quarter, reaching another record level despite significantly increased volumes burn experienced during the period. Third quarter backlog increased 21% year-over-year and was up slightly sequentially with a book-to-bill ratio of 1.1x. While the sequential backlog included a solid 8% increase from our Pipeline segment, our visibility in that segment is considerably better than backlog suggests. We continue to expect further backlog growth in the current quarter and to end the year at another record level.

Turning to some segment highlights. In our Communications segment, the telecom infrastructure market remains dynamic. Our customers are making significant and growing capital investments to support broadband delivery across the country to replace older cable delivery systems, and more recently, to enable enhanced artificial intelligence applications. Third quarter revenue easily exceeded our planned contribution from nearly all of our top 10 customers, with higher capital spend seen in multiple regions across wireless and wireline construction, resulting in an impressive 33% growth rate versus prior year in the quarter.

As expected, margins reached double digits and increased 140 basis points sequentially as well as 40 basis points versus the prior year. Still, the 11.3% EBITDA margin leaves room for improvement as investment requirements for growth moderate. We believe we continue to have significant margin opportunities looking forward.

MasTec's wireless business continues to see solid growth from both geographic expansion and providing new and broader services to existing customers. On the wireline side, demand strength continues to be supported by substantial broadband infrastructure build-out by legacy telecom players, cable operators, as well as newer entrant fiber overbuilders. This race to connect consumers to broadband fiber continues, and we are well positioned to execute deployment nationally. Further, middle mile broadband build-outs have emerged as an additional growth driver for years to come, and hyperscaler CapEx associated with the data center build-out is contributing to this additional growth for fiber deployment. Our contract with Lumen, which has begun to ramp up in recent months, is anticipated to drive solid and visible growth for our business in 2026.

Turning to Power Delivery. While third quarter financials were solid, profit and margin year-over-year comparisons were impacted in the period by a lack of storm-related restoration services against a more normal comparison in the prior year, as well as lower than planned volume from our Greenlink project due to permitting related delays, as has been reported in the press in recent weeks. We have factored both changes into our full year outlook as well. Despite these challenges, we expect our Power Delivery segment to achieve double-digit growth in both revenues and EBITDA for full year 2025.

Further, our bullish stance on overall grid investment demand remains undiminished, and feedback around load growth and capital spend projections by our power delivery customer remains very positive. Implied requirements for grid investments in the coming years are substantial. We see ongoing growth of anticipated power demand, set against an aging infrastructure that does not meet either the capacity or the physical location of the sources of incremental supply and demand. We continue to expect large CapEx commitments across transmission, substation, distribution as well as new generation capacity.

Third quarter backlog for Power Delivery increased 11% versus the prior year quarter and increased slightly from second quarter despite an increased burn rate. Post quarter end, I'm pleased to announce that our transmission and substation group within our Power Delivery segment was awarded its second largest project ever, trailing only Greenlink project in size. We expect the project to start in mid-2026 and to be added to backlog by year-end. We will discuss this project in more detail on our year-end call.

Turning to our Clean Energy and Infrastructure segment. While adjusted EBITDA increased 36% year-over-year, I'd also like to highlight that we have more than doubled our EBITDA from the segment versus the first quarter, demonstrating the considerable progress we've made during 2025. Renewables demand remained very healthy in the period, and we were pleased with execution for the business, which saw significant growth both year-over-year and sequentially, while meeting our margin target of high single-digit, consistent with the prior quarter and improved from the prior year as we continue to benefit from enhanced focus on execution and working closely with our trusted partners.

Our Industrial and Infrastructure business continue to show collective growth, with execution on key projects showing results and reflected in strong margin outcomes. We are excited about future growth here from both ongoing transportation and other infrastructure opportunities and from substantial growth potential related to data center build-outs, including both civil work as well as behind-the-meter power infrastructure.

Overall, backlog for Clean Energy and Infrastructure of $5 billion increased 21% from the prior year and 2% sequentially with a book-to-bill of 1.1x. This included a 9 straight sequential increase in renewables backlog. It's important to note that reported backlog is only estimated 18-month backlog. A number of our recent wins have been for projects with late 2026 starts, where only a portion of the estimated revenue is included in backlog. While our renewable growth will be driven mostly by solar, we've been very successful in securing wind projects for 2026 and beyond. We believe we are well positioned to current backlog levels for strong continued growth in this segment.

Turning to our Pipeline Infrastructure segment. We saw revenues increase 20% year-over-year as we returned to growth after lapping the challenging comparisons of the wind down of the MVP project. The third quarter represented the best margin performance for the year for our Pipeline segment. While still down from the previous year, we expect continued margin improvements and expect our fourth quarter to be the highest margin quarter of the year in this segment, setting us up very well as we enter 2026. This margin improvement, coupled with expected revenue growth creates significant opportunities for earnings growth in 2026 and beyond.

Total pipeline backlog increased 8% sequentially to $1.6 billion and more than doubled from the same period a year ago. We added more than $600 million of new bookings in the period and saw a book-to-bill ratio of 1.2x despite the higher level of burn. Third quarter backlog saw the inclusion of our activity on the Hugh Brinson project, which actually started in the third quarter. We don't normally call out specific projects on our calls, but this project is a good example of how pipeline work is being awarded today. While rumors of our involvement in this project started in the first quarter, we received final signed contract documents just this quarter and physically started work shortly thereafter.

I say all this to highlight that while backlog is an important metric in this segment, our visibility into future work is far greater than just backlog. There are a number of projects that we will build starting in 2026 where final contract documents may not be completed and thus not reported in our backlog until close to project kickoff as all variables get included in final contractual documents.

We remain optimistic and confident in both the short- and long-term growth outlook for our Pipeline segment. Gas-fired generation will be a critical source of incremental baseload power generation for decades to come. And our customers are getting ahead of the process to supply this important demand source while also meeting the needs of near-term LNG export demand growth and continued demand at the consumer level to replace fuel oil and other sources.

In summary, we are pleased with our third quarter results and maintain strong confidence in expected growth based on drivers and powerful demand drivers across each of our businesses. In addition, we are continuously looking for ways to optimize our operating model to generate the best possible margin outcome, and we see multiple levers to achieve better margins as we look ahead. We remain very excited about the opportunity for MasTec and our investors over the coming years.

As always, our enthusiasm for the outlook is grounded in execution and in the hard work of every person on the MasTec team. I'd like to thank all of our people for their continued commitment to our corporate values of safety, environmental stewardship, integrity and honesty, all while serving our customers diligently and ensuring the delivery of a great work product. Thank you, all.

I will now turn the call over to Paul for our financial review. Paul?

Thank you, Jose, and good morning. As Jose mentioned, we are pleased with our strong third quarter results driven by continued sequential volume improvement and solid execution across our operating segments. Looking ahead, our customers continue to highlight a growing need for MasTec's broad service offerings to meet their infrastructure development goals, giving us high confidence in the growth trajectory of our business across all 4 operating segments. Infrastructure investment needs across communications, energy and power sectors, as well as civil and commercial infrastructure remain in the strongest position we can recall and reinforces our positive outlook for years to come.

Now looking at our third quarter segment performance. Our Communications segment continues to produce substantial and robust growth, with revenue of $915 million topping our forecast notably in the third quarter, generating 33% year-over-year growth. The business remains well positioned to leverage strong demand for both our wireless and wireline service offerings, including an increasingly diverse customer set seeking to deliver broadband telecom infrastructure to both residential and commercial end users. Third quarter EBITDA margin was 11.3%, an increase of 40 basis points versus 10.9% in the prior year and a notable 140 basis point increase from the second quarter. We've reduced our full year margin guidance slightly to reflect the investments made to support our strong organic growth rates. The overall telecommunications end market and our visibility remains strong, with third quarter backlog totaling $5.1 billion, a small increase sequentially despite the record quarterly revenue in the period.

MasTec's Power Delivery segment also continues to post significant growth, with a 70% increase in third quarter following a similar year-on-year growth rate in Q2. We continue to see strong growth opportunities across the country through our diverse service offerings that enable our customers to invest in upgrades and new capacity across the U.S. power grid. Our updated guidance does reflect a lower level of activity than previously expected on Greenlink in the fourth quarter as our customer works through isolated delays due to permitting. We are actively constructing other components of the project, and we expect that to continue.

EBITDA margin of 9.4% for the third quarter increased 30 basis points from the prior year and 70 basis points sequentially, but fell below our low double-digit forecast for the period. While an encouraging result in most respects, the outcome was impacted by project mix versus our forecast. We continue to expect improvement in the margin performance of our base business over time through continued strong execution, operating leverage and project mix.

In our Clean Energy and Infrastructure segment, total revenue for Q3 of $1.4 billion represented a strong 20% increase from the prior year and a similar 21% increase sequentially as our renewables business ramp continued as planned. Overall segment revenue was about in line with our third quarter target, with renewables meeting forecast while growing almost 50% year-over-year on record demand for new renewable power installations. Third quarter CE&I EBITDA increased 36% year-over-year, significantly outpacing the revenue increase as margins in this segment increased 100 basis points to 8.5% as well as 110 basis points sequentially.

Renewables margin was stable sequentially as expected at solid single-digit levels -- high single-digit levels, while we captured anticipated operating leverage across industrial and infrastructure from higher volume and strong operating execution. CE&I backlog, which totaled just over $5 billion, benefited from solid new bookings across all business verticals, contributing to a 21% increase from the prior year third quarter and a 2% sequential increase. We have substantial renewables backlog in place now to support a strong 2026 outlook, which we expect to show solid growth versus 2025. Our Industrial and Infrastructure business are also well positioned to continue to win work in the balance of the year to support a higher backlog at year-end and ongoing volume growth into 2026.

Turning to Pipeline Infrastructure. Third quarter revenue of $598 million was an impressive growth rate of 20% from prior year and an 11% increase sequentially as the business ramps from volume lows seen in the first quarter. The pickup is inclusive of a broad-based increase in gas pipeline work nationally, though the beat versus plan of over $20 million was led by New York ramping -- new work ramping in the Southern regions. EBITDA for the quarter of $92 million with a 15.4% margin met guidance of mid-teens for the segment. The comparison to the prior year on a margin basis remains challenged by the current ramp of new work versus the prior year outcome, positively impacted by project closeouts.

Pipeline backlog of approximately $1.6 billion increased 8% sequentially and 124% from the prior year, with new awards totaling over $600 million in the quarter, offset in part by increased burn rates. We again saw diverse project awards, including the large job, as I mentioned, as well as a number of smaller midstream project wins in the period. As Jose noted, we're pleased with the overall strong demand set and opportunity pipeline and other -- sorry, in the pipeline and have received significant verbal awards that we expect to convert to backlog in the coming periods as we get closer to construction start dates, usually within 30 days of mobilization. As a result, the impact of new awards to our pipeline backlog may be less pronounced than in other segments. Our excitement for this oncoming investment cycle continues to accelerate, and we foresee solid growth in our Pipeline segment for 2026 and beyond.

Regarding our overall progress on margin expansion, we are pleased with the consolidated result of 9.4% in the third quarter, which was a really strong 160 basis point improvement from 7.8% in the second quarter and a fairly dramatic lift from the starting point of 5.7% in Q1. The margin progression we have now recorded comes from our continued focus on operating productivity and cost management, as well as solid operating leverage as our volume has increased. We have noted an expectation of a full year double-digit margin as our midterm objective, so we still have some work to get there. Our third quarter results, while improved, were generated by project mix and productivity that is, as of yet, still not fully optimized. The bottom line is we continue to expect annual positive margin progression, which will continue to be a primary focus for MasTec.

Regarding our updated consolidated guidance, our supplemental guidance document per segment and other financial guidance details is now posted to the IR website. We are increasing 2025 full year revenue guidance to $14.75 billion with adjusted EBITDA of $1.135 billion, slightly above the low end of our previous guidance. Our revised outlook reflects higher than previously anticipated levels of Communications and Pipeline activity, offset by lower Power Delivery revenue than previously expected, due in part to timing of activity on Greenlink in Q4 as our customer works through the isolated permit delays. Adjusted EPS is forecasted to be $6.40, up 62% versus 2024.

We generated cash flow from operations of $89 million in the third quarter and free cash flow of $36 million, slightly below our expectations. Our strong sequential revenue growth and associated higher working capital investment as well as higher capital expenditures to accelerate growth impacted these results. We continue to expect $700 million to $750 million of cash flow from operations for 2025, assuming DSOs average around the mid-60s for the year.

We ended the quarter with total liquidity of approximately $2 billion and net leverage of 1.95x, and we expect further leverage improvement by year-end given earnings and cash flow expectations. As I noted last quarter, our strong balance sheet provides us significant financial flexibility to pursue a disciplined, return-focused capital allocation strategy. Our top priority remains supporting our robust organic growth opportunities through investments in equipment and capacity expansion, where we see compelling returns. We will also continue to evaluate opportunistic accretive acquisitions that complement our existing service lines, consistent with our long-standing approach. In addition, we maintain a share repurchase authorization and will deploy capital to buybacks opportunistically.

This concludes our prepared remarks. I'll now turn the call over to the operator for Q&A.

[Operator Instructions] Our first question comes from the line of Ati Modak with Goldman Sachs.

I guess, Jose, on the pipeline backlog, curious if you're able to directionally guide to the level of revenue that these projects and ongoing conversations could lead to for '26? And maybe you can give us a sense of what that backlog growth looks like in the near term given all these conversations?

One of the reasons we really tried to highlight a specific project on today's call was to kind of talk about the change that we're seeing in how pipeline work is being awarded. I remember years ago, when we would have these calls, we would talk a lot about book and burn. And the reality is that the business, the way it is today, it's almost returning to that level. We've got commitments from customers on specific jobs. They want to leave the books open to kind of get all the details of the project done by the time they sign a contract. We're, quite frankly, ready to start construction, which is very favorable from a risk profile perspective. Where it doesn't work because it doesn't give the Street great visibility into our backlog.

But conversely, we do have that visibility, right? So when we talked about the strength of our pipeline market, we're more optimistic today than we've been on our last call. We talked about reaching or exceeding historical high levels of revenue. I can tell you today, we're more confident about our ability to achieve that now than we were then. It's not for '26. This is not a '26 story. I think we'll grow the business double digits in '26, but really, the growth is going to be substantial in '27 and beyond from what we're seeing from the projects that have been committed to us, and it's extremely exciting.

Again, from a margin perspective, it's a business that we struggled with on a year-over-year comparison this year because of the closeout of MVP and the lower revenue levels. We're going to see that business get back to a strong margin profile in Q4. It obviously had significant improvements in Q3 at 15.4%. We expect to do a lot better than that in the fourth quarter. And that bodes really well, entering '26 and beyond. So we're excited about our margin potential in the business, and we're more excited about the revenue opportunities for beyond '26 and into '26. So exciting times.

And then I know you gave the color on the capital allocation strategy. So I guess on the organic growth side, can you remind us what the CapEx level should be on a run rate basis as we consider the opportunities out there? And then also on M&A, I mean, I know you've spoken about a third transmission line capability down the road and need for M&A around that. But curious if given what's going on in the market, you would look at something on gas power generation as well?

This is Paul. I'll start with the CapEx question. So in the near term, with the outlook we have for Pipeline, which is our most capital-intensive end market, you can expect CapEx to run in front of depreciation a little bit, right? So depreciation is running about $300 million right now. You should expect it to be north of that, probably around $350 million going into '26, but it depends where the growth comes from. Obviously, we have other segments that are much less capital intensive. So that's kind of a near-term, maybe '26, '27 view.

On M&A strategy, I'd say a couple of things. I'd say our focus hasn't changed. We will be more active in the M&A space going forward. As it relates to power generation, I think we've historically had an industrial business that we've done some projects. We haven't really done a combined cycle. I don't know that, that's an area that we would get into.

At the same time, one of the fascinating things about our business today is I think everybody is being asked by customers to really look at different things and different opportunities, which creates new opportunity revenue streams for all of us in the space, and I think you'll see MasTec pick up its share of that as well.

Our next question comes from the line of Jamie Cook with Truist Securities.

Congrats on a nice quarter. I guess my first question, Jose, can you just talk about the permitting issues with Greenlink and how that impacted your guidance? Could I just assume that's a change in your Power Delivery revenues and then like the potential risk that you see on Greenlink in 2026 and the potential to offset that? So that's my first question.

My second question, obviously, a lot of large work out there across multiple segments. You're on Greenlink, Hugh Brinson, you won another pipeline job. Just wondering, I guess, across each segment or across the company, given your -- the number of employees you have today and the size of your company, how many large projects do you feel comfortable taking? Do you mean at one time, just given the risk profile of larger projects just from an operational execution standpoint, just how you're thinking about that?

Jamie, I think you got a lot of questions into that one question, but let me try to start from the top.

Okay.

Look, our fourth quarter change is primarily Greenlink. That's what it is, right? We're at the lower end of the range that we had originally put out for Q4. The difference between the low end of our range and the high end of our range for Q4 was about $30 million of EBITDA. That's all coming out of our Power Delivery business for the most part, and that's the big change.

As it relates to Greenlink, we've said a lot historically. We've -- it was an incredible win for our company. We're really excited to be working with the customer. Obviously, they're facing some challenges on permits, quite frankly, that were originally issued and are not being reviewed. We've said that we expected the run rate on that project to be $300 million to $500 million a year over a number of years. We gave more clear guidance over time on '25 of $375 million to $425 million. The truth is that for '25, we're going to end up -- it's more like somewhere in the $250 million range. So it's a significant difference from what our expectations were of ramp in the second half of the year.

With all that said, that project will be built. It's an exciting project. We will build it. We're hoping that the time schedule doesn't really change from a completion perspective, which is just going to increase the load on that project over the coming years. We announced today another transmission substation job within that business, which is the second largest award we've ever gotten within that group. That will help, obviously, in 2026. We're hoping that, that's additive to what we would have done with Greenlink.but at a minimum, it will significantly help offset it if that becomes the case.

We expect Greenlink activity to increase in '26 versus '25 from current levels. So the story in our mind is really solid. It's intact. When you talk about large projects, I think it's almost important to really -- I'm switching subjects now to the large project part of your question. I think it's important to kind of think about different businesses, right? We don't really have large projects in communications.

In pipeline, for the most part, it's a project-oriented business. We don't have projects like MVP anymore. The projects will be smaller in scale, which were a lot more like the projects we've historically built. So I think we have an enormous amount of comfort, as should our investors relative to that. When you think about our Clean Energy and Infrastructure business, it's -- we've got a nice maintenance business there, our infrastructure business. But at the same time, there are more projects there. You should feel comfortable with the level of performance in that business. Again, we've doubled profitability since the first quarter. So I think people should have comfort around that.

When we talk about Power Delivery, it's a $4 billion segment. Of that business, 80% to 90% of that business is maintenance driven. It's MSAs. It's working for utilities every day. It's working on distribution lines. It's working on substations. So it's a very recurring predictable business. We've highlighted the project end of that business because it's where we were the smallest, right? Greenlink was really the first of many projects that we felt could grow our project orientation around that market.

So let's take a step back. 17% revenue growth in the quarter from a revenue perspective in Power Delivery, 21% EBITDA growth. For the year, we're expecting 13% growth in Power Delivery, 13% EBITDA growth. That's important because that's despite Greenlink not having the activity that we expected. Had Greenlink had the activity, obviously, those numbers would be a lot bigger. The project portion of our Power Delivery business is one of the biggest growth potentials that MasTec has. It's one that we need to cultivate and build. Again, it doesn't risk the portfolio because it's such a small percentage of MasTec's overall business, but it is important to the growth of our Power Delivery business.

So I'd say all this to say we're very excited about Greenlink. We're very excited about what the opportunity means. We're very comfortable with our ability to execute on that project at a high level. We're super excited about our next win that we'll talk about more on our next call and what that means to MasTec, and quite frankly, potentially future wins that exist. So I think our investors should have tremendous comfort around how we've grown the business, how we've thought about the projects, how we thought about the risk profiles and the opportunities that they bring to MasTec.

Our next question comes from the line of Philip Shen with ROTH Capital Partners.

Just wanted to check in with you guys on next year. Is -- do you think $8 of EPS is still on the table for next year? Or can we assume that this has potentially moved higher after your recent wins?

Philip, thanks for the question. A couple of things, right? When you look at consensus out there, we haven't given guidance. Consensus today is 10% revenue growth on a year-over-year basis, 20% EBITDA growth on a year-over-year basis. We've said that consensus relates to north of $8 a share, which is 25% EPS growth from '25 to '26. I'd tell you today, we're really comfortable with where consensus sits. We're working really hard to obviously continue to grow and build our business. But I think just where consensus stands, right, 10% revenue growth, more than 20% EBITDA growth. Those are fantastic statistics, right, and a company that's done most of its growth on an organic level, that's nothing to sneeze at. We're proud of that. We hope to do better. But yes, we're comfortable with where the numbers sit today.

Great. Thanks, Jose. That's very helpful color. And then shifting to margins. It sounds like next year, the margin expansion narrative is very much on the table. I just wanted to touch on Q4 specifically. Can you help us understand the basis point impact from OpEx investments versus gross margin percentage? Is the gross margin percentage holding up in Q4?

Yes. The way we think about it, right, is, again, we've had really high levels of growth. And unfortunately, with really high levels of growth, you have certain investments that are made to execute on that growth. And not all of our growth is same-store sales, and we've kind of used that example historically where -- same stores is a lot easier to grow it because you already have an office, you have people and you're just incrementally growing revenues, which is what you want to do to increase margins over time.

But we've expanded in a lot of new geographies. We've opened a lot of new offices. We're working for new customers, and those require more investments. And I think that when you look at the margin profiles that we've laid out from the beginning of the year, we've got some puts and takes. Some businesses are doing better, some are doing slightly worse. I think it's all driven by that, right? So we've made significant investments to the growth profile. Those investments will pay off.

I can tell you that as a company, one of our major focuses is definitely our margin improvement. We think we've got room, quite frankly, across all of our businesses. Again, when we think about fourth quarter, we think the major change is really what's happening in Power Delivery. If you look at -- we've had some questions overnight around Communications and their margins. The reality is if you look at EBITDA dollars on where we guided versus where consensus was, it's no different. We just have a little higher revenue. And again, that talks to the impacts of investment in growth.

So we're really comfortable where we're at. We know we can do better, which I think is a positive. We've got to execute on that. But we feel really good about where our business stands and the opportunities ahead of us.

Our next question comes from the line of Steven Fisher with UBS.

Just a follow-up on that last question, but maybe more specifically to the Communications segment. I mean, it seems like there really is a broadening set of opportunities there, and you did call out some of the investments that you're making. Can you just talk about the shape of those investments? Kind of, is there a lot more that you need to go? Or are you sort of at the peak point of that and just how the margins can evolve there over the next year or 2?

Thank you, Steve. I'd highlight a couple of things. First, margins improved 40 basis points year-over-year to 11.3%, which is one of the highest levels that we've had in a long time. When we think about fourth quarter, we're showing almost 100 basis point improvement on a year-over-year basis for the quarter. Also, we think, really solid. So I think we're headed in the right direction.

We've -- at the end of the day, that business is going to grow almost 30% on a year-over-year basis, which is just a staggering number, again, organically. And a lot of that has to do with investments in new geographies. And those investments are harder because you're opening new offices, you're either moving people or hiring new people, and it takes longer for those investments to translate into earnings, right? So I think we've been doing that for a long time. We're seeing the results of those earlier investments already in our numbers or we wouldn't be able to hit these, right?

So it's a lot of the stuff that has been done more recently that's having the negative impacts or really, the drag. And again, we're working our way through that. We have opportunities for further growth in 2026. The market is really hot. I think that with all of the changes that we've seen in the government, and I know we've talked about [ BEADs ] for a really long time, but I actually now believe that [ BEADs ] is going to have a pretty significant impact on our business and our customers because of how it's changed in the profile of customers it's going after it. So I feel really comfortable that that's going to be a further growth driver as we think in '26.

But everything that's happening with data centers and AI and the need for fiber and the middle-mile fiber growth that we're seeing is just providing tremendous opportunity for us across the country. As we obviously increase in size, the growth requirements moderate because we're in a lot more places, a lot more geographies. So again, we feel really good about the progress that we made this year in the growth of that business and really, what it's going to translate over time.

If I could ask a follow-up on the Power Delivery side. You talked about not having as much revenue on Greenlink this year, and that's taking some of the profits down. But I guess on the bigger picture about the project itself, does this delay impact the overall expected profitability for the whole project? Or is it just a pushout in timing?

And then the bigger picture question is, as this translates to sort of a thought on risk for overall transmission projects that you're going to be taking on over the next couple of years, how should we think about the risk approach that you're taking there? Is this sort of like a reminder that you should be kind of very prudent in the risk you're taking on in these transmission projects?

I think we've got to be prudent in all risks that we take in all jobs in all of our businesses, and I think that's where I think we've been great stewards of MasTec and really understanding the risk profiles that we're committing to and contractually protecting ourselves against those. As it relates to Greenlink, again, we're working with our customers. We have a high level of confidence in both our and our customers' ability to get that project done and to get it done safely and timely. We do not expect any impact to profitability whatsoever on that project over the period, other than obviously it being in different periods than what we originally expected. So our -- again, our confidence and our excitement around Greenlink is unchanged. We expect it to be a very successful project for both our customer and MasTec. And again, we'll provide more updates as they come. But we don't expect any negative impacts in '26 other than from a revenue perspective, what it could be to what it ultimately is, and it's just going to compress the time line.

[Operator Instructions] Our next question comes from the line of Andy Kaplowitz with Citi.

Jose, [ Quanta ] yesterday talked about a total solutions opportunity for hyperscalers. We know you don't have the same exact portfolio as them, and you talked about not being particularly excited to combine the cycle, but you do have significant capability to help data center customers. So what's the probability that we'll see something like that, like a total solution set of projects for MasTec, starting in '26? And could you update us on the journey to $1 billion that you originally discussed you could do with data center customers?

So I'd answer the first part of your question just by saying very high, and I'd answer the second part of your question by saying I think that obviously, data centers offer an incredible opportunity companies like MasTec in our industry, we're involved in a number of different things already when you think about what's happening on power, when you think on what's happening on fiber directly for data center builders, right? We're looking at -- we've been working on the civil side for a long time. We've talked about it. We're working on the infrastructure side. But I think our ability to take a larger role and a more important role as we think about those projects on a future basis and really capture a higher percentage of that revenue, again, is extremely high.

Great. And then could you give a little more color into what's going on in Clean Energy? I think 8.5% EBITDA margin is a high watermark for MasTec. I understand Q3 is a seasonally good time of the year. But do you think margin on an annual basis can continue to push higher in that segment? And you did lower your revenue outlook slightly in the segment, though you're still going to be double-digit growth. So how are you thinking about growth across Clean Energy going into '26?

Again, great quarter, 20% revenue growth. More importantly, 36% EBITDA growth for the quarter. We pretty much beat our margins every quarter there relative to what we've guided. I think we're somewhat conservatively guided for Q4. Hopefully, we can do that again. Business is doing really well. Again, our Clean Energy and Infrastructure business is a combination of renewables and infrastructure. I think if you think about the infrastructure business, it's obviously a slower grower. That's a business that if we're growing at 10% a year is really solid. So our renewable business is obviously growing much faster than that. We're sitting on the highest level of backlog we've ever had in the business. We expect backlog to again increase in Q4, incredible opportunities in front of us, a lot of backlog post the 18-month period where we don't even report. So we're feeling really comfortable about where that business is headed. I think it's going to continue to help drive significant growth in our Clean Energy business, and our margins have improved. We're hopeful we can sustain that and over time, improve on that. So all around, we're feeling really comfortable where we stand there and the opportunities for '26 and beyond.

Our next question comes from the line of Justin with Baird.

Great. I guess I've got two. One is just a really quick one. I just wanted to confirm just on that Hugh Brinson project. Is the full value of that project in backlog? It looks like, I guess, supposed to complete at the end of '26. So I just wanted to ask that.

And then my second question is just on the cash flow. Obviously, last year, it was a huge cash flow year. You've got pretty big guidance here for the fourth quarter ramp. And just curious, what are the contributors to that, moving pieces that drive the 4Q cash flow number?

So I'll cover the first part of the answer. The answer is on the mainline. The answer is yes. There's pieces of that project that are potentially not in backlog yet.

And then cash flow is just a function of the revenue cadence, right? So we're forecasting revenue to contract sequentially in the fourth quarter. I think, expect a little bit of DSO improvement. We got a little bit of degradation up to 69 days in Q3 that we expect to come back down to the mid-60s. So the combination of those two is really what drives the release of the working capital investment in Q4.

[Operator Instructions] Our next question comes from the line of Julien Dumoulin-Smith with Jefferies.

Just wanted to follow up for my friend, Steve Fisher's question here a moment ago. Can we go back to the Comms business? Can we talk about the bifurcation, what's the growth in the wireline versus wireless? And what's being implied for 4Q '25 here? Just, what's the cadence? Do we expect that to continue here when you think about that 32%? Or how are you thinking about that persisting? I hear a little bit of mixed commentary. I would love to hear how you break it out, especially in light of this Lumen contract.

Sure. I mean there's no question that today, our wireline business is bigger than our wireless business. It's been the case for some time. Our wireline business is growing faster than our wireless business. Our wireless business is predominantly -- our biggest account there is AT&T. So obviously, their project to their [ Nokia-Ericsson ] swap out was a big driver of that. That project started for all intents and purposes in the fourth quarter of 2024. So that has been a driver -- a helpful driver in our [ 225 ] growth.

Comparisons there get a little bit harder in Q4. So we've moderated our revenue growth in Q4 versus what we've been achieving for the first 3 quarters. With that said, our wireline business is growing very rapidly. So I think -- I don't have the exact number, but I believe our revenue growth in the [ third ] quarter is estimated to be in the mid-single digits. And again, something that we're hoping to beat. But again, we feel really good about where the business is and where it's headed.

Got it. All right. So fingers crossed on beating that number there. Perhaps handedly. And then maybe just on backlog real quickly, just to talk about this real quickly. I mean, it almost seems like there's a shadow backlog emerging here, if you want to call it that for pipeline. Can you speak to a little bit of like how to size that up? I mean, relative to the $1.5 billion is of backlog you have in the Pipeline business. Any kind of order of magnitude? Any way to think about it? Obviously, ET has got other projects like DSW coming up here. I mean, anything that you can kind of point to that you'd flag? And maybe in a similar fashion, transmission project awards seem to be heating up here as well. Do you have -- you kind of alluded to sort of shadow backlog or opportunities there as well. If you can speak to it?

So I think the best way we've been able to do that, right, is to talk about future revenue potential and pipeline. And what we've said is, which is something that we would never have said a year ago or even probably 6 months ago is we now see the ability to exceed historical high revenue levels in that business. To kind of remind everybody, historically, our high years in that business were about $3.5 billion in revenue. We're guiding at [ $2.2 billion ] this year. And we now have a path to meet or exceed historical levels. I think that's the best way to kind of frame where we see the opportunity, again, not for '26, but for beyond. So I think -- and I feel better about the opportunity to do that today than I did last quarter.

As it relates to transmission, to be clear, today, we announced another win within that segment of our business, which will be substantial. Which is important, and it's something that will kick off in the middle of '26. We'll give more details on that project on our next call, but we think a really important fact, we said a long time ago, we expected to win something else in late '25, early '26. I think it's something else that we're now able to deliver on. And again, we'll talk about them more on our next call.

Our next question comes from the line of Marc Bianchi with TD Cowen.

I wanted to ask about the backlog and maybe similar to -- or along the lines of what Julien's first question was there. But if we look at -- maybe rewind 18 months and look at where kind of backlog was at that time, the ultimate revenue that you delivered, you had sort of like 64% coverage of that revenue over the following 18 months here. And as I look forward from today and you look at the composition of backlog, is there any reason that we shouldn't think about that ratio of conversion or backlog coverage being a whole lot different? You mentioned the pipeline where maybe that's turning to a bit more of a book and burn type of aspect. So just curious if there's any comments around that comparison?

Marc, it's a good analysis. I mean I think as we think about it, obviously -- I think historically, in our history, there's been a few periods where we've continually beat backlog quarter-over-quarter-over-quarter. Backlog at times, tends to be lumpy as you win awards. The fact that we've been able to deliver continued growth in backlog, to me, is as meaningful as any of the percentage statistics you can come up with. I think it definitely shows where the business is headed.

So again, we feel really good about where we stand. We think that with all that said, I think there's a lot of opportunity to further increase backlog and further help that. So I do think that backlog is a reflection over time of where your business is headed. And I think over time, we've delivered great backlog results which will translate into further revenue growth. So whether I can pin down the specifics on whether the historical percentages are going to play out exactly the way they did, to be honest, I haven't done that math. It might be interesting to do off-line, but I haven't done it. But I can just generally tell you that we see momentum in our business. It's supported by our backlog growth, and more importantly, supported by the opportunities that we see coming.

Okay. Great. And I guess just the other one, back on Communications. So the -- '24, was a down year, '25 was a recovery year. What do you think -- as a placeholder for '26 growth, do you think this business could do double-digit growth -- top line growth in '26?

Yes.

Our next question comes from the line of Brian Brophy with Stifel.

Just following up on some prior discussion. In the past, you've talked about having the capacity for 2 large transmission projects at once. Obviously, it sounds like we're going to hit that here next year, but you've also made a lot of investments on the headcount side. Curious if you're still thinking 2 projects is kind of the limit? Or how you're thinking about potentially adding capacity on the transmission side to take on more?

There's no question in our minds that we're going to continue to build that business to take on more projects and to have the ability to take on more projects simultaneously. So you start with one, you build the 2, you eventually get to 3, right? So you can't put -- you can't get ahead of yourself. Again, we're excited about where we stand and the potential that we have in that business. There are other opportunities out there that we're also interested and we're evaluating. So we expect over time to definitely win more.

Okay. And then also following up on some of the prior discussion. It sounds like combined cycle is a little bit less interesting. But how do you guys think about potential opportunities on the single cycle side in gas?

Brian, it's a huge opportunity. Obviously, there's a lot going on. We do play in that space today, albeit at a smaller level. It's a question that we've constantly got to answer, how much are we willing to invest, how much -- it's -- look, it's a very different business than what we've historically done. Risk mitigation in that business is the entire business because there is -- there are risks associated with that business that we don't typically see in other parts of our business. So understanding that and really managing towards that in my mind is the difference between a great project and a bad project. So we're looking at opportunities. Definitely an area that we will engage in, but we will be cautious in our engagement around that.

Our next question comes from the line of Brent Thielman with D.A. Davidson.

Great. Just one more for me, really. Just on the pipeline side. Jose, you mentioned this change in how some of these things are being awarded. Can you just talk a little bit about maybe relative to past cycles, the competitive environment? Is it different? Are the potential economics on these projects different than past cycles, especially as you seem to pretty close to the customers talking about these long-term engagements?

So Brent, I think that -- there is no difference in the earnings opportunity historically, right? I think we've really performed at a really high level historically. I don't think we're sitting here saying that we've got tremendous opportunity to improve on that, but we definitely have opportunities to get to that, and that's a significant difference from where we've been over the course of the last really 2 years. So again, not just because of the revenue opportunities, but because of our ability to execute at a higher margin level in those businesses probably what excites us the most. And there's no reason that we shouldn't be able to deliver at historical levels.

I also think we're working with our customers. We've got a lot of long-term relationships. We're not here to take advantage of our customers and try to make all our money on 1 job. We're going to work with our customers to hopefully get a significant size of their plans and their capital that they spend. And in that, we want to make a fair margin. We want to make a historical margin, but I don't know that we're necessarily looking at elevated margins.

Our next question comes from the line of Liam Burke with B. Riley Securities.

Jose, you're talking about specifically telecom, but I guess it could go across your businesses that you're moving into new geographies and opening new offices. Is that your existing customer pulling you into that market saying, "Hey, we need you?" Or are you just identifying the market, and that's where you decide to invest?

I think it's both new and existing customers, right? Obviously, I think we've done a good job at increasing our share of business with existing customers, especially as we look at a holistic approach across all of the businesses that we offer. The truth is that in today's world, a lot of our customers can use a lot of different MasTec services. I think we've done a good job at cross-selling those services and putting us in a position to build for those customers differently than we have in the past.

On top of that, again, I think we are -- especially as you think about power delivery, we are newer in the space as we've really made a huge push in that business post 2021. So I think our brand recognition has significantly increased in that business, and we're getting a lot more opportunities from new customers because of it, and we will help deliver for those new customers. So I think it's a combination of both. Whether it's for an existing or a new customer, if you're opening a total new geography, it's really not that much different in terms of the investment in the payback.

But the decisions that we've had to make, right? Or do we do this organically or do we do this through M&A. And I think that for the time being, we've decided to do most of that organically, which I think over time has higher return profile, and I think we've executed to that. And I think going forward, you'll see a mix of that.

Great. Just quickly on renewables. You said that it was heavily weighted towards solar this year, but your order flow is looking towards wind in 2026. Is that new build? Or is it just upgrades and maintenance?

Yes. So Liam, to be exact, what we said was we expect our renewable growth to be driven by solar because that's what's growing faster. So the bulk of our business today and in the future will continue to be solar. I think we highlighted wind because there's been a lot of questions about how the wind business is doing and where the future of the wind business is. And I can tell you that it's an important part of our portfolio. Between what we put in backlog and what we expect to put in backlog here for the fourth quarter, we're going to end up with 3 of the 4 largest jobs in MasTec's history on the wind side, which is just, in today's world, somewhat of a staggering statistic. I think it bodes really well to the longevity and really the strength of the wind business in addition to what we're doing on the solar side.

So we just wanted to highlight it because I think so much gets talked about solar, but I actually think there's a pretty healthy wind business out there that we've done a good job at cultivating and growing and that was really the only purpose for the comments.

Due to the interest of time, we have time for our final question. That question will come from [ Maheep ] with Mizuho.

It's Maheep from Mizuho. Just want to follow up on the previous question. Could you talk about like the battery storage business, talk about wind and solar, but any thoughts on the growth in that segment for you? And separately, just on the pipeline side, any thoughts on labor constraints, if any, any part of the business for you?

Yes. So the first part of the question, I mean battery storage is becoming a much larger part of our entire portfolio. The majority of our projects today have some sort of battery opportunity related to them. And I think that business has grown really nicely for us in 2025 and definitely been a growth driver for the business this year and one that we expect for next year.

I think the second part of the question, I missed the end, but I think it was around pipeline constraints. I think -- when we think about the business, it's obviously been a very radical change on what the expectation of the pipeline market was going to be in '25 versus at this point last year. And I think that our customers obviously have decided to make significant investments. Those investments take a little bit of time. So one of the reasons that I think that we talked so heavily about back into '26 is because I think it's taken that amount of time to get engineering, permitting and materials in line to be able to execute on those projects. So while I think that there were some constraints early on in this year to get that cycle going at the level that it wants to be as an industry, I think we're getting through that, and we'll see that activity start to really pop, second half of '26.

Thank you. I would now like to turn the call back over to Chris for closing remarks.

Thank you. That concludes today's call. Thank you for participating. And as a reminder, please visit our website for a replay and transcript of the call, which will be posted when available. Thank you.

Thank you for your participation. You may now disconnect.

Good afternoon. We'll get started. I'm Guru Gupta. I run infrastructure coverage on the investment banking team for Morgan Stanley. And I'm pleased to introduce you to MasTec management team, Paul Dimarco, is the Chief Financial Officer; and Chris Mecray is the Head of Investor Relations.

Paul, you've been a frequent visitor. A lot has changed since last year when you came, I think stock has nearly doubled. So congratulations on all of the success. Maybe we should start with, on the macro side, you're seeing a lot of growth. Just give us a flavor for how macro is impacting your business?

Sure. Well, first of all, thank you to Morgan Stanley for having us here. It's a wonderful event, location and participation from the broad investor community. So thank you again for having us. We're in a really fortuitous place right now. We are an infrastructure construction firm. So largely, our end markets have some level of cyclicality. We are at a place, though, where from a macro demand perspective, we're seeing really strong drivers of growth across the business.

Our 4 main segments are Power Delivery, Clean Energy and Infrastructure, pipeline infrastructure and communications. Really, all of those have pretty strong multiyear demand sets that are giving us a lot of ability to plan collaboratively with our customers for a pretty robust investment cycle. So we're focused on the right growth, very profitable growth and helping our customers achieve the objectives that they've laid out for their strategic infrastructure development plan. So really excited to have that opportunity set in front of us and allow us to really focus on execution and driving value for our clients.

So Paul, maybe we start with the team that is -- that we are hearing at this conference a lot, data center build-out, AI. Tell us about your focus on your data center business and what you're doing in that area?

Sure. So it impacts a lot of the different things that we do, not just from the pure construction of those facilities, but for the needs of power and interconnectivity of communications that these facilities are going to require. So it's a big driver across our end markets. More specifically directly for data centers, we provide a lot of services across our business, whether it's heavy civil facility construction, utilities hookups, whether it's substations and transmission lines or wet utilities and communication aspects. That we can really provide a lot of the components that those owners need. We've been very successful in selling those service offerings into owners of data centers or partnering with their general construction firms to bring this to fruition.

A lot of additional opportunity as we move forward. As I mentioned, there's a lot of downstream impacts. The need for more power is obviously impacting our Clean Energy business and Power Delivery to move that power around as gas fired generation becomes a bigger component of that incremental load in our country and over the next few years. We think it will be a second leg of demand for our pipeline infrastructure space, where we're seeing a lot of demand today just around takeaway capacity for just general demand diversity or LNG export. And we announced an award last year where we're helping Lumen provide interconnectivity to their customer, Microsoft across Microsoft's ever diversifying geography of data centers.

So we're seeing it directly on the construction at the facilities, but also more broadly on the things that these facilities need as they move more geographically dispersed from being relatively concentrated in the past. We're seeing it really impact all of the business. So it's an important driver, but it's also important not to overlook. Data center is the most prevalent factor that people speak to in terms of additional electricity in our country, electrification of heating fleets, reindustrialization, there's a number of specific of other specific drivers that are increasing the demand for electricity in our country the first -- for the first time in many decades, and we're excited to play a part in supporting those needs.

So let's continue on the theme of power delivery. The outlook seems to be very bright on the transmission side in that business. Can you maybe review what are some of the opportunities for 2026 and how the margin profile is developing?

Sure. I mean on the transmission side, what that industry has experienced is a very elongated development cycle over most of the last decade for projects that were necessary, irrespective of this new demand for incremental power. And the permitting environment for those types of projects has been very cumbersome, and it's taken a long time. We are finally starting to see these projects move into construction. There's been a couple of awards in each of the last 2 years, including a large project for [ Nevada Energy ] that we're executing on. And we see a really nice pipeline of jobs that are finally working through that process that should move into construction not just in '26, but over the next handful of years, I mean billions of dollars of opportunity.

And those were needed many years ago, and we're still hopeful that there'll be some efforts around permanent reform accelerate the development and deployment of the next wave of transmission jobs, which is really important as people make decisions around where they place things like a data center, right? The access to power and some of the constraints around moving power around our country are a big impact on site location. And that industry seeing some amount of permanent reform would be a really tangible driver of value, not just for the power delivery space, but for the broader economy and many of the other services that we do.

So we haven't seen the right mix yet. There's been some chatter around it, but we're still optimistic that that's an area that can be tackled by the administration in the next few years.

So besides the growth in that segment, how is the margin trajectory? And are there things you can do on the job side to improve productivity?

Yes. That's an important piece for us. I mean we are coming off of some pretty heavy integration of acquisitions we did in the earlier part of the decade. And we still have some disparity in margin performance across our regional business units. We see the path to unlocking those. A lot of it is through just access to information. So looking at things like crew level productivity on a systematic basis, where area managers know what happened in the prior week in almost real time. That's a big differentiator in our business between who has that and who doesn't. And as we deploy that further across the organization, we think it's a big opportunity to continue to drive value.

We've had some challenges with rate case determinations that delayed or deferred revenue with some larger clients, which we expected and they did resolve in pretty short order. And avoiding those types of revenue volatility will also be helpful as we continue to look at the margin progression that we expect. We're forecasting high single digits for this year. And our goal in the near term is to achieve double-digit EBITDA margins for that segment, and we think we're on a good path to do so.

Okay. So shifting to your other segments. In Communications, can you talk about the growth drivers for this year and for the next 2, 3 years? And how the mix may shift of your business?

Sure. So historically, we had -- a larger proportion of our work was driven by the wireless space. We're the largest wireless contractor in the country, and we do a significant amount of the country on behalf of AT&T and good work for the other major carriers as well. More specifically to that client, they made some changes in terms of their equipment that was deployed across their network in late '23. We started executing on that swap out program in the back half of last year and now kind of had a full year of performance now through the second quarter of 25%, which has been a really nice driver of growth.

We also took a little bit more market share in the most recent renewal. So that otherwise would have been a little bit flatter market, but we've seen really good growth across our wireless business in the last year because of those idiosyncratic opportunities. Going forward, we really see most of the growth in that segment coming on the wireline side. Multiple demand drivers, all of our major telecommunications and broadband providers have pretty robust plans around continuing penetration of fiber, homes passed goals and just further densification.

I talked earlier about the award on behalf of -- with Lumen to build middle mile fiber between data centers. That is a demand set that is just at the beginning of what we think is a pretty broad scale deployment across all the hyperscalers and data center owners. That, again, is a byproduct of this further diversification of geography and the need for interconnectivity between those sites.

And then lastly, BEAD is a program that was part of the IIJA and really hasn't had any meaningful impact in terms of spend to date. There were some changes earlier this year in terms of how that package was interpreted to facilitate quicker deployment of those funds from the states to the grantees and we think that will start impacting the business in '26 as well. So those are all really on the wireline side, and we think that we continue to see a really good organic growth opportunity in that segment for the next few years with those multiple opportunities.

Great. Then on the pipeline, the outlook for midstream gas is very, very strong right now. What are you hearing from your customers on new contracts and are we at the start of a much longer up cycle this time?

It sure appears that way. The commentary from customers, both publicly and privately is very bullish. They're talking more proactively about jobs that they have either in the planning process or that have reached the financial investment decision. And if you think about kind of where that industry came from over the last few years, obviously, the pandemic was very disruptive in terms of just demand for oil and gas. But then coming out of that, there was a big push around energy transition, around moving our economy to a more zero carbon power generation state. And frankly, from investors, there was just a lot of negative sentiment around the broader oil and gas industry to return capital to shareholders rather than invest in further production. And we really saw a pretty tangible change in sentiment with the results of the election, where in the fourth quarter, customers' activity around moving forward with projects that have been under development and accelerating those plans has continued to build momentum.

We looked at '25, we still do, to a large degree, a somewhat of a transition year. with some revenue contraction versus 24. But over the course of the year, we've raised our revenue guidance. We've had really good backlog growth, and we said that we expect backlog to grow over the back half of the year. A little bit early for us to quantify the overall demand set. But there's multiple drivers that are aligning our customers with the ability to move these projects to a financial investment decision. These aren't speculative builds, right? They're largely committed capacity for their clients. And we think as we're moving product in the near term, just to places of higher demand, that will evolve into the need for gas to support gas-fired generation in the latter part of the decade, and we feel really good about the cycle.

We were talking about some analysis of permitting earlier today that showed takeaway capacity from the Permian could double with all the projects that are under various stages of permitting today. So there's a lot of excitement in the industry. And I think part of it is just enhanced sentiment and then the need for that product in different places than it's located today.

That's great. So on the Clean Energy side, both Clean Energy and renewables, how did the news from OBBA over the summer, how does that impacted? All of the regulatory guidance, is that impacting the outlook for solar and wind at all?

In parts of the market, yes, for our customer set specifically, we've been really focused on aligning with developers that have long strategic plans around infrastructure deployment that have sophistication in their procurement, project development, really high credit quality off takers. And what we found is that their reaction to both the various iterations of the one big beautiful bill and the ultimate legislation has been really steady. We haven't seen any acceleration or pause in the cadence of conversation or contracting with our clients. They've retroactively really safe harbored the vast majority of their work that they expect to execute on over the next 3 or 4 years.

So we're not having any scrambling around prospective safe harboring of projects with those clients. And that alignment was a really deliberate effort that we had in the latter part of '23 into '24. The consistency of our backlog growth, I think, is indicative of the types of clients and the diligence we're doing with them around projects, and we have great visibility, not just to the jobs that we expect to execute on in '26, but the projects that will come into our backlog after that.

So there is a subset of less sophisticated, less experienced investors that may be pushed out because of just the overall constraints on the system, not just -- not construction individually, but whether it's interconnect or permitting or availability of various material input needs that could -- the changes could impact that. But for the work that we're doing at a utility scale with sophisticated clients that have been preparing for a multiyear build for a long time, we're really not seeing any major change in how they're going about that strategy.

So what's the outlook for 2026? Is there still some regulatory issues that need to be resolved? Are there things people are waiting for before they pull the trigger?

No. No. I mean from a clean -- we've been fully booked on 25 for a while and have a really healthy backlog already for 26 of projects that we'll work through. And again, we're just -- we are not seeing our customers overreact positively or negatively. It's -- they had robust plans. There was a lot of work that had to happen before these changes and their projects, like I said, are largely safe harbored. And we're still working to just help them achieve those goals really without a lot of modification.

So in your infrastructure business, what gets you excited? Are there a lot of opportunities for doing behind the meter work? Where is MasTec focused?

Yes. So I mean, the -- outside of the Clean Energy segment, the balance of it is there's about 40% of that business is what we'd call our civil infrastructure, which is predominantly DOT work, and then there's a smaller component, probably sub-10% that is that more industrial piece. The infrastructure side won't have as much beyond the meter, obviously, but the amount of activity we're seeing in the markets that we're providing those services has been really strong. We're really happy with the return profile of those businesses. It's not our highest margin business, but they're healthy. And frankly, the contractual structure and the equipment that's provided when we look at it from an invested capital perspective, are some of the best, if not the best, in the company as those business are operating at high levels of utilization.

So we really like that business. We think we've been really deliberate in the types of risks we're taking, right? There's plenty of examples in the past of challenging DOT or municipal projects and the market has reverted to a place of much more balanced risk transfer between owners and contractors. And we think it's an area that we'd love to continue to grow.

On the industrial side, which would be where we do more traditional gas-fired generation. We had some tough jobs coming out of the pandemic where we probably took a little bit too much risk. We were forthcoming about those challenges and the impacts on our performance. And we've elected to be much more focused on jobs that we can -- with risks that we can control. So we will expand that business, but it will be expanded on terms that have the right risk profile. We're happy to do more complex jobs, but we're going to do them with owners that we have confidence in and where we're taking contractual risk that we can control. Now that's typically the first rebalancing in a market when there's higher demand.

So to the extent that we're seeing a resurgence in gas-fired generation or other types of projects that vertical would do. We do think that the opportunity to have the right risk profile could support more project activity for us in that space. But until we see that coming through in the procurement, we're going to continue to be a little more disciplined in that regard.

So Paul, it seems like all of your business segments have very, very strong outlook and demand drivers right now. So what are the things that can go right from here and what can go wrong? And what is it that keeps you up at night?

Yes. I mean for us, our main focus is on execution still. It's -- we have margin expansion opportunities. We have the ability to not with pricing, all that could be on the table as well. Just on our execution, our efficiency, ensuring we're utilizing our equipment more effectively, we can grow margins. And so that's what we're focused on. There is a lot of growth. The business and -- has been really diligent about -- I've talked a lot about customers and customer selection. We could absolutely grow faster. We could -- but it will be taking risk with new clients or clients we've got less experience with. And so in high demand environments, there is that challenge of what's the right amount of growth versus extracting more value out of projects and we're trying to stay balanced there, right?

So the risk profile that we're taking on jobs remains important, but we're really focused, and the teams are really focused on hitting our near-term margin expansion opportunities. We're growing really strong from -- organic growth has been really strong, particularly when you look at the Communications, Power Delivery and Clean Energy segment. I mentioned that pipeline has a little bit of a transition year as these projects -- the new project activity starting here now in the back half, but we grew double digits across all 3 of those verticals in the first half. And achieving that while expanding margins is something we're really proud of. But there's more opportunity there. We want to make sure we don't lose sight of that and keep the focus of those teams on generating the value out of every dollar of revenue that we're able to earn.

So how do you balance this focus between top line growth and maximizing margins for the entire enterprise. Are there things that you can control on productivity, which will lead to margin enhancement? Or is just operating leverage because of the scale of the business.

Yes, there's still opportunity in both regards. I mean the consistency of revenue generation is important. Our first quarter has been relatively light each of the last 3 years. We've improved it year-over-year from '23 to '24 and '24 to '25. But even this year, the first quarter was still well below both our peak production and our peak margin profile. We have to continue to drive that down. So we minimize the underutilization in that first quarter. Weather, just the challenges of working in a winter environment, it will generally result in a low -- some seasonality but we have to continue to narrow that gap, and we think we're in a good position to continue to do that in 2016.

So that's an important piece of -- from the operating leverage perspective. From the execution side, right? The consistency of -- we've really tried to think about the whole project life cycle. So I talked a lot about business development and customer selection. That then rolls into consistency of contracting, consistency of risk transfer. Having that same visibility and knowing what we're responsible for, what risks we have to mitigate across the broader project portfolio is really important to drive more consistent outcomes. And then we're trying to -- as we continue to integrate some of the acquisitions that we did over the last few years, building the right systems environment so that data is comparable and accurate and timely to drive quicker decision-making is a big effort that we're undergoing and that will continue.

As a finance organization, the best thing that we can do is give our operators accurate timely data so that they can impact decisions as quickly as possible, right? If we're making decisions based on the financial close of any given month, that's weeks too late, and we've left opportunity on the table or we haven't mitigated an issue as quickly as we should have. So we're really focused on those things. And as a firm, we're really excited about the opportunity to drive further value from there.

So what kind of investment is needed in the business as you handle this massive growth that's ahead of you? How do you spread that over time?

Yes. I mean it varies by segment. In some instances, there is a larger capital expenditure component, but we've really tried to focus on the people side of it. We've overinvested in training. We've talked a lot more publicly about the 30-plus training centers we have across the country. About our partnerships with community colleges on splicing programs. Bringing people into the industry and upskilling existing workforce is going to be a key component to continuing to handle the top line expectations from our clients. That's number one, right?

And training, you don't get to retain everyone that you work through the system. But giving people an opportunity to build a career and show them that you're investing in them is an important component of that, just like any of us. We want to feel like the firm values, our efforts and giving us opportunities to better our lives for ourselves and our family. And that's what we're trying to do. That will be the gating item of us maintaining double-digit growth. We can get more equipment, but training people so that they can take that next step in their career, move up to a crew supervisory level or project executive level is going to be key. So we can't underestimate that.

Obviously, the systems that I mentioned earlier is -- it's a heavy lift. There's an investment associated with that. We're trying to be really focused on how we quantify the value that we expect to get. So that we can be very clear on what we're expecting to drive from these solutions and ultimately what we do as we measure the success of that program over time.

Paul, for 20-ish years or so that I have spent time with MasTec, we always talked about your customer relationship driven by MSAs, but now you're entering more into these framework agreements. What are you guys trying to do there? How are customer relationship shifting?

Yes. I mean it makes large project activity much more like an MSA, frankly, at the end of the day because the level of predictability and advanced view we have on the jobs we expect to execute. But on big project infrastructure that has a lot of interdependencies that are out of our control and sometimes out of our customers' control. What we found is that level of integration with our customer, not just on the job that we're going to start in the next quarter. But the job that they expect us to build at the end of next year or '27 allows us to add value in terms of helping them manage the potential costs. Helping to drive value through how the project is being designed or will ultimately be constructed and then deal with the challenges that are likely to happen across the development of large-scale infrastructure.

So that level of integration, the level of communication and frankly, just the ability for us both to calibrate better on how they forecast the time lines with these different tasks. It puts us in a position to deploy resources more effectively for them, ultimately improve our profitability while keeping the cost at a very competitive level for the client. So we've seen really positive outcomes, both in terms of how our projects ultimately are executed and the margin profile we're driving and the customer quality and satisfaction.

I was with a client earlier this week. And I asked, what can we do? Is there anything you need from us? And all he said was, "all we need you to do is continue to be consistent, continuing to deliver on your promises." Because I said if something happened, did we miss anything and he said "No, but there are other people that aren't doing everything they say and they're going to do." And when you have the level of integration that we've built with a lot of these framework agreements, it makes it a lot easier to make those commitments properly, right? Because you know what they need, not just again on the next job, but on the second and third and potentially fourth job after that, and you can build those expectations over time. So it's been, I think, a really key component of the success we've had in the Clean Energy space, is the investments that we've made with clients that are looking for that mutual commitment.

Paul, maybe you talk about the financials a little bit. So you've made a lot of progress since you took over the CFO role on working capital management. What are -- what's your current focus in terms of financial performance and metrics?

Yes. I mean, so obviously, we've got the margin profile opportunities. But we've really tried to promote a lot more understanding around the capital that our businesses require and the efforts to make sure we're managing that effectively. That's both with looking at profit metrics that are burdened with things like depreciation. We've really focused on a number of the items below the line below EBITDA, right? So looking at depreciation which is a real cost of being an infrastructure service provider, making sure that we're depreciating our assets correctly and ultimately, driving that back into what are the investments that are required for us to grow a given business. It's working capital and it's equipment.

Outside of M&A, like that's what we need. And we've really focused on explaining the impact of that more broadly across the company. So every quarter, we publish a return-focused metrics to the businesses. And I think we've seen much better fixed asset turnover. We've seen the compression in the working capital cycle because we're measuring and monitoring and incentivizing with those types of metrics.

So we're looking at the totality of the income statement. I mean, cash flow, I grew up in treasury and cash is what drives our ability to grow the business and buy companies and be defensive of the stock, if we've got an opportunity to repurchase equity. And so the business is really focused on their cash flow conversion. It's part of an incentive comp. And I think it's been a key component of the overall broader financial performance of the business, the ability to delever pretty quickly after the IA transaction. Our ability to have the capital allocation flexibility that we have today is because of the focus that the totality of the business has had on not just the P&L, but on the cash flow and the balance sheet as well.

So on capital allocation, what's your focus for 2026? Will you be active in M&A versus returning capital back to shareholders? How are you thinking about that?

Yes. I mean we are absolutely open to M&A. We're not -- it's not a requirement. So we are going to transact on opportunities that we think are key value drivers for the company. So they need to be incremental to our earnings performance, strong management teams, potentially service offerings that customers are asking us to provide that we don't have today. But because of the growth opportunities we have, we're going to be really selective and making sure that we're finding deals that hit all of the requirements to, frankly, get back to how we've transacted M&A over the last 20 years, right?

Outside of the more strategic deals we did in '21 and '22 that we needed to really bolster our presence in Power Delivery and Clean Energy. We're going to focus on businesses that we think are really well run, really well respected by their clients and then bringing MasTec into the equation will allow us to really accelerate growth and margin expansion, which was really -- that was the philosophy and strategy that built most of what is MasTec today. And we think that getting back to that knitting is going to put us in a position to add a lot of good complementary businesses and people into the company.

I think we have a minute or so left. I'll open up for any questions from the audience.

Paul, I just wanted to clarify the question that came up about the business, focusing more on MSAs versus, I guess, like more on the framework agreements versus MSAs in the past. Could you clarify that a bit more sort of where that you're moving to that structurally across your different segments? And what's the driver of that?

Well, I don't think that I'd interpret the question as if we're moving away just that we're utilizing these framework agreements on the larger project activities, right? So the work that generally is procured in our MSA type arrangement is call it, relatively small individual activities, unit-based where any given day, the customer could ask us to do a different subset of activities where we're on a multiyear engagement. That's kind of the definition of what classifies an MSA. As we -- what we've seen is customers on the project side move towards contractual and business relationships that have a lot more characteristics of that long duration repeatable activity focus, but there're still projects, right?

So it's not going to classify as an MSA, but it gives us really good predictability on that large project work because we're not talking about, again, the next job, we're talking about the next 2, 3, 4 jobs with any given client. So it's not replacing MSA. It's not us moving away from that construct. It's for a different type of activity that historically would have been more 1 project at a time. So it's moving that large project work to something that has a much more -- much better visibility and much more repetition with the client.

So is it more of a risk management strategy and building much longer...

It just gives us better -- it enhances -- you're operating off of 1 contract. You're talking about jobs with customers over multiple quarters, if not years, right? So the trust, the collaboration, it's been very, very positive in terms of just mutually beneficial outcomes.

Okay. I think we're out of time. Paul, Chris, thank you very much. Appreciate it.

Thank you, everyone, for your interest.

Thank you for standing by, and welcome to MasTec's Second Quarter 2025 Financial Results Conference Call. Today's call is being recorded. .

I'd like to turn the call over to Chris Mecray, Vice President of Investor Relations.

Good morning, everybody, and thank you for joining us for MasTec's Second Quarter 2025 Financial Results Conference Call. Joining me today are Jose Mas, Chief Executive Officer; and Paul Dimarco, Chief Financial Officer.

We've prepared slides to supplement our remarks, which are posted on MasTec's website under the Investors tab and through the webcast link. There's also a companion document with information and analytics in the quarter and a guidance summary to assist in financial modeling.

Please read the forward-looking statement disclaimer contained in the slides accompanying this call. During this call, we will make forward-looking statements regarding our plans and expectations about the future as of the date of this call. Because these statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially from our forward-looking statements. Our Form 10-K, as updated by our current and periodic reports, includes a detailed discussion of risks and uncertainties that may cause such differences.

In today's remarks, we'll be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules. We may also use certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measures can be found in our earnings press release, slides or companion documents.

I'll now turn the call over to Jose.

Thank you. Good morning, and welcome to MasTec's 2025 Second Quarter Call. Today, I will be reviewing our second quarter results as well as providing my outlook for the markets we serve. .

I am pleased to report that we exceeded guidance in revenue, met our EBITDA expectation and beat our EPS guidance for the second quarter. We're happy to have delivered significant year-over-year growth in revenue despite the difficult comparison from the Mountain Valley pipeline completion in the first half of last year. The remaining segments, our nonpipeline business, improved EBITDA from $181 million to $257 million in this year's second quarter, a 42% year-over-year increase. Revenue for our nonpipeline business was up 26% with power delivery and Clean Energy & Infrastructure, both up 20% and Communications up 40% year-over-year. We expect revenues to sequentially increase again by double digits in the third quarter.

Margins for our nonpipeline segments also improved 100 basis points year-over-year and posted a strong 230 basis point sequential improvement. Both our Communications segment and Power Delivery segment improved EBITDA margins 300 basis points sequentially and Clean Energy improved 120 basis points. We expect further sequential improvements in the third quarter in both our Communications and Power Delivery segments, with margins in our Clean Energy segment expected to be about even with the second quarter.

Total company backlog in the quarter also remained healthy, posting a 23% year-over-year growth, including a 4% sequential increase, resulting in a book-to-bill ratio in the second quarter of 1.2x. The sequential growth from first quarter included an 11% increase from Clean Energy and Infrastructure, inclusive of solid growth for both renewables and infrastructure. And by ongoing growth of 2% from Communications, offset partly by flatter performance in pipeline and Power Delivery, inclusive of stronger burn rates in the period. We expect further backlog growth in the second half of this year and expect to end 2025 at record levels of backlog.

We are increasing revenue guidance to a range of $13.9 billion to $14 billion for full year 2025, a roughly $300 million increase over previous guidance. We are slightly increasing the range of our EBITDA to $1.130 billion to $1.160 billion, and we are increasing the range of EPS guidance to a midpoint of $6.34 per share. Our midpoint EPS guide implies a 60% increase year-over-year.

I'd like to highlight that we are seeing clear acceleration across our business. Revenue is stronger than our initial guidance, and demand is incredibly strong. During the second quarter, we added nearly 4,000 new team members and over 10% increase in our workforce. This compares to an increase of a couple of hundred in last year's second quarter. These additions are a direct result of the demand we are enjoying today, but more importantly, for the need we see to scale up for what we are expecting in 2026 and beyond. Every segment added team members in the quarter, including our pipeline segment.

I'd like to remind everyone that entering 2025, we expected to rightsize resources in our pipeline segment and shed some assets as we initially expected revenues in the $1.8 billion range versus last year's $2.1 billion. We now expect revenues to be approximately $2 billion in pipeline this year, but more importantly, the investment we are making in increasing head count and equipment in our pipeline segment is being driven by the incredible demand we are seeing for 2026 and beyond. These increases in head count will position us to take advantage of the growing opportunities ahead. However, this investment is slightly impacting margins in 2025.

While these additions should allow us to further increase our margin potential, we expect any impact to be short term, particularly in our pipeline segment. We expect pipeline segment margins to improve sequentially in the third quarter and achieve its best margin performance in the fourth quarter, setting us up for strong performance going into 2026.

Turning to some segment highlights. In our Communications segment, revenue in the second quarter was up 42% year-over-year, while adjusted EBITDA grew 55% with a 90 basis point improvement in margin. Backlog increased sequentially to a record $5 billion and increased 13% from the prior year. The market backdrop for telecom infrastructure remains very healthy and dynamic. Given robust capital investments being made by our customers to support broadband delivery and enable enhanced artificial intelligence applications.

We saw continued year-over-year revenue growth in the second quarter from nearly all of our top 10 customers, and our list of significant customers has increased meaningfully in recent years. MasTec's Wireless business continues to see strong growth from expanded geographies served and from continued broadening of services. In Wireline, overall strong demand continues to be supported by broadband infrastructure build-outs and by federal investment. Middle mile broadband build-outs and the recent surge in hyperscaler CapEx associated with data centers is also driving substantial fiber deployment demand.

Over the last few months, A number of our customers have laid out very specific goals. AT&T recently announced a milestone of passing over 30 million fiber locations and reaffirmed their goal of achieving 60 million by 2030, basically doubling over the next 5 years. Verizon publicly stated their goal to also double fiber passings by 2028. And T-Mobile is looking to add 12 million to 15 million fiber passings by 2030. These ambitious plans in conjunction with both increased demand from the traditional cable broadband carriers and a number of new entrant overbuilders create significant growth opportunities for MasTec.

Turning to Power Delivery. Second quarter revenues increased 20% year-over-year and slightly beat our forecast with profit and margins as expected. We believe we are on track to meet our full year targets and continue to expect margin improvement in the second half of the year from a combination of volume growth, mix improvement and solid execution. We still expect mid-teens revenue growth and high single-digit margins for the year. Our optimism and bullishness on overall grid investment remains unchanged. The need for substantial utility customer capital expenditures in the coming years is pressing as power demand drives the need to upgrade and add to an aging infrastructure. This demand requires large CapEx commitments across transmission, substations, distribution, as well as new generation capacity.

Backlog this quarter for the segment was up about 14% versus the second quarter of 2024. We continue to target a broad set of projects of bearing scope, and we still expect several larger projects to be awarded in the coming periods.

In our Clean Energy & Infrastructure segment, second quarter revenue grew 20% year-over-year and adjusted EBITDA nearly doubled from $47.3 million to $83.3 million with a margin of 7.4%, an increase of 240 basis points from the prior year. New awards accelerated in the second quarter and totaled $1.6 billion for the segment compared to $1.1 billion in the first quarter. Backlog was up 11% to a new record level of $4.9 billion, and book-to-bill was 1.4x. We remain in great shape to deliver our 2025 goals and are already progressing well in building backlog for 2026. Within this segment, both renewables and infrastructure had double-digit growth and solid margin performance. We see significant opportunities for new bookings for the second half in these areas as well as opportunities for behind-the-meter power infrastructure, giving substantial experience in this area.

We are fully covered for our 2025 revenue guidance, and recent bookings continued to fill in the 2026 year. An important development during the quarter was the passage of the 1 Big Beautiful Bill. The legislation leaves intact tax credits associated with renewables through 2027 and created a clear path for safe harboring projects, which would allow construction through 2030. Our subsequent executive order was signed, and we expect more clarity in the coming months. As it relates to MasTec and as demonstrated in our backlog, we are very confident that our customer mix, which is heavily skewed to the top-tier developers, will have a high level of success in their ability to safe harbor projects.

We are also confident in the ability for renewables to compete over time even without federal subsidies. As electricity demand continues to expand, driven by artificial intelligence and data center construction, the cost of competitive power becomes increasingly more important in a global marketplace. For example, in the Middle East, renewable power is being sold at approximately $15 a megawatt hour compared to $50 in the U.S. in an unsubsidized and free market. I have no doubt that renewables will continue to play an important role in the domestic energy generation, along with other sources, including natural gas.

Turning to our Pipeline Infrastructure segment. We saw revenue decline 6% and EBITDA dropped to $62 million from $135 million the year before. We've noted the primary driver here being the challenging comparisons from the MVP project wind down last year. Pipeline revenue of $540 million was well higher than our guidance of about $475 million and a substantial acceleration from the first quarter with a 52% sequential increase as overall activity picks up. Profits in the quarter met our plan on slightly weaker margins than forecasted as we invested to prepare for future demand.

While backlog for the segment was down about 5% sequentially, our second quarter backlog does not include a number of verbally awarded project whose contracts we expect to sign shortly. As I previously covered, we expect backlog growth through the balance of the year. Gas-fired generation is clearly going to play a much more significant role in future years than we were expecting, and we fully expect to benefit from a multiyear investment curve in this important baseload generation source.

I'm very bullish and excited about both the short- and long-term outlook for our pipeline segment.

In summary, 2025 is shaping up very well, and the momentum we are building across every segment is very encouraging. I've mentioned previously that we are working more closely with key customers across multiple segments at MasTec on framework agreements that benefit both parties while strengthening our position in diversified end markets. We saw continued progress in the second quarter with such agreements, which have been particularly helpful in securing visibility in all segments.

We are very excited about our market position and the ability to leverage close customer relationships to improve visibility and outcomes for our business, as we execute on growth with scaled businesses across our enterprise. Of course, the outcomes are dictated and determined in large part by our execution against this significant volume opportunity. Our efforts on operational execution and evolving our business processes to ensure both consistency of outcomes and strong structural profitability is a primary focus. Our margin improvement opportunity is real, and we are taking many steps to realize it.

I'm particularly pleased with the progress we showed in the second quarter and expect to have a lot more to show in this regard across our segments in the second half, as we continue to develop volumes across the business and refine our operational execution in key areas. As we talk about execution, I'd also like to thank all of our people at MasTec for their continued commitment to our corporate values of safety, environmental stewardship and integrity and honesty, all while serving our customers with the diligence and ensuring the delivery of a great work product.

Thank you all. I will now turn the call over to Paul for our financial review. Paul?

Thank you, Jose, and good morning. As Jose mentioned, we are very pleased that our second quarter results exceeded guidance, coming in large part from strong sequential volume development and continued solid execution. We remain highly confident in our business positioning today and into the years ahead. And this is true across all of our end markets given solid demand drivers that will require a significant investment in infrastructure for years to come. This is the case regardless of which technologies are favored and whether financing mechanisms include government incentives.

Our customers are clear. They need us to fulfill plans that include major projects across the spectrum of markets we serve.

Let me start with some quarterly highlights. Second quarter revenue was well above expectations at $3.54 billion, a new quarterly record with 20% growth year-over-year and 25% growth sequentially from the first quarter. Adjusted EBITDA of $275 million met our forecast. 3 of our 4 segments beat volume expectations in the period, while the stand-up performance in profit and margins came from Clean Energy and Infrastructure. 18-month backlog at quarter end totaled $16.45 billion, an increase of 4% from the first quarter and 23% year-over-year. This represents another record level of total backlog from MasTec, with the growth led by an 11% increase recorded at CE&I that included continued strong bookings in the Renewables portfolio, which is fully booked for the current year, and continues to build momentum for 2026 and beyond.

We generated cash flow from operations of $6 million in the second quarter and $84 million year-to-date, with DSOs at 65 days, a 1-day improvement from the first quarter, both in line with our expectations. Our strong second quarter revenue growth with consistent DSOs drove higher working capital investment in the quarter. Free cash flow for Q2 was a use of $45 million versus the source of $253 million in the prior year quarter. The variance was driven mainly by higher working capital investment versus last year, as well as somewhat higher capital expenditures, as we accelerated certain capital investments for growth.

You may recall in 2024, we saw DSOs decrease from 79 days in Q1 to 69 days for Q2, allowing us to reduce working capital last year, whereas this year did not have the same benefit with DSOs remaining consistent in the mid-60s. We completed $40 million of share repurchases in the second quarter and extinguished our prior remaining authorization, bringing the year-to-date total to $77 million at an average price of $110 per share. Also in the second quarter, Board authorized an additional $250 million repurchase program.

Regarding some highlights from the second quarter segment performance. Our Communications segment produced quite significant top and bottom line growth with revenue easily exceeding our forecast for the period and benefiting from continued strong demand in both wireless and wireline businesses from a diverse set of customers across the telecom and tech landscape. The adjusted EBITDA margin of 90 basis points year-over-year was generally in line with guidance, inclusive of certain program expenditures ahead of expected growth that held back margin performance. Second quarter adjusted EBITDA margin was 9.9% compared with 9% in the prior year and increased significantly from 6.9% in the first quarter as volumes ramped positively.

Overall, end market strength remained strong, and second quarter backlog increased 2% or $102 million despite the record segment revenue in the quarter.

Power Delivery continues to see substantial growth across the country, and we exceeded our quarterly revenue forecast by close to $50 million, producing 20% growth year-over-year. Adjusted EBITDA was generally in line with our forecast. Power Delivery backlog increased slightly as solid bookings were partially offset by the record quarterly revenue earned in Q2. We continue to see significant new bookings opportunities, as we look forward to the balance of the year and anticipate structural growth for this business for years to come given the anticipated electricity demand and system upgrade requirements for our utility clients.

In Clean Energy and Infrastructure, we saw continued improvement in Q2 adjusted EBITDA margin, which increased 230 basis points year-over-year. Our Renewables business was a strong contributor to the CE&I margin performance with the benefit of some impacts from project closeouts in the quarter. We continue to see strong performance in the second half from operating leverage with higher volume and continued focus on strong execution. Our guidance assumes margins hold at similar levels to Q2 in the second half of the year. On CE&I backlog, we saw solid bookings from all 3 business verticals, contributing to the 11% sequential increase. This included almost $200 million of renewables backlog growth despite the noise in the period from the Big Beautiful Bill legislation.

These new project additions continue to build our book for future years and reinforce the sentiment among our customers that their projects are essential, driven by strong offtake demand. We remain highly optimistic about the sector, driven by the fundamental cost competitiveness of renewable energy and the limited availability of near-term alternatives for new power generation.

Regarding Pipeline Infrastructure, our revenue results in the quarter beat our expectations by nearly $65 million on strong product development, driven by a host of smaller and medium-sized projects. Adjusted EBITDA margin for the quarter was in line with expectations with an 11.5% margin versus guidance of low double digits, but we did see less flow-through from the incremental revenue due to the investments made to support future growth. The year-over-year comparison remained challenged by the MVP project completion in the first half of last year, and we now expect that we will revert to growth beginning in the third quarter to complement ongoing sequential growth after the lower first quarter volume result.

Pipeline backlog development was more muted versus the large increase reported in the first quarter, but we continue to see solid new awards totaling over $450 million in the period, and the backlog did not include certain project verbal awards after they mentioned. We continue to expect to bid on a number of larger projects in the second half of this year with a robust bid schedule that reflects strong sources of demand across multiple geographies and related to numerous major gas basins domestically.

The continued diversity of demand drivers related to LNG export, domestic, residential and commercial demand, is leading to a clear resurgence of pipeline construction activity that we are seeing play out over multiple years to come. Last quarter, I highlighted our focus on margin enhancement over time, particularly in our nonpipeline segments, Communications, Power Delivery and Clean Energy and Infrastructure. Collectively, these segments delivered an 8.5% adjusted EBITDA margin in the second quarter, a 100 basis point improvement year-over-year.

We remain optimistic about continued progress in the second half of 2025 for these operations, including a solid increase sequentially in the third quarter with margins approaching double digits for the first time. This expected improvement is driven by operating leverage on higher volume and our continued focus on execution, productivity and disciplined cost management.

Shifting to our updated consolidated guidance, I'd like to remind you that we posted supplemental guidance document on our IR website and encourage you to review that for segment and other financial guidance details. We are now raising 2025 annual revenue guidance to range between $13.9 billion and $14 billion with adjusted EBITDA ranging from $1.13 billion to $1.16 billion. Adjusted EBITDA performance driven by almost 30% expected growth in our nonpipeline segments year-over-year. Adjusted EPS is forecasted to be $6.23 to $6.44 with the midpoint up 60% versus 2024. We expect Q3 revenue of $3.9 billion, adjusted EBITDA of $370 million and adjusted EPS of $2.28.

We are increasing 2025 revenue estimates to account for the second quarter beat and the continued strong demand visibility with significant year-over-year improvements in most segments, partially offset by the lower pipeline revenue recorded in the first half due to MVP project runoff. .

On adjusted EBITDA margins, we expect second half year-over-year margin expansion for Communications and Power Delivery, offset by slightly lower second half margins year-over-year for Pipeline and Clean Energy due to the investments we are making to support anticipated future growth. Similarly, we are raising our net cash capital expenditure guidance to $140 million, as we procure additional equipment to support this growth.

Also notable, we still do not see material impact from either tariffs or federal tax incentive changes from the recent Big Beautiful Bill legislation and our 2025 outlook that we have considered a measure of general macro uncertainty from the current policy and geopolitical environment, as we discount risk in our forecast planning.

Regarding cash flow and the balance sheet, we are increasing our expectation to $700 million to $750 million of cash flow from operations for 2025, assuming DSOs average around the mid-60s for the balance of the year. We ended the quarter with total liquidity of approximately $2 billion and net leverage of 2.0x, which we expect to decrease in the back half of the year.

In June, we successfully refinanced our credit facilities, resulting in extension of maturities and favorable adjustments to certain terms, covenants and pricing. Our strong balance sheet and well-structured debt profile provides significant financial flexibility to pursue a disciplined, return-focused capital allocation strategy. Our top priority remains supporting our robust organic growth opportunities through investments in equipment and capacity expansion, where we see compelling returns.

We will also continue to evaluate opportunistic accretive acquisitions that complement our existing service lines, consistent with our long-standing approach. In addition, we maintain a share repurchase authorization and will deploy capital to buybacks opportunistically.

This completes our prepared remarks, and I'll now turn the call over to the operator for Q&A.

[Operator Instructions] We will now take our first question from Steven Fisher from UBS.

Just to follow up on the clean energy comments you made. Just curious about kind of what you experienced in terms of customer feedback and activity during the quarter as all the policy uncertainty played out. I know you -- it sounds like you're pretty well set on '25, but did that kind of change things around with any specific projects or what you might have already had booked for 2026? And how much actually do you have in your '26 plan booked at the moment?

Steve, so I would say a couple of things. I'd say our customers so far have been unaffected, right? I think what everybody's plans were for '25 are ongoing, quite frankly. What everybody's plans were for '26 are ongoing. The work that we booked, the success that we've had in bookings in both the first and the second quarter have nothing to do with the federal legislative process as it's played out.

I think it's completely solidified our plan for '25. It's put us in an incredible position for '26, where where we would expect to further grow that piece of the business. And at the end of the day, we're really excited about what came out of the legislation. We think the 1 Big Beautiful Bill is a good bill for MasTec. Obviously, we've got an executive order that we're paying attention to, but we work for top-tier developers, and we think that they're in the best position to really maintain their business over a really long cycle.

Okay. That's helpful. And then in power delivery, just curious how you're thinking about the timing of bookings here. I think, Jose, you said the coming periods, could that mean still the second half of this year? And what are you thinking of your focus projects here? Is it more on the very high-voltage lines? Or would it be substations or anything else or all of the above?

Well, I mean, we're focused on all of the above. I think we've made great progress in the business. If you look at our guidance, we're guiding to grow just under 20% for the year. That's virtually all organic. So I think we've done a great job in that business of building off of what already was a good 2024. I think margin progression is happening in that business as we expected. We're really excited about what the second half is going to bring for us in Power Delivery. We think our positioning in the market is fantastic. We expect to be a player on big projects as we go forward, but also on the day-to-day business, right?

The day-to-day business is really important for us. It's the bulk of what we do. We're constantly winning projects. We're constantly getting more competitive. We're talking a lot about margin expansion opportunities and what we've done to build margins. And if you think about where we've come in that business from just a few years ago in '22, '23, as we were very acquisitive in that business, I think we've made tremendous inroads and margin expansion and then really positioning in the market, and we're really excited about what's going to come in that market for us.

We will take our next question from Philip Shen from ROTH Capital Partners.

First 1 as a follow-up, Jose, on the [indiscernible] expectations for how that could play out and maybe the different outcomes? And how are the Tier 1 customers positioned for those different outcomes?

Sure. So look, I think a number of our customers today have a lot of -- a very large portfolio of safe harbor projects. The way that the legislation is written is through '27, everybody keeps their credits. Beyond '27 is what you have safe harbor. There's a lot of opportunities for people to further safe harbor projects all the way into the middle '26. There will be some changes in the executive order relative to that. We think they'll be manageable.

And more importantly, we think they'll be manageable by the top-tier developers. I think the work that we've done post the acquisition in terms of really focusing ourselves on the customers that we were working for, the relationships that we're creating. When you look at our customer base today in that industry, we think it's best-in-class. It's tier 1, and we think those are the ones that are best positioned to take advantage of the opportunities that will exist to safe harbor. It literally puts your projects in play all the way to 2030.

Obviously, there's another election in 2028. So we'll see what happens. But we're excited about, again, not just '26 where -- I have no doubt in my mind that this business is going to grow for us in 2026. I think it will grow beyond that. And over time, and we said it in our prepared remarks, I actually think the market is becoming a lot more competitive. When you look at the sources of power that exists, right, you've got nuclear, which is a ways out. You've got gas that will see significant increases in 3 to 5 years. But when you look at the price of that, renewables start getting really competitive even without subsidies.

When you look at the rest of the world and what they're able to build renewables at in a free market, it's a low cost. So it is a formidable form of power generation at a low cost, especially when you consider storage, and we think the market is going to be strong for a really, really long time with or without federal in sense.

Great. And then you talked about also how bookings have accelerated, I think, for Clean Energy. And I think in the back half that might continue. And so I was wondering if you could just kind of give a little bit more color post-OBB, what the conversations were like with customers? Did you see really an aggressive kind of amount of activity in July? And do you expect that acceleration to sustain through Q3 and Q4? Or do you think that kind of slows down as we get through the year?

So I would say not yet. So the bookings that we enjoyed in Q1 and Q2 had nothing to do with 1 -- the bill, right? So in Q1, we booked over $1 billion in new projects, which we were really excited about. And I think we had a -- I don't remember 1.4x book-to-bill in that market in Q1. We booked $1.6 billion in Q2. And I think that acceleration is critically important.

I think we're going to have a really strong second half of the year. I think we're going to have a really good third quarter yet again. And I would argue that none of that has to do with the bill. Depending on what happens with the executive order, there is a possibility in place that people work really hard to safe harbor and pull in a lot of work. We have not taken any of that into account in any of our thought process. That would -- we don't know. Obviously, that would be upside to MasTec and others in the industry. But we'll keep working with our customers to see if that's going to be required or not. Hopefully, it won't be, and people will work off their current safe harboring over the course of the next 5 or so years.

Great. One more, if I may, as it relates to margin. In terms of EBITDA margin, what are your latest thoughts on the overall trajectory in '26 and '27? Are double-digit margins still on the table in the near to medium term?

Yes. So the question is from a -- I'm not sure if the question is from a total company perspective or specific to clean energy. .

Total company.

Yes. So from a total company perspective, look, we're really bullish on every segment that we operate in. We're seeing significant acceleration. As we said, obviously, the big driver of margins in our business is our pipeline segment. It's historically been our highest margin business. We're really bullish about what's going to come there. I think, when you look at our guidance for this year, we're in that low 8% range. I don't know that -- we're not going to sit here today and talk about getting to double digits in 2026. But over the long term, that is our goal. That's what we think we can achieve that. Obviously, it has a lot to do with the mix of our business. But we think today, when we look at our outlook over the next few years, the mix potential of our business has never been better.

We will now move to Andy Kaplowitz from Citigroup. .

Jose, so you did raise your pipeline revenue forecast a bit. But as you said, backlog was down slightly sequentially. So could you give us a little more color on what you're seeing? You mentioned I think some projects you expect to book shortly. Is it possible to quantify that? And then I know you've talked about revenue at least as big as in '24 and '26. So maybe you could update us on the potential of this cycle? Could it be comparable to pre-COVID levels?

Sure. Thanks for the question, Andy. So a couple of things I'd say. Our pipeline business isn't about this year, and quite frankly, it isn't even about next year. We stand firm with what we said before, which is we think that our 2026 pipeline business will look a lot more like our '24 pipeline business, which is a sizable increase from where we'll be in 2025.

Historically, obviously, it's been our best performing business. It's been our highest margin business. It peaked at about $3.5 billion of revenues. I think on our last call, we said if the market plays out the way that we're seeing, there's potential to ultimately get there over time. We still feel that way. We -- somewhat remarkable that we're even saying that based on where the business has been in the last couple of years. But the level of activity that we're seeing today is, in my mind, somewhat unprecedented. Again, not necessarily for '26, but even beyond '26, and we're making significant investments today, right? We're investing in people. We're investing in equipment, and we're preparing for what we think is going to be a really large cycle, which we'll see the beginning of in '26.

Helpful, Jose. And maybe a similar question in communications. There seems to be a ton of drivers there, whether it's fiber to the home, but now fiber to the data center. I think the Big Beautiful Bill helps with 100% bonus depreciation. So maybe you can talk about sort of the durability and duration of the cycle as you see it today, both in wireline and wireless?

So again, Andy, it's been something that has somewhat caught us by surprise, the strength of the market. Our revenue guidance this year is north of 20%, again, all organic. When you look at the first 2 quarters, we outpaced that. We're bullish about not just this year, but what's going to quite frankly happen in '26 and beyond. We've got a number of new customers that keep coming to us with different plans, with different opportunities. We're pricing a lot of things in that market. There's no reason that we don't think that next year is going to be another really strong growth year. And quite frankly, we think we're at the beginning of the cycle there as well.

There's been a lot of talk about beads, and beads hasn't even shown up yet, so we'll see how that also impacts the market. But today, the drivers of the business that, that middle fiber expansion, which is being built to not only focus on data centers, but really all of the growth that we're seeing across different industries is really driving that business, and we don't expect that to end anytime soon.

We will take our next question from Sangita Jain from KeyBanc Capital Markets.

Jose, if I can follow up with 1 more on the Communications segment. Can you talk specifically about MasTec's split, wireline versus wireless as you last did with Ericsson order? And as we talked about all the fiber opportunities sum up.

Sure. So again, historically, wireless business for a long time was the biggest piece of the business. It's not anymore. Our wireless business is probably roughly 40% of what we do. The balance is wireline. Wireline has a lot of growth. Our wireless business, though, we're still really bullish on. The Ericsson project is really less than a year old. It really started in the second half of last year. So we're in the first year of what's going to be a long multiyear cycle on that specific opportunity. .

we see tons of opportunities with other carriers on the wireless side. Based on what they've got planned in the coming years, we actually think that, that business will see, again, significant growth opportunities within the entire communications sector. And the wireline market is really -- there's as much demand as we've seen. So that's going to continue to grow for us. So we think both sectors are strong. Both sectors have tremendous growth opportunities over the coming years. And while the wireline is just bigger in total scope, we really like our position in both.

And if I can follow up on that itself, would you need to make investments on that wireline side similar to what you are doing in pipelines if the cycle does materialize the way it's looking today?

I think we've done it. We talked a little bit about that on our first quarter call. We also added people in that business in a sizable way in the second quarter. I think we've talked about ramping up for the demand. I think we've been in that circumstance now for multiple quarters. So I actually think we're pretty well positioned there. I don't think that the level of investment on a go-forward basis is going to be different than what it's been in the last couple of quarters. So I think we'll continue to build off that.

We will take our next question from Julien Dumoulin-Smith from Jefferies.

Just maybe to kick it up a little bit, let's talk about margins here a little bit. I mean, obviously, you're talking about investing and reinvesting in the business in anticipation. What's the time line and cadence here of seeing that inflect in certain segments here? I mean, obviously, as you said yourself, some of those may not necessarily fully translate in bookings or at least meaningful revenue increases in '26. How do you think about the cadence of that margin improvement through the cycle here?

And then secondly, to follow up on the pipeline commentary earlier, there's some pretty mega projects contemplated here for the back half of the year. I mean, obviously, given your market position, can we make presumptions about some of the large ones in your position there in? I mean, just being aligned with those partners.

Yes. So I'd say a couple of things. I'd say when we think about investments relative to margin, our backlog is way up, like, I mean, considerably up since the beginning of the year. It's been across virtually all of our segments. We see what's coming. We see what's not in backlog, but we feel confident we're going to win, and thus, the reason for the investment decisions that we've made. So we're really trying to get ahead of that. We're really trying to be in a position so that when that work comes in, we can hit it and execute on the highest margin that we can relative to that. So we think that a lot of our investment will be captured in '25 relative to what we're going to need to take advantage of some of these growing markets.

Obviously, there's always a need for investment, but we think we're doing a lot of that as we speak. As it relates to pipeline, look, we're the largest pipeline builder in North America. We think we're the best pipeline builder in North America. We've got the largest fleet. We've got great people, and we think that for any owner that's out there that's interested in building a pipeline, there would be no reason not to contact MasTec and want MasTec on your project for lots of reasons. And we think that, that will play out in the marketplace.

Got it. Just to clarify from earlier the renewable timing. Obviously, you saw good progress here. How do you think about the timing of some of those projects getting pulled in? You made allusion to it earlier, but maybe to put a finer point on it, do you think that you actually see a shift forward into '26 and '27 specifically on the renewal business even within your existing backlog?

It depends on -- well, not in existing backlog because our existing backlog is only 18 months. So we wouldn't have anything today in backlog for 2027, regardless of where we stand with customers and our expectations for the work that we'll do for them in '27. I'd say that I don't think customers are there yet. I think -- in a perfect world, customers have dozens of gigawatts of projects planned from now through 2030. And hopefully, they can work that plan off in the process that they're expecting. If something changes relative to the executive order and they have to accelerate that, we will definitely see a significant acceleration of the business, and then, we'll have to manage to that. I think that's speculative, so I don't really want to get into that. I actually think that there's going to be a reasonable way to safe harbor projects, and we won't see significant acceleration across the industry, but time would tell.

We'll take our next question from Atidrip Modak from Goldman Sachs. .

Jose, you mentioned the head count increase on the pipeline side, in particular. Can you talk about the capacity building targets there? And how many large pipelines can you be working on at the same time? And is there a difference in utilization rates as we think of margins between the long-haul lines and the connector lines?

Sure. So the 4,000 number that we gave was company-wide. Obviously, pipeline was a big part of that. We feel like we performed well on all types of projects, large and small. We've said that in the past. We think the margin opportunity and potential doesn't necessarily vary by type, by size of projects. Sometimes it does by contract structure. So the cost plus world allows you a lower margin than if you're doing units. So we've predominantly done most of the units with some cost plus. We'll see what that mix looks like in the future. .

In terms of scale, we would argue we're underutilized, right? At $2 billion, our peak was -- I don't know, a couple of years ago, we were doing $3.5 billion in sales in pipeline. So we think that the opportunity for us to increase the level of productivity with the assets that we own is tremendous, and we don't think that there's a -- we don't think from a terms of scale and our ability to perform that there'll be a lack of project. So for us, it's going to be about who do we want to partner with, what customers do we want to work for and how big and how quick do we want to scale that business over time.

Got it. And then on that note, I guess, on the verbally awarded contracts that you were talking about, can you help us understand the nature of that between sort of connector lines or long-haul lines? And is there a way to assess how much of the pipeline on average you are bidding for or you could be getting awards for?

In terms of the total market or a specific project?

For a long-haul pipeline, I mean, are you bidding for the entire thing? Is it reasonable to expect you're going to get the entire thing or 40%, 50%, anything like that?

Yes. Look, so it depends on the customer. There are projects that we've done in their entirety. There are projects where we've done half a project, the majority of the project, and it all depends on the customer, the size of the project, the location, the risk tolerance, right? For us, again, we've got a lot of availability. We've got, we think, the most flex in the marketplace relative to our ability to gear up for any project. And we are going to responsibly try to be as strong as we can in that business and grow that business as quickly and as reasonably as we can at the margin profile that we've historically enjoyed. .

We will take our next question from Drew Chamberlain from JPMorgan.

First, I just want to follow up on the pipeline margins here. And obviously, I appreciate the investment that you've put into the business this quarter. But can you maybe talk a little bit about how much further investment you need to have in 2025 to be ready for the coming years? And then also, I mean, maybe just touching a little bit, I know we've talked about the revenue volumes in the past being 3.5%. But I mean also the margin profile then was also in the 20s, right? And so I'm just wondering if you think about as that revenue ramps, do you think there's any structural change in what the margin potential is here? I'm not talking about like what you've guided to, but how you think about the potential for that business? Are there things that have changed, the labor cost, other input costs that might have necessarily changed to make you think differently about the margin profile?

I think the long-term answer is no. There's nothing structurally different. If you look at -- even if you look at '25, which I know we don't want to focus on '25, but if we look at the back half of '25, our guidance profile on the margin side is way up, right? So we'll be back to the mid-teens in the second half of '25 versus the first half of '25. Again, '26 isn't a peak year by any stretch of the imagination. I think the cycle starts in '26. I think the performance in '26 will obviously be better than the performance in '25.

Again, we've said approaching '24 levels. But over time, as the volume continues to increase, there is no reason why we shouldn't be able to attain historical margin profiles. Again, we've always guided towards high to mid-teens in that market. The opportunity to outperform that is there, but that's based on execution. So no, we don't think there's anything structurally different that wouldn't allow us if we execute well to achieve a similar level of margins as we've historically done.

Okay. And then a quick 1 on cash. I mean, obviously, a big ramp here in the second half of the year in the implied guidance. Maybe can you just maybe talk about what's giving you confidence in that ramp? I mean, I appreciate you did it last year, and so it's clearly achievable. But what's given you confidence this year? And then maybe if there are a few points that make you worried about whether it's achievable or not, things that could be headwinds in the second half to cash? I mean what would those be? .

It's really just timing of the sequential growth, right? So we had big sequential growth in Q2, and it will moderate as we go through Q3 and Q4 from the prior quarter. It's just working capital. That's the only working capital timing. Our DSOs in the low to mid-60s are where we think they'll be structurally. So we don't have a benefit of reducing those any further. So it's just timing of investing for the various jobs.

We will now move to Jamie Cook from Truist Securities.

Nice quarter. I guess, Jose, obviously, lots of growth opportunities ahead of you, and you're investing in your business as you talked about increasing your labor. I'm wondering to what degree does that create a short-term headwind, as you think about margins at least in the first part of 2026. You mean just as we're absorbing those costs and training people, et cetera?

And then I guess my second question, and I'm sorry if someone's asked this, but there's like 5 calls this morning. Just your thoughts on M&A, your peers -- your peer is making some pretty aggressive moves on the acquisition front. To what degree do you think you need to do more acquisitions to continue to enhance your competitive positioning? And to what degree do you need to do acquisitions to ramp the labor growth?

Yes. So a couple of things. I'd say that when we look at the investments that we're making, we think we're absorbing those costs in 2025. We think we absorbed some of them in the second quarter, which was why we handily beat revenues, but didn't necessarily have a lot of flow-through on EBITDA. We've got a little bit of that in Q3, again, where we've guided revenues slightly higher, but without a significant amount of flow-through. We think that has to do with the investments. .

We actually think that starts to turn as early as the fourth quarter. We don't expect there to be significant lingering impacts of that going into '26, where we think will be highly utilized across these investments that we've made. So we're -- again, we think that's a great story and really important.

As it relates to M&A and what we've said in the past, look, we were very acquisitive in the '22, '23 timeframe. We talked about really focusing on the organic opportunities that are in front of us. That's been our focus. When you look at our revenue growth this year, when you look at our earnings growth, when you look at our 60% EPS growth this year relative to last year, that's been virtually all organic. And I think that, that was important for the organization at that moment in time with some of the issues that we had with the integration of IA. We think we're through that. We think we're in a very different position.

To your question of do we need to do M&A., our answer is we do not need to do M&A. We -- when we look at '26, right, we see -- we laid out a goal when we did the IA acquisition in the summer of 2022 that we wanted to exceed $15 billion in revenue. We've put a midterm target on that. Here we are 3 years later, I'm highly convinced that next year we will exceed $15 billion in revenue in 2026. I think we'll improve our EBITDA margins in 2026 versus 2025.

When we look at our EPS, we think we can exceed $8 of EPS in 2026 versus where we've been. So from a necessity point of view, no, to grow at double digits and to continue to grow earnings at double digits, we do not feel we need to do M&A. And with that said, are there M&A opportunities out there that we're intrigued by that we think could potentially help further grow the business, the answer is yes, right? And I think that as an organization, we're getting to a place where we're more ready for it than we've been in the last couple of years.

Again, we're not looking to do anything transformational. We think we've been really good at tuck-ins over time. So that's where we're focused. But as we kind of alluded to on our last call, I do think you can expect us to be more active in the M&A world on a go-forward basis.

We will take our next question from Justin Hauke from Robert W. Baird.

Great. I think most of my questions have been answered. I just have 1 quick one. Just turning back to the Communications segment. I think your previous guidance for the second half was that it would be kind of flattish, and now, 3Q in particular, is really strong and, I guess, second half up high single digits, maybe close to 10%. Is that the data center fiber work that's driving it? Or what's the change versus kind of the previous outlook that it would be flattish here in the second half?

Well, I think it's outperformance in the first half, right? So if you look at the first half, again, we grew first half revenue versus last year in the Coms business is up 38%, which is really impressive. I think that, if anything, I'd argue we're being a little conservative in the second half, and I think it's broad-based. I think the wireless business is performing well. It's strong. We've done a really good job of gearing up and -- or we did a really good job at gearing up and preparing for some of the larger projects we had in that business. I think that's showing in execution today. .

We continue to see tons of wireline opportunities, new ones that we're pricing, that will have some impact towards the end of '25, but quite frankly, will probably impact '26 more. So we continue to see activity. I think, obviously, the wireless build-out started in the second half of '25. So the '25 2nd half comps are more difficult than the first half '25. That's part of the reason for the large variances in growth. But again, when we look at the cycle and what we think we can accomplish in this business over a longer period of time, we think high single to low double-digit top line growth is very reasonable in this market for that segment.

We will now take our next question from Brian Brophy from Stifel.

I appreciate you squeezing us in here. I wanted to ask about power delivery margins. There was some discussion about project inefficiencies in the Q. And I think the press release as well. And I think this is the second quarter you guys have talked about this. Any more color on what is driving these project inefficiencies? Is it related to Greenlink at all? And how should we be thinking about this potential headwind in the second half?

Well, if you think about our second half guide for margins in Power Delivery are double digits. We think we'll achieve that in both quarters, third and fourth. So I think it's no different than the commentary we've put out in the past. I don't think there's anything significant to really highlight. I'd say in some areas, I think we had some weather impacts. We had -- geographically, we had some areas that really improved and areas that probably held us back a little bit. I do think there -- we said it in Q1, there's some margin that we felt we left on the table there in the first half of the year. .

With that said, I mean, we were still up, right, in both earnings and in revenue on a year-over-year basis. So revenue was up about 17% in the first half year-over-year. EBITDA was up 10% in the first half year-over-year. So it's not that we didn't improve. It's quite frankly, we thought we could have improved more. And I think we'll start to show that in the second half of the year.

We will take our next question from Brent Thielman from D.A. Davidson. .

Congrats on all the momentum here. Jose, just had a -- look, you got a lot of businesses that sort of benefit indirectly from the AI data center build-out. Maybe just refresh us on some of the things you're doing more directly for data centers, kind of size it for us? And are you investing more in it and trying to scale that up?

The short answer is yes. I think everything from -- we started in that world. We talked about it. It feels like a long time ago, but we really started that on the civil side of our business with our infrastructure business. I think it's grown where we're doing a lot of power associated work relative to data centers. We're obviously doing a lot of telecom work related to data centers. Our business continues to grow there. It's performing as expected or better. I think we're probably more optimistic about the longer-term opportunities of what we have in that market than we've ever been. And I think over the next couple of quarters, hopefully, we'll be able to talk more about what that is and what services we're specifically trying to target.

We will take our next question from Liam Burke from B. Riley Securities.

Jose, pipeline is accelerating, and you laid out all the reasons why. Is it just the challenge you have in front of you scaling the business? Or has there been any change in the competitive front?

I mean, we're not afraid of the competition. I think that -- no, it's a matter of -- there's obviously been a huge sentiment change. So if you would have asked our customers a year ago, the outlook was nowhere near what it is today. So I think as the -- obviously, the election changed a lot, the reliance on natural gas in the future has changed a lot. It's changed the business. Our customers are responding to that change, but it doesn't happen overnight, right? So any of these projects, there's obviously a lot of engineering, planning, you got to order pipe, you've got to work on routes and get permitting, and that's happening, right? So we're -- the level of activity that we're seeing is incredible.

We will get more than our share of that, we believe, and it's just a matter of timing, right? So we're -- we see what's coming in the second half of the year. We're excited about it, and we're preparing for that. And that's kind of what's driving the business today and the investment decisions that we're making today.

Great. And then just real quickly, and you mentioned this in your prepared comments that nuclear is way out there, but are there any early discussions on any of the providers on getting you involved?

Look, it's the beauty of our business, right? We evolve with every 1 of our markets. We evolve in the different technologies as they come up. Obviously, we're paying really close attention to it. And there's no doubt in my mind that when the time comes, if that becomes a growing source of generation, we will be engaged. .

That will conclude today's Q&A session. I would now like to turn the call back over to management for any additional or closing remarks.

Thank you all for joining. This concludes today's call. Thanks for participating. And as a reminder, please visit our investor website for a replay and transcript of the call, which will be posted when available. Have a good day.

That concludes today's call. Thanks for participating. And as a reminder, please visit our investor website for a replay and a transcript of the call, which will be posted when available.

Good morning. Welcome to the JPMorgan Energy Power Renewables and Mining Conference. Thank you all for attending. My name is Drew Chamberlain, clean energy analyst here. Very excited to be joined by MasTec's CFO, Paul Dimarco, well, thank you very much for being here.

No, I appreciate it. It's the first time here, and thanks, everyone, for the interest today.

Well, great. I think it's probably best to just get kicked off with the topic of du jour. I mean what do you think about what's in the Senate right now? What are your customers saying from their latest read on the IRA and what are all the possible implications to MasTec?

Well, I think the biggest takeaway that we'd like to share is our customers have been really steady throughout the process. And I think it really comes back to the underlying drivers. The drivers for their business today are the need for more power generation in our country. And today, the primary source of that until a few years down the road is going to be through renewable energy. So what we're really seeing is a wait-and-see approach. We're not seeing any pause in activity. We're talking about jobs that are already out into '27.

It's kind of what we're working on in terms of a procurement cycle today. So the customers have been really steady. We're not seeing any change in interaction from bookings or project execution. And I think it's indicative of just that underlying demand environment, right? Renewables is the really only viable choice for incremental load growth in our country today, and that's evident by the confidence they're getting from their off-takers in terms of moving projects forward with whatever set of circumstances they ultimately have to deal with. The current construct for our customers and the sophistication of their supply chains and the robustness of their platforms is perfectly acceptable.

There are some things and puts and takes that can make it better but we're not hearing any alarm bells from them in terms of delays of projects or cancellations. We feel really good about our understanding of their needs, where they are from a development perspective and their ability to continue to move these projects forward in the ordinary course. And then as we get to the back end, we're not talking in big heavy terms today about pull forward, but obviously, if there's an earlier exploration of certain subsidies that will be a conversation, and we'll try to find ways to help our customers take advantage of that.

And I guess just on that last point, I mean, is it becoming more of a conversation today? I mean I appreciate -- it doesn't have to be an action item yet, but is it something you're talking about? And is it something that you're actively planning for because you consider the robustness of your backlog, your teams must be -- I think you've talked about being fairly booked out into '26 and then even somewhat beyond. So what are they saying? And how do you prepare for that?

Yes. I mean you have to be thinking about it because we're already -- the general consensus is already a decent level of growth on top of the strong growth that the industry has seen over the past couple of years. So for us, we have to be thinking about our services, how are we more productive with our labor, how can we be more efficient as we deliver projects, what can we do to help customers achieve that? I think we're in the more conceptual planning component, what projects will ultimately be need to pull forward for what duration of time is still to be determined. How else can we help them qualify for things, how can we help drive efficiencies through the execution. Those will all be ongoing conversations, but there's enough work that has to come in today to get projects started in the previously anticipated time frame for 2026 and 2027, but that's still the predominant focus. And I think we'll be continuing to ramp up conversations about pull forward, once we actually know what the final legislation provides for.

Yes. Yes, it makes sense. All right. We can step back a little bit on this renewables business. I mean, clearly, it is somewhere along the lines -- somewhere along the time line of a structural change, clearly. And the execution has materially performed much better over the last 4 to 6 quarters, I mean, can we talk about what's changing and what you think you can do to continue to further improve this business?

Sure. I mean, when we look at -- and we can step back a little bit to the IEA acquisition, but it was effectively a merger of 2 very equivalent sized firms, both in terms of the renewable exposure and in terms of the civil infrastructure exposure. It was a heavy lift, but what we predominantly were challenged with in the back half of 2023 was the level of diligence around factors that could impact project timing. That was obviously -- that was a clear focus for us coming out of that period of difficulty. And I think what the team really showed was our legacy business had a very strong handle on interfacing with our customers to understand the things that the customer had to do to bring a project to be shovel-ready. And the expansion of our backlog very consistently over the last 1.5 years, I think, is indicative of how far we've come in that regards from a consolidated operating framework.

We are a single business today. It is MasTec renewables, like if anyone was at ACP recently, like that's how we're branded. The legacy entities are licensing and operating companies but we are one face of the customer. We have unified services across the value chain from business development through project commissioning. It is -- there's always opportunities to enhance that, but that's how we are interfacing with our customers and with our suppliers. And I think the continued improvement in execution is indicative of that further integration and consistent execution across the business, right? You're always going to have areas where you're performing better, project managers who may be utilizing better processes or protocols, procurement continues to embed itself further in the organization, but it's about bringing that consistent framework across all customers, across all projects that we're seeing continued value being driven through.

And I think what's most indicative of that is it's the consistency of performance. None of the 3 most recent quarters where we've seen improved margin profile, it wasn't because of big exceptions or closeouts. It was about things, projects executing much more consistently. No big onetime benefits, but also no projects fading as they came to completion either. And I think that's also a really good indication of where the business is from a maturity perspective. We have work still to do. We think that's why we talk about further margin expansion opportunities for that segment. But we're really proud of the both -- how both sides have embraced because this isn't like MasTec legacy, just took everything we did and dropped it into IEA. There was a lot of really good practices and people at IEA that are an integral part of this business today.

Yes. We were able to meet with the team at ACP and heard them talk a lot about something that I believe you mentioned on the 1Q call was going deeper with your customer relationships, right, and working further into the early stages of their pipeline of projects and understanding what could be coming down years ahead? I mean, can you talk about how much impact that has on your visibility, your ability to price accurately? And then what type of competitive advantage that creates going into it? I mean a time period where we don't know how long a tax credit is going to be and there could be some real barriers on to when projects need to be completed?

Yes. I think it's been a very important component of our success since the acquisition. And I think it's an incredible value driver for our customers. This isn't something that we go around marketing to anyone that's building a renewables project, it is a very thoughtful evaluation of the customers' desire to have a deeply integrated relationship with their contractor. And that's built over a number of quarters. It's a level of consistent engagement, not just at the business development level, but with executives of the customer and MasTec and it's a commitment on both sides to be aligned around the long-term strategy on how we're going to help them deploy a significant portion of their portfolio.

I think it adds a lot of value for the customer, number one, because they have -- we're there early. We're helping them understand constructability. We're helping them understand ways to value engineer projects. It clearly helps us a lot with resource allocation and planning because it helps us understand where customers may be more aggressive or conservative in their overall project planning. Someone may underestimate the time it takes them to close financing or the time it takes them to work through local permitting. When you have that cadence of consistency, you understand that, and you can help them refine those estimates to be more accurate going forward or at least to better assess your revenue projections as you look out into the future.

So I think to the extent that projects move around, it gives us great visibility in terms of how we can repivot. We're not trying to find a new customer. We're already talking about these jobs knowing what the cadence is if something is accelerating, if something slowing down. So I think it's been a really important component of our success. And I think our customers, more importantly, are really happy with how we are engaging with them and the value that it's driving for their business as well.

Okay. We can move on from the renewable business there. Maybe let's turn to the topic du jour at MasTec these days, and that's probably on our inbound is the pipeline business. I mean, I just -- maybe I'll leave it open-ended and you can kind of update us on maybe a little background on where the pipeline business was, some of the large projects in the past, what the setup looks like for 2025 and then kind of where we're going to go beyond from there?

Sure. I mean this, it's always been a business we've liked a lot. We've been -- I think the largest pipeline contractor for most of the last decade and been able to participate in really every major pipeline project that's been executed in the United States. Again, going back to at least 2015. We obviously hit a challenging patch post the pandemic where there was a lot less project activity. We didn't waver on our commitment to that space being deeply integrated with those customers, we did think it was important to continue to support it, but we obviously saw a need to grow the rest of the business as well.

I think the current environment is marked by 2 things. One, just the more positive investor sentiment to drive capital into that space coming out of the pandemic again, there was a lot of negative investor sentiment around exploration and production of incremental oil or gas. We're -- those companies were expected to return capital to shareholders, not reinvest in their infrastructure. And that sentiment change alone has driven a lot of positive developments in the near term for the industry. Our customers are generally the folks that are moving the product. They move forward with a new pipeline, when they have demand to move product across it. And the recent investment decisions that we've seen in this space are indicative of just that, right? Our customers going out and pulling the industry around the need to move product from one point to another and having really strong feedback, right?

That's because more is being -- more is either being expected to produce or needs to be moved. And we're seeing that benefit already. We're seeing customers acknowledge the fact that there have been -- there has been a contraction in capacity, right? A number of firms have either deemphasized or exited the pipeline infrastructure landscape. So to the extent that the expectations are around increased infrastructure growth are true, there's going to be some capacity challenges from a personnel and from an equipment perspective. I mean equipment manufacturers, they also can have to reallocate production around where the demand, what types of product is being demanded. So there are some specialized pieces of equipment that are in shorter supply today than they would have been in prior cycles. So -- or when there was just more capacity available or more consistent demand.

So we're seeing really good cadence with customers. They're talking to us about projects earlier than they would have in prior cycles. I think there's a good visibility for a multiyear demand opportunity at a minimum. And we're really kind of depending on which estimate you want to take 3 or 4 years out from seeing any new load growth from gas-fired generation. So today, we're seeing projects that are moving product either because of basis differentials and bottlenecks or over to the Gulf Coast for exportation. There will be a second driver of demand, which is the need for additional gas-fired generation, again, 3, 4 years down the road. So we see a really good durable cycle here. The dialogue with customers is increasing in terms of proactiveness. And I think our positioning over the last decade and where we sit today from a -- from not just an equipment perspective, but project supervision and craft labor to execute it, I think we're really, really well equipped to help this industry grow.

Just talk a little bit about that last point there. The durability of this cycle, right? I think there's a lot of speculation in the market and people that we talk to are worried about or wondering excited about what '26, '27 looks like. But how much do you think about -- and obviously, I think it's worth saying that these are a little bit shorter cycle projects than maybe a renewable project. So things could hit backlog and be recognized fairly quickly. How do you think about -- do you see a spike in '26, '27 and then it comes back down? Or is this something you really think extends for a longer duration than that?

I mean we're sitting here in almost July, right, of '25. And I think on the Q1 call, we had the confidence to say that we think '26 is at least back to the levels of 2024, which for us was $2.1 billion of revenue in the segment versus we're doing -- we expect to do just under $1.9 billion for 2025, which we increased at Q1 up from $1.8 billion. So we're talking about double-digit growth in the early parts of 2025 for next year. I think as this demand plays out, we're hopeful to be able to capitalize on more opportunity, but to be talking about 2026 levels specifically today and even 3 months ago, I think is should be really -- a really strong indicator of how positive we are on the dialogue with our customers. And I mean, frankly, some of the backlog that we won in the first quarter is already work that we're executing on in 2026.

We should think backlog will continue to grow over the course of the year. And I think '26 should grow into '27, and then we'll see is '27 the peak? Is '28 the peak? I think it's too early to say but really good dialogue, again, around multiple project opportunities with customers talking about it, yes, this segment has a historical propensity to move quickly from project execution to construction. We are seeing that change a little bit, where customers are talking to us more proactively about the work they need because of the concerns around capacity for the industry overall.

Can you talk a little bit about your expectations for the margins in that segment and how they can grow as revenue grows and what the operating leverage profile can be there?

Yes. So we've been consistently targeting high double-digit margins for that segment. We have achieved that at points in the past. What allows you to do better than that? It's really all about resource efficiency. It's moving crews and equipment and the ordinary course from the completion of one job after the right amount of rest and maintenance onto the next one, right? Any extended period bleeds into that margin opportunity and if you're moving at a very efficient pace from one job to the next, then yes, you'll have higher opportunities for margin performance. The returns in that segment for the capital that's required at that high-teens profile are very strong.

So to the extent that we can work more proactively with our customers to better time, the cadence for resource needs, the better opportunity we'll have to drive margins higher over the course of the cycle. The guide for this year in the mid-teens is solely because of operating leverage and that's holding on the resources for the cycle that's coming and putting us in a position to take advantage of these -- of the demand that we expect in the back half of this year into 2026 and beyond. So I think there's definitely a possibility to drive it up. We don't think we need pricing to do that. We think it's all about labor and equipment utilization.

Okay. And then I think can you talk a little bit about how much competition has changed in that business? Obviously, challenging business. The reason the margins are higher, reason people have gotten out of it. Can you just talk a little bit about how much it's changed? And then how comfortable you feel on your last point there about where you are labor-wise, equipment-wise, resources wise to be ready for '26, '27, '28 maybe?

Yes. I mean, the industry has always tried to stay balanced in terms of procurement. So on every major project, there was generally always some diversity of supply. So there are good competitors out there, both on the union and nonunion side. One of the gating items is project supervision. I think our commitment to the space, the work that we've won and executed on in a period where other firms weren't as successful. Our performance from a quality and safety perspective on those projects, that resonates with project executives, right? So if people are looking for where to hang their hat, I think our track record and commitment to the business is a leg up for us.

There's good competition. I think we'll see how there's any more capacity on the union side than nonunion. So you could see some blurring of what side of the business is required to execute different projects. That could morph from where it's been over time. I think it's a great relief valve for the industry, though. We are double breasted, so we have capabilities to perform both union and nonunion construction projects in that space. But I think that's what we'll have to see play out. How does the industry leverage the overall capacity at the sacrifice of some cost to make sure the work is completed.

Okay. Before we move into pipeline, I want to see -- or sorry, move away from pipeline. I want to see if there's any questions from the audience? Great. Okay. Power Delivery. Greenlink, obviously, a great project win there last summer, then a lot of talk about what's next from there. So maybe give us your view on the market, what's active out there bidding wise? Where you see this going?

Yes. So I mean we've been pretty consistent with our messaging is that today, we feel like we can handle another similar-sized project of annual revenue contribution successfully. So we will be disciplined with that additional capacity. It's not chasing another job. It's finding the right job with the right customer to be successful, like we feel like we've set up with the Greenlink project. We're actively trying to build additional capacity. But in the near term, the procurement methodology there is to make sure that we're putting the right emphasis on the projects that we feel have the most chance for success with us as the contractor EPC provider whatever the scope is.

There is a number of jobs that will continue to work through the procurement process. There's been a couple that have been awarded this year. There's a couple that will be late '24 -- I'm sorry, late '25, maybe early 2026, that we think we're really well positioned on, we've got to be competitive. We've got to put our best foot forward and ultimately prove that to the customers that we are the right provider for these incredibly important projects for them. That's where the -- that's where we are, right? There's a consistent cadence of projects through at least 2028 and that our teams are tracking that will continue to expand this cycle, right? We're really -- we've seen kind of 2 or 3 major awards after a very long dearth of any major interstate pipeline activity, I think we'll be in a cycle going forward where there's multiple projects a year. So we have to enhance our capacity, right, through utilizing projects like Greenlink to better equip existing employees.

How are you cross-training employees on your infrastructure projects so they can get exposed to that bigger project, more complicated project management activity while you're also looking at how do you supplement it from external perspectives, whether that's through M&A or from acquiring additional talent resources in the field. So it's two-pronged. It's going through the procurement cycle, but also we're not sitting around just trying to get what is the next job. It's how do we build the right capacity to support what is expected to be a continuing expansion cycle around large transmission.

Okay. And it's probably fair to say that that's longer time horizon for bookings and execution of projects I mean, these are products that can last, what, 8, 10 years, and EPCs come in a little later. So do you think the real bookings opportunities and executing on these projects is...

I mean everyone will be a little bit different. But like Greenlink as an example, we announced the award in Q2 of last year, and we really -- there was some work in the fourth quarter, but really didn't start in earnest until Q1. So a 2- or 3-quarter lag is not uncommon, right? Converse to pipeline where we historically, we've seen that quick return. And the procurements in advance of that contractual signing are much longer. I mean, they could be a multiple quarters to years long procurement cycles. So these are all very far advanced. The ones that we're talking about towards the end of this year, they're very far advanced with -- they can slide a quarter or 2, but I think they should be in that late '25 or early '26 time frame.

Okay. So we're 25 minutes into this, and we have yet to use the words data centers. So maybe we'll let you have the floor and say whatever you want about the MasTec offering to data centers and what that can be.

Yes. So I mean, listen, it's an explosive opportunity across the globe, frankly. What we've tried to do is evaluate the service offerings that we have at MasTec today and package those in a way that we can bring the totality of services to either a developer, hyperscaler or a general contractor who has turnkey scope on a facility. And when you look at that, we can really do the vast majority of the work outside some of the inside plant services like low-voltage electrical or the final installation of servers and kind of the brains at the end of the day. So that's site preparation, facility erection, substation construction, utility interconnectivity whether that's communications, whether utilities or power. Our Communications segment has the central office business, which is basically the inside wiring of a facility.

So we're bringing those totality of services to the customer. And then we've done all of those in some form or another today across a diverse set of clients. And we're trying to find the best way to make that more transferable across the country. So we may be working with the GC who has a need in a new geography. Well, they prequalified us from all those services. So that's easily transferable to a new geography for them. We've evaluated -- we've been asked, and so far, we haven't taken this tack, but we could fully turnkey -- be full turnkey provider for a data center as well. There would be certain trades we would subcontract out, but we have a lot of those capabilities in-house. We have a general construction, construction management business in the company today that, that dovetails into very easily.

So it's -- there's a couple of different paths. I think the totality of services really resonated. We've expanded again our customer base in our geography over the past year and our scope of services because when we rewind to 2024, we were talking about civil site work and that was really what we had done. So we're continuing to grow the base. The individual business -- the individual work streams reside in the different segments. So we don't have a data center P&L, but the work continues to expand and the customer base continues to expand. So we feel really good about that as a good growth driver across the business going forward.

Okay. And last for me. Can we talk a little bit about the balance sheet. So one, obviously, capital allocation priorities. But maybe just more so a holistic or higher level Paul Dimarco, on the health of your balance sheet right now. I mean obviously, what you've done year-to-date has been a lot different than what you've been able to do the last couple of years, buying back stock, deploying capital maybe a little bit more flexibly than you have been able to historically. So maybe just talk a little bit about that as well.

Yes. We think the balance sheet -- I'll start with the latter question. We think the balance sheet is in a position that gives us full flexibility to take advantage of whatever strategic opportunities out there. Whether it is taking advantage of a dislocation in the share price, and repurchase some stock like we did in March and April or M&A or strategic investments, we feel that we're positioned today with where the balance sheet is to do whatever activity is best for the overall growth and returns of the company. In terms of our priorities, organic growth and investing in the business is still going to be #1.

We will be acquisitive, albeit focusing on complementary M&A that has a relatively lower level of integration risk and doesn't distract our operations from their core goal today of continuing to execute and drive margin expansion. So it will be things that we expect to help us achieve our margin goals and our return objectives more quickly. It's not going to be something just to grow. And then from a shareholder return perspective, there, our perspective hasn't changed. We will buy back stock when we think there is a meaningful discount to fair value, and particularly if it's something we can take advantage of that we've been very consistent with that over really the totality of Jose's tenure, which aligns with most of my time with the business.

And I think that's going to be a tertiary opportunity for us, hopefully, if we're executing, hopefully, we're redeploying capital in a much more traditional fashion with M&A and I didn't mentioned strategic investments, but sometimes customers need help, right? We've invested very successfully in projects in the past or helped customers get things across the finish line. Sometimes that's an important component, and we're definitely in a position to be able to do that today. So we think we have full optionality. It's about the return it generates and again, putting the business in a position to achieve our near-term goals more quickly.

Great. I think we're out of time here. So thank you very much, Paul.

Thank you everybody.