Everus Construction Group, Inc.

second quarter 2025 operational and financial results. This release, together with the accompanying presentation materials, are publicly available on our website at investors.everest.com. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements, which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results could differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the risk factor section of our latest filings with the SEC. Additionally, please note that you can find reconciliations of historical non-GAAP financial measures in the news release issued yesterday and the appendix of today's presentation. Today's call will begin with prepared remarks from Jeff, who will provide a review of our recent business performance, followed by a financial update from Max. At the conclusion of these prepared remarks, we open the line for your questions. With that, I'll turn the call over to Jeff.

Thank you, Paul, and good morning to everyone joining us on the call today. We are very excited to be with you all today as we report our second quarter 2025 results. I will provide a brief overview of our results and highlight some of our key accomplishments against our strategic priorities before I turn it over to Max for his financial review. Beginning with slide four, I am very pleased with our results through the first half of the year, with our second quarter results further building on our strong first quarter start. Our second quarter revenue increased 31% driven by continued strength in our electrical and mechanical segment, as well as improved results in our transmission and distribution segment. I am very excited by the continued momentum across many of our key end markets, which positions us well for further strength in the coming quarters. Our second quarter EBITDA increased 36% on strong revenue growth combined with solid execution by our team members across the organization. As a result, our EBITDA margins were up 30 basis points from last year. Our total backlog at the end of the second quarter was $3 billion, up 24% from the same period last year, and up 7% from the end of 2024. We were particularly pleased with the balanced backlog growth across both E&M and T&D, as both segments posted solid 20% plus growth relative to last year. We are excited by the strong momentum in our business and continue to see favorable trends driving our growth. Our customers look to Everest as a trusted partner and count on us to perform even the most complex projects, giving us confidence that we are well positioned for continued backlog growth. We were particularly pleased with the favorable trends in our T&D business during the quarter, where our momentum continues to grow, driven by strong spending plans of many of our key customers. We are seeing strength across the utility end market, notably in our underground submarket. We continue evaluating several opportunities in our pipeline. The need to upgrade and expand power transmission infrastructure in the U.S. is clear given the projected loan growth that is expected in the coming years. And with our long-term customer relationships and track record of safety, efficiency, and project execution, we are well positioned to succeed. We will remain disciplined as we approach some of the larger projects we are pursuing, and we are excited about the outlook. As we look across the rest of our business, we continue to see favorable opportunities in most of our submarkets, including data center and hospitality. As it relates to data center work, our message remains the same. We continue to see very strong demand trends and have not seen any meaningful change in our customers' plans. We are deeply involved in the long-term planning with many of our key customers, giving us good visibility into the ongoing strength in the data center submarket. Our operating companies are positioned in key geographic locations, which puts us in a favorable position to take advantage of the attractive trends in the data center submarket. We remain well positioned as one of only a small handful of service providers with track record expertise and people to successfully execute on these complex jobs now let me shift gears a bit and provide a quick update on some of our key accomplishments during the quarter regarding our forever strategy during the second quarter we continued our focus on attracting and retaining key talent we were able to add to our skilled labor headcount during the quarter which is critical to supporting our growth objectives and enabled us to generate more than $900 million in revenue during the second quarter for the first time in our history. We had another quarter of excellent execution, which once again positively impacted results during the quarter. This is a direct reflection of our hardworking, highly skilled, and dedicated employees across the organization. We had favorable variances and project pull forward across several large jobs that were spread across multiple end markets, highlighting the strength and depth of our team. Our focus on project selection, bidding discipline, training, safety, and execution are core to everything we do. We are extremely proud of our track record of superior execution and work every day to maintain our success. As we highlight on slide eight of today's presentation, we expect our forever strategy to drive us toward a long-term financial framework of organic revenue growth in a range of 5% to 7% compounded annually, which combined with our discipline focus and operational excellence should drive EBITDA growth of 7% to 9% on a compound annual basis. We are confident based on the strength of our recent results favorable backlog trends, and high performance of our team that we will remain on track to successfully execute on our long-term financial targets, delivering more than our long-term framework in 2025, driving value for our shareholders. With that, I'll turn it over to Max.

Thank you, Jeff, and good morning, everyone. I will provide additional details on the quarter, give an update on our liquidity and balance sheet, and wrap up with some details on our guidance. Beginning on slide 10 in today's presentation, revenues for the second quarter of 2025 were $921.5 million, an increase of 31% compared to the same period last year. The increase was driven by growth in both segments, with E&M revenue increasing 42% and T&D up 3%. Total EBITDA was $84.2 million during the second quarter, an increase of 36% from the same period last year that was driven by solid revenue growth and increases in segment-level margins in both E&M and T&D, including continued strong project execution on a number of projects that we completed, which will not likely repeat in the second half of the year. Our stand-up costs continue to trend in line with our expectation for full-year run rate incremental costs of $28 million. As a result, our second quarter EBITDA margin was 9.1%, up from 8.8% in the prior year period. At June 30th, total backlog was $3 billion, up 24% from June 30th of 2024. We saw solid year-over-year growth in both of our segments, with E&M backlog up 24% from the prior year period and T&D up 21%. While data center work was once again a key driver we continue to see solid growth in several key submarkets, highlighting the diversity in our business. Given the current mix of our backlog, which includes some larger multi-year projects, many of which are just getting started, our backlog conversion may be extended relative to our historical pattern in the coming quarters. Our backlog at the end of the second quarter was down modestly from our record first quarter levels, but as we have previously discussed, our backlog can be lumpy quarter to quarter. In addition, our second quarter revenues were at record levels and up nearly $100 million from the first quarter. It is also worth noting that we have several larger projects that are either in the pre-construction phase or early stages of construction, and these large projects generally don't have the full scope of work in backlog at these early stages. This is all to say, given the number of early stage large projects combined with our strong competitive positioning and favorable demand drivers, we remain confident in our ability to generate continued backlog growth. Now, turning to our segment results, let's first look at E&M, where our second quarter revenues increased 42% to $713.6 million. The increase was driven by growth across key submarkets, with data center once again a key driver. Our E&M EBITDA was $63.7 million in the second quarter, up from $41.5 million in the same period last year, or an increase of 53%. The increase was driven by higher revenues and higher gross profit margin due to project timing pulled forward and efficiency gains on certain projects as they came to a close, partially offset by changes in project mix and higher SG&A expenses. As a result, our E&M segment EBITDA margin was 8.9%, up 70 basis points compared to 8.2% in the second quarter of 2024. Our second quarter T&D revenues were $212.4 million, up from $206.8 million last year, an increase of 3% driven by growth in both the transportation and utility end market. The transportation end market experienced higher workloads in the traffic signalization submarket, while the utility end market had increased activity in a number of submarkets with underground activity leading the way. T&D segment EBITDA increased 19% to $30.4 million in the second quarter, driven primarily by the increase in revenues, together with higher gross profit margin due to project mix and solid project execution. As a result, T&D segment EBITDA margin was 14.3%, up 200 basis points compared to 12.3% in the same period last year. Turning now to our balance sheet and liquidity. As of June 30th, we had $64.5 million unrestricted cash and cash equivalents, $292.5 million of gross debt, and $209.4 million available under the credit facility, net of $15.6 million of standby letters of credit. Net leverage, defined as net debt to trillion 12-month EBITDA, was approximately 0.8 times. CapEx was $31.6 million during the first half of 2025, up from $16.5 million in the first half last year. The increase in CapEx reflects our strategy to increase investments that support our organic growth, including the purchase of our new prefab facility that we discussed last quarter, as well as additional vehicles and equipment purchases in T&D to support the growth of our business. Wrapping up with guidance. We are very pleased with our strong first half results, which reflect the attractive demand drivers in our business and our strong competitive positioning. as well as excellent project execution and the pull forward of revenues and profits on certain projects. Based on these factors, combined with our project mix and expected project cadence for the second half of the year, we are raising our 2025 guidance. We are now forecasting revenues in the range of $3.3 to $3.4 billion, which is up from the prior range of $3 to $3.1 billion. and EBITDA in the range of $240 million to $255 million, up from $210 to $225 million previously. At the midpoint of our updated range, our revenue and EBITDA forecasts represent growth of 18% and 21%, adjusted for the incremental standalone costs versus last year. Before wrapping up, I want to provide some additional color as it relates to our outlook for the balance of this year. As we have already discussed, we have benefited from some very strong execution during fiscal 2025. While we always strive to outperform our projected margins, there were several projects where we recognized meaningful upside in the first half. If you adjust for the strong execution that has benefited our results this year, our margins have been relatively consistent in the low to mid 7% range over the past several quarters. We expect this trend to continue for the remainder of the year on solid revenue. Additionally, we will be executing on a higher mix of large jobs that are in the engineering phase or in the early stages of construction during the back half of the year. This makes it more difficult to predict how our workflow will ramp up over the next couple of quarters, which impacts our margin visibility. Furthermore, given we were able to pull some jobs forward in the early part of this year at the request of our clients, We had work that was originally slated for the second half that was completed early. We are working on lining up schedules as we ramp new projects and finalize opportunities with book and burn work, but the timing is tough to predict. Another result of having a higher mix of projects in the early stages is that there are fewer opportunities for significant execution upside in the near term. We are focused on continuing our strong execution and see the potential for additional upside as these jobs progress. This will likely be more of a 2026 event as it relates to these projects that are just getting underway. Again, all of this is to say that while we're encouraged by the trends in our core markets and excited by the momentum in our business and backlog growth, there are several factors impacting the outlook for the second half of the year relative to the first half. This is nothing more than a timing issue, which is very typical for a business like ours. and we remain confident in our outlook and our ability to deliver on our long-term financial targets. That completes our prepared remarks. Operator, we are now ready for the question and answer portion of our call.