Everus Construction Group, Inc.

Hello, and thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Everest Construction Group fourth quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, press star one again. We kindly ask that you please limit your questions to one and re-enter the queue for any additional follow-ups. I would now like to turn the conference over to Paul Bartolai. Please go ahead.

Thank you. Good morning, everyone, and welcome to Everest Construction Group's fourth quarter 2025 results conference call. Leading the call today are CEO Jeff Seed and CFO Max Marcy. We issued a news release yesterday detailing our fourth quarter and full year 2025 operational and financial results. This release and the accompanying presentation materials are 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 their earliest 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 in 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 and an update on the progress against our strategic priorities, followed by Max, who will provide a more detailed financial update before wrapping up with guidance. At the conclusion of these prepared remarks, we will 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 talk to you today about our record fall year results in our first year as a standalone public company. It has been a transformational year for Everest, which is a direct reflection of our highly skilled and dedicated team members across the organization. Through disciplined focus on our Forever strategy, we established our structure as an independent public company, generated tremendous financial results, and positioned Everest for continued success in the years ahead. I am so proud of everything we accomplished during the year and am even more excited about our future opportunities. During our call today, I will provide a brief overview of our results highlight some of our key accomplishments towards our strategic initiatives and detail some of our key priorities for this year before I turn it over to Max for his financial review. Turning to our quarterly highlights, beginning with slide four. Much like the first three quarters of 2025, I'm pleased to report that we delivered another quarter of exceptional financial performance, reflecting the robust opportunities across our end markets and our outstanding execution capabilities. We delivered fourth quarter revenues in excess of $1 billion for the first time in our history, up 33% from the prior year period, driven by growth across both our E&M and T&D segments. Our strong revenue growth was complemented by another quarter of strong execution, as fourth quarter EBITDA increased 45% from the prior year period and our EBITDA margin was up 70 basis points. Our ability to execute complex projects safely on time and on budget is critical to our clients and is a driving factor in helping us build the deep relationships that are key to our long-term growth strategy. Looking at the full year, our revenues increased 32%, primarily from the continued momentum in our E&M business. While our E&M segment was the key driver in 2025, we remain optimistic about the growth outlook for our T&D business with our recent backlog momentum and favorable industry trends. Due to our strong execution throughout 2025, our full-year EBITDA was $320 million, up 52% compared to 2024 after adjusting for incremental standalone operating costs. Our strong performance is a direct reflection of the continued focus on our strategic priorities by all our employees across 15 operating companies around the country. Our backlog at the end of 2025 was $3.2 billion, up 16% from the same period last year, with strong growth across both T&D and E&M. While we're benefiting from favorable end market trends, Our backlog growth also reflects our strong execution, our deep client relationships, and the value our employees bring to our customers, the key pillars of our forever strategy. Our healthy backlog gives us confidence in our growth outlook for 2026. Importantly, we continue to see a robust project pipeline across diverse markets, including data center, hospitality, semiconductor, transmission, and undergrounding. While we will certainly remain disciplined in our approach to project selection, ensuring we choose projects with the right risk-reward, we expect the favorable market trends and our strong competitive positioning to allow for continued backlog growth. As I reflect on 2025, we made tremendous progress against our strategic priorities, which enabled us to generate record financial results and, importantly, has positioned us for continued success in the years to come. I would like to take this opportunity to highlight some of our key accomplishments during the year and provide an update on some of our strategic priorities as we look ahead. As I already mentioned, the foundation of our operational framework is our forever strategic priorities. You can see on slide six that our forever priorities are focused on attracting, retaining, and training our most critical asset, our employees. creating value for our customers and shareholders, delivering safe and high-quality execution, and maintaining and growing our customer relationships. Our forever strategic priorities are the basis for everything we do and are designed to deliver value creation through sustained profitable growth, operational excellence, and disciplined capital allocation. Our value creation framework is highlighted on slide 7 in today's presentation. We clearly generated strong growth during 2025, with full-year revenues increasing 32% compared to 2024 results. Our strong growth reflects our expertise, discipline, and long track record of success in critical markets that provide data center, hospitality, and other grounding work. These are markets where we have developed project management expertise, skills, and relationships over the course of decades. An important aspect of our growth strategy is to expand geographically through satellite projects, which was how we entered the Southwest. More recently, as discussed on our last earnings call, we entered a new geography in support of a large semiconductor company. The initial large project is helping us scale up to this new location, which we expect will allow us to follow our previous blueprint to make this a permanent new geography for Everest. Of course, our organic growth initiatives are contingent on our ability to attract and retain skilled labor to execute our projects. We have a long track record of effectively scaling our business, having tripled our workforce over the past 13 years. We ended 2025 with approximately 9,400 employees, up from 8,700 at the end of 2024. Through our strategic focus on attracting, developing, training and retaining employees, we continue to efficiently grow our workforce by leveraging our union partnerships, our industry relationships and internal initiatives. While we remain committed to our organic growth strategies, an important part of our growth playbook going forward will be strategic acquisitions. We have strengthened our corporate development team and have a broad and deep pipeline of potential deals we are evaluating. We look forward to updating you on our progress. As a reminder, our acquisition strategy is focused on finding accretive transactions that expand our geographic footprint, diversify our business, or deepen our market presence. We are well below our leverage targets and have ample capacity under our credit facility and cash on hand, giving us significant financial flexibility to execute our growth initiatives. Now turning to operational excellence, 2025 was certainly a year of strong execution with our full year EBITDA margin up 40 basis points as reported. and up 110 basis points when adjusting for incremental standalone operating costs. Our strong execution is thanks to our people and our strict adherence to our Everest operational playbook, which focuses on project selection, bidding discipline, safety, training, and sharing of lessons learned. We continually look for opportunities to drive execution upside on every project and experienced exceptionally strong execution in 2025. Another important area of focus for us is our prefabrication and modular construction strategy. As we discussed earlier in 2025, we are consolidating and expanding our prefab and modular construction across the country. Notable investments have been made in the Pacific Northwest and Southwest, and our latest expansion in Kansas City, which is now operational. We constantly evaluate and expand our capabilities where possible. Prefab and modularization helps improve safety, increases labor efficiency, lowers costs, improves project timelines, and makes project outcomes more predictable. This allows us to enhance margins, increase savings for our customers, and strengthen relationships. And finally, we maintain our focus on disciplined capital allocation. Our priorities are investments in organic growth, acquisitions, and maintaining financial flexibility. As Max will discuss, we increased our capital spending in 2025 to support our growth initiatives and remain committed to our long-term expectation of investing 2% to 2.5% of our revenues. While we have not yet completed an acquisition, our strong balance sheet positions us to execute on growth strategies. We do not currently have any return of capital programs in place, which reflects our optimism and our growth opportunities and our belief that this is the best use of capital at this time. Our management team, together with our board, will continue to evaluate the highest and best uses of capital over time, consistent with our ongoing focus on driving stockholder value. And finally, slide eight details our long-term financial expectations. We outperformed these targets in 2025, which again reflects strong market trends, execution upside, and our focus on our forever strategic priorities. We entered 2026 with strong momentum and remain committed to delivering on these long-term targets to provide value to our stockholders. With that, I'll turn it over to Max.