MasTec, Inc.

Welcome to Mass Tech's third quarter 2024 earnings conference call, initially broadcast on Friday, November 1st, 2024. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to our host, Mark Lewis, Mass Tech's Vice President of Investor Relations. Mark?

Thanks, Maddie. Good morning, everyone. The following statement is made pursuant to the safe harbor for four looking statements described in the Private Securities Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking, such as statements regarding MOSFET's future results, plans, and anticipated trends in the industries where we operate. These forward-looking statements are the company's expectations on the day of the initial broadcast of this call, and the company does not undertake to update these expectations based on subsequent events or knowledge. Various risks, uncertainties, and assumptions are detailed in the press release and filings with the SEC. Should one or more of these risks or uncertainties materialize, or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in these communications today. In today's Remarks by Management, we'll be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules. In addition, we may use certain non-GAAP financial measures in today's call. A reconciliation of any non-GAAP financial measure, not reconciling these comments to the most comparable GAAP measure, can be found in our press release. Please note that we have two additional documents associated with today's webcast along with our earnings release, which can be found on the investor page in the events and presentations section at mystack.com. There is a comparison presentation with information about analytics on the quarter just ended and a guided summary to exist to assist you in financial models for Q4 and the year. Both PDF files are available for download immediately. With us today, we have Jose Mas, our CEO, and Paul DiMarco, our EVP and Chief Financial Officer. The format of the call will be opening remarks and analysis by Jose, followed by a financial review from Paul, and we expect the call to last about 60 minutes. We have a nice quarter and a lot of important things to say today, so I'd like to turn it over to Jose. Jose?

Thanks, Mark. Good morning and welcome to MOSTECH's 2024 third quarter call. Today, I'll be reviewing our third quarter results as well as providing my outlook for the markets we serve. First, some third quarter highlights. Revenue for the quarter was $3.3 billion. Adjusted EBITDA was $306 million. Adjusted earnings per share was $1.63. and backlog at quarter end was $13.9 billion, a $520 million sequential increase. In summary, we had another good and clean quarter. While revenues were slightly below expectations, EBITDA margins were about 85 basis points better than expected. For me, the highlight of the quarter was that every segment outperformed our margins compared to guidance. This demonstrates the significant improvement in our business, and with record backlog, we entered 2025 with great momentum and confidence. I'd like to point out some further highlights about our quarter. Our communications segment revenue grew over 12% both year over year and sequentially, which resulted in record quarterly revenues for this segment. Our communication segment EBITDA margin of 11.5% was its highest performance in two years. Our clean energy and infrastructure segment also had record quarterly revenue and EBITDA. Our clean energy and infrastructure EBITDA margin of 7.5% was its best performance since 2019. and revenue in our power delivery segment was up year over year for the first time in 2024, and was up about 10% versus both guidance and sequentially, and begins to reflect an improving environment on distribution spending. I'd also like to point out that our total company non-oil and gas revenue was up over 15% sequentially, and non-oil and gas EBITDA improved 36% sequentially, which was the primary driver of our earnings beat. We made significant investments post-pandemic to diversify our business and position us to participate and benefit from the changing landscape of both power generation and delivery. While we believed we had made great progress in our ability to compete and win, today's earnings begin to demonstrate our success. To be clear, while we're happy with today's results, we have room for significant improvement across all of our segments. That opportunity for improvement is actually what I'm most excited about. We are seeing incredibly strong demand for our services. We participate in great end markets, and our prospects for strong organic growth are as good as they've ever been. we also have the ability to meaningfully improve margins. While we have made progress this year, that margin improvement, coupled with strong revenue growth, should lead to significant value creation for our stakeholders. I'm excited about that opportunity and am confident that the MOSTEC team will deliver. Now I'd like to cover some segment highlights. In our communication segments, Third quarter revenues were up double digits year over year and sequentially, and represented the segment's highest revenue in our history. Margins at 11.5% were at a two-year high. On the wireless side, our market share expansion with AT&T, coupled with the Nokia Ericsson swap-out, is on track and playing out as we expected. On the wireline side, demand remains incredibly strong. While there have been some short-term delays, the impact of BEADS funding will be a catalyst for our business, as will the growing demand for fiber associated with artificial intelligence and data centers. As an example, we are excited to announce that post-quarter end and not included in backlog, we were awarded a major fiber program build from Lumen Technologies. This multi-state award represents over 8,000 miles of fiber in support of their efforts to provide capacity for hyperscalers and expand their high-capacity network infrastructure, enhance connectivity, and address the demand for reliable, advanced digital networks. In our power delivery segment... During the quarter, revenue was above our expectations as we began to see some improving trends from our distribution customers who had cut back earlier in the year. The third quarter represented our first year-over-year revenue increase in 2024. We made good progress on our large 700-mile transmission award that we announced last quarter and we are on schedule to fully mobilize in early 2025. Despite the revenue beat, backlog was up nearly $200 million sequentially and book to bill was strong at 1.29 times. Projected energy load growth in the U.S. will have a substantial impact on our business as our customers meaningfully increase their investment in both generation and grid expansion. We are incredibly well positioned to take advantage of this opportunity. In our oil and gas pipeline segment, revenues were slightly lower than expected, but margins outperformed. While backlog is down, demand is better than backlog suggests. We have a number of verbally awarded projects that will convert to backlog. We currently have strong multi-year visibility and are excited about the role gas fire generation is going to play in helping meet our country's low growth needs. Finally, In our clean energy and infrastructure segment, revenues were up over 20% sequentially, and EBITDA was up 80% sequentially. Both revenue and EBITDA were at record levels for the segment. Margins of 7.5% were well ahead of expectations. I'd like to congratulate our clean energy and infrastructure team for their performance. 2023 was a difficult year in this segment. and we made a number of changes to both maximize our competitive positioning and improve our operational performance. The third quarter results begin to reflect their progress. In addition to the financial progress, backlog for this segment is at record levels, an increase nearly $500 million sequentially for a book-to-bill of over 1.4 times. Backlog is up over a billion dollars from this time last year and that positions us well for 2025 and beyond. In addition to the growth opportunity, we are focused on continuing to improve margins. While the third quarter showed great progress, we expect to keep improving. In summary, this was a good quarter, with solid performance across all of our segments. The investments we've made in the last few years to build scale along our vertical offerings are beginning to translate to financial success. I want to highlight again that what excites me the most today is our opportunity to not only grow revenues, but to do it while simultaneously improving margins. That combination provides tremendous upside for MOSTECH. We are pleased with our market position, our diversified business model, and our ability to offer our customers integrated solutions at scale. I believe that the most successful companies in our space are those that have the scale to meet our customers' demand. Our customers' projects have significantly increased in size, scope, and complexity, and there is no question that our customers need strong partners. I believe that over the last few years, our biggest accomplishment has been to position ourselves as one of only a few partners that's viewed throughout our industry as a partner whose workforce, size, and scale affords it the capabilities to take on any project. I'd like to take this opportunity to thank the men and women of MOSTEC. I'm honored and privileged to lead such a great group. The men and women of MOSTEC are committed to the values of safety, environmental stewardship, integrity, honesty, and in providing our customers a great quality project at the best value. These traits have been recognized by our customers, and it's because of our people's great work that we've been able to position ourselves for continued growth and success. I will now turn the call over to Paul for our financial review.