MasTec, Inc.

Thank you for standing by and welcome to MassTech's second quarter 2025 financial results conference call. Today's call is being recorded. I'd like to turn the call over to Chris McRae, Vice President of Investor Relations.

Good morning, everybody, and thank you for joining us for MozTech'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 MozTech's website under the Investors tab and through the webcast link. There's also a companion document with information and analytics from 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 MOSTEX 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 non-pipeline business, improved EBITDA from $181 million to $257 million in this year's second quarter, a 42% year-over-year increase. Revenue for our non-pipeline business was up 26%, with power delivery and clean energy and 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 non-pipeline 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 1.2 times. 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 to $14 billion for full year 2025, a roughly $300 million increase over previous guidance. We are slightly increasing the range of our EBITDA guidance to $1,130,000,000 to $1,160,000,000, 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, an over 10% increase in our workforce. This compares to an increase of a couple 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 right-size resources in our pipeline segment and set 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 headcount in equipment in our pipeline segment is being driven by the incredible demand we are seeing for 2026 and beyond. These increases in headcount 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. MOSTECH's wireless business continues to see strong growth from expanded geography 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 five years. Verizon publicly stated their goal to also double fiber passings by 2028. and T-Mobile is looking to add 12 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 MOSTECH. 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 varying scope, and we still expect several larger projects to be awarded in the coming periods. In our clean energy and 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 1.4 times. 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 continue to fill in the 2026 year. An important development during the quarter was the passage of the One 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. A subsequent executive order was signed, and we expect more clarity in the coming months. As it relates to MOSTECH 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 drop 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 this segment was down about 5% sequentially, our second quarter backlog does not include a number of verbally awarded projects 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 multi-year investment curve in this important base load 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 MassTech 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 Mostek 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?