Tutor Perini Corporation

If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. I will now turn the conference over to your host today, Mr. Jorge Casado, Senior Vice President of Investor Relations. Thank you. Please proceed.

Hello, and thank you all for joining us. With us today are Gary Smalley, CEO and President, Ron Tudor, Executive Chairman, and Ryan Sirocco, Executive Vice President and CFO. Gary and Ryan will review the details of the quarter and provide some commentary regarding our outlook and guidance. Ron is here to help answer any project-specific questions as he remains involved in the setup of our newer major projects. Before we discuss our results, I will remind everyone that during this call, we will be making forward-looking statements, which are based on management's current assessment of existing trends and information. There is an inherent risk that our actual results could differ materially. You can find our disclosures about risk factors that could contribute to such differences in our Form 10-K, which we filed on February 27, 2025, and in our Form 10-Q that we are filing today. The company assumes no obligation to update forward-looking statements, whether due to new information, future events, or otherwise, other than as required by law. In addition, during today's call, management will be referring to certain non-GAAP financial measures. a reconciliation of these non-GAAP financial measures in the earnings release that we issued today and in the Form 10-Q that is being filed today, both of which can be found in the Investors section of our website. Thank you, and with that, I will turn the call over to Gary Smalley.

Thanks, Jorge. Hello, everyone, and thank you for joining us. As I mentioned during our last two earnings calls, it certainly is a great time to be a TutorPretty shareholder. Our business, and correspondingly our stock, has performed extremely well this year, yet we are just at the start of what we expect will be a very strong period of double-digit revenue growth, increased profitability, and solid cash generation over the next several years. With what we continue to see on the horizon, there remains tremendous opportunity ahead for further substantial shareholder value creation. Now let's talk about our third quarter performance. Tudor Perney delivered excellent results for the third quarter, once again setting new records across various key metrics. Our operating cash flow was extraordinarily strong for the quarter at $289 million and $574 million through the first nine months of 2025, setting new records for both respective periods. The strong cash flow was almost entirely driven by collections from newer and ongoing projects. Our third quarter cash flow was the second best for any quarter ever, and our cash flow through the first nine months of this year is already well in excess of last year's full-year record operating cash flow. With what is now our fourth consecutive year of record operating cash generation, the cash on our balance sheet is quite healthy. We plan to continue building our cash position until our general corporate purpose cash reaches a level at which we can comfortably initiate one or more strategic capital allocation alternatives, most likely in the form of recurring dividend, and or a share repurchase program. Tudor Verney has been benefiting from favorable macroeconomic tailwinds, which are driving strong sustained market demand for construction services across all segments. We believe that these tailwinds will persist due to the tremendous amount of federal, state, and local level funding that are now in place and because our country has for decades and until recent years neglected to adequately fund and prioritize the types of substantial infrastructure investments being made today. We have continued to be successful in capitalizing on major project opportunities, adding $2 billion of new awards and contract adjustments in the third quarter, which increased our backlog to a new record of $21.6 billion, up 54% year over year. Backlog for both the building and specialty contractor segments also set new records. Our book-to-burn ratio for the third quarter was 1.4x. I'll provide further details on some of our new awards shortly. Our third quarter revenue was strong, up 31% year over year, and revenue for the first nine months of 2025 was the highest since 2009, achieving record quarterly and first nine months revenue performance for the civil segment and the best performance since 2020 for the building segment. Operating income was up significantly this quarter despite a further substantial increase in our share-based compensation expense that resulted from the dramatic growth in our stock price, which has nearly tripled since the end of last year, reflecting our continued strong operating performance driven by contributions from various newer higher margin projects in the civil and building segments. I will note that while we expect our share-based compensation expense to be higher than previously anticipated for the full year of 2025, it is still projected to decrease considerably in 2026 and further in 2027 once certain awards have vested. The civil segment continues to perform at record levels, delivering its highest segment operating income ever for both the third quarter and first nine months of the year, with strong margins that are sustainably above the historical range for the segment. The building segment's operating income for the first nine months of 2025 was the highest since 2011. And importantly, the specialty contractor segment returned to profitability this quarter ahead of expectations. Adjusted earnings per share for the third quarter, which excludes the impact of share-based compensation expense net of the associated tax benefit, was $1.15 up significantly compared to the adjusted loss per share of $1.61 reported for the third quarter last year, again demonstrating our strong core operating performance and contributions from various newer, larger, and higher margin projects, many of which are just ramping up. Our GAAP EPS was $0.07 for the third quarter, a substantial improvement compared to a loss of $1.92 per share for the same quarter last year. Overall, Our business continues to perform extremely well this year, significantly better than we anticipated at the start of the year. The newer, larger projects I mentioned are expected to drive very substantial growth, strong profitability, and solid cash flow over the next several years. Now, taking a closer look at our new awards in the third quarter, the largest of these included the UCSF Benioff New Children's Hospital in California valued at approximately $1 billion, a $182 million defense system project in Guam, and a $155 million education facility project in California. We also listed several other smaller new awards in our earnings release today. Looking ahead, we believe that our backlog will remain strong as we continue to see numerous major bidding opportunities for our civil and building segments, many of which should also include a significant role for electrical and mechanical business units within the specialty contractor segment. Our most significant new project opportunities over the next several years are primarily located in California, New York, the Midwest, and the Indo-Pacific region. Among these opportunities are several building segment projects currently in the pre-construction phase that are expected to advance to the construction phase a few later this year and others over the next two years. We have well over $25 billion of upcoming bidding opportunities over the next 12 to 18 months, the largest of which include the $12 billion Sepulveda Transit Corridor, the $3.8 billion Southeast Gateway Line, and a $2 billion replacement hospital, all of which are in California, as well as the $5 billion Penn Station Transformation Project in New York, the $1.4 billion I-535 Platnick Bridge Project in Minnesota, and the $1 billion I-69 ORX Section 2 project connecting Indiana and Kentucky. In addition to these billion-dollar-plus projects, we have an even firmer opportunity that is on the near-term horizon. We expect to add approximately $1 billion to backlog by second quarter of next year for the finished trade scope of work for Phase 1 of the Midtown bus terminal in New York City. Recall that we were awarded the first part of phase one of the bus terminal project last quarter for an announced value of $1.87 billion. We also continue to have significant Indo-Pacific opportunities, largely driven by the federal government's specific deterrence initiative. Black Construction, our Guam-based subsidiary, has had tremendous success in winning various new projects throughout the region and continues to be well positioned to capture additional major projects over the coming years. We remain highly selective as to what opportunities we will pursue with a continued focus on bidding projects with favorable contractual terms, limited competition, and higher margins. We're pursuing projects that will highlight TutorPrinti's differentiated approach, depth of operational talent, and history of outstanding project execution. Based on our outstanding performance to date and strong confidence in the results we expect to deliver for the fourth quarter, we are raising our guidance for the third consecutive quarter. Our adjusted EPS for 2025 is now expected to be in the range of $4 to $4.20, up from our previous guidance of $3.65 to $3.95. Importantly, the outlook for TutorPrinting remains very positive beyond 2025. We still anticipate that our adjusted EPS in 26 and 27 will be significantly higher than the upper end of our increased guidance for 2025, and we expect strong operating cash flow for the rest of this year and beyond. Finally, I will reiterate and expand a bit on what we have said earlier this year regarding the broader macro environment. We still do not anticipate that tariffs will have a significant impact on our business. We also do not currently foresee the risk of any of our major projects and backlog being canceled, delayed, defunded, or otherwise materially impacted by the administration's targeted funding cuts or by the recent federal government shutdown, including our work on the first phase of the California High-Speed Rail project or any of our projects in New York. We have had discussions with our customers, and they have confirmed that our projects are funded and authorized, and they are not expected to be adversely impacted. So for us, it continues to be business as usual at this time on all of our major projects. Thank you, and with that, I will turn the call over to Ryan to discuss the details of our third quarter results.