MasTec, Inc. Price & Performance (MTZ)

In addition, we may use certain non GAAP financial measures in this conference call. For reconciliation to any non GAAP financial measures not reconciled in these comments and most comparable GAAP financial measure, can be found in our earnings press release. Please note that we had two documents associated with today's webcast on the Investor Events and Presentations page of our website at mastec.com MasTec. There is a companion document information and analytics on the quarter just ended and a guidance summary for 25 to assist you in developing your financial models going forward. Both PDF files are available for download. With us today, we have Jose Masch, our CEO and Paul Demokkar, our EVP and Chief Financial Officer. The format of the call will be opening remarks and analysis by Jose followed by financial review for all of these discussions will be followed by Q and A period. And we expect the call to last about sixty minutes. We have another great quarter ahead of expectations and volume important things to talk about. Today. So I'll turn the call over to Jose. Good morning, and welcome to MasTec's twenty twenty four fourth quarter year end call. [indiscernible] I'll be reviewing our fourth quarter and full year results, as well as providing my outlook for 2025 and the markets we serve.

First, some fourth quarter highlights. Revenue was $3,400,000,000 dollars Fourth quarter adjusted EBITDA $271,000,000 a 20% year over year increase and fourth quarter adjusted EPS was $1.44 more than double last year's fourth quarter. 2024 revenue was $12,300,000,000 dollars 2024 adjusted EBITDA was $1,060,000,000 an almost 20% year over year increase 2024 full year adjusted earnings per share was $3.95 and full year cash flow from operations was 1,100,000,000.0 and net debt was reduced by over $700,000,000 for the year. In summary, fourth quarter performance was strong. For the quarter, revenue, EBITDA and EPS were all above guidance and backlog grew sequentially in every segment. I'd like to highlight that fourth quarter non pipeline revenue increased 21% year over year and fourth quarter non pipeline EBITDA improved 57% year over year.

Combined with solid third quarter results, We entered 2025 with great momentum. For full year 2025, we expect about 9% revenue and EBITDA growth but taking into account that we expect our pipe because of the completion of the Mountain Valley Pipeline, we expect our nine pipeline businesses to grow revenues 14% and EBITDA by over 25%. I'd like to repeat that. For 2025, we expect our non pipeline revenues to increase 14% and non pipeline EBITDA to grow over 25% That growth is supported by our backlog and strong customer demand. Couple that with an improving landscape in our gas pipeline business, and I believe MasTec has never been better positioned. Let me elaborate. I've had the privilege and honor of being MasTec's CEO now for just over seventeen years.

I've never seen the demand momentum and the number of opportunities for our collective business. I wanted to emphasize this today because over the last month, we've seen investor uncertainty related to announced like DeepSeq, or the concerns of political shifts related to our business. While we definitely need to understand potential disruptions to our business, and how any action may affect us, the overarching theme is the unprecedented level of demands on our communication, power delivery, generation, civil and pipeline infrastructure customers. In every segment we operate, our customers are facing increased demand for their services. More importantly, this isn't a bubble of short term demand. But a fundamental need to support our country's fastest growing industries. While our backlog today is at record levels, opportunities with our customers are accelerating Customers are talking about multiyear and decade long plans. As a result, MasTec MasTec invested in continually cultivating the industry's best talent with over 30 dedicated trading facilities throughout the country we are preparing the workforce of tomorrow. Now I'd like to cover some segment highlights. In our Communications segment, Fourth quarter revenues were up 28% over last year's fourth quarter. And also up sequentially even though the third quarter is usually our strongest.

EBITDA for this segment was up 67% versus last year's fourth quarter, Backlog was up sequentially and year over year backlog increased by nearly $400,000,000 We continue to enjoy strong demand in virtually every aspect of telecom infrastructure.

Our wireless business successfully started on its new contracts in the second half the year, with both growth in geography and services. Funding and build outs of broadband infrastructure is growing supported by federal investment. Middle mile activity and the demand created by hyperscalers is creating a new wave of long haul build out and we're seeing great optimism from our customers as there is a race to build fiber throughout the country. In our Power Delivery segment, fourth quarter revenues were up about 16% over last year's fourth quarter. That was the highest level of growth for any quarter compared to last year. We expect double digit revenue growth for this segment in 2025 with revenues for the segment increasing by over $500,000,000 While our customers have been planning for significant investments to the grid for years, there has been a lot of political focus on grid reliability. Terms like unleashing American energy and national energy emergency are top of mind in Washington. But more importantly, what is driving the need for investment isn't politics, but rather demands. Our customers are focused on meeting this increased demand and we expect significant opportunities related to the transmission grid [indiscernible] distribution and new generation, Backlog was up about $150,000,000 sequentially and up about $900,000,000 year over year for the segment.

We're excited about our opportunities for 2025 and beyond. In our pipeline segment, Fourth quarter revenue as expected was down both year over year and sequentially. Today, we provided revenue guidance of $1,800,000,000 for the segment versus the just over $2,100,000,000 we achieved this year. As we previously discussed, the completion of the Mountain Valley pipeline is impacting 2025 revenues as large project activity had slowed With that said, Today, there is significant optimism for the future on behalf of our customers. As gas fired generation enjoys a sort of renaissance the pipelines built to support that will have a meaningful impact on our business. We are increasingly bullish not only in potentially outperforming our guidance for 2025, but more importantly, we now expect revenues in 2026 and beyond to exceed 2024 levels. Finally, in our clean energy and infrastructure Fourth quarter revenue was the highest revenue quarter in this segment's history and EBITDA was also at record levels. Revenue was up 18% and EBITDA was up over 100% year over year for the quarter. Backlog was up sequentially by over $100,000,000 and book to bill was about 1.1. Considering this was the highest revenue quarter in segment history, we're both proud of this backlog growth but also bullish about what it means for 2025.

Backlog is up over 1,100,000,000.0 versus last year's fourth quarter. Our business is enjoying really strong demand And despite concern around the political landscape, we expect continued backlog growth for this segment in 2025. Our efforts around customer and project selection, and the effort we put around truly understanding project timing starts and risks has really started to pay off. We've significantly grown the scale of our execution teams and we are beginning to see the financial improvements of our collective efforts. In summary, we had an excellent fourth quarter While the financial metrics exceeded guidance, our biggest success both for the quarter and the year. Is how we position MasTec. We are on the front lines helping our customers modernize and rebuild America's infrastructure. The diversity of our business is our strength. For example, today, MasTec is connecting people and technologies through our communication business.

We're helping our country reach energy independence, We're modernizing the electrical grid. We're generating energy through renewable sources and building the associated energy storage. We're building the pipelines that will allow us to use our nation's significant supply of natural gas. We're on the front end of providing civil resources to data center developers and helping them meet their power and communication needs. We're building the roads and bridges that connect our communities. These skill sets and expertise provide MasTec with endless opportunities for future growth. 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 scope and complexity, and there is no question that our customers need strong partners. There is a lot to be excited about.

With that said, we also need to keep improving While our financial metrics in 2024 were much improved, We also have the ability to meaningfully improve margins.

That opportunity for improvement is actually what I'm most excited about. Our margin improvement opportunity [indiscernible] with strong revenue growth should lead to significant value creation for our stakeholders. I'm confident that the MasTec team will deliver I'd like to take this opportunity to thank the men and women of MasTec MasTec.

I'm honored and privileged to lead such a great group The men and women of MasTec are committed to the values of safety, environmental stewardship, integrity, Honesty, 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'll now turn the call over to Paul for our financial review. Thank you, Jose, and good morning, everyone. We reflect on 2024, we are proud of the meaningful progress made across several key initiatives that are critical to our long term success.

Over the past year, we have successfully advanced our acquisition integration efforts strengthened our balance sheet through debt reduction and capital structure improvements, and enhance the accuracy of our forecasting and guidance. Most importantly, we have delivered improved operational and financial performance. While our 2024 results mark an important step in the right direction, we firmly believe is still significant room to build on this momentum and generate even stronger results in the years ahead. We remain focused on executing our strategic priorities with discipline and look forward to sharing more details with you today. I'll start with some 2024 highlights.

Fourth quarter revenue was above expectations at $3,400,000,000 and adjusted EBITDA was $271,000,000 exceeding guidance by approximately $12,000,000 Clean Energy and Infrastructure drove the fourth quarter results $104,000,000 of EBITDA or 8.3% of revenue, exceeding guidance by 140 basis points. Adjusted earnings per share was $1.44 more than doubling year over year. 2024 full year revenue was $12,300,000,000 while adjusted EBITDA of $7,000,000,000 and adjusted earnings per share of $3.95 both exceeded our annual guidance expectations.

With annual adjusted EPS also doubling year over year.

Our fourth quarter cash flow from operations performance remained very strong at approximately $470,000,000 bringing the total for 2024 to 1,100,000,000.0 a Maastec MasTec.

DSO continued its positive trend.

Ending at sixty days for the quarter down from sixty eight days at the third quarter and seventy four days for the prior year. Net debt at year end is 1,800,000,000.0 down over $700,000,000 for the year.

Net leverage now stands at 1.8 times line with our financial policy. We have proactively engaged with the rating agencies expect their outlooks to be reevaluated in the near future to account for Maastec's strong performance.

Eighteen month backlog at year end totaled $14,300,000,000 an increase of over $400,000,000 sequentially and almost $2,000,000,000 year over year. This represents a record level for MasTec in all three non pipeline segments. The growth in backlog is even more impressive when you consider it came despite a record quarterly revenue level from Mazda collectively, and for our communications, power delivery and Clean Energy segment individually. We have very good visibility to support our 2025 outlook and dialogue with customers across all of our end markets continues to indicate strong demand into 2026 and beyond. Turning now to our segment performance and outlook. Fourth quarter communications revenue was $975,000,000 ahead of our estimates and up 20% year over year.

Adjusted EBITDA margin was 9.9% expanding two thirty basis points year over year. We continued the efficient transition into our expanded wireless territories and the pace of activity on wireline projects remains strong. Annual 2024 Communications segment revenue was $3,460,000,000 up 6% year over year with adjusted EBITDA margins expanding 70 basis points to 9.6%. [indiscernible] As disclosed in yesterday's press release, beginning in 2025, results related to certain utility operations previously reported in our Communications segment will be reported in Power Delivery, to better align with how we manage the business.

Our Communications segment guidance reflecting this realignment calls for annual revenue of $2,800,000,000 11% growth year over year with adjusted EBITDA margins in the low double digits. Compared to 8.7% for 2024. [indiscernible] revenue for the first quarter of twenty twenty five is expected to be $600,000,000 representing 19% growth year over year adjusted EBITDA margins of 6.5% to 7%. Increasing over 150 basis points from last year's first quarter.

We have provided recast quarterly and full year 2024 results reflecting the realigned segments in our guidance summary.

Fourth quarter Clean Energy and Infrastructure segment revenue was $1,260,000,000 18% growth year over year with adjusted EBITDA margins of 8.3% increasing 80 basis points from our strong third quarter and over three forty basis points year over year. Once again, we had strong performance across all three segment verticals, with Renewables, infrastructure and industrial all posting their highest margins of the year.

Full year segment revenue was approximately $4,100,000,000 with adjusted EBITDA margins of 6.3%. Up 200 basis points from 2023.

Backlog for the segment now stands at $4,200,000,000 up 36% year over year. Our revenue visibility continues to improve for this segment.

For 2025, we expect Clean Energy segment revenue to approximate $4,750,000,000 approximately 16% growth Adjusted EBITDA margins are expected to be approximately 7% Q1 revenue is expected to be $950,000,000 representing 26% growth year over year with adjusted EBITDA margins in the mid single digits two fifty to 300 basis points higher versus last year.

Fourth quarter pipeline infrastructure revenue was $30,000,000 with adjusted EBITDA margins of 13.6%. For the full year, revenue was $2,100,000,000 and adjusted EBITDA margins were 18.3%. Please note that we formally renamed this segment to better reflect the nature of our activity in the space.

But there were no changes in the segment's composition or historical results.

We anticipate 2025 pipeline infrastructure revenue to be dollars with adjusted EBITDA margins in the mid teens. The revenue reduction versus 2024 is driven by last year's completion of MVP and timing of upcoming projects.

Which we expect to start in the latter half of the year. First quarter revenue is forecasted at $325,000,000 with mid teens adjusted EBITDA margins. [indiscernible] if not all of the year over year revenue contraction should occur in the first half. Our customers planned project activity continues to improve both in terms of the number of new projects and timing of previously announced awards.

We expect a multiyear expansion cycle for this segment that we are uniquely positioned to capitalize on.

Fourth quarter Power Delivery segment Rev revenue was $762,000,000 and adjusted EBITDA margin was 7.1%, both in line with our expectations.

Annual 2024 Power Delivery segment revenue was approximately $2,700,000,000 with annual adjusted EBITDA margin of 7% Two important developments occurred in the fourth quarter. First, we began construction of the GreenLink transmission line which is moving along well.

Second, two Midwest utility clients resolved their rate case appeals and have indicated a path to increased capital expenditures in 2025. Our 2025 outlook incorporating the realigned utility operations previously reported in communications calls for revenue of $4,150,000,000 15% growth year over year and high single digit adjusted EBITDA margins 50 to 100 basis points higher than last year's 8.3%. First quarter revenue is expected to be $850,000,000 with adjusted EBITDA margin in the mid single digits.

The year is starting off at a slower production rate than previously anticipated due to severe winter weather in a number of markets. Pushing project activity into subsequent quarters.

Q1 should be the lowest margin quarter of the year.

Again, recast 2024 results for the revised segment can be found in the guidance summary.

From a consolidated perspective, we are projecting 2025 annual revenue of $13,450,000,000 with adjusted EBITDA ranging from $1,100,000,000 to $1,150,000,000 dollars Adjusted earnings per share is expected to range between $5.35 and $5.84 We expect Q1 revenue of $2,700,000,000 adjusted EBITDA of $160,000,000 and adjusted earnings per share of $0.34 Our 2025 expectations include the significant year over year improvements laid out for our non pipeline segments partially offset by the reduced outlook for pipeline activity. We expect to generate a approximately $700,000,000 of cash flow from operations in 2025. Assuming DSOs average in the mid-60s over the course of the year. At our current leverage, we have full flexibility around capital allocation and will continue to drive our decisions based on maximizing return on investment. Supporting organic growth will be a priority. Complemented by acquisitions and strategic investments.

Share repurchases will remain opportunistic I'll now turn the call over to the operator for Q and A. We'll go first to Jamie Cook with Truist.

Good morning and congratulations on a nice quarter, in particular the cash flow. I guess my first question think feel like I heard you say for the pipeline business that revenues in 2026 and beyond can exceed 2024 revenue levels. So can you just confirm that? And I guess what gives you that confidence? I thought that was interesting just because that's not in the consensus estimates that are out there. So just why so confident if that's true?

And and color around that? And then I guess my second question, just given the strong free cash flow and where your net leverage is Jose, how are we thinking about M and A just given the organic growth opportunity you have out there? Thank you.

Sure. Good morning, Jamie. Thank you for the questions. There's no question that we've seen a significant shift the mindset of our pipeline customers There is more optimism today than there's been in years. That's going to translate into a lot of projects coming in line that we didn't expect and that will create a lot of growth in We expect 2026 revenues to exceed 2024 revenues. Our pipeline segment and we think that trend is going to continue a number of years. The market is incredibly active right now and I think we're in an incredible position based on our history there and the fact that kind of stayed with it for a long time. So we feel great about our positioning there. On the M and A question, look, we never stopped looking. Obviously, we were in a very difficult position that was meaningful. Today, the organic growth opportunities in front of us are awesome. That is where we will focus first. We will look at potentially some tuck ins across the country to help us meet some of our goals and objectives quicker. So that's it's there, it's potentially there, but we are focused on organic growth first.

We'll go next to Sangeetha Jain. With KeyBanc Capital Markets.

Good morning. Thank you for taking my questions. So I was looking at your Clean Energy margins for the quarter and they've surprised us to the upside. I know 4Q can be tricky with weather, So wondering what you may have seen during the quarter, whether there were closeouts or is just structural improvement that you guys have been working on?

So thank you. The margins were driven by execution. I think going into the quarter, our internal projections were higher than what we put out in guidance. So, Obviously, the third quarter was a strong quarter. Hadn't had a quarter like that.

In a long time, so we didn't want to get ahead of ourselves in Q4. So think we built Q4 with a lot of conservatism. The team delivered what it said it was going to deliver and thus the margins were driven by execution in the business. I think that as we look at 2026, I'm sorry, as we look at 2025, we've modeled somewhat conservatively as well, right? We think we've got a lot of potential to be both in top line and bottom line. I think that's probably one of the areas that if we exceed our guidance, it's one of the areas where we probably have the most opportunity to do so. Great. And if I can ask one more on the Clean Energy segment. I know Jose you've been talking about RFAs out to data center type work. So can you give us an update on how that may have looked? And if there's any backlog that you ended up booking in the 4Q because your book to bill was again pretty strong?

Sure. We've got a significant number of opportunities out I'd say we probably did somewhere in the $200,000,000 plus range in data center activities for 2024. We expect that number to increase significantly in 2025, but but still not to the levels of what we ultimately think we can achieve. We're probably shooting for about a $300,000,000 number in '20 The opportunity there is multiples of that. And I think the bidding for that kind of supports it. It was not a big driver of the backlog growth in the fourth quarter.

Great. Thank you so much.

Thank you. We'll take our next question from Andy Kaplowitz with Citigroup.

Good morning, everyone. Nice quarter.

Hi, Andy. Good morning, Andy. Jose, you grew backlog sequentially as you said in all segments in Q4, which good to see and you obviously sound extremely confident in the environment moving forward. But do you think Mazda could continue to grow backlog in all segments in 2025? I know you said you'll grow in clean energy. Have you seen any change in the project environment markets such as renewables or any delays And did you incorporate a period of award lumpiness in your guidance at all? Andy, it's a good question and we've talked about lumpiness in backlog for a long time. We actually went back the last time that we had every segment in the company grow backlog was in the first quarter of twenty eighteen.

And subsequent to that, had two amazing years of growth in earnings. So I feel really really good about where we sit I know there's a lot of concern out there relative to especially renewables and what potentially could happen. The administration. We talk to our customers a lot about that.

And we are unbelievably optimistic. So So as I think about the end of twenty twenty five, I would expect every segment to have higher backlog than it has today.

I would love to be able to say that for every quarter, but again backlog is lumpy and you don't necessarily know when awards are coming in.

But generally, we expect backlog growth in every segment during 2025.

Helpful. And then could you give more color into the growth profile in communications? You've got communications upload double digit in '25. How much of that growth is call it your own self help with the new contracts Lumen, new wireless versus what the overall wireline and wireless market is growing at? And is there any beads of money that you're counting on in '25 at all?

So beads makes up a very, very small negligible piece of what we're thinking about for 2025. We do think that it will have significant impact in 2026 and beyond. Obviously, the contract with AT and T that we discussed the end of twenty twenty three, which kind of took effect in the second half of twenty twenty four, we saw that come through our numbers. In the second half of twenty twenty four. It's part of what drove our revenue and earnings beat.

With that said, we've been awarded a number of new contracts Obviously, we spoke about the Lumen one in the last quarter. There's a lot of other customers that were either in late negotiations with or projects that have actually been awarded, [indiscernible] A lot of that work quite frankly, we won't even start until the second half of twenty twenty five, I think What we're talking about $25,000,000 is a lot about what we've already announced. I think what's yet to come is the buildup into 2026. I expect 2026 to be a really good year. Another further year of growth. So we're really bullish about where we stand today, what the opportunities in that business are.

Just this week, there's a show called Metro Connect. It's one of the largest U. S. Digital infrastructure [indiscernible] conferences in the country. The level of optimism there was just incredible. There was a number of new entrants to the market All of our existing customers were there. And just the how upbeat and what they're seeing from fiber builds and the requirement of demand their customers are placing on them that will ultimately make it to us. It's just just a fantastic market. Thanks, Andy.

We'll go next to Justin Hocky with Robert W. Baird. Great. Yes, a lot of my questions is that been answered either through your prepared remarks or people have already asked about it. I just had one, obviously, cash flow was excellent here. As you guys have already talked about. The factoring in the quarter or the selling of receivables, the looks like you sold about $350,000,000 quarter over quarter. And I guess I was just curious if that's a headwind as we think about 2025 and maybe the economics on that decision because relative to your $700,000,000 guide for the year, it looks like that was that was kind of the factor here in 4Q.

So Justin, remember with the AR programs, you have to look at the amount that's outstanding. In the period. So in the quarter and the year had about $20,000,000 impact So it's really negligible So it's not a factor in the in the cash flow generation. The cash flow generation was driven by reduction in WIP from a as a day of sale outstanding and an increase in mobilization payments associated with with renewable and DOT projects. Those are really the drivers. [indiscernible] Okay, great. Thank you. I guess my other question was just now that you guys are naming the large transmission contractors, the Greenleaf contract, can you give the amount of backlog, eighteen month backlog attributed to that contract specifically?

Well, there wouldn't have been a change in the fourth quarter because that was prior to So it didn't really have a significant impact in the fourth quarter. [indiscernible] No, I know. I was just curious about the amount of it.

How much it is?

About the annual revenue contribution. So I think we said 3% to $500,000,000 annually and there's a year and a half of it. So I think that's a reasonable estimate.

Okay.

All right.

That does make up a significant portion of the $900,000,000 growth that we had from beginning of year to end of the year. So of the 900 you could assume about half of it came from that one project.

Thank you. We'll go next to Adam Thalhimer with Thomas Davis. Hey, good morning guys. Nice quarter, nice outlook. Jose, I wanted to zero in on your margin improvement commentary. I was curious what gives you the confidence there? Is it tight resources and industry pricing? Or is it more about process improvement that you can do internally? Think it's everything, right? If you look at the third quarter of 'twenty four, margin dollars improved 28% year over year in our non pipeline businesses. I think I think the way that we're trying to really play out the story is Obviously, our pipeline business has performed great. When the work is there, we performed great. Think everybody knows that. We've demonstrated that over a lot of years. I think the story about MasTec has always been how are the non pipeline businesses going to do? How are they going to grow both from a top line perspective how are they going to ultimately execute the margin profiles that we've laid out over the years. And that's been a theme for a long time. And I think in the third quarter of twenty twenty four, we started to demonstrate that. EBITDA grew in our non pipeline businesses by 28% in the third quarter.

That was a tall a tall order to try to beat in the fourth quarter and yet it grew again by 57% in the fourth quarter.

Which we're really proud of.

And if you fast forward to Q1, it's supposed to grow 47% year over year in the first quarter. So I think that the trends that we're showing financially are supporting that.

And it's a combination of everything, right? It's a combination of improved performance. It's a combination of growth in revenues. And we're with that said, with all that said, because I think it's great improvement we still have a ton of opportunity. And we know we've got the ability to continue to increase margins in all three of our non pipeline segments. And hopefully throughout 2025, we can execute on that. And demonstrate that. A long time ago, we laid out a path to get to $15,000,000,000 in revenue with double digit margins. That's our goal.

We feel a lot more confident about our goal today and our ability to do that. Over the next couple of years based on the performance that we've been able to deliver in the second half of 'twenty four. And we hope we can keep demonstrating that throughout 'twenty five.

Okay. And then had one more on the communications segment.

I was curious, what's the rough mix now between wireless and wireline And maybe you can just expand on the outlook for [indiscernible] Yes. I'd say our wireless business is just over $1,000,000,000 and with the new restated kind of numbers, our comps business will be $2,800,000,000 in 2025. So it's about 40% of our business and we've done a great job at growing the wireline side of that business over the last few years. It's obviously where a lot of the existing opportunities sit. Based on the fiber demand. With that said, I think there's a there's going to be a strong wireless cycle that's coming. It won't be in 2025, but we're really bullish about that in future years. Especially with increased investments by T Mobile and Verizon. So we think that the mix is probably permanently different than what it historically had been for a period of time our wireless business was bigger. With the demand in wireline, we expect it to be a bigger business for the foreseeable future. Thanks, Jose. Thanks Adam. We'll go next to Ati Mudak with Goldman Sachs. Hi, good morning team. Jose, you talked about the growth in the pipeline business.

So I was just curious if you can talk about the mix as well. It sounds like you're talking about the base business opportunity growing around gathering lines and maintenance maybe, but are you also [indiscernible] could potentially be incremental from the Permian?

Yes, that's what will drive our revenue up, right? I think if you think about our twenty twenty five year, a lot of it is MasTec business. It's kind of that's kind of the level that we've been talking about for a long time. We said $1,500,000,000 to $2,000,000,000 We obviously did better in 2024 because we had the one big project in Mountain Valley. I think we're back to a base level. There's no question that activity of larger lines is dramatically increasing. Even for our pipeline business, we've had five quarters of shrinking backlog quarter over quarter and this was the first quarter where we actually had an uptick in backlog again in five quarters. So we're excited about that. We think that throughout 2025, backlog will increase significantly in the business to support growth in 2026 and beyond. And again, we're seeing a ton of activity and our commentary is more towards larger projects than it is just growth in the base business.

That's super helpful. Thanks. And then on the power delivery side, I mean there's been some recent announcements for seven sixty five kV lines in the PJM market under a joint venture. Seems like it's a significant project. So I was just curious if you have any thoughts around your exposure to that project or those customers or the market there in general?

I would say as an overarching theme, one of things that I think that has been difficult to communicate or to get people to truly understand is the sheer size of what's going to happen in that market. Our transmission grid in this country is severely underinvested in. Are going to see a dramatic growth in transmission lines across the country out of every region. Our customers are talking about it a lot. Obviously, there's these projects take a long time to plan. I think that if there's anything that the the new administration can do, In terms of infrastructure, it's actually improving the timelines around transmission lines and I think they're hyper focused on it I think that will end up being one of the biggest opportunities for MasTec MasTec quite frankly its peers over the course of the next decade If there's a project out there we're chasing it, we're involved in, we think we're capable of doing any project in America. And we plan to compete for them.

Thank you, Jose.

Next to Brian Brophy with Stifel.

Yes. Thanks. Good morning, everybody. I guess just piggybacking off that last one. Can you guys talk about how much capacity you guys have to take on more work on the large transmission side outside of GreenLake here? Thanks.

What we've said over the last few quarters is we're ready to take on a second project, a second major project. We've been building towards that for a long time.

We're hopeful that during 2025, we'll be awarded another project where we can be working two large projects simultaneously in 2026. And once we get that under our belt, we're going to start working on trying to get our third large project project. That's helpful. And then Wanted to ask on pipeline margins. They were a little bit lower than we were expecting in the quarter. I guess, is there anything to call out there And then your pipeline guidance for 2025 assumes a little bit of decline from '24. I guess with MVP behind us now, I guess why wouldn't we expect margins to be a little bit better in that segment in '20 Sure.

So I'll start with the last part of the question. I mean, we're going from 2.1 to point $8,000,000,000 in revenue. Obviously, there's a fixed cost component of that that gets absorbed I think delivering we're guiding mid teen margins. I think that's a strong guide relative to the revenue drop With that said, I can't remember the last year we did not perform guidance relative to our pipeline business. So hopefully we get to do that again in 2025. When you look at the fourth quarter of twenty twenty four, there was actually a lot of weather impacts in a lot of the areas where we were active on the five had a lot of revenue that pushed out of '24 and some increased costs to finish some of the projects that we had to finish in 2024. So we're not worried about our margin capabilities and pipeline. If the works there, we're going to do really well. And the work is coming. So again, we're really bullish about what we'll deliver in that market.

Very helpful.

I'll pass it on.

Thank you. We'll go next to Brent Thielman with D. A. Davidson.

Hey, thanks. Good morning. Congrats Great quarter, great year. Jose, just on the 2025 growth outlook, I just wanted to pick your brain on where where else you might see kind of the most opportunity to outperform [indiscernible] pipeline, but if you could talk about the other segments that the stars align in terms of schedules, external noise, etcetera. I'd just be curious there. Sure, Brian.

We really tried to highlight what '25 looks like in a little bit of detail because when we sit there and we say 9% revenue growth for the full year, 9% margin growth for the full year, those aren't Those are decent numbers, but we're not jumping up and down about those numbers, right. But if you dissect the year, right, we're having we are having contraction in our pipeline business. I think it'll be it will be short lived, but it's what we're facing in 2025. So when we focus on the non pipeline businesses, our guidance is 14% revenue growth, 26% EBITDA growth. I mean, those are really impressive numbers, right? I don't and that's organic, right? That's not M and A and organic growth. That's organic growth of 1426% growth in earnings. Can we do better than that? The answer is yes, right? We talked about earlier that I actually think we've got a good opportunity if things play out. Obviously, there's some uncertainty in the market today and we've got to be cognizant of that. But I think that on the pipeline side, I think the year can be better than what we're saying. There's been a lot of activity here in the last four or five months since the administration changed.

There are a lot of projects trying to be pulled into 2024.

But there's challenges with that, right? And I think we've been really conservative as we've guided to that. We look at the non pipeline businesses, I think we took a very conservative view of what we see in renewables. I think we've got a really good opportunity to do better than what we're saying. When we look at our comms business and the acceleration of what we're seeing from our customers, we've taken, I'd say a realistic view, but it could be perceived as conservative relative to what's going to happen in the second half there with a lot of the new accounts that we've won.

And even in Power Delivery, right? I think we've taken a moderate view of GreenLink of what we can accomplish in year one.

So I feel really good about where we stand. We were in a difficult position in 2023 where we were used to hitting and beating guidance for many years and in 'twenty three we we had some challenges and kind of swore we didn't want to be there again. So as I look at our '25 plan, again, I'm not 14% revenue growth, 26% earnings growth in our non pipeline businesses, solid, but I do think we can do better and that's hopefully what we'll deliver in 2025.

Got it. Thanks, Jose. And then indication, I mean, you've got really nice momentum here. Wireless and wireline. And it seems like wireline for years to come, but could you talk about maybe the wireless side beyond 2025, the visibility you have, the confidence you have that that has some sustained strength beyond this year?

Sure. I think when you look at the industry as a whole, right, We've done really well with AT and T. Obviously, they're going through their Nokia Ericsson swap out. I mean, for all intents and purposes that just started, right?

So that is not a 25 opportunity that is a multiyear opportunity that's going to be bigger in 2026 than it is in 2025. You look at the other carriers, whether it's Verizon or T Mobile, I mean, everybody is so focused on fiber that the wireless market is relatively slowed down investments, right? That's going to come back There's no question because capacity is going to drive it. And when that happens, we're going to be there. We're actually really pleased with the fact that we've kind of been able to build the growth within the AT and T markets that we're supporting in an environment where everything else is in going crazy because it makes it more challenging.

So feel good about the increase in labor that we have, the growth across the different markets in terms of of our labor availability and the crews that we put together. And that's going to position us really well as Verizon and T Mobile start to spend again.

Thank you.

We'll go next to Abi Jaroslawis from Maastik MasTec. Good morning from UBS. [indiscernible] On the outlook for the pipeline segment, so I know you've spoken about some building momentum there. Do you feel like you have a line of sight to when we could see that business infect the growth Could that be sometime this year maybe early twenty twenty six or even later than that.

So the commentary around potentially beating is is obviously driven by timing, right? I think that you will see awards throughout 2025.

Those awards will primarily impact 2026, but could impact 2025. So I think that's we've guided to the 1.8 to the if we have success and some of those projects started a little bit earlier, we feel really good about our ability to beat that. If not, through backlog growth throughout 2025, you're going to get a really good sense of what we're going to achieve in 2026 and beyond.

Again, we fully expect 2026 to be at least at 2024 levels.

Okay, got it.

And then within the Renewables business, How far out are you booked there? And you hearing anything new from the customer base in terms of timing?

Permit related delays or timing shifts due to the policy uncertainty, but want to confirm that And also within the CEI segment, do you still need to book to hit the guide?

Yes. So the reality is that we are in an incredible position relative to backlog and revenue targets for '25 For clarity's sake, and I know we've said it in the past, but the only renewable business we have in backlog is project set have actually fully committed, so we're not waiting on things for those projects to start.

We have another category that we term that it's not backlog. We track those projects, but it's not in backlog.

So we feel really good about our 25 targets and where we sit on backlog growth to those We have a we're in the middle of a very active cycle of negotiations with customers We're feeling really optimistic about 26 currently. Obviously, there's a lot of noise out there. You had the the executive order on wind. So you've got a lot of talk about [indiscernible] Irrespective of those conversations and what might come out of that, we're still incredibly bullish about 2026 If those things end up resolving in a more positive way, then I think that optimism only grows So we feel great. We think '25 is going to be a great year. We've got a lot of bookings currently for '26. We've got a lot of projects that will convert to backlog that are for 2026 here in the near future. So our multiyear outlook in that business is really, really strong. Okay.

Great. Appreciate the time. Thank you.

Thank you.

So the next two Drew Chamberlain with JPMorgan.

Yes, good morning and thanks for taking the question. Just a follow-up on that last one. Are you guys hearing any pull forward from your customers as they kind of mull potential IRA changes or any other sort of policy changes? So maybe that some products that were once maybe slated a little bit later in the decade are pulling forward to '25, '26 timeframe?

Well, not '25 or '26. I don't think that that's really feasible, right?

There is talk about if you shorten the period of the IRA, right, that projects that were slated for the early 2030s would move into the late 2020s.

So could we see a significant increase in activity in 'twenty seven, 'twenty eight, 'twenty nine for people trying to get what would ultimately be a shorter timeframe in the IRA to to finish their projects potentially. I don't know that we're not seeing that in 2025 for sure. I don't know that we'll see that in 2026.

But depending on what happens with the legislation, is there an opportunity for 2027, 2028 and 2029 to be significantly bigger because of some pull forward of the RA. That's there is potential for that. There's conversations around that.

But at this point, Through the end of the decade, we see an unbelievably active environment Okay.

Thank you. And then just a quick one on the data center opportunity, are you seeing any bookings or any of that $300,000,000 in $2,025,000,000 dollars is going to be in power delivery or generation or [indiscernible] build outs or is it still all on the more of the heavy civil and more of the land preparation work?

Yes. So it's both, right? Because I mean, we obviously announced a large award with Lumen last quarter, which is data center driven. We're not not necessarily calling that out when we talk about data center revenue. So our data center revenue is more focused on data center sites. It could be power work, it could be civil work, but it's we're not not trying to take dollars associated with a third party customer For example, a big fiber network in fully attributed to data centers, we're really not doing that as we speak about the commentary. So but it's impacting all of our businesses, right? The reality is that data centers and AI are going to consume an enormous amount of both power and [indiscernible] fiber bandwidth that will have a very significant impact on our business irrespective of whatever we might do for a hyper scaler or a data center developer. And I think that's important. I know there's again, we know there's concerns out there and we know there's power concerns When you look at every single projection of what the incremental power usage is going to be, varies greatly right from low single digits to mid to high single digits on a yearly basis, just the real The reality of any of those numbers, right, is that the amount power that's going to be generated to help these industries over the next ten years is just it's absolutely incredible.

And you're at the low end of that spectrum or the high end of that spectrum, for us, it really doesn't matter because it's so much incremental growth that we should benefit from it. And again, I say that related to multiple businesses that we have, right? It's going to impact our civil business. It's going to impact our telecom business. It's going to impact our power business. It's going to impact our clean energy generation business. So we're just again, we just feel like we're in a great spot right now.

Thank you. Appreciate it.

At this time, there are no further questions. I'll turn the call back over to Jose for closing remarks.

Just want to thank everybody for participating today and we look forward to our first quarter call in a few months. So thank you for joining us.

This does conclude today's conference. We thank you for your participation.