Earnings call transcript: MasTec Q2 2025 sees robust growth, stock dips

MasTec Inc. (MTZ) reported its Q2 2025 earnings, showcasing significant growth in revenue and operational performance. Despite these positive results, the company’s stock dipped by 1.05% in regular trading and an additional 1.59% in pre-market trading. The company’s revenue for the quarter reached $3.54 billion, marking a 20% year-over-year increase, while its adjusted EBITDA stood at $275 million. MasTec’s guidance revisions and strategic investments point to continued expansion in its core sectors.

Key Takeaways

• Q2 2025 revenue increased by 20% year-over-year to $3.54 billion.
• Adjusted EBITDA for the quarter was $275 million.
• Stock price declined by 1.05% in regular trading and 1.59% in pre-market.
• MasTec raised its 2025 revenue guidance to $13.9-$14.0 billion.
• Significant investments in communications and clean energy sectors.

Company Performance

MasTec’s Q2 2025 performance underscores its strong position in the infrastructure sector, with a substantial year-over-year revenue increase of 20%. The company has capitalized on robust demand across its core segments, particularly in communications, power delivery, and clean energy. The addition of nearly 4,000 new team members and investments in equipment and capacity have bolstered its operational capabilities.

Financial Highlights

• Revenue: $3.54 billion, up 20% YoY and 25% sequentially.
• Adjusted EBITDA: $275 million.
• 18-month backlog: $16.45 billion, a 23% YoY increase.
• Adjusted EPS guidance for 2025: $6.23-$6.44.

Market Reaction

Despite the positive earnings report, MasTec’s stock experienced a decline, closing down 1.05% at $217.84 in regular trading, with a further 1.59% drop in pre-market trading. This movement contrasts with the broader market trends and may reflect investor caution amid broader economic uncertainties.

Outlook & Guidance

MasTec raised its 2025 revenue guidance to between $13.9 billion and $14.0 billion, reflecting confidence in its growth trajectory. The company projects continued expansion in its pipeline, communications, and clean energy segments, with expectations of $15 billion+ revenue and over $8 EPS by 2026.

Executive Commentary

CEO José R. Mas emphasized the company’s strong demand and growth potential, stating, "We’re seeing significant acceleration across our business. Revenue is stronger than our initial guidance and demand is incredibly strong." He also highlighted the strategic focus on infrastructure buildouts, particularly in AI data center infrastructure and fiber deployment.

Risks and Challenges

• Supply chain disruptions could impact project timelines and costs.
• Policy uncertainties in the renewable energy sector may affect growth.
• Competitive pressures in the communications infrastructure market.
• Macroeconomic factors, including inflation and interest rates, could influence capital investments.

Q&A

During the earnings call, analysts inquired about the potential for the pipeline business to return to $3.5 billion revenue levels and the outlook for the communications and clean energy segments. Executives confirmed a strong outlook and addressed potential impacts of recent legislative changes on operations.

Full transcript - MasTec Inc (MTZ) Q2 2025:

Speaker 3: Thank you for standing by and welcome to MasTec’s second quarter 2025 financial results conference call. Today’s call is being recorded. I’d like to turn the call over to Chris Mecray, Vice President of Investor Relations.

Chris Mecray, Vice President of Investor Relations, MasTec: Good morning everybody and thank you for joining us for MasTec’s second quarter 2025 financial results conference call. Joining me today are José R. Mas, Chief Executive Officer, and Paul Dimarco, Chief Financial Officer. We’ve prepared slides to supplement our remarks, which are posted on MasTec’s website under the Investors tab and through the webcast link. There’s also a companion document with information and analytics on 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 José.

José R. Mas, Chief Executive Officer, MasTec: Thank you. Good morning and welcome to MasTec’s 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 to 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 2020 at record levels of backlog. We are increasing revenue guidance to a range of $13.9 billion 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 $1.13 billion to $1.16 billion, 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 and 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 rightsize resources in our pipeline segment and shed 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 and 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. MasTec’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 buildouts and by federal investment.

Middle mile broadband buildouts 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 MasTec. 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 the 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, given 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 MasTec, 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 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 Mountain Valley Pipeline 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 the 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 baseload 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 MasTec 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 MasTec 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 Dimarco, Chief Financial Officer, MasTec: Paul thank you Jose and good morning. As Jose mentioned, we are very pleased that our second quarter results exceeded guidance, coming in large part from strong sequential volume development and continued solid execution. We remain highly confident in our business positioning today and into the years ahead, and this is true across all of our end markets. Given solid demand drivers that will require significant investment in infrastructure for years to come, this is the case regardless of which technologies are favored and whether financing mechanisms include government incentives. Our customers are clear they need us to fulfill plans that include major projects across the spectrum of markets we serve. Let me start with some quarterly highlights. Second quarter revenue was well above expectations at $3.54 billion, a new quarterly record with 20% growth year over year and 25% growth sequentially from the first quarter.

Adjusted EBITDA of $275 million met our forecast. Three of our four segments beat volume expectations in the period, while the standout performance in profit and margins came from clean energy and infrastructure. Eighteen-month backlog at quarter end totaled $16.45 billion, an increase of 4% from the first quarter and 23% year over year. This represents another record level of total backlog for MasTec, with the growth led by an 11% increase recorded at CEI that included continued strong bookings in the renewables portfolio, which is fully booked for the current year and continues to build momentum for 2026 and beyond. We generated cash flow from operations of $6 million in the second quarter and $84 million year to date, with DSOs at 65 days, a one day improvement from the first quarter, both in line with our expectations.

Our strong second quarter revenue growth with consistent DSOs drove higher working capital investment in the quarter. Free cash flow for Q2 was a use of $45 million versus a source of $253 million in the prior year quarter. The variance was driven mainly by higher working capital investment versus last year as well as somewhat higher capital expenditures as we accelerated certain capital investments for growth. You may recall in 2024 we saw DSOs decrease from 79 days in Q1 to 69 days for Q2, allowing us to reduce working capital last year, whereas this year did not have the same benefit with DSOs remaining consistent in the mid-60s. We completed $40 million of share repurchases in the second quarter and extinguished our prior remaining authorization, bringing the year to date total to $77 million at an average price of $110 per share.

Also in the second quarter, our Board authorized an additional $250 million repurchase program. Regarding some highlights from second quarter segment performance, our communications segment produced quite significant top and bottom line growth with revenue easily exceeding our forecast for the period and benefiting from continued strong demand in both wireless and wireline businesses from a diverse set of customers across the telecom and tech landscape. The adjusted EBITDA margin of 90 basis points year over year was generally in line with guidance, inclusive of certain program expenditures ahead of expected growth that held back margin performance. Second quarter adjusted EBITDA margin was 9.9% compared with 9% in the prior year and increased significantly from 6.9% in the first quarter as volumes ramped positively. Overall end market strength remains strong and second quarter backlog increased 2% or $102 million. Despite the record segment revenue in the.

Quarter.

Power delivery continues to see substantial growth across the country, and we exceeded our quarterly revenue forecast by close to $50 million, producing 20% growth year over year. Adjusted EBITDA was generally in line with our forecast. Power delivery backlog increased slightly, as solid bookings were partially offset by the record quarterly revenue earned in Q2. We continue to see significant new bookings opportunities as we look forward for the balance of the year and anticipate structural growth for this business for years to come, given the anticipated electricity demand and system upgrade requirements for our utility clients.

In.

Clean energy and infrastructure, we saw continued improvement in Q2 adjusted EBITDA margin, which increased 230 basis points year over year. Our renewables business was a strong contributor to the CE&I margin performance, with the benefit of some impacts from project closeouts in the quarter. We continue to see strong performance in the second half from operating leverage with higher volume and continued focus on strong execution. Our guidance assumes margins hold at similar levels to Q2 in the second half of the year. On CE&I backlog, we saw solid bookings from all three business verticals contributing to the 11% sequential increase. This included almost $200 million of renewables backlog growth.

Despite the noise in the period from the One Big Beautiful Bill legislation, these new project additions continue to build our book for future years and reinforce the sentiment among our customers that their projects are essential, driven by strong offtake demand. We remain highly optimistic about the sector, driven by the fundamental cost competitiveness of renewable energy and the limited availability of near-term alternatives for new power generation. Regarding pipeline infrastructure, our revenue result in the quarter beat our expectations by nearly $65 million on strong project development driven by a host of smaller and medium-sized projects. Adjusted EBITDA margin for the quarter was in line with expectations, with an 11.5% margin versus guidance of low double digits, but we did see less flow through from the incremental revenue due to the investments made to support future growth.

The year over year comparison remained challenged by the Mountain Valley Pipeline project completion in the first half of last year, and we now expect that we will revert to growth beginning in the third quarter to complement ongoing sequential growth after the lower first quarter volume. Result pipeline backlog development was more muted versus the large increase reported in the first quarter, but we continue to see solid new awards totaling over $450 million in the period, and the backlog did not include certain project verbal awards. As José R. Mas mentioned, we continue to expect to bid on a number of larger projects in the second half of this year with a robust bid schedule that reflects strong sources of demand across multiple geographies and related to numerous major gas basins.

Domestic, the continued diversity of demand drivers related to LNG, export, domestic residential and commercial demand is leading to a clear resurgence of pipeline construction activity that we are seeing play out over multiple years to come. Last quarter I highlighted our focus on margin enhancement over time, particularly in our non-pipeline segments Communications, Power Delivery, and Clean Energy and Infrastructure. Collectively, these segments delivered an 8.5% adjusted EBITDA margin in the second quarter, a 100 basis point improvement year over year. We remain optimistic about continued progress in the second half of 2025 for these operations, including a solid increase sequentially in the third quarter with margins approaching double digits for the first time. This expected improvement is driven by operating leverage on higher volume and our continued focus on execution, productivity, and disciplined cost management.

Shifting to our updated consolidated guidance, I’d like to remind you that we posted a supplemental guidance document on our IR website and encourage you to review that for segment and other financial guidance details. We are now raising 2025 annual revenue guidance to range between $13.9 and $14 billion, with adjusted EBITDA ranging from $1.13 to $1.16 billion. Adjusted EBITDA performance is driven by almost 30% expected growth in our non-pipeline segments year over year. Adjusted EPS is forecasted to be $6.23 to $6.44, with the midpoint up 60% versus 2024. We expect Q3 revenue of $3.9 billion, adjusted EBITDA of $370 million, and adjusted EPS of $2.28.

We are increasing 2025 revenue estimates to account for the second quarter beat and the continued strong demand visibility, with significant year over year improvements in most segments, partially offset by the lower pipeline revenue recorded in the first half due to Mountain Valley Pipeline project runoff. On adjusted EBITDA margins, we expect second half year over year margin expansion for Communications and Power Delivery, offset by slightly lower second half margins year over year for pipeline and Clean Energy due to the investments we are making to support anticipated future growth. Similarly, we are raising our net cash capital expenditure guidance to $140 million as we procure additional equipment to support this growth. Also notable, we still do not see material impact from either tariffs or federal tax incentive changes from the recent One Big Beautiful Bill legislation in our 2025 outlook.

We have considered a measure of general macro uncertainty from the current policy and geopolitical environment as we discount risk in our forecast planning. Regarding cash flow and the balance sheet, we are increasing our expectation to $700 to $750 million of cash flow from operations for 2025, assuming DSOs average around the mid-60s for the balance of the year. We ended the quarter with total liquidity of approximately $2 billion and net leverage of 2.0x, which we expect to decrease in the back half of the year. In June, we successfully refinanced our credit facilities, resulting in extension of maturities and favorable adjustments to certain terms, covenants, and pricing. Our strong balance sheet and well-structured debt profile provide us significant financial flexibility to pursue a disciplined, return-focused capital allocation strategy.

Our top priority remains supporting our robust organic growth opportunities through investments in equipment and capacity expansion where we see compelling returns. We will also continue to evaluate opportunistic, accretive acquisitions that complement our existing service lines, consistent with our long-standing approach. In addition, we maintain a share repurchase authorization and will deploy capital to buybacks opportunistically. This completes our prepared remarks and I’ll now turn the call over to the operator for Q and A.

Speaker 3: Thank you. If you would like to ask a question at this time, please press the star key followed by the digit 1 on your telephone. Please ensure that the mute function on your telephone is switched off to allow your signal to reach our equipment. Again, please press star 1 to ask a question. We will pause for just a moment to allow everyone to signal. We will now take our first question from Steven Fisher from UBS. Please go ahead.

Thanks. Good morning. Just to follow up on the clean energy comments you made, just curious about what you experienced in terms of customer feedback and activity during the quarter as all the policy uncertainty played out. I know it sounds like you’re pretty well set on 2025, but did that change things around with any specific projects or what you might have already had booked for 2026, and how much actually do you have in your 2026 plan booked at the moment?

José R. Mas, Chief Executive Officer, MasTec: Good morning, Steve. I would say a couple things.

I’d say, you know, our customers so far have been unaffected. I think what everybody’s plans were for 2025 are ongoing. Quite frankly, what everybody’s plans were for 2026 are ongoing. The work that we booked, the success that we’ve had in bookings in both the first and the second quarter have nothing to do with the federal legislative process as it’s played out. I think it’s completely solidified our plan for 2025. It’s put us in an incredible position for 2026 where we would expect to further grow that piece of the business. At the end of the day, we’re really excited about what came out of the legislation. We think the One Big Beautiful Bill is a good bill for MasTec.

Obviously, we’ve got an executive order that we’re paying attention to, but we work for top tier developers and we think that they’re in the best position to really maintain their business over a really long cycle.

Okay, that’s helpful. In power delivery, just curious how you’re thinking about the timing of bookings here. I think José R. Mas said the coming periods. Could that mean still the second half of this year? What do you think are your focus projects here? Is it more on the very high voltage lines or substations or anything else or all the above?

We’re focused on all of the above.

I think we’ve made great progress in the business. If you look at our guidance, we’re guiding to grow just under 20% for the year. That’s virtually all organic. I think we’ve done a great job in that business of building off of what already was a good 2024. I think margin progression is happening in that business as we expected. We’re really excited about what the second half is going to bring for us in power delivery. We think our positioning in the market is fantastic. We expect to be a player on big projects as we go forward, but also on the day-to-day business. The day-to-day business is really important for us. It’s the bulk of what we do. We’re constantly winning projects, we’re constantly getting more competitive. We’re talking a lot about margin expansion opportunities and what we’ve done to build margins.

If you think about where we’ve come in that business from just a few years ago in 2022, 2023, as we were very acquisitive in that business, I think we’ve made tremendous inroads in margin expansion and in really positioning in the market and we’re really excited about what’s going to come in that market for us.

Thank you very much.

Thanks, Steve.

Speaker 3: We will take our next question from Philip Shen from Rote Capital Partners, please go ahead.

Hey guys, thanks for taking the questions. First one is a follow up, José, on the, what are your expectations for how that could play out and maybe the different outcomes, and how are the Tier one customers positioned for those different outcomes? Thanks.

José R. Mas, Chief Executive Officer, MasTec: Sure.

I think a number of our customers today have a very large portfolio of safe harbor projects. The way that the legislation is written is, you know, through 2027, everybody keeps their credits. Beyond 2027, it’s what you have, safe harbor. There’s a lot of opportunities for people to further safe harbor projects all the way into the middle of 2026. There will be some changes in the executive order relative to that. We think they’ll be manageable and, more importantly, we think they’ll be manageable by the top tier developers. I think the work that we’ve done post the IA acquisition in terms of really focusing ourselves on the customers that we were working for, the relationships that we’re creating.

When you look at our customer base today in that industry, we think it’s best in class, it’s tier one, and we think those are the ones that are best positioned to take advantage of the opportunities that will exist to safe harbor. It literally puts your projects in play all the way to 2030. Obviously, there’s another election in 2028, so we’ll see what happens. We’re excited about, again, not just 2026. I have no doubt in my mind that this business is going to grow for us in 2026. I think it’ll grow beyond that and over time, and we said it in our prepared remarks, I actually think the market’s becoming a lot more competitive. When you look at the sources of power that exist, you’ve got nuclear, which is a ways out. You’ve got gas that will see significant increases in three to five years.

When you look at the price of that, renewables start getting really competitive even without subsidies. When you look at the rest of the world and what they’re able to build renewables at in a free market, it’s a low cost. It is a formidable form of power generation at a low cost, especially when you consider storage. We think the market’s going to be strong for a really, really long time, with or without federal incentives.

Great, thank you. You talked about how bookings have accelerated, I think for clean energy. I think in the back half that might continue. I was wondering if you could just kind of give a little bit more color post One Big Beautiful Bill, what the conversations were like with customers. Did you see really an aggressive kind of amount of activity in July, and do you expect that acceleration to sustain through Q3 and Q4, or do you think that kind of slows down as we get through the year? Thanks.

I would say not yet.

The bookings that we enjoyed in Q1 and Q2 had nothing to do with One Big Beautiful Bill. In Q1, we booked over $1 billion in new projects, which we were really excited about. I think we had a, I don’t remember, 1.4 times book-to-bill in that market. In Q1, we booked $1.6 billion in Q2, and I think that acceleration is critically important. I think we’re going to have a really strong second half of the year. I think we’re going to have a really good third quarter yet again. I would argue that none of that has to do with the bill. Depending on what happens with the executive order, there is a possibility in place that people work really hard to safe harbor and pull in a lot of work. We have not taken any of that into account in any of our thought process.

We don’t know. Obviously, that would be upside to MasTec and others in the industry, but we’ll keep working with our customers to see if that’s going to be required or not. Hopefully, it won’t be and people will work off their current safe harboring over the course of the next five or so years.

Great, thank you. One more if I may, as it relates to margin in terms of EBITDA margin, what are your latest thoughts on the overall trajectory in 2026 and 2027? Are double digit margins still on the table in the near to medium term? Thanks.

Yes, the question is from a. I’m.

Not sure if the question is from.

A total company perspective is specific to clean energy.

Total company.

Thanks. Yeah. From a total company perspective, look, we’re really bullish on every segment that we operate in. We’re seeing significant acceleration as we said. Obviously, the big driver to margins in our business is our pipeline segment. It’s historically been our highest margin business. We’re really bullish about what’s going to come there. I think, you know, when you look at our guidance for this year, we’re in that low 8% range. I don’t know that, you know, we’re not going to sit here today and talk about getting to double digits in 2026. Over the long term, that is our goal. We think we can achieve that. Obviously, it has a lot to do with the mix of our business. We think today, when we look at our outlook over the next few years, the mix potential of our business has never been better.

Great. Thanks for the questions, and I’ll pass it on.

Thank you.

Speaker 3: We will now move to Andy Kaplowitz from Citigroup. Please go ahead.

Good morning, everyone.

Paul Dimarco, Chief Financial Officer, MasTec: Morning, Andy.

Jose, you did raise your pipeline revenue forecast a bit, but as you said, backlog was down slightly sequentially. Could you give us a little more color on what you’re seeing? You mentioned, I think, some projects you expect to book shortly. Is it possible to quantify that? I know you’ve talked about revenue at least as big as in 2024 and 2026. Maybe you could update us on the potential of this cycle. Could it be comparable to pre-COVID levels?

Sure.

Thanks for the question, Andy.

José R. Mas, Chief Executive Officer, MasTec: A couple things I’d say, you.

Our pipeline business isn’t about this year, and quite frankly, it isn’t even about next year. We stand firm with what we said before, which is we think that our 2026 pipeline business will look a lot more like our 2024 pipeline business, which is a sizable increase from where we’ll be in 2025. Historically, it’s been our best performing business. It’s been our highest margin business. It peaked at about $3.5 billion of revenues. I think on our last call we said if the market plays out the way that we’re seeing, there’s potential to ultimately get there over time. We still feel that way. It’s somewhat remarkable that we’re even saying that based on where the business has been in the last couple of years. The level of activity that we’re seeing today is, in my mind, somewhat unprecedented. Not necessarily for 2026, but even beyond 2026.

We’re making significant investments today. We’re investing in people, we’re investing in equipment, and we’re preparing for what we think is going to be a really large cycle which we’ll see the beginning of in 2026.

Helpful. José, maybe a similar question in communication. There seems to be a ton of drivers there, whether it’s fiber to the home, but now fiber to the data center. I think the One Big Beautiful Bill helps with 100% bonus depreciation. Maybe you can talk about the durability and duration of this cycle as you see it today both in wireline and wireless.

Again, Andy, it’s been something that has somewhat caught us by surprise, the strength of the market. Our revenue guidance this year is north of 20% again, all organic. When you look at the first 2 quarters, we outpaced that. We’re bullish about, you know, not just, you know, this year, but what’s going to, quite frankly, happen in 2016 and beyond. We’ve got a number of new customers that keep coming to us with different plans, with different opportunities. We’re pricing a lot of things in that market. There’s no reason that we don’t think that next year is going to be another really strong growth year. Quite frankly, we think we’re at the beginning of the cycle there as well. There’s been a lot of talk about BEADs and BEAD hasn’t even shown up yet. We’ll see how that also impacts the market.

Today, the drivers of the business, that middle fiber expansion, which is being built to not only focus on data centers, but really all of the growth that we’re seeing across different industries, is really driving that business and we don’t expect that to end anytime soon.

Thanks, Jose.

Thanks, Andy.

Speaker 3: We will take our next question from Sangeeta Jain from KeyBanc Capital Markets. Please go ahead.

Hi, good morning.

Thanks for taking the questions.

Jose, if I can follow up with one more on the communications segment, can you talk specifically about MasTec split wireline versus wireless as you lap the Ericsson order, and as we talked about, all the fiber opportunities come up.

Sure. Historically, a wireless business for a long time was the biggest piece of the business. It’s not anymore. Our wireless business is probably roughly 40% of what we do. The balance is wireline. Wireline has a lot of growth. Our wireless business, though, we’re still really bullish on. The Ericsson project is really less than a year old. It really started in the second half of last year. We’re in the first year of what’s going to be a long multi-year cycle on that specific opportunity. We see tons of opportunities with other carriers on the wireless side based on what they’ve got planned in the coming years. We actually think that business will see significant growth opportunities within the entire communications sector. The wireline market is really, there’s as much demand as we’ve seen. That’s going to continue to grow for us. We think both sectors are strong.

Both sectors have tremendous growth opportunities over the coming years. While wireline is just bigger in total scope, we really like our position in both.

Thank you for that, José. If I can follow up on that itself, would you need to make investments on that wireline side similar to what you are doing in pipelines if the cycle does materialize the way?

It’s looking today, I think we’ve done it.

We talked a little bit about that.

José R. Mas, Chief Executive Officer, MasTec: On our first quarter call.

We also added people in that business in a sizable way in the second quarter. I think we’ve talked about ramping up for the demand. I think we’ve been in that circumstance now for multiple quarters. I actually think we’re pretty well positioned there. I don’t think that the level of investment on a go forward basis is going to be different than what it’s been in the last couple quarters. I think we’ll continue to build off that.

Speaker 3: Great. Appreciate that.

Thanks, Jose.

Thank you.

We will take our next question from Julian Dumoulin-Smith from Jefferies. Please go ahead.

Hey, good morning, team. Good morning, José. Thanks for the time. I appreciate it. Just maybe to kick off a little bit, let’s talk about margins here a little bit. Obviously, you’re talking about investing and reinvesting in the business in anticipation. What’s the timeline and cadence here of seeing that inflect in certain segments here? Obviously, as you said yourself, some of those may not necessarily fully translate in bookings or at least meaning revenue increases in 2026. How do you think about the cadence of that margin improvement through the cycle here? Secondly, to follow up on the pipeline commentary earlier, there’s some pretty mega projects contemplated here for the back half of the year. Obviously, given your market position, can we make presumptions about some of those large ones in your position therein? Just being aligned with those partners. Yeah.

I’d say a couple things. When we think about investments relative to margins, our backlog is way up, I mean, considerably up. Since the beginning of the year, it’s been across virtually all of our segments. We see what’s coming, we see what’s not in backlog, but we feel confident we’re going to win and thus the reason for the investment decisions that we’ve made. We’re really trying to get ahead of that. We’re really trying to be in a position so that when that work comes in we can hit it and execute on the highest margin that we can relative to that. We think that a lot of our investment will be captured in 2025 relative to what we’re going to need to take advantage of some of these growing markets.

Obviously there’s always a need for investment, but we think we’re doing a lot of that as we speak as it relates to pipeline. Look, we’re the largest pipeline builder in North America. We think we’re the best pipeline builder in North America, bar none. We’ve got the largest fleet, we’ve got great people. We think that for any owner that’s out there that’s interested in building a pipeline, there would be no reason not to contact MasTec and want MasTec on your project for lots of reasons. We think that that will play out in the marketplace.

Got it. Thank you. Just to clarify from earlier, the renewal timing obviously saw good progress here. How do you think about the timing of those projects getting pulled in? You made allusion to it earlier, but maybe to put a finer point on it, do you think that you actually see a shift forward into 2026 and 2027 specifically on the renewable business even within your existing backlog?

It depends on, not an existing backlog because our existing backlog is only 18 months. We wouldn’t have anything today in backlog for 2027. Regardless of where we stand with customers and our expectations for the work that we’ll do for them in 2027, I’d say that I don’t think customers are there yet. I think in a perfect world, customers have dozens of gigawatts of projects planned from now through 2030, and hopefully they can work that plan off in the process that they’re expecting. If something changes relative to the executive order and they have to accelerate that, we will definitely see a significant acceleration of the business, and then we’ll have to manage to that. I think that’s speculative, so I don’t really want to get into that.

I actually think that there’s going to be a reasonable way to safe harbor projects, and we won’t see significant acceleration across the industry, but time will tell.

Excellent guys. Thank you so much. Best of luck. Exciting times.

We’ll take our next question from Ati Modak from Goldman Sachs.

Hey guys, good morning. Jose, you mentioned a headcount increase on the pipeline side in particular. Can you talk about the capacity building targets there and how many large pipelines can you be working on at the same time? Is there a difference in utilization rate as we think of margins between the long haul lines and the connector lines?

Sure. The 4,000 number that we gave was company wide. Obviously, pipeline was a big part of that. We feel like we perform well on all types of projects, large and small. We’ve said that in the past. We think the margin opportunity and potential doesn’t necessarily vary by type, by size of project. Sometimes it does by contract structure. The cost plus world allows you a lower margin than if you’re doing units. We’ve predominantly done most of the units with some cost plus. We’ll see what that mix looks like in the future. In terms of scale, we would argue we’re underutilized at $2 billion. Our peak was, I don’t know, a couple years ago. We were doing $3.5 billion in sales in pipeline. We think that the opportunity for us to increase the level of productivity with the assets that we own is tremendous.

We don’t think from terms of scale and our ability to perform that there’ll be a lack of projects. For us, it’s going to be about who do we want to partner with, what customers do we want to work for, and how big and how quick do we want to scale that business over time.

Got it. On that note, I guess on the verbally awarded contracts that you were talking about, can you help us understand the nature of that between sort of connector lines or long haul lines? Is there a way to assess how much of the pipeline on average you are bidding for or you could be getting awards for?

In terms of the total market or of a specific.

Project for a long haul pipeline? I mean, are you bidding for the entire thing? Is it reasonable to expect you’re going to get the entire thing, or 40%, 50%, anything like that?

José R. Mas, Chief Executive Officer, MasTec: Yeah, look, it depends on the customer.

There are projects that we’ve done in their entirety. There are projects where we’ve done half a project, the majority of a project. It all depends on the customer, the size of project, the location, the risk tolerance. For us, we’ve got a lot of availability. We think the most flex in the marketplace relative to our ability to gear up for any project. We are going to responsibly try to be as strong as we can in that business and grow that business as quickly and as reasonably as we can at the margin profile that we’ve historically enjoyed.

Thank you. Appreciate that. Thank you.

Speaker 3: We’ll take our next question from Drew Chaberman from J.P. Morgan.

Yeah, good morning. Thank you for taking the questions. First of all, I just want to follow up on the pipeline margins here and obviously appreciate the investment that you’ve put into the business this quarter. Can you maybe talk a little bit about how much further investment you need to have in 2025 to be ready for the coming years? Also, maybe just touching a little bit, I know we’ve talked about the revenue volumes in the past being $3.5 billion, but also the margin profile then was also in the 20%. Right. I’m just wondering if you think about, you know, as that revenue ramps, do you think there’s any structural change in what the margin potential is here? I’m not talking about like what you’ve guided to, but how you think about the potential for that business.

Are there things that have changed, labor costs, you know, other input costs that might have necessarily changed to make you think differently about the margin profile.

José R. Mas, Chief Executive Officer, MasTec: In the long term, the answer is no.

There’s nothing structurally different if you look at, you know, even if you look at 2025, which I know we don’t want to focus on 2025, but if we look at the back half of 2025, our guidance profile on the margin side is way up. Right. We’ll be back to the mid teens in 2H2025 versus 1H2025. Again, you know, 2026 isn’t the peak year by any stretch of the imagination. I think the cycle starts in 2026. I think the performance in 2026 will obviously be better than the performance in 2025. Again, we’ve said approaching 2024 levels, but over time as the volume continues to increase, there is no reason why we shouldn’t be able to attain historical margin profiles. Again, we’ve always guided towards high to mid teens in that market. The opportunity to outperform that is there, but that’s based on execution.

No, we don’t think there’s anything structurally different that wouldn’t allow us, if we execute well, to achieve a similar level of margins as we’ve historically done.

Okay, thank you. A quick one on cash. Obviously, a big ramp here in the second half of the year in the implied guidance. Can you just maybe talk about what’s giving you confidence in that ramp? I appreciate you did it last year, so it’s clearly achievable. What’s giving you confidence this year? If there are a few points that make you worried about whether it’s achievable or not, or things that could be headwinds in the second half to cash, what would those be?

Paul Dimarco, Chief Financial Officer, MasTec: It’s really just timing of the sequential growth.

Right.

We had big sequential growth in Q2, and it’ll moderate as we go through Q3 and Q4 from the prior quarter. It’s just working capital. That’s the only working capital timing. Our DSOs in the low to mid-60s are where we think they’ll be structurally. We don’t have a benefit of reducing those any further. It’s just timing of investing for the various jobs.

Okay, great. Thank you both.

José R. Mas, Chief Executive Officer, MasTec: Thank you.

Speaker 3: We will now move to Jamie Cook from Truist Securities. Please go ahead.

Hi, good morning. Nice quarter, I guess, José. Obviously lots of, you know, growth opportunities ahead of you and you’re investing in your business. As you talked about increasing your labor, I’m wondering to what degree does that create a short term headwind, you know, as you think about margins, at least in the first part of 2026, you know what I mean? Just as we’re absorbing those costs and training people, et cetera. My second question, and I’m sorry if someone’s asked this, but there’s like five calls this morning. Just your thoughts, you know, on M&A. Your peers or your peer is making some pretty aggressive moves on the acquisition front. To what degree do you think you need to do more acquisitions to continue to, you know, enhance your competitive positioning? To what degree do you need to do acquisitions to ramp the labor growth?

Thank you.

Yes, a couple things. I’d say that when we look at the investments that we’re making, we think we’re absorbing those costs in 2025. We think we absorbed some of them in the second quarter, which was why we handily beat revenues, but didn’t necessarily have a lot of flow through on EBITDA. We’ve got a little bit of that in Q3 again, where we’ve guided revenues slightly higher but without a significant amount of flow through. We think that has to do with the investments. We actually think that starts to turn as early as the fourth quarter. We don’t expect there to be significant lingering impacts of that going into 2026, where we think we’ll be highly utilized across these investments that we’ve made. We’re, again, we think that’s a great story and really important as it relates to M&A and what we’ve said in the past.

Look, we were very acquisitive. In the 2022, 2023 timeframe, we talked about really focusing on the organic opportunities that are in front of us. That’s been our focus. When you look at our revenue growth this year, when you look at our earnings growth, when you look at our 60% EPS growth this year relative to last year, that’s been virtually all organic. I think that that was important for the organization at that moment in time. With some of the issues that we had with the integration of IEA, we think we’re through that. We think we’re in a very different position. To your question of do we need to do M&A, our answer is we do not need to do material.

When we look at 2026, we see, you know, we laid out a goal when we did the IEA acquisition in the summer of 2022 that we wanted to exceed $15 billion in revenue. We put a midterm target on that. Here we are three years later. I’m highly convinced that next year we’ll exceed $15 billion in revenue. In 2026, I think we’ll improve our EBITDA margins in 2026 versus 2025. When we look at our EPS, we think we can exceed $8 of EPS in 2026 versus where we’ve been. From a necessity point of view, no, to grow at double digits and to continue to grow earnings at double digits, we do not feel we need to do M&A. With that said, are there M&A opportunities out there that we’re intrigued by that we think could potentially help further grow the business? The answer is yes.

I think that as an organization we’re getting to a place where we’re more ready for it than we’ve been in the last couple years. Again, we’re not looking to do anything transformational. We think we’ve been really good at tuck-ins over time, so that’s where we’ll focus. As we kind of alluded to in our last call, I do think you can expect us to be more active in the M&A world on a go-forward basis.

Thank you.

We’ll take our next question. We will take our next question from Justin Hawkey from Robert W. Baird. Please go ahead.

Oh, great.

I think most of my questions have been answered. I just have one quick one. Just turning back to the communications segment. I think your previous guidance for the second half was that it would be kind of flattish, and now 3Q in particular, really strong, and I guess second half up high single digits, maybe close to 10%. Is that the data center fiber work that’s driving that, or what’s the change versus the previous outlook that it would be flattish here in the second half?

I think it’s the outperformance in the first half. Right. If you look at the first half again, we grew first half revenue versus last year in the comms businesses, up 38%, which is really impressive. I think that if anything, I’d argue we’re being a little conservative in the second half. I think it’s broad based. I think the wireless business is performing well, it’s strong. We’ve done a really good job of gearing up and preparing for some of the larger projects we had in that business. I think that’s showing in execution today.

José R. Mas, Chief Executive Officer, MasTec: We continue to see tons of wireline opportunities, new ones that we’re pricing.

Will have some impact towards the end of 2025, but quite frankly it’ll probably impact 2026 more. We continue to see activity. I think obviously the wireless build out started in 2H2025, so the 2025 second half comps are more difficult than the first half 2025. That’s part of the reason for the large variances in growth. Again, when we look at the cycle and what we think we can accomplish in this business over a longer period of time, we think high single to low double digit top line growth is very reasonable in this market for that segment.

Great.

That’s all I have. Thank you.

Thank you.

Speaker 3: We will now take our next question from Brian Grohe from Stifel. Please go ahead.

Yeah, thanks. Good morning everybody. Appreciate you squeezing us in here. Wanted to ask about power delivery margins. There was some discussion about project inefficiencies in the queue, and I think the press release as well. I think this is second quarter. You guys have talked about this. Any more color on what is driving these project inefficiencies? Is it related to Greenlink at all, and how should we be thinking about this potential headwind in the second half?

José R. Mas, Chief Executive Officer, MasTec: If you think about our second.

Half guide for margins and power delivery are double digits. We think we’ll achieve that in both quarters, third and fourth. I think it’s no different than the commentary we’ve put out in the past. I don’t think there’s anything significant to really highlight. In some areas I think we had some weather impacts. Geographically we had areas that really improved and areas that probably held us back a little bit. I do think there, you know, we said it in Q1, there’s some margin that we felt we left on the table there in the first half of the year. With that said, I mean we were still up, right, in both earnings and in revenue on a year over year basis. Revenue was up about 17% in the first half, year over year. EBITDA was up 10% in the first.

Half year over year.

It is not that we did not improve. Quite frankly, we thought we could have improved more, and I think we will start to show that in the second half of the year. Thanks. I will pass it on.

Speaker 3: We will take our next question from Brent Thielman from DA Davidson. Please go ahead.

Hey, thanks. Congrats on all the momentum here. Jose, just out of you got a lot of businesses that benefit indirectly from the AI data center build out. Maybe just refresh us on some of the things you’re doing more directly for data centers, kind of size it for us, and are you investing more in it and trying to scale that up?

José R. Mas, Chief Executive Officer, MasTec: The short answer is yes.

I think everything from we started in that world, we talked about it feels like a long time ago, but we really started that on the civil side of our business with our infrastructure business. I think it’s grown where we’re doing a lot of power associated work relative to data centers. We’re obviously doing a lot of telecom work related to data centers. Our business continues to grow there. It’s performing as expected or better. I think we’re probably more optimistic about the longer term opportunities of what we have in that market than we’ve ever been. I think over the next couple quarters, hopefully we’ll be able to talk more about what that is and what services we’re specifically trying to target.

Excellent. Thank you.

Thank you.

Speaker 3: We will take our next question from Neem Burke from B. Riley Securities.

Thank you. Good morning, José. Good morning, Paul.

Paul Dimarco, Chief Financial Officer, MasTec: Good morning, Liam.

Excuse me. Pipeline’s accelerating and you laid out all the reasons why. Is it just the challenge you have in front of you scaling the business, or has it been any change in the competitive front?

I mean, we’re not afraid of the competition. I think that, no, it’s a matter of there’s obviously been a huge sentiment change. If you would have asked our customers a year ago, the outlook was nowhere near what it is today. I think the election changed a lot. The reliance on natural gas in the future has changed a lot. It’s changed the business. Our customers are responding to that change, but it doesn’t happen overnight. Any of these projects, there’s obviously a lot of engineering planning. You have to order pipe, you have to work on routes and get permitting, and that’s happening. The level of activity that we’re seeing is incredible. We will get more than our share of that, we believe. It’s just a matter of timing. We see what’s coming in the second half of the year.

We’re excited about it, and we’re preparing for that. That’s what’s driving the business today and the investment decisions that we’re making today.

Great. Just real quickly, you mentioned this in your prepared comments, that nuclear is way out there. Are there any early discussions on any of the providers on getting you involved?

Look, it’s the beauty of our business, right? We evolve with every one of our markets. We evolve in the different technologies as they come up. Obviously, we’re paying really close attention to it. There’s no doubt in my mind that when the time comes that that becomes a growing source of generation, we will be engaged.

Great. Thank you, José.

Thank you.

Speaker 3: That will conclude today’s Q&A session. I would now like to turn the call back over to management for any additional or closing remarks.

Chris Mecray, Vice President of Investor Relations, MasTec: Thank you all for joining. This concludes today’s call.

Paul Dimarco, Chief Financial Officer, MasTec: Thanks for participating.

Chris Mecray, Vice President of Investor Relations, MasTec: Please visit our investor website for a replay and transcript of the call, which will be posted when available. Have a good day.

Speaker 3: Thank you. That concludes today’s call. Thanks for participating. As a reminder, please visit our investor website for a replay and a transcript of the call, which will be posted when available.

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