Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to MasTec's Fourth Quarter 2022 Earnings Conference Call initially broadcast on Friday, February 24, 2023.

Let me remind participants that today's call is being recorded.

And at this time, I'd like to turn the call over to our host, Marc Lewis, MasTec's Vice President of Investor Relations. Marc?

Marc Lewis

Thanks. everyone. morning, Good fourth MasTec's call. Welcome quarter to earnings following for forward-looking is Reform of pursuant Private made harbor safe Act the to XXXX. statements Litigation The Securities statement described the in we results, plans anticipated forward-looking communications, In operate. that where the and certain regarding future statements trends are these MasTec such make industries as we in statements

subsequent does initial this from conference on call, forward-looking the expectations or implied company's expectations of These events to in on the these the this prove or differ risks, broadcast or company not actual Various statements are day undertake update significantly of our results may expressed uncertainties the any should knowledge. and incorrect, underlying based communication. results materialize assumptions of

metrics yesterday's schedules. In and supporting release reconciled in today's management, adjusted remarks from press we'll be financial discussing

use found our In website. measure non-GAAP the non-GAAP that the most measure addition, reconciliation press on earnings in comparable these to can financial or financial A call. release be this the comments in may found GAAP certain earnings be we release conference an of earlier not in reconciled measures can

today, and us and by Financial have With will call CFO, George our remarks of financial by be 'XX incoming from format Dimarco. the Chief Paul The Officer; review Vice Executive opening Jose Pita, our followed CEO; analysis we President Mas, Jose, George.

a another for things the and George Today, good Paul had call outlook our discussions the These about at retires lot XX when and about. to of of be talk a we end question-and-answer executive, minutes. we'll followed CFO, to period, expect financial our XXXX. longtime incoming by important quarter will March, give Dimarco, We last a

Jose? turn to Jose. ahead it go and I'll So over

Jose Mas

XXXX welcome call. Thanks, to and fourth Good year-end Marc. and quarter morning, MasTec's

to sacrifices hard as Today, I'll like us quarter and work MasTec. we Their achieve the another women the as be markets our full my and strong serve. well and I'd today men fourth and start by of year. for results outlook providing XXXX thanking year reviewing helped

men providing and the the safety, value. able great-quality and because our results our deliver people's honored lead I'm in and these privileged MasTec great to it's we've to our of environmental recognized and of of honesty been that women great group. stewardship, customers, have and by integrity, customers a work are These The at project committed success. such a to continued and for position best traits been financial growth ourselves values

was adjusted adjusted $XXX $X Now Fourth Revenue XX% $X.XX. quarter was billion, year-over-year some EPS EBITDA was fourth quarter fourth and quarter increase. highlights. a million,

XXXX XXXX $X.XX. a was year, revenue was $XXX adjusted year-over-year earnings year share million, full $X.X XX% was per increase; million; the XXXX For adjusted and EBITDA full

for really our was While how highlight our future. our results XXXX, met we for the for year MasTec position expectations the

transformative position delivered believe most and further and MasTec to Over a effort in diversify robust months, be we've our the in ourselves XX we of a dynamic nation. industries the leader last to some

a our of Just years business Gas MasTec coming two from XXXX, XX% revenue ago, nearly with and business. pipeline was $X that Oil short billion in revenue

in have of to XXXX EBITDA EBITDA business Gas XX% Oil pipeline improved, XX% While business year. under the the long-term our this represented segment in XXXX, XX% prospects from only revenues company total of and of went and

much the a delivered more We years. two recurring have on creating over and model last diversified

are growth we continue strong of its be a and what come has with to effort sets for challenges, our is incredibly for well the will positioned of business. While we believe opportunities period

and in million in accomplishments. of some from and I our I'd on like have transmission our on to been believe over XXXX revenues electric XXXX. billion increased $X.X have key presence focused growing to market $XXX highlight the electrical We in what distribution grid our

clean significantly $X.X now billion energy we've XXXX acquisition approximately and end versus in the expect revenue to of in of Clean the our increased market $X at space the of year, and billion this XXXX. in IEA Infrastructure share Through Energy our segment

grow delivered delivered revenues predictable diversification created with double-digit segment again, XXXX Communications rate. recurring a strong and Our XXXX growth we've at on growing XX% and full believe revenue We've a to, expected year more model. and

For our Gas $XX.X a XXXX to are $X.X segments now of XX% years. example, expected X.Xx and in our from billion three XXXX, having in XXXX, in generate revenue in increase non-Oil to almost gone billion

business. basis Gas infrastructure last of XXXX improving we've from two XXX basis declining delivery begun basis the by and basis and power over XXX points potential first points. improving over the Margins points, earnings over quarters, our demonstrate XXX to second clean XXX XXX Over to Oil the points, the basis offset with improving points communications of half improved and half energy

Backlog is XXXX levels, provided and as XXXX year-over-year record up guidance And guidance XX% very at on visibility over release. is to a revenue finally, we result, strong. yesterday's

to $X.XX and and improvement billion, diversification a its room our We from billion is while come levels. the for from record there a range XXXX, proud years. expect of guidance, to XXXX challenges. expansion tremendous our big revenue both billion of and coming improvement $XX it's with sets $X.X of over Again, further know And EBITDA has we're we

Oil with similar XX%. slight with to of growth Assumptions margins include Gas of in Communications approximately margins revenue revenue XX%, improvement guidance, segment XXXX. growth and segment XX% a to about about in

we And completion of expected in our is guidance that not high capabilities. to to range. approximate believe our levels transmission is EBITDA billion the Energy This year's and we we Again, increase ramp into full Infrastructure margins strong. year as mid-to to visibility revenue expected and the continue XX%, very last to is does Mountain guidance our X% Power Valley Clean expect pipeline. be revenue $X the with margins organically roughly include delivery

I'd industry Now like some to specifics. cover

demand million, increased growth for revenue revenue strong year We our levels, XX% our Communications record is full was of major and the coming we will the Our continue over and with a years. enjoyed increase opportunities increasing increase broad-based in continue invest to year-over-year expect for $XXX this the at quarter XX%. as in customers. and customer we to all segment Backlog capabilities

the of networks to the funding The transform related for demand Opportunity current and industry impact of continues seeing the While amount to Internet meet Rural grants XG the usage. Fund, increase. communications ecosystem, the exponentially upgraded be to requiring revolution RDOF, ever-increasing to the we're are expanded to available going federal Digital and to data

and new and power. fiber Not millions only existing must including be small and to connected, towers, new equipment must cell be added microcells built also of

points maintenance significant maintenance long-term of be to presence need will built, they not service, creating these All and ongoing a new only require of but opportunity.

last million million segment. quarter. in Delivery to $XXX year's Moving fourth versus our $XXX Power was Revenue

exceeded year, represented the revenue and of full XX% For billion nearly $X.X MasTec revenue.

on the in transforming energy meeting reliability, of of in midst charging our are providing grid. hardening, to customers power transition and renewable are the the United States for and vehicle connectivity We challenges customers' an electric focus the

and mostly developers. our focused of off to over growth the the been in years throughout able the and along history performance have of With needs believe we energy current we our We assets efforts organization. our a improvements scale integration of on of the driving complete, margin significant on base uniquely two helping to safety, role achieve, and with utilities our now meet are us play last position acquired

growing resources and long-term near-and and equipment. significant in business to transmission heavily opportunities have have related investing We our been

just the quarter. Infrastructure Moving and Clean, segment. over was to $X.X billion for fourth Revenue our Energy

results $XXX for quarter in revenue Our about fourth included million IEA.

year, For was the $X.X segment full revenue billion.

have include pro basis, you $X.X the would forma full a If billion on IEA revenue been for approximately year.

issues. supply reminder, impacted the chain renewables and solar circumvention by revenue As was XXXX a

the revenue market our of and we While delays billion includes in roughly XXXX reality guidance a exceeds assumes demand far Guidance certain that. project guidance. the XX% have a relative conservative project view that of growth, in assumed to $X is level starts,

on our we Act, this the demand for and that the confident interactions any the through Inflation not Inflation segment strong, Reduction chain impact incentives Reduction future with the ease, for will part, Act. increase. in Demand services with governmental customers, our the issues significantly for as coupled most from available the services are inclusive supply incredibly of our is Based

enhances this in first related our in family, power part IEA MasTec. renewable with the It points and transitions to MasTec an of quarter to presence for continues carbon-neutral a believe make IEA's as ongoing like the both energy those grow excellent and contractor. the fit highlight While just we ESG market to believe transformation of an is what to economy. the we are country energy roots our as key profile generation renewable that union our I completed I'd delivery strategic

nonunion union and markets While renewables in business been expanded exclusively the an MasTec renewable construction our IEA had states. company,

years customers union it in these importantly, with to allows our to services cross growing last in distribution the sell complementary and presence. transmission the More two same investments we've made us

us scale And IEA thousands the added IEA safety. significantly scarce, so to the on family is an more roots labor MasTec our serve team management and generational type culture skilled deep finally, emphasis efficiently led where giving with business the excellent ability increasing customers. our a family, in market a team an to with by In of strong members is and

Our cultures are similar and complementary.

great MasTec growth future improvement. for believe with We are support, opportunities margin there and

despite last Oil Moving Margins and solid year the the remained was significant drop. $X.X to versus $X.X billion revenue our segment. year. billion Gas Revenue for

year on We of the of to projects. year this pandemic difficult expected as be full was the impact the XXXX a first

XXXX, With that significant vocal burning seen uptick pre-pandemic been we Up projects backlog. for still we've the 'XX and 'XX. XXXX, until for were off some said, about we've

addition gas, In and to intensified. capacity projects for natural capture hydrogen have activity levels carbon both projects takeaway for

assumes reflected to to in continues XXXX that and in revenue Valley guidance, that we delayed. versus XX% approximately expect XXXX, Mountain the As increase pipeline in be segment the

a XXXX early are that We expect summer of 'XX. in and have to further number off and kick larger projects in expected growth

last a transitioned we we've presence recap, Today, second performance as a truly of some half markets economy. incredibly growth MasTec proud I the in a most two glimpse of transformed of of over in company. years. XXXX To offers I'm the our resilient enjoy our believe our how potential and significant

customers work to to like honored good of transition bandwidth our men with carbon-neutral their Keep women a thank and their MasTec are we I'd need up customers, helping and for economy. and supporting as their sacrifices. commitment to the work. and again, hard safety, for energy the We our communications work to, the

has MasTec of nearly team, retiring, and today and call. the ethic. work today is the George, to I'd my be and of years, George MasTec sacrifices thank wouldn't like He's family school high Wish many my missed, for to is been teacher, where he dedication MasTec family. give XX without shout be George know, my entire the myself, I'd and my the embarrass made been significant last as his for he is Delilah, knows all turning of wife behalf appreciated. she which Delilah out be to to best and On his greatly will partner Before you and like it was over behalf earnings a not call will of his of to but him. friend. part always He George, MasTec, on also you

George?

George Pita

Thanks, Jose.

Before decade. we status, revenue and Mas acknowledge the XXX Fortune We've XXXX for investment-grade I future get $XX to in grown and on earned profile the approximately be Bob over Jose, annual billion incredible billion didn't from started great than if position transformational MasTec remiss rating take less achieved M&A $X with Jorge I this past to and a an opportunity completed in opportunities. me thank XXXX, moment Apple, to Board providing would results,

I since the door high school to to future support It book my I to wife guess retire, MasTec's sharing here, a forward pictures. participate after Jose years, highlight as Young starting called planning career professional complete and and I the been on And really of on look the opened Mas, are in this a the my work shareholder. I growth process and has with

of of done who man, one the to something been had she So the class bidder. over if a together an do know line, there's before. the was But last my had a period allowing wife describe any seriousness, words mentioning him student, publishers evening President, to we're that I Jose our open I never is visionary. until used decade. And on rally, all remember convinced pep In as MasTec the didn't highest young here

if be Jose or at describe near you think would I were today, that the to top term of still list. the

the fourth of some of results, and things Paul more and the more our the story our XXXX will financial cover stay the I cover expectations. the same. I'll guidance So change, they is, quarter annual highlights Today, moral XXXX guess

first-time filing SOP material XXXX on controls we yesterday's As week, XX-K underwent general at which are press we Form anticipate noted in release, IT next that planning controls controls, XXXX. acquired operations, we may weakness identification internal primarily report our of evaluation XXXX in to related and a in

any procedures or will have multiple result and not results. in identified matter XXXX issues this We financial to and our completed substandard change no errors

we integration, implementation transformational end internal combination reminder, during undertook completed XXXX, for in activities including the a market XXXX, and As significant streamline incremental acquisitions controls. of

take we continue to and certainly We remediation during issues and of seriously, XXXX. deficient internal any expect control complete controls

Fourth XXXX adjusted highlights. line with our with $X million. to some billion results quarter revenue generally Turning were guidance approximating $XXX EBITDA approximating and expectation, in

adjusted X% diluted million share, $X.XX costs. include approximately $X.X lower or adjusted primarily per higher XXXX with $X.XX share partially of $XXX our quarter, revenue. the billion above to quarter of Fourth by per revenue expense earnings due income were results interest tax in offset Annual XXXX of guidance EBITDA

including transition headwinds, services on material began challenging well a delays chain project we also as permitting significant As our governmental during challenges. anti-circumvention issues, market with energy by operations, exacerbated end supply navigating in as and shift we previously several emphasizing a while wage panels, investigation solar have implementing inflation discussed, XXXX,

of a reference, year-over-year market the As to segment generated offset $XXX adjusted and decline, XXXX adjusted by only XX% was $XXX Oil and significance operations operation XXXX, million EBITDA. shift the in of EBITDA of this XXXX. Gas To highlight point our Oil EBITDA and significance non-Oil to approximately in was experienced operations largely further in segment a compared of Gas end segment demonstrate from adjusted segment which increased XX% Gas million and shift, our

an second half first first XXXX trends, consolidated revenue $X.X XXXX improvement Both consolidated highlight half the important revenue the half fourth namely, of adjusted of of strong with XXXX. XXXX, billion quarter And billion second our $X.X half during in to of and at compared showed half margin to business improving results to year. revenue with X.X% EBITDA X.X% the developing second results compared

non-Oil we fourth half a reflect growth Paul As segments, XXXX. expanding similar in more operations. second detail, trend second Gas in will expect and and in half, cover results segment Gas first offsetting Oil decreased XXXX quarter Both half and

were the Gas with are year quarter the quarter increasing fourth increased XXXX non-Oil adjusted segment results fourth Oil Importantly, the segment Gas XX% in and in last decline approximately quarter results to exceeded consolidated over EBITDA time first adjusted fourth $XXX EBITDA million. and of

billion record future billion of backlog. We this business our that XXXX of earnings backlog, of reflects approximately performance sequentially approximately MasTec's the growing this believe multiple demonstrates ended backlog potential demand excluding IDA with And future profile. expected services for $X.X segments. $XX We strong acquired across

This under As a clarification point, policies $X.X IEA backlog, as of our includes year-end contracts XXXX, verbal at is MasTec billion. being months. XX no and only and only signed reported reflects thus, approximately awards

entity any year-end manner apples that way, previously as public reported So the another pre-acquisition approximately oranges. reported amounts the are at would reported to same backlog backlog IEA it XXXX. than comparisons company, by Stated pre-acquisition higher and XXXX in the have stand-alone XX% been backlog year-end IEA

XXXX, XXXX than XX% no master of from spend, our This revenue and revenue our diversification derived during recurring, annual revenue stream, total Turning revenue is total on strategic represented over service our derived customer the of significant nature to utility, the Based mix. our greatly repeatable business increases of from primarily year. which agreements, profile. revenue, our the XX% of increase exceeded services a prior more

finished a fourth approximately IEA billion During in during XXXX acquisition the debt and $XXX acquisition. of We net assumed $X.XX of adding in debt. the billion acquisition the of quarter IEA, reduction XXXX, financing quarter $X.X completed the net approximately we following debt, with million

expectation. was with cash million the $XXX XXXX at reduction from IEA While expectation, below our our our generally approximately was transaction debt levels line operations, approximately flow year-end in $XXX million, post and showed strong annual

this payments than made flow GAAP amounts majority operating cash of acquisition, required transfers There shortfall fourth cash outlays expenditures control to the under credit rather of in with of due initiate and acquisition including rules letter of commitments. among which, fees, connection cash as is banking other the to accounting part items, price. to advisory and IEA legal of shown quarter be as MasTec the are IEA change And and

$X.X liquidity billion. XXXX, we year-end had ample of approximately At

or were in range well Our days with mid-XXs. within managed anticipated sales receivables of outstanding year of our DSO days XX

capital the sheet of As committed maintaining our of the balance to indicated strong at and rating. IEA supportive appropriate we time structure remain we a management acquisition, investment-grade

coupled overall an metrics adjusted course flow in reduction XXXX. our over levels improved of We and expect debt significantly of XXXX will EBITDA through a improve with investments, from capital cash leverage performance, and the expenditures moderated levels operations strategic

I'd MasTec long-time Paul over, call the over turn to baton am say I in a how thrilled to pass Dimarco. like colleague Before to the capable very I

with as role and Paul, exceptional him of congratulations. result, his had a I this to MasTec, to was strong to we that began as me joined combination company And I it critical he background prepare continually work capacity. moment. the an after within financial expanded over years, Shortly obvious the thinking for Paul,

and now, is the best. time Your wish I you

it Now over to I'll turn Paul.

Paul Dimarco

you, Thank good morning. and George,

financial To MasTec begin, to George I in work on been to been the at to for fortunate two to great putting years and and end Campbell. incredible I MasTec markets. their have mentors next legacy, look Jose leaders and XX I opportunities me, in They incredibly me Bob capitalize Board as CFO. trust our under by my key afforded their forward the thank following wanted helping have MasTec during both

revenue increase last communications Turning adjusted now was XX.X%. strong XXXX segment XX.X%. XXXX when second is a and was margin by our with billion, EBITDA performance XX% XXXX $X.X and characterized year, expectations. of $XXX million revenue segment to compared to half. Annual was EBITDA margin a performance adjusted Fourth and quarter Communications accelerating

margin approximate adjusted approximately will billion improve revenue segment to EBITDA XX%. and We anticipate that $X.X XXXX will Communications that

over second the revenue annual balanced EBITDA be half second more to with adjusted margins XX% approximating just total revenue contributing Within of XXXX and XX%. we half the anticipate expectation,

For This the quarter, grow over range. to expect the in XX% with to in XXXX, communication compares we X.X% adjusted quarter. setting margins approximately last first revenue first by mid-X% EBITDA year's

Fourth acquisition Energy XXX the and of over the Infrastructure almost segment quarter, Fourth million margin with EBITDA and years. IEA quarter. X%, quarter during Clean margin points highest revenue adjusted past segment's improvement revenue Energy two adjusted was contributing $XXX Clean, basis sequential was a billion $X.X the EBITDA performance

Annual EBITDA industrial XXXX close fourth billion, impacted revenue negatively segment by quarter to Energy EBITDA margin XXXX. out adjusted continued select adjusted said we to Clean X.X%. That was in approximately projects was that $X.X be expect

we Clean high to segment adjusted approximately of half comprise and $X margin mid- the timing XXXX, revenue billion of total. of revenue XX% approximately seasonality, to XXXX to improve Energy on range. typical expect For project anticipate EBITDA and second and we the will Based annual X%

half margin in the to range. second half mid- high And single-digit over first improve should XXXX the EBITDA adjusted and be

is Clean quarter, to first expect adjusted Energy the For impacted seasonally rate This levels. margin single-digit revenue $XXX approximately EBITDA we by a with low revenue margin. million lower

some million and the panel adjusted pro XXXX. million It's negative for continued industrial jobs forma $XX been to XXXX margin quarter -- of adjusted a delays. first continued $XX X%. EBITDA have of important impact quarter basis, On that the from IEA recall solar would delivery EBITDA reported first negative select also Energy Clean

Fourth Gas will revenue improvement reflects adjusted million, our As be XX.X%. quarter segment a XXXX and first quarter with year-over-year. EBITDA first expectation $XXX levels similar, was quarter of margin Oil strong

was of EBITDA XXXX XX.X%. $X.X margin Gas adjusted with approximately Oil segment revenue and billion, Annual

compared a mid-teens. XXXX. performance in to will anticipate and in and strong with $X.X represented the Gas EBITDA adjusted growth adjusted We both decrease approximate XXXX billion significant segment While expected, revenue Oil when margins show EBITDA this and revenue

the second mid- EBITDA expected second growth expect with XX% margins of to Based total annual in and second this the adjusted occur half revenue half half year start-ups, to on approximately teens. of the high in the project we

quarter, last first pipeline starts the digits, expected 'XX. For in adjusted lower to as in is to the year be revenue later margins with similar to year-over-year EBITDA invest we mid-single project

segment in adjusted X.X%. X.X%. and EBITDA adjusted XXXX investments EBITDA EBITDA new Annual quarter project Power was revenue starts segment margin Fourth Delivery project margin was adjusted million $X.X some margin impacted Delivery approximately Power of quarter Fourth adverse was and was revenue with by billion closeouts. $XXX

Delivery XXXX of expect approximately billion We with adjusted to Power segment approximately annual $X margins EBITDA X%. revenue

First quarter revenue year-over-year. XX% approximately is expected to decline

momentum program This revenue certain to considerably to expected quarter EBITDA adjusted margins XXXX, Similar into and services storm-related startups, to delay to to stronger First a half in adjusted second in and EBITDA XXXX. exit and X%. acquired margin second margin performance the in has been slower in we the certain approximate decline which continuing is quarter, a underperforming reduction activity, sequentially due strong are date. of rationalization the expect with contracts

to of half in second double adjusted low productivity year. margins with power the EBITDA also reach utilization half the Power XXXX. revenue third of the and digits quarter as Delivery is expected the Revenue course over approximately the should through of second improve delivery crude XX% ramp coming

for segment are are million costs to $XX XXX reported $XX points of basis expected segment approximately to in revenue Corporate million XXXX. to Investments of XX expected adjusted approximate generate to EBITDA. consolidated our Other

process, our While in early Energy $XX acquisition the approximately the million of we the course is that we over will to expenses incur XXXX. million integration of estimate $XX of are Clean initial integration stages

our Turning now consolidated announced to yesterday. guidance

in of $X.X in $XXX and billion; million quarter of adjusted per As our expected of comments loss an $X.XX. revenue a of adjusted share some diluted expect slow revenue; for start with EBITDA or the time, public messaging first we've we X.X% been

in This accentuated investments segments exiting ramp previously expectation and quarter, slow acquired contracts of the the with and combination includes costs normally various by for a delays, coming chain first associated the underperforming services. supply certain mentioned

of the as of half for cadence XXXX, first should percentage year, half a total the levels. approximate XXXX and In second terms revenue,

disruptions continue experienced will effect half XXXX. that half expansion the chain do We supply we have growth quarter improvement negative the projects we the we This of XXXX. EBITDA in expect as foresee second second exceed should achieved to in margin adjusted the 'XX strong not second sequential select into of that in and margin industrial

during margins point adjusted and second this expect to EBITDA half majority come improvement expansion we of indicates a the XXXX. XX basis to the guidance full in year of Our XX

projecting XX% billion XXXX ranging diluted revenue EBITDA are For our we to $X.XX and share Adjusted over guidance, annual $X.XX. billion. adjusted of approximately is $XX billion, range expected $X.XX per increase with and XXXX a earnings between between $X.X

XXXX's and improvement represent a non-Oil of mark of segments. the strong forecasts all levels Gas and These results and EBITDA over revenue adjusted record for

to further this MasTec's demonstrates importantly, generation. transformation more and earnings diversified More sustainable

Now I'd some briefly for like to cover details purposes. modeling additional guidance

We approximately expect million cash XXXX generation, operations adjusted XXXX. despite generate of revenue will EBITDA, from capital year Xs the should our growth to course to that the to drive $XXX working end in in of flow coupled growth over the significant allow with investment. reduce us anticipated by This of leverage cash the low

rating, are George grade As additional We we be leases. million to anticipate $XXX and to continue investment maintaining approximate manage in CapEx our incurred structure an XXXX committed accordingly. to with cash $XXX we'll capital million net to mentioned, our finance under

higher of down reflects course We expect by rates. offset to expectation over pay $XXX to continuation annual This $XXX of million approximate XXXX million. the interest our debt expense interest 'XX, a to

actively monitor our capital the will We opportunities adjust rate and interest profile. to markets maturity for

basic issued is estimate includes count will diluted the shares. million XX.X annual IEA XXXX connection with QX quarter share loss share not shares, utilize This XX Our acquisition. fourth for million shares of Remember, count the in number. fully a

range in we adjusted be XXXX will of low XXXX annual expect X% revenue. annual expect approximate depreciation lastly, that We the income XX%. And to tax

call turn the now operator for over the I'll to our concludes prepared back Q&A. This remarks.

Operator

that our and first we that of comes We'll from rest from UBS. go queue Steven question assemble the while Instructions] [Operator Fisher to

Steven Fisher

morning and best and for good your all Thanks, wishes thanks George, help.

million cleared I bar below it So does a look seems to with a well the the of Jose, for ramp-up of year, QX, steep? guess, your pretty QX But that kind bit to better full year. guidance QX of the like for consensus, keeping EBITDA set which you $XXX the Paul, is part of for in kind first decks

Maybe give confidence you most year hitting that full something evidence of and us in pieces for that ramp-up the like - can gives So opportunities you that for track XXXX? you guess I the that what that gives on the see you you're the confidence? important numbers and

Jose Mas

good so Steve. Sure, morning

to know written So I'd because like quarter a on the first of it. I lot notes guess, I first, been address there's

So break lot at the if of you you take, a of gave detail quarter, the on it if and kind call. you first look

Communications Our segment we loss first to it Energy you be in line, the if had Clean the quarter where account [ph] expected of in it and take take right? XXXX. Basically, you into

actually XXX deliver basis basis. point on on a the quarter about forma We're in going a pro improvement a first to relative year-over-year

XXX full the For year, point improvement. a expecting XXX we're to basis

if maintain plan beat actually going improvement that we're basis the through point year, So to actually can significantly we XXX our to relative that.

Our oil of just business, last issue and gas which in what are margins right, the QX, were year. of they is part half under

costs work quarter. that to we've whatsoever concerns no long I know lot these as is about larger has for preparing fact ability a unabsorbed with a getting that perform of we that there. And segment's to won. do revenue the jobs in have bunch there, second we're the We've projects that got of it's pushed and as that are and starting

them, probably more having than So just preparing quarter an first and for expected. we slow really unseasonably we're that's

a I $XXX impact there. for in section first We're And biggest to and previously less guess, of reasons. are going it's expectations QX bunch the million we up power stated the our than delivery expected of, what made the in of of see quarter, probably about revenue

activity. One of was lot of change seen them, we because mid-quarter, same time, we're at to could Paul but a which the haven't storm, alluded

decided to pressures into conservative a and what issue going some we after of to exiting some was a supply some also like. going then So a contracts look pushing very that's And at from put QX. year exit took I acquired to we're are chain the on had We on the those business. look storm think some project we entities revenue one which the ability particular had cost

a we in fabulous year XXXX. had So power I delivery in think

set think incredibly up I 'XX. we're well for

out So isn't I year, volume I laid levels. significant for hitting half's unfortunately, versus as about well the When QX of think it's in it the in a think first on the revenue stuff difference lot think versus half and cadence we that the second call, on in 'XX just lower we 'XX.

I and XX% QX Oil we're our second think revenue by in about in 'XX half. came that the talking being are and and second started projects the XX% of the Gas difference in is half, really in driven that

as increase pushed by is getting into projects know half of the clean we the wind and are start. going lot business And in to energy that solar the second a

Even got about on $X.X good $X basis. we've So, pro year. plan. billion in we forma We're a feel Energy, did We really a doing billion really achievable about think next it. Clean we talking

So I demand far I think think -- the it's is greater. again,

important I in as to contracts note the backlog that We full are it's do backlog only significantly business, the and as projects - is projects understated we signed probably and reported. book that lot a initially completed, is is start a projects are percentage of backlog. notice of a an with LNTP, the hits called limited something revenue. what very to which And small these which that's proceed, think

of already Clean when And you when So that you full think all I oil about happening think awarded. those as and with things, what's significantly what's Energy. projects increases happening go with think on these projects have production, backlog into about gas, been

quarter half we we're those next first all than to exit As second which going 'XX segments, were to strength different because really 'XX we're 'XX the to across quarter going year's significantly comparables with and be I think what have our and have in make easy. broad-based 'XX we 'XX of is going even saw leave first in and the to in going we

lead down excited road. pretty what that's about we're the going So to

Steven Fisher

what in Very you I just gets beyond $X.X think I Communications 'XX billion, connections call and knew your to billion wiring And $X follow-up concerns specifically between somewhere helpful. target, about the like on a 'XX I spending guess talked I'm from revenues is XG. wireless a quick is curious of 'XX market tower in near-term the maybe some 'XX the which of assume and on I peaking there kind you

you. you So pretty of do kind next RDOF, How guess -- if there's that what that Is level? fiber? a you you do more I solid to see shift how reconcile that? to the gets it Thank growth

Jose Mas

just to really The of just over it's A then XG really getting touching started lot an of with Steve, have and So both. are is time. the amount the say deployments initial you network enormous add industry capacity I'd deployment. wireless

the we're $XX cycle. side RDOF the think business, the on the which very wireline only XG what's I think you half really about funded, first in of When is got roughly of the early happening billion.

Those of business is have all last really The massive. the in $XX it's few had impact of over activity the billion in and space our years. all peers the has that the us that been seen

in of remaining and bill the the Act, got funds, is all the additional was federal other RDOF the we've government from which infrastructure $XX that money over billion Reduction of Inflation Aside spend.

market talking XX. I So you're of spend least another argue at could to effects we've billion federal of telecom that's the where seen hit going $XX only the

of potential understating is $X effect to think that only we going I multiplier a we're long-term $X.X do we're from I base And the business on if be So today, business. massive. think if -- billion think that can significantly that billion we

Steven Fisher

Thanks very much.

Jose Mas

Thanks Steve.

Operator

next comes question Thank our Citigroup. go from from ahead. Please Kaplowitz And Andy you.

Andy Kaplowitz

morning Good everyone.

Jose Mas

morning Andy. Good

Andy Kaplowitz

moving a helpful? getting guide George, at more they all assume your Could so, exactly lower with in thanks Henkel's you would And are Paul, all forward little they're out impacts to say Jose you color delivery Congratulations. storm in again help. know of going mentioned what's QX. for you what QX. past - that I working [indiscernible] I forward I I looking bit any on that? projects work, for but you because tail more power think would you be have

Jose Mas

really Yes, which we're is we no, things, impact. doing. think had rationalize an a I to think exit revenue on I don't it's what that's and the year after Andy, opportunity

to cost QX. more going that's only That's think of impact the impact. I

won't out going have of think QX, forward. that I we

had some We I large revenue the that one restarts. that have delivery quarter second early significant quarter, first the having quarter first hopefully is material end project of on by the impact think delays, pretty project which that a

a from feel we billion for built target utility. the So, utility our year. bottoms-up by really good $X that about We've

originally really with what we're is So, cadence than a it comfortable the of expected. metrics. little we Unfortunately, different the

Andy Kaplowitz

which Helpful. upstream guys, are wind beginning major customers to but customers assume the wind conference is when manufacturers, bit secure yesterday And you secure that from your your line suggested starting capacity then Jose from see movement you to capacity? get then still who to I Gee for would to are some in want

of beginning about see some more you ramp more you're to wind? next like us thinking color in could seems but renewables you're a couple ramp-up in significant what wind, give the on It over up years, of particularly

Jose Mas

projects we of In We're up we're the capabilities about completed. just we're with our When dramatic XX second booked a pretty much, going to in bigger we're activity. committing we're to much impact are that think deliver the half seeing at for take that into trying what really our to our of start 'XX we'll sure means increase you XXXX, this what point. going year, make Well, than projects 'XX. right? a that wind, If it means wind, to in the be

strong of be So is to relative to 'XX full the going strong second a 'XX is really year to wind. going half really a be year and growing.

going great relative what's wind in couple this we outer to pretty last it of second and we the expect ramp market. happen slow year. the of significantly It's about in So, years for to the half years, feel been the starting to

And solar is right? similar,

the We right? it's think year. supply get lot the year. significant Solar the many We're of there's the booked the so half itself. - a because resolving as we really had that going a thing, and -- is same solidly starts the improvement to think stop be of And we've second in we're in We into of issues. chain

multiply astonishing. when into it's in that 'XX, it you And means quite full what the for year

the exponentially the time. it's position year - that to going investments think incredibly I over us that's in we've grow I well, think last a I made think again, market So

a really, I hasn't really up great spot. our know in I numbers, us. we're we're for it but what think shown means it in about bullish

Andy Kaplowitz

Appreciate it Jose.

Jose Mas

Andy. Thanks

Operator

question from Please Jamie from Credit go you. Cook next Thank ahead. Suisse. our comes And

Jamie Cook

if year in back and delivery half morning. like it peers. starting for I said, the the at approach looks would margins question, Energy half the implied back the good to in power your guess my I Clean margins Hey you've look of first be and infrastructure, what given

-- XXXX, peers do in as as So should more business XXXX those that comparable exit going into a the, be path see I'm wondering you in we margins to think the double-digit the range? we

understanding in in question, go weighing Thank on And in on be then XXXX what we're acquisitions, we you that you. XXXX away terms that potentially cetera. my a of lot type But have the approaching et second as could making margins going 'XX? of are investments

Jose Mas

second points are about of about the year, let's half you this expectation so over second look If right? improve our points. to just is 'XX, half, over margins things, going of we it break out at Yes 'XX by Energy, couple basis XXX think that a so - and XXX our basis business, Jamie, by if Clean in in

of So to lot has - frankly, lot at business talked a had do we've wasn't under there of NASUM were our quite of we and about it absorbed our that to business, industrial a to impacts right? lot We a work. we - had because renewable relative

second think, level you relatively think again, conservative. actually to not year-over-year industrial, that's the XXX to we going take QX into a exist We're by that points, in the activity half XXX have that fact we're points. we you basis over is account in renewables basis, When to on and account beat going going of headwinds the take into with 'XX these basis

quarter. year seeing second improvement So versus in we're the we in half of moderating the actually have the the what first

So achievable. that's again, think very we

some in our delivery, when - be still about would we XXX look of And would of the power we 'XX Again, basis we a improvement. in it's half by opportunities both of peers. with those profile versus the businesses the quite year, the last there, second point at frankly, margin exist that In way, significantly below

are any of not. imagination, are the by these - we think they're optimal what for not margins, So stretch

people got margins, We've substantially, think these ability question, operate there down exists. We're to your improve. we're are work the right? 'XX, We're We we think segment time across 'XX. grow in. over in of that every revenue making, the in just that to continue making to lot not to a in some we investments but investments improve to driving last do continue going the to of to what And is

We have growth tremendous opportunities. revenue

of 'XX able It's embedded elevated about that, having to in level our further to us 'XX. place to 'XX, targets to ability about to the but prepare feel and achieve we're trying ourselves. execute for we those really targets our on in good prepare resources costs Again, be current and for in growth are

Jamie Cook

you. Thank

Jose Mas

Jamie. Thanks

Operator

Please from Riley. next ahead. you. B. Thank our And question from comes go Rygiel Alex

Alex Rygiel

quick good sensing can questions bit there. morning your nothing you, and George, Jose, telecom wish Thank a but the any of first, talk its you're by conservatism historically the Couple and and you new year?X here you best customers as whether start about sensitivity they economic

Jose Mas

to involved they're with resources right? tie them. find I I all the through a government So that's to of Alex, think of because the differences today, other. frankly, the solid question, that, available trying other off is overbuilding spending I federal are it's to of relatively in Every it's And think of great one a And each business all or our dollars, table customers historically, ways right? the think - the actually any major RDOF been one whether quite all bets But it's industry.

to seen anything going all their not a - meet anywhere. been in in to I recently position all trying in to I've to I to is networks. of announced I've venture demands have. build market be on that's going what's the They're struggle never slow out it's the is life. reality the going understand mean it. It's joint in been been footprint. my not of business that how The industry that going like expand to this one is kind I've down. of AT&T going it's to industry unprecedented. all that

revenue customers worried a something of I that we're just because customers we our from about not and from and very quite services. up delivering from business. our activity activity, for what And that's frankly, ultimately the level that that demand that, have a gear that's best profile can But we in where our the our we what do, for, understanding challenges we of the is basis, customers margin see level can lie, the of right, understanding mean, can right picking

Alex Rygiel

then be understand margin and oil oil the do of your sort target the opinion, And target with in margins EBITDA could Energy gas. think me, for and of But we Clean communications, in what - and Delivery EBITDA and over think gas in helpful. I for That's power same time? Power you range the excuse

Jose Mas

a a in made we've it's generated the to integration of the years, last Delivery, margin double-digit look question, XXXX. of So while a we big two at our lot we're that's have -- in acquisitions right? that Power the improve We profile. think So improve efforts points hundreds us in Again, are margin margins concluding. of those to When great business. a two definitely about We X% peer, basis closest our are there you businesses, do profile work above to of in still lot market.

I just And time that. We build think need to accomplish into is it. market there to the

think we over we're guiding think, margins margins be some again, some roughly money We've that So spending We've time. to to we're preparing got year. business time. the ultimately, we future improve some growth this growth X%. to those going to and money spend in - over We're got ability on for solid what improve to are

half in we But definitely a Energy, a solid second and next we're Clean double-digit that's growing. business of In X.X%, acceleration. roughly profile the really full EBITDA think targeting years, couple year with

guidance to So, was to is available if full here we think business a half full with for is us, the going be our about thinking that X% be range. in in what I which margin second trending year acceleration 'XX I sitting to more that roughly year, would

create the target and we will in also double-digit business X.X% a time, and I to expand And And I be to year. continues X% think a as first think somewhere could margin market that -- that's over achieve opportunities. our full between if probably

Alex Rygiel

you much. Thank very

Jose Mas

Alex. Thanks

Operator

Thank you.

Hauke from Robert Our Baird. go Justin next ahead. from question comes Please

Justin Hauke

first copy of we're think I just George. the guess, my don't great. high That's from I but we know questions, as Hi, great. it get the wondering years Yes, can when I advanced of if all Mas, an school counts Young one

Jose Mas

we'll… shut not there it's so Yes in

Justin Hauke

no. that, a serious look We on note. That's great to forward

the from industrial were margins in some Clean kind maybe confidence sounds Just thing those there the I maybe efforts to projects guess, in like on of portfolio? exiting that Energy the some discrete of took one with challenged you help it - is

maybe first And XQ to the how of the revenue the or I at year? from to the half some that's extent completion dragging the context percentage could zero or in know, Are of running of those you margin impact those kind understand that the in quantify having beginning are? or don't you're the maybe they just just on margin

George Pita

The no other complete that. this at that I'll at is there of majority that's margin, we're that Yes, happen industrial still doing. basically XXXX right? take going items this revenue to of projects and in the is George. some largely is level some mass are there but right, first complete, some you're of wrap-up point. them are The half is But

we revenues will that and be that in with coming much half year the are of not complete those and at zero, for in - at group. - the of quarter even So them, margin. first the of the less portion, second it's CE&I But the that revenue all maybe of smaller the profile will portion relatively small We're a in, it. be quarter end think the first substantially

Justin Hauke

little it's right you're some organic second first in some projects then, of guess organic I but delivery on But away kind that moved was my power in question, context number bookings because clean terms basis? thinking the I and it is guess down, surprised I from. a this year-over-year backlog, on guess seeing of of And with you've might of that what Henkels kind on Okay. of I of sized just maybe just the be I'm power the some just that delivery and McCoy

Jose Mas

what feel of end Yes, you're of to I in hard really bunch things about. it's think the in. we're see hit at to now, quarter to big when what the bookings. really middle 'XX 'XX versus going think look right we really good and in it's strong seasonal, Obviously to exactly 'XX going going I is But predict We're bookings. a we see of it's

with really marketplace. you're in that numbers results the good the We our the near ultimately that customers. been going to resonated see with think has well. our that's with position the not I that about feel our set we think opportunity we acquisitions but made in And backlog, business and the of up created in So competitive as future, in just show legacy

Justin Hauke

you thank guys. Great,

Jose Mas

Sure.

Operator

Thank you. And Noelle our Please Stifel. from from next comes ahead. go question Dilts

Noelle Dilts

Hi guys, congratulations. thanks George, and

it maybe times. I kind have excess And So little seems some growth you you and when the and a of some like clean for might in like for might of mentioned example, it future bit think - capacity segments gas businesses feels oil a the investing today? energy, like, you've about few

do investing these better Is can it of things But that making bit some for you're more front-end you're services? Thanks. a us about how a think you in? of detail? little it in we Like the some give equipment? Is investments feel

Jose Mas

Yes, they're different for each business.

mean in in levels, a projects we're the second So if that you I place on the think gas, know we we about of oil today, quarter. we based today's starting that and wouldn't have have bunch but workforce

yet we've there. best we're So holding is we quite today, a that the know absorbed got that bunch on labor, to to come frankly, because of under

When adding a what's So expanding that's on to holding new in is, think equipment we investments, ability that growth, happening current there. the expanding but normalized to. work there you we people, that's necessarily equipment have about fashion where about in because to to not opportunities is hold would put telecom subset and had people we people, markets, them at if for tremendous more revenue the opportunity all the on rates it's never

to and a do in that don't not trying just to continue We overexpose we're to where way to we resources have performing. grow ourselves thought-out our meaningfully

and continual continue. that's will So been

delivery on On a added transmission of there. business. tremendous that side opportunities people. we've the have the reinforcing of power side resources our the We've the been acquisitions We've made, with we lot

specialty We're add to starting some equipment.

investments frankly, through great the got what's we're more than books there. on making the Clean today. are base we've of kind quite significantly those So done a we've And people. of Energy, volume Historically, going

a new rates holding obviously, perspective, its or not coming. on in we because necessarily investments So I revenue huge think the we're, from equipment at we're know people but on people lower making wind,

either holding growing, new on So is then bit adding exponentially is market we by lot much because different And about to keep they're solar a trying They're communications. investments, that twofold. talk when or markets little penetrating We're a people to right? they're of And that be that of or on mix always there's the to our -- a come, in in of of and mix level a way, anticipation a there cost we're we of business. expect by business. in to revenues the

I in think, quarter, unseasonably today, especially first the high. it's

Noelle Dilts

little a then how XXXX? and more talk in on you side the look Okay questions, thinking wireline have perfect. That's about you bit you the year? about And growth as in relative if wireless out confidence or touched rates And other of helpful. the Alex but for and one a Steve you're can this their bit for

Jose Mas

is around funding think faster that federal building. today's because I everybody growing wireless in there's - today of is Well, business the wireline -- the much much world, than so business

a opportunities somewhat that activities there So lot more wireless are the dependent a house the fiber. on obviously of lot are side on of

So things do. certain fiber there until is are deployed, and can can't you

extremely fiber. been couple to do So going active have of With spend need has deploying wireless be in that of the of a lot more for wireline last carriers others versus because others active XG, over said, the while delayed than maybe the think bit. there's a been some related delayed we have to some years. T-Mobile a

spend maybe T-Mobile. bit expect this right? less see Verizon AT&T a to We So a bigger transition, with little we're much seeing and from year coming from

but different, there, are the there. over requirements to, years are nicely. And really it's grow the think So need time, is I think, we going the

Noelle Dilts

much. great, Okay, very you thank

Operator

And Davidson. Thielman you. question Thank Brent from from D.A. next our comes

Brent Thielman

a Clean into Jose, got wind the George, on wanted a congrats pieces It second sounds developing like seeing more comments and as and you're impressive well, thanks bit you've pretty moving the side. within some few understand 'XX and Hey for Energy career. good beyond? the half better to things I very backlog. Infrastructure encouraging

backlog impact that's material that sort segment bookings solar climb because I a just or in seen coming to I IEA of of accelerates? outside still market in largely you so way we've a think and been material yet guess that curious, your as seeing are step-up I'm the

Jose Mas

Right.

got part you. I and I the of lost the -- was last Was the wind, question. then heard it wind? So what I all

Brent Thielman

recovery of and material material that's a really and you've come? impact whether in seen curious whether to yet so a bookings speak, backlog wind function still up kind the market, a your also to this of I'm as step to

Jose Mas

Clean look, our And the you identified mean, Energy it's look is job fraction revenues. for if we revenues our at our backlog, every at 'XX, I and every where coming that a Yes when we've reality customer look from. of it's

we is is in energy of a that, limited dramatically number overall under of working LNTPs, So contract. again, clean understated small because the a It's notice which our think backlog proceed. very we're to a percentage

execution, those is be higher going into all went, today. If in. full contracts as you than it of actually would that contracts And play to those backlog - if go you're our dramatically see

'XX clean going to as that out. plays grow we our yes, considerably think So backlog is energy

Brent Thielman

Because doing the participate view a in future? guess of I terms on it Yes, it helpful. in wanting the like you're still there? the your projects, that's experience question, opportunity of seems I these does to on things mean And what second Jose, the change industrial huge

Jose Mas

project, working working about XXXX, going an we're lithium technologies project. to the and we're really looks, projects excited. interesting it are challenges. for government our When that we support. customers obviously, We've got recycling the talked think taken think I cost-plus had got that are our the last jobs on, relative We look funding large a incredibly we're similar plant that at we we've working newer get lot other very that which in unique a we're to We've is job that and of that's we've quarter. It's

that again, So that going I business But think incredible is as not about we well this take. And prudent we huge think that comparatively going And jobs contract speaking. we're an - to built we we're actually the take. be fairly being be to coming we've aggressive. cost, It's year if very The we're that, a resume. unfortunately. do structures to going

for be to a well get us projects we execute to as market will and timid bit think be but these it. better nice incredibly at probably we're at continue what's little growth look positioned because a we going happened, of that as and We're

Brent Thielman

good, very you thank Right

Operator

our from last Thompson, Thalhimer Davis. question you. Thank Adam And from comes

Adam Thalhimer

kind flow free And curious timing the and give shakes of there? also Hey morning guidance? good George guys. Did I to don't XXXX out you missed Paul, both. it. congratulations just if cash you how on I know

Paul Dimarco

Yes.

So cash of $XXX pieces, $XXX million we said from did million net of it of CapEx we in cash right? flow. So cash imply and would that free million operations $XXX

Adam Thalhimer

little Okay. XXXX? And the into And shed then just maybe can is you're insight on maybe side? pipeline bidding Jose, outlook a what you what the seeing beyond

Jose Mas

starts there's to there we're bunch of think in what I do right? of 'XX, at projects kind already gotten, that a we've won number this are look, 'XX think going as So point. Well, I out a we've projects of for

and on I what what 'XX. today plan. fall but 'XX we we for is want So the think that 'XX is built it's are into how things based 'XX, our of opportunity And going there's and bigger kind to definitely coming, know we

XX% expected numbers, higher. is we've is to to over MVP the considerably over 'XX at in again, go and we're the but that two comfortable still So think project roughly that, feeling least come I is next the more in these course, the more going 'XX MVP 'XX, opportunity but ultimately got, for growth wildcard. change could all potentially and conclusion years.

Adam Thalhimer

guys. thanks Okay,

Jose Mas

Thanks Adam.

Operator

Mas. turn very over it I'd CEO, much. Jose like our you Thank back to to

Jose Mas

and of talent over he's he's closing Dimarco, time has our for his great leading with Paul Paul. long before you MasTec on call, for demonstrated would to forward and the organization Paul I'll joining career first I And know lot again and ideas, our this like just financial be updating opportunity MasTec. to you a I'm to look thank that take so out call. been congrats, I excited all in congratulate his a we us, So quarter

Operator

conclude Thank participation, today's wonderful you. a and We appreciate conference. your and Ladies day. that gentlemen, does have

MasTec (MTZ) 24 Feb 232022 Q4 Earnings call transcript