MTZ - Earnings call 3 2023

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Operator

Welcome to MasTec's Third Quarter 2023 Earnings Conference Call initially broadcast on November 1, 2023.

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

At this time, I'd like to turn the conference over to Marc Lewis, MasTec's Vice President of Investor Relations. Marc?

J. Lewis

morning, good and Elaine, everyone. Thanks, third Welcome call. to MasTec's quarter pursuant safe the harbor following Securities statement forward-looking the made is XXXX. of in The for to statements Reform Act Litigation Private described regarding certain communications, these are as plans industries in we anticipated make where MasTec's In statements we results, future operate. may forward-looking, that such trends the and statements undertake expectations call, the initial broadcast the on forward-looking are and company or These the of knowledge. statements these the day company's to does event subsequent not this based expectations conference update on of

results Various risks, or are expressed results more detailed Should press prove should our in may of implied with in or actual our materialize or uncertainties filings the call. differ uncertainties and of significantly one risks assumptions releases assumptions any and from these today's or our -- underlying SEC. incorrect,

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

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

forward. to our is in and and associated Please on download. at Investors webcast X PDF assist financial page the quarter are Events Both on going website analytics files a a There of summary note developing and and documents with mastec.com. companion guided the document Presentations available information that for have we today's with models ended immediate just your

of by Jose, discussions from a will opening period, XX These Mas, last the will review and The and call we our expect Financial Paul Q&A call CEO; to Dimarco, Paul. about be us be format EVP With Chief by financial we followed and followed have minutes. our Officer. a remarks announcement by Jose today, the

I'll get today, it We Jose? things Jose talk now can we lot going. so have of important so about to to turn a over

Jose Mas

outlook XXXX MasTec's I'll and third we welcome as reviewing Good our results Marc. Third the to quarter be my Today, serve. Quarter Thanks, morning, for providing markets Call. as well

know, all our normal release our earnings this X you As up call we days by moved from cadence. in

we that quarter important for our close and we quarter us to release to We the the we prior earnings were third the the that on determined you. to as on As some our was the our had clarity we process, are preliminary adapting had results out as get relative procedures appreciate seeing call forward our of guidance data. we market from reached through today. this join the went that our you sufficient segments, could schedules so Thank everyone receiving soon your it point information given

during the Revenue a roughly growth Now below sequential but for and was well increase, $XXX the a increase million, $X.XXX over well below increase some during third XX% of $XXX net previous was quarter. quarter with quarter XX% million, year-over-year Adjusted generated of last Cash share organic XX% previous our from guidance. a a million billion, per debt was highlights. quarter the operations earnings $X.XX. XX% EBITDA our was estimate. Adjusted year, $XXX flow reduction again, but

backlog We the XXXX, cover and end quarter $XX.X of during which expect flow at quarter And Paul the cash further first later. strength will was finally, fourth billion. quarter

revenue late $XXX were expectations. our business, primarily million year up continued last our which where is shortfall full initial that shortfall versus about at challenges this estimates. This The X% billion face our IEA, revenues of in challenges acquired continue In year bulk previous summary, year. to to Clean occurred the Energy year. or we now $X be to below about We we expect related full revenue

$X.X IEA XXXX. approximately reminder, billion revenue generated in a in As

market solar would $X.X billion. be market expected approximately in XXXX. the to achieve be allow We to to now the we While IEA revenues growth wind XXXX expect this we for them knew in revenue challenged year,

are While negative factors finance there have using there IEA number degree help on customer we equity is been renewable question impact that forecasting of risk our on have projects. outsized based that than disappointed legacy more no a on an a business in had ability market understand IEA. MasTec's base to project tax greater timing, dependent to to a was

positive While access impact and has for example, business, significant on tax created tax delay defining certain has incentives equity. clear solar expected industry domestic a have that created the significant Act our customers' on the specifics the Reduction content inflation delay are to a to law, the the to of materially ability

services. has this make some projected general clear our been that while but like revenue, negative ability on there delay been to achieve lately, rather we haven't projects our delayed. I'd our While the has for these renewable And impacted solar significant to canceled, in demand to experience market commentary continue

the While new half of quarter in starts guidance new number not of fourth second we our a started projects October. does project have assume XXXX, after

of our are quarter on. guidance is currently made working we So projects fourth up

and in this pipeline fill XXXX this the to to segment's projects be will right IEA It's as to to bringing and base, also be IEA our believe our get prudent. believe customer forecast consistent and know more scrutiny we are revenue. ability believe the we We to taken we time both our much we us legacy

We assumptions risks understanding revenue projects are made our XXXX disappointed assumptions. our of we and forecasting with the and in

market significant have and we to changes how risks. we how made We projects go assess on and

timing future. we've ever with of very customers bullish as While we're our around are our business. projects performance as good this today about in had incredibly our having are and is disappointed level our interaction we we year, The still on

opportunity grow verbal level a of have We business. expected Energy Clean awards us an gives and our that to significantly

financing, need we and rates is be interconnect around to on our for associated the understand and outlook risks market prudent long-term While this agreements, timing interest unchanged.

and truly into and with by for believe our legacy XXXX. the our year-end and a end both MasTec I'm Energy Clean that being up And IEA shareholders. growth, combination of I backlog while XXXX considerable very business great will disappointed results, again, expect We acquisition our

and risks We going conservative until will the manage assumptions market appropriately XXXX and stabilizes. revenue make into expectations

With strong our growth that said, in revenue in XXXX Energy Clean double-digit we expect segment.

quarter the revenues target the half more MVP below expected. than our Gas estimate our MVP this, our we Oil previous We in billion year. our longer $X of and ramp activity Despite now were the segment, took revenue expect expected. as In first unchanged project through extend originally on is full the year project to expected the fourth than with of

to XXXX, but with lower and expect we this margins We than expect slightly be slightly XXXX revenue better there new cost-plus will Oil segment less levels in versus our year. work Gas as be

expectations to In a primarily our slowdown spend. fell segment, wireless of in Communications revenue related short

the year-over-year. expect down For be we to about our year, from X revenue primary full T-Mobile XX% and customers, wireless Verizon AT&T,

growth this by strong our expect offset to customers. be We from wireline

to revenues. we we and year look should by our previously fully million post expect for As weren't for providing. $XXX the largest maintenance over year, customer end, This we quarter we ahead program a XXXX, annual of services quarter won communications in significant a next contract be second ramped

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number year-over-year a Delivery short sequentially, year-over-year expectations with and we they significant Power expect decline in in utilities performance had of spending as we deal of revenue with were their and interest similar quarter. segment, which rate Margins a the also plans the both impacted fourth along revenues margins changing moderating fell our in environment. storm revenue, In as up margins,

been of few the seen of quarter, market begin only had for we improved. consolidation capital short-term scope we months, fundamentals share, some We've Post fluctuations seen been good long-term Over of the efforts. quarter number a the activity we've and increased the while course very has strong, our has vendor business awarded utilities increasing in XXXX. spend, have last having a believe award

associated on leading by modest work, behalf with in We expansion. single-digit growth revenue continued of growth XXXX substation margin and the of transmission capital expect expectations discipline with some to utilities offset

to our Gas in revenues. power pipeline in steps to a I'd took turning that pandemic, significantly like believe us our which call Clean more We In presence fundamentally reflect company than significant of Paul, any better in to over increase Before on seeing than has this transformation, Energy at positions our delivery seen Oil and our point history. today. X transform we Post and the to doubled drop revenue MasTec. the the since, where despite are we've we business the years X

acquisitions But X we us than this for expansion we much are has with future been positioned opportunities expected. delivery strategically made XXXX difficult in well growth. performing The transition significant more and have power

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business keenly are flow. effectively margins growing and focused our we for and on managing cash strong XXXX, Exiting growth,

allow fully we focus no improve. first years, the few new time we For in will areas to integrate, have on us acquisitions need to to the which a that

my CEO. to you of those new as For is year XXth this MasTec,

for with great was say, competitive potential. as Our hard-earned been has succeed and MasTec responsibility my all This interests $XXX to any a opportunities aligned point today and we The our you as people with but ever know take I and sure My and I at also am our lot that than CEO year understand, their bear million always actions know I million. single can realize. shareholder and to our dollars I perform. that EBITDA in think was knowing shareholders know around MasTec. MasTec reaches motivated history. of better speak largest that than better long-term I'm I want louder of me, an revenue how I full granted. make than are is Those determined our sense made as in investment year, $XX positioned shareholders. its the do I segments a have family not and in first words, in challenging and for a are believe than that I are how less

our challenges, outlook is short-term intact. the Despite long-term

segment each power the communications, has margin Our but delivery Energy strong us give not growth segments revenue Clean and ability only for opportunities improvement.

Our expectations forward levels. impacted long-term delivering but and the not unchanged by higher our volume more We been are ability pricing, and to by community. on costs look these to margin absorb have revenue goals the investment regaining confidence of and on

thank women I value. know are of over how at and the they're I'd our environmental like people the and call honesty to now high women of MasTec I are of a up our integrity, the this project Paul? take level. to turn and they will review. financial also the for to providing a values best very stewardship, Men customers task. to safety, desire I the for have know competitive Paul perform our the opportunity and to MasTec. in great-quality men at committed

Paul Dimarco

Thank you, Jose, good morning, and everyone.

Jose's First visibility to provide and schedule. you our thank outlook accommodating I will flexibility some earnings echo hope change and our We and the to call earlier the into for results the off, value. wanted comments,

performance towards accurate our clear into providing to We continue work to are goal. and and and committed we'll visibility strategy, that

approximately quarter Turning below to year-over-year billion, which our will but expectations third activity in We and XX% consolidated versus cover generated of by had XX% revenue lower-than-anticipated I later. segment, XX%. results. our in up more each sequentially, $X.XX MasTec guidance detail

and delays certain decreased performance missed volume, EBITDA by operating $X.XX. adjusted due EBITDA associated challenges million, ongoing legacy costs earnings by our $XX $XXX guidance drove with driven of also Adjusted million lower execution to leverage adjusted unabsorbed projects. per Lower-than-expected share and on project at

us number of the prospects Overall, our the year, it of disappointing outlook a certain closeout and was a we and activity balance lower appropriately with customers. projects believe the this We business that challenging look took a our very risks challenged hard quarter, developments. and the the in for year faced we captures at anticipated have where

reduction. corresponding pleased net and Despite the million these the of $XXX challenges, operations debt the quarter generated during we are cash with $XXX of million flow by

Turning segment details. to some

Third X.X% $XX was billion, quarter and Clean Energy revenue was revenue. adjusted or $X.X EBITDA of million

challenges XX% expectations, by quarter, in delays were achieve revenue well organic of certain below performance in did certain the legacy year-over-year both and revenue execution growth EBITDA contracts on we adjusted While driven and projects.

While second almost were basis margins held with expectations absorption. the margins due XXX quarter, fixed lower to points flat below cost

on almost past to our by legacy and We the to in project XXX the been expect we be has This few off-site project for basis reduced industrial points. but we additional QX accounted potential appropriately costs incurred also for risks margins out have quarters that believe that close in guidance. challenging

as Gas anticipated revenue QX, our below approximately XX% the in increase Valley million a slower and generated than on saw of $XXX ramp Our XX%, of segment Oil expectations, Mountain year-over-year but Pipeline. we a

due to site. the X,XXX faced passed relief our after even expectation crew XX.X%, almost from over delays commensurate with As We debt legal but project ongoing reminder, EBITDA under the was Adjusted ceiling $XX challenges a revenue the bill some mobilize had the lower guidance, receiving million, to the rate summer. line than we members in shortfall. encountered to the approval at

the the ramped completed in and construction be of in XXXX. are expect half project first now We fully to

Communications of million, in our spending from also excess of less experienced also had previous with customers the indirect quarter, expenses, guidance. than or basis which expect impacted pullback $XXX fiber revenue. absorption late wireless of margins million continue to versus segment in activity we for moderated in volume $XX of EBITDA Adjusted through by saw million We expected XXX forecast. our below Our quarter and the revenue year-end. approximately lowering QX expectations, continued Lower we points X.X% $XX was

segment or revenue below $XX had adjusted million, of Power $XX our million $XXX revenue. X.X% million QX and EBITDA Delivery of Lastly, guidance of

have as of burn lower in annual move expectations pullback the expected see from trend in year points the Gas slow X% and delivery quarter replenished. as their but of decline expect for our decline the to fourth were of segment. below activity Energy While fell of our began balance this cost the and second be contract by this manage Several basis quarter. crews we was short our they customers very be billion, XXXX driven restoration in and a to indicated up XX we the are the as our budgets spending quarter. guidance into of annual Clean $XX.X that The will of little near-term Emergency activity work, is of budgets to and versus utilization alleviated margins QX, QX short-term due lower MSA equipment. utility capital services higher will and Backlog We third capital. expected power third was quarter, we and Oil late trended also a revenue in our communication timing significant our in reflecting executions and the down

in September XX, are Energy million we Clean color, over alone additional of backlog. included in that QX not contracts $XXX some For signed since

continue be contract projects these to Additionally, that value. contracts limited of proceed we included once work a our notice billion fully contract Per on signings, executed. under of $X policy, in to after approximately these backlog will

with have existing received Communication Power verbal totaling or clients. for are geographic work segments. expansion We $XXX new both new or also over million to signed These related awards services Delivery customers, the awards for and

net levels. days, improving we in quarters. by DSO billion. flow operations down improvement DPO, generated improved to cash at debt reducing subsequent line working metrics cash by flow was to and expect and was improved about days with capital by and DSO XX in million, XX $XXX from our million The now $X further QX driven both historical QX $XXX with

prior leverage third For the now $XXX with revenue guidance, also improved the EBITDA driven and we This Factoring the the of from our developments billion X.Xx slightly to net by we significant quarter, liquidity X.X% business. adjusted or in reflects to $X.X million billion. debt expect are improved experiencing revenue. developments approximate $XX approximately reduction to of near-term QX, XXXX across a during

feel expected current the segment perspective, at $X year that XXXX revenue Oil we a XXXX are the mid-teens. for full in of remain with expectations unchanged EBITDA adjusted From is confident outlook appropriately our disappointed segment results, Gas conservative margins the billion we market. in light While the and in

we of quarter, EBITDA fourth revenue expect double the For and $XXX approximately low adjusted million in the digits. margins

adjusted digits. low year the Energy expected to billion EBITDA $X now margins with Clean approximately be Full segment mid-single revenue in is to

We pipeline QX to have than to due the expect Margins our growth. strong start expected variability. quarter-to-quarter we expectations continued trend product carrying but and volume dates with preparation the very produce project of are are previous are to specific significant projects a some signings for in costs lower pleased post

EBITDA Fourth third with similar adjusted $X.XX to billion quarter are revenue quarter. of the expectations margins

Communications to revenue in of year further quarter. was forecasted For segment leverage quarter full XXXX, lower we $XXX our reduced anticipate million down versus operating with due billion guidance some EBITDA pressure the margin prior digits. Fourth from single expect $X.XX the We from high at the slightly with revenue expectations. to adjusted adjusted third margins margins EBITDA revenue generate

on provide having to are positioned we're capital dialogue XXXX, well in further we scale. ways spend, to through something to with industry-leading our efficiency their drive Looking customers good

$X.XX, tax to rate. lower driven both partially roughly and a expected by performance EBITDA. our share due Delivery earnings work. offset effective the are Power single-digit also high little Finally, revenue XXXX to to expectation than earnings, year EBITDA operating very reduced revised of QX and full for is lower year segment anticipated to by be to quarter be forecast restoration expected Margins Fourth margins. full similar $X.X XXXX leverage expected adjusted guidance expectations We've now are per with revenue billion previous emergency adjusted lower

guidance, at In remain for to X.Xx should our return lower debt the Net capital year. light our leverage and leverage million of we generally is requirements is in to $XXX readily now objectives. year, our continued approximately full the we our will Recall support believe This to generation. cash cash generate to and Xx than but from of this operations million outlook XXXX $XXX operations are flow of the approximately QX. next our revised the second year-end, so we in expected higher QX from level for expect of $XXX quarter, sustained support to XXXX that million half slowest cash of target working flow committed low equates flow

Finally, our while expect early some we it for outlook single-digit provided we release the Jose, initial felt To on process, expanded preliminary disappointing XXXX currently growth the are planning in yesterday's with we off company. important achievable still to to guidance XXXX. provide in results for by was mid- and the XXXX revenue recap investors high

be by high in to Gas. Delivery, mid-single-digit We growth double-digit revenue Communications, Energy, driven in single-digit growth expect decline mid-single-digit and Oil growth this growth Power in in a Clean and

margins company X%. each expect resulting X.X% EBITDA segment XXXX, in total to to of improve adjusted margins We in

call I'll over the the And to turn now operator for Q&A.

Operator

[Operator B. from We Instructions] question from Rygiel take Riley. our first will Alex

Alexander Rygiel

conservative all cloudy we looks of there. probably kitchen be the the cross-currents? that a gotten out reflects sort no here your the reset can environment and how assumptions surprise this given and it like Clearly, macro how of most given sort -- But reassured quarter has sink

Jose Mas

in Quite there's don't to we XXXX. that miss. in no this forecasting frankly, we Well, want question, look, year Alex, struggled

of in I raising. struggled little a and lot that. bit. here in think We spent We've last obviously we years the took beading pride

were a to an off we for providing coming a for that indication set to earnings this we set having, for wanted us is early thought for needed people very be the base, give what would of we base So XXXX, XXXX. of results of we But sure. outlooks

Alexander Rygiel

the backlog at how you about a helpful. level economic have your that That's maybe that And this backlog of MSAs base cancellation? in and stable from talk And risk talk environment? you bit possibly and then can about sort backlog quantify also or is of that

Jose Mas

was through you our about backlog Yes. think in I right, we that -- be a didn't through so backlog, Energy it's experience of it Alex. actually think It's means a in in even business, To significant in when put or our takes contract, backlog a a something backlog, signed in backlog. on it based much because XXXX, scrutiny and right, good it delays important we've really once it to it needs Clean we or question, we to have amount our go finance make And got any -- project. cancellations what to

is It's come some MSA, impact that it's in it fully generally the but backlog it In start rate, see very our MSA work Obviously, other not your businesses, go-forward risk. driven. a usually of the understated. utilities little to we front reflective So us. as if there's doesn't work put of at heavy bit, impacts back

vetted So really we XXXX. we Again, at think initial really as about targets the good least backlog. set for about we've customers, the this feel we entry-level that with them we've base we about think XXXX, vetted is them us

Operator

next question from will [Operator We our take Citigroup. from Andy Instructions] Kaplowitz

Andrew Kaplowitz

impact into Can color Power I give that more customers would into cycle. QX But said business? think, us know be is several higher if some Delivery I seemingly anything, year. CapEx QX. long versus supposed push Delivery, rates Power more to you And next you your

for of are thinking then Was about the broad-based business it a couple XXXX? longer-term profile projects how of confidence big more reaching it a the in was So delays? growth moving right? your target and growth to that level you And

Jose Mas

Andy. Yes.

of kind to year-over-year comparison. One a break up I'd is business year, in X, on last right? So the comparing full

biggest lack in of perspective a storm of was One especially we challenges QX. from the work the had, margin

not just So we as probably million impacted, basis, that well. decline work storm margins, a had on revenues $XX a impacted again, which in year-over-year

last we to about When of million were see revenue with what when driver down in to right, $XX QX you the We that this So it comparing think year, from probably compare Delivery. QX. you're Power you was QX, year in still I were biggest sequentially down.

get of We're projects. transition projects. probably was those We on a of some didn't projects. of the starting just quick as others. finished Some start We of some that

Some of comes that back.

balance is then so beginning And to some that, think pullbacks utilities. I $XX $XX what was million that we of the in really which probably the was of or saw million

So talked into but about consolidation it vendor position efforts, to will It it continue we extent. was that, number, And well into next we we again, which, think these QX actually then year. huge wasn't and fared significant. really us in think a again, we've going some well

we So that of of previous in right, of it, We've as late think last in the about year revenue kind 'XX. calls activity about that 'XX made. some had acquisition talked on year, versus that grow slightly this out we'll we contracts year a some of from impacted we early the basis, revenue got previously especially full

So area substation growth. it it's with on. sets year and We're mid-single of an come there transmission hoping activity to of the up out ton guide focused in an really that, that for initial us and out nicely 'XX. conservative. We've tends we've that in in There's digits I think a really be

us. opportunities of early, But again, lots really So in October. for we're still

contracts our given distribution that really we the from feel can what predominantly MSA work. that we So expecting that in the achieve have, base we based on our just client awards that we're and we've comfortable been

Andrew Kaplowitz

that that at Very you announced your about the just your more disclosed then you quality but you're in of make base, us of customer the customers? And of how And from in construction not risk pause to aren't challenging maybe the the backlog give one announcement point surprised of as you more recent such are Energy helpful, Clean a you one-off Jose. particularly color are announcement and their you at by a some sure IEA. can thinking into just What's again this little your do customer? type to how customers scrub of front function

Jose Mas

Yes.

the the So really questions And I of I ask the to I things about with not. I'd did IEA? because over of think of answer be had no, we one we of last the few base customer mean ourselves clear an mean, that is, the the inferior buy to months we one want flat is acquisition to I course did

we what think strategies. installed customer customers exactly on doesn't dependent cases, they're base we're doing, just different made lots history, IEA, them year. customers have make at this of great our some them their They It financing better lots of I in have more or that worse. know a different It capacity.

think we exactly position we had challenges the for broad-based So in I and have better different should think obviously, 'XX, we're the XXXX. when I do types of to the that with in think risk that's be opportunities and doing we about what understood more the clients, business

plan. spent absolutely every exists, being and of to degree we've in. project that think that to project XXXX through we're possible going months a asked every really are So prioritizing level going have that high happen participate in we that confidence We're our how those and XXXX, that's we're building

big of really once will which catalyst XXXX a happen -- ways, people be is in create gets mean year-end, of which the not going think us, tax multiple of because start to we We're not that huge including think get of we expect business. equity improves, that's involved as a many market projects to to of If behind going new projects what with. by I be that we're if lot And changes right? and we we really catalyst XXX% the sure about a think the we're to financing timing.

opportunities So are starts, we some that the progresses. as customer to plan built base, a that with we've based on of come our that and then can again, as going grow hoping we're year the very the solid year

Operator

will We our Steven from question next take Fisher from UBS.

Steven Fisher

bit, of the in timing. I specifically flow a focus terms the wanted cash to little on

into little And just QX again, of next flow maybe positive, of think of kind about is QX flow the continue cash the the reduction develop debt year? that how have over Is curious how QX, go QX, you will I a you're QX course it cadence weaker will I'm of and may year? saying than in curious next might kind the the really mentioned positive that cash just year? of

Paul Dimarco

is this Steven, Paul. Yes,

the to year. So I similar think it should be cadence a

year, weather less laid haven't expect we so we in and some flow investment requirement. should volume we'd going then cash debt ramp the be out there QX of lower we'd be reduce can And a with into of that challenges middle yet. as We QX. to the quarter, earnings, the stronger facilitate through there's some But normal ability the right, of to because expect year do but you're each largely that generation hopefully less capital seasonal and quarter working middle offset

Steven Fisher

things then on helpful. of for the side communication That's just year. And Okay. next

QX companies? What and of these just that, what right and I curious think a give you fiber like to those can If of as of have some you because go the to a looks that's I in sounds fiber some any given you wireless said between you breakout are the within you now kind the into experiencing of from getting slowdown of a And for that? estimate of assumed Maybe telecom you like guess next experiencing growth. -- and clarify on year? color number a trends robust of it we're bit what pretty can high Just here. single on I'm growth there's gauging digits. comfort overhangs some

Jose Mas

Yes, Steve.

think couple So impacted things, it's of say wireless. slowdown by I were obviously we Jose. I'd right? the in this a year,

for different full of slowdown happen, obviously, I the our I as year strong and the close is be pullbacks. A out. in that half management think will different as up that we've is second hoping wireline the of the a for year, changes, little we environment credit of the were bit customers think business full we strong do had And some CapEx. the wouldn't year year

volume, starting versus in really in have number it going dollar. QX, a lot early amount in to got low XXXX we impact. we associated is increased that a a of but construction, volume year it that that turns significant knew of of we've late and a had have 'XX And meaningful where once that would projects engineering going said, are has it's lot the a these which QX revenue activity are that the construction, didn't to lot of bunch awards projects important, during have the in 'XX. And a those a this RDOF-funded initial engineering government with that of With in XXXX, kick of

balance we're as planned the wireless project where plan without awards took the going based very on And our making So even assumption based things for a much goes though growth 'XX, here in really built conservative we 'XX of from new some kind opportunities. conversations are early, customers. on had on 'XX, out we've from we again, and we've there really assumption that activity with into

is going be which talk important awarded it's of because we until don't see about impacting a Again, in the funding, really 'XX. that to business even to bead 'XX lot

recent any to CapEx customers guide us approach numbers will based talked important. 'XX a So feel that's on ability the that we've should just improvements think think we've taken our few that months, here about last that to grow in conservative how on We've about based that in commentary. on we we awards good our the And business we the allow had again, actually to to improve very today.

Steven Fisher

year? business to just next the wireless clarify, But is are actually you so up assuming

Jose Mas

We assuming are it's assumption. that that not making flat. We're

Operator

We will our from now Hauke from question to next Baird. Justin move

Justin Hauke

wanted resolution quarter, project. that contracts go us balance from of annual materially about on driving questions you the revenue of you increasing? fixed years. the just those we on over unapproved the into the X.X least industrial the give orders, unapproved answered out kind IEA, you as on I moved at have but the But just talked about kind what's been guys, as last at I risk of XX-Q, guess I overruns of last been context my profile of And here. ask the some has orders and don't XQ change of to can legacy of the price mean the lot have some A cost higher just some we close a change one

Paul Dimarco

Yes.

of So year. that legacy we the reduction a it slight 'XX part a is in -- with the had projects QX lot do come this but early out, see of should we we numbers on and when challenges the industrial

them and our ordinary work we obviously under of were that contractual in with in resolved they've think made contracts. for the Some a very robust QX on have the we And reporting customers process some those. obligations the we course

realizing don't any record have different those we strong really of change and very a expect environment We orders, the today. in track

Justin Hauke

how assuming visibility a much that project, of then half MVP And contributing? the help high giving XQ? to then kind the project will know it disclosed you're for And understand in 'XX? be of can just quantify that's they've some how is because in contribution Okay. that much the context you the there revenue first I cost estimate higher, is us just

Jose Mas

the in the terms into so know this than number started that people ramp going XXXX. -- Remember, project latter fourth full be We allowed I on some understanding quarter the in there heavier probably project, quarter, a think delays quarter publicly, September. to for that moved what will third in unchanged allowed. I it's don't was the in of It's ramping say delays. revenue for to we're want the half and for just in of point that year be just the in to of towards don't we Look, because hundreds they've But at it's in was X,XXX the 'XX. what some it lot to it fully roughly get said QX. not really had full delays We with the of -- of early so of revenue got a was millions. give we us, And in I'd I Yes.

Operator

Neil Sachs. from take our will We question from Goldman Mehta next

Neil Mehta

start of Jose? me I a [Technical wanted hear driver to -- been can off Paul, Jose, morning, on okay, some Difficulty] you tax has big Good Sorry.

Jose Mas

ahead, Go Neil. Yes.

Neil Mehta

Okay.

Energy around expect I a a of the you and year equity that. clarity a Clean by lot think point, this comment been tax of get more And made some bit volatility of little the to you that had created that's the the in to have end segment. concerns your around

So can you think do the talk translate on customer into activity about that's going greater from base? you And to that? what gives confidence you

Jose Mas

the answer is So short absolutely.

released work in guidance of been summer. the the of language there's enormous was some since on an think I that's amount happened

conversations customers feeling have the happening treasury think energy are I the industry that commerce. really from been comfortable with to and better everybody to about

makes final understanding will language that of which which of enormous opportunities I think be up. think will year, I by an the out will open end amount It it activity because spur the that the will tax makes it what tax means sellable. to depreciation of bill, the hit -- bonus equity people the it clear, give makes then exist the within and

activity customers equity it it And to to want so their are. understand and we're and they the the they give think their getting a return want opportunities 'XX to we very to, -- bonus then a that think close our again, on as to amount year. use market. trying super again, it's tremendous dependent that being don't commit we have they what fully of significantly to so the of with to aren't And really who don't about capital I profile important today projects I that think tax adds build finalized, that up, the profile which, changes and lot potential think I all plan upside And as and we're

Paul Dimarco

monetize a direct generators through from I becomes starting -- on value transaction from more more right? Yes. think a those early would more is how and equity another transfer, is how But Neil, renewable that's add, cost transactions we're and perspective, an what a that which efficient IRA there more long be effectuated provision administrative prevalent, it become that finding the ways from just on. And much much to developers some transfer uncertainty the was seeing efficient perspective. tax -- as perspective their power to -- as would it's direct I of

So we developments. are on positive

Neil Mehta

talking then well. couple of last top Paul, for a the of the over the but margins And lot that's of on line, this about call time have helpful. a been margins. is just as follow-up Thanks We Jose spend on volatility source years

in out biggest risks you do give surprise do upside think margin where profile, think way where the that confidence the you're for the areas the the And market So can be? could you are? modeling you

Jose Mas

today about we we with we're what again, to I we're seeing took, where the Again, 'XX Sure. that here, thinking is as think as thought going. are a about then view revenue how where and we and

also doesn't I -- think to lot we there. that we've traditionally types beat based haven't important. If is at I in margin margin the our year board, on conservative on frankly, We work very think the the expectations, We're year, margins new and previous business upside gas a for where we're of think think changed which seeing don't nothing as mid-teens allow we've projects full those quite assumptions long-term upside they've in we our that reasonable oil us they're We There's year a of returns. across I right? the about, that in company with, reach and there's think profile coming there's said, talked starting where anything, the targets.

when year. second back the of On had we've a those very the significantly But obviously, end we -- are no think where communications half. there's year. get back better reason about where than they business, soon, to levels XXXX, we this side we the year the step stronger started had the which the taken we'll previous than here we We've in were year a for shouldn't

-- after this X the first acquisition. again, really was business, delivery year this is post power Our

some to in double-digit the we're is completely I been that but unchanged. margins, think of there's and hit ability think -- I noise margins So there out our

that Energy, on volume with challenges Clean the margins despite somewhat we're to the think have I held basis a all despite and even increase. And that improved And margins have year-over-year steady. I that expecting, opportunity -- an really had, we've think

to margins feel Neil. feel that think I are So a again, about really set And where for should conservative Thanks, everybody over we've time. 'XX with. good going base go I comfortable level

Operator

Cowen. question TD Marc We our from next Bianchi will take from

Marc Bianchi

and mentioned and Power generally had like with first had higher to cost businesses. the that's question of you businesses, relates think been those so Delivery the I the market has Energy and concerned The affecting I electric Clean capital

and cost cost Energy about project of capital and higher utility higher for capital, in of mentioned some one you thing spending. Clean So slowing if then and customers sector, development think you that's the

that issue you've made of systemic continuing XXXX some renew back they the got you their once that into picking seems So to budget. spending be the but up utility customers comment

XXXX getting in do business and much mechanisms is of overhang continuing to for and think kind how is are that? of maybe of cleared how the talk that So much it up can systemic you the you about what risk

Jose Mas

Yes.

we in a had thought in we've way growing think is cycle, planning of again, when success So about we've very we're 'XX I early and lot think business. for the it our about the

in of existing and territories this And margin x a growth costs, higher today. feel with out would within the we customers, than with normal or and that really major wouldn't East the overhang typical what we laid both projections and where have the months, year done we we've So up last in basically Coast expansion. happening dramatically picking just on relative our concern expansion territory good that about with utilities Coast, that either right? West And on rates be based what's in interest major to

projecting, us will which So less I allow utilities a as issues than opportunities utilities to perspective will think actually hopeful with we we're We're we're we're develops, from have growth hedging challenges of continue think getting faster better at to those the rate. that opportunity face. that some the the a the or perform what will year grow

think on really rate number. one is have you fund would For we help next I'd that, we've set about suspected. into mid-single-digit from they to capitalization It's as the business to answer that low projects. some than they we that I conservative business a when should need And is growth exactly that throw a well. say and it's going then lower perspective year projects same us Energy to do really our what And being delivery think that on we're are where a power in won to Clean our as

Marc Bianchi

Okay.

The Gas. to and other X I relates had Oil

of the year. So overall half in the revenue decline about for MVP talked first helping but you've got 'XX,

below for look that sort about bit half rate second as a is $X talked think level you the a run So quite billion I it state of like that would business. steady the

you billion? now it -- conservatism? about steady the is see run do state fact can So of bit $X source is talk that another in below you maybe Or quite a rate that

Jose Mas

to feeling for that closer business No. of it's that for going end billion. that We've a higher $X to billion said was Look, level to the that. been $X.X think while be more we've I right comfortable the

lot it that that would go knew would be its own particular also it We start, of away. it challenges MVP of would revenue would set a and periods, present in in

As a we've XXXX, projects because going of in the be MVP. bit about filling little obviously, previously that about first think stronger 'XX. the of year of a that is to got We've I talked lot half are

really feel So we good about 'XX. actually

higher the in think first be half will I than was it 'XX.

know The based lower. on today. second I slightly think half that's the be we projects Again, will

start I are think also there's some pull-in for opportunities projects know going about 'XX. in that some to we there's potential but that

flows had So last it's I and well consistent ebbs quite think the versus year year frankly, that to going or had more that year be we've we a this business. much in as that

Operator

D.A. will Brent our take next Thielman Davidson. from from question We

Brent Thielman

is, Energy that range? profile under the more for to question on the mid-single-digit margins. projects above in something you to you're margins once think of need to or through backlog [indiscernible] sort Clean Or start Jose, of just the X work the hoping I business guess we underway? work Support the that about first gets do achieve nicely the that before eventually does the

Jose Mas

that the us it with allows achieve the more. about, pricing hit our volume in to allows achieve talking could definitely we margins we're we to If potentially profiles associated and think actually bids that, us

basis it of been on has at problem. So absorption performance the we We don't It's year, issue. been level look delivering as been project a good. been believe we've that's -- job pricing more we the as this have projects of at costs project-by-project a we a

So start not what on we've today, getting we but be, into to about even they need profile, margin laid our out outlook. we talking we're that where to levels revenue the previously get over longer-term time, as

Brent Thielman

does of sort this preliminary the this far year? that degree mid- Okay. through year. included another I single-digit And I question renewables defer that To IEA guess thus next the projects you've on mean seen I'll growth on for way. from inherited maybe sort executing of 'XX ask high view, to what

Jose Mas

the slight because second? can question question Brian, the I for repeat -- a of you missed after out a part it cut

Brent Thielman

that you've XXXX is I the so seen preliminary question assumptions the IEA far Jose, view Yes, this deferred as year? work To that what does degree growth. about just think for that from include for you guess

Jose Mas

of what Well, And right? little 'XX for the our regardless done start, kind gone think we've or have abandoning and not building project whether IEA we is going We're can that. to projects do abandoning where where we're issues and really it risk-adjusted schedule the are took trying we're obviously performing well. in, the we not plan. that and back the jobs to on plan to have was combined of of focusing our But 'XX, will it, legacy projects. we've build every we from, customers of them to We're Energy work highest likelihood and how based in it a proceed that's in any we very extent Clean we that came we've pull we're on any business, think

Operator

Davis. [Operator Instructions] We will take our next question from Thalhimer Adam from Thompson,

Adam Thalhimer

and Jose, to macro what extent uncertainty impacting are higher rates bidding?

Jose Mas

our the -- know from building I perform time. don't us on to bidding I ultimately cost a extent we're to is that costs or a a meet to impacting execute. in to customer right, think much they materials. is we're perspective gets bidding know can whatever ability the in on we where impacting of projects concern a that bid it as and of think what that locked labor a does basis as that is, ability that a lot their building as get our it strategy current what And they're them, really may makes A in we in potential as change good go-forward Well, of the from perspective, right? So very understanding they're customers' bidding, job

pricing not project the is well that moving relative on the sure a we're concerned. that to of perspective, forward. with We're mechanism we're bidding projects the we're bidding spending more time that from and that making projects So potential overly concerned served

Adam Thalhimer

Okay.

the to pace kind was or thinking of at more the of amount look I XXXX? flow bidding So, that of about of are for or the just people bidding projects giving

Jose Mas

is that than ask people or do. right, amount us issue, could we the being mean more that's presented, to I And It's on work ever bid the Yes. of is -- right?

you isn't is providing list challenge you're that the making challenge doable. is to a to the So pricing sure everybody, really selecting that down list that think from

market different incredibly ways, I this pent-up is in we in because marketplace healthy. There demand want to of relative the the reiterate projects. an say it to enormous is amount to tried

dozens plants. question have is lot that forward think time. of we're of quite of spending when. customers The and is what And You and a massive go go meet most can when, question frankly, many all I portfolios that's but how them dozens of build and the those they forward, will go will really of or forward, will

So we're in we 'XX. same the not that were in position

Operator

remarks. are Jose It the call questions closing this would over back time. any no or there for I like additional appears at further to to Mas turn

Jose Mas

Yes.

Thank So I you take on Thank this you. just want to we forward fourth for quarter look and you thank updating to your call. everybody again. to opportunity changing schedules, our

Operator

participation. your for you Thank call. today's concludes This

disconnect. now may You

MasTec (MTZ) 1 Nov 232023 Q3 Earnings call transcript