MasTec Q2 2025 Earnings Report

MasTec EPS Results

• Actual EPS: $1.49
• Consensus EPS: $1.41
• Beat/Miss: Beat by +$0.08
• One Year Ago EPS: $0.96

MasTec Revenue Results

• Actual Revenue: $3.55 billion
• Expected Revenue: $3.40 billion
• Beat/Miss: Beat by +$141.52 million
• YoY Revenue Growth: +19.70%

MasTec Announcement Details

• Quarter: Q2 2025
• Date: 7/31/2025
• Time: After Market Closes
• Conference Call Date: Friday, August 1, 2025
• Conference Call Time: 9:00AM ET

MasTec (NYSE:MTZ), an infrastructure construction company, provides engineering, building, installation, maintenance, and upgrade services for communications, energy, utility, and other infrastructure primarily in the United States and Canada. It operates through five segments: Communications, Clean Energy and Infrastructure, Oil and Gas, Power Delivery, and Other. The company build infrastructure for wireless and wireline/fiber communications; clean energy infrastructure comprising renewable energy power generation; pipeline infrastructure, including natural gas, water, carbon capture sequestration, and other product transport; power delivery services, such as electrical and gas transmission, and distribution systems; industrial and heavy civil infrastructure, including roads, bridges, and rail; and water infrastructure. It also installs electrical and other gas distribution and transmission systems, power generation, power generation, civil and industrial facilities, pipelines, and fiber optic and other cables, as well as install-to-the-home services. In addition, the company offers maintenance and upgrade support services comprising maintenance of customers' distribution facilities, networks, and infrastructure, including communications, power generation, pipeline, electrical distribution and transmission, and civil and industrial and heavy civil infrastructure; service restoration for natural disasters and accidents; and routine replacements and upgrades to overhauls. Its customers include wireless and wireline/fiber service providers, broadband operators, install-to-the-home service providers, public and private energy providers, including renewable and other energy providers, pipeline operators, civil and industrial infrastructure providers, and government entities. MasTec, Inc. was founded in 1929 and is headquartered in Coral Gables, Florida.

MasTec Q2 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: MasTec exceeded Q2 revenue guidance, met EBITDA expectations, and beat EPS targets, raising full-year 2025 revenue to $13.9–$14.0 B and EPS to a $6.34 midpoint.
• Positive Sentiment: Communications segment revenue jumped 42% Y/Y and EBITDA rose 55%, backed by a record $5 B backlog driven by fiber expansion for broadband and AI networks.
• Positive Sentiment: Clean Energy & Infrastructure revenue grew 20% Y/Y while EBITDA nearly doubled to $83.3 M, with a record $4.9 B backlog bolstered by renewable tax credits in the “One Big Beautiful Bill.”
• Neutral Sentiment: Pipeline revenue fell 6% Y/Y and EBITDA declined to $62 M on tough comps, yet it beat guidance with 52% Q/Q growth and expects margins to peak in Q4.
• Neutral Sentiment: MasTec added nearly 4,000 team members (≈10% workforce increase) to scale for robust 2026 demand, causing a short-term margin drag in segments like pipeline.

Presentation

[Operator]

Thank you for standing by, and welcome to MasTec's Second Quarter twenty twenty five Financial Results Conference Call. Today's call is being recorded. I'd like to turn the call over to Chris McCray, Vice President of Investor Relations.

[Chris Mecray, VP - IR at MasTec]

Good morning, everybody, and thank you for joining us for MasTec's second quarter twenty twenty five financial results conference call. Joining me today are Jose Mas, Chief Executive Officer and Paul DiMarco, Chief Financial Officer. We've prepared slides to supplement our remarks, which are posted on MasTec's website under the Investors tab and through the webcast link. There's also a companion document with information and analytics on the quarter and a guidance summary to assist in financial modeling. Please read the forward looking statement disclaimer contained in the slides accompanying this call.

[Chris Mecray, VP - IR at MasTec]

During this call, we will make forward looking statements regarding our plans and expectations about the future as of the date of this call. Because these statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially from our forward looking statements. Our Form 10 ks, as updated by our current and periodic reports, includes a detailed discussion of risks and uncertainties that may cause such differences. In today's remarks, we'll be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules. We may also use certain non GAAP financial measures in this conference call.

[Chris Mecray, VP - IR at MasTec]

A reconciliation of any non GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measures can be found in our earnings press release, slides or companion documents. I'll now turn the call over to Jose.

[José R. Mas, CEO at MasTec]

Thank you. Good morning, welcome to MasTec's twenty twenty five second quarter call. Today, I will be reviewing our second quarter results as well as providing my outlook for the markets we serve. I am pleased to report that we exceeded guidance in revenue, met our EBITDA expectation and beat our EPS guidance for the second quarter. We're happy to have delivered significant year over year growth in revenue despite the difficult comparison from the Mountain Valley pipeline completion in the first half of last year.

[José R. Mas, CEO at MasTec]

The remaining segments, our non pipeline business improved EBITDA from $181,000,000 to $257,000,000 in this year's second quarter, a 42% year over year increase. Revenue for our non pipeline business was up 26% with power delivery and clean energy and infrastructure both up 20% and communications up 40% year over year. We expect revenues to sequentially increase again by double digits in the third quarter. Margins for our non pipeline segments also improved 100 basis points year over year and posted a strong two thirty basis points sequential improvement. Both our Communications segment and Power Delivery segment improved EBITDA margins 300 basis points sequentially and Clean Energy improved 120 basis points.

[José R. Mas, CEO at MasTec]

We expect further sequential improvements in the third quarter in both our Communications and Power Delivery segments with margins in our Clean Energy segment expected to be about even with the second quarter. Total company backlog in the quarter also remained healthy, posting a 23% year over year growth, including a 4% sequential increase, resulting in a book to bill ratio in the second quarter of 1.2 times. The sequential growth from first quarter included an 11% increase from Clean Energy and Infrastructure inclusive of solid growth for both Renewables and Infrastructure. And by ongoing growth of 2% from Communications, offset partly by flatter performance in Pipeline and power delivery inclusive of stronger burn rates in the period. We expect further backlog growth in the second half of this year and expect to end 2025 at record levels of backlog.

[José R. Mas, CEO at MasTec]

We are increasing revenue guidance to a range of $13,900,000,000 to $14,000,000,000 for full year 2025, a roughly $300,000,000 increase over previous guidance. We are slightly increasing the range of our EBITDA guidance to $1,130,000,000 to $1,160,000,000 and we are increasing the range of EPS guidance to a midpoint of $6.34 per share. Our midpoint EPS guide implies a 60% increase year over year. I'd like to highlight that we are seeing clear acceleration across our business. Revenue is stronger than our initial guidance and demand is incredibly strong.

[José R. Mas, CEO at MasTec]

During the second quarter, we added nearly 4,000 new team members and over 10% increase in our workforce. This compares to an increase of a couple 100 in last year's second quarter. These additions are a direct result of the demand we are enjoying today, but more importantly, for the need we see to scale up for what we are expecting in 2026 and beyond. Every segment added team members in the quarter, including our pipeline segment. I'd like to remind everyone that entering 2025, we expected to rightsize resources in our pipeline segment and set some assets as we initially expected revenues in the $1,800,000,000 range versus last year's $2,100,000,000 We now expect revenues to be approximately $2,000,000,000 in pipeline this year, but more importantly, the investment we are making in increasing headcount and equipment in our pipeline segment is being driven by the incredible demand we are seeing for 2026 and beyond.

[José R. Mas, CEO at MasTec]

These increases in headcount will position us to take advantage of the growing opportunities ahead. However, this investment is slightly impacting margins in 2025. While these additions should allow us to further increase our margin potential, we expect any impact to be short term, particularly in our pipeline segment. We expect pipeline segment margins to improve sequentially in the third quarter and achieve its best margin performance in the fourth quarter, setting us up for strong performance going into 2026. Turning to some segment highlights.

[José R. Mas, CEO at MasTec]

In our Communications segment, revenue in the second quarter was up 42% year over year, while adjusted EBITDA grew 55% with a 90 basis point improvement in margin. Backlog increased sequentially to a record $5,000,000,000 and increased 13% from the prior year. The market backdrop for telecom infrastructure remains very healthy and dynamic, given robust capital investments being made by our customers to support broadband delivery and enable enhanced artificial intelligence applications. We saw continued year over year revenue growth in the second quarter from nearly all of our top 10 customers and our list of significant customers has increased meaningfully in recent years. MasTec's wireless business continues to see strong growth from expanded geography served and from continued broadening of services.

[José R. Mas, CEO at MasTec]

In wireline, overall strong demand continues to be supported by broadband infrastructure build outs and by federal investment. Middle mile broadband build outs and the recent surge in hyperscaler CapEx associated with data centers is also driving substantial fiber deployment demand. Over the last few months, a number of our customers have laid out very specific goals. AT and T recently announced a milestone of passing over 30,000,000 fiber locations and reaffirmed their goal of achieving 60,000,000 by 02/1930, basically doubling over the next five years. Verizon publicly stated their goal to also double fiber passings by 02/1928, and T Mobile is looking to add 12 to 15,000,000 fiber passings by 02/1930.

[José R. Mas, CEO at MasTec]

These ambitious plans in conjunction with both increased demand from the traditional cable broadband carriers and a number of new entrant overbuilders create significant growth opportunities for MasTec. Turning to Power Delivery, second quarter revenues increased 20% year over year and slightly beat our forecast with profit and margins as expected. We believe we are on track to meet our full year targets and continue to expect margin improvement in the second half of the year from a combination of volume growth, mix improvement and solid execution. We still expect mid teens revenue growth and high single digit margins for the year. Our optimism and bullishness on overall grid investment remains unchanged.

[José R. Mas, CEO at MasTec]

The need for substantial utility customer capital expenditures in the coming years is pressing as power demand drives the need to upgrade and add to an aging infrastructure. This demand requires large CapEx commitments across transmission, substations, distribution, as well as new generation capacity. Backlog this quarter for the segment was up about 14% versus the 2024. We continue to target a broad set of projects of varying scope, and we still expect several larger projects to be awarded in the coming periods. In our Clean Energy and Infrastructure segment, second quarter revenue grew 20% year over year and adjusted EBITDA nearly doubled from 47,300,000 to $83,300,000 with a margin of 7.4%, an increase of two forty basis points from the prior year.

[José R. Mas, CEO at MasTec]

New awards accelerated in the second quarter and totaled $1,600,000,000 for the segment compared to 1,100,000,000 in the first quarter. Backlog was up 11% to a new record level of $4,900,000,000 and book to bill was 1.4 times. We remain in great shape to deliver our 2025 goals and are already progressing well in building backlog for 2026. Within this segment, both Renewables and Infrastructure had double digit growth and solid margin performance. We see significant opportunities for new bookings for the second half in these areas as well as opportunities for behind the meter power infrastructure giving substantial experience in this area.

[José R. Mas, CEO at MasTec]

We are fully covered for our 2025 revenue guidance and recent bookings continue to fill in the 2026 year. An important development during the quarter was the passage of the One Big Beautiful bill. The legislation leaves intact tax credits associated with renewables through 2027 and created a clear path for safe harboring projects, which would allow construction through 02/1930. A subsequent executive order was signed, and we expect more clarity in the coming months. As it relates to MasTec and as demonstrated in our backlog, we are very confident that our customer mix, which is heavily skewed to the top tier developers, will have a high level of success in their ability to safe harbor projects.

[José R. Mas, CEO at MasTec]

We are also confident in the ability for renewables to compete over time even without federal subsidies. As electricity demand continues to expand, driven by artificial intelligence and data center construction, the cost of competitive power becomes increasingly more important in a global marketplace. For example, in The Middle East, renewable power is being sold at approximately $15 a megawatt hour compared to 50 in The US in an unsubsidized and free market. I have no doubt that renewables will continue to play an important role in the domestic energy generation along with other sources, including natural gas. Turning to our pipeline infrastructure segment, we saw revenue decline 6% and EBITDA dropped to $62,000,000 from $135,000,000 the year before.

[José R. Mas, CEO at MasTec]

We've noted the primary driver here being the challenging comparisons from the MVP project wind down last year. Pipeline revenue of $540,000,000 was well higher than our guidance of about $475,000,000 and a substantial acceleration from the first quarter with a 52% sequential increase as overall activity picks up. Profits in the quarter met our plan on slightly weaker margins and forecasted as we invested to prepare for future demand. While backlog for the segment was down about 5% sequentially, our second quarter backlog does not include a number of verbally awarded project whose contracts we expect to sign shortly. As I previously covered, we expect backlog growth through the balance of the year.

[José R. Mas, CEO at MasTec]

Gas fired generation is clearly going to play a much more significant role in future years than we were expecting and we fully expect to benefit from a multiyear investment curve in this important baseload generation source. I'm very bullish and excited about both the short and long term outlook for our pipeline segment. In summary, 2025 is shaping up very well and the momentum we are building across every segment is very encouraging. I've mentioned previously that we are working more closely with key customers across multiple segments at MasTec on framework agreements that benefit both parties while strengthening our position in diversified end markets. We saw continued progress in the second quarter with such agreements, which have been particularly helpful in securing visibility in all segments.

[José R. Mas, CEO at MasTec]

We are very excited about our market position and the ability to leverage close customer relationships to improve visibility and outcomes for our business as we execute on growth with scaled businesses across our enterprise. Of course, the outcomes are dictated and determined in large part by our execution against this significant volume opportunity. Our efforts on operational execution and evolving our business processes to ensure both consistency of outcomes and strong structural profitability is a primary focus. Our margin improvement opportunity is real, and we are taking many steps to realize it. I'm particularly pleased with the progress we showed in the second quarter and expect to have a lot more to show in this regard across our segments in the second half as we continue to develop volumes across the business and refine our operational execution in key areas.

[José R. Mas, CEO at MasTec]

As we talk about execution, I'd also like to thank all of our people at MasTec for their continued commitment to our corporate values of safety, environmental stewardship, and integrity, and honesty, all while serving our customers with the diligence and ensuring the delivery of a great work work product. Thank you all. I will now turn the call over to Paul for our financial review. Paul?

[Paul Dimarco, EVP & CFO at MasTec]

Thank you, Jose, and good morning.

[Paul Dimarco, EVP & CFO at MasTec]

As Jose mentioned, we're very pleased that our second quarter results exceeded guidance, coming in large part from strong sequential volume development and continued solid execution. We remain highly confident in our business positioning today and into the years ahead, and this is true across all of our end markets given solid demand drivers that will require significant investment in infrastructure for years to come. This is the case regardless of which technologies are favored and whether financing mechanisms include government incentives. Our customers are clear. They need us to fulfill plans that include major projects across the spectrum of markets we serve.

[Paul Dimarco, EVP & CFO at MasTec]

Let me start with some quarterly highlights. Second quarter revenue was well above expectations at $3,540,000,000 a new quarterly record, with 20% growth year over year and 25% growth sequentially from the first quarter. Adjusted EBITDA of $275,000,000 met our forecast. Three of our four segments beat volume expectations in the period, while the standout performance in profit and margins came from Clean Energy and Infrastructure. Eighteen month backlog at quarter end totaled $16,450,000,000 an increase of 4% from the first quarter and 23% year over year.

[Paul Dimarco, EVP & CFO at MasTec]

This represents another record level of total backlog for MasTec, with the growth led by an 11% increase recorded at CE and I that included continued strong bookings in the renewables portfolio, which is fully booked for the current year and continues to build momentum for 2026 and beyond. We generated cash flow from operations of $6,000,000 in the second quarter and $84,000,000 year to date, with DSOs at sixty five days, a one day improvement from the first quarter, both in line with our expectations. Our strong second quarter revenue growth with consistent DSOs drove higher working capital investment in the quarter. Free cash flow for Q2 was a use of $45,000,000 versus the source of $253,000,000 in the prior year quarter. The variance was driven mainly by higher working capital investment versus last year, as well as somewhat higher capital expenditures as we accelerated certain capital investments for growth.

[Paul Dimarco, EVP & CFO at MasTec]

You may recall in 2024, we saw DSOs decrease from seventy nine days in Q1 to sixty nine days for Q2, allowing us to reduce working capital last year, whereas this year did not have the same benefit with DSOs remaining consistent in the mid-60s. We completed $40,000,000 of share repurchases in the second quarter and extinguished our prior remaining authorization, bringing the year to date total to $77,000,000 at an average price of $110 per share. Also in the second quarter, our Board authorized an additional $250,000,000 repurchase program. Regarding some highlights from the second quarter segment performance, our Communications segment produced quite significant top end bottom line growth with revenue easily exceeding our forecast for the period and benefiting from continued strong demand in both wireless and wireline businesses from a diverse set of customers across the telecom and tech landscape. The adjusted EBITDA margin of 90 basis points year over year was generally in line with guidance inclusive of certain program expenditures ahead of expected growth that held back margin performance.

[Paul Dimarco, EVP & CFO at MasTec]

Second quarter adjusted EBITDA margin was 9.9% compared with 9% in the prior year and increased significantly from 6.9% in the first quarter as volumes ramped positively. Overall, end market strength remained strong and second quarter backlog increased 2% or $102,000,000 despite the record segment revenue in the quarter. Power Delivery continues to see substantial growth across the country, and we exceeded our quarterly revenue forecast by close to $50,000,000 producing 20% growth year over year. Adjusted EBITDA was generally in line with our forecast. Power Delivery backlog increased slightly as solid bookings were partially offset by the record quarterly revenue earned in Q2.

[Paul Dimarco, EVP & CFO at MasTec]

We continue to see significant new bookings opportunities as we look forward for the balance of the year and anticipate structural growth for this business for years to come, given the anticipated electricity demand and system upgrade requirements for our utility clients. In Clean Energy and Infrastructure, we saw continued improvement in Q2 adjusted EBITDA margin, which increased two thirty basis points year over year. Our Renewables business was a strong contributor to the CE and I margin performance with the benefit of some impacts from project closeouts in the quarter. We continue to see strong performance in the second half from operating leverage with higher volume and continued focus on strong execution. Our guidance assumes margins hold at similar levels to Q2 in the second half of the year.

[Paul Dimarco, EVP & CFO at MasTec]

On CE and I backlog, we saw solid bookings from all three business verticals contributing to the 11% sequential increase. This included almost $200,000,000 of Renewables backlog growth despite the noise in the period from the Big Beautiful Bill legislation. These new project additions continue to build our book for future years and reinforce the sentiment among our among our customers that their projects are essential, driven by strong offtake demand. We remain highly optimistic about the sector, driven by the fundamental cost competitiveness of renewable energy and the limited availability of near term alternatives for new power generation. Regarding pipeline infrastructure, our revenue result in the quarter beat our expectations by nearly $65,000,000 on strong product development, driven by a host of smaller and medium sized projects.

[Paul Dimarco, EVP & CFO at MasTec]

Adjusted EBITDA margin for the quarter was in line with expectations with an 11.5% margin versus guidance of low double digits, but we did see less flow through from the incremental revenue due to the investments made to support future growth. The year over year comparison remained challenged by the MVP project completion in the first half of last year, and we now expect that we will revert to growth beginning in the third quarter to complement ongoing sequential growth after the lower first quarter volume result. Pipeline backlog development was more muted versus the large increase reported in the first quarter, but we continue to see solid new awards totaling over $450,000,000 in the period, and the backlog did not include certain project verbal awards as Jose mentioned. We continue to expect to bid on a number of larger projects in the second half of this year with a robust bid schedule that reflects strong sources of demand across multiple geographies and related to numerous major gas basins domestically. The continued diversity of demand drivers related to LNG export, domestic, residential and commercial demand is leading to a clear resurgence of pipeline construction activity that we are seeing play out over multiple years to come.

[Paul Dimarco, EVP & CFO at MasTec]

Last quarter, I highlighted our focus on margin enhancement over time, particularly in our non pipeline segments, communications, power delivery and clean energy and infrastructure. Collectively, these segments delivered an 8.5% adjusted EBITDA margin in the second quarter, a 100 basis point improvement year over year. We remain optimistic about continued progress in the 2025 for these operations, including a solid increase sequentially in the third quarter with margins approaching double digits for the first time. This expected improvement is driven by operating leverage on higher volume and our continued focus on execution, productivity and disciplined cost management. Shifting to our updated consolidated guidance, I'd like to remind you that we posted supplemental guidance document on our IR website encourage you to review that for segment and other financial guidance details.

[Paul Dimarco, EVP & CFO at MasTec]

We are now raising 2025 annual revenue guidance to range between $13,900,000,000 and $14,000,000,000 with adjusted EBITDA ranging from $1,130,000,000 to 1,160,000,000.00 Adjusted EBITDA performance driven by almost 30% expected growth in our non pipeline segments year over year. Adjusted EPS is forecasted to be $6.23 to $6.44 with the midpoint up 60% versus 2024. We expect Q3 revenue of $3,900,000,000 adjusted EBITDA of $370,000,000 and adjusted EPS of $2.28 We are increasing 2025 revenue estimates to account for the second quarter beat and the continued strong demand visibility with significant year over year improvements in most segments, partially offset by the lower pipeline revenue recorded in the first half due to MVP project runoff. On adjusted EBITDA margins, we expect second half year over year margin expansion for Communications and Power Delivery, offset by slightly lower second half margins year over year for pipeline and clean energy due to the investments we are making to support anticipated future growth. Similarly, we are raising our net cash capital expenditure guidance to 140,000,000 as we procure additional equipment to support this growth.

[Paul Dimarco, EVP & CFO at MasTec]

Also notable, we still do not see material impact from either tariffs or federal tax incentive changes from the recent Big Beautiful Bill legislation in our 2025 outlook, though we have considered a measure of general macro uncertainty from the current policy and geopolitical environment as we discount risk in our forecast planning. Regarding cash flow and the balance sheet, we are increasing our expectation to 700,000,000 to $750,000,000 of cash flow from operations for 2025, assuming DSOs average around the mid-60s for the balance of the year. We ended the quarter with total liquidity of approximately $2,000,000,000 and net leverage of two point zero times, which we expect to decrease in the back half of the year. In June, we successfully refinanced our credit facilities, resulting in extension of maturities and favorable adjustments to certain terms, covenants and pricing. Our strong balance sheet and well structured debt profile provide a significant financial flexibility to pursue a disciplined return focused capital allocation strategy.

[Paul Dimarco, EVP & CFO at MasTec]

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

[Operator]

Thank We will now take our first question from Steven Fisher from UBS.

[Steven Fisher, MD & Equity Research Analyst at UBS Group]

Just to follow-up on the clean energy comments you made. Just curious about kind of what you experienced in terms of customer feedback and activity during the quarter. As all the policy uncertainty played out, I know you're sounds like you're pretty well set on '25, but did that kinda change things around with any specific projects or what you might have already had booked for 2026? And and how much actually do you have in your '26 plan booked at the moment?

[José R. Mas, CEO at MasTec]

Good morning, Steve. So I would say a couple things. I'd say, you know, our customers so far have been unaffected. Right? I I think what everybody's plans were for '25 are ongoing.

[José R. Mas, CEO at MasTec]

Quite frankly, what everybody's plans were for '26 are ongoing. The work that we booked, the success that we've had in bookings in both the first and the second quarter, you know, have nothing to do with with the federal legislative process as it's played out. I think it's completely solidified our plan for '25. It's put us in an incredible position for '26 where where we would expect to further grow that piece of the business. And, you know, at the end of the day, we're, you know, we're really excited about what came out of the legislation.

[José R. Mas, CEO at MasTec]

We think the one big beautiful bill is a good bill for MASTEC. Obviously, we've got an executive order that we're paying attention to. But we work for top tier developers and we think that they're in the best position to really maintain their business over a really long cycle.

[Steven Fisher, MD & Equity Research Analyst at UBS Group]

Okay. That's helpful. And then in power delivery, just curious how you're thinking about the timing of bookings here. I think, Jose, you said the the coming periods. Could that mean still the second half of this year?

[Steven Fisher, MD & Equity Research Analyst at UBS Group]

And, what are are you thinking your your focus projects here? Is it is it more on the the very high voltage lines or it would be substations or or anything else or all the above?

[José R. Mas, CEO at MasTec]

Well, I'm more focused on all of the above. I think we've made great progress in the business. If you look at, you know, our guidance, we're we're guiding to to grow just under 20% for the year. That's that's, you know, virtually all organic. So I think we've done a great job in that business of building off of what already was a good 02/2024.

[José R. Mas, CEO at MasTec]

I think margin progression is happening in that business as we expected. We're really excited about what the second half is gonna bring for us in power delivery. We think our positioning in the market is fantastic. We expect to be a player on big projects as we go forward, but also on the day to day business. Right?

[José R. Mas, CEO at MasTec]

The day to day business is really important for us. It's the bulk of what we do. We're constantly winning projects. We're constantly getting more competitive. We're talking a lot about, you know, margin expansion opportunities and what we've done to build margins.

[José R. Mas, CEO at MasTec]

And if you think about where we've come in that business from, you know, just a few years ago in 2223 as we were very acquisitive in that business, I think we've made tremendous inroads in margin expansion and then really positioning in the market and we're really excited about what's going come in that market for us.

[Steven Fisher, MD & Equity Research Analyst at UBS Group]

Thank you very much.

[José R. Mas, CEO at MasTec]

Thanks, Steve.

[Operator]

We will take our next question from Philip Shen from ROTH Capital Partners. Please go ahead.

[Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Hey, guys. Thanks for taking the questions. First one is a follow-up, Jose, on the expectations for how that could play out and maybe the different outcomes and how are the tier one customers positioned for those different outcomes? Thanks.

[José R. Mas, CEO at MasTec]

Sure. So I I look, I think a number of our customers today have have a lot of have a very large portfolio of safe harbor projects. The way that the legislation is written is, you know, through '27, everybody keeps their credits. Beyond '27, it's what you have safe harbor. There's a lot of opportunities for people to further safe harbor projects all the way into the middle of '26.

[José R. Mas, CEO at MasTec]

There will be some changes in the in the executive order relative to that. We think they'll be manageable. And more importantly, we think they'll be manageable by the top tier developers. I think the work that we've done post CIA acquisition in terms of, you know, really focusing ourselves on the customers that we were working for, the relationships that we're creating. When you look at our customer base today in that industry, we think it's it's best in class.

[José R. Mas, CEO at MasTec]

It's tier one. And we think those are the ones that are best positioned to take advantage of the opportunities that will exist to safe harbor. It it literally puts your projects in play all the way to 2030. Obviously, there's another election in 02/2028. So we'll see what happens, but, you know, we're we're excited about, again, not just '26.

[José R. Mas, CEO at MasTec]

We're you know, I have no doubt in my mind that this business is gonna grow for us in 02/1926. I think it'll grow beyond that. And over time, and we said it in our prepared remarks, I actually think the the market's becoming a lot more competitive when you look at, you know, the sources of power that exist. Right? You've got nuclear, which is a ways out.

[José R. Mas, CEO at MasTec]

You've got gas that will see, you know, significant increases in three to five years. But when you look at the price of that, renewables start getting really competitive even without subsidies. When you look at the rest of the world and what they're able to build renewables at in a in a free market, it's a low cost. So it is a formidable form of power generation at a low cost, especially when you consider storage. And we think the market's gonna be strong for a really, really long time with or without federal incentives.

[Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Great. Thank you. And then you talked about also how bookings have accelerated, I think, for clean energy. And I think in the back half, that might continue. And so I was wondering if you could just kind of give a little bit more color post OVB, what the conversations were like with customers?

[Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Did you see really an aggressive kind of amount of activity in July? And then, you know, do you expect that acceleration to sustain through q three and '4? Or do you think that kind of slows down as we get through the year? Thanks.

[José R. Mas, CEO at MasTec]

So I would say not yet. So the the bookings that we enjoyed in q one and q two had nothing to do with one the the bill. Right? So in q one, we booked over a billion dollars in new projects, which we were really excited about it. You know, I think we had a I don't remember 1.4 times book to bill in that market in q one.

[José R. Mas, CEO at MasTec]

We we booked 1,600,000,000.0 in q two. And I think that acceleration is critically important. I think we're gonna have a really strong second half of the year. I think we're gonna have a really good third quarter yet again. And I would argue that none of that has to do with the bill.

[José R. Mas, CEO at MasTec]

You know, depending on what happens with the executive order, there is a possibility in place that people work really hard to safe harbor and pull in a lot of work. We have not taken any of that into account in in any of our thought process. That would we don't know. Obviously, that would be upside to Mastic and others in the industry. But we'll keep working with our customers to see if that's gonna be required or not.

[José R. Mas, CEO at MasTec]

Hopefully, it won't be. And people will work off their current safe harboring, you know, over the course of the next five or so years.

[Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Great. Thank you. One more if I may, as it relates to margin. In terms of EBITDA margin, what are your latest thoughts on the overall trajectory in '26 and '7? Are double digit margins still on the table in the near to medium term? Thanks.

[José R. Mas, CEO at MasTec]

Yeah. So the the question is, from a I'm not sure if the question is from a total company perspective or specific clean energy.

[Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC]

Total company. Thanks.

[José R. Mas, CEO at MasTec]

Yeah. So from a total company perspective, look, we're really bullish on every segment that we operate in. We're seeing significant acceleration. As we said, obviously, the big driver to margins in our business is our pipeline segment. It's historically been our highest margin business.

[José R. Mas, CEO at MasTec]

We're really bullish about what's gonna come there. I think, you know, when you look at our guidance for this year, you know, we're in that, you know, low 8% range. I don't know that, you know, we're not gonna we're not gonna sit here today and and talk about getting to double digits in 02/1926. But over the long term, that is our goal. That's we think we can achieve that.

[José R. Mas, CEO at MasTec]

Obviously, it has a lot to do with the mix of our business. But, you know, we think today when we look at our outlook over the next few years, the mix potential of our business has never been better.

[Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC]

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

[José R. Mas, CEO at MasTec]

Thank you.

[Operator]

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

[Andrew Kaplowitz, Managing Director at Citi]

Good morning, everyone.

[José R. Mas, CEO at MasTec]

Good morning, Andy.

[Andrew Kaplowitz, Managing Director at Citi]

Okay. So you you did raise your pipeline revenue forecast a bit, but as you said, backlog was down slightly sequentially. So could you give us some more color on what you're seeing? You mentioned, I think, some projects you expect to book shortly. Is it possible to quantify that?

[Andrew Kaplowitz, Managing Director at Citi]

And then I know you've talked about revenue at least as big as '20 as in '24 and '26. So maybe you could update us on the potential of this cycle. Could it be comparable to pre COVID levels?

[José R. Mas, CEO at MasTec]

Sure. Thanks for the question, Andy. So a couple of things I'd say, you know, our pipeline business isn't about this year, and quite frankly, it isn't even about next year. We stand firm with with what we said before, which is we think that our 2,026 pipeline business will will look a lot more like our '24 pipeline business, which is a sizable increase from where we'll be in 02/2025. Historically, obviously, you know, it's been our best performing business.

[José R. Mas, CEO at MasTec]

It's been our highest margin business. It peaked at about 3 and a half billion of revenues. I think on our last call, we said, you know, if the if the market plays out the way that that we're seeing, there's potential to ultimately get there over time. We still feel that way. We it's somewhat remarkable that we're even saying that based on where the business has been in the last couple years.

[José R. Mas, CEO at MasTec]

But the level of activity that we're seeing today is, you know, in my mind somewhat unprecedented. Again, not not necessarily for '26, but even beyond '26. And we're we're making significant investments today. Right? We're we're investing in people, we're investing in equipment, and we're preparing for what we think is gonna be a really large cycle, which we'll see the beginning of in '26.

[Andrew Kaplowitz, Managing Director at Citi]

Helpful, Jose. And maybe a similar question in communication. There seems to be, you know, a ton of drivers there, you know, whether it's fiber to the home, but now fiber to the data center. I think the big beautiful bill helps with, you know, 100% bonus depreciation. So maybe you can talk about for the durability and duration of the cycle as you see it today, both in wireline and wireless?

[José R. Mas, CEO at MasTec]

So again, Andy, it's been something that has somewhat caught us by surprise, the strength of the market. You know, our revenue guidance this year is, you know, north of 20%, again, all organic. When you look at the first two quarters, we outpaced that. We're bullish about, you know, not just, you know, this year, but what's gonna quite frankly happen in '26 and beyond. We've got a number of new customers that keep coming to us with with different plans, with different opportunities.

[José R. Mas, CEO at MasTec]

We're pricing a lot of things in that market. You know, there's no reason that we don't think that next year is gonna be another really strong growth year. And quite frankly, we think we're at the beginning of the cycle there as well. You know, there's been a lot of talk about beads and, you know, beads hasn't even shown up yet. So we'll see, you know, how that also impacts the market.

[José R. Mas, CEO at MasTec]

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

[Andrew Kaplowitz, Managing Director at Citi]

Thanks, Jose.

[José R. Mas, CEO at MasTec]

Thanks, Andy.

[Operator]

We will take our next question from Sangeetha Jain from KeyBanc Capital Markets. Go ahead.

[Sangita Jain, Senior Equity Research Analyst at KeyBanc Capital Markets]

Hi, good morning. Thanks for taking my questions. Jose, if I can follow-up with one more on the Communications segment. Can you talk specifically about Maastricht, like, wireline versus wireless as you lap the Ericsson order and as we talked about all the fiber opportunities come up?

[José R. Mas, CEO at MasTec]

Sure. So again, historically, wireless business for a long time was the biggest piece of the of the of the business. It's not anymore. Our wireless business is probably roughly 40% of what we do. The balance is wireline.

[José R. Mas, CEO at MasTec]

Wireline has a lot of growth. Our wireless business though, we're still really bullish on. You know, the Ericsson project is really less than a year old. It really started in the second half of last year. So we're in the first year of what's gonna be a a long multi year cycle on on on that specific opportunity.

[José R. Mas, CEO at MasTec]

We see tons of opportunities with other carriers on the wireless side based on what they've got planned in the coming years. We actually think that that business will see, again, significant growth opportunities within within the entire communication sector. And the wireline market is is is really there's as much demand as we've seen. So that's gonna continue to grow for us. So we think both both sectors are strong.

[José R. Mas, CEO at MasTec]

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

[Sangita Jain, Senior Equity Research Analyst at KeyBanc Capital Markets]

And thank you for that, Jose. And if I can follow-up on that itself, would you need to make investments in on that wireline side similar to what you are doing in pipelines if the cycle does materialize the way it's looking today?

[José R. Mas, CEO at MasTec]

I think we've done it. We talked a little bit about that on our first quarter call. We also added people in that business in a sizable way in the second quarter. I think, you know, we've we've talked about ramping up for the demand. I think we've we've been in that circumstance now for multiple quarters.

[José R. Mas, CEO at MasTec]

So I actually think we're pretty well positioned there. I don't think that the level of investment on a go forward basis is gonna be different than what it's been in the in the last couple quarters. So I think we'll continue to build off that.

[Sangita Jain, Senior Equity Research Analyst at KeyBanc Capital Markets]

Great. Appreciate that. Thanks, Jose.

[José R. Mas, CEO at MasTec]

Thank you.

[Operator]

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

[Julien Dumoulin-Smith, II-Ranked & 'Hall of Fame' Research Analyst covering Power, Utilities & Clean Energy at Jefferies]

Hey. Good morning, team. Good morning, Jose. Thanks for the time. I appreciate it.

[Julien Dumoulin-Smith, II-Ranked & 'Hall of Fame' Research Analyst covering Power, Utilities & Clean Energy at Jefferies]

Just maybe to to kick it off a little bit, let's talk about margins here a little bit. I mean, obviously, you're talking about investing and reinvesting in the business in anticipation. What's the timeline and cadence here of of seeing that inflect in certain segments here? I mean, obviously, as you said yourself, some of those may not necessarily fully, you know, translate in in in bookings or at least, you know, meaning revenue increases in '26. How do you think about the cadence of that margin improvement through the cycle here?

[Julien Dumoulin-Smith, II-Ranked & 'Hall of Fame' Research Analyst covering Power, Utilities & Clean Energy at Jefferies]

And then secondly, to follow-up on the pipeline commentary earlier, there's some pretty mega projects contemplated here for the back half of the year. I mean, obviously, given your market position, can we make presumptions about some of those large ones and your position therein? I mean, just being aligned with those partners?

[José R. Mas, CEO at MasTec]

Yeah. So I'd say a couple things. I'd say, you know, when we think about investments relative to margin, our backlog's way up, like, I mean, considerably up since the beginning of the year. It's been across virtually all of our segments. We see what's coming.

[José R. Mas, CEO at MasTec]

We see what's not in backlog, but we feel confident we're gonna win. And thus the reason for the investment decisions that we've made. So we're really trying to get ahead of that. We're really trying to be in a position so that when that work comes in, we can hit it and and execute on the highest margin that we can relative to that. So we think that a lot of our investment will be captured in '25 relative to what we're gonna need to take advantage of some of these growing markets.

[José R. Mas, CEO at MasTec]

Obviously, there's always a need for investment, but we think we're doing a lot of that as we speak. As it relates to pipeline, look, we're the largest pipeline builder in North America. We think we're the best pipeline builder in North America, bar none. We've got the largest fleet. We've got great people.

[José R. Mas, CEO at MasTec]

And and we think that for any owner that's out there that's interested in building a pipeline, there would be no reason not to contact Mastic and want Mastic on your project for lots of reasons. And we think that that'll play out in the marketplace.

[Julien Dumoulin-Smith, II-Ranked & 'Hall of Fame' Research Analyst covering Power, Utilities & Clean Energy at Jefferies]

Got it. And thank you. And just to clarify from earlier the the renewable timing, obviously, you saw good progress here. How do you think about the timing of those projects getting pulled in? You made allusion to it earlier, but maybe to put a finer point on it, do you think that you actually see a shift forward into '26 and '27 specifically on the renewable business to you know, even within your existing backlog?

[José R. Mas, CEO at MasTec]

It depends on well, not in existing backlog because our existing backlog is only eighteen months. So we wouldn't have anything today in backlog for 2027 regardless of where we stand with customers and our expectations for the work that we'll do for them in '27. I'd say that I don't think customers are there yet. I think cost you know, in a perfect world, you know, customers have, you know, dozens of gigawatts of projects planned from now through 2030. And hopefully, they can work that plan off in the process that that they're expecting.

[José R. Mas, CEO at MasTec]

If something changes relative to the executive order and they have to accelerate that, we will definitely see a significant acceleration of the business, and then we'll have to manage to that. I think that's speculative, so I don't really wanna get into that. I actually think that, you know, there's gonna be a reasonable way to safe harbor projects and and we won't see, you know, significant acceleration across the industry. But we'll but time will tell.

[Julien Dumoulin-Smith, II-Ranked & 'Hall of Fame' Research Analyst covering Power, Utilities & Clean Energy at Jefferies]

Excellent, guys. Thank you so much. Best of luck. Exciting time.

[Operator]

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

[Atidrip Modak, Vice President - Energy Services & E&Ps at Goldman Sachs]

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

[José R. Mas, CEO at MasTec]

Sure. So the 4,000 number that we gave was company wide. Obviously, pipeline was a big part of that. We, you know, we feel like we perform well on all types of projects, large and small. We've said that in the past.

[José R. Mas, CEO at MasTec]

We think the margin opportunity and potential doesn't necessarily vary by type by size of projects. Sometimes it does by contract structure. So, you know, the cost plus world allows you a lower margin than than than if you're doing units. So we've predominantly done mostly units with some cost plus. We'll see what that mix looks like in the future.

[José R. Mas, CEO at MasTec]

In terms of scale, you know, we we we would argue we're underutilized, right, at $2,000,000,000. Our peak was I don't know, a couple years ago, were doing 3 and a half billion in sales and pipeline. So we think that the opportunity for us to increase the level of productivity with the assets that we own is tremendous. And we don't think that there's a we don't think from a a terms of scale and our ability to perform that there'll be a, you know, a a lack of projects. So for us, it's gonna be about, you know, who do we wanna partner with, what customers do we wanna work for, and, you know, how big and how quick do we wanna scale that business over time.

[Atidrip Modak, Vice President - Energy Services & E&Ps at Goldman Sachs]

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

[José R. Mas, CEO at MasTec]

In terms of the total market or of a specific project?

[Atidrip Modak, Vice President - Energy Services & E&Ps at Goldman Sachs]

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

[José R. Mas, CEO at MasTec]

Yeah. Look. So it depends on the customer. There are projects that we've done in their entirety. There are projects where we've done, you know, half a project, the majority of a project, and it all depends on the customer, the size of project, the location, the risk tolerance.

[José R. Mas, CEO at MasTec]

Right? For us, you know, again, we've we've got a lot of availability. We've got, you know, we think the most flex in the in the marketplace relative to our ability to gear up for any project. And we are going to responsibly try to, you know, be as strong as we can in that business and grow that business as quickly and as reasonably as we can at the margin profile that we've historically enjoyed.

[Atidrip Modak, Vice President - Energy Services & E&Ps at Goldman Sachs]

Thank you. Appreciate that.

[José R. Mas, CEO at MasTec]

Thank you.

[Operator]

We'll take our next question from Drew Treiberman from JPMorgan.

[Drew Chamberlain, Equity Research Associate at JP Morgan Chase & Co]

Good morning. Thank you for taking the questions. First of I just want to follow-up on the pipeline margins here. And obviously, I appreciate the investment that you've put into the business this quarter. But can you maybe talk a little bit about how much further investment you need to have in 2025 to be ready for the coming years?

[Drew Chamberlain, Equity Research Associate at JP Morgan Chase & Co]

And then also, I mean, maybe just touching a little bit, I know we've talked about the revenue volumes in the past being three and a half. But, I mean, also, the the the margin profile then was also in the twenties. Right? And so I'm just wondering if you think about, you know, as that revenue ramps, you know, do you think there's any structural change in what the margin potential is here? I'm not talking about, like, what you've guided to, but how you think about the potential for that business.

[Drew Chamberlain, Equity Research Associate at JP Morgan Chase & Co]

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

[José R. Mas, CEO at MasTec]

In the long term answer is no. There's nothing structurally different. If you look at, you know even if you look at '25, which I know we don't wanna focus on '25, but if we look at the back half of '25, our guidance profile on the margin side is way up, right? So we'll be back to the mid teens in the second half of '25 versus the first half of '25. Again, you know, '26 isn't the peak year by any stretch of the imagination.

[José R. Mas, CEO at MasTec]

I think the cycle starts in '26. I think the performance in '26 will obviously be better than the performance in '25. Again, we've said approaching '24 levels. But over time, as the volume continues to increase, there is no reason why we shouldn't be able to attain historical margin profiles. Again, we've always guided towards high to mid teens in that market.

[José R. Mas, CEO at MasTec]

The opportunity to outperform that is there, but that's based on execution. So no, we don't think there's anything structurally different that wouldn't allow us, if we execute well to achieve a similar level of margins as we've historically done.

[Drew Chamberlain, Equity Research Associate at JP Morgan Chase & Co]

Okay. Thank you. And then the quick one on on cash. I mean, obviously, a big ramp here in the the second half of the year in the implied guidance. Can you just maybe talk about what's giving you confidence in that ramp?

[Drew Chamberlain, Equity Research Associate at JP Morgan Chase & Co]

I mean, I appreciate you did it last year, so it's clearly achievable. But what's giving you confidence this year? And then maybe if there are a few points that make you worried about whether it's achievable or not, things that could be headwinds in the second half to cash. I mean, what what would those be?

[Paul Dimarco, EVP & CFO at MasTec]

It's really just timing of the sequential growth. Right? So we had big sequential growth in in q two, and it'll moderate as we go through q three and q four from the prior quarter. It's just working capital. That that's the only working capital timing.

[Paul Dimarco, EVP & CFO at MasTec]

You know, our DSOs and the, you know, low to mid sixties are where we think they'll be structurally. So, you know, we don't have a benefit of reducing those any further. So it's it's just timing of investing for the various jobs.

[Drew Chamberlain, Equity Research Associate at JP Morgan Chase & Co]

Okay. Great. Thank you both.

[José R. Mas, CEO at MasTec]

Thank you.

[Operator]

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

[Jamie Cook, MD - Equity Research at Truist Securities]

Hi. Good morning. Nice quarter. I guess, Jose, obviously, lots of growth opportunities ahead of you, and you're investing in your business as you talked about increasing your labor. I'm wondering to what degree does that create a short term headwind as you think about margins, at least in the 2026, just as we're absorbing those costs and training people, etcetera.

[Jamie Cook, MD - Equity Research at Truist Securities]

And then I guess my second question, and I'm sorry if someone's asked this, but there's, like, five calls this morning. Just just your thoughts, you know, on m and a. Your peers or your peer is making some pretty aggressive moves on the acquisition front. To what degree do you think, you need to do more acquisitions, to continue to, you know, enhance your competitive positioning? And to what degree do you need to do acquisitions to ramp the labor growth? Thank you.

[José R. Mas, CEO at MasTec]

Yes. A couple things. I'd say that when we look at the investments that we're making, we think we're absorbing those costs in 02/2025. We think we absorbed some of them in the second quarter, which was why we, you know, handily beat revenues but didn't necessarily have a lot of flow through on EBITDA. We've got a little bit of that in q three again, where we've guided revenue slightly higher, but without a significant amount of flow through.

[José R. Mas, CEO at MasTec]

We think that has to do with the investments. We actually think that starts to turn as early as the fourth quarter. We don't expect there to be significant lingering impacts of that going into '26, where we think will be highly utilized across these investments that we've made. So we're again, we we think that's a great story and really important. As it relates to m and a and what we've said in the past, look, we've you know, we we were very acquisitive in the 2223 time frame.

[José R. Mas, CEO at MasTec]

We talked about really focusing on the organic opportunities that are in front of us. That's been our focus when you look at our revenue growth this year, when you look at our earnings growth, when you look at our 60% EPS growth this year relative to last year, that's been virtually all organic. And I think that that was important for the organization at that moment in time with you know, some of the issues that we had with the integration of IA. We think we're through that. We think we're in a very different position.

[José R. Mas, CEO at MasTec]

To your question of do we need to do m and a? Our answer is we do not need to do m and a. We when we look at '26, right, we see we laid out a goal when we did the IA acquisition in the 2022 that we wanted to exceed $15,000,000,000 in revenue. We put a midterm target on that. You know, here we are three years later.

[José R. Mas, CEO at MasTec]

I'm highly convinced that next year will exceed $15,000,000,000 in revenue in 02/1926. I think we'll improve our EBITDA margins in 2026 versus 02/2025. When we look at our EPS, we think we can exceed $8 of EPS in 2026 versus where we've been. So from a necessity point of view, no, to grow at double digits and to continue to grow earnings at double digits, we do not feel we need to do m and a. With that said, are there m and a opportunities out there that we're intrigued by that we think could potentially help further grow the business?

[José R. Mas, CEO at MasTec]

The answer is yes, right? And I think that as an organization, we're getting to a place where we're more ready for it than we've been in the last couple years. Again, we're not looking to do anything transformational. We think we've been really good at tuck ins over time, so that's where we'll focus. But, you know, as we kind of alluded to on our last call, I do think you can expect us to be more active in the m and a world on an angle on on a go forward basis.

[Jamie Cook, MD - Equity Research at Truist Securities]

Thank you.

[Operator]

We will take our next quest we will take our next question from Justin Hauke from Robert W. Baird. Please go ahead.

[Justin Hauke, Senior Equity Research Associate at Robert W. Baird & Co]

Oh, great. I think most of my questions have been answered. I have I just have one quick one. Just turning back to the communications segment. You know, I think your previous guidance for the second half was that it would be kind of flattish.

[Justin Hauke, Senior Equity Research Associate at Robert W. Baird & Co]

And now, you know, 3Q in particular is really strong. And I guess, you know, second half up high single digits, maybe close to 10%. Is that, you know, is that the data center fiber work that's driving that? Or what what's the change versus kind of the the previous outlook that it would be flattish here in the second half?

[José R. Mas, CEO at MasTec]

Well, I think it's the outperformance in the first half. Right? So if you look at the first half, again, we grew, you know, first half revenue versus last year in in in the comms business is up 38%, which is really impressive. I think that if anything, I'd argue we're being a little conservative in the second half, and I think it's broad based. I think the wireless business is performing well.

[José R. Mas, CEO at MasTec]

It's strong. We've done a really good job of gearing up and and or we did a really good job of gearing up and preparing for some of the larger projects we had in that business. I think that's that's showing in execution today. We continue to see tons of wireline opportunities, new ones that were pricing that will, you know, have some impact towards the '25, but quite frankly, will probably impact '26 more. So we continue to see activity.

[José R. Mas, CEO at MasTec]

I think, you know, obviously, the wireless build out started in the '25. So the twenty five second half comps are more difficult than the first half twenty five as part of the reason for the large variances in growth. But again, we you know, when we look at, you know, the cycle and what we think we can accomplish in this business over a longer period of time, we think high high single to low double digit top line growth is is very reasonable in this market for that segment.

[Justin Hauke, Senior Equity Research Associate at Robert W. Baird & Co]

Great. That's all I had. Thank you.

[Operator]

Thank you.

[Operator]

We will now take our next question from Brian Brophy from Stifel. Please go ahead.

[Brian Brophy, AVP at Stifel Financial Corp]

Yes, thanks. Good morning, everybody. I appreciate you squeezing us in here. Wanted to ask about Power Delivery margins. There was some discussion, about project inefficiencies in the queue and I think the press release as well.

[Brian Brophy, AVP at Stifel Financial Corp]

And I think this is second quarter you guys have talked about this. Any more color on what is driving, these project inefficiencies? Is it related to Greenlink at all? And how should we be thinking about this this potential headwind in the second half?

[José R. Mas, CEO at MasTec]

Well, if you think about our our second half guide for margins and power delivery are double digits. We think we'll achieve that in both quarters, third and fourth. So I I I think it's no different than the commentary we've we've put out in the past. I don't think there's anything significant to really highlight. I'd say, you know, in some areas, think we had some weather impacts.

[José R. Mas, CEO at MasTec]

We had, you know, geographically, had areas that really improved and areas that that probably held us back a little bit. I do think there you know, we we said it in q one, there's some margin that we felt we left on the table there in the first half of the year. You know, with that said, I mean, we were still up, right, in both earnings and in revenue on a year over year basis. So, you know, revenue was up about 17% in the first half year over year. EBITDA was up 10% in the first half year over year.

[José R. Mas, CEO at MasTec]

So it's not that we didn't improve. It's quite frankly, we thought we could have improved more. And I think we'll start to show that in the second half of the year.

[Brian Brophy, AVP at Stifel Financial Corp]

Thanks. I'll pass it on.

[Operator]

Will take our next question from Brent Thielman from D. A. Davidson. Please go ahead.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

Hey. Thanks. Congrats on all the momentum here. Jose, just at a in e book, you get a lot of businesses that sort of benefit indirectly from the AI data center build out. Maybe just refresh us on, you know, some of the things you're doing more directly for for data centers, kinda size it for us, and are you investing more in it and and trying to scale that up?

[José R. Mas, CEO at MasTec]

The short answer is yes. I think, everything from, you know, we started in that world, we we talked about it. It feels like a long time ago, but, you know, we really started that on the civil side of our business with our infrastructure business. I think it's grown where we're doing a lot of power associated work relative to data centers. We're obviously doing a lot of telecom work related to data centers.

[José R. Mas, CEO at MasTec]

Our business continues to grow there. It's performing, you know, as expected or better. I think we're probably more optimistic about the longer term opportunities of what we have in that market than we've ever been. And I think over the next couple quarters, hopefully, we'll be able to talk more about what that is and what services we're specifically trying to target.

[Brent Thielman, MD & Senior Research Analyst at D.A. Davidson]

Excellent. Thank you.

[Operator]

Thank you.

[Operator]

We will take our next question from Liam Burke from B. Riley Securities.

[Liam Burke, Managing Director at B. Riley Financial]

Thank you. Good morning, Jose. Good morning, Paul. Good morning, Liam.

[Liam Burke, Managing Director at B. Riley Financial]

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

[José R. Mas, CEO at MasTec]

I mean, we're not afraid of the competition. I think that, no, it's a matter of there's obviously been a huge sentiment change. So if you if you would have asked our customers a year ago, you know, the the outlook was, you know, nowhere near what it is today. So I think as the, you know, obviously, the election changed a lot, the reliance on natural gas in the future has changed a lot. Changed the business.

[José R. Mas, CEO at MasTec]

Our customers are responding to that change, but it doesn't happen overnight. Right? So any of these projects, there's obviously a lot of engineering planning. You gotta order pipe. You gotta you gotta work on routes and get permitting and and that's happening.

[José R. Mas, CEO at MasTec]

Right? So we're the level of activity that we're seeing is incredible. We will get, you know, more than our share of that, we believe, and it's just a matter of timing. Right? So we're you know, we see what's coming in the second half of year.

[José R. Mas, CEO at MasTec]

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

[Liam Burke, Managing Director at B. Riley Financial]

Great. And then just real quickly, and you mentioned this in your prepared comments that nuclear is is way out there. But are there any early discussions on any of the providers on getting you involved?

[José R. Mas, CEO at MasTec]

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

[Liam Burke, Managing Director at B. Riley Financial]

Great. Thank you, Jose.

[José R. Mas, CEO at MasTec]

Thank you.

[Operator]

That will conclude today's Q and A session. I would now like to turn the call back over to management for any additional or closing remarks.

[Chris Mecray, VP - IR at MasTec]

Thank you all for joining. This concludes today's call. Thanks for participating. And as a reminder, please visit our investor, website for a replay and transcript of the call, which will be posted when available. Have a good day.

[Operator]

Thank you. That concludes today's call. Thanks for participating. And as a reminder, please visit our investor website for a replay and a transcript of the call, which will be posted when available.

Participants

Executives

• Chris Mecray, VP - IR
• José R. Mas, CEO
• Paul Dimarco, EVP & CFO

Analysts

• Steven Fisher, MD & Equity Research Analyst at UBS Group
• Philip Shen, MD & Senior Research Analyst at Roth Capital Partners, LLC
• Andrew Kaplowitz, Managing Director at Citi
• Sangita Jain, Senior Equity Research Analyst at KeyBanc Capital Markets
• Julien Dumoulin-Smith, II-Ranked & 'Hall of Fame' Research Analyst covering Power, Utilities & Clean Energy at Jefferies
• Atidrip Modak, Vice President - Energy Services & E&Ps at Goldman Sachs
• Drew Chamberlain, Equity Research Associate at JP Morgan Chase & Co
• Jamie Cook, MD - Equity Research at Truist Securities
• Justin Hauke, Senior Equity Research Associate at Robert W. Baird & Co
• Brian Brophy, AVP at Stifel Financial Corp
• Brent Thielman, MD & Senior Research Analyst at D.A. Davidson
• Liam Burke, Managing Director at B. Riley Financial