MYR Group (MYRG) Q4 2025 Earnings Call Transcript

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Date

Thursday, Feb. 26, 2026 at 10 a.m. ET

Call participants

• President and Chief Executive Officer — Rick Swartz
• Senior Vice President and Chief Financial Officer — Kelly Huntington
• Senior Vice President and Chief Operating Officer, Transmission and Distribution — Brian Stern
• Senior Vice President and Chief Operating Officer, Commercial and Industrial — Don Egan

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Takeaways

• Annual revenue -- $3.7 billion, representing a record for MYR Group (NASDAQ:MYRG).
• Fourth quarter revenue -- $974 million, up $144 million, or 17%, compared to the prior-year quarter.
• T&D (Transmission and Distribution) segment revenue -- $531 million in the fourth quarter, an 18% year-over-year increase; transmission projects contributed $330 million (+$64 million), and distribution projects $201 million (+$17 million).
• C&I (Commercial and Industrial) segment revenue -- $443 million in the fourth quarter, a record for the segment and up 17% from the same period in the prior year, driven by increased fixed price contract work.
• Annual gross margin -- 11.4%, compared to 10.4% last year; improvement attributed to margin recovery as specific problem T&D and C&I projects from 2024 were resolved, complemented by favorable productivity, change orders, and job closeouts.
• T&D operating income margin -- 7.4% for the year, compared to 6.7% last year, benefiting from improved demand and absence of prior-year clean energy project impacts.
• C&I operating income margin -- 6.6% for the year, versus 3.9% last year, primarily reflecting higher-margin projects nearing completion and operational improvements.
• Fourth quarter SG&A expenses -- $65 million, an $8 million increase due to higher employee incentive compensation and personnel investments for future growth.
• Fourth quarter interest expense -- $1 million, down $1 million from the previous year, reflecting lower average debt and interest rates.
• Effective tax rate -- 21.2% in the fourth quarter, compared to 40.9% prior year, due to adjustments in state rates and permanent difference items.
• Fourth quarter net income -- $37 million, the highest quarterly net income reported, compared to $16 million for the previous fourth quarter.
• Diluted EPS -- $2.33 for the fourth quarter, up from $0.99 in the prior-year fourth quarter.
• Fourth quarter EBITDA -- $64 million, compared to $45 million one year prior.
• Backlog -- $2.8 billion as of period end, up 9.6% from the previous year; $1.0 billion T&D and $1.8 billion C&I, with longer-duration projects driving growth.
• Fourth quarter operating cash flow -- $115 million, compared to $21 million in the prior-year quarter, linked to improved billings, collections, higher income, and lower contingent acquisition payouts.
• Fourth quarter free cash flow -- $85 million, versus $9 million last year, reflecting higher capital expenditures offset by elevated operating cash flow to support expansion.
• Working capital and liquidity -- $265 million in working capital, $59 million funded debt, $408 million available on the credit facility, and $150 million in cash balances at year-end.
• Debt leverage -- Funded debt to EBITDA ratio at 0.25x, demonstrating conservative leverage.
• Bidding environment -- Management characterized the current environment as healthy, underscored by high return-client concentration (90%), and continued selectivity for long-term client relationships.
• Data center awards -- Multiple new projects won in Colorado, Arizona, California, and New Jersey; C&I backlog diversification confirmed, with clients including hyperscalers, general contractors, and developers.
• Large project pipeline -- Seven-year Kentucky MSA and multi-state T&D awards cited; major new MSAs (e.g. Xcel) not yet material in current backlog due to 90-day backlog recognition policy.
• Cash flow drivers -- CFO Huntington stated, "A lot of that is driven by our lower DSOs. We are now in the mid-50s versus the historical average of around 70, and that is driven by a combination of things. We saw a 16-day improvement if you look year over year, with 11 days of that in the third quarter. Part of it is getting beyond the problem projects that we had in 2024, but I would say a larger factor is just that we have a very strong net overbilled position, really driven by some of the large fixed price work that we have on the C&I side in particular."
• Capital allocation -- Management reaffirmed priority on organic and acquisition-driven growth, with share repurchases ("over $150 million at an average price of $117") as tactical, not strategic, capital deployment.

Summary

MYR Group described 2025 as a record-setting year for both revenues and profitability, coupled with historically high quarterly net income and cash generation. Management detailed substantial backlog expansion in both T&D and C&I segments, attributing this to robust multi-year project awards and diversified end market participation. The call confirmed a consistent 10% revenue growth outlook for the year ahead, driven by a dynamic mix of long- and short-cycle projects and a disciplined, selective bidding approach focused on repeat customers.

• Management clarified that recently awarded long-duration transmission MSAs, including Xcel and Kentucky, are not yet fully reflected in backlog figures, given the company's 90-day backlog recognition convention.
• CEO Swartz stated, "over 90% of our business is return clientele," underscoring the deliberate emphasis on repeat projects and risk-management in project selection.
• Weather and project timing were explicitly framed as the principal operational risks for the upcoming period, with permitting noted as a secondary risk for project scheduling rather than demand.
• MYR Group highlighted margin increases in both C&I and T&D segments, pointing to ongoing productivity gains, favorable billing profiles, and "midpoint" positioning within their 5%-7.5% margin targets for 2026.
• CFO Huntington highlighted material improvement in days sales outstanding (DSO), asserting this "represent potentially a little bit of a headwind as we look forward," given billing mix shifts could reduce working capital benefits.

Industry glossary

• DSO (Days Sales Outstanding): A measure of how quickly a company collects payment after a sale is made, indicating efficiency in collections and customer payment behavior.
• Master Service Agreement (MSA): A long-term agreement that sets the basic terms for a contractor to deliver as-needed services, often with backlog booked for a limited upcoming period (90 days for MYR Group) despite longer agreement length.
• Fixed price contract: A contractual arrangement where the price is set in advance for the full scope of work, limiting risk of cost overruns and often associated with more favorable billing terms for contractors.
• Book-to-bill: Ratio of orders received to revenue billed in a specified period, used to assess business pipeline momentum.

Full Conference Call Transcript

Jennifer Harper: Thank you, and good morning, everyone. I would like to welcome you to the MYR Group Inc. conference call to discuss the company's fourth quarter and full year results for 2025, which were reported yesterday. Joining us on today's call are Rick Swartz, President and Chief Executive Officer; Kelly Huntington, Senior Vice President and Chief Financial Officer; Brian Stern, Senior Vice President and Chief Operating Officer of MYR Group Inc.'s Transmission and Distribution segment; and Don Egan, Senior Vice President and Chief Operating Officer of MYR Group Inc.'s Commercial and Industrial segment.

A copy of yesterday's press release announcing our fourth quarter and full year 2025 results can be found on the MYR Group Inc. website at myrgroup.com under the Investors tab. A webcast replay of today's call will be available on the website for seven days following the call. Please note, today's discussion may contain forward-looking statements. Any such statements are based upon information available to MYR Group Inc.'s management as of this date and MYR Group Inc. assumes no obligation to update any such forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance.

For more information, please refer to the risk factors discussed in the company's most recently filed Annual Report on Form 10-K. Certain non-GAAP financial measures will also be presented. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in yesterday's press release. With that, let me turn the call over to Rick Swartz.

Rick Swartz: Thanks, Jennifer. Good morning, everyone. Welcome to our fourth quarter 2025 conference call to discuss financial and operational results. I will begin by providing a summary of the fourth quarter and full year results, and then will turn the call over to Kelly Huntington, our Chief Financial Officer, for a more detailed financial review. Following Kelly's overview, Brian Stern and Don Egan, Chief Operating Officers for our T&D and C&I segments, will provide a summary of our segments' performance and discuss some of MYR Group Inc.'s opportunities going forward. I will then conclude today's call with some closing remarks and open the call up for your questions.

We closed 2025 with strong financial performance in the fourth quarter and full year, revenues of $3.7 billion, and a steady backlog of $2.8 billion at the end of 2025 that reflects a healthy bidding environment and the continued investment in infrastructure to meet the growing electrification needs across the U.S. and Canada. Our work this year underscores the stability and expansion of our client relationships, as well as our measured pursuit of new opportunities. We continue to see strong bidding activity across our business segments, and we are closely monitoring these opportunities and positioning ourselves to strategically pursue and execute projects with operational excellence.

As always, our success is grounded in an unwavering commitment to our customers through safe and reliable project execution. Our teams are dedicated to helping our customers advance their business objectives, and I am grateful for their continued hard work. Now Kelly will provide details on our fourth quarter and full year 2025 financial results.

Kelly Huntington: Thank you, Rick, and good morning, everyone. For the year ended 12/31/2025, we reached record annual revenues of $3.7 billion, full year net income of $118 million, and EBITDA of $233 million. Our fourth quarter 2025 revenues were $974 million, which represents an increase of $144 million, or 17%, compared to the same period last year. Our fourth quarter T&D revenues were $531 million, an increase of 18% compared to the same period last year. The breakdown of T&D revenues was $330 million for transmission and $201 million for distribution, with increases of $64 million in revenue on transmission projects and $17 million in revenue on distribution projects from the prior year.

Work performed under master service agreements continued to represent approximately 60% of our T&D revenue. C&I revenues were $443 million, a record high for our C&I segment and an increase of 17% compared to the same period last year. C&I segment revenues increased primarily due to an increase in revenue on fixed price contracts. Our gross margin was 11.4% for 2025, compared to 10.4% for the same period last year. The increase in gross margin was primarily due to 2024 being negatively impacted by certain T&D clean energy projects and a C&I project. In 2025, gross margin was also positively impacted by better-than-anticipated productivity, favorable change orders, and a favorable job closeout.

These margin increases were partially offset by an increase in costs associated with inefficiencies on certain projects. T&D operating income margin was 7.4% for 2025, compared to 6.7% for the same period last year. The increase was primarily related to 2024 being negatively impacted by certain clean energy projects. In 2025, T&D operating income margin was also positively impacted by a favorable change order and better-than-anticipated productivity. These operating income margin increases were partially offset by an increase in costs associated with project inefficiencies on certain projects. C&I operating income margin was 6.6% for 2025, compared to 3.9% for the same period last year.

The increase was primarily related to a larger portion of our C&I projects progressing at higher contractual margin, some of which are nearing completion. In 2025, C&I operating income margin was also positively impacted by better-than-anticipated productivity, a favorable change order, and a favorable job closeout. These operating income margin increases were partially offset by an increase in costs associated with inefficiencies on certain projects. Fourth quarter 2025 SG&A expenses were $65 million, an increase of $8 million compared to the same period last year, primarily due to increases in employee incentive compensation costs and employee-related expenses to support future growth.

Fourth quarter 2025 interest expense was $1 million, a decrease of $1 million compared to the same period last year. The decrease was attributable to lower interest rates and lower average outstanding debt balances during 2025 as compared to the same period last year. Our fourth quarter effective tax rate was 21.2%, compared to 40.9% for the same period last year. The decrease was primarily due to changes in state tax rates used to measure our state deferred income taxes and lower permanent difference items. Fourth quarter 2025 net income was a record $37 million, compared to $16 million for the same period last year.

Net income per diluted share of $2.33 compared to $0.99 for the same period last year. Fourth quarter 2025 EBITDA was a record $64 million, compared to $45 million for the same period last year. Total backlog as of 12/31/2025 was $2.8 billion, a 9.6% increase from the prior year. Total backlog as of 12/31/2025 consists of $1.0 billion for our T&D segment and $1.8 billion for our C&I segment. As a reminder, our backlog includes projected revenue for only a three-month period for many of our unit price time and equipment, time and materials, and cost-plus contracts, which are generally awarded as part of a master service agreement; however, our master service agreements typically have a much longer duration.

Fourth quarter 2025 operating cash flow was $115 million, compared to operating cash flow of $21 million for the same period last year. The increase in cash provided by operating activities was primarily due to the timing of billings and payments associated with project starts and completion, higher net income, and lower contingent compensation payments associated with the prior acquisition. Fourth quarter 2025 free cash flow was $85 million, compared to free cash flow of $9 million for the same period last year, reflecting the increase in operating cash flow partially offset by higher capital expenditures to support future growth.

Moving to liquidity, we had approximately $265 million of working capital, $59 million of funded debt, $408 million in borrowing availability under our credit facility, and $150 million in cash and cash equivalents as of December 31, 2025. We have continued to maintain a strong funded debt to EBITDA leverage ratio of 0.25x as of 12/31/2025. We believe that our credit facility, strong balance sheet, and future cash flow from operations will enable us to meet our working capital needs, support the organic growth of our business, pursue acquisitions, and opportunistically repurchase shares. I will now turn the call over to Brian Stern, who will provide an overview of our Transmission and Distribution segment.

Brian Stern: Thanks, Kelly, and good morning, everyone. The T&D segment delivered steady fourth quarter and full year results, supported by a healthy mix of smaller to mid-sized jobs and ongoing master service agreements. Our performance reflects the continued application of our core business principles around safety, quality, and reliable execution. Bidding activity remains healthy as backlog, revenue, margins, and income increased from 2024 to 2025. We continue to expand relationships with long-term clients and pursue opportunities with new and existing clients, building on the positive industry outlook. This quarter, Great Southwestern Construction executed a new seven-year master service agreement in Kentucky for transmission line construction and maintenance projects. E.L.

Myers was awarded a transmission project in Virginia as well as transmission work in Iowa. In addition, Sturgeon Electric won two transmission projects in Oregon and transmission work in Arizona. Both Sturgeon Electric and High Country Line Construction were awarded station and line work in Washington, California, and Arizona. Harlan Electric was selected to perform multiple jobs throughout New Jersey and Pennsylvania. According to Edison Electric Institute industry data, investor-owned electric companies are projected to invest approximately $178 billion in transmission construction between 2025 and 2028. This level of planned investment reflects an ongoing need for grid modernization and the increased capacity to accommodate load growth.

As utilities invest in these upgrades, we believe we are well positioned to benefit from expanding backlogs and a long-duration project pipeline. With our experience, we continue to position ourselves to capture future 765 kV projects along with 500 kV and 345 kV transmission and substation projects over the next ten years. MYR Group Inc. subsidiaries are prepared to pursue and perform these opportunities across the U.S. and Canada. In summary, we are proud of our accomplishments in the fourth quarter and all of 2025.

We will continue to actively bid and execute projects of varied capacity and complexity across the U.S. and Canada while maintaining our consistent focus on safety and the development of our dedicated workforce who ultimately enable us to take on the important work ahead. I will now turn the call over to Don Egan, who will provide an overview of our Commercial and Industrial segment.

Don Egan: Thanks, Brian, and good morning, everyone. Our C&I segment achieved solid results in the fourth quarter thanks to the health of our core markets. We continue to see steady bidding activity and increases in backlog as we strategically monitor and pursue new opportunities in collaboration with our valued customers. We believe our ability to safely and skillfully execute projects of various sizes continues to create many long-term opportunities in our core markets. Data centers continue to be one of the most active areas of investment nationwide, fueled by the accelerating need for cloud, AI, and digital infrastructure. Industry researchers expect this demand to remain robust through 2026, with utilities and developers working to expand power capacity to support this surge.

Infrastructure-related construction is also benefiting from ongoing investments in transportation, clean energy, wastewater, and freshwater treatment facilities. Our ever-expanding network of clients continues to engage us early on upcoming opportunities in these segments. Our teams across all subsidiaries continue to pursue an array of work. During this period, we were awarded multiple data center projects in Colorado, Arizona, California, and New Jersey. In addition to data centers, our subsidiaries were awarded projects in clean energy, manufacturing, and industrial projects in California and Arizona. These accomplishments highlight our ongoing momentum and solid market presence throughout the U.S. and Canada. In conclusion, we believe our core markets remain healthy, and the depth of our customer relationships continues to create new opportunities.

This success is driven by our dedicated employees, whose commitment to quality and safety is at the heart of everything we do. Thank you everyone for your time today. I would now hand the call back to Rick for his closing remarks.

Rick Swartz: Thank you for those updates, Kelly, Brian, and Don. We are proud of our fourth quarter and full year 2025 performance, which demonstrated the strength of our sound business strategies and our ability to maintain and expand long-term customer relationships across both segments. We believe our core markets are well positioned for continued growth as investment in electrical infrastructure accelerates. We remain committed to safely executing projects, strategically bidding opportunities, and supporting our customers in an ever-changing energy environment. We believe our proven track record of collaboration, integrity, and dependable full project delivery puts us in a strong position for opportunities ahead. We are excited to play a meaningful role in strengthening the electrical infrastructure that keeps our communities running.

I would like to thank our employees for their invaluable contributions and our shareholders for your continued support of MYR Group Inc. I look forward to the year ahead. Operator, we are now ready to open the call up for your comments and questions.

Operator: Thank you. As a reminder for those of you on the phone, to ask a question, please press star 11 on your telephone and then wait until your name is announced. To withdraw your question, please press star 11 again. We will now open for questions. Our first question comes from Sangita Jain of KeyBanc. Your line is now open.

Sangita Jain: Good morning, Rick and Kelly. Thank you. First, Rick, can I ask you for your thoughts on the large transmission market out there? I know you were optimistic on late 2026 potential bookings for 2027 revenue. Just wondering if you are seeing the same type of trends right now.

Rick Swartz: We are. Nothing has changed on that side. I mean, it takes a while to bring these projects to market, and we have known that. So we are in good conversations with our clients, and we believe we will capture some of that work that will start to burn in 2027.

Sangita Jain: Got it. And then, Kelly, maybe for you, cash flow has been really, really strong this year. So I am trying to figure out if some of that was catch-up from the pending payments from last year's solar projects or if there are any meaningful advances in new projects that we should be aware of?

Kelly Huntington: Thank you for that question. Yes, a very strong year for cash flow and particularly in the fourth quarter. A lot of that is driven by our lower DSOs. We are now in the mid-50s versus the historical average of around 70, and that is driven by a combination of things. We saw a 16-day improvement if you look year-over-year, with 11 days of that in the third quarter. Part of it is getting beyond the problem projects that we had in 2024, but I would say a larger factor is just that we have a very strong net overbilled position, really driven by some of the large fixed price work that we have on the C&I side in particular.

So I think that does represent potentially a little bit of a headwind as we look forward, and part of that will depend on the mix of work that we have as far as awards this year and how much of it is some of that mid- to large-size fixed price work that can have a more favorable billing profile versus more MSA-weighted work, which is great work to have but does not have quite as positive of a cash flow profile.

Sangita Jain: Great. Thank you so much.

Operator: Thank you. Our next question comes from Jefferies. Your line is open.

Brian Russel: Yeah. Hi. It is Brian Russel on for Julian. Good morning.

Rick Swartz: Morning. Hey. Could you just comment more on the strength in the T&D backlog at $1.0 billion? Looks like it was up about 20% year-over-year. You know, quite a bit of improvement from the year-over-year progression that we have seen in the last few quarters. Just curious, are any of the new projects, in particular that Kentucky MSA agreement, included in the December backlog? And then, also, is there any Xcel $500 million five-year MSA in that December backlog as well?

Rick Swartz: As far as the backlog goes, I would say on the Xcel stuff, very little of that is in that backlog as of now. We said it would be a slow start to the year and then kind of progressing throughout the year and increase. So, again, not too much of that in our backlog right now because we only count 90 days of that MSA work, as Kelly highlighted in her script, within our backlog. When we look at the Kentucky side, that work really will start later this year, so not much of that in there.

So, again, we have seen great markets out there, and we are being selective of what we take on and really focused on long-term relationships with clients. Ninety percent of our business is return clientele. We are always looking for those one-off projects as additive. But, again, how do we grow with our existing clients? And that is where our focus is at.

Brian Russel: Okay. Great. And just a follow-on there in T&D. We saw a very large Texas-based wires company announce a rather robust five-year capital plan update. And could you just remind us what your positioning is currently in Texas, and then maybe what your level of activity has been kind of in past upcycles in capital spend that we have seen?

Rick Swartz: Yeah. Texas has been a good market for us for the last decade. I mean, it has been a good market. We continue to see that grow. We are excited about some of the opportunities that are out there with some of the 765 kV work, but even some of the 500 kV and 345 kV work we do every day. So I think the 765 kV is upcoming. We are excited about our positioning on that. But, again, we are seeing good activity not just in Texas, but across the nation. Lots of good opportunities out there.

Brian Russel: Okay. And the strong C&I margins in the fourth quarter, plus 6%, how does that fit into the 5% to 7% operating margin target step-up you are guiding towards this year? And then just kind of tie that into the backlog. Are there still projects to be completed that would be in that old kind of 4% to 6% target, or are those really nearly all burned, so everything from here on out is really in the new 5% to 7.5% range?

Rick Swartz: I would say our forecast when we look at it for the year is operating within the mid-part of both our T&D and C&I margin profile. So in that midpoint of that, we see good opportunities out there. We continue to see good activity in the market. So with that being said, we have not changed from what we said last quarter on both, you know, from a revenue standpoint. We look at that 10%-ish growth in both segments and then as a company overall, and then we look at operating in the mid-part of that range.

So good opportunities there, and I think we will continue to do everything we can to increase our margins from our standpoint as far as what we do from prefab standpoint, from efficiency standpoint, from utilizing our equipment better, and we will continue to try to maximize on that side.

Brian Russel: Great. Thank you very much.

Operator: Thank you. Our next question comes from Baird. Your line is open.

Justin Hauke: I had two quick ones here. The first one, I was just going to ask about, in your backlog, you break out what you expect to book over 12 months and what you expect to book beyond 12 months. And it looks like almost all the backlog increase this quarter was kind of the longer-duration backlog. And so I guess I just wanted to understand the components of that. Is that some of the data center work from C&I that you are talking about? And so the duration of your projects is just extending because the size is getting bigger, or maybe just kind of how to think about that.

Rick Swartz: Sure. On our larger project side, I would say those go out a little ways. So they go out, you know, some of those data centers take 18 months to construct or so, 18 to 24 months when you look at the larger projects, and that goes for transportation work. Some of that goes beyond that. They are four- or five-year projects. But, again, good activity on the small and mid-size that is burning quickly. But on the larger projects, it does take a little longer to construct those projects.

Justin Hauke: Okay. Then I guess my second question, not to be myopic, I guess, but obviously there has been a lot of winter weather all over. You know, 1Q is not typically your most productive quarter versus the summer. But just curious if there is anything you would be thinking about or you would want to communicate in terms of potential weather impacts in the first quarter that would be unusual that have occurred thus far? Or maybe it is not, maybe it is just in line with kind of normal seasonality?

Rick Swartz: I think for us, we always bid our work on normal seasonality. I think there are always going to be some storms that take place. I do not think snow always affects us in the way that maybe really wet weather where we cannot traverse the right of way. That seems to affect us a little bit more. But, again, we are always monitoring the weather, and it really has to do with what projects are affected. You can see, in any given area, you can be 50 miles away, and it really affects one area, and it may not affect the other. So, again, the weather has not affected our business across the country everywhere equally.

So I would say we will continue to look at that. Weather is the biggest impact we can have. But, again, it has not affected us across the country as a whole, just in some select areas. And with that, sometimes we have some offset of some storm and other type works that we are doing for repair. But, again, our base business is that day-to-day MSA and construction projects. We like storm work, but, again, we are not dependent on it.

Kelly Huntington: Yeah, and I would just add a little bit broader context, Justin, in looking at first quarter revenues. We are expecting that we will trend in the first quarter a little bit above that full year rate of about 10% growth, and that is really driven by first quarter last year. We had a little bit slower start, so it is a bit of an easier comp compared to the rest of the year. So just as you are thinking about modeling that, we would expect a little stronger revenue growth in the first quarter.

Justin Hauke: Got it. Thank you for that. Alright. Thank you.

Operator: Thank you. Our next question comes from Goldman Sachs. Your line is open.

Caitlin Donahue: Good morning, and thank you for taking my questions. Just focusing on the data centers, you outlined a few awards this past quarter. How are you seeing that project pipeline shape up for 2026 and 2027 as you are speaking with your customers?

Rick Swartz: The conversations are strong on that side. It is not just 2027 and 2028. We are having conversations with customers that go well beyond that time frame. So, again, I think our awards are always lumpy just on how long it takes the projects to get finalized. But, again, great conversations going forward. Good activity in that market. But, again, not completely dependent on that market by itself. We like the diversification we have with transportation, healthcare, some of that other work we do. So good opportunities on that side also.

Caitlin Donahue: That is helpful. Thank you. And then just on capital allocation strategy for 2026, we have seen CapEx step up a little bit. You have done buybacks in the past. How are you thinking through MYR Group Inc.'s strategy for the year?

Kelly Huntington: We are seeing great opportunities to continue to grow our business organically and through acquisitions. And so I think as we have talked about before, we will continue to prioritize our capital allocation to growth. We do use share repurchases, and I think the last two years are a great example of that, with deploying over $150 million at an average price of $117. So I think at this point, really focused on the growth opportunities that we see both organically and from acquisition.

Caitlin Donahue: That is helpful. Thank you. I will turn it back.

Operator: Thank you. Our next question comes from Stifel. Your line is open.

Brian Brophy: Yes. Thanks. Good morning, everybody. Just want to kind of continue the conversation on the large transmission opportunity and some potential awards you may see there. Would those, assuming you see something in the back half of 2026 as you kind of alluded to, be additive to growth in 2027, or would you have to pull resources from somewhere else to meet some of that demand?

Rick Swartz: I do not see us having to pull any resources. I mean, we have done a good job of retaining our employees, recruiting, and developing people. So to us, that is additive, and it goes into 2027 and beyond. It is not just the work that is going to start in 2027. We see this cycle being much longer than that. So I think it is a decade worth of growth out there, and we are going to capitalize on it where we can. And there are some great opportunities that we feel are coming our way.

Brian Brophy: Great. Yeah. That is good to hear. And then just as a follow-up to that, how do you think about some of the large transmission wins potentially impacting the margin profile of the business at all? Maybe not from an individual project standpoint, but capacity utilization overall. Should we think about that being a margin driver?

Rick Swartz: Yeah. I think it can show marginal margin increases on that side. Again, it is how can we better utilize our equipment, how can we take labor out of the field and do more things on the prefab or the kitting side. So we are always looking at that side and being a solution provider for our customers. So along with that, we are always looking to enhance our margins. But, again, our relationships with our clients are long term, so it is not always, you know, on this side, they are a regulated business.

We will continue to push margins where we can, but more from an efficiency standpoint than ever reaching out and trying to gouge our customers or anything like that. We really build on long term. Again, over 90% of our business is return clientele. We always want to make sure we maintain those relationships.

Brian Brophy: Appreciate it. I will pass it on.

Operator: Thank you. Our next question comes from Cantor Fitzgerald. Your line is open.

Manish Samaya: Thank you. Can you hear me?

Operator: Yes.

Manish Samaya: Okay. Wonderful. Rick, I have the first question for you. In the press release, you talked about the bid environment being steady. Maybe if you can just give us a sense as to what you are seeing in terms of pricing by geography, by end market, and when are you walking away from business that may not be attractively priced? Maybe if you can just give us a sense of what is going on in the marketplace.

Rick Swartz: I think for us, we have a select client list. We are not trying to be everything to everyone, if that makes sense. So if we get on the, let us say, C&I as an example, if it is a customer we have done work for a long time with or it is somebody that is a continued relationship, or we can build a continued relationship, we are really focused on that side, not the one-off ones. We are not focused on bidding a project that has 20 bidders on it. We like the customers that have select bid lists or we have teaming arrangements with. So with that side, good activity, good opportunities there.

I would say market by market, when you are talking geographies in the U.S., some are a little tighter than others still, but we see those areas that are maybe not as busy as others getting busy in the future. So we are always monitoring that. We have 65-plus offices across the U.S. and some in Canada, and with that, we are always using that local expertise to help us pick what work we want to go after, which ones really fit us and which ones do not. So along the way, we always evaluate and weight those opportunities. And, again, we are seeing good activity in all our marketplaces.

Manish Samaya: And I know we talked a bit about the data centers. Maybe Don can shed some more light. Are the customers on the data center side hyperscalers, GCs, developers? Maybe if you can just give us a sense. And then as it pertains to backlog, it seems obviously everybody is doing more data center work. But would you say that the backlog on the C&I side is diversified, or is it kind of more concentrated?

Don Egan: I will answer that question first. Our backlog is very diversified. You are absolutely correct, there is a lot of activity in the market, and we are having conversations with end users, the hyperscalers, general contractors, and developers. It is ongoing conversations on a very regular basis. If that answers your question.

Manish Samaya: And in terms of the customers on the data center side, would it be hyperscalers, general contractors, or developers?

Don Egan: Again, as I stated, it is all of the above. We are having conversations with hyperscalers on a daily, weekly basis, same with general contractors and end users, owners.

Manish Samaya: Okay. Thanks for clarifying that. And then just lastly, Rick, from a high level, obviously you do not give guidance, but what would be the puts and takes for 2026 as you kind of look at your internal benchmarks and targets? You know, how should we think about the risks and opportunities?

Rick Swartz: Let me go back to Don's question real quick, the one you had for him. I would say the other side on data centers is it is not just the new construction. I think that is really what has the headline. But a lot of it is the retrofits in existing buildings too, existing data centers that have been there. I mean, they are living buildings. They are always changing the technology. So as that happens, that repeat work for us is very important. And once we are in a data center, we tend to stay there for a long time. So it is not just the new builds. It is also that retrofit work.

That is the only thing I would add to that. We look at the puts and takes going forward, I would say the biggest impact we can always have on the T&D side is weather. Other than that, the activity in the market—other than something that we do not see right now from any of our conversations with our clients—would be any kind of slowing in the market, but we do not see that nor do we anticipate it. So it is really the weather on our T&D that is the biggest impact.

And then the timing of these projects, how quick they roll out, would be the other kind of risk out there because it is not if these projects are going to be built, it is when. So sometimes you can see a two- to four-month push on projects. But it is not like they are going to be pushed out years. That is kind of how we see it now. Then the other side of the T&D side that I would probably highlight is permitting. Sometimes that can push a project out a little bit, but, again, it is not if the projects are going to be built; it is when.

So, again, good activity on both sides, both T&D and C&I.

Manish Samaya: Wonderful. Thank you so much.

Operator: Thank you. Our next question comes from Clear Street. Your line is now open.

Tim Moore: Thanks, and great job with your backlog growth and book-to-bill. My equipment utilization tailwind for the T&D side was already asked, so I just have two questions remaining. Maybe you can walk us through, or even Kelly elaborate on, the trade-off in your selectivity for staffing for maybe an 18-month data center versus cross-selling your more medium-sized utility project. I know they are separate segments, but I am just wondering if you could talk a bit more to the regional staffing plan and cross-selling opportunity, and if it is a new customer, not more than 90% incumbents.

Rick Swartz: I will start there. Like what you just said, 90% of our business is return clientele. We are always focused on that. We are always trying to cross-sell. There are lots of opportunities on that side, especially on data centers where the substation might be within the owner side of it rather than the utility side. So either way, we are able to construct that portion of the project. I would say we are always looking at those opportunities. We are always going to focus on our long-term clients first, and then we will take the one-off ones later if they are just going to build one project and out. That is probably not our focus.

But if they are going to build multiple projects, that is where we are focusing. And I think we have done a very good job on, as an example, some of our data centers where they are facilities that have built one building, then they move into the next, and as they build out their campus, it is a great place for us. There are some of them where we might be on, as an example, we are on Building 3 of maybe a planned 12 building. So, again, this goes out for many years forward, and that is really where our focus is. Kelly, do you want to add?

Kelly Huntington: I think you covered that well, Rick. Thanks.

Tim Moore: Okay. Great. That was really helpful, and thanks for that color. The only other question I had, given your liquidity and the cash and the bolt-on acquisitions opportunity, can you maybe just talk high level about the philosophy as your priority within T&D—more of the electrical contractors? And then, on the C&I side, is it to build geographic scale, like, in the Southeast? Just kind of curious if you can add any color.

Kelly Huntington: Sure. I can start on that one. On the T&D side, we definitely focus on electrical contractors. We do have really good geographic presence across the U.S. and up into Canada in Ontario on the T&D side. So we also look at opportunities that would be ancillary services, like right of way or foundation or environmental work. Those can be of interest to us as well. On the C&I side, I would say really two primary screens from a strategic perspective. First would be the geographic fit, because we do not have quite as consistent of coverage as we do on the T&D side. And then really taking a close look at the end markets they serve.

So does that acquisition opportunity have a similar profile as far as higher growth, tend to be less cyclical and more complex end markets like we are? So those would be the main things we are looking at, really still focused on tuck-in acquisitions in the places we know and the risk profiles that we understand as well.

Tim Moore: Great, Kelly. That is very helpful. Thanks for that granularity. That is it for my questions.

Operator: Thank you. Our next question comes from KCCA. Your line is open.

John: Good morning, everyone.

Rick Swartz: Good morning.

John: Rick, your markets are very strong, and I think you have indicated that the top line you could see is 7% to 10% type of revenue growth. But should the opportunities present themselves as they might, do you have the ability or the capacity of the labor force and infrastructure in place to maybe accelerate that growth as we go forward?

Rick Swartz: Yeah. We have that opportunity. I think if you look back in our history, we have grown more than that in certain years, and other years we have tamed that back a little bit. Again, it is timing of the awards, how they happen. I see good opportunities out there, but where we are really focused is controlled growth also. I think anybody could really add revenue at this point, but could they do it profitably? And for us, it is maintaining that right amount of growth so we can be profitable.

We are definitely capable of doing more than that, but we have said for this year, we anticipate growing in that 10% range, so a little more than the 7% to 10%. But, again, making sure we have controlled risk, and then we take on the right opportunity.

John: Sure. Given the strength of your market and the number of projects out there and so on, I sense that you could be more selective and maybe the risk profile of the work that you are doing has improved. Would that be a fair statement?

Rick Swartz: Sure. We are always focused on that as we select our projects—how do we limit our risk, how do we partner with our customers, how do we make sure that we have those kinds of conversations. But, again, de-risking our projects is definitely important to us, and that is one of the evaluations we go through as we look at projects. I would say we have less risk in our backlog today than we had in our backlog a year ago or five years ago.

John: Okay. Thank you.

Rick Swartz: Thank you.

Operator: I am showing no further questions in the queue. I would now like to turn the call back over to Rick Swartz for additional closing remarks.

Rick Swartz: To conclude, on behalf of Kelly, Brian, Don, and myself, I sincerely thank you for joining us on the call today. I do not have anything further. We look forward to working with you in the future and speaking with you again on our next conference call. Until then, stay safe.

Operator: Thank you. This concludes today's conference call. We thank you for your participation, and you may now disconnect.

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