Financial Performance - Centuri's Q2 2025 revenue reached $724.1 million [23], compared to $672.1 million in Q2 2024 [30], representing an increase of approximately $52 million [38] - The adjusted EBITDA for Q2 2025 was $71.8 million [30], compared to $68.6 million in Q2 2024 [30] - The adjusted EBITDA margin was 9.9% [23] for Q2 2025 - The company is raising its revenue guidance for FY 2025 to $2.7 billion - $2.85 billion [46] from a previous range of $2.6 billion - $2.8 billion [47] - FY 2025 Adjusted EBITDA is projected to be between $250 million and $270 million [46] Commercial Achievements - Total bookings for the quarter amounted to $1.8 billion [3] - New awards totaled $619 million [26], including $244 million in new MSAs [27] - MSA renewals reached $1.2 billion [25, 27] - The book-to-bill ratio is 2.3x [25] for the six-month period ended June 29, 2025 [29] Segment Performance - Non-Union Electric revenues increased by 24% year-over-year [24], with core electric revenues up by 51% [24] - Union Electric revenues increased by 11% year-over-year [24], with core electric revenues up by 26% [24] - Canadian Gas revenue increased by 18% year-over-year [24], and segment gross margins increased by 210 bps [24]

Executive Summary & Outlook This section summarizes Centuri's Q2 2025 financial highlights, management's strategic commentary, and the updated full-year 2025 outlook [Second Quarter 2025 Financial and Other Business Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20and%20Other%20Business%20Highlights) Centuri reported solid Q2 2025 performance with revenue growth, strong electric operations, significant new awards, and increased full-year guidance - Centuri's Q2 2025 performance showed **solid execution** across all business segments, with electric operations being **particularly strong**, and meaningful progress made in its U.S. Gas segment through margin-enhancing initiatives[3](index=3&type=chunk) - Strong commercial momentum led to approximately **$1.8 billion** in new awards during the quarter and a nearly **$14 billion** sales pipeline, positioning the company for maximized revenue potential and strategic expansion[3](index=3&type=chunk) Q2 2025 Key Financial Highlights (YoY) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change ($M) | Change (%) | | :--------------------------------- | :-------- | :-------- | :--------- | :--------- | | Revenue | $724.1 | $672.1 | $52.0 | 7.7% | | Net Income Attributable to Common Stock | $8.1 | $11.7 | ($3.6) | -30.8% | | Diluted EPS | $0.09 | $0.14 | ($0.05) | -35.7% | | Adjusted Net Income | $16.9 | $17.0 | ($0.1) | -0.6% | | Adjusted Diluted EPS | $0.19 | $0.20 | ($0.01) | -5.0% | | Adjusted EBITDA | $71.8 | $68.6 | $3.2 | 4.7% | - The company achieved a book-to-bill ratio of **2.3x** in the first half of 2025, including a new bookings record of approximately **$1.8 billion** in Q2, contributing to a cumulative **$3.0 billion** in awards for the first half of the year[4](index=4&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management highlighted Q2 2025 financial improvements from strong revenue growth, improved segment profit, substantial bookings, and debt refinancing - Q2 2025 revenue increased by **$52.0 million (7.7%)** and Adjusted EBITDA improved by **$3.2 million (4.7%)** year-over-year, reflecting growth across Canadian Gas, Non-Union Electric, and Union Electric segments, and improved profit across all four reportable segments[5](index=5&type=chunk) - Core Union Electric revenue grew by **$33.4 million (26.4%)** and Non-Union Electric by **$46.1 million (51.1%)** year-over-year, driven by robust bid project activity in industrial and electrical substation infrastructure, and increasing crew counts and work hours under MSAs, respectively[5](index=5&type=chunk) - Centuri booked approximately **$1.8 billion** in Q2 2025, comprising over **$600 million** in new customer contracts and MSAs (**34%**) and nearly **$1.2 billion** in MSA renewals (**66%**), leading to a **2.3x** book-to-bill ratio in H1 2025 and an increase in backlog to **$5.3 billion**[6](index=6&type=chunk) - Subsequent to Q2-end, Centuri refinanced existing debt, extending the revolver maturity to July 9, 2030, increasing its size to **$450 million**, and extending Term Loan B maturity to 2032 at improved interest rates, enhancing financial flexibility[7](index=7&type=chunk) [Full Year 2025 Outlook](index=2&type=section&id=Full%20Year%202025%20Outlook) Centuri updated its full-year 2025 outlook, increasing revenue guidance and narrowing the Adjusted EBITDA outlook, while also increasing projected net capital expenditures Full Year 2025 Outlook Updates | Metric | Previous Outlook | Updated Outlook | Change | | :-------------------------- | :----------------- | :---------------- | :----- | | Revenue | $2.60 to $2.80 billion | $2.70 to $2.85 billion | Increased | | Adjusted EBITDA | $240 to $275 million | $250 to $270 million | Narrowed | | Net Capital Expenditures | $65 to $80 million | $75 to $90 million | Increased | Segment Performance This section details Centuri's financial performance across its U.S. Gas, Canadian Gas, Union Electric, and Non-Union Electric segments for Q2 and H1 2025 [Q2 2025 Segment Results](index=3&type=section&id=Q2%202025%20Segment%20Results) In Q2 2025, Centuri's consolidated revenue increased by **7.7%** year-over-year, driven primarily by strong growth in the Non-Union Electric and Union Electric segments, with consolidated gross profit also seeing a significant increase of **12.1%** Q2 2025 Segment Revenue (YoY) | Segment | Q2 2025 Revenue ($K) | Q2 2024 Revenue ($K) | Change ($K) | Change (%) | | :---------------- | :------------------- | :------------------- | :---------- | :--------- | | U.S. Gas | 336,834 | 340,686 | (3,852) | (1.1%) | | Canadian Gas | 55,111 | 46,666 | 8,445 | 18.1% | | Union Electric | 182,239 | 164,211 | 18,028 | 11.0% | | Non-Union Electric | 149,868 | 120,512 | 29,356 | 24.4% | | **Consolidated** | **724,052** | **672,075** | **51,977** | **7.7%** | Q2 2025 Segment Gross Profit (YoY) | Segment | Q2 2025 Gross Profit ($K) | Q2 2024 Gross Profit ($K) | Change ($K) | Change (%) | | :---------------- | :------------------------ | :------------------------ | :---------- | :--------- | | U.S. Gas | 26,424 | 25,156 | 1,268 | 5.0% | | Canadian Gas | 9,485 | 7,032 | 2,453 | 34.9% | | Union Electric | 15,355 | 12,079 | 3,276 | 27.1% | | Non-Union Electric | 16,537 | 16,237 | 300 | 1.8% | | **Consolidated** | **67,801** | **60,504** | **7,297** | **12.1%** | [H1 2025 Segment Results](index=3&type=section&id=H1%202025%20Segment%20Results) For the first six months of 2025, Centuri's consolidated revenue increased by **6.2%** year-over-year, primarily driven by substantial growth in the Non-Union Electric and Union Electric segments, with consolidated gross profit seeing an even stronger increase of **19.4%**, despite a decline in U.S. Gas gross profit H1 2025 Segment Revenue (YoY) | Segment | H1 2025 Revenue ($K) | H1 2024 Revenue ($K) | Change ($K) | Change (%) | | :---------------- | :------------------- | :------------------- | :---------- | :--------- | | U.S. Gas | 534,528 | 567,264 | (32,736) | (5.8%) | | Canadian Gas | 94,895 | 87,645 | 7,250 | 8.3% | | Union Electric | 357,707 | 328,062 | 29,645 | 9.0% | | Non-Union Electric | 287,003 | 217,127 | 69,876 | 32.2% | | **Consolidated** | **1,274,133** | **1,200,098** | **74,035** | **6.2%** | H1 2025 Segment Gross Profit (YoY) | Segment | H1 2025 Gross Profit ($K) | H1 2024 Gross Profit ($K) | Change ($K) | Change (%) | | :---------------- | :------------------------ | :------------------------ | :---------- | :--------- | | U.S. Gas | 11,568 | 21,180 | (9,612) | (45.4%) | | Canadian Gas | 16,564 | 10,118 | 6,446 | 63.7% | | Union Electric | 27,168 | 23,448 | 3,720 | 15.9% | | Non-Union Electric | 32,829 | 19,037 | 13,792 | 72.4% | | **Consolidated** | **88,129** | **73,783** | **14,346** | **19.4%** | Financial Position & Capital Structure This section outlines Centuri's commercial momentum through bookings and backlog, alongside its debt structure and efforts to enhance financial flexibility [Bookings, Backlog, and Sales Pipeline](index=2&type=section&id=Bookings,%20Backlog,%20and%20Sales%20Pipeline) Centuri achieved record bookings in Q2 2025, contributing to a strong book-to-bill ratio for the first half of the year and a significant increase in backlog, indicating robust future revenue potential - Centuri booked approximately **$1

Group 1 - Centuri Holdings (CTRI) is outperforming the Utilities sector with a year-to-date return of approximately 12.6%, compared to the sector average of 9.9% [4] - The Zacks Sector Rank for the Utilities group is 1, indicating strong performance among its 108 individual stocks [2] - Centuri Holdings has a Zacks Rank of 2 (Buy), reflecting an improving earnings outlook with a 4.5% increase in the full-year earnings estimate over the past quarter [3][4] Group 2 - The Utility - Electric Power industry, which includes Centuri Holdings, has an average return of 9.9% this year, with CTRI performing better than this average [6] - IdaCorp (IDA) is another stock in the Utilities sector that has shown strong performance, returning 10.4% year-to-date and also holding a Zacks Rank of 2 (Buy) [5][6] - Investors in the Utilities sector should monitor both Centuri Holdings and IdaCorp for their continued solid performance [7]

Core Viewpoint - Centuri Holdings (CTRI) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based solely on a company's changing earnings picture, tracking the Zacks Consensus Estimate for EPS from sell-side analysts [2]. - The Zacks rating upgrade for Centuri reflects an optimistic earnings outlook, likely leading to increased buying pressure and a rise in stock price [4][6]. Impact of Earnings Estimate Revisions - Changes in a company's future earnings potential, as shown through earnings estimate revisions, are strongly correlated with near-term stock price movements [5]. - Institutional investors often adjust their valuations based on earnings estimates, which can lead to significant stock price movements due to large share transactions [5]. Centuri's Earnings Outlook - Centuri is projected to earn $0.60 per share for the fiscal year ending December 2025, with no year-over-year change expected [9]. - Over the past three months, the Zacks Consensus Estimate for Centuri has increased by 4.5%, indicating a positive trend in earnings estimates [9]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [8]. - Centuri's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10][11].

Core Viewpoint - Southwest Gas Holdings, Inc. is conducting a secondary public offering of Centuri Holdings, Inc. common stock, offering 9,750,000 shares at a price of $20.75 per share, with a potential additional 1,462,500 shares available for underwriters [1][2] Group 1: Offering Details - The offering size has increased from an initial proposal of 9,500,000 shares to 9,750,000 shares [1] - The offering is expected to close on June 18, 2025, subject to customary closing conditions [1] - J.P. Morgan and Wells Fargo Securities are the joint lead book-running managers for the offering, with several other firms acting as book running managers and co-managers [3] Group 2: Concurrent Private Placement - Southwest Gas Holdings has agreed to sell $22 million in shares of Centuri's common stock to Icahn Partners and Icahn Partners Master Fund LP at the same price as the public offering [2] - The concurrent private placement is contingent upon the completion of the public offering and must close by July 9, 2025, or it will terminate [2] Group 3: Company Background - Southwest Gas Holdings, Inc. operates through its subsidiary, Southwest Gas Corporation, providing natural gas services to over 2 million customers in Arizona, Nevada, and California [6] - Centuri Holdings, Inc. partners with regulated utilities to build and maintain energy networks across the U.S. and Canada [7]

Core Viewpoint - Southwest Gas Holdings, Inc. successfully closed a secondary public offering of Centuri Holdings, Inc. common stock, raising significant capital for debt repayment [1][3]. Group 1: Offering Details - The company sold 10,350,000 shares of Centuri's common stock at a public offering price of $17.50 per share, including the underwriters' full exercise of their option to purchase an additional 1,350,000 shares [1]. - Icahn Partners LP and Icahn Partners Master Fund LP purchased 2,857,142 shares of Centuri's common stock in a concurrent private placement at the same price per share as the public offering [2]. - The net proceeds from the offering were approximately $175 million, while the concurrent private placement generated about $50 million [3]. Group 2: Use of Proceeds - The proceeds from both the offering and the private placement will be utilized for the repayment of outstanding indebtedness [3]. Group 3: Ownership Structure - After the completion of the offering and private placement, Southwest Gas Holdings retains approximately 65.9% ownership of Centuri's outstanding common stock [3]. Group 4: Underwriters - J.P. Morgan, UBS Investment Bank, and Wells Fargo Securities served as joint lead book-running managers for the offering, with additional support from BofA Securities and Moelis & Company [4]. Group 5: Company Background - Southwest Gas Holdings operates through its subsidiary, Southwest Gas Corporation, which focuses on the distribution and transportation of natural gas across Arizona, Nevada, and California [7]. - Centuri Holdings, Inc. provides utility infrastructure services, partnering with regulated utilities to maintain energy networks in the U.S. and Canada [8].

Core Viewpoint - Southwest Gas Holdings, Inc. is conducting a secondary public offering of 9,000,000 shares of Centuri Holdings, Inc. at a price of $17.50 per share, with an additional option for underwriters to purchase 1,350,000 shares [1][2] Group 1: Offering Details - The offering is expected to close on May 22, 2025, subject to customary closing conditions [1] - Icahn Partners and Icahn Partners Master Fund LP will purchase $50 million in shares of Centuri's common stock in a concurrent private placement at the same price per share as the public offering [2] - The shares are being offered under an effective shelf registration statement filed with the U.S. Securities and Exchange Commission [4] Group 2: Underwriters and Management - J.P. Morgan, UBS Investment Bank, and Wells Fargo Securities are acting as joint lead book-running managers for the offering [3] - BofA Securities and Moelis & Company are serving as book-running managers, with additional co-managers including Baird, KeyBanc Capital Markets, and others [3] Group 3: Company Background - Southwest Gas Holdings, Inc. operates through its subsidiary Southwest Gas Corporation, providing natural gas services to over 2 million customers in Arizona, Nevada, and California [6] - Centuri Holdings, Inc. partners with regulated utilities to build and maintain energy networks across the U.S. and Canada [7]

Core Viewpoint - Southwest Gas Holdings, Inc. is initiating a secondary public offering of 9,000,000 shares of Centuri Holdings, Inc. common stock, with an option for underwriters to purchase an additional 1,350,000 shares [1][2] Group 1: Offering Details - The offering includes 9,000,000 existing shares of Centuri's common stock, with a potential additional purchase option for underwriters [1] - Icahn Partners and Icahn Partners Master Fund LP will concurrently purchase $50 million in shares from Southwest Gas Holdings at the offering price [2] - The shares are being offered under an effective shelf registration statement filed with the SEC, and a preliminary prospectus supplement will be available [3] Group 2: Company Background - Southwest Gas Holdings operates through its subsidiary, Southwest Gas Corporation, providing natural gas services to over 2 million customers in Arizona, Nevada, and California [5] - Centuri Holdings, Inc. is a utility infrastructure services company that collaborates with regulated utilities to maintain energy networks across the U.S. and Canada [6]

Core Viewpoint - Aemetis, Inc. has signed a $27 million agreement with Centuri Holdings to construct biogas cleanup systems for 15 dairy digesters, which will enhance the production of renewable natural gas (RNG) from dairy waste [2][3]. Group 1: Agreement and Impact - The agreement with Centuri will facilitate the rapid scaling of dairy digesters, enabling Aemetis Biogas to produce RNG for a total of 50 dairies [3]. - Aemetis Biogas plans to have 16 dairies operational this summer as part of the Central Digester Project near Modesto, California, which includes a biogas pipeline and a production facility delivering RNG into the PG&E utility gas pipeline [3]. Group 2: Strategic Relationship - Aemetis is expanding its strategic relationship with Centuri, which includes plans for construction management and pipe assembly for future energy efficiency and carbon sequestration projects [4]. - Centuri's expertise in utility distribution and renewable natural gas projects aligns well with Aemetis' goals, adding significant value to upcoming projects [5]. Group 3: Renewable Energy Projects - Aemetis aims to generate over 1 million MMBtu of RNG from the 50 dairies involved in the project [6]. - Other projects include a Keyes ethanol plant expected to generate $32 million in annual cash flow starting in 2026, and a carbon sequestration project to inject 1.4 million tons of CO2 per year [6]. - Aemetis is also developing a sustainable aviation fuel and renewable diesel plant, which has received necessary permits and approvals [6]. Group 4: Company Overview - Aemetis is focused on the operation, acquisition, development, and commercialization of technologies that replace petroleum products and reduce greenhouse gas emissions [7]. - The company operates a biogas digester network and pipeline system in California, converting dairy waste gas into RNG, and has ethanol production facilities in both California and India [8].

Financial Data and Key Metrics Changes - Consolidated revenues for Q1 2025 totaled $550.1 million, a 4.2% increase from Q1 2024 [21] - Consolidated gross profit was $20.3 million, reflecting a 53.1% increase year-over-year, with a gross profit margin of 3.7% compared to 2.5% in the prior year [21] - Net loss attributable to common stock was $17.9 million, or a diluted loss per share of $0.20, an improvement from a net loss of $25.1 million or $0.35 per share in the same period last year [22] - Adjusted EBITDA for Q1 2025 was $24.2 million, approximately 20% higher than the prior year [22] Business Line Data and Key Metrics Changes - U.S. Gas segment revenue totaled $197.7 million, a year-over-year decrease of 12.7%, with a gross profit margin of -7.5% [23][25] - Canadian Gas segment revenue was $39.8 million, down 2.9% year-over-year, but the segment margin improved to 17.8% from 7.5% [26] - Union Electric segment revenue increased by 7.1% year-over-year to $175.5 million, with a core growth of 32.7% driven by increased bid project activity [26] - Nonunion Electric segment revenue rose by 41.9% year-over-year to $137.1 million, with gross profit increasing to 11.9% from 2.9% [27] Market Data and Key Metrics Changes - The U.S. Gas segment faced adverse weather conditions impacting performance, but improvements were noted in March and April [19][25] - The nonunion electrical segment benefited from strong market trends in the Sunbelt and Southeast regions, driven by storm damage recovery efforts [20] Company Strategy and Development Direction - The company is focused on implementing a unified business development strategy to enhance growth and market positioning [11][31] - A significant increase in the sales pipeline was reported, approaching $12 billion in revenue opportunities, with a record booking quarter of $1.2 billion in Q1 2025 [14] - The company aims to improve capital efficiency and reduce working capital levels as part of its strategic priorities [29] Management's Comments on Operating Environment and Future Outlook - Management does not anticipate significant impacts from the global trade war or tariffs in 2025, citing a resilient business model [8][30] - The outlook for full-year 2025 remains unchanged, with expectations to deliver between $2.6 billion and $2.8 billion in revenues [29][30] - Management expressed confidence in maintaining a positive trajectory across segments, with strong growth anticipated in the coming quarters [21][32] Other Important Information - The company has made significant progress in enhancing its pipeline management and sales strategies, fostering a growth-oriented culture [12][31] - Capital expenditures for Q1 2025 were $23.2 million, down from $24.6 million in the prior year [28] Q&A Session Summary Question: Can you talk about the trajectory for 2025 and how you expect to reach the upper end of revenue guidance despite a weaker Q1 in U.S. Gas? - Management noted that the gas business faced weather-related challenges in January and February but recovered in March and April, with work under contract supporting the revenue guidance [35][36] Question: Can you discuss the key findings of the strategic review? - Key findings included the need for a fully integrated sales pipeline, improved cross-selling capabilities, a cultural shift towards identifying more work for customers, and aligning KPIs with growth and profitability [38][39][40] Question: How would you frame the loss in the U.S. Gas segment relative to expectations? - Management acknowledged that weather impacts are uncontrollable but emphasized efforts to migrate the business to regions less affected by weather to achieve profitability earlier in the year [45][46] Question: What is the visibility and cadence expected for bookings moving forward? - Management indicated strong visibility for Q2 bookings and anticipated some lumpiness in Q3, with Q4 expected to be robust due to MSA renewals and new bid work [49][51] Question: Can you clarify the guidance for adjusted EBITDA? - Management confirmed that while they are cautious, the bookings and backlog are pushing towards the upper end of the revenue guidance, and they do not foresee margin erosion [55][57] Question: Can you provide details on the new MSAs and their risk profile? - Management stated that the new work aligns with existing services and customers, maintaining the same risk profile without significant changes [60][61] Question: What will be needed to achieve full-year EBITDA margin? - Management indicated that no radical changes are necessary, and they are on track to meet the full-year guidance based on current backlog and expected bookings [67][68]