Financial Data and Key Metrics Changes - Revenue grew by 32% year-over-year, driven by a 58% increase in the e-infrastructure solutions segment and a 10% increase in the transportation segment [5][6] - Adjusted earnings per share increased by 58% to $3.48, while adjusted EBITDA rose by 47% to $156 million [5][6] - Gross profit margins expanded by 280 basis points to 24.7% [5] - Operating cash flow for the quarter was strong at $84 million, with backlog totaling $2.6 billion, a 64% year-over-year increase [5][6] Business Line Data and Key Metrics Changes - E-infrastructure solutions revenue grew by 58% year-over-year, with a 42% organic growth rate [5][6] - Transportation solutions revenue increased by 10%, with adjusted operating profit growing by 40% [9] - Building solutions segment revenue declined by 1%, with adjusted operating income down by 10% due to challenges in the housing market [10][18] Market Data and Key Metrics Changes - E-infrastructure backlog reached $1.8 billion, up 97% year-over-year [6] - Transportation solutions backlog was $733 million, a 23% year-over-year increase [9] - The overall demand for homes has been impacted by affordability challenges, leading to a 17% decline in revenue from the legacy residential business [10][18] Company Strategy and Development Direction - The company is focused on expanding its service portfolio and leveraging the recent CEC acquisition to enhance growth opportunities [8][16] - The strategy emphasizes a commitment to infrastructure development while maintaining a focus on high-margin end markets [6][18] - The company anticipates continued growth in e-infrastructure, particularly in data centers and semiconductor fabrication facilities [14][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the multi-year opportunities across markets, particularly in e-infrastructure and transportation solutions [14][17] - The company expects e-infrastructure revenue growth of 30% or higher on an organic basis for 2025, with adjusted operating profit margins approximating 25% [16] - Transportation solutions are projected to grow in the low teens on an adjusted basis, with margins expected to improve significantly [17][18] Other Important Information - The company has a strong liquidity position with $306.4 million in cash and $294.6 million in debt, resulting in a net cash position of $11.8 million [12] - Full-year guidance for 2025 has been increased, projecting revenue between $2.375 billion and $2.39 billion, representing over 5% growth at the midpoint [12][19] Q&A Session Summary Question: Growth in CEC signed and unsigned work - Management noted strong bookings in the data center market and expressed excitement about the reception from customers regarding the CEC acquisition [23][24] Question: Margin expansion opportunities - Management highlighted that larger project sizes and improved productivity from recent acquisitions contribute to expected margin expansion [26][27] Question: Composition of the $4 billion forward pipeline - The majority of the forward pipeline is in e-infrastructure, particularly data centers, which are expected to drive significant growth [43] Question: Impact of government shutdown on transportation funding - Management confirmed no impact from the government shutdown, as funding for current jobs has already been allocated [60] Question: Data center growth breakdown - Growth is attributed to a combination of new projects and the successful conversion of future phases into backlog [64]

Financial Data and Key Metrics Changes - Revenue grew by 32% year-over-year, driven by a 58% increase in the e Infrastructure Solutions segment and a 10% increase in the Transportation segment [7][12] - Adjusted earnings per share increased by 58% to $3.48, while adjusted EBITDA rose by 47% to $156 million [8][17] - Gross profit margins expanded by 280 basis points to 24.7%, and operating cash flow was strong at $84 million [8][15] - Backlog at the end of the quarter totaled $2.6 billion, a 64% year-over-year increase [8][14] Business Line Data and Key Metrics Changes - **e Infrastructure Solutions**: Revenue grew by 58% year-over-year, with a 42% organic growth rate. The data center market was a primary growth driver, with revenue from this market increasing by over 125% year-over-year [10][19] - **Transportation Solutions**: Revenue increased by 10%, and adjusted operating profit grew by 40%, driven by strong market demand and a shift towards higher-margin services [12][23] - **Building Solutions**: Revenue declined by 1%, with adjusted operating income down by 10%. The legacy residential business saw a 17% decline due to affordability challenges in the housing market [13][24] Market Data and Key Metrics Changes - The e Infrastructure segment backlog reached $1.8 billion, up 97% year-over-year, with a 45% increase excluding contributions from recent acquisitions [9][14] - Transportation Solutions backlog was $733 million, a 23% year-over-year increase, while Building Solutions faced headwinds from a soft housing market [12][13] Company Strategy and Development Direction - The company remains committed to its guiding principle, "The Sterling Way," focusing on taking care of people, the environment, investors, and communities while building America's infrastructure [9] - The company anticipates continued strong demand in the e Infrastructure segment, particularly in data centers and manufacturing, with expectations for significant growth in 2026 and beyond [19][20] - The company is actively seeking small to mid-sized acquisitions to enhance service offerings and geographic footprint, with a focus on infrastructure-related opportunities [25][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the multiyear opportunities across markets, with strong backlog and customer discussions contributing to this outlook [19][20] - The company expects e Infrastructure revenue growth of 30% or higher on an organic basis for 2025, with adjusted operating profit margins approximating 25% [22][23] - In Transportation Solutions, revenue growth is anticipated in the low teens, with adjusted operating profit margins expected to improve significantly [23][24] - Building Solutions is projected to face a mid to high single-digit decline in revenue for the full year, with adjusted operating margins in the low double digits [24] Other Important Information - The company ended the quarter with a strong liquidity position, including $306.4 million in cash and $294.6 million in debt [16] - The company has a combined backlog of $3.44 billion, an 88% increase year-over-year, indicating strong future revenue visibility [15] Q&A Session Summary Question: What is driving the momentum in CEC's signed and unsigned work? - Management noted strong bookings primarily around data center projects, with excitement about customer reception and future projects [27][28] Question: What drives margin expansion opportunities? - Management highlighted the increasing size of projects and productivity gains from combining electrical and site development services as key drivers for margin expansion [31][32] Question: What is the mix of end markets driving the growth of the forward pipeline? - The majority of the $4 billion forward pipeline is in e Infrastructure, with data centers making up 75-80% of that segment [42][47] Question: Has there been any impact from the government shutdown on transportation funding? - Management confirmed no impact from the government shutdown, as funding for current jobs has already been allocated [68][69] Question: Are there any signs of improvement in Building Solutions for 2026? - Management indicated no expected improvement until at least 2026, with current market conditions remaining flat [87]

Backlog and Awards - As of September 30, 2025, the Company's Backlog was $2.58 billion, up from $1.69 billion at December 31, 2024, with a book-to-burn ratio of 1.6X for the nine months ended September 30, 2025[93] - The Company's margin in Backlog increased to 18.0% at September 30, 2025, from 16.7% at December 31, 2024, driven by a greater mix of E-Infrastructure Solutions backlog[93] - Unsigned Awards reached $868.8 million at September 30, 2025, compared to $137.9 million at December 31, 2024, with $335.3 million contributed from the recently acquired electrical and mechanical business[94] - Combined Backlog totaled $3.44 billion at September 30, 2025, significantly higher than $1.83 billion at December 31, 2024, with a book-to-burn ratio of 2.1X for the nine months ended September 30, 2025[94] Acquisitions - The Company acquired Drake Concrete, LLC for $25 million in cash, enhancing its presence in the Dallas-Fort Worth market[86] - The acquisition of CEC Facilities Group, LLC was completed for $561 million, including $445 million in cash and $79 million in common stock, with an earn-out opportunity of up to $80 million[87] Market and Segment Insights - The Infrastructure Investments and Jobs Act (IIJA) provides approximately $643 billion in funding for transportation programs, significantly increasing federal funding for infrastructure projects[90] - The E-Infrastructure Solutions segment is expected to benefit from multi-year capital deployment plans by data center customers, driven by cloud computing and AI applications[89] - Demand in the Building Solutions segment is anticipated to remain muted in the near term due to affordability challenges, but long-term growth is supported by population growth and housing shortages[91] - The Company aims to improve margins across all segments while focusing on growth in E-Infrastructure Solutions and expanding market share in Building Solutions[88] Financial Performance - Revenues for Q3 2025 were $689.0 million, a 16.0% increase from $593.7 million in Q3 2024, driven by a $153.2 million increase in E-Infrastructure Solutions[96] - Gross profit for Q3 2025 was $170.2 million, up $40.4 million or 31.1% from Q3 2024, with a gross margin increase to 24.7% from 21.9%[98] - General and administrative expenses were $37.6 million for Q3 2025, representing 5.5% of revenue, compared to $30.7 million or 5.2% of revenue in Q3 2024[100] - E-Infrastructure Solutions revenues increased by 58.1% to $417.1 million in Q3 2025, with operating income of $106.6 million, or 25.6% of revenue[106][107] - Transportation Solutions revenues were $170.5 million in Q3 2025, a 9.9% increase excluding prior year RHB revenue, with operating income of $24.4 million, or 14.3% of revenue[108][109] - Building Solutions revenues decreased by 1.1% to $101.4 million in Q3 2025, reflecting lower commercial volume and a slowdown in residential markets[110] - Net income attributable to Sterling common stockholders for Q3 2025 was $92.1 million, compared to $61.3 million in Q3 2024[96] - Interest income for the nine months ended September 30, 2025, was $5.0 million, significantly up from $0.3 million in the same period of 2024[102] - The effective income tax rate was 24.1% for Q3 2025, with an anticipated full-year rate of approximately 25%[103] - The company expects general and administrative expenses to be approximately 6.3% of revenue for the full year 2025[100] - Operating income for Q3 2025 was $10.8 million, or 10.6% of revenue, down from $12.2 million, or 11.9% of revenue in Q3 2024[111] Cash Flow and Financial Position - Total cash and cash equivalents decreased to $306.4 million as of September 30, 2025, from $664.2 million as of December 31, 2024[112] - Net cash provided by operating activities was $253.9 million for the nine months ended September 30, 2025, compared to $322.8 million for the same period in 2024[113] - Net cash used in investing activities was $531.1 million for the nine months ended September 30, 2025, significantly higher than $62.3 million in 2024, primarily due to $484.2 million for acquisitions[115] - Net cash used in financing activities was $80.7 million for the nine months ended September 30, 2025, slightly lower than $84.0 million in 2024[116] - The change in Contract Capital was a negative $113.6 million for the nine months ended September 30, 2025, driven by the E-Infrastructure Solutions segment[114] - As of September 30, 2025, the company had $296 million of variable rate debt, with a potential interest expense fluctuation of approximately $3 million per year for a 100-basis point change in interest rates[122] - The company plans to explore additional revenue growth and capital alternatives to strengthen its financial position and leverage trends in civil infrastructure and E-infrastructure markets[117] Operational Challenges - Inflation and supply chain volatility since 2021 have increased operational costs, negatively impacting financial results[124] - Approximately $10 million of construction work remains to be completed on unconsolidated construction joint venture contracts, with the company's share being about $4 million[119]

November 4, 2025 Q3 2025 EARNINGS CALL DISCLOSURE: Forward-Looking Statements This presentation contains, and the officers and directors of the Company may from time to time make, statements that are considered forward- looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about: our business strategy; o ...

Financial Performance - Third quarter 2025 revenue reached $689.0 million, a 32% increase year-over-year, excluding RHB[5] - Adjusted diluted earnings per share for the quarter were $3.48, reflecting a 58% increase[4] - Gross profit margin improved to 24.7%, up from 21.9% in the prior year[5] - Net income for the quarter was $92.1 million, a 50% increase compared to the previous year[5] - Revenues for Q3 2025 reached $689.0 million, a 16.0% increase from $593.7 million in Q3 2024[21] - Gross profit for Q3 2025 was $170.2 million, up 31.1% from $129.8 million in Q3 2024[21] - Operating income for Q3 2025 increased to $125.3 million, representing a 43.2% rise compared to $87.5 million in Q3 2024[21] - Net income attributable to Sterling common stockholders for Q3 2025 was $92.1 million, a 50.3% increase from $61.3 million in Q3 2024[21] - Adjusted net income attributable to Sterling common stockholders for Q3 2025 was $107.7 million, compared to $68.5 million in Q3 2024, representing a 57.3% increase[29] - Total revenues for Q3 2025, excluding RHB, reached $689.0 million, a 32.2% increase from $521.6 million in Q3 2024[33] - Adjusted EBITDA for Q3 2025 was $155.8 million, up 46.6% from $106.2 million in Q3 2024[31] Backlog and Acquisitions - Signed backlog at the end of the quarter was $2.6 billion, a 34% year-over-year growth[4] - Combined backlog reached over $3 billion for the first time, growing 44% year-over-year[4] - The CEC acquisition contributed $41.4 million to revenue and $475.3 million to backlog[5][7] - The backlog at the end of 2024 was $2,184,478 million, excluding RHB backlog, which was $491,255 million[47] Guidance and Projections - Full year 2025 guidance was raised to reflect a projected revenue of $2.375 billion to $2.390 billion, representing a 27% year-over-year growth[12] - Adjusted EBITDA for the full year is expected to be between $486 million and $491 million, indicating a 42% growth[12] - Full year 2025 guidance for net income attributable to Sterling common stockholders is projected between $270.0 million and $275.0 million, compared to $257.5 million in 2024[36] - Adjusted net income per share for 2025 is expected to be between $10.35 and $10.52, significantly higher than $7.09 in 2024[36] Segment Performance - E-Infrastructure Solutions revenue grew by 58%, while Transportation Solutions revenue increased by 10%[6][8] - E-Infrastructure Solutions contributed $417.1 million in revenues for Q3 2025, accounting for 60% of total revenues[23] - The E-Infrastructure Solutions segment generated revenues of $417.1 million in Q3 2025, accounting for 60% of total revenues[33] - Transportation Solutions revenue for 2024 was $547,783 million, showing a significant contribution to total revenues[40] Assets and Liabilities - Total assets as of September 30, 2025, were $2.56 billion, up from $2.02 billion at the end of 2024[25] - Cash and cash equivalents decreased to $306.4 million from $664.2 million at the end of 2024[27] - Total liabilities increased to $1.48 billion as of September 30, 2025, compared to $1.19 billion at the end of 2024[25] Operating Expenses - The company incurred $5.3 million in acquisition-related costs in Q3 2025, compared to $72,000 in Q3 2024[31] - Non-cash stock-based compensation for Q3 2025 was $6.0 million, up from $4.4 million in Q3 2024[31] - Corporate G&A expenses for 2024 totaled $38,268 million, impacting overall operating income[42] - Adjusted operating income for 2024 was $305,839 million, reflecting adjustments for non-cash stock-based compensation and other costs[42] Historical Performance - Net income attributable to Sterling common stockholders for 2024 was $257 million, with guidance for 2025 set between $270 million and $275 million[38] - Total revenues for 2024 reached $2,115,756 million, with E-Infrastructure Solutions contributing $923,728 million, Transportation Solutions $783,659 million, and Building Solutions $408,369 million[40] - Adjusted EBITDA for 2024 was $343 million, with guidance for 2025 projected between $486 million and $491 million[38] - The total operating income for 2024 was $264,622 million, with segment operating income from E-Infrastructure Solutions at $203,359 million[42] - The company reported a gain on deconsolidation of subsidiary, netting a loss of $91 million in 2024[38]

Core Insights - Sterling Infrastructure, Inc. reported record financial results for Q3 2025, with a 32% increase in revenue and a 58% increase in adjusted diluted earnings per share, reaching $3.48 [5][13][14] - The company achieved significant growth in E-Infrastructure Solutions, with a 58% revenue increase, while Transportation Solutions grew by 10% [5][7] - The total backlog reached $2.6 billion, a 34% year-over-year increase, with combined backlog exceeding $3 billion for the first time [5][13] Financial Performance - Revenues for Q3 2025 were $689 million, a 32% increase compared to the prior year, excluding RHB [13][29] - Gross margin improved to 24.7%, up from 21.9% in the previous year [13] - Net income for the quarter was $92.1 million, or $2.97 per diluted share, marking increases of 50% and 51% respectively [13][21] Segment Performance - E-Infrastructure Solutions accounted for 60% of total revenue, with $417.1 million in Q3 2025, up from 51% in Q3 2024 [27] - Transportation Solutions generated $170.5 million, representing 25% of total revenue, while Building Solutions contributed $101.4 million, or 15% [27] - Adjusted operating income for E-Infrastructure Solutions was $106.6 million, with a margin of 25.6% [27][29] Backlog and Future Outlook - The signed backlog at the end of Q3 2025 was $2.6 billion, with a combined backlog of $3.44 billion, reflecting strong demand [5][13] - The company anticipates continued growth in 2025, raising guidance to reflect strong year-to-date performance, projecting 27% revenue growth and 47% adjusted diluted earnings per share growth [8][14] Acquisition Impact - The acquisition of CEC contributed $41 million to revenue and $475.3 million to backlog in Q3 2025 [6][13] - The integration of CEC is expected to enhance project timelines and value through combined services [6]

Core Insights - Sterling Infrastructure, Inc. is a significant entity in the construction and infrastructure sector, offering a variety of services including heavy civil construction, residential construction, and infrastructure solutions [1] - The company is set to release its quarterly earnings on November 3, 2025, with an estimated earnings per share (EPS) of $2.79 and projected revenue of approximately $618.8 million [2] - A conference call will follow the earnings release on November 4, where management will discuss results and future outlook [2] Financial Metrics - Sterling's price-to-earnings (P/E) ratio is around 39.7, indicating strong investor confidence in the company's future earnings potential [3] - The price-to-sales ratio is approximately 5.29, reflecting the market's valuation of each dollar of sales [4] - The enterprise value to sales ratio is about 5.13, suggesting the company's total valuation relative to its sales [4] - The enterprise value to operating cash flow ratio is around 22.13, indicating the company's valuation in relation to its cash flow from operations [5] - The earnings yield is about 2.52%, providing insight into the return on investment for shareholders [5] - Sterling maintains a debt-to-equity ratio of approximately 0.39, indicating a balanced approach to financing its assets [5] - The current ratio of around 1.42 suggests the company's ability to cover its short-term liabilities with its short-term assets [5]

Core Insights - Sterling Infrastructure, Inc. (STRL) is set to report its third-quarter 2025 results on November 3, 2025, after market close [1] Financial Performance - In the last reported quarter, Sterling achieved adjusted earnings per share (EPS) of $2.69, exceeding the Zacks Consensus Estimate by 19% and reflecting a 41% year-over-year increase [2] - Revenues reached $614.5 million, surpassing estimates by 10.7% and increasing by 21% compared to the previous year [2] - The gross margin expanded by 400 basis points to 23%, driven by a shift towards higher-margin projects [2] - Adjusted EBITDA rose by 35% from the same quarter last year, supported by solid revenue growth and improved margins [2] Earnings Estimates - The Zacks Consensus Estimate for the third-quarter EPS remains unchanged at $2.79, indicating a 41.6% growth from the year-ago figure [4] - The consensus revenue estimate for the third quarter is $612.4 million, reflecting a 3.1% year-over-year growth [4] - For the full year 2025, STRL is projected to register a 56.9% EPS growth compared to the previous year [5] Segment Performance - E-Infrastructure Solutions, accounting for 51% of second-quarter 2025 revenues, is expected to be the key growth driver, benefiting from strong demand in data center development [11] - The Transportation Solutions segment, which made up 32% of total second-quarter revenues, is anticipated to perform steadily, supported by solid backlog levels and federal funding [13] - The Building Solutions segment, contributing 17% of total second-quarter revenues, is expected to face mixed conditions due to elevated mortgage rates, although steady construction activity in key markets may provide some support [15] Market Position and Valuation - STRL shares have increased by 125% year-to-date, significantly outperforming the Zacks Engineering – R&D Services industry, which grew by 16.4% [18] - The stock currently trades at a forward 12-month price-to-earnings (P/E) ratio of 35.29, representing a 39.6% premium over the industry average of 25.28 [19] - Compared to peers like AECOM, Fluor, and KBR, STRL appears overvalued, with their forward P/E ratios at 23.44, 22.21, and 10.08, respectively [22] Growth Drivers - The company is expected to maintain growth momentum in Q3 2025, driven by high-margin markets and strategic acquisitions [10] - Expansion into new geographies and a healthy project pipeline are likely to provide multi-year visibility [10] - Continued focus on mission-critical infrastructure work, particularly in data centers and industrial markets, is expected to enhance profitability [17]

Core Insights - Sterling Infrastructure, Inc. is experiencing growth due to its focus on mission-critical and large-scale projects, particularly in the data center market [1] - The company's profitability has improved through complex, multi-phase developments, leading to higher productivity and operational efficiency [1] - Strong demand in data centers, e-commerce facilities, and manufacturing projects is driving growth in high-margin markets [1] Financial Performance - In Q2 2025, the company reported a 400 basis-point year-over-year increase in gross margin to 23.3%, attributed to improved mix and productivity gains [2] - The E-Infrastructure segment achieved a 28% operating margin, up more than 500 basis points year-over-year, with data center revenues more than doubling [2] - E-Infrastructure backlog increased by 44% year-over-year to $1.2 billion, supported by a steady pipeline of large, multi-phase projects [2] Profitability and Efficiency - The company noted a 40% profit improvement on projects where site and utility work were completed simultaneously, highlighting efficiency benefits from scale and integration [3] - Combined signed backlog and future phases provide visibility into nearly $2 billion of E-Infrastructure revenues, indicating sustained momentum [3] - For 2025, E-Infrastructure margins are expected to remain in the mid-to-high 20% range, supported by expanding data center activity and growing project complexity [3] Future Outlook - Strong backlog levels, continued bidding activity, and rising participation in high-return data center and e-commerce projects are expected to support sustained earnings growth [4] - Multi-year visibility across infrastructure programs and disciplined execution provide a solid base for long-term profitability [4] Peer Comparison - Margin expansion is a key focus for infrastructure peers, with MasTec, Inc. and EMCOR Group, Inc. demonstrating stronger profitability through operational efficiency and favorable project mix [5] - MasTec reported a 42% year-over-year increase in non-pipeline EBITDA to $257 million, with overall margins up 100 basis points [6] - EMCOR achieved a record operating margin of 9.6%, up 50 basis points year-over-year, targeting full-year margins between 9% and 9.4% [7] Stock Performance and Valuation - STRL shares have surged 31.7% in the past three months, outperforming the Zacks Engineering - R and D Services industry's decline of 11.3% [8] - The stock is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 31.07, indicating a premium compared to industry peers [11] - Earnings estimates for 2025 and 2026 have trended upward to $9.57 and $10.98 per share, respectively, indicating year-over-year growth of 56.9% and 14.7% [13]

Core Points - Sterling Infrastructure, Inc. plans to release its financial results for Q3 2025 on November 3, 2025, after market close [1] - A conference call to discuss the results and 2025 outlook is scheduled for November 4, 2025, at 9:00 am ET [2] - The company operates through subsidiaries in three segments: E-Infrastructure, Transportation, and Building Solutions, primarily in the U.S. [4] Company Overview - Sterling Infrastructure specializes in advanced site development services, electrical services for data centers, and infrastructure projects for transportation [4] - The company is committed to sustainability and improving the quality of life for society [4] - CEO Joe Cutillo emphasizes the role of the company in building and servicing infrastructure that supports economic growth [5]