MasTec(US:MTZ)2025-07-31 20:26Part I. FINANCIAL INFORMATION Item 1. Financial Statements The unaudited consolidated financial statements for the period ended June 30, 2025, reflect significant year-over-year growth in revenue and net income, an increase in total assets, and a notable decrease in operating cash flow due to working capital changes Consolidated Statements of Operations For Q2 2025, MasTec reported substantial revenue growth to $3.54 billion and a significant increase in net income to $85.8 million, with diluted EPS rising to $1.09 Consolidated Statements of Operations Highlights (in thousands, except per share amounts) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $3,544,705 | $2,961,086 | +19.7% | $6,392,423 | $5,647,935 | +13.2% | | Income before income taxes | $120,793 | $63,112 | +91.4% | $129,737 | $17,574 | +638.2% | | Net income attributable to MasTec, Inc. | $85,766 | $33,988 | +152.3% | $95,669 | $(7,192) | N/A | | Diluted EPS | $1.09 | $0.43 | +153.5% | $1.21 | $(0.09) | N/A | Consolidated Balance Sheets As of June 30, 2025, total assets increased to $9.13 billion, driven by contract assets, while cash and cash equivalents significantly decreased to $191.1 million Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $3,746,999 | $3,652,530 | | Cash and cash equivalents | $191,052 | $399,903 | | Contract assets | $1,797,190 | $1,555,807 | | Total Assets | $9,132,156 | $8,975,275 | | Total Current Liabilities | $3,067,658 | $2,999,699 | | Long-term debt, including finance leases | $2,096,775 | $2,038,017 | | Total Liabilities | $6,117,791 | $5,987,932 | | Total Equity | $3,014,365 | $2,987,343 | Consolidated Statements of Cash Flows Net cash provided by operating activities significantly decreased to $84.0 million for H1 2025, primarily due to working capital changes, while financing activities saw lower net debt repayments Six Months Ended June 30, Cash Flow Summary (in thousands) | Cash Flow Category | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $84,011 | $372,199 | | Net cash used in investing activities | $(86,653) | $(24,470) | | Capital expenditures | $(111,076) | $(56,907) | | Net cash used in financing activities | $(207,274) | $(579,078) | | Repurchases of common stock | $(77,326) | $— | | Net decrease in cash and cash equivalents | $(208,851) | $(231,975) | Notes to Consolidated Financial Statements The notes detail accounting policies, segment realignment, $11.4 billion in remaining performance obligations, and significant debt refinancing activities including a new $600 million term loan - In Q1 2025, the company realigned its Communications and Power Delivery segments by moving a utility operations component from Communications to Power Delivery to better align with end markets and management structure2599 - As of June 30, 2025, remaining performance obligations (backlog) totaled $11.4 billion. The company expects to recognize approximately $5.4 billion (47.5%) of this as revenue during the remainder of 202534 - In June 2025, the company entered into a new $600 million senior unsecured term loan facility maturing in 2028 and amended its credit facility, extending the maturity to 2030. Proceeds were used to repay existing term loans7278 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the 19.7% YoY revenue growth in Q2 2025, driven by strong segment performance and a substantial increase in the $16.5 billion 18-month backlog, while addressing liquidity and working capital changes Business Overview and Backlog MasTec's 18-month estimated backlog significantly increased to $16.45 billion as of June 30, 2025, driven by growth across all major segments 18-Month Estimated Backlog by Segment (in millions) | Reportable Segment | June 30, 2025 | June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Communications | $5,008 | $4,448 | +12.6% | | Clean Energy and Infrastructure | $4,922 | $3,666 | +34.2% | | Power Delivery | $5,062 | $4,424 | +14.4% | | Pipeline Infrastructure | $1,460 | $800 | +82.5% | | Total Estimated Backlog | $16,452 | $13,338 | +23.4% | - Approximately 48% of the June 30, 2025 backlog is attributable to master service agreements, which are not contractually committed and can be canceled on short notice150 Results of Operations Consolidated revenue for Q2 2025 increased 19.7% to $3.5 billion, driven by strong segment growth, while net income surged to $85.8 million despite gross margin impacts Q2 2025 vs Q2 2024 Segment Performance (Revenue in millions) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | YoY Change | Q2 2025 EBITDA | Q2 2024 EBITDA | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Communications | $836.9 | $591.1 | +41.6% | $82.6 | $53.1 | +55.5% | | Clean Energy & Infra. | $1,131.4 | $942.3 | +20.1% | $83.3 | $47.4 | +75.7% | | Power Delivery | $1,045.6 | $868.4 | +20.4% | $91.3 | $80.1 | +14.0% | | Pipeline Infrastructure | $539.7 | $572.4 | -5.7% | $62.1 | $135.1 | -54.0% | - The Communications segment's revenue growth was driven by higher wireless and wireline project activity, while EBITDA margin improved by 90 basis points due to better efficiencies185186 - The Pipeline Infrastructure segment saw a significant decline in EBITDA margin by 1,210 basis points, primarily due to reduced efficiencies from lower revenue on large-diameter pipeline projects and unfavorable project mix191 Financial Condition, Liquidity and Capital Resources The company's liquidity is supported by its $1.9 billion credit facility, despite a decrease in H1 2025 operating cash flow to $84 million and an increase in DSO to 65 days - Net cash provided by operating activities decreased by $288 million in H1 2025 compared to H1 2024, primarily due to negative timing-related changes in accounts receivable and contract liabilities222223 - Days Sales Outstanding (DSO) increased to 65 days as of June 30, 2025, from 60 days as of December 31, 2024, due to the timing of ordinary course billing and collection activities224 - In June 2025, the company amended its credit facility, extending maturity to 2030, and entered a new $600 million term loan to repay existing debt, enhancing its financial flexibility227230 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate risk from its variable-rate debt, where a 100 basis point increase would raise H1 2025 interest expense by $4 million, while foreign currency risk remains minimal - As of June 30, 2025, the company had approximately $647 million in variable-rate debt outstanding. A 100 basis point increase in interest rates would have increased interest expense by about $4 million for the first six months of 2025236237 - Fixed-rate debt, including Senior Notes and finance leases, totaled approximately $1.56 billion, mitigating exposure to rising interest rates on that portion of the debt portfolio238 - Foreign currency risk is limited as revenue from foreign operations, primarily in Canada, represented only about 1% of total revenue for the first half of 2025239 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during Q2 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025244 - No material changes were made to the company's internal control over financial reporting during the quarter ended June 30, 2025245 Part II. OTHER INFORMATION Item 1. Legal Proceedings The company refers to Note 12 for legal proceedings, applying a $1 million disclosure threshold for environmental matters involving governmental authorities - For details on legal proceedings, the report incorporates by reference Note 12 – Commitments and Contingencies246 Item 1A. Risk Factors The company highlights the risk of recent tariff and trade actions potentially increasing construction material costs and reducing customer capital expenditures, adversely affecting business - A key risk identified is the potential adverse effect of recent U.S. and international tariff and trade actions on the business249 - These trade actions could increase costs for essential construction materials (steel, concrete, solar panels), potentially leading customers to reduce capital spending and demand for MasTec's services249250 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During Q2 2025, MasTec repurchased 391,892 shares, completing its March 2020 program, and authorized a new $250 million share repurchase program Q2 2025 Share Repurchases | Period | Total Shares Purchased | Average Price Paid | Shares Purchased Under Program | | :--- | :--- | :--- | :--- | | April 2025 | 380,574 | $109.06 | 369,968 | | May 2025 | 6,157 | $143.98 | — | | June 2025 | 5,161 | $159.68 | — | | Total Q2 | 391,892 | N/A | 369,968 | - The company completed its $150 million March 2020 share repurchase program in April 2025252 - A new $250 million share repurchase program was authorized in May 2025, with the full amount remaining available as of June 30, 2025252 Item 4. Mine Safety Disclosures Mine safety disclosures, as required by the Dodd-Frank Act, are provided in Exhibit 95.1 of the Form 10-Q - Mine safety disclosures are provided in Exhibit 95.1 to the report253 Item 5. Other Information No directors or officers adopted, modified, or terminated Rule 10b5-1 trading plans or other trading arrangements during Q2 2025 - No directors or officers made changes to their Rule 10b5-1 trading plans during the quarter254 Item 6. Exhibits This section lists key exhibits filed with the Form 10-Q, including the amended credit agreement, new term loan agreement, and CEO/CFO certifications - Key exhibits filed include the Amended and Restated Credit Agreement and the new Term Loan Agreement, both dated June 26, 2025258