Core Insights - MasTec, Inc. (MTZ) reported a strong second-quarter performance for 2025, with revenue increasing by 20% year over year to a record $3.54 billion and earnings per share of $1.49, surpassing consensus estimates by 5.7% [1][9] - The Communications segment experienced significant growth, with a 42% increase in revenue and a 55% rise in adjusted EBITDA, driven by robust demand in wireless and wireline services [1][9] Industry Trends - The surge in fiber infrastructure needs is primarily fueled by AI advancements, with hyperscaler capital spending, data center construction, and broadband expansion converging to create a long-term opportunity for fiber deployment [2] - Major telecom companies such as AT&T, Verizon, and T-Mobile have set aggressive multi-year fiber passing targets, effectively doubling their footprints by the end of the decade, positioning MasTec to capture a significant share of this investment wave [2] Company Performance - The backlog in the Communications segment reached a record $5 billion in the second quarter, reflecting a 13% year-over-year increase, indicating strong demand durability [3][9] - Federal broadband initiatives and middle-mile build-outs further support this demand, while MasTec's recent 10% workforce expansion enhances its ability to execute large-scale projects [3] Future Outlook - Management anticipates continued double-digit sequential revenue growth in the third quarter, along with margin expansion due to operating leverage [4] - The Communications segment is well-positioned for sustained growth, driven by AI applications that increase data consumption and telecoms' efforts to meet bandwidth requirements [4] Competitive Landscape - MasTec operates in a competitive telecom and fiber infrastructure market, with significant players including Quanta Services, Dycom Industries, and Uniti Group [5] - Quanta Services has a strong presence in utility and telecom infrastructure, leveraging its resources to secure major fiber deployment contracts, making it a formidable competitor [6] - Dycom focuses on telecom infrastructure and benefits from broadband expansion initiatives, directly competing with MasTec for multi-year build-out budgets [7] - Uniti Group specializes in communications infrastructure, owning and leasing fiber networks, and is positioned within the same ecosystem as MasTec due to the increasing demand for fiber networks driven by AI [8]

Merger Overview - Uniti and Windstream are merging to create a premier fiber provider with approximately $4 billion in revenue and 240,000 fiber route miles across 47 US states[13] - Existing Uniti shareholders will own roughly 62% and Windstream shareholders will own about 38% of the combined company's common equity[13] - The combined company has approximately 44 million residential households, 240,000 fiber route miles, and 150,000 on-net locations[8] Financial Profile & Growth - The combined company anticipates core fiber revenue between $2845 million and $2865 million, and total revenue between $3745 million and $3780 million in 2025[25] - The combined company anticipates total adjusted EBITDA between $1545 million and $1575 million, and total net Capex between $1210 million and $1220 million in 2025[25] - Kinetic consumer revenue is expected to grow approximately 2% in 2025, and strategic fiber infrastructure revenue is expected to grow approximately 5% in 2025[28] - Uniti is targeting strategic recurring revenue growth of approximately 4% to 6% and strategic recurring adjusted EBITDA growth of approximately 8% to 10% in 2025[35] Strategic Priorities - Uniti aims to pass an incremental 325,000 homes with fiber in 2025, reaching approximately 2 million homes in total[35] - Consolidated new sales bookings MRR was $08 million in Q1 2025, up approximately 40% from the prior year period[49] - The company's debt yielded approximately 125% in February 2023, which has improved to approximately 75% currently[52] AI Opportunity - The total AI TAM is projected to be $300 billion by 2030, with digital infrastructure TAM at $40 billion and fiber/network TAM at $15 billion[19]

MoffettNathanson 2025 Media, Internet & Communications Conference May 14, 2025 Together, Building the Future Safe Harbor Statement Forward-Looking Statements Certain statements in this communication may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended from time to time. Those forward-looking statements include all statements that are not historical statements of fact, including, without limitation, statements regarding the anticipat ...

Financial Data and Key Metrics Changes - Unity reported consolidated revenues of $294 million for the first quarter, with adjusted EBITDA of $238 million and AFFO attributed to common shareholders of $92 million, resulting in an AFFO per diluted common share of $0.35 [15][20] - Core recurring strategic revenue grew approximately 4% year-over-year, while capital intensity of the fiber business declined over 50% year-over-year [14][15] - The leverage ratio was reported at 6.09 times based on net debt to annualized adjusted EBITDA [21] Business Line Data and Key Metrics Changes - Uniti Leasing segment revenues were $222 million with an adjusted EBITDA of $215 million, achieving a 97% adjusted EBITDA margin [15] - Uniti Fiber reported revenues of $72 million and adjusted EBITDA of $29 million, resulting in a 40% adjusted EBITDA margin [17] - Non-recurring revenue was lower than expected due to a delay in a $4 million one-time sale of fiber to a government customer [17] Market Data and Key Metrics Changes - The company noted strong demand from wireless carriers, with bookings in the quarter nearly doubling compared to the same quarter last year [12] - The percentage of bookings related to hyperscalers was around 15% to 20%, consistent over the past 18 months [43][45] - The ABS market has remained resilient, providing a key financing tool for the company [6][8] Company Strategy and Development Direction - Unity aims for disciplined top-line growth of mid-single digits and high-single digit adjusted EBITDA growth, reiterating full-year guidance for revenue, adjusted EBITDA, and AFFO [5][10] - The company is focused on building new fiber, particularly within the Kinetic footprint, with plans to double the number of targeted homes passed with fiber by 2025 [6][10] - The merger with Windstream is expected to enhance Unity's fiber network and operational capabilities, with a goal to transition Kinetic off legacy systems to fiber [26][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the fiber infrastructure business, noting minimal impact from recent economic downturns [8][9] - The company is optimistic about regulatory changes that may benefit its business, including increased leniency towards retiring aging copper networks [9] - Management highlighted the ongoing investment cycle for large language models and the anticipated growth in AI-related demand [36][37] Other Important Information - The company received shareholder approval for the merger with Windstream, with approximately 97% of voting shareholders in favor [10] - New appointments to the Unity team include John Harobin as president of Kinetic and Harold Zeitz as a new board member [11] Q&A Session Summary Question: Concerns about M&A environment and lease-up mix - Management indicated no slowdown in M&A activity and remains engaged in strategic conversations, while also focusing on integration and accelerating growth strategies [33][34] - The high mix of lease-ups was acknowledged, with continued strong investment from hyperscalers expected [35][36] Question: Nature of bookings and AI-related deals - Approximately 20% of bookings are related to hyperscalers, with a growing percentage over the past quarters [43][44] - AI-driven builds are treated similarly to other anchor lease-up models, with yields nearing 20% for hyperscaler deals [47][48]

Financial Data and Key Metrics Changes - The company reported consolidated revenues of $294 million, with adjusted EBITDA of $238 million, and AFFO attributed to common shareholders of $92 million, resulting in an AFFO per diluted common share of $0.35 [15][20] - Core recurring strategic revenue grew approximately 4%, while capital intensity of the fiber business, excluding GCI impact, declined over 50% year over year [14][15] Business Line Data and Key Metrics Changes - Uniti Leasing reported segment revenues of $222 million and adjusted EBITDA of $215 million, achieving an adjusted EBITDA margin of 97% [15] - Uniti Fiber generated revenues of $72 million and adjusted EBITDA of $29 million, resulting in an adjusted EBITDA margin of 40% [16] Market Data and Key Metrics Changes - The company noted strong demand from wireless carriers, with bookings in the quarter almost double those from the same quarter last year [12] - The percentage of bookings related to hyperscalers is around 15% to 20%, consistent over the past 18 months [42][44] Company Strategy and Development Direction - The company aims for disciplined top-line growth of mid-single digits and high-single-digit adjusted EBITDA growth, reiterating full-year guidance for revenue, adjusted EBITDA, and AFFO [4][20] - The merger with Windstream is expected to enhance the fiber network significantly, with plans to convert approximately 2 million homes to fiber by the end of 2025 [26][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the fiber infrastructure business, noting minimal impact from recent economic downturns [7] - The company remains optimistic about the merger with Windstream, expecting to close the transaction in the second half of the year [10][29] Other Important Information - The company has a leverage ratio of 6.09 times based on net debt to annualized adjusted EBITDA [21] - The ABS market is viewed as an attractive source of financing, with potential for incremental capacity exceeding $1 billion [22] Q&A Session Summary Question: Concerns about M&A environment and lease ups - Management indicated no slowdown in M&A activity, with ongoing strategic conversations and a focus on integration and accelerating growth [33][34] - Regarding lease ups, management noted that a significant portion of the lease up activity was driven by hyperscalers, with expectations for continued investment in large language models [35][36] Question: Nature of bookings and AI-related deals - Approximately 20% of bookings are related to hyperscalers, with a growing percentage over the past quarters [42][44] - AI-driven builds are treated similarly to other anchor lease up models, with yields nearing 20% on hyperscaler deals [46][47]