Financial Data and Key Metrics Changes - The company's Q1 2025 revenue increased by 32% to $826.6 million compared to the same period last year, driven by a 47% increase in Electrical and Mechanical (E and M) revenue, partially offset by a 2% decline in Transmission and Distribution (T and D) revenue [20][21] - Total EBITDA for Q1 2025 was $61.8 million, also up 32% year-over-year, with an EBITDA margin of 7.5%, consistent with the prior year [20][21] - The total backlog at the end of Q1 2025 was $3.1 billion, up 10% from the end of 2024 and up 41% from the same period last year [21][10] Business Line Data and Key Metrics Changes - E and M segment revenue increased by 47% to $648.2 million, with EBITDA rising by 51% to $49.5 million, resulting in an EBITDA margin of 7.6%, up 20 basis points from last year [22][23] - T and D segment revenue was $185 million, down from $188.5 million, but T and D EBITDA increased by 5.8% to $20.1 million, with an EBITDA margin of 10.9%, up 80 basis points from last year [23][24] Market Data and Key Metrics Changes - The company reported strong demand trends in key markets, particularly in data centers, hospitality, and high-tech reshoring, with E and M backlog increasing by 46% year-over-year [10][11] - The company noted that while there are macroeconomic uncertainties, favorable trends in several key end markets position the company well for growth [11][12] Company Strategy and Development Direction - The company's "forever strategy" focuses on attracting and retaining talent, creating value for customers and shareholders, and maintaining strong customer relationships [14][16] - The company is increasing capital expenditures to support organic growth, including the purchase of a new prefabrication facility in Kansas City [17][25] - The company aims for organic revenue growth of 5% to 7% and EBITDA growth of 7% to 9% on a compound annual basis [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties and highlighted the importance of maintaining strong customer relationships and effective project execution [9][11] - The company remains optimistic about backlog growth based on demand trends and its diverse end market exposure [14][48] Other Important Information - The company is actively monitoring tariff impacts and has implemented strategies to mitigate risks associated with price increases [58][59] - The company has a net leverage ratio of approximately one times, indicating a strong balance sheet position [24] Q&A Session Summary Question: Outlook on larger projects and revenue timing - Management indicated that backlog could be bumpy due to the nature of larger projects, which may have longer lead times [30][31] Question: Transmission and Distribution segment outlook - Management noted strong demand in the T and D segment, particularly in undergrounding projects, and expressed confidence in building upon existing customer relationships [33][35] Question: Status of high-tech manufacturing market - Management confirmed ongoing strong relationships with semiconductor manufacturers and expressed confidence in continued support for these customers despite some cyclicality in capital allocation [37][38] Question: Non-backlog business outlook - Management emphasized the importance of non-backlog work and resource allocation to maintain a healthy balance between backlog and non-backlog projects [41][42] Question: Hospitality market status - Management reported an increase in backlog in Las Vegas and expressed confidence in capturing future opportunities in the hospitality sector [46][47] Question: Impact of weather delays on T and D business - Management believes that weather-related delays will not significantly impact the overall business for the year, as demand remains strong [48] Question: Guidance for 2025 in light of strong Q1 - Management acknowledged some revenue pull-forward in Q1 and emphasized the need to monitor macroeconomic uncertainties moving forward [55][56] Question: Tariff impacts on business - Management discussed proactive measures to mitigate tariff risks and secure pricing with suppliers [58][59] Question: Corporate costs outlook - Management indicated that corporate costs may increase slightly for the remainder of the year as the company stands up its departments [60][61]
Everus Construction Group, Inc.(ECG) - 2025 Q1 - Earnings Call Transcript