Financial Data and Key Metrics Changes - The company's second quarter revenue increased by 31% to $921.5 million compared to the same period last year, driven by strong performance in both Electrical and Mechanical (E and M) and Transmission and Distribution (T and D) segments [6][15] - EBITDA for the second quarter rose by 36% to $84.2 million, with EBITDA margins improving to 9.1% from 8.8% in the prior year [7][16] - Total backlog at the end of the second quarter was $3 billion, up 24% year-over-year and 7% from the previous quarter [7][16] Business Line Data and Key Metrics Changes - E and M segment revenues increased by 42% to $713.6 million, with EBITDA rising by 53% to $63.7 million, resulting in an EBITDA margin of 8.9% [19] - T and D segment revenues grew by 3% to $212.4 million, with EBITDA increasing by 19% to $30.4 million, leading to an EBITDA margin of 14.3% [20] Market Data and Key Metrics Changes - The company noted strong demand trends in key end markets, particularly in data centers and hospitality, with favorable growth opportunities across various submarkets [11][36] - The utility end market showed strength, especially in the underground submarket, driven by increased spending plans from key customers [9][10] Company Strategy and Development Direction - The company aims for organic revenue growth of 5% to 7% compounded annually, with EBITDA growth of 7% to 9% on a compound annual basis [13] - The focus remains on attracting and retaining key talent to support growth objectives, with a record employment level achieved [12][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate continued backlog growth, citing strong competitive positioning and favorable demand drivers [10][18] - The outlook for the second half of the year is tempered due to a higher mix of large projects in early stages, impacting margin visibility [23][26] Other Important Information - The company raised its 2025 guidance, forecasting revenues between $3.3 billion and $3.4 billion and EBITDA between $240 million and $255 million [22] - The company is focused on maintaining strong execution and anticipates potential upside as new projects progress [25] Q&A Session Summary Question: Capability to convert backlog and fill gaps with book and burn work - Management highlighted the importance of timing and resource planning, stating they are well positioned to support growth and continue adding headcount [28][30] Question: Weather impact on T and D and hospitality outlook - Management confirmed no weather impacts in the second quarter and noted an uptick in hospitality work in Las Vegas, although not yet at pre-pandemic levels [34][36] Question: Sustainability of gross margin improvements - Management attributed margin improvements to efficiency gains and prefab investments, emphasizing ongoing investments in prefab facilities [40][41] Question: Book to bill ratio and demand environment - Management indicated that the book to bill ratio was affected by backlog lumpiness, but expressed optimism about year-to-date performance [45][46] Question: Growth rates in the back half by segment - Management suggested that growth rates may be tempered in the second half due to tougher comparisons but expected T and D to maintain its growth rate [51][52] Question: Pipeline for M&A and inorganic growth - Management is actively pursuing M&A opportunities and expanding their pipeline, focusing on companies with strong reputations and commitment to safety [56][58] Question: Cash flow and working capital impact - Management expressed confidence in their ability to generate cash flow in the second half, despite increased working capital needs for new projects [60][61]
Everus Construction Group, Inc.(ECG) - 2025 Q2 - Earnings Call Transcript