Financial Data and Key Metrics Changes - For Q3 2025, revenue reached $986.8 million, a 30% increase compared to the same period last year, driven by strong growth in the electrical and mechanical (E&M) segment [15][6] - EBITDA for the third quarter was $89 million, reflecting a 37% increase from the prior year, with an EBITDA margin of 9%, up 50 basis points from 8.5% in the previous year [15][16] - Total backlog at the end of Q3 was $2.95 billion, up 2% year-over-year and 6% from the end of 2024, indicating solid growth despite strong revenue performance [7][16] Business Line Data and Key Metrics Changes - E&M segment revenues increased 43% to $767.3 million, primarily driven by growth in commercial and renewables markets, particularly in the data center submarket [15][17] - T&D segment revenues were $223.4 million, a slight decrease from $228.5 million last year, attributed to timing and a decline in utility work, although T&D EBITDA increased 11% to $33.8 million [15][18] Market Data and Key Metrics Changes - The T&D backlog increased by 19% year-over-year, driven by utility end market growth, particularly in undergrounding and substation work [16][18] - The company is experiencing strong demand in the data center submarket, with no signs of weakening, and is strategically positioned in key geographic locations for data center development [9][10] Company Strategy and Development Direction - The company is focused on maintaining a disciplined approach to project selection, emphasizing opportunities that align with strategic objectives and offer attractive returns [8][10] - The "Forever" strategy continues to underpin sustainable growth, with a strong emphasis on attracting and retaining talent, which is critical for supporting growth objectives [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to continue building backlog momentum, citing robust underlying demand drivers across key markets [7][9] - The company anticipates ongoing strong momentum into 2026, supported by favorable trends in core markets and a solid backlog position [20][22] Other Important Information - The company raised its 2025 guidance, now forecasting revenues between $3.55 billion and $3.65 billion, and EBITDA between $290 million and $300 million, reflecting strong business momentum [20][21] - Operating cash flows for the first nine months of 2025 were $108.6 million, up from $82.7 million in the same period last year, indicating strong operational results [19] Q&A Session Summary Question: Thoughts on margin sustainability - Management noted that execution upside is hard to forecast, but strong execution has led to margin improvements this fiscal year, with a focus on maintaining this uplift going forward [27][28] Question: Data center project strength and timelines - Management highlighted strong demand for data center projects, particularly in the Upper Midwest and Southwest regions, with ongoing visibility into future projects [29][30] Question: Organic growth expectations for next year - Management remains optimistic about strong demand for services and the ability to secure backlog to support growth, despite potential cyclicality [35][36] Question: Status of pre-construction projects - Some projects in pre-construction have accelerated, contributing to solid revenue, while others remain in early phases, providing visibility for the next year [39][40] Question: Las Vegas market activity - Management indicated a diversified approach in Las Vegas, with ongoing projects in hospitality and data centers, and a positive outlook for 2025 despite potential slowdowns [42][44] Question: Data center end market revenue progression - Data centers have become a significant part of the business, with strong demand and a long runway for opportunities, while maintaining diversification to mitigate risks [48][49] Question: M&A opportunities and strategy - The company is actively evaluating M&A opportunities, with a broader and deeper funnel than a year ago, focusing on companies that align with strategic priorities [51][52]
Everus Construction Group, Inc.(ECG) - 2025 Q3 - Earnings Call Transcript