Financial Data and Key Metrics Changes - Fourth quarter revenues exceeded $1 billion for the first time, up 33% from the prior year period, driven by growth in both E&M and T&D segments [6][16] - Full-year revenues increased 32% to $3.75 billion, primarily from the E&M business, with EBITDA rising 52% to $320 million compared to 2024 [7][17] - Fourth quarter EBITDA margin was 8.4%, up 70 basis points from 7.7% in the prior year period [16][17] Business Line Data and Key Metrics Changes - E&M segment revenues increased 44% to $791.6 million in the fourth quarter, with EBITDA rising 57% to $67.1 million [18][19] - T&D segment revenues were $227.7 million, up 6.8% from the previous year, but EBITDA was flat at $30.5 million due to project mix and higher SG&A expenses [19][20] Market Data and Key Metrics Changes - The backlog at the end of 2025 was $3.2 billion, up 16% from the same period last year, with T&D backlog increasing by 41% and E&M backlog by 13% [8][18] - The company sees robust project pipelines across diverse markets, including data centers, hospitality, and semiconductor sectors [9][18] Company Strategy and Development Direction - The company focuses on its "Forever Strategy," which emphasizes employee retention, customer value creation, and operational excellence [10][12] - Plans for geographic expansion through satellite projects are in place, with a recent entry into a new market supporting a large semiconductor company [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth due to favorable market trends and a strong backlog entering 2026 [24] - The company anticipates revenue guidance for 2026 in the range of $4.1 billion to $4.2 billion, reflecting strong demand drivers [23][24] Other Important Information - The company ended 2025 with approximately 9,400 employees, up from 8,700 at the end of 2024, indicating a focus on workforce expansion [11] - Capital expenditures increased to $66.8 million in 2025, up from $43.8 million in 2024, to support growth initiatives [22] Q&A Session Summary Question: Guidance and Margins - Inquiry about whether exceptional execution in 2025 would be repeatable in 2026 and if management is being conservative in their guidance [27] - Management confirmed that exceptional margin upside was due to diversified contributions from various markets and expressed confidence in achieving forecasted margins for 2026 [28][29] Question: Leverage and Free Cash Flow - Questions regarding the company's low leverage and thoughts on optimal leverage levels, as well as free cash flow conversion going forward [30] - Management emphasized the importance of a strong balance sheet for organic growth and M&A opportunities, indicating a target leverage of 1.5-2 times [32] Question: Capacity Constraints and Backlog - Inquiry about potential capacity constraints given the record backlog and lead times for projects [37] - Management reassured that they have sufficient skilled labor to complete projects and that 80% of the backlog typically burns off within 12 months [39][41] Question: Satellite Operations and Expansion - Questions about opportunities for satellite expansions in 2026 and specific geographies of interest [47] - Management indicated a selective approach to satellite operations and mentioned potential opportunities in the South and Southeast [49] Question: Labor Costs and M&A Strategy - Inquiry about labor cost management and the company's approach to M&A in the current market [58][60] - Management stated that they are successfully incorporating labor cost increases into pricing and are open to both larger and smaller M&A transactions [61][63]
Everus Construction Group, Inc.(ECG) - 2025 Q4 - Earnings Call Transcript