Sterling Infrastructure(US:STRL)2026-02-26 15:00Financial Data and Key Metrics Changes - The company achieved strong revenue growth of over 32% and adjusted diluted EPS growth of over 53% for the full year 2025 [6] - Full year gross margins reached 23%, and adjusted EBITDA margins exceeded 20% for the first time in history [6] - Operating cash generation remained strong at $440 million for the year [6] Business Line Data and Key Metrics Changes - E-Infrastructure Solutions revenue grew 59% for the full year, with 40% organic growth, and adjusted operating income grew 67% [8] - Transportation Solutions revenue grew 17% for the full year, with adjusted operating profit growing 66% [10] - Building Solutions revenue declined 6% for the full year, with adjusted operating profit declining 23% [10] Market Data and Key Metrics Changes - The signed backlog at the end of Q4 2025 totaled $3 billion, a 78% increase from year-end 2024 [8] - The Texas market showed strong growth, particularly in electrical and site development, with significant opportunities ahead [10] Company Strategy and Development Direction - The company remains committed to its guiding principle of taking care of people, the environment, investors, and communities while building America's infrastructure [6] - Future growth is anticipated in E-Infrastructure Solutions, with expected revenue growth of 40% or higher in 2026 [18] - The company is focusing on geographic expansion and incremental electrical footprint and services, with a strong emphasis on data centers and semiconductor projects [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the multiyear opportunities across markets, particularly in E-Infrastructure and Transportation Solutions [17] - The company expects continued strong demand in the Texas data center market and anticipates growth in the semiconductor and manufacturing sectors [18] - Management acknowledged challenges in the Building Solutions segment but remains optimistic about long-term market share gains [20] Other Important Information - The company is forecasting 2026 revenue of $3.05 billion to $3.2 billion, with adjusted diluted EPS of $13.45 to $14.05 [15] - Cash flow from operating activities for 2025 was strong at $440 million, with expectations for continued strength in 2026 [12] Q&A Session Summary Question: Update on transportation awards and backlog - Management noted that while there were no major projects, bid activity remains strong, and funding will continue through extensions of existing bills [25] Question: Progress in Texas on site prep and joint awards at CEC - Management expressed excitement about the Texas market and indicated that significant awards would be announced in the first half of the year [28] Question: Pipeline evolution at CEC since acquisition - Management confirmed that jobs are getting larger, with data centers evolving into data campuses, leading to margin improvements [34] Question: Legacy site development margins - Management indicated that margins are not expected to decline, with opportunities for improvement through larger jobs and strategic investments [39] Question: High probability future phase work - Management clarified that the $1 billion in future phase work is tied to existing projects and customers, with expectations for continued acceleration [44] Question: Capital allocation priorities - Management emphasized a focus on geographic expansion and service enhancement within infrastructure, while remaining open to strategic acquisitions [50] Question: Market opportunity in manufacturing and high tech - Management believes the semiconductor market is in its early stages, with significant projects expected in the coming years [56]