CTRI

Interested in Centuri Holdings, Inc.? Here are five stocks we like better. Record results and raised guidance: Centuri reported second-quarter revenue of $962 million, up 36% on a base-revenue basis, while adjusted net income rose 44% to $24.4 million. The company raised its 2026 outlook to $3.59 billion–$3.79 billion in revenue, $285 million–$310 million in adjusted EBITDA and more than $75 million in free cash flow. Backlog and demand expanded: Year-to-date bookings exceeded $2.2 billion, backlog grew 21% year over year to $6.4 billion and the opportunity pipeline reached $16 billion. Data centers were a key growth area, including a $125 million contract and roughly $2 billion in additional pipeline opportunities. JJ White adds capacity, while costs pressure margins: The $62 million acquisition adds about 1,000 employees, a $315 million backlog and greater exposure to Northeast and Midwest industrial and data-center projects. However, elevated fuel prices and investments in roughly 1,700 new employees reduced quarterly gross margins, particularly in U.S. Gas. Centuri (NYSE:CTRI) reported record quarterly revenue of $962 million in its second quarter, while raising its full-year 2026 outlook to reflect continued demand across its utility, electric and industrial end markets and the contribution from its recently completed JJ White acquisition. President and Chief Executive Officer Chris Brown said quarterly adjusted net income rose 44% year over year to $24.4 million, while base revenue, excluding storm work and a one-time receivable write-off, increased 36%. Base gross profit rose 21% from the prior-year period. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control “We’re proud to have delivered $962 million of revenue for the quarter, a new quarterly record for Centuri,” Brown said. He added that first-half base revenue grew 33% and base gross profit increased 35% from a year earlier. Centuri reported second-quarter bookings of nearly $850 million, bringing year-to-date bookings above $2.2 billion. The company’s year-to-date book-to-bill ratio was 1.3x, and management is targeting an organic full-year book-to-bill ratio of 1.2x, or roughly $4.4 billion in bookings for 2026. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Backlog stood at approximately $6.4 billion at quarter-end, up 21% year over year. The company’s opportunity pipeline increased 23% from the first quarter to about $16 billion, including nearly 700 differentiated bid opportunities that account for 60% of the total pipeline. Centuri also had $2.5 billion of outstanding bids at the end of the second quarter, a 15% increase from the first quarter. Brown said more than two-thirds of pending bids were in the electric segment. He also said bid margins increased by more than 10% year over year as the company pursued higher-margin project work. → 3 Drone Stocks That Should Soar After the Summer Slump The company cited a $125 million data center contract for electrical infrastructure and utility work at a multi-building campus. Centuri had about $2 billion in data center opportunities in its pipeline at quarter-end, excluding opportunities added through the JJ White acquisition. Other awards included electrical transmission and substation construction work in Atlantic Canada, installation work for a gas infrastructure company, and a high-voltage transmission project in the U.S. Northeast. On the master service agreement side, Centuri booked about $250 million in renewals and approximately $200 million from new agreements and expanded existing customer relationships. Centuri acquired JJ White, a provider of union industrial, mechanical and electrical maintenance and construction services, for approximately $62 million in cash. The acquisition was funded through existing balance-sheet liquidity and is not expected to change Centuri’s target of ending the year at roughly 2x net debt to adjusted EBITDA. JJ White, which has approximately 1,000 employees, will be integrated into Centuri’s Riggs Distler business. Brown said the acquisition expands the company’s scale in the Northeast and Midwest, particularly for in-plant power and data center-related work. Centuri expects JJ White to contribute more than $20 million of gross profit on a full-year annualized basis. Brown said the company does not expect cost synergies from the transaction, instead citing the acquired company’s workforce, supervisors and craft labor as capacity that can support additional work for customers. JJ White’s $315 million backlog and $2.8 billion opportunity pipeline were not included in Centuri’s reported second-quarter backlog and pipeline figures because the transaction closed in July. Consolidated gross profit was $69 million, producing a 7.2% gross margin. Base gross margin was 7.9%, compared with 8.9% in the prior-year quarter. Chief Financial Officer Greg Izenstark said elevated fuel prices and investments in workforce capacity affected quarterly profitability. Fuel costs rose as a result of the Middle East conflict, with average per-gallon fuel prices up 48% year over year. Centuri estimated the cost impact at approximately $6 million during the quarter, or about 60 basis points of margin. The company’s full-year outlook assumes an additional $5 million fuel headwind in the third quarter if elevated prices persist. Centuri also added approximately 1,700 employees organically during the first six months of 2026, including more than 1,200 employees in its U.S. Gas business. The additional U.S. Gas resources reduced second-quarter gross profit by about $3 million, according to management, but are expected to support stronger performance in the second half and help reduce seasonality going into the first quarter of 2027. U.S. Gas revenue increased 45% to $489.5 million, though its reported gross margin declined to 4.2% from 7.8% a year earlier. Base gross margin for the segment was 5.9%. Canadian Operations revenue rose nearly 48% to $81.4 million, supported by the inclusion of Connect, and delivered a 16% gross margin. Union Electric revenue grew 23% to $224.2 million, with gross margin improving to 9%. Non-Union Electric revenue increased 11% to $166.9 million, while its gross margin declined to 9.1% from 11%. For 2026, Centuri now expects base revenue of $3.5 billion to $3.7 billion and base gross profit of $270 million to $290 million. Including estimated storm restoration activity, the company expects total revenue of $3.59 billion to $3.79 billion, adjusted EBITDA of $285 million to $310 million, and adjusted net income of $60 million to $75 million. Management expects free cash flow to exceed $75 million for the year, a 25% improvement from its initial expectation. Centuri reduced its net capital expenditure outlook to $60 million to $75 million following a sale-leaseback of select equipment early in the third quarter. Brown said Centuri is forecasting more than $3.6 billion of revenue coverage for 2027 as it exits 2026, representing a 20% organic increase. He said the company remains focused on reducing seasonality, increasing its mix of higher-margin bid work and improving operations as it works toward its 2029 base gross-margin target of 9.7%. Centuri Construction Group, Inc (NYSE: CTRI) is a heavy civil contractor specializing in water and wastewater infrastructure projects. The company delivers end-to-end services encompassing design-build, engineering, procurement and construction for water transmission mains, wastewater force mains, treatment facilities, pump and lift stations, and stormwater management systems. Centuri’s core offerings include pipeline installation and rehabilitation, civil sitework, earthwork, structural concrete and slope protection. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Centuri Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Centuri Holdings Inc (NYSE:CTRI) delivered record quarterly revenue of $962 million, a 33% increase year-over-year, with adjusted net income up 44%. The company's backlog reached approximately $6.4 billion, up 21% year-over-year, and the opportunity pipeline surged to $16 billion, up 23% from the first quarter. Centuri Holdings Inc (NYSE:CTRI) secured its largest data center project to date, a $125 million award, and has a robust pipeline of $2 billion in data center opportunities. The acquisition of JJ White is expected to add over $20 million in annualized gross profit, expanding capabilities in the Northeast and Midwest without changing the year-end leverage target. Management raised full-year 2026 guidance, forecasting base revenue of $3.5-$3.7 billion and free cash flow exceeding $75 million, a 25% improvement over initial expectations. Centuri Holdings Inc (NYSE:CTRI)'s base gross profit margin declined to 7.9% in Q2 from 8.9% last year, impacted by higher fuel costs and capacity investments. Elevated fuel prices due to Middle East conflicts added approximately $6 million in costs during the quarter, with an additional $5 million headwind expected in Q3. The company wrote down $9 million in receivables related to pre-2020 work for the City of Chicago, negatively impacting US Gas revenue. US Gas gross profit margin fell sharply to 4.2% in Q2 from 7.8% last year, partly due to $3 million in costs from adding 1,700 new employees. Free cash flow was negative $7 million in the quarter, and the company faces a 55 basis point EBITDA margin headwind from increased operating lease usage. Warning! GuruFocus has detected 5 Warning Signs with CTRI. Is CTRI fairly valued? Test your thesis with our free DCF calculator. Q: Can you discuss the key goals of the JJ White acquisition and what type of synergies you are hoping to achieve?A: Chris Brown (President and CEO): We have known JJ White for years, so the cultural fit and capabilities were well established. The acquisition brings more scale and capacity to deliver growth in the Midwest and Northeast, primarily focused on in-plant power and data center activities. The business has a strong track record of developing talent and can flex from 1,000 to 2,000 employees. We do not see cost synergies; the synergy comes from combining their operational capability with ours to do more work for customers, particularly in data centers and energy. Q: Can you provide a sensitivity on how many basis points of margin the $5 million in forecasted incremental fuel expenses will mean for the second half?A: Greg Eisenstark (CFO): For the full year, the fuel impact from the $7 million in the first half and the $5 million in the third quarter is about 35 basis points of headwind on a full-year basis. Our guidance assumes the $5 million headwind in Q3 and then a return to normalized levels in Q4. Q: The revenue guidance is up about $300 million at the midpoint, but EBITDA is up only a little. Can you help us understand the conversion and EBITDA flow-through?A: Greg Eisenstark (CFO): About two-thirds of the base gross profit increase relates to organic business, and one-third relates to the JJ White contribution for the five months in the back half. From an adjusted EBITDA perspective, we assumed that same level of base gross profit along with storm activity. We have the previously discussed headwind from moving to a 50/50 split on leasing, which we are on target with. The combination gets you to an adjusted EBITDA margin of about 8.1% at the midpoint. Q: Is the $2.8 billion pipeline increase from JJ White already included in the $16 billion opportunity pipeline number?A: Chris Brown (President and CEO): No, it is not. We did not close on JJ White until the third week in July, so it is excluded from the numbers and will be additive. The only element of JJ White in our release is in the guidance, where one-third of the guidance increase came from JJ White for that five-month period. Q: Can you help me understand the dynamic of the guidance raise, which implies no incremental margin on the organic revenue increase, and the confidence in the second-half base gross profit margin outlook of roughly 9% versus just under 8% in Q2?A: Chris Brown (President and CEO): We feel very strongly about the volume of work and the 9% quoted margin for the second half. We have total visibility on everything needed to deliver this year, as it is under contract. We added the capacity needed in gas, which impacted Q2 costs, but those resources will now generate revenue and margin expansion. We are confident in the 9% margins for the second half and are driving strongly to the end of the year. Greg Eisenstark (CFO): The annualized gross profit contribution from JJ White is $20 million plus, with margins consistent with our Union Electric business. They have lower depreciation and some G&A expense, so the EBITDA contribution is a bit less than the gross profit basis. The EBITDA guidance also includes the $12 million full-year fuel impact. Q: Can you provide more color on the 9% base gross margin for the second half, specifically whether Q3 hits that mark or if there is a sizable step up in Q4?A: Greg Eisenstark (CFO): For the back half of the year, we expect U.S. Gas gross margins in the 7.5% range and total base gross margin of about 9%. The third quarter is generally our most active quarter due to weather, while the fourth quarter can be impacted by weather and holidays. Generally speaking, Q3 is our strongest period. Q: Can you talk about how gross margins have been trending in bid work versus MSA work?A: Chris Brown (President and CEO): We are tracking bid margins more closely as delivered margins. Bid work is between 1.1% and 1.5% higher than MSA margins. We are moving from an 80% MSA/20% bid work mix to a long-term target of 65%/35%. Q: The opportunity pipeline is up about $3 billion, and the mix of bid work is up about five percentage points, but the number of bid opportunities is about the same as last quarter. Does that mean you are looking at meaningfully larger bid opportunities?A: Chris Brown (President and CEO): We look at absolute data over a longer time horizon. At the end of December, we had $13 billion in the pipeline; now it is $16.2 billion. The project work has gone from $6.7 billion to $9.664 billion, while MSA work went from $6.5 billion to $6.56 billion. The average size of the scope of work has only moved up by a couple of million dollars, so we are not deviating from our core services. The amount of bid work has increased by about 46.5%. Q: Regarding the slide noting you are evaluating opportunities to expand geographically and with electric transmission capabilities, do you see these as organic growth opportunities or through acquisitions?A: Chris Brown (President and CEO): The primary basis of our business is organic growth, and we have the capability to do transmission work. We announced two awards in the quarter, one in Canada and one in the Northeast, and we have doubled the amount of electric transmission opportunities in the pipeline from December to June. On M&A, we have a very good platform to grow, and there are areas where we would like to acquire. We have done two tuck-in acquisitions, Connect and JJ White, and if we see similar businesses that complement our electrical business, especially electric transmission, we would love to do those. Q: Can you summarize all the puts and takes on the positive and negative impacts to the full-year guidance?A: Greg Eisenstark (CFO): On base gross profit margin, the contribution of JJ White is about a third of the gross profit increase. Fuel costs are about $12 million of a full-year impact. The ramp-up costs of $3 million are already incurred in the first half. Overall, gross margins adjusted for fuel are about 8. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

PHOENIX, August 04, 2026--(BUSINESS WIRE)--Centuri Holdings, Inc. (NYSE: CTRI) ("Centuri" or the "Company") today announced financial and operating results for the second quarter ended June 28, 2026. Second Quarter 2026 Results and Highlights Achieved company record quarterly Revenue of $962.0 million, a 33% increase versus the second quarter of 2025 Produced Gross Profit of $69.1 million, a 2% increase from the same period last year Delivered Base Revenue and Base Gross Profit of $959.5 million and $75.7 million, respectively, representing increases of 36% and 21% versus the second quarter of 2025 Reported Net Income of $6.1 million and Adjusted Net Income of $24.4 million, 44% higher than last year's same-period Adjusted Net Income Recorded Adjusted EBIT of $40.5 million, an 8% increase year-over-year Realized Adjusted EBITDA of $75.7 million, a 5% increase year-over-year Secured bookings of nearly $850 million, bringing year-to-date bookings to $2.2 billion and book-to-bill ratio to 1.3x Expanded opportunity pipeline by 23% to a record $16 billion, highlighting continued end-market strength Closed the acquisition of JJ White, Inc ("JJ White"), adding scale and key capabilities to the Union Electric segment First-Half 2026 Results Summary Revenue of $1.69 billion and Base Revenue of $1.65 billion, 32% and 33% higher than last year, respectively Gross Profit of $104.9 million and Base Gross Profit of $103.8 million, 19% and 35% higher than last year, respectively "Our second quarter results reflect tremendous year-over-year growth, including record quarterly revenue and a 21% year-over-year increase in Base Gross Profit," said Centuri President & CEO Christian Brown. "The business has delivered a trailing 12-month Base Gross Profit Margin of 7.8%, compared to 7.4% a year ago, underscoring sustained improvement in profitability. Notably, trailing 12-month margins expanded even as higher fuel prices created an estimated $6 million headwind in the second quarter, highlighting the strength and resilience of the underlying business. We are focused on driving higher-margin work into our backlog and delivering sustainable long-term growth. Our end-markets continue to display growth as evidenced by our $16 billion opportunity pipeline and approximately $2.5 billion of outstanding bids, which is up 15% from last quarter." "In addition to our growing organic opportunities, we are excited about the recently announced acquisition of JJ White and want to welcome the team to Centuri. Consistent with our strategy laid out earlier this year, the acquisition adds scale in our Union Electric segment, strengthens our mechanical and electrical construction services, and adds in-plant construction services across several end-markets including data centers." "During the first half of 2026, we organically increased our workforce by approximately 18%, or 1,700 employees, consistent with our backlog and Base Revenue growth. In addition, during the second quarter, and specifically aligned with our strategy to expand margins and mitigate seasonality within the U.S Gas business, we invested a further $3 million into resources, mobilization and ramp up. This planned investment into our U.S Gas business capacity is expected to deliver a meaningful impact to gross profit and margins in the third quarter and across subsequent quarters. For the second half of 2026, we forecast the overall Centuri Base Gross Profit Margin to be approximately 9.0%, which fully aligns with the expectations set within our Vision One Centuri strategy." Management Commentary Second quarter 2026 revenue increased by $237.9 million, or 33%, to $962.0 million, and Gross Profit was $69.1 million compared to $67.8 million in the prior year quarter. Revenue growth was broad-based across all segments, with Canadian Operations leading at 48%, followed by U.S. Gas at 45%, Union Electric at 23%, and Non-Union Electric at 11%. Net Income Attributable to Common Stock in the second quarter was $6.1 million compared to $8.1 million in the prior year. Adjusted Net Income for the second quarter was $24.4 million, a 44% increase compared to the same quarter last year. Adjusted EBIT in the second quarter was $40.5 million compared to $37.6 million in the prior year quarter, an 8% year-over-year increase. Adjusted EBITDA in the second quarter was $75.7 million compared to $71.8 million in the prior year quarter, a 5% year-over-year increase. Base Revenue, Base Gross Profit, and Base Gross Profit Margin are non-GAAP measures that exclude the impact of storm restoration services, which are highly unpredictable, and the City of Chicago reversal, as described below. Base Revenue in the second quarter was $959.5 million versus $707.0 million in the prior year quarter, a 36% increase. Base Revenue growth was primarily driven by new bid and Master Service Agreement ("MSA") contracts in the U.S. Gas segment, new bid work in the Union Electric segment, the inclusion of Connect Utility Services in the Canadian Operations segment, and increased volumes under new and existing MSA in the Non-Union Electric segment. Base Gross Profit was $75.7 million in the second quarter, a 21% increase from $62.8 million reported in the same quarter last year. Gross Profit Margin was 7.2% in the second quarter, while Base Gross Profit Margin declined to 7.9% in the second quarter from 8.9% in the year prior, driven primarily by increased fuel costs and labor mobilization costs associated with the increase in headcount during the first half of 2026. The Company estimates that second quarter results were negatively impacted by approximately $6 million due to higher fuel prices across its business and approximately $3 million due to investment in resources, mobilization, and ramp up associated with increased headcount in the U.S Gas segment. Together, these items had approximately 95 basis point impact on Base Gross Profit Margin. In the second quarter of 2026, the Company wrote down all remaining accounts receivables and contract assets related to work completed for the City of Chicago prior to 2020 (the "City of Chicago reversal"). The determination was made following an opinion and order issued on April 20, 2026 by the Circuit Court of Cook County, Illinois. The write-down reduced second quarter U.S. Gas revenue by $9.0 million and the Company no longer has any amounts recorded as receivables or contract assets related to this matter. The Company has excluded this one-time item from certain of its Non-GAAP financial measures. See "Non-GAAP Financial Measures" below. Centuri's Net Debt to Adjusted EBITDA Ratio was 2.6x as of June 28, 2026, which compares to 3.7x as of June 29, 2025. Commercial Update During the second quarter of 2026, Centuri secured nearly $850 million in total bookings, representing a book-to-bill ratio of 0.9x. Bookings for the quarter included nearly $400 million of new bid awards, including a $125 million data center award, approximately $200 million of new or expanded MSA awards and approximately $250 million of MSA renewals. Total bookings year-to-date reached approximately $2.2 billion, representing a book-to-bill ratio of 1.3x. For full year 2026, the Company is targeting a book-to-bill ratio of approximately 1.2x. As of quarter-end, Centuri had a backlog of approximately $6.4 billion, an 8% increase from year-end 2025 and a 21% increase from the second quarter last year. The opportunity pipeline expanded to $16 billion at quarter-end, up 23% from the first quarter 2026, driven by continued end-market strength. Strategic Acquisition As previously announced, on July 20, 2026 the Company completed the acquisition of JJ White, a leading provider of union industrial, mechanical and electrical maintenance and construction services. Total cash consideration paid was approximately $62 million, subject to customary post-closing adjustments. With nearly 1,000 employees, JJ White brings expertise across power generation, industrial, data centers, and other industrial end markets. At closing, JJ White had approximately $315 million of backlog and an opportunity pipeline of approximately $2.8 billion. The Company expects the annual gross profit contribution to be more than $20 million, with gross profit margins consistent with Centuri’s business. The Company expects the acquisition to be immediately accretive to Adjusted Net Income. Full Year 2026 Financial Guidance The Company has updated full year 2026 guidance, which includes anticipated contributions from JJ White and approximately $5 million of incremental expense associated with elevated fuel prices, assuming current fuel price levels persist through the third quarter. Base Revenue and Base Gross Profit do not include contributions from storm restoration services, which are highly unpredictable. While storm restoration services remain a key capability of the Company management believes these non-GAAP measures are more suitable for evaluating fundamental business performance and for comparison purposes. Base Revenue of $3.5 to $3.7 billion Base Gross Profit of $270 to $290 million Adjusted EBITDA and Adjusted Net Income are non-GAAP measures that include contributions from storm restoration services. Guidance for these measures and Revenue include estimated contributions from storm restoration services based on three-year (2023-2025) averages of $88 million of storm restoration services revenue and $28 million of storm restoration services gross profit. Revenue of $3.59 to $3.79 billion Adjusted EBITDA of $285 to $310 million Adjusted Net Income of $60 to $75 million The Company also expects Net Capital Expenditures of $60 to $75 million in 2026. Please review the second quarter investor presentation for more information related to our full year 2026 Guidance and historical storm restoration services contributions. Segment Results The following table summarizes our revenue and gross profit for the periods indicated by segment, as well as the dollar and percentage change from the prior year period. Gross margins are calculated by dividing gross profit by revenue. Fiscal three months ended June 28, 2026 compared to the fiscal three months ended June 29, 2025 Fiscal six months ended June 28, 2026 compared to the fiscal six months ended June 29, 2025 Conference Call Information Centuri will conduct a conference call today, Tuesday, August 4, 2026 at 10:00 AM ET / 7:00 AM PT to discuss its second quarter and other business highlights. The conference call will be webcast live on the Company’s investor relations (IR) website at https://investor.centuri.com. The conference call can also be accessed via phone by dialing (585) 542-9983 or (833) 461-5787. The meeting ID is 959 971 025. An investor presentation is also available on Centuri's IR website. A replay of the earnings call will be available on Centuri’s IR website approximately two hours after the call’s conclusion and will be active for one year. About Centuri Centuri Holdings, Inc. is a strategic utility and energy infrastructure services company that partners with regulated utilities to build and maintain the energy network that powers millions of homes and businesses across the United States and Canada. Investors should note that we announce material financial information in Securities and Exchange Commission ("SEC") filings, press releases and public conference calls. Based on guidance from the SEC, we may use the IR section of our website to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on our website is not part of, and is not incorporated into, this press release. Forward-Looking Statements This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can often be identified by the use of words such as "will," "predict," "continue," "forecast," "expect," "believe," "anticipate," "outlook," "could," "target," "project," "intend," "plan," "seek," "estimate," "should," "may" and "assume," as well as variations of such words and similar expressions referring to the future. The specific forward-looking statements made herein include (without limitation) statements regarding sustaining our growth trajectory in 2026; our ability to strengthen our operating and support functions, and to achieve sustainable growth; our expectations around the North American energy infrastructure industry and the market for bid project activity; our ability to achieve a book-to-bill ratio of approximately 1.2x for the full year 2026; the number ranges, assumptions, targets and other statements presented in our Full Year 2026 Financial Guidance; expected margin improvements for the second half of 2026; and expectations regarding the acquisition of JJ White, including the accretive nature thereof. A number of important risks, uncertainties and other factors affecting the business and financial results of Centuri could cause actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. These risks, uncertainties and other factors include, but are not limited to, capital market risks and the impact of general economic, political, regulatory, weather-related, or industry conditions and those detailed from time to time in Centuri’s reports filed with the SEC, including Item 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 28, 2025. The statements in this press release are (i) made as of the date of this press release, even if subsequently made available by Centuri on its website or otherwise, and (ii) based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Except to the extent required by applicable law, Centuri does not assume any obligation to update or revise the forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments, or otherwise. You are cautioned not to place undue reliance on these forward-looking statements. Backlog Backlog represents contracted revenue on existing bid agreements as well as estimates of revenue to be realized over the contractual life of existing long-term MSAs. The contractual life of an MSA is defined as the stated length of the contract including any renewal options stated in the contract that we believe our customers are reasonably certain to execute. Book-to-bill Ratio Book-to-bill ratio represents the ratio of total bookings in a period to total revenue recognized in the same period. Opportunity Pipeline Opportunity pipeline represents our current unweighted bids and opportunities tracked in our sales database. Non-GAAP Financial Measures We prepare and present our financial statements in accordance with GAAP. However, management believes that EBIT, Adjusted EBIT, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted Earnings per share ("Adjusted EPS"), Net Debt to Adjusted EBITDA Ratio, Base Revenue, Base Gross Profit, and Base Gross Profit Margin, all of which are measures not presented in accordance with GAAP, provide investors with additional useful information in evaluating our performance. We use these non-GAAP measures internally to evaluate performance and to make financial, investment and operational decisions. We believe that presentation of these non-GAAP measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparisons of results. Management also believes that providing these non-GAAP measures helps investors evaluate the Company’s operating performance, profitability and business trends in a way that is consistent with how management evaluates such matters. Because these non-GAAP measures, as defined, exclude some, but not all, items that affect comparable GAAP financial measures, these non-GAAP measures may not be comparable to similarly titled measures of other companies. Management believes that, due to the non-recurring nature of the City of Chicago reversal, its exclusion from certain non-GAAP financial measures provides investors with a better understanding of the current performance of the business. EBIT is defined as earnings before interest and taxes. Adjusted EBIT is defined as EBIT, adjusted for (i) non-cash stock-based compensation, (ii) acquisition costs, (iii) separation-related costs, (iv) strategy implementation costs, (v) other professional fees and (vi) the City of Chicago reversal. Adjusted EBITDA is defined as Adjusted EBIT, adjusted to remove depreciation and amortization. Adjusted EBITDA Margin is defined as the percentage derived from dividing Adjusted EBITDA by revenue. Management believes that EBIT, Adjusted EBIT, and Adjusted EBITDA help investors gain an understanding of the factors affecting our ongoing cash earnings from which capital investments are made and debt is serviced, and that Adjusted EBIT and Adjusted EBITDA provide additional insight by removing certain expenses that are non-recurring or non-operational in nature. Management believes that Adjusted EBITDA Margin is useful for the same reason as Adjusted EBITDA, and also provides an additional understanding of how Adjusted EBITDA is impacted by factors other than changes in revenue. Net Debt to Adjusted EBITDA Ratio is calculated by dividing net debt as of the latest balance sheet date by the trailing twelve months of Adjusted EBITDA. Management believes this ratio helps investors understand our leverage. Net debt is defined as the sum of all bank debt on the balance sheet and finance lease liabilities, net of cash. Adjusted Net Income is defined as net income (loss) adjusted for (i) separation-related costs, (ii) strategy implementation costs, (iii) amortization of intangible assets, (iv) other professional fees, (v) City of Chicago reversal, (vi) non-cash stock-based compensation, (vii) acquisition costs and (viii) the income tax impact of adjustments that are subject to tax, which is determined using the incremental statutory tax rates of the jurisdictions to which each adjustment relates for the respective periods. Management believes that Adjusted Net Income helps investors understand the profitability of our business when excluding certain expenses that are non-recurring and/or non-operational in nature. Adjusted EPS is defined as Adjusted Net Income divided by weighted average diluted shares outstanding. Base Revenue is defined as total revenue, net adjusted to exclude revenue attributable to storm restoration services and the impact of the City of Chicago reversal. Base Gross Profit is defined as gross profit adjusted to exclude gross profit attributable to storm restoration services and the City of Chicago reversal. Base Gross Profit Margin is calculated by dividing Base Gross Profit by Base Revenue. U.S. Gas Base Revenue is defined as U.S. Gas segment revenue, net adjusted to exclude the impact of the City of Chicago reversal. U.S. Gas Base Gross Profit is defined as U.S. Gas segment gross profit adjusted to exclude the City of Chicago reversal. U.S. Gas Base Gross Profit Margin is calculated by dividing U.S. Gas Base Gross Profit by U.S. Gas Base Revenue. Revenue derived from storm restoration services varies from period to period due to the unpredictable nature of weather-related events, and when this type of work is performed, it typically generates a higher profit margin than base infrastructure services projects due to higher contractual hourly rates given the nature of services provided and improved operating efficiencies related to equipment utilization and absorption of fixed costs. While storm restoration services remain a key capability of the Company, management believes its exclusion provides more suitable disclosures for evaluating fundamental business performance and for comparison purposes. Using EBIT, Adjusted EBIT, and Adjusted EBITDA as performance measures has material limitations as compared to net income (loss), or other financial measures as defined under GAAP, as they exclude certain recurring items, which may be meaningful to investors. These metrics all exclude interest expense net of interest income; however, as we have borrowed money to finance transactions and operations, or invested available cash to generate interest income, interest expense and interest income are elements of our cost structure and can affect our ability to generate revenue and returns for our stockholders. Further, these metrics exclude income taxes; however, as we are organized as a corporation, the payment of taxes is a necessary element of our operations. Adjusted EBITDA also excludes depreciation and amortization; however, as we use capital and intangible assets to generate revenue, depreciation and amortization are necessary elements of our costs and ability to generate revenue. As a result of these exclusions, the metrics from which they are excluded have material limitations compared to net income (loss). When using these metrics as a performance measure, management compensates for these limitations by comparing them to net income (loss) in each period, to allow for the comparison of the performance of the underlying core operations with the overall performance of the Company on a full-cost, after-tax basis. As to certain of the items related to these non-GAAP measures: (i) non-cash stock-based compensation varies from period to period due to changes in the estimated fair value of performance-based awards, forfeitures and amounts granted; (ii) acquisition costs vary from period to period depending on the level of our acquisition activity; (iii) separation-related costs represent expenses incurred post-IPO in connection with the separation and stand up of Centuri as its own public company, including costs incurred in association with Southwest Gas Holdings' sale of its holdings of our common stock, which are not reflective of our ongoing operations and will not recur given that Centuri is fully separated from Southwest Gas Holdings; (iv) strategy implementation costs represent non-recurring consulting fees incurred in connection with implementing the Company’s new long-term strategy announced on May 6, 2026; (v) other professional fees are non-recurring costs associated with certain one-time events; and (vi) the City of Chicago reversal relates to a non-recurring reversal of revenue on a legacy contract. The most comparable GAAP financial measures and information reconciling the GAAP and non-GAAP financial measures are set forth below. We are unable to provide reconciliations for forward-looking non-GAAP measures without unreasonable efforts due to our inability to project non-recurring expenses and events. Such items could have a substantial impact on GAAP measures of the Company’s financial performance. The most comparable GAAP financial measure and information reconciling the GAAP and non-GAAP financial measures are set forth below. View source version on businesswire.com: https://www.businesswire.com/news/home/20260804528843/en/ Contacts For Centuri investors, contact:Nate Tetlow(480) [email protected] For Centuri media information, contact:Jennifer Russo(602) [email protected]

Centuri Holdings (CTRI) came out with quarterly earnings of $0.24 per share, beating the Zacks Consensus Estimate of $0.2 per share. This compares to earnings of $0.19 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +20.00%. A quarter ago, it was expected that this utility infrastructure services provider would post a loss of $0.05 per share when it actually produced a loss of $0.02, delivering a surprise of +60%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Centuri, which belongs to the Zacks Utility - Electric Power industry, posted revenues of $961.99 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 18.88%. This compares to year-ago revenues of $724.05 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Centuri shares have added about 10.3% since the beginning of the year versus the S&P 500's gain of 11%. While Centuri has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Centuri was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.27 on $981.42 million in revenues for the coming quarter and $0.67 on $3.5 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Utility - Electric Power is currently in the bottom 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Algonquin Power & Utilities (AQN), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 7. This utility operator is expected to post quarterly earnings of $0.06 per share in its upcoming report, which represents a year-over-year change of +50%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Algonquin Power & Utilities' revenues are expected to be $552.5 million, up 4.7% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Centuri Holdings, Inc. (CTRI) : Free Stock Analysis Report Algonquin Power & Utilities Corp. (AQN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Thursday, May 7, 2026 at 10 a.m. ET President and Chief Executive Officer — Christian Brown Chief Financial Officer — Greg Izenstark Vice President, Investor Relations — Nathan Tetlow Nathan Tetlow: Thank you, Liz, and hello, everyone. Yesterday, we issued and posted to Centuri Holdings website our first quarter earnings release and investor presentation. In addition, we have posted to the website a Vision One Centuri presentation that will be referenced during this call. Please note that on today's call, we will address certain factors that may impact this year's earnings and provide longer-term guidance. Some of the information that will be discussed today contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are as of today's date and based on management's assumptions and are subject to several risks and uncertainties, including uncertainties surrounding the impacts of future economic conditions and regulatory approvals. A cautionary note as well as a note regarding non-GAAP measures is included in yesterday's press release in the investor presentation and in our filings with the Securities and Exchange Commission, which we encourage you to review. Also provided are reconciliations of our non-GAAP measures to related GAAP measures. These risks and uncertainties may cause actual results to differ materially from statements made today. We caution against placing undue reliance on any forward-looking statements, and we assume no obligation to update any such statements, except as required by law. Today's call is also being webcast live and will be available for replay in the Investor Relations section of our website shortly after the completion of this call. On today's call, we have Chris Brown, President and Chief Executive Officer; and Greg Izenstark, Chief Financial Officer. In a moment, Chris will discuss our strategy. But first, I'll turn the call to Greg to review the first quarter results. Greg? Greg Izenstark: Thank you, Nate, and thank you, everyone, for joining us today. In the first quarter, we delivered exceptional results, highlighted by significant year-over-year growth, including revenue up 31%, base revenue up 29%, gross profit up 76% and base gross profit up 96%. For the quarter, we reported revenue of $723 million and base revenue of $689 million, gross profit of $36 million and base gross profit of $28 million. Our base gross profit margin was 4.1% for the quarter, up from 2.7% last year and on a trailing 12-month basis was 8%, a 100 basis point increase from the same measure last year. Net loss attributable to common stock in the quarter was $9 million or $0.09 per share compared to a loss of $18 million or $0.20 on a per share basis last year. Adjusted net loss in the first quarter was $2 million or $0.02 on a per share basis compared to a loss of $11 million or $0.12 per share in the same quarter last year. And our adjusted EBITDA for the quarter was $33 million, representing a 35% increase from last year. Net cash used in operating activities for the quarter was $35 million and free cash flow was negative $54 million, both of which were driven primarily by the timing of changes in working capital. First quarter free cash flow was consistent with our expectations. And for the full year, we continue to expect free cash flow to exceed $60 million. SG&A for the quarter was $33 million, an increase of about $6 million year-over-year. Approximately $2 million of the increase relates to the timing of professional fees in support of our strategic initiatives, with the remaining increase consistent with the growth of the business. As a percent of revenue, SG&A is down 25 basis points versus a year ago. As we previously stated, we anticipate that SG&A will be around 4% of revenue for the full year. We ended the quarter with a net debt to adjusted EBITDA ratio of 2.7x, which was down from 3.5x a year ago. And we continue to forecast net debt to adjusted EBITDA of around 2x by year-end. Now to our segments. U.S. Gas revenue was $284 million, an increase of 44% compared to 2025. The increase was driven by progress on bid works, bid projects and our actions to secure work that is less impacted by weather. Gross loss for the quarter was $6 million, a 57% improvement from a $15 million gross loss last year. The year-over-year improvement is a testament to our work addressing seasonal impacts, particularly considering the challenge that winter storm Fern posed, which not only impacted work in the Northeast, but also briefly slowed work on a new multiyear MSA in Texas. Canadian operations revenue was $60 million, up 51% from last year. The increase is primarily from the inclusion of Connect Atlantic Utility Services in the current year results. Operational performance in this segment remains strong against a solid demand backdrop. As expected, gross profit margin was down slightly to 15%, driven by the inclusion of Connect. Union Electric base revenue was $199 million, an increase of 14% year-over-year. Base gross profit margin was 8.7% for the quarter, up 200 basis points from a year ago. Growth has been fueled by robust activity in projects serving industrial end-user customers, particularly substation infrastructure and data center-related work. Non-union electric base revenue was $151 million, an increase of 25% over last year. This growth reflects a significant expansion in MSA activity. Base gross profit margin was 6.3% compared to 8.7% in the prior year, driven by activity ramp early in the year on an MSA contract, resource allocations to on-system storm restoration work and seasonal weather impacts in January and early February. Activity and margins were back to normal by the end of March. Moving on to our commercial update. In the first quarter, we delivered bookings of $1.3 billion or a 1.8x book-to-bill ratio. Awards included $900 million of MSA renewals, $180 million of new or growth MSAs and $250 million in bid work. Momentum has continued into April as we have approximately $2 billion of pending bids outstanding, including nearly $200 million of data center work that is in negotiations. For the year, we are targeting a 1.1x to 1.2x book-to-bill ratio. Our focus remains on securing higher-margin work and building on the backlog for 2027. Lastly, we are reiterating our full year 2026 guidance. As a reminder, base revenue and base gross profit are non-GAAP measures that exclude the impact of storm restoration services. For 2026, we expect base revenue of $3.15 billion to $3.45 billion and base gross profit of $255 million to $285 million. Revenue, adjusted EBITDA, and adjusted net income are measures that include storm restoration services. Guidance for these measures include storm restoration services using a 3-year average of $88 million in revenue and $28 million in gross profit. For 2026, we expect revenue of $3.24 billion to $3.54 billion, adjusted EBITDA of $280 million to $310 million, adjusted net income of $55 million to $75 million; and lastly, the net CapEx outlook at $75 million to $90 million. I will now turn it to Chris for the strategy discussion. Chris? Christian Brown: Thank you, Greg, and hello to all, and thank you for joining the call today. I'll be discussing our strategy and multiyear financial outlook, and I'll be referring to the Vision One Centuri slide deck that was posted on our website late yesterday. I've now been CEO for about 17 months, and I'm extremely proud of what has been accomplished in that very short time and the path that we are on as demonstrated by the strength of the first quarter results and the incredible year-over-year growth. Centuri has more than 115 years of successful operating history, as we can see on Slide 2, has a long-standing relationship and reputation as a trusted, high-quality and above all safe infrastructure services partner. Everything we're building now is on the solid foundation of decades of operating history and industry leadership paired with intentional decisions aimed at building a lasting and successful future. We will start with purchase of our largest operating company, NPL, in 1996 through to the mid-2000s, the company has significantly achieved growth from geographic expansion with a focus on servicing regulated utilities and building strong customer relationships through master services agreements. In 2012, the company reached $500 million in revenue and just 3 years later, revenue doubled to $1 billion. From there, the company continues to grow through strategic acquisitions that diversify the service capabilities and the reach of our business. After joining Centuri in late 2024, my assessment was clear; nothing was broken from within the business. That view remains the same. My initial focus was centered around breaking away from certain legacy priorities and practices born under a utility parent, establishing a growth mindset, installing growth-related KPIs across the organization, driving capital efficiency and unifying the company around a clear vision, what we now call One Centuri. Simply put, we all have a common purpose, strategic direction and a common set of values. To advance the One Centuri vision, the leadership team began a strategic evaluation last year with several areas of focus, assessing our end markets, benchmarking all our peers, identify the measures that drive shareholder value and establish credible top-tier goals, advanced growth initiatives supported by our capabilities and the end markets and enhance internal functions to enable sustainable growth, specifically focused on resource planning and risk management. In 2025, we began implementing the One Centuri approach, which proved to be a true inflection year for Centuri. On Slide 3, we highlight some of what we achieved, including becoming fully independent, reducing our net debt to adjusted EBITDA to 2.5x, commencing the fleet initiatives and achieving records for bookings, backlog and revenue. Beyond the tangible results of 2025, I'm also proud of the way the organization emboldened commitments to our customers while also embracing the changes necessary to set Centuri on a path for value creation. We are all very well positioned to execute against a favorable market backdrop and look forward to delivering for our stakeholders. Moving to Slide 4. We are anchored by 4 objectives: top-tier earnings growth, top-tier revenue growth, being an agile, integrated customer-facing organization and establishing a world-class resource delivery led organization. These objectives were established based on the value drivers we believe matter most to our stakeholders. While scaling the business will drive revenue growth, long-term shareholder value creation will be achieved through earnings growth. Retaining existing business, expanding relationships and secure new customers are all about how we execute and engage with our customers. This is the strength of Centuri and will remain core to our culture. To enable the growth, we will execute a plan to build further on our industry-leading workforce, more on that later. To set the stage, let me first review the end markets, starting on Slide 5. The North American energy infrastructure build-out represents a true tailwind for Centuri. It's durable and long term in nature. Between grid modernization, electrification expansion, gas infrastructure replacement and power demand for industrial and data center customers, the opportunity set for Centuri is evident. None of this should be used to anybody on this call. Slide 6 is the big picture view. We started with an overall analysis of our core gas and electrical T&D end markets and the relevant adjacent end markets. This represents over $2 trillion of cumulative spend from 2026 through to 2029. Our next step in the process was to drill into the data and capture those areas that were relevant to Centuri. This results in a true Centuri total addressable market of $625 billion over the next 4 years. For perspective, our current $13 billion pipeline and $6.5 billion of record backlog reflects only a fraction of this opportunity. On an annual basis, the opportunity pipeline is less than 10% of Centuri's total addressable market. Importantly, the market data and our analysis reinforce that we do not need to change in direction or we do not need to pivot differently. Instead, we are all well positioned to drive profitable growth through our existing capabilities, expanding our scale and geography and selectively pursuing market supported initiatives. Our operational leadership has all confirmed through the process that the end markets fully underpin our growth targets as we've laid out. Moving to Slide 7. This breaks down the core end markets into electric and gas across transmission and distribution. In short, the forecasted 8% CAGR to 2029 confirms the tailwinds we've been seeing and expect moving forward. In nominal dollars, the electric market offers the largest opportunity with transmission expected to grow a bit faster than the distribution segment. On Slide 8, we highlight the adjacent markets. Again, the data suggests further tailwinds and ample opportunity to capture more market share. It's no surprise that data spend exhibits the highest percentage growth, but each of these markets have the size and growth qualities that makes some very attractive opportunities for Centuri as a group. Now let's get into our strategy on Slide 9. Our strategy is designed to be sustainable, successful through market cycles, driven by choices rather than acting out of necessity, and it maintains our low risk profile in the work we execute as we expand our business. We've laid out our ambition on the slide, which ultimately centers around delivering exceptional value to all stakeholders, being customers, employees and shareholders. To achieve this, we will focus on 3 fundamental principles. Firstly, we will protect and deepen the core. We'll remain diverted to our long-standing relationships with regulated utilities, executing with the quality, reliability and safety they expect and trust us to deliver. We will expand relationships with existing customers, pursue increased MSA work through new customer relationships, cultivate cross-selling opportunities and continue to lean into bid work by leveraging our core capabilities in our well-defined adjacent markets. Second, we will pursue initiatives to grow the portfolio. These growth initiatives build on our existing capabilities, existing services and the strength of our organization and are supported by strong end market demand. In parallel, we will pursue tuck-in acquisitions that are accretive to our core business or directly advance our targeted growth initiatives. And lastly, to enable long-term growth, we will sustainably scale the enterprise. We will do this by achieving industry-leading talent acquisition capabilities, driving operational excellence through standardized performance management and enhancing our risk management practices. The result of this work will be 10% to 15% compounded annual growth rate in base revenue through 2029 and an improvement of 70 to 170 basis points in base gross profit margin. On Slide 10, we dig into the first principle, protect and deepen the core. This is the foundation that defines Centuri today and also our future. Across both gas and electric, MSA work is the cornerstone of Centuri. These agreements represent stable, long-cycle opportunities, and we are deeply committed to protecting and strengthening this core. Our 100% MSA renewal rate is a powerful validation of the trust we have earned through relationships with our customers over many years and in many cases, decades. When it comes to growth, our priority is securing new and expanding scope of work from existing customers by leveraging our operating track record, the execution consistency and the reputation we have earned. We are focused on adding new customers, again, leveraging our reputation and relationships through cross-selling and our One Centuri go-to-market approach. Our ability to offer integrated solutions across the value chain positions Centuri as a differentiated service provider and partner to our customers. Looking back to '25, we booked $900 million of new or expanded scope MSAs. And in the first quarter this year, we booked a further $180 million. We absolutely intend to keep this momentum going as we move into subsequent quarters and subsequent years. At the same time, big work opportunities are abundant and represent meaningful incremental growth and margin upside. For us, big work is a natural extension of MSA work. It's the same services utilizing the same capabilities and equipment, just executing on a different contract structure. This work not only originates from our well-defined adjacent markets, but also from many of our existing MSA customers who often have projects that fall outside the MSA scope. As mentioned many times before, the data center market is our fast-growing adjacent market. Data centers offer a range of work scopes well suited for Centuri. And since the start of 2025, we've already secured $170 million of data center-related work. Additionally, we continue to evaluate and bid for approximately $1.5 billion of further data center work. We see this as a market with strong multiyear growth potential and attractive margin characteristics. In summary, MSA work is our core today and will continue to be our core. We are focused on deepening and expanding that core through new and broader MSAs, while bid work serves as a growth engine and is margin accretive. This is protect and deepen the core. Moving to Slide 11. We have identified several initiatives to enhance our growth rates and drive margin expansion. Each initiative is supported by end market data and represents an extension of our core capabilities. Let me start with electric transmission. Today, we have electric transmission capabilities in both our union and nonunion electric businesses, generating less than 10% of our annual revenue. Compare this to the $150 billion of utility spend on electric transmission work expected over the next 4 years, and it's clear this is an area we are under serving. And we've recently had a number of customers driving us to build further capability and execute more of these services within this segment. With grid modernization, significant work for us and the build-out of high-voltage lines as an opportunity for Centuri to capture transmission projects in the low to mid-voltage range. Our focus will be on projects under the $200 million in size. This is a size where Centuri has the scale, track record to compete and win against smaller regional players, while also remaining below the typical size targeted by larger industrial players. In addition, we offer customers a fully integrated solution across transmission line tower construction, substation work, interconnects and battery storage. This is true differentiation for Centuri. While larger than our current portfolio of transmission projects, we have confidence in our ability to execute based on our track record of core capabilities over many years. Next, we will expand our service offerings into underserved geographies and areas that need more scale. Our One Centuri go-to-market strategy will facilitate this initiative. Our operating companies no longer will act in silos. Instead, we approach customers with a full suite of services across gas, electric, union and nonunion. Several recent awards highlight the success of this approach. First, we were able to leverage a long-standing relationship with a premier customer in Canada to make introductions with the Midwest gas utility who is owned by the same parent company. This introduction, coupled with the Google with them through many years of quality service has led to a new multiyear FSA award across the U.S. In another example, a recent electric award for a Florida customer was secured through relationships and introductions originating from our gas business. This represents our first work for the utility customer and nice entry into the Floridian market. I absolutely expect more examples like these to materialize over the coming weeks, months and into the subsequent years. On the slide, we've highlighted a few areas where we see logical geographic expansion, including the Southeast for gas, the Midwest for electric and in Canada, where we are targeting expansion of our new electric capabilities into the Ontario region. Lastly, we believe there's an opportunity to exceed expectations on our new bid work. This can be achieved through business development efforts to generate more opportunities from the total addressable market or just by exceeding our historical win rates. We also aim to do more for existing customers, offering them access to all of our services and being their partner of choice. The strength of the market is unlike anything I've seen in my career. And as the market data supports, we believe this trend will continue at least through the end of the decade. Now let's shift to Slide 12 for the other leg of grow the portfolio, which is M&A. We operate in a fragmented industry and believe there are strong merits to consolidation and benefits of scale. At Centuri, we've established several attributes we look for in tuck-in acquisitions. In terms of geography, we're focused on the Midwest and Southeast and in terms of scope, electric services, in particular, transmission is a focus. While we are pursuing these areas organically, the right acquisition could prove immediate -- the right acquisition that can provide immediate scale from which to grow is attractive to us. Strategically, our focus is not on acquisitions that need to be fixed. Rather, we target companies that match Centuri's operating excellence, our culture and bring already established customer relationships. We look for opportunities that add to the foundation of Centuri, providing more scale and scope for the core business to grow. Slide 13 highlights the Connect acquisition that we closed last year. It's the perfect case study for what we look for in an acquisition. Connect fill 2 needs. It gives us an electrical T&D services platform in Canada and entrance into the Atlantic region of Canada. Connect has a strong track record of operations and has existing long-term relationships with high-quality customers. Focus now is leveraging our existing gas relationships to grow the Connect platform into the Ontario region. Just a few months into this acquisition, we are already gaining traction on the business development side and expect to have positive updates on these efforts in the coming quarters. Now turning to Slide 14. We believe the execution of our strategy supports a conservative base revenue compounded annual growth rate of 10% to 15% through 2029. We believe we have the strategic direction and plans in place to deliver this top-tier revenue growth. In order to achieve our targets and scale the organization, we must advance our enabling functions and our structure. On Slide 15, we highlight 3 areas of ongoing focus. First on the talent side, we've added several key additions to the team in 2025, a Head of Fleet and a President of Gas. In addition, we launched development efforts and began building out our talent pipeline. We anticipate adding more leadership talent within the coming year. Second, on fleet, we shifted away from the historic practice of purchasing all equipment to a balanced funding plan that aims to be 50-50 lease versus buy. This allows us to generate more free cash flow and be more strategic with our equipment sourcing. We are also well underway with our analysis and implementation of fleet utilization improvement plans, which will drive margins higher and improve efficiency across the entire organization. Lastly, we established a sales pipeline, which now houses all opportunities that our business development team is evaluating and preparing to bid. The pipeline allows us to track win rates, see trends more quickly, be more accountable and forecast more accurately. Now moving to Slide 16. A critical aspect to enable our strategic execution is our ability to source human capital. Centuri is starting from a solid platform. We have many programs in place, including local relationships and partnerships with colleges, trade schools and vocational programs. We also have an apprentice program in our nonunion electric segment that is currently training more than 800 people. We do an excellent job sourcing our labor needs today, but we must think ahead and take our platform to the next level. To that end, we are already underway of building an integrated group-wide data-driven workforce forecasting tool that will interface with our sales pipeline. This interface will allow us to stay ahead of growth. We'll be able to identify specific skill set needs for specific projects and specific regions over long time frames. Rather than just knowing we need to add head count, we will be precise and strategic with our sourcing. Our goal is to ensure that each job has the right people at the right time. We'll also use the tool to identify new geographies to establish as resourcing hubs. This program, along with our other deliberate work to upskill the workforce and our mix of union and nonunion labor will provide Centuri the flexibility to support expanded MSA, new bid work and expansion into new geographies. We expect to have this tool fully implemented during the course of this year. Developing a group-wide resourcing delivery plan is critical to our success. We will be investing in our people and our workforce pipeline in a far more structured and focused way. And as we grow, we'll seek to capture and share lessons learned across the business to up-level the entire organization through a formal knowledge network. This culture of continuous improvement will further differentiate us for our customers and enable us to deliver true value-added solutions. Another critical aspect required to achieve our goals is managing the risk that comes with growing our business. We outlined this on Slide 17. We are currently in the process of establishing an enterprise-level project management office that will guide the organization through consistent good practices, standardization of controls, data analysis to drive margin improvement and continuous learning. This effort will leverage the existing talent by consolidating our operating company PMO competencies that already exists into a groupwide PMO. We have full line across our operating company leadership team regarding the critical nature of this function, and we expect to have this group up and running during the course of this year. Now let's jump to the financial outputs beginning with Slide 19. In 2025, our business mix was about 78% MSA and 22% bid work. And our split between gas and electric was 53% gas and 47% electric. As we've talked about, we expect bid work growth to outpace MSA growth over the next few years. And we also see more opportunity on the electric side, recognizing that both electric and gas end markets are growing. When we project out to 2029, we anticipate that bid work to grow approximately to 35% of the business and the gas and electric split to be equal at 50-50. Importantly turn to Slide 20, where we provide base revenue growth and base gross profit margin targets by segments. These targets do not include impacts from potential M&A or storm restoration work. For U.S. gas, we are targeting base gross profit margins between 7% and 8% by 2029, reflecting our action plan to fully mitigate the seasonal impacts of the business. Consistent with the mix shift, growth in the Electric segment is expected to outpace the gas segment. On Slide 21, we outlined both the progress made and expectations for our corporate level gross base profit margin. I remind everyone in 2025, we delivered significant improvements from 2024 going from a 6.9% to 8% base gross profit margin. As we look out to 2029, we have clearly identified areas of focus and several drivers that will allow us to drive further growth and margin expansion at a 70 to 170 basis point level. First on seasonality. We are about a year into this initiative. And as Greg talked about, we have achieved a meaningful year-on-year improvement in the first quarter of 2026. We continue to be focused on securing customers and work that is less impacted by weather in the first quarter. The ultimate goal, as we've consistently said, is to achieve consistent profitability in the first quarter when compared to the remaining 9 months of the year. Next, our overall margin profile will improve as our mix shifts over the next few years towards higher-margin bid work. Lastly, we see margin improvement from operational excellence program we have launched, increased pricing power, be more selective on projects as well as the work that is advanced on fleet efficiency. We are already excited about the operational excellence opportunity and believe it offers upside potential. Operational excellence involves dissecting each job and identifying components that perform well and an appropriate margins and identify those components that we don't perform well and under deliver on margin. This level of performance attribution analysis will allow us to make informed decisions moving forward. In some cases, certain aspects of the job might always underperform, and we should look to subcontract the work or increase our pricing or in some cases, we might have inconsistent margin delivery across different locations of the operations. In this case, we can assess what's causing the underperformance and quickly apply lessons learned to improve. We have well advanced this granular analysis and expect the benefits to accrue over the coming months and years. Moving to Slide 22. Here, for the first time, I guess, we present the long-term financial targets for Centuri. In addition to the top line growth and the margin improvements I talked about, we expect significant growth in earnings over the next few years. From a bottom line perspective, adjusted EPS is expected to grow at a compounded annual growth rate of 30% to 45% through 2029. We expect our net debt to adjusted EBITDA to be around 2x by year-end '26, and we anticipate keeping year-end leverage below 2x thereafter. This plan is also achieved with no equity issuances pursued over the forecasted period. Lastly, we expect a meaningful improvement in our free cash flow conversion over the next few years. This will be fueled by lower interest expense, the shift to more bid work, fleet leasing, capital efficiency and working capital efforts aimed at reducing our DSO. We expect to reach a free cash flow conversion rate of between 40% and 50% by 2029. I'll conclude on Slide 23. Centuri is well positioned today. We have the scale, the capabilities and talent across gas and electric to execute. We have long-term and deep customer relationships with end market tailwinds, and we have a leadership team fully aligned and committed to the long Centuri vision. Our strategy is conservative, but built for long-term success. It is anchored in staying true to who we are and what we do best, and it will deliver top-tier growth while maintaining a low-risk profile. We are all in Centuri extremely excited about our path forward and delivering value for our shareholders. I thank everybody for dialing in and listening to us today. And operator, I think we're ready to open up the call to any questions that people dialing in may have. Operator: Your first question comes from the line of Joe O'Dea with Wells Fargo. Joseph O'Dea: Chris, I appreciate all the details on the strategic vision. I got one short-term and one longer-term question. I'll start on the shorter-term side. So just in terms of the revenue strength that we saw in the quarter and demand strength with revenue up 31% and book-to-bill at 1.8, and I think with no raise in the revenue guidance for the year, just any color on how you're thinking about Q2 revenue growth, details on the gas and electric side as we think about kind of rest of the year tracking after Q1 strength? Christian Brown: Yes. I wouldn't read into just reaffirming guidance and no change to guidance. There's anything other than the conservatism that we run the business. Look, we're a quarter in first quarter beat what we expected internally from both the revenue. All businesses in the first quarter beat their budgeted EBIT margins and EBITDA margins and performed exceptionally well. So I wouldn't read into the fact we didn't break guidance in the first quarter of anything other than we're just conservative, and we'll be that way. As I look forward to the remainder of the year, let's just deal with bookings first. We've reiterated we think the book-to-bill will be in the region of 1.1 to 1.2. There's every indication that, that is a really solid number for us. The end markets are supporting the amount of bid work and Greg referred to some of it when he spoke earlier. We've got about and a little bit more than that actually bid work ongoing and our win rates are holding nicely. So I think it's fair to say that we have good confidence in continuing to build the backlog through the rest of the year and achieving the book-to-bill margins. I'd also talk about the coverage for the year, and I think most on the call will know what I mean by coverage. It is sort of backlog under contract, the bid work that we're targeting adjusted to what our current win rates are and the confidence level we've got. I think Slide 9 shows it quite well in the quarter deck. We've got almost all of the midpoint guidance under contract, and we've got upside. We've got further bid work, which we anticipate booking in the next few weeks that will take us to the upper end. So we feel really confident not only the ability to do well against the guidance, we also see a positive momentum in the margins as well as you've seen in the first quarter results. So I guess to recap I'd say the conservatism in us is the reason that we didn't increase guidance. We did reaffirm it. I would look to various points in the deck that should indicate where we feel we are in the year, which is very strong bookings, a continued emphasis on booking more work to build backlog. You see margin improvements from a year ago of 7% trailing 12 months to now 8%. I think what gets lost is the seasonality aspect of our business. You can't look at the business in a sequential quarter basis. You've got to look at it Q1 last year to Q1 this year, and you've seen 30% growth in revenue. We have seen that in the gas seasonality, and you've seen gross margins go from sort of 2.7% to 4.1%. So overall, it's really good, and we feel good about the rest of the year. Joseph O'Dea: I appreciate all those details. And then just on the longer-term side of things and the 2029 targets, when we think about really good base growth on revenue, 10% to 15% CAGR that you've got out there, the adjusted EBITDA CAGR, 9% to 17%. And so just the question in terms of why not greater opportunities for operating leverage? I think you've talked about the fleet strategy and owned versus lease as a near-term headwind, but efficiency opportunities to offset that. And so we would think that there's some operating leverage opportunity within that 10% to 15% base growth. Christian Brown: Yes, there is. I mean, look, we took a while -- I mean I just go back to the basic principles, we took a while to get our organization to work as one having been led as a subsidiary of the utility in an OpCo environment. So this exercise to pull the strategy together has been as much about change as it has been delivering a long-term strategy. What I will tell you is everything that we communicate is well backed by fact, alignment and data. So the numbers you see in the deck here are things that I can and my team and more broadly across the business have a plan around to understand and know how to get there. So there's an element of conservatism in what we produced. So specific to your question, of course, we are very much focused on doing better than you see there. There is absolute desire to do better than that, but we wanted to be sure that we have a long-range plan, long-range targets, confirming that we are sticking to the knitting. We're not adding any more risk into the business that we know when we make the commitments we can deliver. And I will be challenged about the conservatism and I look with that every day, but we feel good about what we've published. You can go from top to bottom in this organization and our team is aligned that this is very well achievable. But you can also take from us wherever there's other opportunity to grow margin expansion or to do more work at higher margins or to be more efficient, we will. Operator: Your next question comes from the line of Manish Somaiya with Cantor Fitzgerald. Manish Somaiya: I just wanted to go back to Chris, Q1, which, in your words, was a strong quarter. Obviously, I appreciate the long-term agenda that you put out. But I'm just trying to understand the disconnect perhaps based on what you're saying and how the market is looking at it with the stock down 15%. And again, I just want to hear it from you in terms of what the market might be missing, which clearly is not something that's being digested. So I would appreciate your thoughts on that. And then I did have one other question. Christian Brown: I deliberately haven't looked at where the share price is this morning. But let me answer your question hopefully a complete way. We have a budget that we developed for 2026. That budget guides the midpoint, which we've communicated to the outside world. We set a target for the first quarter, which was to grow at least 10% and to mitigate some of the seasonality and improve margins. We just closed the first quarter, which not only includes the results of the first quarter, but the forecast for the full year. I compare that to what drove our budget process and I compare the absolute results to where we are in our forecast. And as I said in my earlier comment, every one of our operating businesses, whether that be nonunion electric, Union Electric, Canada Oil and Gas has to beat the budget, every one of them when it comes to revenue and profitability. We are 35% -- excuse me, 30% on the revenue base. Everybody in this on the revenue base, but more importantly, the gas business is up $80 million and it delivered $80 million of growth at 10% margin. We reduced the loss from 15% down to 6%. So I would say this is a strong operating quarter, it met every expectation internally. Every forecast that we have taken out of our monthly reviews, and we're only just looking at April confirms that we continue to deliver on our expectations. I can't explain what's getting lost with the outside world. I think some of it may be that people look at our business on a pure sequential basis and neglect the fact that we've got a massive seasonal impact that happens in the first quarter. I think that might be it. But I also -- I just believe that the business has maintained and stuck to what we said we were going to do. I just don't think that's always translated into what people write about us. Manish Somaiya: And then I just wanted to go back to the bookings. I know in the past, we've talked about the $13 billion opportunity pipeline, $1.4 billion of data center-related work. And then I think Greg alluded to the $2 billion in earlier stage opportunities. How soon can we get some more sort of completeness around actually formalizing some of those orders? Because we've been kind of hearing about this for some time. So I'm just trying to get a sense as to how we can sort of get more comfortable with the pipeline and the prospects that you see. Christian Brown: Yes. I'll talk a couple of things about it, Manish. That's a fair question. I think our book to bill, I think Greg said $170 million. And so we have we have found and we've been able to book and bill and collect cash on between $170 million and $200 million of revenue so far. We have been very selective and I will repeat what I think I said on prior calls to many people. Data centers are just one of our many customers. And our real challenge here is to make sure that we focus on those data center customers that have got capital that is deployed. We like the stuff to work. It's consistent with our capabilities and that we've got a contracting format allows us to deliver higher margins. And sometimes it's not always clear to see what is happening with the data center value chain. But what I will tell you is we've got close to $300 million, give or take of data center work that we believe we have been selected and are currently negotiating. So that should be in the next quarter, Manish. The next quarter being Q2, to be precise. Operator: Your next question comes from the line of Justin Hauke with Robert W. Baird. Justin Hauke: I wanted to clarify on the 10% to 15% base revenue growth forecast that you have through 2029. It's not totally clear -- does that include M&A in it or not? Because you have Slide 14 that kind of shows like there's an M&A piece, but then Slide 20, at segment level, you're saying that it doesn't include it. Christian Brown: Let me just give you clarity. If you look at Slide 14 on the strategy deck, I apologize if I jumped in. And I reiterate the words conservative. The base revenue growth organically is about 12%, which is higher than what we previously communicated at 10%. And the M&A component that's gone into our modeling is [ 73% ] Justin Hauke: Okay. All right. Got it. And so I guess if I was doing the math on your free cash flow conversion of EBITDA, it looks like it would bring your leverage lower than kind of your target over the time line. So I'm assuming that, that's capital that you anticipate kind of redeploying into M&A to drive that 3% in the algorithm. Christian Brown: You've got it absolutely right. And I stress what I alluded to in the slide deck, and then I'll let Greg chime in a second. But this is a self-sustaining plan to 2029. So we don't need to issue equity, but there will be an allocation of capital in really 2 areas -- 3 areas. First of all, we've got to fund organic growth. Secondly, we've assumed we will do 3 possibly 4 tuck-in acquisitions over the planning period. And then we want to take the debt below the 2 mark. That's it. It's that simple. Justin Hauke: Yes. Okay. All right. My other one, I just wanted to understand, we've talked a lot about the revenue conservatism, but I'm a little confused, too, on the book-to-bill, the 1.1 to 1.2 that you've maintained for the year. Just given that you did 1.8 here in the first quarter, 1.5 on a trailing 12-month basis and all the opportunity that you guys have kind of laid out that you expect. So I guess I'm just trying to understand why because mathematically, that would assume sub 1 for the rest of the year. So I just wanted to understand that disconnect a little bit. I don't know maybe it's the same conservatism as the revenue side. Christian Brown: I wish it was a finite science just to roll out 12 months, 52 weeks and the book-to-bill isn't. What I will tell you is, yes, there's some conservatism. I will commit to something we can just try. And every bit of data internally, as you know, data is confirming we're going to be in that range. I think immediately, Q2 will be just a little slower than the rest of the year, then it will pick up. And that's just part of the timing on the awards. We've got a couple of that awards, I think, at the end of Q3, beginning of Q4. But what I will also tell you, and I refer to Slide 9 in the deck for the overall quarter, we're not out bidding work for this year. We pretty much have got this year's budget business to deliver on the commitment both to our business as well as our shareholders. What we're looking at now is work that allows us to improve margins for this year and building back for '27. So yes, conservatism. I'd just remind you that we've got ample work book for '26. So we're trying to find those opportunities that bring margin improvement for this year, but more importantly, building a bigger platform going into next year 2027, so that we can be -- we can meet or beat what we've laid out in the strategy deck. Operator: The next question comes from the line of Sangita Jain with KeyBanc Capital Markets. Sangita Jain: So if I can ask one from each deck. From your earnings deck, I just want to kind of get some additional color on the pipeline, which seems to have stayed at $13 billion. So I just want to see what moved in, what moved out. And it also seems to have moved a little bit more towards gas from electric. So any color on what you may have added in gas and what may have come out of electric? And I have a follow-up. Christian Brown: Let me just talk about the dynamic in the pipeline. I care about quality in the pipeline, not necessarily quantity. We've booked in the last sort of 15 months close to just over $6 billion of work, which means we've clearly bid a lot more work than that because we don't win everything we bid, yet the pipeline has stayed flat. I mean that's a pretty good achievement, frankly. I feel as though the pipeline is of high quality, is very, very, very sustainable. We can add quantity into the pipeline. I just don't think we need to. I think we're very much focused on quality of opportunity in the pipeline that drives higher margins this year and build quality going into 2027. I wouldn't read anything into the mix, Sangita, about gas and electric. As I said in my commentary, I think inevitably, the gas market grows at a slightly slower pace than the electric markets where we play. I'm quite pleased that we're about 50-50 in the mix. As long as it's 50-50, 48-52 or the other way, I'm not worried about it, quite frankly. If you go back a year to my first quarter last year, most of what we were booking was gas related, and that was driven by MSAs and the push to have more backlog for seasonality. If you look at the latter part of last year into the first quarter this year, most of the bookings are on the electrical side. So the takeaway is that I'm not concerned of the size of the pipeline. Bear in mind, we've already booked $6 billion in the first 15 months and completely replenish that. The pipeline has held well at $13 billion. I'm also not worried that we've got a mix of more electric than gas. I think that just is consistent not only with the way our customers award work, but also where the market opportunity growth is. And I think I said in my strategy, I would anticipate that bookings in electrical will outpace those in gas, just purely driven by the market opportunity. Sangita Jain: And then one on your strategy deck. You talked about $550 million of potential M&A in your 2029 outlook on Slide 14. I kind of just want to get a sense of the size of -- like should we think of the average size as being similar to the one you did in Canada recently? Or are you contemplating larger M&A to make up for that $550 million? Christian Brown: I'll restate we see the M&A funded by the existence of the balance sheet without doing any equity offering. And I think we believe we've got line of sight on some already, but they'll all be within the range of Connect but less than about $100 million of revenue. Operator: Your next question comes from the line of Avinatan Jaroslawicz with UBS. Avinatan Jaroslawicz: So just on the margins in non-union electric in Q1, you noted that the new MSA that you're ramping up on was a drag in the quarter, but expect margins on that to improve throughout the year. I just want to understand, is that going to be a margin drag throughout the rest of the year? Or are you thinking that it should get up to segment level margins by sometime before the end of the year? Christian Brown: No. It's not a long-term issue at all. In fact, when we look at March and we look at some preliminary data from April already, we've already recovered where we think we should be and with some upside throughout the remainder of the year. So it is limited to earlier in the first quarter, just given the ramp-up after the holidays and some other things. So nothing of a long-term impact. Avinatan Jaroslawicz: Okay. Got it. And just staying on the margins in that segment. Can you help us understand just why the storm work that you did there in the quarter came in at seasonally lower margin than it did last year. I noted that work for on-system customers came in, yes, lower margin. Was that more about like favorable rates for those customers or anything related to execution there? Greg Izenstark: Nothing about execution. I think it's just the reality that not all storm work comes at the same margin. It's something we've talked about in the past. When we do on system storm work, generally, the margins are lower than if we're able to travel or take crews from the Southeast and go to the Northeast or hurricanes where we work a little bit longer. It's just the makeup of the storm and when it occurs, if we're able to work over the weekend, our margins are a little bit greater than when we're working and replacing it with base work during the week. So there's a number of different factors. Regardless of the factors or the specifics, margin on storm work is greater than base work. How much greater kind of depends on the other variables that I just mentioned. Operator: Your next question comes from the line of Sherif El-Sabbahy with Bank of America. Sherif El-Sabbahy: Just starting off, I wanted to touch on the quarter. The use of cash for free cash flow picked up this year versus last. Could you touch on what drove the use of cash? Greg Izenstark: Yes. It's just some timing and changes in working capital, and we grew our revenue over $150 million year-over-year. And obviously, there's an investment that we need to make and that will kind of unwind over the remainder of the year. We're still very confident that we'll see $60 million of free cash flow for the year, which is what we said back in February, and we remain very confident in that. Sherif El-Sabbahy: And then just looking at the bid work, it seems like the average sizes are picking up $3.9 million this quarter, $3.8 million in the last and $3.2 million the quarter before. Is it fair to say bid work projects on average are getting larger over time just given the scale of the build-out utilities are faced with? And then could you also just remind us of the average project size for MSA work? Christian Brown: Yes. From a bid perspective, yes, I guess there is a small increase quarter-over-quarter, but nothing is changing from the scope of work that we're doing, the size -- the type of work we're doing. Nothing is changing from the details. But yes, I guess it is upticking a little bit. I think as we continue to see increased opportunity on the bid side, and we'll continue to grow that part of our portfolio, you might see a bit of increase. But on average, it's still $4 million, and that's a pretty comfortable number for us. From an MSA perspective, we're still in that $50,000 to $75,000 per work order range, whether it's gas or electric, no material changes from that perspective. Greg Izenstark: There's no shift, and I try to say it, Sherif, in my words. We're going to continue to stick to the knitting as we go through '29. I think the average contract size will still very small, probably less than $5 million is what we're projecting. MSAs don't change that materially. So the average contract size will be less than $100,000. What you'll see change is just the amount of bid work as a percentage of revenue going to that 65% and 35% bid work. But the overall concept of the business, the structure of it, the revenue streams and more importantly, the risk profile just won't change materially at all. Sherif El-Sabbahy: Understood. And looking at those long-term targets, as you highlighted, a big pickup in bid work, but still sort of in the 50-50 electric gas mix. Is that just driven by the fact that, again, there's that large-scale build-out needed by utilities. And so the opportunities in front of you are just for those somewhat larger projects versus sort of the day-to-day MSA work? Christian Brown: Yes. MSA, it's not science. I mean we've got customers that bid work to us and then choose to roll it into an MSA. And I think the MSA work is just generally by intent, grow year-over-year at a slower rate than bid work. MSA is a slower moving machine versus the bid cycle. So I think I wouldn't read a lot into the rates than they just reflect the rate that we will grow in the market we're currently in. But 50-50 on electric I will tell you will swing a little bit. It not only is it somewhat seasonal, as I referred to a question that Sangita asked, I mean, early last year, most of the bookings were driven by the gas business yet late in the year and early this year were electric driven. That's just a customer thing. It's nothing more than that. I would say there is definitely a drive we hear from our customers, they want us to deliver services on the transmission side, electrical. So there will be absolutely a push to find more opportunities that we convert into bids and wins and backlog. But I wouldn't expect a violent shift in mix of gas and electric in the pipeline or in the backlog. You just won't see it. It's pretty steady. Sherif El-Sabbahy: And then just with that bid work mix shift, does that change your exposure to heavier transmission versus distribution? Anything on that front of the type of work that's going into that? Christian Brown: No. Look, we've done electrical transmission work, we've done -- we do about 10% of revenue less than that each year in transmission work. We do a lot more distribution work. If I look at the end markets and I look at the customers, what they're saying to us and the opportunity, and I referred to an award we've got in Florida, customers want us to do more small transmission projects. And those transmission projects may have a few miles of cable in the ground, they have substation attached to it, may have battery energy storage cost to a mix of things. And they fit our scope of work really well. So I think the margins are a little better on the transmission work because we have slightly larger contracts. I think the scope of work is more integrated, which sits us well. I think the competitive forces for those probably play well to where we sit versus trying to bid against large, large contracts, which we're not equipped to do. Operator: Your next question comes from the line of Manish Somaiya with Cantor Fitzgerald. Manish Somaiya: I had one question on the '25 to '29 targets. You have 10% to 15% CAGR for base revenue growth, 12% to 19% for base gross profit. I'm not sure why the adjusted EBITDA CAGR is 9% to 17%. Why isn't it at least in line or higher than the gross profit CAGR? And then secondly, I know we just talked about backlog, Chris. But if you can also just help us understand the visibility that you have into '27. I think you mentioned '26 is pretty much kind of sold out for the most part. Maybe if you can just help us understand what that visibility picture looks like for '27. Christian Brown: Absolutely, Manish. I will let Greg talk about the margins because that's a really important point. I think it does get missed by the outside world. So he will take margin and then I'll take the backlog. Greg Izenstark: Yes. Thanks for the follow-up question. I think when you're reconciling and going from gross profit to adjusted EBITDA, one of the key characteristics of this model is the continuation of what we started late last year around our capital efficiency and purchasing and buying a more balanced amount of our fleet. So 50% buy, 50% leased. As that kind of compounds over the 5-year period, there is a bit of a headwind on margin when you get to EBITDA, not as much when you get to gross profit. Offsetting that is the scale that we're getting on a G&A perspective as a percent of revenue. So there is some partial offset. But net-net, there is a bit of a headwind just from the leasing impact. Obviously, you get that benefit on free cash flow, that's allowing us to reinvest it in the business and look at opportunities for tuck-ins and such like that. Christian Brown: Manish, on the backlog question, let's just close out '26 comment first. I think Slide 9 in the deck that shows the histogram there and the coverage. I'm talking about the quarter deck strategy deck. I think you can read that literally. We kind of got the midpoint and trending towards the upper end of the guidance, close to sort of $3.5 billion, $3.6 billion. And you can do the math. I mean it adds to it other than what we see within our pipeline is where we currently think we'll be during 2026, which, as you know, from last year is up from 3% to what you see in that chart, so somewhere between 15% and 18%. When I look to 27%, which is kind of where the focus on BD is at the moment, Manish, I don't see any negative trends in the market around bookings that we will have this year that will feed next year's backlog and coverage. A little rule of thumb, I will tell you, even though the data was a little bit -- was not as developed as it is now, but if you go back 12 months ago when we were looking at the end of the first quarter to '26, I think we were about $1.8 billion of revenue -- sorry, if you go back to '25 first quarter, we're about $1.8 billion, give or take of coverage backlog rather going into '26. We've got about 35% more this time looking into '27 at this time of year. So the trends are all positive. I don't see any concern that we won't meet our bookings and our ultimate coverage going into next year. Operator: We have no further questions at this time. I would now like to turn the call back over to Nate Tetlow for closing remarks. Nathan Tetlow: Great. Thanks, Liz. Thank you, everyone, for participating today and all of your questions. And please feel free to reach out to myself if you have further questions. Thank you. That concludes the call. Operator: Ladies and gentlemen, that does conclude today's call. Thank you all for joining. You may now disconnect. Before you buy stock in Centuri, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Centuri wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $463,900!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,294,401!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of June 1, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Centuri (CTRI) Q1 2026 Earnings Transcript was originally published by The Motley Fool

Investors were disappointed with Centuri Holdings, Inc.'s (NYSE:CTRI) earnings, despite the strong profit numbers. We did some digging and found some worrying underlying problems. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. Centuri Holdings expanded the number of shares on issue by 14% over the last year. As a result, its net income is now split between a greater number of shares. Per share metrics like EPS help us understand how much actual shareholders are benefitting from the company's profits, while the net income level gives us a better view of the company's absolute size. You can see a chart of Centuri Holdings' EPS by clicking here. Three years ago, Centuri Holdings lost money. On the bright side, in the last twelve months it grew profit by 9,564%. On the other hand, earnings per share are only up 9,094% over the same period. Therefore, the dilution is having a noteworthy influence on shareholder returns. In the long term, earnings per share growth should beget share price growth. So it will certainly be a positive for shareholders if Centuri Holdings can grow EPS persistently. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Alongside that dilution, it's also important to note that Centuri Holdings' profit suffered from unusual items, which reduced profit by US$17m in the last twelve months. While deductions due to unusual items are disappointing in the first instance, there is a silver lining. We looked at thousands of listed companies and found that unusual items are very often one-off in nature. And that's hardly a surprise given these line items are considered unusual. Assuming those unusual expenses don't come up again, we'd therefore expect Centuri Holdings to produce a higher profit next year, all else being equal. To sum it all up, Centuri Holdings took a hit from unusual items which pushed its profit down; without that, it would have made more money. But on the other hand, the company issued more shares, so without buying more shares each shareholder will end up with a smaller part of the profit. Given the contrasting considerations, we don't have a strong view as to whether Centuri Holdings's profits are an apt reflection of its underlying potential for profit. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For example, we've found that Centuri Holdings has 2 warning signs (1 makes us a bit uncomfortable!) that deserve your attention before going any further with your analysis. In this article we've looked at a number of factors that can impair the utility of profit numbers, as a guide to a business. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Interested in Centuri Holdings, Inc.? Here are five stocks we like better. Centuri posted strong Q1 growth, with revenue up 31% year over year to $723 million and adjusted EBITDA up 35% to $33 million. Gross profit and margins also improved sharply, while the net loss narrowed from the prior year. Bookings were robust and guidance was reaffirmed, with first-quarter bookings of $1.3 billion and a 1.8x book-to-bill ratio. Management kept its 2026 outlook unchanged, including adjusted EBITDA of $280 million to $310 million and free cash flow expected to exceed $60 million for the full year. Centuri is targeting long-term growth in electric infrastructure and data centers under its “One Centuri” strategy, alongside selective acquisitions. The company highlighted a $625 billion addressable market, growing transmission opportunities, and about $170 million of data center awards already secured in 2025. Centuri (NYSE:CTRI) reported sharply higher first-quarter revenue and gross profit while reiterating its 2026 guidance and outlining a multi-year strategy aimed at expanding in electric infrastructure, data centers and selected geographic markets. Executive Vice President and Chief Financial Officer Gregory Izenstark said first-quarter revenue rose 31% year over year to $723 million, while base revenue increased 29% to $689 million. Gross profit climbed 76% to $36 million, and base gross profit rose 96% to $28 million. Base gross profit margin improved to 4.1% from 2.7% a year earlier. → Wells Fargo’s Comeback Is Real—But Not Risk-Free The company reported a net loss attributable to common stock of $9 million, or $0.09 per share, compared with a loss of $18 million, or $0.20 per share, in the prior-year period. Adjusted net loss was $2 million, or $0.02 per share, compared with an adjusted loss of $11 million, or $0.12 per share, last year. Adjusted EBITDA increased 35% to $33 million. Izenstark said net cash used in operating activities was $35 million and free cash flow was negative $54 million, primarily due to the timing of working capital changes. He said first-quarter free cash flow was in line with expectations and that Centuri still expects full-year free cash flow to exceed $60 million. → Rocket Lab Posts Record Q1 Revenue, Raises Q2 Guidance In U.S. Gas, revenue increased 44% year over year to $284 million. The segment reported a gross loss of $6 million, improving from a $15 million gross loss a year earlier. Izenstark said the improvement reflected efforts to address seasonal impacts, even as Winter Storm Fern affected work in the Northeast and briefly slowed work on a new multi-year master service agreement in Texas. Canadian operations revenue rose 51% to $60 million, primarily due to the inclusion of Connect Atlantic Utility Services in the current-year results. Izenstark said operational performance remained strong, while gross profit margin declined slightly to 15% because of the Connect acquisition. → The Great Crypto Thaw: Regulation Ignites an Infrastructure Boom Union Electric base revenue increased 14% to $199 million, with base gross profit margin rising 200 basis points to 8.7%. Izenstark cited strong project activity serving industrial end users, including substation infrastructure and data center-related work. Non-Union Electric base revenue increased 25% to $151 million. Base gross profit margin declined to 6.3% from 8.7% a year earlier, which Izenstark attributed to the early-year ramp-up of an MSA contract, resource allocations to on-system storm restoration work and seasonal weather impacts in January and early February. He said activity and margins had returned to normal by the end of March. Centuri delivered first-quarter bookings of $1.3 billion, representing a 1.8 times book-to-bill ratio. Izenstark said awards included $900 million of MSA renewals, $180 million of new or growth MSAs and $250 million of bid work. He added that momentum continued into April, with about $2 billion of pending bids outstanding, including nearly $200 million of data center work in negotiations. For 2026, Centuri reiterated its outlook for base revenue of $3.15 billion to $3.45 billion, revenue of $3.24 billion to $3.54 billion, adjusted EBITDA of $280 million to $310 million and adjusted net income of $55 million to $75 million. The company also maintained its net capital expenditure outlook of $75 million to $90 million. Izenstark said Centuri ended the quarter with a net debt to adjusted EBITDA ratio of 2.7 times, down from 3.5 times a year earlier, and continues to forecast a ratio of about 2 times by year-end. President and Chief Executive Officer Christian Brown said the company’s “One Centuri” strategy is intended to unify the business around a common purpose, strategic direction and values. He said the strategy focuses on protecting and deepening Centuri’s core utility work, pursuing growth initiatives and scaling the enterprise through talent, fleet efficiency, operational excellence and risk management. Brown said North American energy infrastructure spending provides a long-term tailwind. He cited grid modernization, electrification, gas infrastructure replacement and demand from industrial and data center customers. According to Brown, Centuri estimates its total addressable market at $625 billion over the next four years, compared with a current $13 billion pipeline and $6.5 billion backlog. Centuri expects base revenue to grow at a 10% to 15% compound annual growth rate through 2029 and base gross profit margin to improve by 70 to 170 basis points. Brown said the company expects bid work to grow faster than MSA work, increasing to about 35% of the business by 2029, while the gas and electric mix is expected to move toward 50/50. Brown also said Centuri expects adjusted earnings per share to grow at a 30% to 45% compound annual rate through 2029. The company expects year-end leverage to remain below 2 times after 2026 and free cash flow conversion to reach 40% to 50% by 2029. Brown identified electric transmission as an area where Centuri is currently “underserving” the market. He said the company has transmission capabilities in both its Union Electric and Non-Union Electric businesses, but that transmission generates less than 10% of annual revenue. Centuri intends to focus on projects under $200 million, where Brown said the company can compete against smaller regional players while staying below the typical target size for larger industrial competitors. Data centers remain a growing adjacent market for Centuri. Brown said the company has secured $170 million of data center-related awards since the start of 2025 and continues to evaluate and bid for about $1.5 billion of additional data center work. During the question-and-answer session, he said Centuri has close to $300 million of data center work for which it believes it has been selected and is negotiating, with potential formalization in the second quarter. Brown said Centuri will also pursue tuck-in acquisitions, particularly in the Midwest and Southeast and in electric services, including transmission. He said the company is not targeting businesses that need to be fixed, but rather companies with strong operations, cultural fit and established customer relationships. In response to an analyst question, Brown said acquisition targets contemplated in the plan would generally be within the range of the Connect acquisition but below about $100 million of revenue. Analysts asked why Centuri did not raise 2026 guidance after the strong first quarter. Brown said investors should not interpret the decision as a sign of weakness. “I wouldn’t read into our reaffirming guidance and not change the guidance as anything other than the conservatism that we run the business,” Brown said. He added that every operating business exceeded budgeted revenue and profitability in the first quarter. Brown also said the company has strong visibility into 2026, with much of the midpoint of guidance under contract and additional bid work expected to support the upper end. He said the current focus is on improving margins for 2026 and building backlog for 2027. On book-to-bill expectations, Brown said the company continues to target 1.1 times to 1.2 times for the year, despite the first-quarter ratio of 1.8 times. He described that outlook as partly conservative and said the timing of awards can vary by quarter. Asked about the market’s reaction to the results, Brown said he had not checked the share price but emphasized that the quarter met internal expectations. “I would say this is a strong operating quarter,” he said. Centuri Construction Group, Inc (NYSE: CTRI) is a heavy civil contractor specializing in water and wastewater infrastructure projects. The company delivers end-to-end services encompassing design-build, engineering, procurement and construction for water transmission mains, wastewater force mains, treatment facilities, pump and lift stations, and stormwater management systems. Centuri’s core offerings include pipeline installation and rehabilitation, civil sitework, earthwork, structural concrete and slope protection. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Centuri Q1 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.