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Thank you for standing by, and welcome to MasTec's First Quarter 2026 Financial Results conference call. I want to remind participants that today's call is being recorded. I'd now like to turn the call over to Marc Lewis for some opening comments.

Thank you, Lisa. Good morning, everyone. Thanks for joining us for MasTec's first quarter conference call. Joining me today are José Mas, Chief Executive Officer, and Paul DiMarco, our CFO. We have prepared slides to supplement our remarks today, which are posted on MasTec's website under the Investors tab and through the webcast link this morning. There's also a companion document with information analytics on the quarter and a guide summary to assist in financial modeling. Please read the forward-looking statement disclaimer contained in the slides accompanying this call. During this call, we'll make certain forward-looking statements regarding our plans and expectations about the future as of the date of this call. Because these statements are based on current assumptions and factors that involve risk and uncertainties, our actual performance and results may differ materially from our forward-looking statements.

Our Form 10-K, as updated by our current and periodic reports and filings, includes a detailed discussion of risk and uncertainties that may cause such differences. Additionally, in today's remarks, we'll be discussing adjusted financial metrics, reconciling yesterday's press release and supporting schedules. We may also use certain non-GAAP financial measures on this call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings press release, slides, or companion documents. We had another great quarter to start the year, and let's get into it. I'll now turn the call over to José. José?

Thanks, Marc. Good morning, and welcome to MasTec's 2026 first quarter call. Today, I'll be reviewing our first quarter results as well as providing my outlook for the markets we serve. First, some first quarter highlights. Revenue for the quarter was $3.829 billion, up 34% year-over-year. Adjusted EBITDA was $284 million, a 73% year-over-year increase. Adjusted earnings per share was $1.39, a 174% year-over-year increase. Backlog at quarter-end was $20.3 billion, a $1.4 billion sequential increase and a new record level. In summary, we delivered a great quarter. In fact, the strongest first quarter in our history, setting new highs across virtually every key metric.

Revenue, EBITDA, and EPS were all above guidance with strong year-over-year double-digit growth. EBITDA margins improved 170 basis points versus last year first quarter, and total company book-to-bill was 1.4x, setting yet another backlog record. 2026 should be a great year, and I'm excited about the momentum we are building as we look ahead to 2027 and beyond. Maybe more importantly, when you step back from the quarter, what we're seeing across our end markets continues to reinforce our confidence in the longer-term opportunity in front of us. The amount of investment going into critical infrastructure right now is significant and is being driven by some very durable trends, whether that's AI in data centers, grid reliability, energy demands, critical infrastructure, or connectivity.

The way we're positioned at MasTec, we're right in the middle of all that. On the telecom side, we feel really good about where we are. The fundamentals continue to improve, driven by strong growth in total data usage. Aggregate U.S. data consumption is estimated to almost double by 2030. This growth is fueled by increasing demand for streaming video, cloud computing, gaming, and connected devices. The rapid expansion in total network traffic underscores durable demand and significant long-term growth potential. At the same time, you've got the next wave of investment coming from BEAD funding, which will support rural broadband and middle mile builds over the next several years. The biggest shift we're seeing is around data center interconnectivity. AI is driving a level of demand for fiber capacity, redundancy, and low latency that we haven't seen before.

Connecting data centers, both long haul and metro, is becoming a major driver of spend, and we think that creates a multi-year opportunity measured in the tens of billions of dollars. In Power Delivery, the visibility remains strong. We're in the middle of a multi-year investment cycle in the grid. Utilities are spending heavily on transmission, system hardening, and reliability, and that's being driven by both aging infrastructure and increasing demands. A big part of that demand is coming from AI and data centers, which could drive up to 12% of total U.S. electricity consumption by the end of the decade. That kind of growth requires significant expansion of the grid, new transmission lines, substations, and upgrades across the system.

When you combine load growth, resilience, and energy transition, it creates a long duration, highly visible opportunity set, and we think we're really well positioned there. Power Delivery revenue for the quarter was up 16%, and EBITDA was up 40%, and book-to-bill was 1.6x, with backlog increasing over $600 million sequentially. In Clean Energy and Infrastructure, what's really making a difference is the platform we've built across renewables, civil, industrial, and general building. Our renewable revenue was up over 60% year-over-year, and margins improved 70 basis points. In our industrial and infrastructure markets, we're seeing significant opportunities tied to critical infrastructure, including gas-fired generation, civil construction, and general building for mission-critical projects. Data center development is a big part of that. Each one of those projects requires significant site work, power infrastructure, and ongoing expansion, and that plays directly into our capabilities.

Our recent turnkey data center award is progressing very well. The demand for both the skill set that MasTec has developed in construction management, coupled with the capabilities we have in civil, power, telecom, and maintenance, provides us the opportunity to exponentially grow this part of our business. As the opportunity for full turnkey services matures, we continue to look for ways to increase our self-performed capabilities and improve margins. Clean Energy and Infrastructure segment revenues increased 45% year-over-year. EBITDA was up 56%, and segment backlog increased sequentially by over $770 million, representing a book-to-bill of 1.6x. On the pipeline side, the fundamentals are also very solid. For the quarter, Pipeline segment revenue was up 92% year-over-year, and EBITDA more than tripled.

There's a growing need for natural gas infrastructure, particularly to support gas-fired generation, which remains critical for reliability as power demand increases. At the same time, global LNG demand continues to grow, driving investment in export infrastructure and related pipelines, both domestically and internationally. We see this as a business with good visibility and steady demand going forward. Our reported backlog is not fully representative of the potential, as it only includes signed contracts. Based on current negotiations and verbal awards, our visibility in this segment is as strong as it's ever been, and we expect strong long-term growth. In closing, we delivered an exceptional start to 2026, with record performance across revenue, profitability, and backlog. These results reflect strong execution across the business and the strength of our diversified platform.

More importantly, the long-term fundamentals across all of our end markets remain highly compelling. From AI-driven data center growth and telecom demand to grid modernization, energy infrastructure, and pipeline opportunities, the scale and durability of investment continue to grow. We believe MasTec is uniquely positioned at the center of these critical infrastructure trends with the capabilities, customer relationships, and backlog to drive sustained growth. Given our strong performance and momentum, we are increasing our full-year guidance. We now expect revenue of $17.5 billion, adjusted EBITDA of $1.5 billion, and earnings per share of $8.79, representing year-over-year growth of 22%, 30%, and 34% respectively. With strong visibility, accelerating demand, and meaningful momentum across our segments, we are confident in our outlook for 2026 and increasingly optimistic about the opportunities ahead in 2027 and beyond.

I'd like to take a moment to thank the men and women of MasTec. It is both an honor and a privilege to lead such an outstanding team. Our people are deeply committed to the values that define us: safety, environmental stewardship, integrity, and honesty, while consistently delivering high-quality projects at the best possible value for our customers. These principles have not gone unnoticed. Our customers recognize and appreciate the dedication and excellence our team brings to every project. It is through the hard work and commitment of our people that we have positioned ourselves for continued growth and long-term success. I'd like to thank you for your continued support, and I'll now turn the call over to Paul for our financial review. Paul?

Thank you, José, and good morning. We are pleased with the momentum built by our first quarter results and the continued trend of improved first quarter performance. This has been a focused effort in recent years, and 2026 marks the best first quarter in MasTec's history. Off of our strong start, we now expect to generate almost 45% of our full-year EBITDA in the first half of 2026, implying markedly lower seasonality than our business has experienced historically. Our Q1 results represent record levels of first quarter revenue, adjusted EBITDA, EPS, and backlog. Year-over-year, we drove meaningful growth with revenue up 34%, adjusted EBITDA up 73%, EPS 174%, and backlog by 28%. We continue to see strong customer demand for MasTec's broad service offerings and expertise to meet their infrastructure development goals.

Our customers continue to show high confidence in MasTec, seeking deeper integration and partnership through alliance agreements, sole-sourced contracts, and a desire for MasTec to provide turnkey services on strategic infrastructure builds. This is particularly apparent when speed and execution certainty are critical. Our scale, expertise, and focus on mutually beneficial outcomes are key components driving this confidence. I'll share some further details on our first quarter segment performance and our outlook. Our Communications segment had a good start to the year, generating revenue of $802 million, growing 18% year-over-year and 7% ahead of expectations. EBITDA margins were about 100 basis points below last year's first quarter, negatively impacted by cost to exit certain markets in our DIRECTV fulfillment business.

Communications backlog in the first quarter was up slightly from year-end and 12% year-over-year to another record level. We continue to see strong broad-based demand for wireline services, with customers engaging for multiyear turnkey opportunities. Our second quarter Communications outlook calls for $875 million of revenue, with EBITDA margins slightly higher than 2025 in the low double digits. We also expect to achieve double-digit EBITDA margins for the remainder of the year, resulting in approximately 70 basis points of margin expansion versus 2025. First quarter Power Delivery results exceeded our guidance by 10% on revenue and 21% on EBITDA, with solid execution to start the year, resulting in 120 basis points of EBITDA margin expansion year-over-year.

Most notable in the quarter was the continued backlog strength, with a 1.6x book-to-bill driving backlog to a new record of $6.2 billion. We saw a number of new contracts executed in Q1, as well as expanded scope on some existing projects. Regarding Greenlink, our client resolved the transmission permitting review earlier than anticipated, and we are now operating across the full contractual scope. This is one of the factors driving our revenue guidance higher to approximately $4.8 billion or 14% year-over-year growth. Full year EBITDA margins remain on track to approach double digits and are trending higher than our prior guidance. We continue to expect year-over-year margin expansion in each quarter for Power Delivery, with 60 to 70 basis points of margin expansion for Q2 specifically.

Our pipeline segment had a terrific first quarter, generating $682 million of revenue, almost doubling year-over-year, with EBITDA margins of 21%. Margins exceeded our guidance by 165 basis points and increased 270 basis points sequentially. It is important to note that broader pipeline construction demand is still developing, and we are generating these margin results in a competitive environment. Unquestionably, we are executing at a high level, delivering high-quality projects ahead of schedule for our clients. These positive outcomes further illustrate MasTec's position as the leader in this space and will continue to be a differentiating factor as the cycle develops. For the second quarter, we expect revenue of $600 million, with EBITDA margins in the high teens, slightly below the first quarter result.

Full year margins are still forecasted in the mid-teens but trending higher with the first half performance. We are currently taking a conservative view around second half project timing and productivity while we firm up specific resource allocations. Longer term, we continue to see an unprecedented level of project activity and remain very bullish on the opportunity set for this segment in the years ahead. Clean Energy and Infrastructure also started the year off strong, delivering over $1.3 billion of revenue, up 45% year-over-year, almost 10% ahead of our guidance. EBITDA margins of 6.7% expanded 50 basis points from Q1 of 2025, and we generated 56% EBITDA growth. Renewables and general buildings both contributed to the revenue beat with year-over-year growth of 63% and 166% respectively.

While our recent acquisitions were solid contributors to the quarter, organically, we still generated over 30% year-over-year growth. Backlog continued to develop nicely, reaching another record level of $7.3 billion. This represents a total book-to-bill of 1.6x, inclusive of 1.3x organically. Infrastructure led the backlog development, but renewables also extended its streak to 11 consecutive quarters of backlog growth. Demand continues to be robust across the business verticals, leading us to increase our full year revenue guidance to approximately $6.7 billion, up $325 million or 5% higher than previous forecasts. EBITDA margins are still forecasted in the high single digits, comparable year-over-year, largely due to the higher mix of general buildings activity in 2026.

Q2 revenue is expected to increase almost 50% year-over-year to $1.7 billion, with EBITDA margins also comparable to 2025 second quarter. We generated cash flow from operations of $99 million in the first quarter, with higher revenue levels versus guidance driving additional working capital investment. We also saw DSOs increase to 72 days versus 65 days at year-end, resulting in lower cash conversion than anticipated. We expect DSOs to trend back to the mid-60s over the course of the year. Our liquidity stands at approximately $1.8 billion, and net leverage of 1.8x is well within the terms of our financial policy and criteria to maintain our investment-grade ratings.

Our improved Q1 performance, coupled with continued capital efficiency, led to further growth of return on invested capital, expanding almost 100 basis points from year-end to over 10%. We expect this trend to continue, and we'll share more thoughts regarding ROIC targets at our upcoming Investor Day. Moving to our consolidated 2026 guidance. We are raising our full year guidance to reflect the first quarter beat and our improving outlook for the remainder of 2026. We now expect revenue of $17.5 billion or 22% growth year-over-year and 3% higher than our prior forecast. For adjusted EBITDA, we are now forecasting $1.5 billion or an 8.6% margin, with a $50 million increase representing a 10% margin flow through on the increased revenue outlook.

Adjusted EPS is forecast to be $8.79, an increase of almost 35% year-over-year and 5% ahead of our prior guidance. Our cash flow from operations outlook remains unchanged, expecting to exceed $1 billion for 2026. We are increasing our net cash capital expenditure forecast to about $220 million to support the additional revenue growth. Our second quarter outlook reflects another strong quarter of year-over-year growth across all of our major financial metrics, with revenue, adjusted EBITDA and EPS growing 21%, 38%, and 47% respectively. Adjusted EBITDA margins are expected to expand by over 100 basis points compared to the second quarter of 2025. Lastly, I want to remind you that MasTec will be hosting Investor Day on May 12th, which will also be webcast live via a link on MasTec's investor site.

We are excited to introduce additional members of our operational management team to the investment community and provide a medium-term financial outlook. This concludes our prepared remarks. I'll now turn the call over to the operator for Q&A.

Thank you. If you would like to ask a question, please press star one one on your telephone. You will then hear an automated message advising your hand is raised. If you would like to remove yourself from the queue, press star one one again. We also ask that you would please limit yourself to one question and one follow-up on the same subject. If you have more questions, you can always return back to the queue by pressing star one one again. Please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question today will be coming from the line of Alex Rygiel of Texas Capital Securities. Your line is open.

José, congratulations to you and your team on another outstanding quarter.

Thank you, Alex. Good morning.

Morning. In the context of profit margins, growth at MasTec has been very impressive. Now with backlog up 28% year-over-year, can you talk about how pricing and/or contract terms are changing? Is there a point where price and contract terms become more important to the company rather than volume?

Alex, I think it's a great question. I think we've been talking about the momentum of the business over the course of the last year. We've obviously seen it in our backlog growth, right? I think backlog in 2025 was up about $4.5 billion. We're up another $1.4 billion this quarter. I think in the last two quarters alone, we're up around $3.5 billion? I would argue that, you know, a lot of the improvements that we've seen in the business from a pricing perspective, obviously from a growth perspective, haven't really even started hitting our financials yet, right?

I think we're just at the beginning of seeing some of the improvements that we saw in 2025 relative to backlog and repricing, and I think that'll play through the balance of 2026 and into 2027. I definitely think it's something to pay attention to. We feel really good about what we have in backlog. We feel really good about ability to not just grow our revenue, but I think we've talked about margins a lot and our intentions to improve them on a segment by segment level. We know we have a lot of opportunity there, and we're looking forward to delivering on that.

Excellent. As it relates to the pipeline market, which appears poised for kind of notable upside, can you comment on the competitive environment there and how you're positioned? It sounds like it's a little bit more of a 2027 opportunity from a P&L standpoint, maybe talk about the timeline here over the next few years.

Sure. Nothing's changed. I think going into this year, we said we'd expected to do about $2.5 billion. We knew we would be somewhat constrained because a lot of projects were gonna be pending materials, that were gonna take a long time to come online. We've always said we thought 2027 was a significant growth year for us. We're really happy with the way we started 2026. We do think there's some potential at the back end of 2026 to maybe bring in some projects and hopefully be a little bit different than what we've been saying. Right now, we're very bullish on 2027 and beyond. We've talked about getting to historical highs in revenue. I mean, we feel great about all of that.

I think to the beginning of the question, which was, you know, the competitive landscape in the business, there's no question that, you know, post-pandemic, we saw some companies fail, we saw some companies disappear completely. We saw others de-emphasize the pipeline business. I think the competitive landscape today really benefits MasTec. We never, you know, we continued to invest in the business. We kept, you know, our strongest people. I think we've rebuilt. I think we're in a great position to not just, you know, win the market share of the past, but to actually increase our market share throughout the cycle.

Very helpful. Thank you.

Thanks, Alex.

Thank you. One moment for the next question. Our next question will be coming from the line of Andy Kaplowitz of Citigroup. Your line is open.

Good morning, everyone.

Good morning, Andy.

José, I'd be curious about your thoughts on this cycle versus others. Your backlog, as you know, is almost is up almost 30% year-over-year, and that's with pipeline backlog being down. We know you think pipeline earnings will be stronger going forward. I think you expect to grow EPS now mid-30s this year. Are you starting to think about that kind of growth being sustainable in 2027? Do you think it'll be pipeline leading earnings growth or actually one of your other segments, such as Clean Energy?

Yeah. Lots of questions in there, Andy. I'd start by saying, look, the momentum of our business is incredible. I think that comparing it to past cycles, I've been CEO since 2007, I can't remember a time where every business was just humming, right? Where everything just, you know, had great opportunities in front of it, where we see backlog growing across the board, where we see momentum actually increasing. I think from a total business perspective, it's as good as I've ever seen, and quite frankly, I would only expect it to get better. We're gonna have a great year across the board on every financial metric. I think, you know, we've got our Investor Day on May 12th, where we're gonna lay out some longer term targets.

We're really bullish about what we think we can accomplish, you know, in the mid to long term, and we're excited. You know, we spend so much time, whether it's on these conference calls or at investor conferences, talking about either the previous quarter or the next quarter or the current year. We're looking forward to having a day where we can lay out a little bit of longer term vision, and really give you some long-term targets that I think everybody's gonna really feel good about.

Okay. I'll ask you a quick follow-up. Just you positively surprised pretty much every quarter in Communications over the last few quarters. I think, you know, you raised 2026 Communications revenue guidance by even less than you beat in Q1. Is it just conservatism, or do you continue to see the momentum moving forward across most of your Communication businesses?

Yeah. I'd say a couple of things. I think, you know, Paul laid out in his script, you know, we took some one-time charges there that impacted margins by about 100 basis points. If not, it kinda would have been flat with last year. When we look at the balance of the year, I mean, you know, we're guided to a $17.5 billion number. It was a nice round figure. I don't think you should take anything into the back half Communications guidance. We have plenty of opportunity there, and hopefully, you know, we'll continue with our goal of at least meeting, but if not beating expectations on a quarter-by-quarter basis.

Appreciate all the color, José.

Thanks, Andy.

Thank you. One moment for the next question, please. Our next question is coming from the line of Steven Fisher of UBS. Please go ahead.

Thanks. Good morning, and congratulations. José, you mentioned that you're seeing potential for exponential growth, and I think it was essentially the data center piece of Clean Energy and Infrastructure. To what extent do you think this is going to be the main narrative for the clean energy segment going forward, and how much will natural gas plants be part of that?

I'd say a couple of things. When we look at, you know, we kinda look at our Clean Energy and Infrastructure business and break it out in roughly four buckets, right? We've got renewables, we've got our industrial business, which would include any new power generation, conventional power generation. We've got our infrastructure business, which is a lot of what we're doing on the civil side. We've got our general buildings group, which is what, you know, has really been focused on both critical infrastructure and the data center subset. You know, I would say if you look at backlog, every one of those had a backlog increase in the first quarter relative to sequential backlog growth. We're feeling good about all four of them.

Obviously, the data center opportunity subset is massive, and it's one that I think will play a big role in MasTec's future. You know, what we found, you know, we're on one job currently. What we found is, it's an incredible opportunity for us. We bring a really unique skill set that I think many are interested in. We have an incredible number of opportunities that we're going through right now that I think will develop. We feel good about that part, but we quite frankly, we feel good about the whole business. You know, I think we've been, you know, really adamant about what our position is on power generation on the conventional side. You know, historically done a lot of simple cycle work, haven't done a lot of CCGT work, and we feel good about that.

There's a tremendous amount of opportunity, of demand. It will be a part of our growth story. It won't be the leading part of our growth story, but it will definitely be a part of our growth story, and I think we're well exposed to all of it.

That's great. Then on the Power Delivery side, I wonder if you could just talk about transmission opportunities for bookings. I'm curious to what extent are customers coming to you looking for skill sets and capacity sort of versus putting out a more competitive process, and sort of what's the timing of sort of next major bookings for you? Thank you.

We're really excited about the growth and backlog in our Power Delivery this quarter, right? 1.6 book-to-bill, over a $600 million backlog increase. Broad-based, no major projects kinda pushed that way. From a major project perspective, we're seeing more activity than we ever have. I think we're in a great position. I think the fact that we're working Greenlink and our success on Greenlink has really positioned us differently across the industry. Couldn't be more excited about the opportunities that are on the way and think we're really well-positioned. That will be a big part of our story on a go-forward basis.

Thank you.

Thanks, Steve.

Thank you. One moment for the next question. Our next question will be coming from the line of Brian Brophy of Stifel. Your line is open.

Yeah, thanks. Good morning, everybody. Congrats on the nice quarter. Just wanted to ask on CE&I. Obviously, awards there were pretty healthy. Just any color on where the source of strength is coming from when I think across your clean energy, civil, street and highway businesses or were there any additional GC awards in the quarter? You talked about having about $4 billion of projects under LNTP in that segment. Did that come down with the backlog build here, or does that remain elevated still? Thanks.

Yeah. Just to reiterate on the last question, 'cause it was similar, right? On our Clean Energy and Infrastructure business, right, in all four buckets, backlog increased. I think maybe in general buildings, we were flat. To the point of it being data center driven, it was not. It was really made up from the other three parts of the business. I would say that our LNTP work is either at the same number or it's actually increased. I think we feel really good about our potential to continue building backlog in renewables through the balance of the year and for sure for the segment. I would expect Clean Energy and Infrastructure backlog to be a lot higher by the end of the year than it is today.

You know, it may not be every single quarter, but we feel really good about where we're in the year. Again momentum is just really, really strong today.

Yeah, that's great. Appreciate the color there. Just big picture question on the GC business. When you think about the opportunity in terms of size and scale, how are you thinking about it in terms of number of projects you can take on and kind of size of project ranges you're looking at? Thanks.

It's a great question. By the way, it's the beauty of the business that we're in. I think we'll elaborate a lot on this on our Investor Day. You know, the beauty of a turnkey data center site is the number of people that it actually takes on the construction management side is relatively limited. We can stand up groups relatively quickly to meet our customers' needs, right? On the self-perform side, it's a little different because you need a lot of craft, and in some cases we're really well-positioned, and then maybe in some geographies we're not. From a pure construction management perspective, with a relatively small group of people, you can actually do some incredible work on behalf of the customer. That's really what we've been working on. We've been working about building our resources there.

I think we're super well-positioned. I think we can take, you know, a significant number of projects on concurrently. We're working towards that. I think, again, I think at our Investor Day, we'll get into a lot more details on that.

Appreciate it. I'll pass it on.

Thank you, Brian.

Thank you. One moment for the next question. The next question is coming from the line of Ati Modak of Goldman Sachs. Your line is open.

Hey, José. Can you talk about, you know, what you're seeing on the long-haul transmission line opportunities through the next few years? You previously talked about M&A to add capability for a third simultaneous line there. I'm curious if, you know, how that thought process is progressing, what are you seeing in the market, and what should we expect?

Good morning, Adi. I think that a couple of things. I think we've done a great job of organically growing that side of the business. We've, you know, we've really focused on it in the last four or five years. Obviously, Greenlink was a solid culmination of that to kinda really prove to ourselves and to the industry that we had made significant inroads in that market. Again, the opportunity subset there is incredible right now. I think the industry is gonna substantially grow. Again, I think we're super well-positioned there. We are not, you know, we do not feel that we need to make an M&A transaction in that market to kinda reach the goals that we have internally.

It's definitely an area where if the right opportunity arose, we would definitely pay attention and consider it. Right now we feel good about, you know, where we are, how we're positioned, and our ability to win.

Awesome. Thanks for that. Maybe one for Paul. You mentioned lower seasonality than previous years. Can you give us more color on the structural element that's driving that going forward? Obviously, Q1 performance was great. Would love to know how you're thinking about the structural elements here.

Yeah. A lot of it's just around project timing and working with our customers to promote higher productivity and, and access to projects, you know, that are executing through the end of the year. That, that was a big focus. You know, you know, the weather helped out a little bit. Weather was a little bit mild in most of the most areas we operate. Overall, it's just being proactive and really working with our clients to, to try to promote opportunities for us to keep our crews and our equipment productive. You know, it balances out. It, it makes the peak to, you know, the summer months, more efficient, and we're excited about how it'll benefit, you know, the business in this year and the years ahead.

Awesome. Thank you.

One moment for the next question. Our next question is coming from the line of Jamie Cook of Truist Securities. Please go ahead.

Hi. Good morning. Congrats on the next quarter and excited about May 12th. I guess, José, a couple questions. You know, one, as we're thinking about the opportunity that you're gonna lay out, how much do you wanna differentiate, i.e., you know, MasTec is largely an organic growth story versus, you know, relying on M&A or joint venture. Maybe you need to do that to manage risk or get into markets, adjacent markets in a, you know, in a proper way.

I guess, you know, my second question on that is just sort of you have so much growth in front of you, to what degree are you prioritizing the type of growth that you want in that for MasTec, it's not growth for the sake of growth, but it's more growth for the sake of where you can generate the best margin of return? Thank you.

Sure. Thanks, Jamie. I'd say a couple of things. First, let's talk about organic growth versus M&A. I think, you know, MasTec was in a unique position post-pandemic where, you know, we really tried to focus on certain core diversification into the energy markets. I think we did that in 2022, 2023. You know, obviously those were big acquisitions for us at the time. We said very vocally that we were gonna focus on organic growth. We were gonna focus on really, you know, making our balance sheet a lot healthier and being in a position to put ourselves in a position to do whatever we wanted. I think we've accomplished that. I think that was, you know, Barry set our goal. We had levered up a little bit on those acquisitions. We wanted to bring leverage back down.

We wanted to fully integrate those acquisitions. We wanted to make sure they were performing at a high level. I think today we sit here and it's, you know, we can check the box. We've done that. We're excited about that. I think you're seeing the, you know, the beginning of those results. I don't even think we've seen all of those results flow through our financials yet. We're excited about that. We're also excited about, you know, what M&A has meant to our business over a really long period of time. We've had a lot of growth via M&A since, you know, at least in my term as CEO since 2007. We've bought some incredible companies. I think you saw us be more active at the end of 2025, right?

We bought what we thought were two incredible companies in two market segments that we think have tremendous long-term potential and growth opportunities. you know, they're both here just over a quarter. We're excited to have them. They've been fantastic additions to MasTec. The truth is there's a lot more, and we've said we're gonna focus more on M&A. There are a ton of opportunities out there, a lot of which we really like, and they're very strategic, right? We're looking at our business in a way of which to figure out where are the areas that we wanna grow as a business.

You know, where are the, you know, internal opportunities that we have relative to the workforce that we have, and then where do we need to go outside and try to find some help to either bolster whether it's a geographic area or an area of work. I do think you're gonna see us be a lot more active in M&A for sure than we've been in the last couple years. I think we started that in the fourth quarter of 2025, and I think you'll see that continue throughout 2026. With all that said, I mean, today, you know, we feel good about the segments that we're in. We think all of the segments offer us solid growth potential. More importantly, I think we've got the management teams within each of those businesses to handle the level of growth.

Where I would be concerned on growth isn't necessarily on capital allocation because I think, you know, some of these, quite frankly, aren't even that capital intensive. Some are more. I think we feel good about the return profile of each, but where it becomes really important for us is to understand that we have the leadership strength to be able to deliver on that growth and deliver the optimal margins on that growth. Today, I think we're more than equipped to take on multiple areas of growth, multiple businesses of growth, and I think we're just really starting to enjoy that.

I think we've worked really hard over a really long period to put ourselves in the position that we are today, and I think it's time to kind of enjoy the fruits of our labor and to take advantage of those growth opportunities and execute on them. I don't really see us, you know, jumping into a lot of new businesses, but quite frankly, I see us really trying to expand the ones that we're in and take advantage of the opportunities within those.

Thanks, and congrats.

Thanks, Jamie.

Thank you. One moment for the next question, please. The next question is coming from the line of Sangita Jain of KeyBanc. Please go ahead.

Great. Thank you. Good morning. Can I ask 1 question, given, José, how you said demand is inflecting so strongly in all your segments. Last year, you were resourcing in pipelines and Communications as the demand emerges. How do you feel right now about the ability to keep resourcing upwards to meet this demand, whether it's labor or other, you know, facilities that you need? Is that getting harder?

Good morning, Sangita. A couple things I'd say. I'd say, you know, at the end of the day, we're a people business, right? It's what differentiates us. It's what makes us who we are. I think it's a critical element. It's an irreplaceable asset. Nobody can replicate the workforce that we've built, right? Especially trying to come in. It's one of our big moats. It's important to us. It's something that we keep building on. When we look at just pure numbers, right, I think we're up about 6,000 people year-over-year. We're up just under 2,000 sequentially. You know, quite frankly, it's a machine, right? We're constantly adding people. We're constantly adding resources. We're constantly manning to the opportunities that are in front of us.

It's part of what makes us good at what we're at. It's critical to our success in the long term, and it's something that we're not just investing in, but, you know, we think we're good at. We'll continue to do that. I think that, you know, there's been periods where obviously the hiring impacts margins because you're going from a slower period to a period where you're a lot busier. I think the business is much more consistent today. I just think it's part of the business. We'll continue to grow. We'll continue to grow into the demand and then hopefully benefit from, you know, the margin opportunities that are associated with that.

Great. That's helpful. Just a quick follow-up on your Communications revenue guide. You guys referred to BEAD maybe emerging over time and being conservative in your second half outlook. Can you tell us if there is any BEAD factored into your back half, or is there still an optionality in the second half?

I think we've got some design built in, but I don't think we have a lot of construction built in, so there's some revenues, but I think it has a really meaningful impact to 2027.

Got it. Thank you.

Thank you, Sangita.

The next question, please. Our next question will be coming from the line of Liam Burke of B. Riley Securities. Please go ahead.

Thank you. Good morning, José.

Morning, Liam.

José, you talked on your prepared comments about the step up in demand for telecom on data center interconnectivity. Are you seeing more of that activity on the long haul or on the local loop of the network?

I think both, right? I think you've got different types of data centers. I think you've got a lot of our customers, chasing that business. I think, you know, what makes some customers more competitive than others is the vastness of their infrastructure. Depending on the client, it'll be more specific to one or the other, but I think both will have substantial growth over time, and we're seeing opportunities to grow across both of those.

Great. On power, you had a nice step up in margin. Is that just better terms of the negotiations, or are you just seeing the advantages of your scale?

Well, I think it starts with better execution, then it gets into, you know, obviously all of the opportunities that the business has today relative to the size and the growth. At the end of the day, it's a lot of it is our execution. Again, you know, we made significant investments in, you know, 2021, 2022 to really grow that business, I think now, you know, a lot of the fruits of those efforts over many years of hard work are starting to pay off.

Great. Thank you, José.

Thanks, Liam.

Thank you. One moment for the next question. Our next question is coming from the line of Maheep Mandloi of Mizuho. Please go ahead.

Hey, thanks for the questions. Hi, José. Maybe just a quick one on the gas pipelines. It's talking about like the demand over there. When are you expecting the orders to kind of flow in on those for the next year or after that? Thanks.

Good morning, Maheep. I, you know what? It hasn't really changed. I think that, you know, we've got an enormous amount of confidence relative to, you know, the conversations we're having with our customers, whether they're verbal awards that we have or the expectations from our customers have laid out to us on what we're gonna build. You know, for us, right, when we look at 2027, we think, you know, we've got our plate is pretty full as it is. You know, when those turn into contracts and when we can report them in backlog is a different story. It's, you know, that's why, you know, we keep talking about, you know, backlog isn't really representative in that market today. It will be at some point. It's coming. It's close.

It'll probably be towards the latter half of 2026. I can tell you that our visibility today in the 2027 and beyond is fantastic.

Appreciate it. Thank you.

Thank you.

Thank you. One moment for the next question. Our next question is coming from the line of Justin Hauke of Baird. Go ahead.

Great. Thank you. I guess I just wanted to get a little more clarity on the guidance. I mean, you know, clearly the first quarter came in much better than what you were expecting. You know, you beat revenue by 10% and earnings by like 40%. In the full year, you know, flowing through a lot less than that, and I know 1Q is seasonally the lightest, but you're also having a lot less seasonality than you had historically. Just trying to understand kind of, you know, what's underpinning the conservatism as, you know, you look at the balance of the year versus what you did in the first quarter.

Well, first, good morning, Justin. I think that, you know, a couple of things I'd say is, you know, that's what we did. We kinda pushed the beating Q1 through the guide through the year. Didn't necessarily reforecast the balance of the year. I think that's, you know, there's a lot of conservatism built into that. Obviously, we haven't, taking into account that that acceleration in the business is gonna continue throughout the three quarters. Hopefully, we can deliver on that, and that'll be the source of our beats throughout the balance of the year. I think that that's how we looked at it, right? Not a lot more science than that.

I think, you know, we've got our Investor Day coming up on May 12th, where we're gonna lay out, I think, a, you know, a much longer-term vision, and we're excited about how the rest of the year can play out for us. I wouldn't read too much into it. I think we're pretty excited. You know, I think we took each of the areas where we beat, and we kinda pushed it through the year. Obviously, if the opportunities continue to exist across all those segments, then we'll do better than what we're saying.

Yep. All right. I kind of figured that's what you would say. Looking forward to the Analyst Day too. I guess the second question, just understanding on the Communications side, the exiting from the install-to-the-home market, was that something you guys were expecting? I guess the corollary to it is that all done, so the cost that you took, that's all contained in the quarter, or is that something that's gonna kinda continue throughout the year?

We don't expect any more to continue throughout the year. I'd say we're still in that business. We're not out of the business. Let me be maybe a little more clear on what that, on what that is. You know, we've had a relationship with DirecTV as far back as I can remember, and I actually think this is a remarkable story at MasTec. I became CEO in 2007. At the time, DirecTV was almost 50% of revenues. Last year, DirecTV was less than 1%. I think that the fact that, you know, what we've been able to do to the business over the course of last 19 years has been phenomenal.

It was a business that at its peak reached almost $700 million in revenue. Again, it was less than 1% of revenues last year. You know, we see challenges in our business at times, right? We had a customer that was, you know, it was all pay television service, satellite-driven. Obviously, the Internet took off, streaming video took off, the business changed. I actually think that's part of the beauty of MasTec, right? We took a business that was such a major part of our, you know, financial performance a long time ago. We were able to adapt in the business. We were absolutely able to help our customers with other technologies like the, you know, everything that happened relative to fiber and Internet.

We were able to offset that decline over a period of time. You know, what gets lost in our story a lot is the fact that we've done an amazing job growing our telecom business over many years, especially over the last few years, in an environment where that business massively declined from $700 million to a negligible number. You know, this year we, you know, we kinda exited a number of markets. It's a small business. We took some charges in Q1 that represented about 100 basis points. Quite frankly, we probably could have Reg G'd them. We decided not to. It is what it is. We're, you know, we're thankful for that relationship. We're still gonna work for them in any way that we can.

We're still gonna support them and help them in any way that we can. I think it's a great reflection of, you know, the way that MasTec has matured in the business that we've come and the fact that we've been able to overcome something like that, over such a long period and done it with a ton of success.

Yep. Yep. No, for sure. It's, diversification is a big thing from the time we started covering. Thank you for that perspective.

Thanks, Justin.

Thank you. One moment for the next question. Our next question is coming from the line of Manish Somaiya of Cantor. Please go ahead.

Good morning. José, can you remind us, what is the mix between maintenance and new projects for your pipeline business? What I'm trying to figure out is how I should think about the incremental upside to backlog. I mean, obviously, you know, the backlog right now is about $1.3 billion out of the $20.3 billion. I'm just trying to get a sense for that as well.

Yeah. I don't have an exact number, but I would tell you is, you know, a few years back when the business looked doom and gloom post-pandemic, we said that, you know, we thought the bottom run rate would be $1.5 billion-$1.8 billion. We did that based on, you know, predominantly a maintenance-driven business, so I'd still argue that that's kind of the range, and the balance is project-driven. You know, I don't have an exact breakout today, but I would argue that that's pretty close. I think that the, you know, as you think about future projects, it'll be the growth off of that base.

Right. Obviously, Q1, the business did exceptionally well. Favorable, favorable outlook for 2026. How should I think about 2027, in terms of, you know, reaching or exceeding your prior peak margins in that business?

Yeah. I think the opportunity is there. I mean, if I was sitting here today and I was having to guide for 2027, I would say we'll do $2.5 billion this year. I would feel, you know, super comfortable that we're gonna, you know, do three or better. I think we have an outside chance to get to historical levels, which are $3.5 billion as early as 2027. I think that's what we've been saying over the last couple of quarters.

Right. Just on capital allocation, with leverage approaching low ones, how are you thinking between deleveraging even further, bolt-on acquisitions, repurchases? If you could just shed some light on that.

You know, I think based on the growth opportunities that we have in front of us, I do think you're gonna see us be more active in M&A, and I think that's where you'll see deployment of capital.

Okay. Great. Thank you so much.

Thank you. Appreciate it.

Thank you. One moment for the next question. Our next question is coming from the line of Brian Russo of Jefferies. Please go ahead.

Yeah. Hi, good morning.

Morning. How are you?

Hey, just assuming Greenlink North commences construction also next year combined with the smaller project that I believe is supposed to commence mid-year this year, do you have the capacity to handle more than those, you know, two projects combined in 2027? Just to tie into your comments that you don't need to grow that side of the business organically to competitively bid on new projects.

Absolutely.

Okay. Great. Then just to follow up on the M&A question, could you be any more specific on target markets, assuming nothing in Power Delivery, target markets that you see, you know, the most opportunity for MasTec particular? Would you be interested in MEP at all, you know, to kind of round out that turnkey solution for the data centers?

Look, I don't want to get ahead of myself. I think that at our Investor Day, we're going to walk through strategy a lot more than what we normally do. I think from that, you'll be able to attain the types of things that we're looking at. It's broad-based. I think at the end of the day, we're still opportunistic driven, right? I don't think, you know, somebody asked a question earlier, I think it was Jamie, are we chasing revenue? We're not. For us, it's strategic. I think that we've got some really good opportunities in front of us. I don't really want to kind of tip my hand on that, but I feel like we're in a good spot.

I felt like the two acquisitions that we made at the end of last year have been really beneficiary to MasTec, and I think we have a number more that we can make that would really help our company.

Okay, great. Thank you very much.

Thank you. Appreciate it.

Thank you. One moment, please, for the next question. Our next question is coming from the line of Marc Bianchi of TD Cowen. Please go ahead.

Hey, thank you. I guess first on the Communications progression from here, you're quite precise on what the margin improvement's gonna be for the year. But I don't know, I don't know if you wanna put any precision on second quarter, but the way it looks to me, like, the margin improvement year-over-year may need to accelerate in the back half. That's right. Could you just maybe walk us through that? Is that just sort of getting to absorbing some of those earlier costs that you have, or is there something else going on there?

Yeah. Good morning, Marc. I think that's exactly right. You know, in 2025, again, we had phenomenal organic growth in 2025. I think it was 34% on a year-over-year basis. We entered a lot of new markets. We opened a lot of new offices. I think those offices are beginning to mature. I think we'll see the significant impact of that maturity in the second half of the year. That's why we're, you know, we're so comfortable of really calling for a higher profile margin in the second half of the year, and that's exactly how we expect it to play out.

I think, you know, considering if you would normalize Q1 for our charges, and we kind of look at what's happening in Q2, we feel really good that the progression of that is taking shape, and are very confident in being able to say that.

Yep. Okay, great. Now the last one is for Paul. This isn't a big increase, but the CapEx number ticked up just a little bit. Could you talk about what's going on there and maybe more broadly, how we should be thinking about kind of capital intensity for the business going forward?

Yeah. I said it in the comments, it's really just about the additional growth we see, you know, not just in 2026, but in the years ahead. I mean, that's our primary objective around capital allocation is supporting organic growth and fixed assets is a big piece of that. Still relatively low, particularly where we've been historically. We're still very comfortable with that level of capital intensity, but, you know, really just focusing on supporting the demand that we see and the needs of our customers.

Great. Thanks very much. I'll turn it back.

Thank you. Appreciate it.

Thank you. One moment. Our next question is coming from the line of Philip Shen of Roth Capital Partners. Please go ahead.

José, Paul, thanks for taking my questions. Congrats on the great quarter.

Thank you, Phil.

Wanted to check in on the renewables comments you made. Visibility, you said, is as strong as it's ever been. Momentum is strong, you said as well. Wanted to check in with you also on this tax equity pause by four major banks. You know, we're what, four months into the year, and this has kind of become a bit of a topic. You know, I know 2026 is not impacted 'cause it's a Section 48 year, but for 2027, I think more projects might depend on Section 48E.

I was wondering if you could give us a little bit more color on that really strong outlook vis-a-vis this tax equity pause, and to what degree have you guys kinda gone through your portfolio and checked in with customers to make sure that, you know, the exposure here is modest, if any at all? Thanks.

Look, I think that's the big change in our business over, you know, the longer period. I think we've done a great job at aligning ourselves with key customers, understanding their business, understanding what their risks are, right? I think we've managed that really well. We feel really comfortable about our book of business for 2027. As we generally think about it for the market, I would also add the following because I do think it's important, right? We are in the middle of an unbelievable opportunity of growth as a country, relative to so much of this critical infrastructure. Power is the cog in the wheel. Everybody knows it. Everybody's talking about it. The administration knows it. The president knows it. Everybody knows it.

While, you know, obviously, we're going to get a lot of noise, at the end of the day, issues like this have to be fixed because if not, it has, you know, much, much greater implications. I have a high level of confidence that, you know, the things that need to be done to fix issues like this will happen irrespective of that. That was a general comment for the industry. I feel good about our portfolio, but, you know, just seeing what's happening in Washington, seeing how they're reacting to certain things, I promise you that renewables are an incredibly important part of the story in the, in the near to midterm, and they understand that, and they will do what they have to do to make sure that that doesn't delay meaningful investment in this country.

Great. Thanks, José. Then as a follow-up on that topic, one thing I've been trying to track is this LNTP to NTP timeframe when it comes to solar and renewables. For you guys, what is that typical timeline with customer? When they saw an LNTP, that's typically six to seven months before you go to NTP. Or it maybe nine months? Just you know, EPC has kind of a different average based on geographic mix and so forth. Was curious where you goinna sit next.

Yeah. I think it depends on the customer, right? Some customers you have alliance agreement with, others you're just, you know, doing specific projects. I think that's vastly different between the two. You know, we don't go to backlog until financial close on the project, which, you know, a lot ofx is late in the cycle of that project. Some could be open longer than others, but, again, it's an important metric for us 'cause it gives us visibility into what we're gonna book into new work over time. You know, I don't think, you know, I would say the majority of it, if not all of it, is less than a year.

Great. Thanks very much. I'll pass it on.

Thanks, Phil.

Thank you. One moment for the next question. Our next question is coming from the line of Adam Thalhimer of Thompson Davis. Please go ahead.

Morning, guys.

Morning, Adam. How are you?

Good. Data center connectivity, you said that was tens of billions of dollars. Is that the labor component and therefore the opportunity for MasTec? Has that started or is that more 2027?

I think it started, right? I mean, we've announced in, you know, back, I wanna say maybe even at the end of 2024, our first award relative to, you know, a customer that had gone after that work and specifically won a project around it. I think this is a really long cycle. I think there's gonna be an enormous amount of work that happens across the country. Obviously, you know, data center construction is really a cycle that's just starting. We feel good about it. We think that is a, you know, massive TAM number. It's just a massive opportunity.

Quickly on pipeline, are you seeing book-and-burn projects that could come in for the back half of 2026, but just not putting that into guidance until you have them in hand?

I mean, you know, we have a portion of our business that's all book and burn, so we would expect. I mean, there is some book and burn built into our guidance. Thus, you know, our backlog levels, you know, don't fully support the full year anyway, right? We need some book and burn, but that's a normal part of the business and we will, you know, we definitely feel good about that. To the question, right, to the, I guess, broader question, which is, are opportunities for more book and burn to improve even what we're saying, I think the short answer to that is yes.

Thanks, José.

Thanks, Adam.

Thank you. One moment. Our next question is from the line of Chris Senyek of Wolfe Research. Please go ahead.

Hey, thank you. Good morning, José and Paul.

Good morning.

Good morning. I just wanted to ask, with President Trump approving Bridger Pipeline yesterday, like just beyond a specific project, do you see this approval approving project activity or just more de-risking project pipeline that's already in your funnel?

I think this president has been very vocal about his desire to see infrastructure built, especially pipelines. I think that, you know, if any project is brought to him that he has the potential to influence, he will. I think that's a good thing for the industry.

Okay, thanks. As a follow-up, can you just provide any color on the type of pipeline work that's been driving the margins? Like, is it pricing, execution, project mix, and how does that evolve as you return to peak pipeline revenues? Thank you.

Yeah, look, I don't think there was anything abnormal about our margin execution in Q1, right? We've had plenty of quarters where we've done as well. I think that's just a moment in time where, you know, you had good utilization, you had a lot of work, and you were able to perform it at a high level. You know, we're obviously not guiding to that for the balance of the year, but, you know, we would hope that we can continue to deliver on that. Again, utilization is a key driver there, but, you know, we had a good quarter and hopefully that'll continue.

Thanks. Congrats on the results.

Thanks, Chris.

Thank you. This concludes today's Q&A session. I would like to turn the call back over to José for closing remarks. Please go ahead.

Thank you. I'd just like to thank everybody for participating today. Again, to remind everybody, we've got our Investor Day on May 12th in New York. We hope you can make it, and we look forward to updating you on our second quarter call in a few months. Thank you.

Thank you all for participating in today's program. You may now disconnect.