Sangita Jain • KeyBanc Capital Markets

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CEO Daniel Peyovich confirmed that the Q2 backlog includes all 'inside defense' awards to date, which consist of new projects in different locations. He described the significant new award as a multi-state, multi-year agreement with a long-term customer for both fiber-to-the-home construction and ongoing service and maintenance.

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CEO Dan Peyovich stated the revised outlook is achievable, reflecting Q1's outperformance and the scale of their project portfolio. CFO H. DeFerrari addressed the second question, reiterating that free cash flow is a priority and noting DSO improvement in the quarter. He confirmed the full-year net CapEx guidance remains unchanged, indicating no immediate shift in capital intensity.

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President and CEO Daniel Peyovich stated there was nothing significant to read into the headcount change, as the company uses a variable mix of its own labor and subcontractors. He confirmed that while their pre-existing wireless business does some equipment replacement, the primary focus is currently on executing the large replacement program from the recent acquisition.

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President & incoming CEO Daniel Peyovich noted the strong, multi-year relationship with GigaPower and explained its appearance in the top 10 was due to the natural movement of customers in the rankings. Peyovich declined to discuss specific pricing theory but emphasized the significance of the broader data center opportunity, alongside fiber-to-the-home and BEAD-funded projects, as key growth drivers.

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President & CEO Christian Brown detailed that the pipeline is roughly two-thirds new project work and one-third MSA renewals, with about 20% of the project work related to distributed power and data centers. He also stated the strategic fleet goals are a 50/50 buy/lease mix and 15-25% efficiency savings. EVP & CFO Gregory Izenstark added that the higher CapEx supports strong growth in the electric business without deviating from their planned financing mix.

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President and CEO Christian Brown stated that no radical actions are necessary and that the company is on track to meet its goals through execution, noting the gas business has already bounced back to expected levels. Regarding new MSAs, he confirmed that the wins were a result of both displacing underperforming competitors and securing work from increased customer capital spending.

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President and CEO Christian Brown explained that the immediate 3-6 month focus is on organic growth within the core business, with a broader, long-term strategy to be unveiled toward the end of the year. CFO Greg Izenstark added that the high end of the guidance range is achievable through faster crew onboarding and new bid wins, while the low end accounts for potential project delays or cancellations. Storm activity remains a wildcard.

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CFO Greg Izenstark stated the offshore wind backlog is approximately $100 million, extending into early 2026, and that it was too early to comment on election impacts. Interim CEO Paul Caudill addressed the gas MSA environment, emphasizing that the company's priority is to grow and diversify its customer base to mitigate concentration risk, rather than depending on specific regulatory outcomes.

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Chair & CEO Bob Pragada explained that data center work has expanded from design to include power, water, and full program delivery, highlighting the transformational NVIDIA partnership for a reference design. CFO Venk Nathamuni added that the backlog is well-balanced, with faster-burn projects in Life Sciences and Advanced Manufacturing providing momentum for FY26.

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CFO Venk Nathamuni confirmed that I&AF is expected to see the largest margin improvement, driven by mix and lapping the impact of the JV matter. Chair and CEO Bob Pragada clarified that pursuing large, complex projects is part of the company's long-standing pedigree, not a new strategy, and that they maintain a balanced portfolio of project durations.

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Chair and CEO Bob Pragada noted that PA Consulting's revenue ramp is visible in its pipeline, with growth expected as major U.K. public sector projects commence. CFO Venk Nathamuni stated that the top capital allocation priority is organic growth, followed by returning cash to shareholders via buybacks and dividends, with M&A being an option but not an immediate focus.

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CEO Bob Pragada clarified that while international infrastructure markets are inflecting positively from a flatter period, the company still expects the U.S. to grow faster in the upcoming year, based on strong pipeline and backlog data. Regarding talent, Pragada described the workforce as highly 'deployable' rather than 'fungible,' emphasizing that the global talent pool works on projects around the world in a balanced model that does not map directly to regional revenue streams.

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CEO José R. Mas clarified that wireline now constitutes about 60% of the Communications business and is growing strongly, while the wireless business (about 40%) also has significant growth opportunities, including the multi-year Ericsson project. He stated that the necessary investments to ramp up for demand have already been made in recent quarters and he does not expect a different level of investment going forward.

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CEO Jose Mas explained that the strong pipeline bookings were broad-based across nearly a dozen projects, not reliant on a single large contract, and he expects backlog to continue growing. Regarding capital allocation, he reiterated that the primary focus remains on organic growth, but MasTec is opportunistically evaluating tuck-in acquisitions in key geographies and with certain customers, noting a more reasonable M&A market.

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CEO Jose Mas explained that the strong Clean Energy margins were driven by solid execution, not one-offs, and noted the team delivered on internal projections that were more optimistic than public guidance. He added that this segment has significant potential to outperform in 2025. On data centers, he stated that while activity is growing, it was not a major driver of the Q4 backlog increase.

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CEO Jose Mas expressed optimism for a normalization of distribution spending in the Power Delivery segment, which, combined with a major transmission project, could be a significant catalyst in 2025. He identified skilled labor as the most significant long-term industry constraint and asserted that MasTec's investment in training and workforce development provides a key competitive advantage.

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CEO Dan Batrak stated that he expects the 'book and burn' environment for federal work to continue into fiscal year 2026, potentially leading to a flat or even declining backlog in Q4 without impacting the revenue outlook. He also noted that disaster recovery revenue from recent fire and hurricane events would be 'quite minimal' in the fourth quarter, as the primary response work has been largely completed ahead of schedule.

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CEO Dan Batrack stated that without the lower-margin USAID work, the company's overall margin profile now has a higher baseline and is expected to grow slightly faster than the previously guided 50 basis points annually. He clarified that the remaining $220 million in USAID backlog, primarily for work in Ukraine, is expected to be recognized relatively evenly in Q3 and Q4 of the fiscal year, though he cautioned the situation remains highly variable.

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CEO Dan Batrack stated that $40-$50 million in incremental revenue from recent California fires has been added to the 2025 guidance, offsetting the USAID hold. He noted this work is higher margin, which supported the increase in the EPS guidance range. CFO Steven Burdick addressed M&A, confirming a strong pipeline focused on acquiring technical leaders in water and environmental sectors to make Tetra Tech 'better, not just bigger,' across its key geographies.

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CEO Dan Batrack stated the guidance range is primarily influenced by the outlook for U.S. federal international development (USAID) funding, with the low end assuming a reduction and the high end assuming continued strength. He also confirmed it is viable to pull forward work, noting they have already received requests for sole-source task orders and that an unusual increase in Q1 backlog would reflect this activity.

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President, CEO & Director Richard Swartz clarified that the Xcel MSA is for new, additional work and did not involve any displacement. Regarding the C&I backlog, Mr. Swartz explained that backlog is inherently "lumpy" due to the long negotiation timelines for large-scale projects, and the sequential change reflects the normal progression of ongoing work.

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SVP and CFO Kelly Huntington explained that strong Q1 cash flow resulted from collecting on reduced pending change orders and retainage from late 2024. She cautioned that future cash flow could face headwinds from lower DSOs and fewer opportunities for overbilling. President and CEO Richard Swartz added that capital allocation is a balance between growth and shareholder returns. Regarding margins, Swartz affirmed the company is on track to be in the mid-range of its 7% to 10.5% T&D margin target by year-end.

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President and CEO Richard Swartz stated that bidding activity is strong across all core markets, particularly in data centers, hospitals, and transit. He confirmed that potential tariffs are a frequent discussion point and that new contracts are including provisions to mitigate this risk. Swartz clarified that the recent increase in T&E work over fixed-price was a result of the specific project mix in the quarter, not a long-term strategic change. CFO Kelly Huntington added that the revenue decrease in fixed-price contracts was also influenced by the wind-down of large, fixed-price clean energy projects in the Transmission & Distribution (T&D) segment.

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Executive Richard Swartz stated that the solar portion of the backlog is declining as the company remains selective, and he confirmed no new problem projects have been identified. CFO Kelly Huntington projected Q4 T&D revenue to be flat to Q3, with lower clean energy revenue offset by core growth. She reiterated that margins should be in the mid-range, excluding problem projects, but risks remain until completion. Regarding cash flow, she attributed the Q3 strength to the timing of project starts and completions and noted an outlook for stronger cash flows due to anticipated profitability increases.

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President & CEO Duke Austin described the Boardman to Hemingway project's contribution to backlog as "meaningful" but did not quantify it. Regarding safe harbor rules, he expressed confidence, stating that any changes that accelerate project timelines would actually benefit Quanta, as customers would seek more certainty, playing to Quanta's strengths in execution and delivery.

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President and CEO Duke Austin confirmed Quanta has the capability for natural gas generation projects but would only pursue them under a low-risk model, avoiding technology risk on new turbines. CFO Jayshree Desai stated the book-to-bill ratio was due to normal timing, not a strategic shift. Duke added that some businesses, like Cupertino, have inherently faster book-to-bill cycles.

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President & CEO Earl Austin clarified that the acquired civil business is based in the Southeast but has the engineering and operational capabilities to expand nationally. He confirmed there are significant synergies with Cupertino's work, particularly with data center expansions in Texas and the Southeast. He noted the acquisition's capabilities are so complementary that its entire capacity could be absorbed by internal projects, though it will continue to serve external clients as well.

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President and CEO Earl "Duke" Austin stated that while DOE backing is helpful, projects still face significant permitting and equipment availability hurdles. On the acquisition, he explained it produces a smaller class of transformer than PTTI but is a strategic buy to supplement their offerings, cross-sell to clients, and de-risk projects by securing U.S.-based manufacturing capacity amid supply chain uncertainty.

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EVP & CFO William George stated the company prefers measured, incremental capacity additions while focusing on productivity in existing locations. He noted a third location is a long-term consideration but not a current high priority. Regarding legislation, he acknowledged bonus depreciation helps but is not a major driver given the already high demand.

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EVP & CFO William George responded that the company favors a measured, incremental approach to adding modular capacity, focusing heavily on improving productivity and automation in existing facilities. He noted that while a third location is a long-term consideration, it is not a high priority. Regarding tax changes, Mr. George stated that while bonus depreciation is helpful, it is not a significant driver of demand, which already far outstrips the company's capacity.

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President and CEO Stuart Bradie clarified there is no single metric for the HomeSafe ramp, but customer satisfaction is a key area of focus for TRANSCOM. He emphasized that the program has proven its operational capability and that move volume will grow as the supply chain expands. He also stated clearly that KBR has seen no impact to date from government efficiency initiatives, noting the company is well-aligned with current budget priorities.

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EVP & CFO Mark Sopp clarified that the HomeSafe ramp is sequential; a delay in the domestic phase would have a carryover effect, pushing out the international phase. President & CEO Stuart Bradie described the Mura partnership as an exciting pathway to growth, noting KBR has exclusive licensing rights, proprietary equipment offerings, and an ownership stake, creating multiple potential economic benefits as the plants achieve commercial operations.

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President and CEO Stuart Bradie clarified that while KBR could theoretically support Aramco in Asia, he believes the investment is strategically tied to decarbonization and value-add initiatives within Saudi Arabia itself. He then corrected the premise of the second question, explaining that KBR secured the overarching coordinating PMC role on the broader LTC program, which is a very prominent, multiyear contract that fully supports the company's long-term targets, despite the suspension of one specific cracker project.

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CEO Tom McCormick stated that while there may have been a slight benefit from safe-harboring, clients remain well-funded and are proceeding with projects, adopting a 'wait and see' approach to policy changes which would likely impact 2026. He confirmed the gas power projects are located in Texas, Oklahoma, and California, with sizes ranging from $70 million to $300 million, and are all currently underway.

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Chairman and CEO David Constable explained that Fluor is in 'detailed negotiations' with its strategic investor for a long-term monetization and revenue stream for NuScale, emphasizing the need for patience to get the deal right for the long term. Regarding government contracts, Constable and COO James Breuer stated they do not anticipate significant impacts, as Fluor's work for the Department of Energy and Department of Defense is tied to mission-critical national security and energy programs that are expected to continue.

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Chairman and CEO David Constable clarified that Fluor is pursuing near-term programmatic data center opportunities, supported by a master agreement with a major tech client. He noted that modularization capabilities developed for this client provide a significant competitive advantage. Regarding Intel, Constable explained that while one mega-project was paused, the relationship remains strong, and Fluor is actively engaged on other work at the same site and pursuing new tool install projects.

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CEO Troy Rudd described AECOM's role in disaster recovery as a two-phase process of immediate support followed by long-term resiliency work, drawing on experience from over 700 climate-related events. CFO Gaurav Kapoor confirmed the expectation that International margins will continue to outpace Americas' margin growth, as the segment is starting from a lower base and has significant room for improvement, though the primary focus remains on enterprise-level margin expansion.

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President Lara Poloni attributed the backlog strength to broad-based demand in the U.K., Australia, and the Middle East, highlighting renewed U.K. budget certainty and high win rates on AMP8 water frameworks. CFO Gaurav Kapoor noted that while the International segment will lead margin improvement, the overall enterprise margin expansion is guided at 30 bps for FY25 due to ongoing, high-return organic investments that are expensed through the P&L. He expressed confidence in exceeding the 17% long-term margin target.

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