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Centuri Holdings, Inc. (CTRI)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid top-line growth and improved gross margin: revenue rose 7.7% year over year to $724.1M and gross margin expanded 40 bps to 9.4% on strength in both Union and Non‑Union Electric; GAAP diluted EPS was $0.09 and adjusted EPS was $0.19 .
  • Guidance raised: FY25 revenue up to $2.70–$2.85B (from $2.60–$2.80B) and adjusted EBITDA narrowed to $250–$270M; net capex increased to $75–$90M, reflecting growth investments and fleet optimization initiatives .
  • Commercial momentum remains robust: ~$1.8B of bookings in Q2 and $3.0B in H1; backlog increased to ~$5.3B; book‑to‑bill was 2.3x in H1 2025 .
  • Capital structure and liquidity enhanced post‑quarter: revolver extended to 2030 and increased to $450M; Term Loan B extended to 2032 at improved pricing; net debt to adjusted EBITDA ratio was 3.7x at quarter‑end .

Potential stock reaction catalysts: revenue guidance raise, large bookings/backlog build, and balance sheet refinancings; near‑term debates center on EPS quality vs consensus, US Gas margin trajectory, and capex/fleet efficiency ramp .

What Went Well and What Went Wrong

What Went Well

  • Strong electric performance: Union Electric revenue +11% YoY, non‑union +24% YoY; consolidated gross profit +12% YoY, with margin improvement in Union Electric to 8.4% .
  • Bookings/backlog momentum: ~$1.8B Q2 bookings and $3.0B H1 bookings; backlog up to $5.3B; management expects to exceed 2025 book‑to‑bill target of 1.1x .
  • Management quote: “Strong momentum from our integrated commercial strategy resulted in approximately $1.8 billion in new awards during the quarter… Based on our strong commercial momentum… we are increasing our full‑year revenue guidance.” — CEO Christian Brown .

What Went Wrong

  • US Gas still mixed: Q2 US Gas revenue down 1.1% YoY; segment margin modest at 7.8%; H1 margin 2.2% impacted by Q1 weather and ramp timing, though management expects normalization .
  • Lower storm contribution and offshore wind wind‑down: non‑union margins diluted by lower storm restoration mix; offshore wind revenue decreased as projects wind down .
  • Higher SG&A: +39.9% YoY from separation and one‑time professional fees, incremental public company costs, and higher stock‑based compensation .

Financial Results

Consolidated performance vs prior periods

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$672.1 $550.1 $724.1
GAAP Diluted EPS ($)$0.14 $(0.20) $0.09
Adjusted Diluted EPS ($)$0.20 $(0.12) $0.19
Gross Margin %9.0% 3.7% 9.4%
Adjusted EBITDA ($USD Millions)$68.6 $24.2 $71.8
Adjusted EBITDA Margin %10.2% 4.4% 9.9%

Actual vs Wall Street consensus (Q2 2025)

MetricConsensusActualSurprise
Revenue ($USD Millions)$702.4*$724.1 +$21.7 (beat)
Primary EPS ($)$0.24*$0.09 (GAAP) −$0.15 (miss)

Values retrieved from S&P Global.*

Segment breakdown (Q2 2025 vs Q2 2024)

SegmentRevenue Q2 2024 ($MM)Revenue Q2 2025 ($MM)Gross Profit Q2 2024 ($MM)Gross Profit Q2 2025 ($MM)
U.S. Gas$340.7 $336.8 $25.2 $26.4
Canadian Gas$46.7 $55.1 $7.0 $9.5
Union Electric$164.2 $182.2 $12.1 $15.4
Non‑Union Electric$120.5 $149.9 $16.2 $16.5
Total$672.1 $724.1 $60.5 $67.8

KPIs and balance sheet

KPIQ1 2025Q2 2025
Bookings ($USD Billions)~$1.2 ~$1.8
Backlog ($USD Billions)$4.5 $5.3
Book‑to‑Bill (H1)2.2x 2.3x
Net Debt ($USD Millions)$857.9 $909.6
Net Debt / TTM Adj. EBITDA (x)3.5x 3.7x
Net Capex (Quarter, $USD Millions)$19.4 $19.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)FY 2025$2.60–$2.80 $2.70–$2.85 Raised
Adjusted EBITDA ($USD Millions)FY 2025$240–$275 $250–$270 Narrowed
Net Capital Expenditures ($USD Millions)FY 2025$65–$80 $75–$90 Raised

Management noted assumptions: modest gas growth with margin improvement toward historical norms (7%+), double‑digit electric growth (crew counts/work hours, bid projects), storm restoration at 2021–2023 three‑year average, and offshore wind modest backlog ($40M) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
Sales pipeline & bookingsPipeline +30% in H2 2024; $221M Q4 bookings; aim >1.1x book‑to‑bill in 2025 ~$1.2B Q1 bookings; pipeline near $12B; backlog $4.5B; targeting >1.1x book‑to‑bill ~$1.8B Q2 bookings; H1 $3.0B; backlog $5.3B; pipeline near $14B Strengthening
US Gas marginsBelow expectations in 2024; actions to renegotiate/exit underperforming contracts; normalize to ~7–7.5% in 2025 Q1 weather hit; March recovery; expect stronger H2 Progressing; Q2 margin 7.8%; continued initiatives to enhance Improving gradually
Offshore windWind‑down; ~$40M 2025 backlog; ~$25M 2026; no new pipeline focus Same stance maintained Continued wind‑down; mix shift benefits core union electric De‑emphasized
Storm restoration2024 high ($137M); 2025 guidance assumes 3‑yr average (~$74M) Q1 contribution ~10% of non‑union revenue; core utilization the driver Lower storm mix dilutes non‑union gross margin vs 2024 Normalizing lower
Capital efficiency & fleetPlan to rebalance buy/lease, reduce working capital, improve AR/DSO Ongoing; free cash flow improvement Leasing partners set; execution in H2; no material margin change expected Executing
Data centers & industrialFocus on substation/industrial; data center opportunities Pipeline includes data centers; strategic bids ~20% of project pipeline in distributed power/data centers Expanding

Management Commentary

  • “Our second quarter performance reflected solid execution across all business segments… Strong momentum from our integrated commercial strategy resulted in approximately $1.8 billion in new awards during the quarter… we are increasing our full‑year revenue guidance.” — Christian Brown, President & CEO .
  • “On a trailing twelve month basis, our net debt to adjusted EBITDA ratio was 3.7x… we extended our revolver maturity to 2030… and our $800M term loan B maturity to 2032 at a modestly improved interest rate… eliminating legacy change of control provisions.” — Gregory Izenstark, CFO .
  • “Backlog that we have as we go into the second half… is at a higher margin than what we’ve delivered in the first half… We expect second half margins to improve across all the businesses.” — Christian Brown (Q&A) .
  • “The pipeline is… just shy of $14 billion… about two thirds… new project work and about one third… MSA renewals… about 20% of the project work is distributed power or data centers.” — Christian Brown .

Q&A Highlights

  • Margin cadence: Management expects H2 margins higher across segments given backlog quality and mobilization; improved pricing and differentiation to support margin uplift .
  • Fleet strategy: Leasing partners engaged; gradual implementation; aim to offset potential EBITDA pressure via pricing and utilization; expect no material long‑term margin change .
  • Pipeline composition: ~2/3 strategic bid work vs 1/3 MSA renewals; ~20% distributed power/data center opportunities; average contract size < $20M to maintain risk profile .
  • Guidance cadence: Revenue midpoint implies modest H2 growth vs tough storm comps in 2024; offshore wind rundown offset by core business strength .

Estimates Context

  • Q2 2025 revenue beat consensus ($724.1M vs $702.4M*) while GAAP EPS missed ($0.09 vs $0.24*). Number of estimates: revenue (7), EPS (6)* .
  • Q1 2025 also beat revenue consensus ($550.1M vs $537.6M*) with adjusted loss per share better than expected; Q3 consensus currently embeds continued margin recovery and higher volume*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Near‑term setup: Revenue guidance raised; bookings/backlog robust; H2 margin expansion expected as projects hit “full flight.” Consider revenue upside vs EPS quality given non‑GAAP adjustments .
  • Electric strength is structural: Crew additions, higher work hours under MSAs, and industrial/substation bid work underpin growth; data center exposure building in pipeline .
  • US Gas margin normalization in focus: Actions on pricing, contract renewals, and performance management should drive progress toward historical levels; watch winter weather sensitivity and execution .
  • Balance sheet flexibility improved: Extended maturities, larger revolver, and lower pricing create optionality for growth investments; ND/Adj EBITDA at 3.7x with plan to improve by year‑end .
  • Capex and fleet optimization: Higher net capex supports growth, while leasing mix aims for 15–25% efficiency gains over time; monitor conversion into free cash flow .
  • Storm/Offshore wind normalization: 2024’s outsized storm tailwind won’t repeat; offshore wind remains de‑emphasized—core execution is the driver of margin trajectory .
  • Trading lens: Near‑term catalysts include contract awards, margin prints vs expectations, and capex/fleet milestones; key risks include weather impacts, customer budget dynamics, and mix shifts .