MI
MASTEC INC (MTZ)·Q3 2025 Earnings Summary
Executive Summary
- Record Q3 revenue of $3.97B (+22% YoY) with broad-based segment growth; adjusted EPS $2.48 and adjusted EBITDA $373.5M, all exceeding company guidance and Wall Street consensus; backlog reached a record $16.8B with ~1.1x book-to-bill .
- Communications delivered 33% YoY revenue growth and 11.3% EBITDA margin (+40 bps YoY; +140 bps QoQ), supported by broadband fiber builds, middle‑mile projects, and hyperscaler/data center demand tied to AI .
- Power Delivery grew revenue 17% and EBITDA 21% YoY, but margins (9.4%) were below low double-digit forecasts due to project mix and lack of storm work; Q4 outlook cut for GreenLink timing (permit delays), partially offset by a second-largest T&S award starting mid‑2026 .
- Pipeline revenue +20% YoY and 15.4% EBITDA margin (best YTD), with backlog +124% YoY and 1.2x book-to-bill; management guided to further margin improvement in Q4 and strong multi‑year cycle ahead (2026/2027+) .
- FY25 guidance raised: revenue to $14.075B, adjusted EPS to $6.40; catalysts: beats vs consensus, backlog trajectory, margin progression, and visibility on large projects (pipeline, transmission) .
What Went Well and What Went Wrong
What Went Well
- All segments posted double-digit revenue growth; consolidated adjusted EPS ($2.48) beat guidance and consensus; backlog hit a record $16.8B with ~1.1x book‑to‑bill .
- Communications margins expanded: “Third quarter revenue easily exceeded our planned contribution... margins reached double digits... 11.3% EBITDA margin leaves room for improvement... significant margin opportunities looking forward,” citing AI-driven fiber demand and middle‑mile builds .
- Clean Energy & Infrastructure: margins improved to 8.5% (+100 bps YoY) with EBITDA +36% YoY; “we have more than doubled our EBITDA from the segment versus the first quarter,” supported by renewables and industrial closeouts .
What Went Wrong
- Power Delivery margin (9.4%) below forecast due to mix and limited storm work; Q4 outlook trimmed on GreenLink permit timing—“lower power delivery revenue... isolated delays” .
- Free cash flow ($36M) and CFO ($89M) were below expectations as working capital rose with revenue ramp and higher capex to support growth; DSOs worsened to 69 days but expected to normalize to mid‑60s .
- Pipeline margins still below prior-year due to mix and ramp, despite QoQ improvement; “comparison to the prior year... challenged by... prior year outcome positively impacted by project closeouts” .
Financial Results
Segment breakdown (revenue, EBITDA, margin):
KPIs:
Guidance Changes
Segment guidance commentary:
- Communications FY25 margin guide reduced slightly to reflect growth investments (while margins improved YoY/QoQ) .
- Power Delivery Q4 revenue trimmed due to GreenLink permit timing; management expects higher activity in 2026 and announced a second‑largest transmission/substation award to offset .
- Pipeline margins guided higher in Q4 with strong multi‑year revenue potential (double‑digit growth in 2026; substantial cycle in 2027+) .
Earnings Call Themes & Trends
Management Commentary
- “Revenue for the quarter was just shy of $4 billion, a 22% year‑over‑year increase... adjusted earnings per share was $2.48... backlog at quarter end was $16.8 billion... we exceeded guidance across each of our revenue, EBITDA, and EPS metrics” – Jose Mas (CEO) .
- Communications: “significant and growing capital investments... to enable enhanced artificial intelligence applications... middle‑mile broadband build‑outs... Hyperscaler CapEx associated with the data center build‑out” .
- Power Delivery: “impacted... by a lack of storm‑related restoration... lower‑than‑planned volume from our GreenLink project due to permitting‑related delays... awarded its second‑largest project ever... starting mid‑2026” .
- Clean Energy: “we have more than doubled our EBITDA from the segment versus the first quarter... renewables demand remained very healthy... backlog... included a nine‑straight sequential increase” .
- Pipeline: “best margin performance for the year... expect our fourth quarter to be the highest margin quarter... total pipeline backlog increased 8% sequentially to $1.6 billion... book‑to‑bill 1.2x” .
- FY25 outlook: “Adjusted EPS is forecast to be $6.40, up 62% versus 2024... total liquidity of approximately $2 billion and net leverage of 1.95x” – Paul DiMarco (CFO) .
Q&A Highlights
- GreenLink impact: “Difference between low and high end of our Q4 range was about $30M of EBITDA… coming out of our power delivery business... we’re hoping the time schedule doesn’t change from a completion perspective” .
- 2026 EPS & growth: “Consensus today is 10% revenue growth… >20% EBITDA growth… north of $8 a share… we’re really comfortable with where consensus sits” .
- Communications margins: “Margins improved 40 bps YoY to 11.3%… showing almost 100 bps improvement YoY in Q4… market is really hot… BEAD now expected to have a significant impact in 2026” .
- Pipeline visibility (“shadow backlog”): “We have commitments… final contract documents may not be completed and thus not reported... we now see the ability to exceed historical high revenue levels... beyond 2026” .
- Cash flow mechanics: “Forecasting revenue to contract sequentially in Q4… expect DSOs to come back down to mid‑60s… drives the release of working capital” .
Estimates Context
Consensus vs actual (SPGI; Primary EPS and Revenue):
Values retrieved from S&P Global.
- Q3: EPS beat by ~$0.18 ($2.48 vs $2.302*), revenue beat by ~$59M ($3,966.9M vs $3,907.8M*). EBITDA consensus was ~$369.4M* vs company adjusted EBITDA $373.5M (note definitions may differ) .
Key Takeaways for Investors
- Broad-based beat with strong backlog supports near‑term earnings; expect seasonal working capital release in Q4 to improve cash generation .
- Communications momentum (AI/data center fiber, middle‑mile) and margin expansion underpin 2026 growth; investments depress near‑term margins but build capacity .
- Power Delivery’s GreenLink timing headwind is transitory; new large T&S award improves 2026 visibility; PD margins should trend toward low double‑digits .
- Pipeline is entering a multi‑year upcycle; Q4 margin improvement expected with double‑digit revenue growth in 2026 and substantial expansion in 2027+ (“shadow backlog”) .
- FY25 guide raised (revenue, adj EPS); management comfortable with 2026 consensus implying >$8 EPS and >20% EBITDA growth, suggesting estimate upward revisions are plausible post‑Q3 beat .
- Balance sheet flexibility (≈$2B liquidity, ~1.95x net leverage) supports organic capacity expansion, selective tuck‑ins, and opportunistic buybacks .
- Tactical: Near term, watch Q4 cash flow/DSO normalization and PD/GreenLink permit progress; medium term, monitor large pipeline/T&S contract conversions and comms BEAD rollout into 2026 .
Other Q3 2025 Press Releases
- MasTec Reports Third Quarter 2025 Results and Updates 2025 Financial Guidance (earnings PR) .
- MasTec Schedules Third Quarter 2025 Earnings Conference Call .
- Management to present at Morgan Stanley Investor Conference (investor relations) .
- Partner/industry releases posted on IR page (e.g., Scout Clean Energy blade signing; 4M Analytics reseller partnership), not material to quarterly financials .