Sign in

You're signed outSign in or to get full access.

MG

MYR GROUP INC. (MYRG)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was solid with broad-based improvement: revenue $0.834B (+2.2% YoY), diluted EPS $1.45 (+29% YoY), gross margin 11.6% (+100 bps YoY). Backlog rose to $2.64B (+8.9% YoY), signaling continued demand across electrification and core C&I end-markets .
  • MYRG delivered clear beats versus S&P Global consensus: EPS $1.45 vs $1.20* and revenue $0.834B vs $0.786B*. Strength was driven by higher contractual margins, favorable change orders, productivity, and a favorable job closeout; partially offset by labor/project inefficiencies and unfavorable change orders . Values retrieved from S&P Global.
  • Segment mix: C&I revenue grew 14.4% YoY to $0.372B with operating margin 4.7%; T&D revenue declined 5.8% YoY to $0.462B but operating margin improved to 7.8%, aided by fewer inefficiencies and strong execution under MSAs (~60% of T&D) .
  • Cash generation and capital allocation were notable: operating cash flow $83M and free cash flow $70M; company exhausted its $75M repurchase authorization in Q1 (639k shares at $117.33). Management prioritizes organic growth and M&A; no new buyback announced yet .
  • Near-term stock reaction catalysts: visible beat on EPS/revenue, margin expansion, backlog growth, and strong FCF; tempered by solar-related headwinds and tariff uncertainty affecting cost profiles on fixed-price C&I work .

What Went Well and What Went Wrong

What Went Well

  • C&I strength and mix quality: C&I revenue +14.4% YoY; operating margin 4.7% vs 3.5% LY; drivers included higher contractual margins, favorable change orders, JV results, job closeout, and better productivity .
  • Margin expansion and execution: consolidated gross margin rose to 11.6% (vs 10.6% LY), with positive contributions from favorable change orders, productivity and a favorable job closeout. T&D operating margin improved to 7.8% (vs 6.1% LY) on fewer inefficiencies .
  • Backlog and demand signals: backlog reached $2.64B; management highlighted healthy bidding and electrification drivers; MSAs represented ~60% of T&D revenue, reinforcing recurring demand. Quote: “Bidding activity is healthy… investments being made to meet the growing electrification demand” .

What Went Wrong

  • T&D top-line pressure from clean energy selectivity: transmission revenue declined by $44M YoY; overall T&D revenue -5.8% YoY as MYRG remained selective on clean energy projects .
  • Labor and project inefficiencies persisted: margin gains were partially offset by higher labor-related costs, inefficiencies, and unfavorable change orders (ongoing headwind to perfect execution) .
  • Tariff and solar headwinds: management cited tariff uncertainty as a potential margin/cost risk on fixed-price C&I contracts; solar within T&D continues to be a headwind in 1H25 before easing later in the year .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Billions)$0.888 $0.830 $0.834
Diluted EPS ($)$0.65 $0.99 $1.45
Gross Margin (%)8.7% 10.4% 11.6%
Operating Income Margin (%)2.3% 3.6% 4.1%
Segment Revenue ($USD Billions)Q3 2024Q4 2024Q1 2025
Transmission & Distribution (T&D)$0.482 $0.450 $0.462
Commercial & Industrial (C&I)$0.406 $0.380 $0.372
Segment Operating Income Margin (%)Q3 2024Q4 2024Q1 2025
T&D OI Margin %3.6% 6.7% 7.8%
C&I OI Margin %5.0% 3.9% 4.7%
KPIsQ3 2024Q4 2024Q1 2025
Backlog ($USD Billions)$2.60 $2.58 $2.64
T&D Backlog ($USD Billions)$0.799 $0.818 $0.873
C&I Backlog ($USD Billions)$1.80 $1.76 $1.77
EBITDA ($USD Millions)$37.166 $45.491 $50.183
Cash from Operations ($USD Millions)$35.625 (Q3) $21.119 (Q4) $83.286
Free Cash Flow ($USD Millions)$17.952 $8.815 $70.220
Borrowing Availability ($USD Millions)$375.5 $354.8 $379.4
Working Capital ($USD Millions)——~$230
Funded Debt ($USD Millions)$93.186 $74.381 $87.159
Share Repurchases—Program approved $75M 639k shares @ $117.33; $75M spent
Estimates vs Actuals (Q1 2025)ConsensusActual
Primary EPS$1.20*$1.45
Revenue ($USD Billions)$0.786*$0.834

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
T&D Operating Income Margin TargetFY 2025Mid-range of 7%–10.5% (implied prior framework) Management expects mid-range by year-end Maintained
Core T&D Revenue Growth (ex-solar)FY 2025Higher single-digit growth (prior commentary) Higher single-digit ex-solar; solar remains a headwind in 1H25 Maintained (with timing)
CapEx as % of RevenueFY 2025Mid-2% benchmark Mid-2% benchmark; timing-related variability Maintained
Share Repurchase AuthorizationFY 2025$75M authorized (announced 2/26/25) $75M completed; no new program announced yet Paused after exhaustion
Tax RateFY 2025Not providedNo formal guidance; Q1 effective tax rate 28.9% N/A
DividendsFY 2025None providedNone discussedN/A

Note: MYRG does not provide formal quantitative revenue/EPS guidance; management offers qualitative guardrails on margin profile, growth, and capital intensity .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2025)Trend
Data centers / AI demandQ3’24 press: core C&I improved; Q4’24 press: robust project opportunities (grid/transit/tech) Verbal award: $90M data center (Colorado); expect expansions to meet AI demand Strengthening pipeline
Tariffs / macro cost riskNot explicit in Q3/Q4 press releasesTariffs could impact fixed-price C&I margins; active client negotiations; newer contracts with stronger language Heightened vigilance
Clean energy selectivity (solar)Q3/Q4 press: clean energy project roll-offs pressured T&D Continued selectivity; solar headwind persists in 1H25; core T&D up high-single-digit YoY Headwind moderating through 2025
Electrification and grid investmentsQ3/Q4 press: steady backlog and electrification demand Backlog $2.64B; references PJM ($5.9B) and MISO ($6.7B) plans; healthy bidding Structural tailwind
Capital allocationQ4’24: $75M repurchase program announced $75M buyback exhausted in Q1; priority on organic growth and M&A; nimble on future buybacks Shift to growth/M&A

Management Commentary

  • CEO (prepared remarks): “Bidding activity is healthy in both business segments and is reflective of the investments being made to meet the growing electrification demand” .
  • CFO (financial review): “Gross margin was also positively impacted by favorable change orders, better-than-anticipated productivity and a favorable job closeout” .
  • T&D COO: “Utility market continues to see opportunities such as the PJM interconnection approval of $5.9 billion in new transmission projects… MISO… tranche 2.1 plans of $6.7 billion” .
  • C&I COO: “We’re pursuing exciting opportunities for sizable data center projects this year… expect some data center contracts already in place to increase due to project expansion to meet the growing demand for artificial intelligence” .

Q&A Highlights

  • C&I pipeline and macro: Management sees active client engagement with no pullback despite tariff/inflation discussions; outlook “points positive” .
  • Capital allocation: $75M buyback completed; priorities are organic growth and acquisitions; nimble on future buybacks but none announced now .
  • Free cash flow sustainability: Q1 strength tied to reductions in pending change orders ($30M) and retainage ($40M) in late-2024; cautions on DSO headwinds and MSAs mix; no simple FCF conversion rule for near term .
  • Margins trajectory: Targeting mid-range of 7%–10.5% margin profile by year-end (refers to T&D operating margin framework) .
  • Tariffs impact: Potential margin impact on fixed-price C&I work; contractual protections improving; monitoring closely .
  • Solar headwind roll-off: Solar share of T&D declined through 2024 (15% → 12% → 10% → 4% in Q4) and further declined in Q1’25; core T&D growing high single digits YoY .

Estimates Context

  • Q1 2025 results exceeded Wall Street consensus: EPS $1.45 vs $1.20* (beat ~21%), revenue $0.834B vs $0.786B* (beat ~6%) with 6 estimates underpinning consensus for both EPS and revenue*. Values retrieved from S&P Global.
  • Implications: Expect upward revisions to 2025 profitability/margin assumptions for core T&D and C&I; caution that solar headwinds and tariff-related cost pressure may temper second-quarter growth/margin assumptions .

Key Takeaways for Investors

  • MYRG delivered a clear beat on EPS and revenue with margin expansion driven by higher-quality project mix, favorable change orders, and productivity — supportive of near-term multiple stability .
  • Backlog rose to $2.64B, and sector tailwinds (PJM/MISO) plus MSAs (~60% of T&D revenue) provide visibility; C&I demand buoyed by data centers (AI), healthcare, and industrial .
  • Solar headwinds are fading into the second half; core T&D is tracking high single-digit growth YoY, which should support margin continuity in the mid-range of the 7%–10.5% framework by year-end .
  • Strong FCF in Q1 (helped by working capital collections) and low leverage (funded debt-to-EBITDA 0.68x) create optionality for M&A and opportunistic buybacks (though none newly authorized yet) .
  • Watch tariffs and fixed-price C&I contracts; management is tightening language, but headline volatility may introduce cost risk and timing friction .
  • Near-term trading setup: positive surprise factors (beat, margins, backlog, FCF) vs. macro cost/tariff headline risk; Q2 likely modest given solar drag, with better H2 trajectory .
  • Medium-term thesis: electrification/grid modernization and AI-driven data center build-outs underpin sustained demand; MSAs and disciplined project selectivity should continue to improve margin quality .

Additional data references:

  • 8‑K/press release: Q1 2025 results, segment mix, margins, backlog, cash flow .
  • Prior quarters: Q3 2024 and Q4 2024 earnings releases for trend comparison .
  • Earnings call: qualitative guidance, operational commentary, and Q&A detail .