Centuri Holdings (CTRI) Q1 2026 earnings call transcript

Thank you, Liz, and hello, everyone. Yesterday, we issued and posted to Century Holdings' website our first quarter earnings release and investor presentation. In addition, we have posted to the website the Vision 1 Century presentation that will be referenced during this call. Please note that on today's call, we will address certain factors that may impact this year's earnings and provide longer-term guidance.

Some of the information that will be discussed today contains forward-looking statements within the meaning of the private security litigation reform act. These statements are as of today's date and based on management's assumptions and are subject to several risks and uncertainties, including uncertainties surrounding the impacts of future economic conditions and regulatory approvals. A cautionary note, as well as a note regarding non-gap measures, is included in yesterday's press release in the investor presentation and in our filings with the Securities and Exchange Commission, which we encourage you to review.

Also provided are reconciliation of our non-gap measures to related gap measures. These risks and uncertainties may cause actual results to differ materially from statements made today. We caution again placing undue reliance on any forward-looking statements, and we assume no obligation to update any such statement except as required by law. Today's call is also being webcast live and will be available for replay in the investor relations section of our website shortly after the completion of this call.

On today's call, we have Chris Brown, President and Chief Executive Officer, and Greg Eisenster, Chief Financial Officer. In a moment, Chris will discuss our strategy, but first I'll turn the call to Greg to review the first quarter of this call soon, Greg.

Thank you, Nate, and thank you everyone for joining us today. In the first quarter, we delivered exceptional results highlighted by significant year-to-year growth, including revenue of 31 percent, based revenue of 29 percent, gross profit of 76 percent, and based gross profit of 96 percent. For the quarter, we reported revenue of $723 million, and based revenue of $689 million, gross profit of 36 million, and based gross profit of 28 million.

Our base gross profit margin was 4.1 percent for the quarter, up to 2.7 percent last year, and on a trailing 12 month basis was 8 percent, 100 basis point increase from the same measure last year.

Net loss attributable to Tom Stock in the quarter was $9 million, or 9 cents per share, compared to a loss of $18 million, or 20 cents on a per share basis last year. But just to net loss in the first quarter was $2 million, or 2 cents on a per share basis, compared to a loss of $11 million, or 12 cents per share in the same quarter last year.

And our adjusted even up for the quarter was $33 million, representing a 35 percent increase from last year. Net cash used in operating activities for the quarter was $35 million, and free cash flow was negative $54 million, both of which were driven primarily by the timing of changes in working capital. First quarter, free cash flow was consistent with our expectations, and for the full year, we continue to expect free cash flow to exceed $60 million.

SG&A for the quarter was $33 million, an increase of about $6 million a year. Approximately $2 million of the increase relates to the timing of professional fees and support of our strategic initiatives, with the remaining increase consistent with the growth of the business. At the percent of revenue, SG&A is down 25 basis points versus a year ago.

As we've previously stated, we anticipate that SG&A will be around 4 percent of revenue for the full year. We ended the quarter of the net debt to adjust the unit ratio of 2.7 times, which was down from 3.5 times a year ago. And we continue to forecast net debt to adjust the unit up around 2 times by year end. Now to our segments.

U. S. gas revenue was $284 million. It increased to 44 percent compared to 2025. The increase was driven by progress on mid-works, big projects, and our actions to secure work that is less impacted by weather.

Growth loss for the quarter was $6 million, a 57 percent improvement from a $15 million gross loss last year. The year-of-year improvement is a testament to our work addressing seasonal impacts, particularly considering the challenge that winter storm firm posed, which not only impacted work in the northeast, but also briefly slowed work on a new multi-year MSA in Texas.

Canadian operations revenue was $60 million, also 51 percent from last year. The increases primarily from the inclusion of Connect Atlantic utility services in the current year results. Operational performance in this segment remains strong against the solid demand backdrop. As expected, gross profit margin was down slightly to 15 percent, driven by the inclusion of Connect. Union electric base revenue was $199 million.

It increased to 14 percent a year. Base gross profit margin was 8.7 percent for the quarter, up 200 basis points from a year ago. Growth is fueled by robust activity and project-serving industrial end-user customers, particularly substation infrastructure and data center-related work.

Non-union electric base revenue was $151 million. It increased to 25 percent over last year. This growth reflects a significant expansion in MSA activity. Base gross profit margin was 6.3 percent compared to 8.7 percent in the prior year. Driven by activity ramp early in the year on an MSA contract, resource allocations to on-system soil restoration work, and seasonal weather impacts in January and early February.

Activity and margins were backed normal by the end of March. Moving on to commercial update. In the first quarter, we delivered cookies of $1.3 billion, where a 1.8 times book-to-bill ratio. Awards included $900 million of MSA renewals, $180 million of new regrowth MSA, and $250 million in bid work. Momentum has continued into April as we have approximately $2 billion of pending bids outstanding, including nearly $200 million of data center work that has been negotiations.

For the year we are targeting 1.1 times to 1.2 times book-to-bill ratio. Our focus remains on securing higher margin work and building on the backlog for 20.7.

Lastly, we are reiterating our full year 20.6 guidance. As a reminder, base revenue and base gross profit are non-gap measures that extend the impact of soil restoration services. For 20.26, we expect base revenue of $3.15 to $3.45 billion, and base gross profit of $255 to $185 billion. Revenue, adjusted EVA, and adjusted net income are measures that include storm restoration services.

Guidance for these measures include storm restoration services using a three-year average of $88 million in revenue and $28 million in gross profit. For 20.26, we expect revenue of $3.24 to $3.45 billion, adjusted EVA, $280 to $310 billion, adjusted net income of $55 to $75 million, and lastly, the net cap, CapEx album at $75 to $90 million.

I will now turn to Chris for the strategy discussion.

Chris, thank you, Greg. Hello to all of you for joining the call today. I'll be discussing our strategy, a multi-year financial outlook, and I'll be referring to the vision one-century slide deck that was posted on our website later yesterday.

I've now been CEO for about 17 months, and I'm extremely proud as well, and what has been accomplished in that very short time, and the path that we are on, and demonstrated by the strength of the birth water results and the incredible year-over-year growth. Century has more than 115 years of successful operating history, as we can see on slide two, and a long-standing relationship and reputation as a trusted, high-quality, and above all, certain prescription services time.

Everything we're building now exists on a solid foundation of decades of operating history and in industry leadership, paired with intentional decisions in that building a lasting and successful future.

From start with that purchase of our largest operating company, NPL, in 1996, through to the mid-2000s, the company had significantly grown from geographic expansion, with a focus on servicing regulated utilities and building strong customer relationships through microservices agreements.

In 2012, the company raised $500 million in revenue, and just three years later, revenue doubled to $1 billion. From there, the company continued to grow through strategic acquisitions that diversified the service capabilities and the reach of our business.

After joining Century in late 2024, my assessment was clear. Nothing was broken from within the business. That view remains the same. My initial focus was centered around breaking away from certain levels of priorities and practices from voluntary utility parents, establishing a growth mindset, installing growth-related KPIs across the organization, driving capital efficiency, and unifying the company around a clear vision, what we now call one-centering.

Simply put, we all have a common purpose, strategic direction, and a common set of values. To advance the one-centering vision, the leadership team began a strategic evaluation last year with several areas of focus.

Assessing our end markets, benchmarking all our peers, identifying the measures that drive shareholder value, and establish credible top-tier goals.

Advanced growth initiatives supported by our capabilities and the end markets, and enhance internal functions to enable sustainable growth, specifically both on resource planning and risk management.

In 2025, we began implementing the one-century approach, which proved to be a true reflection year-to-century. On slide three, we highlight some of what we achieved, including becoming fully independent, reducing our red decks, and we just did eat it down to 2.5 times, committing complete initiatives, and achieving records for bookings, backlog, and revenue.

Beyond the tangible results of 2025, I'm also proud of the way the organization involved and commitments to our customers, while also embracing the changes necessary to set a century on a path of value creation. We are all very well positioned to execute against the favorable market backdrop and look forward to delivering for our stakeholders.

Moving to slide four, we are entered by four objectives. Top-tier end growth, top-tier revenue growth, being an agile, integrated, custom-efficient organization, and establishing a world-class resource delivery and living organization.

These objectives were established based on the value drivers we believe match in those two stakeholders. While scaling the business will write revenue growth, long-term shareholder value creation will be achieved through earnings growth. Retaining existing business, expanding relationships, and securing new customers are all about how we execute and engage with our customers.

This is a strength century, and will remain core to our culture. To enable the growth, we will execute a plan to build further on our industry-leading workforce, more on that later.

To set the stage, let me first review the end markets, starting on slide five. The North American Energy infrastructure bill out represents a true tailwind to century, a sure goal, and long-term in nature. Between grid modernization, electrification expansion, gap infrastructure replacement, and power demand for industrial and data center customers, the opportunity set to century evidence.

No one should be used to any of their own's call. Slide six is the big picture view. We started with an overall analysis of our core gas and electrical team, the end markets, and the relevant adjacent end markets. This represents the two trillion of cumulative spend from 2026 through to 2029. Our next step in the process was to drill into the data and capture those areas that were relevant for century.

This results in a true century total addressable market of 625 billion over the next four years. For perspective, our current 13 billion pipeline, and 6.5 billion of records backlog reflects only a fraction of this opportunity.

On an annual basis, the opportunity pipeline is less than 10% of centuries total addressable market. Importantly, the market data and our analysis reinforce that. We do not need to change in direction, but we do not need to pivot differently. Instead, we are all well-positioned to provide profitable growth through our existing capabilities, expanding our scale of geography, and selectively pursuing markets for initiatives.

Our operational leadership has all confirmed through the process that the end markets fully underpin our growth targets as we've laid out.

Moving to slide 7, this breaks down the core end market since the electric and gas across transmission and distribution.

In short, the 4.8% capital through 2029 confirms the tailwinds we've been seeing and expect moving forward. In nominal dollars, the electric market offers the largest opportunity with transmission expected to grow a bit faster than the distribution segment.

On slide 8, we highlight the adjacent markets. Again, the data suggests further tailwinds and opportunity to capture more market share. It's no surprise that data spending visits the highest percentage growth, but each of these markets have the size and growth qualities that make some very attractive opportunities for centuries as a group.

Now, let's get into our strategy on slide 9. Our strategy needs designed to be sustainable, successful through market cycles driven by choices rather than acted out of necessity, and it maintains our lower risk profile in the work we execute as we spend our business.

We've led our ambition on the slide, which ultimately centers around delivering exceptional value to all stakeholders, being customers, employees and shareholders.

To achieve this, we will focus on three fundamental principles. Firstly, we will protect and deepen the core. We will remain devoted to our longstanding relationships with regulated utilities, executed with the quality, reliability and safety they expect and trust us to deliver.

We will expand relationships with existing customers, pursue an incredibly devastating work through new customer relationships, cultivate cross-selling opportunities and continue to lead into big work by leveraging our core capabilities in our well-defined adjacent markets.

Second, we will pursue initiatives to grow the portfolio. These growth initiatives build on our existing capabilities, existing services and the strengths of our organization, and are supported by strong in-market demand.

In parallel, we will pursue token acquisitions that are appropriate to our core business or directly advance our targeting growth initiatives.

And lastly, to enable long-term growth, we will sustainably scale the enterprise. We will do this by achieving industry leading talent acquisition capabilities, driving operational excellence through standing-out performance management and enhancing our risk management practices.

The result of this work will be 10 to 15 percent compounded annual growth rate in virtual revenue from 2029, and an improvement of 70 to 100 and 70 basis points in base growth profit margin.

On slide 10, we dig into the first principle, Protect the Deep of the Core. This is the foundation that defines Century today and also our future.

And possible of getting electric, MSA work is the core stone of Century. These agreements represent stable, long cycle opportunities, and we are deeply committed to protecting and strengthening this core. Our 100% MSA renewal rate is a powerful validation of the trust we have earned through relationships with our customers over many years, and in many cases, decades.

When it comes to growth, our priorities secure new and expanding skills of work from existing customers by leveraging our operating track record of the execution consistency and the reputation we have earned. We are focused on adding new customers, again, leveraging our reputation and relationships through processing and our one-century growth environment approach.

Our ability to operate in, our ability to offer integrated solutions across the value chain, position century that differentiated service provider and partner to our customers.

Looking back to 25, we bought 900 million of new or expanded skill MSA's. And in the first part of this year, we've built a further 180 million. We absolutely intend to keep this momentum going as we move into subsequent quarters and subsequent years.

At the same time, big work opportunities are abundant and represent meaningful, incremental growth and margin upside. For us, big work is a natural extension of MSA work. It's the same services utilizing the same capabilities and equipment just executing them in a different contract structure.

Big work not only originates from our well-defined adjacent markets, but also from many of our existing MSA customers who often have projects that fall outside the MSA store. As mentioned many times before, the data center market is our fast-growing adjacent market. Data centers offer a range of work stores once suited for century. And since the start of 2025, we've already secured at 170 million of data centers and related awards.

Additionally, we continue to evaluate and bid for approximately 1.5 billion of further data center work. We see this as a market with strong multi-year growth potential and attractive market margin characteristics.

In summary, MSA work is our core today and will continue to be our core. We are focused on deepening and expanding that core through new and broader MSA's while big work serves as a growth engine and as margin increases. This is protect and deepen the core.

Moving to slide 11, we have identified several initiatives to enhance our growth rates and drive margin expansion. Each initiative is supported by NMI data and represents an extension of our core capabilities.

Let me start with electric transmission. Today we have electric transmission capabilities involved in union and non-union electric businesses, generating less than 10% of our annual revenue.

Compare this to the 150 billion of utility spends on electric transmission work expected over the next four years and it's clear this is an area we are in the serving. And we've recently had a number of customers driving us to build further capability and execute more of these services within this segment.

We've revitalization significant load growth in the build out high voltage lines and an opportunity for centuries to capture transmission projects in the lower to mid-voltage range. Our focus will be on projects under the $200 million each size. This is the size where essentially at the scale track what a track record can be and win against smaller regional players. While also remaining below this typical size, trying to be buying this larger industrial place.

In addition, we offer customers a fully integrated solution across transmission line and tower construction. Substation work interconnects and battery storage. This is true differentiation per century.

While larger than our current portfolio transmission projects, we have confidence in our ability to execute this in our track record and core capabilities over many years.

Next, we will expand our service offerings into underserved jobs and pieces of areas that need more scale. Our once-century go-to-market strategy will facilitate this initiative.

Our operating company is no longer all acting silos. Instead, we approach customers with a full suite of services across gas, electric, union and non-union.

Several recent awards highlight the success of this approach. First, we were able to leverage a longstanding relationship with a premier customer in Canada to make introductions with a Midwest gas utility who is an unbalanced and parent company. This introduction coupled with Google with them through many years of quality service has led to a new multi-year MSA award across the U. S. In another example, a recent electrical award for a Florida customer was secured through relationships and introductions originating from our gas business.

This represents our first work for the utility customer and a ninth entry into the Florida market. I absolutely expect more example-wide beats to material materialize of the coming weeks, months and into the subsequent years.

On the slide, we highlighted a few areas where we see the logical geographic expansion, including the southeast, the gas, the Midwest for electric, and in Canada where we are targeting expansion of our new electric capabilities into the Ontario region.

Lastly, we believe that an opportunity to exceed expectations on our new big work. This can be achieved through business development efforts to generate more opportunities from the total addressable market or just by exceeding our historical win rates.

We also aim to do more for existing customers, offering them access to all of our services and being their partner of choice. The strength of the market is unlike the Midland and I've seen in my career. And as the market data supports, we believe this trend will continue at least through the end of the decade.

Now, let's shift to slide 12 for the other leg of the growing portfolio, which is underneath. We operate in the fragmented industry and believe they're strong merits to consolidation and benefits of scale. At Centering, we've established several attributes we look for in some kind of positions. In terms of geography, we've focused on the Midwest and Southeast, and in terms of scope, electric services, in particular, the transmission is a focus.

While we have pursuing these areas organically, the right acquisition could prove the media's, the right acquisition that can provide immediate scale from which to grow is attractive to us.

Strategically our focus is not acquisitions that need to be fixed. Rather we target companies that match Centering's operating excellence, our culture, and bring already established customer relationships. We look for opportunities that add to the foundation of Centering, providing more scale and scope for the core business to grow.

Slide 13 highlights the Connect Act position that we've closed last year. It's the perfect case today for what we look for in that position. Connect filled to needs. It gives an electrical to indeed services platform in Canada, and then proceeds to the Atlantic region of Canada. Connect has a strong track record of operations, and has existing long-term relationships with high quality customers.

So it's now leveraging our existing gas relationships to grow the Connect platform into the Ontario region. Just a few months into this acquisition, we are already getting traction on the business development side and expect to have positive updates on these efforts in the coming quarters.

Now it's turning to slide 14. We believe the execution of our strategy supports a concept-based revenue can carry down your growth rate at 10-15% to 20-29. We believe we have a strategic direction and plans in place to deliver this top tier revenue growth.

In order to achieve our types and scale, we often ask that we must advance our enabling functions and our structure.

On slide 15, we highlight three areas of ongoing focus. First on the talent side, we've added several key additions to the team in 2025 and through their head of fleet and a president of gas. In addition, we launched development efforts and began building out our talent pipeline. We anticipate adding more leadership talent within the coming year.

Second, on fleet, we shifted away from the historic practice and purchase and all equipment to a balanced funding plan that aims to be 50-50 least versus buying.

This allows us to generate more free cash flow and more strategic with our equipment sourcing. We are also well underway with our analysis and implementation and fleet utilization improvement plans, which will drive margins higher and improve efficiency across the entire organisation.

Lastly, we established a sales pipeline which now holds all opportunities that our business development team is evaluating and preparing for this. The pipeline allows us to track win rates, she trends more quickly, be more accountable and forecast more accurately.

Now moving to slide 16. A critical aspect to enable our strategic execution is our ability to source human capital.

Centuries starting from a solid platform. We have many programs in place, including a lot of relationships and partnerships with colleges, trade schools and vocational programs. We also have a training program and our non-unoelectric segment that is currently trading more than 800 people. We do an excellent job sourcing our land on these today, but we must think ahead and take our platforms to the next level. To that end, we are already in the web building an integrated group wide, different river workforce forecast and tool that will interface with our sales pipeline.

This interface will allow us to stay ahead of growth. We'll be able to identify specific skill set needs to specific projects and specific regions for the long time frames. Rather than just knowing we need to add headcount, we will be precise and strategic with our sourcing. Our goal is to ensure that each job is the right people at the right time. We'll also use the tool to identify new geographies to establish as resourcing hubs.

This program, along with our relevant deliberate work to upskill the workforce, and our mix of union and non-union river will provide centuries of flexible and flexibility to support expanding MSA, new big work, and expanding into new geographies. We expect to have this tool fully implemented during the course of this year.

Developing a group wide resourcing blueprint plan is critical to our success. We will be invested in our people and our workforce pipeline in a far more structured and focused way. And as we grow, we'll feed the capture and share lessons learned across the business to uplevel the entire organization through a formal knowledge network. This cool, true, continuous improvement will further differentiate us for our customers and enable us to deliver true value added solutions.

Another critical aspect we'd like to achieve our goals is managing the risk that comes with growing our business. We outlined this on slide 17. We are currently in the process of establishing an enterprise level project management office that will get the organization to consider good practices, standardization of controls, data analysis to track marketing improvement from both continuous learning.

This effort will leverage the existing talent that consolidates in our operating company, PMO competencies, or that already exists into a group wide PMO. We have full line across our operating company that we should see regarding the critical nature of this function of it to expect have this group up and running during the course of this year.

Now, let's jump to the financial outputs beginning with slide 19. In 2025, our business mix was about 78% MSA and 22% big work, and our split between gas and electric was 53% gas and 47% electric.

As we've talked about, we expect big work growth to outpace MSA growth over the next few years. And we also see more opportunity on the electric side recognizing that both electric and gas and markets are growing. When we project out to 2029, we anticipate that big work to grow approximately to 35% of the business, and the gas and electric split to be equal at 50-50.

Importly, slide in quarterly terms slide 20, where we provide this revenue growth and this growth profit margin targets by segments.

These targets do not include impacts from potential MSA or storm restoration work. For U. S. gas, we have targeted these growth profit margins between 7 and 8%, that's 1 in 29. Reflecting our action plans of fully meeting day the seasonal impacts of the business.

Consistent with the mid shift, growth and electric segment is expected to outpace the gas segment. On slide 21, we outlined both the progress made and expectations for our corporate level growth-based profit margin.

I remind everyone in 2025, we delivered significant improvements from 2024, going from a 6.9% to 8% based growth profit margin.

As we look out to 2029, we have clearly identified areas of focus and several drivers that will allow us to drive further growth and margin expansion at a 70 to 170 basis point level.

First on seasonality, we are about a year into this initiative and as Greg talked about, we have achieved a meaningful year-of-year improvement in the first quarter of 2020.

We continue to be focused on securing customers of work that is less impacted by when we're in the first quarter. The ultimate goal, as we consistently said, is to achieve consistent profitability in the first quarter when compared to the remaining 9 months of the year.

Next, our overall margin profile will improve as our mid shift over the next few years to what high-margin bid were. Lastly, we see margin improvement from operational excellence program we have launched increased pricing power, the most selective on projects, as well as the work that is advanced on fleet efficiency. We are already excited about the operational excellence opportunity and believe it offers upside potential.

Operational excellence involves dissecting each job and identifying components that perform well and then appropriate margins and identify those components that we don't perform well under the liberal margin. There's a level of performance attribution analysis that allows us to make informed decisions moving forward. In some cases, the aspects of the job might always underperform and we should look to subtract the work or increase our pricing.

Or in some cases, we might have been consistent by delivering across different locations of the operations. In this case, we can assess what's causing the underperformance and quickly apply lessons learned to improve. We have well-advanced this granular analysis, this granular analysis, and expect the benefits to improve over the coming months and years.

Moving to slide 22. Here, for the first time, I guess, we present the long-term financial targets to century. In addition to the top line growth and the margin improvements that I talked about, we expect significant growth in earnings over the next few years. From a bottom line perspective, but just an EPS is expected to grow at a compounded annual growth rate of 30 to 45% through 2029.

We expect our net debt to be just an EBITDA to be around two times by year-end 26, and we anticipate keeping year-end leverage below two times thereafter.

This plan is also achieved with no equity issuances assumed over the four past six periods. Lastly, we expect a meaningful improvement in our free cash flow conversion over the next few years.

This will be fueled by a lower income expense, this shift to more big work, fleet leasing, capital efficiency, and working capital efforts and that reducing our DSO. We expect to reach a free cash flow conversion rate of between 40 and 50% by 2029.

I'll conclude on slide 23. Century well positioned today. We have the scale, the capabilities, and talent across gas and electric to execute.

We have long-term and deep customer relationships with their market tailwinds, and we have a leadership team fully aligned and committed to the one with one's revision.

Our strategy is conservative, but built the long-term success. It is that good in staying true to who we are and what we do best, and it will deliver top to you, bro, while maintaining a low risk profile.

We are all in century, extremely excited about our path forward and delivering value for our shareholders. I thank everybody for getting in and listening to us today. And operator, I think we're ready to open up the call to any questions that people down the need may have.

I appreciate all those details. And then just on the longer term side of things and the 2029 targets when we think about really good base growth on revenue, 10 to 15% Kager that you've got out there, the adjusted EBITDA Kager 9 to 17%. And so just the question in terms of, you know, why not greater opportunities for operating leverage? I think you've talked about the fleet strategy and own versus lease, a near term headwind, but efficiency opportunities to offset that.

And so, you know, we would think that there's some operating leverage, you know, opportunity within that 10 to 15% base growth.

I mean, look, we took a while. You know, just go back to the best principles. We took a while to get our organization to work as well, having been led as a subsidiary of the utility in an awkward environment. So this exercise to pull the strategy together is being as much about change as it has been delivered along term strategy.

What I will tell you is everything that we communicate is, is well backed by fact alignment and data. So the numbers you see in the deck here are things that I couldn't imagine. And more broadly across the business have a plan around understanding how to get there. So there's an element of conservatism in what we produced. So specifically to your question, of course.

We are, we are very much focused on doing better than you see there. There is absolute desire to do better than that. But we wanted to be sure that we had a long range plan, long range targets, confirming that we are speaking to the knitting. We're not adding any more risk into the business that we know when we make the commitments we can deliver.

And I will be challenged about the conservatism and I'll look with that every day. But we feel good about what we've published. You can go from top to bottom of this organization. So he is aligned. This is very well achievable. But you can also take from us wherever there's other opportunity to grow market expansion on to do more work at higher margin. So to be more efficient, we will.

Thank you for the question. I just want to let the share prices this morning. But let me answer your question and hopefully a complete way.

We have a budget that we developed for 2026. That budget goes to the midpoint, which we can get into the outside world.

We set a target for the first quarter, which was to grow at least 10%. And to mitigate some of the seasonality and improve margins. We just closed the first quarter, which not only includes the results of the first quarter, but the forecast for the full year. I compare that to what drove our budget process. And I compare the absolute results to where we are in our forecast.

And as I said in my earlier comment, everyone about operating businesses, whether that be non-union electric, union electric, can draw gas as beat the budget, every one of them. But it comes to revenue and profitability.

We are 35%. That's our excuse me. 30% on the revenue base. Everybody in this world, another revenue base. But more importantly, the cash business, he's up $80 million. And he delivered $80 million to grow at the 10% margin. We reduced the loss from 15 down to six. So I would say this is a strong operating quarter. It meant every expectation internally.

Every forecast that we have taken out of our monthly reviews and we're only just looking at April confirms that we continue to deliver on our expectations.

I'm trying to explain to me what's getting lost with the outside world. I think some of it may be that people look at how business on a pure sequential basis and neglect the fact that we've got a massive season of impact that happens in the first quarter. I think that might be it. But I also, I just believe that the business has maintained and stuck to what we said we were going to do.

I just don't think that's always translated into what people write about us. Okay, that's super helpful. And then I just wanted to go back to the bookings. I know in the past we've talked about the $13 billion opportunity pipeline, $1.4 billion of data center related work. And then I think Greg alluded to the $2 billion in earlier stage opportunities.

How soon can we get some more sort of completeness around actually formalizing some of those orders because we've been kind of hearing about this for some time. So I'm just trying to get a sense as to how we can sort of get more comfortable with the pipeline and the prospects that you see. Thank you. Yeah. I'll talk a couple of things about emanation. That's the fact questions.

You know, I think we've booked to the bill and Greg knows that $170 million. And so we have acted, we have found and we've been able to book and build and collect cash on between 170 years, 300 million of revenue so far. We have been very selected and I repeat what I think I said on prior calls to many people.

Data centers are just one of our many customers. And our real challenge here is to make sure that we focus on those data center customers that have got capital that is deployed. We can look, we like the stuck to work is consistent with our capabilities. And that we've got a contracting form that allows us to deliver high margins.

And sometimes it's not always clear to see what is happening with the data center value chain. But what I will tell you is we've got close to 300 million give a take of data center work that we believe we have been selected and are currently negotiating. So that should be in the next quarter of the nation. The next quarter of the year to decide.

Thank you, Chris. Appreciate the questions.

You look at slide 40. I can give it. I'll, I'll make you strategy that. I'll just expand the jumping. And I reiterate the words, conservative. The best revenue growth organically is about 12%, which is higher than what we previously, previously communicated 10%. And the M&A component that's gone into our modeling gives us a third, three percent.

Okay.

So I'm assuming that that's capital that you anticipate kind of redeploying into M&A to drop that three percent in the algorithm. You've got it absolutely right. I stress what, what I alluded to in me in the slide deck and then I'll let Greg be 29. So we don't need to issue equity, but there will be an allocation of capital in really two areas. Three areas.

First of all, we've got to fund our guy grow up. Secondly, we've assumed we will do three possibly four token acquisitions over the planning period. And then we want to take the debt, the law of the two mark. That's it. It's that simple.

Yeah.

I mean, I wish it was a finite science that just to run out 12 months, 52 weeks and divide that part of the book to build it. What I will tell you is yet for some consensus of my work, what can make us something we kept us to track.

And everybody's days are internally, as you know, with that, for this concern, we're going to be in that range. I think it nearly, Q2 will be just a little slower than the rest of the year. I think we'll pick up and that's just part of the timing on the awards. We've got a couple of that that says that award. I think at the end of Q3, beginning of the Q4.

But what I will also tell you, and I'll reflect slide nine in the depth for the overall quarter. We're not out bidding work for this year. We pretty much have got this year's budget, business, book to deliver on the commitments both to our, our business as well as our shareholders. What we're looking at now is work that allows us to improve margins for this year and building back what's going on.

So yes, conservatism. I just remind you that that we've got ample work for 26. So we're trying to find those opportunities that bring margin improvement for this year, but more importantly, building a bigger platform going into next year's 2027 so that we can be, we can meet or meet what we've led out in the strategy deck.

Yet the pipeline instead flat, I think it's a pretty bad achievement, frankly. I feel as though the pipeline is a high quality. It is very, very, very stable. We could add quantity into the pipeline. I just don't think we need to. And we're very much focused on quality of opportunity in the pipeline. I trust high margins this year and built quality good into 2027.

I wouldn't really get into the mix. Some gates are about gas that are electric. As I said in my commentary, I think you never said that the gas market grows a slightly slower face than the electric markets where we play. I'm quite pleased that we're about 50, 50 in the mix.

As long as it's 50, 50, 40, 50, or the other way, I'm not worried about it, quite frankly. If you go back in here to my first quarter last year, most of what we're booking was gas related. And that was driven by MSAs and a push to have more backup for seasonality. If you look at the latter part of last year into the first quarter issue, most of the bookings are on the electrical side. So the takeaway is that I'm not concerned of the size of the pipeline. Burning Man, we've already booked $6 billion in the first 50 months and completely replenished that. The pipeline's held well at $13 billion.

I'm also not worried that we've got a mix of more electric than gas. I think that just is consistent, not only with the way our customers award work, but also the opportunity to grow to that process. I think it's that I think most strategy, I would anticipate that booking can be electrical without taste those in gas, just purely driven by the market. But it's super helpful. And then one on your strategy deck, you talk about $550 million of potential M&A in your 3, 3, 9 o'clock on slide 14. I kind of just want to get a sense of the size of like, should we think of the average size of being similar to the one you did in Canada recently?

Or are you contemplating larger M&A to make up for that $550 million? I'll re-scare it. We see the M&A fully badly existed south of the balance sheet without doing any equity offering. And I think we believe that we've got a line of sight on some already.

But all the within the range is connected, but less than about $100 million of revenue.

Thank you so much, Chris.

No. It's not a long-term issue at all. In fact, when we look at March and we look at some preliminary data from April already, we've already recovered where we think we should be and put some upside throughout the remainder of the year. So it is limited to earlier in the first quarter, just given the ramp up after the holidays and some other things. So nothing of a long-term impact.

One second. Yeah. Nothing about execution. I think it's just the reality that not all storm work comes at the same margin. It's something we've talked about in the past.

When we do on-system storm work, generally the margins are lower than if we're able to travel or take crews from the southeast and go to the northeast or hurricanes where we work a little bit longer. It's just the makeup of the storm and when it occurred. If we're able to work over the weekend, our margins are a little bit greater than when we're working and replacing it with base work during the week. So there's a number of different factors.

You know, regardless of the factors of the specifics, you know, margin on storm work is greater than base work. How much greater, you know, depends on the other variables that I just mentioned.

Yes, it's just, you know, some timing and changes and working capital and we threw our revenue, you know, over $150 million a year over year. And obviously there's an investment that we need to make. And that will, you know, kind of unwind over over the remainder of the year. We're still very confident that we'll see, you know, $60 million of free cash flow for the year.

Yeah, you know, from a big perspective, yeah, I guess there is a small increase, you know, quarter over quarter. But nothing's changing from the scope of work that we're doing the size, you know, the type of work we're doing. Nothing's changing from the details.

But yeah, I guess it is up taking a little bit. I think it's we consider you to see increased opportunity on this side and we'll continue to grow that part of our portfolio. You know, well, you might see a bit of increase, but on average, it's still $4 million, and that's a pretty comfortable number for us. From an MSA perspective, we're still in that $50,000 to $75,000 per work order range, whether it's gas or electric. No material changes from that perspective.

Yeah, there's no shift on how to say it's true to my amount of words. We're going to continue to stick to the meeting as we know through 29. I think the average contract size will will stay very small, probably less than $5 million is what we're projecting. MSA's don't change that materially. So the average contract size will be less than $100,000.

What you'll see change is just the amount of big work as a percentage of revenue going to that 65, and they say 35% big work. But the overall concept to the business, the structure of it, the revenue streams, and more importantly, the risk profile just won't change materially at all.

I mean, we've got customers that big work to us and then choose to roll into an MSA. And I think the MSA works just generally by intent, grow year of the year, a slow rate of big work. And it says it's a slow moving machine versus the big, big, big cycle. So I think I wouldn't read a lot into the rate. So then it just reflects the rate that will grow in the market will currently end. So 50, 50 on the left, and I will tell you, we'll swing a little bit.

It's not only is it somewhat seasonal. As I referred to a question that Sangeeta asked, I mean, early last year, most of the bookings were driven by the gas business. Yeah, late in the year and early this year, were electric driven. That's just a customer thing. It's not, it's nothing more than that. I would say the risk definitely a drive. We're here for our customers, they want us to deal with the services on the transmission side electrical.

So then we'll be absolutely pushed to find more opportunities that we convert into bits and wins and backlog. But I would expect a violent shift in making sort of gas and electric in the pipeline or in the backlog. You just won't see it.

It's pretty steady. And then just with that bid work mix shift, does that change your exposure to heavier to transmission versus distribution, anything on that front of the type of work that's going into.

No, no, I, I, you will see what we've done with transmission, electrical transmission work. We've done, we do about 10% of revenue less than I each year in transmission work. We do a lot more distribution work.

If I look at the end markets and I look at the customers, what they look, what they say to us in the opportunity, I refer to an award when we got in Florida.

Customers want us to do more small transmission projects. And those transmission projects may have, you know, a few miles of cable in a book or a cable in the mouth.

They have a substation attached to it. They may have battery energy storage close to it. And then mix of things. I know they fit our scope of work really well.

So I, I, I, I think really. I think the margins are looking back for the transmission work. We have slightly larger contracts.

I think the scope of work is more integrated, which sits as well. I think the competitive forces for those probably play well to when we sit versus trying to bid against large, large contracts, which we're not equipped to do.

Absolutely. Let Greg talk about the margin because that's a really important point. I think it does get missed by the outside world. So we set the margin and then I'll be back on.

Yeah. Thanks for the follow up question. I think when you're reconciling and going from gross profit to adjust. One of the key characteristics of this model is the continuation of what we started late last year. Around our capital efficiency and purchasing and buying a more balanced amount of our fleet. So 50% by 50% least at that kind of pounds over the five year period. There is a bit of a headwind on margin when you get to EBITDA.

Not as much when you get to gross profit offsetting that is the scale that we're getting on a G&A perspective as a percent of revenue. So there is some virtual offset. But but net net. There is a bit of a headwind just from the leasing impact.

Obviously you get that benefit on free cash flow that's allowing us to reinvest it into the business and look at opportunities for tokens and such like that. I'm talking about the quarter deck, not strategy deck.

I think you can read that literally. We kind of got the midpoint and trending towards the upper end of the guidance.

Clustered sort of 3.5 3.6 billion. I mean, there's no science to it. What we see within our pipeline is where we currently think will be. During 2026, which is, you know, from last year is up from 3 to what you see in that chart. So somewhere between 15 and 18%. When I look to 27, which is kind of where the focus on BD is at the moment at the bottom of the niche.

I don't see any, any negative trends in the market around bookings that we will have this year that will feed next year backlog and coverage.

A little room of some, I will tell you, even though the data was a little bit. Was not as developed as it is now. But if you go back 12 months ago, when we were looking at the end of the first quarter to 26.

I think we were about a billion eight of revenue for 20. Sorry, if you go back to 25, first quarter. We've had a billion eight give a take of coverage backlog rather than going into 26.

We've got about 35% more this time looking into 27. At this time of year. So the trends are all positive. I'll see any concern that we want. Our bookings and our ultimate coverage going into next year.

Great. Thanks Liz. Thank you everyone for participating today and all of your questions. And please feel free to reach out to myself if you have further questions. Thank you.