MasTec Inc

NYSE:MTZ

Welcome to MasTec's Fourth Quarter 2024 Earnings Conference Call initially broadcast on Friday, February 28, 2025. Let me remind participants that today's call is being recorded.

At this time, I'd like to turn the call over to our host, Marc Lewis, MasTec's Vice President of Investor Relations. Marc?

Thanks, Jennifer, and good morning, everyone. Welcome to MasTec's Fourth Quarter call. The following statement is made pursuant to the safe harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking such as statements regarding MasTec's future results, plans and anticipated trends in the industries where we operate. These forward-looking statements are the company's expectations on the day of the initial broadcast of this conference call, and the company does not undertake to update these expectations based on subsequent investor knowledge. Various risks, uncertainties and assumptions are detailed in our press releases and filings with the SEC. Should one or more of these risks or uncertainties materialize or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in this communication today.

In today's remarks by management, we'll be discussing adjusted financial metrics reconciled in yesterday's press release with supporting schedules. In addition, we may use certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings press release. Please note that we have 2 documents associated with today's webcast on the Investor Events and Presentations page of our website at mastec.com. There is a companion document information analytics on the quarter just ended and a guidance summary for 2025 to assist you in developing your financial models going forward. Both PDF files are available for download.

With us today, we have Jose Mas, our CEO; Paul Dimarco, our EVP and Chief Financial Officer. The format of the call will be opening remarks and analysis by Jose, followed by a financial review from Paul. These discussions will be followed by a Q&A period, and we expect the call to last about 60 minutes. We had another great quarter, ahead of expectations, and I'll have an important thing to talk about today, so I'll turn the call over to Jose. Jose?

Thanks, Marc. Good morning, and welcome to MasTec's 2024 Fourth Quarter and year-end call. Today, I'll be reviewing our fourth quarter and full year results as well as providing my outlook for 2025 and the markets we serve. First, some fourth quarter highlights. Revenue was $3.4 billion. Fourth quarter adjusted EBITDA was $271 million, a 20% year-over-year increase and fourth quarter adjusted EPS was $1.44, more than double last year's fourth quarter. For the full year, 2024 revenue was $12.3 billion, 2024 adjusted EBITDA was $1.6 billion, an almost 20% year-over-year increase, 2024 full year adjusted earnings per share was $3.95 and full year capital from operations was $1.1 billion, and net debt was reduced by over $700 million for the year.

In summary, fourth quarter performance was strong. For the quarter, revenue, EBITDA and EPS were all above guidance and backlog grew sequentially in every segment. I'd like to highlight that fourth quarter nonpipeline revenue increased 21% year-over-year, and fourth quarter nonpipeline EBITDA improved 57% year-over-year. Combined with solid third quarter results, we enter 2025 with great momentum. For full year 2025, we expect about 9% revenue and EBITDA growth. But taking into account that we expect our pipeline infrastructure business to decline versus 2024 because of the completion of the Mountain Valley Pipeline, we expect our 9 pipeline businesses to grow revenues 14% and EBITDA by over 25%. I'd like to repeat that, for 2025, we expect our nonpipeline revenues to increase 14% and nonpipeline EBITDA to grow over 25%. That growth is supported by our backlog and strong customer demand. Couple that with an improving landscape in our gas pipeline business and I believe MasTec has never been better positioned.

Let me elaborate. I've had the privilege and honor of being MasTec's CEO now for just over 17 years. I've never seen the demand momentum and the number of opportunities for our collective business. I wanted to emphasize this today because over the last month, we've seen investor uncertainty related to announcements like DeepSeek or the concerns of political shifts related to our business. While we definitely need to understand potential disruptions to our business and how any action may affect us, the overarching theme is the unprecedented level of demand on our communication, power delivery, generation, civil and pipeline infrastructure customers. In every segment we operate, our customers are facing increased demand for their services.

More importantly, this isn't a bubble of short-term demand but a fundamental need to support our country's fastest-growing industries. While our backlog today is at record levels, opportunities with our customers are accelerating. Customers are talking about multiyear and decade-long plans. As a result, MasTec is invested in continually cultivating the industry's best talent with over 30 dedicated trading facilities throughout the country, we are preparing the workforce of tomorrow.

Now I'd like to cover some segment highlights. In our Communications segment, fourth quarter revenues were up 28% over last year's fourth quarter and also up sequentially even though the third quarter is usually our strongest. EBITDA for this segment was up 67% versus last year's fourth quarter. Backlog was up sequentially and year-over-year backlog increased by nearly $400 million. We continue to enjoy strong demand in virtually every aspect of telecom infrastructure. Our wireless business successfully started on its new contracts in the second half of the year with both growth in geography and services. Funding and build-outs of broadband infrastructure is growing, supported by federal investment, middle mile activity and the demand created by hyperscalers is creating a new wave of long-haul build-out, and we're seeing great optimism from our customers as there is a race to build fiber throughout the country.

In our Power Delivery segment, fourth quarter revenues were up about 16% over last year's fourth quarter. That was the highest level of growth for any quarter compared to last year. We expect double-digit revenue growth for this segment in 2025, with revenues for the segment increasing by over $500 million. While our customers have been planning for significant investments to the grid for years, there has been a lot of political focus on grid reliability. Terms like unleashing American Energy, and National Energy emergency are top of mind in Washington. But more importantly, what is driving the need for investment is in politics, but rather demand. Our customers are focused on meeting this increased demand, and we expect significant opportunities related to the transmission grid, substations, distribution and new generation. Backlog was up about $150 million sequentially and up about $900 million year-over-year for the segment. We're excited about our opportunities for 2025 and beyond.

In our Pipeline segment, fourth quarter revenue, as expected, was down both year-over-year and sequentially. Today, we provided revenue guidance of $1.8 billion for the segment versus the just over $2.1 billion we achieved this year. As we previously discussed, the completion of the Mountain Valley Pipeline is impacting 2025 revenues as large project activity had slowed. With that said, today, there is significant optimism for the future on behalf of our customers. As gas-fired generation enjoys a sort of renaissance the pipelines built to support that will have a meaningful impact on our business. We are increasingly bullish not only in potentially outperforming our guidance for 2025 but more importantly, we now expect revenues in 2026 and beyond to exceed 2024 levels.

Finally, in our Clean Energy and Infrastructure segment, Fourth quarter revenue was the highest revenue quarter in the segment's history and EBITDA was also at record levels. Revenue was up 18% and EBITDA was up over 100% year-over-year for the quarter. Backlog was up sequentially by over $100 million and book-to-bill was about $1.1. Considering this was the highest revenue quarter in segment history, we're both proud of this backlog growth, but also bullish about what it means for 2025. Backlog is up over $1.1 billion versus last year's fourth quarter. Our business is enjoying really strong demand. And despite concern around the political landscape, we expect continued backlog growth for this segment in 2025. Our efforts around customer and project selection and the effort we put around truly understanding project timing starts and risks has really started to pay off. We've significantly grown the scale of our execution teams and we are beginning to see the financial improvements of our collective efforts.

In summary, we had an excellent fourth quarter. While the financial metrics exceeded guidance, our big success, both for the quarter and the year is how we position MasTec. We are on the front lines helping our customers modernize and rebuild America's infrastructure. The diversity of our business is our strength.

For example, today, MasTec is connecting people and technologies through our communication business. We're helping our country reach energy independence, we're modernizing the electrical grid, we're generating energy through renewable sources and building the associated energy storage, we're building the pipelines that will allow us to use our nation's significant supply of natural gas, we're on the front end of providing civil resources to data center developers and helping them meet their power and communication needs, we're building the roads and bridges that connect our communities. These skill sets and expertise provide MasTec with endless opportunities for future growth. We are pleased with our market position, our diversified business model and our ability to offer our customers integrated solutions at scale.

I believe that the most successful companies in our space are those that have the scale to meet our customers' demand. Our customers' projects have significantly increased in size, scope and complexity, and there is no question that our customers need strong partners. There is a lot to be excited about. With that said, we also need to keep improving. While our financial metrics in 2024 were much improved, we also have the ability to meaningfully improve margins. That opportunity for improvement is actually what I'm most excited about. Our margin improvement opportunity, coupled with strong revenue growth should lead to significant value creation for our stakeholders. I'm confident that the MasTec team will deliver.

I'd like to take this opportunity to thank the men and women of MasTec. I'm honored and privileged to lead such a great group. The men and women of MasTec are committed to the values of safety, environmental stewardship, integrity, honesty and in providing our customers a great-quality project at the best value. These traits have been recognized by our customers, and it's because of our people's great work that we've been able to position ourselves for continued growth and success.

I'll now turn the call over to Paul for our financial review. Paul?

Thank you, Jose, and good morning, everyone. As we reflect on 2024, we are proud of the meaningful progress made across several key initiatives that are critical to our [indiscernible] term success. Over the past year, we have successfully advanced our acquisition integration efforts, strengthened our balance sheet through debt reduction and capital structure improvements and enhance the accuracy of our forecasting and guidance. Most importantly, we have delivered improved operational and financial performance. While our 2024 results mark an important step in the right direction, we firmly believe there is still significant room to build on this momentum and generate even stronger results in the years ahead. We remain focused on executing our strategic priorities with discipline and look forward to sharing more details with you today.

I'll start with some 2024 highlights. Fourth quarter revenue was above expectations at $3.4 billion, and adjusted EBITDA was $271 million, exceeding guidance by approximately $12 million. Clean Energy and Infrastructure drove the fourth quarter results with $104 million of EBITDA or 8.3% of revenue, exceeding guidance by 140 basis points. Adjusted earnings per share was $1.44, more than doubling year-over-year. 2024 full year revenue was $12.3 billion, while adjusted EBITDA of $1.06 billion and adjusted earnings per share of $3.95 both exceeded our annual guidance expectations with annual adjusted EPS also doubling year-over-year. Our fourth quarter cash flow from operations performance remained very strong at approximately $470 million bringing the total for 2024 to $1.1 billion, a MasTec record.

DSO continued its positive trend, ending at 60 days for the quarter, down from 68 days at the third quarter and 74 days for the prior year. Net debt at year-end is $1.8 billion, down over $700 million for the year. Net leverage now stands at 1.8x, in line with our financial policy. We have proactively engaged with the rating agencies and expect their outlooks to be reevaluated in the near future to account for MasTec's strong performance. 18-month backlog at year-end totaled $14.3 billion, an increase of over $400 million sequentially and almost $2 billion year-over-year. This represents a record level for MasTec and all 3 non-pipeline segments. The growth in backlog is even more impressive when you consider it came despite a record quarterly revenue level for MasTec collectively and for our Communications, Power Delivery and Clean Energy segment individually. We have very good visibility to support our 2025 outlook and dialogue with customers across all of our end markets continues to engage strong demand into 2026 and beyond.

Turning now to our segment performance and outlook. Fourth quarter Communications revenue was $975 million, ahead of our estimates and up 20% year-over-year. Adjusted EBITDA margin was 9.9%, expanding 230 basis points year-over-year. We continued the efficient transition into our expanded wireless territories, and the pace of activity on wireline projects remain strong. Annual 2024 Communications segment revenue was $3.46 billion, up 6% year-over-year with adjusted EBITDA margins expanding 70 basis points to 9.6%. As disclosed in yesterday's press release, beginning in 2025, results related to certain utility operations previously reported in our Communications segment will be reported in Power Delivery to better align with how we manage the business. Our Communications segment guidance, reflecting this realignment calls for annual revenue of $2.8 billion, 11% growth year-over-year with adjusted EBITDA margins in the low double digits compared to 8.7% for 2024.

Revenue for the first quarter of 2025 is expected to be $600 million, representing 19% growth year-over-year, with adjusted EBITDA margins of 6.5% to 7%, increasing over 150 basis points from last year's first quarter. We have provided recast quarterly and full year 2024 results, reflecting the realigned segments and our guidance summary.

Fourth quarter Clean Energy and Infrastructure segment revenue was $1.26 billion, 18% growth year-over-year with adjusted EBITDA margins of 8.3% increasing 80 basis points from our strong third quarter and over 340 basis points year-over-year. Once again, we had strong performance across all 3 segment verticals, with renewables, infrastructure and industrial, all posting their highest margins of the year. Full year segment revenue was approximately $4.1 billion, with adjusted EBITDA margin 6.3%, up 200 basis points from 2023. Backlog for the segment now stands at $4.2 billion, up 36% year-over-year. Our revenue visibility continues to improve for this segment. For 2025, we expect Clean Energy segment revenue to approximate $4.75 billion, approximately 16% growth. Adjusted EBITDA margins are expected to be approximately 7%. Q1 revenue is expected to be $950 million, representing 26% growth year-over-year with adjusted EBITDA margin in the mid-single digits, 250 to 300 basis points higher versus last year.

Fourth quarter pipeline infrastructure revenue was $430 million with adjusted EBITDA margins of 13.6%. For the full year, revenue was $2.1 billion, and adjusted EBITDA margins were 18.3%. Please note that we formally renamed this segment to better reflect the nature of our activity in the space, but there were no changes in the segment's composition or historical results.

We anticipate 2025 pipeline infrastructure revenue to be approximately $1.8 billion with adjusted EBITDA margins in the mid-teens. The revenue reduction versus 2024 is driven by last year's completion of MVP and timing of upcoming projects which we expect to start in the latter half of the year. First quarter revenue is forecasted at $325 million with mid-teens adjusted EBITDA margins. Most, if not all, of the year-over-year revenue contraction should occur in the first half. Our customers' planned project activity continues to improve, both in terms of the number of new projects and timing of previously announced awards. We expect a multiyear expansion cycle for this segment that we are uniquely positioned to capitalize on.

Fourth quarter Power Delivery segment revenue was $762 million, and adjusted EBITDA margin was 7.1%, both on with our expectations. Annual 2024 Power Delivery segment revenue was approximately $2.7 billion, with annual adjusted EBIT margin of 7%. Two important developments occurred in the fourth quarter. First, we began contracting of the Greenlink transmission line, which is moving along well. Second, 2 Midwest utility clients resolve their rate case appeals and have indicated a path to increased capital expenditures in 2025.

Our 2025 outlook, incorporating the realigned utility operation previously reported in Communications, calls revenue of $4.15 billion, 15% growth year-over-year and high single-digit adjusted EBITDA margins, 50 to 100 basis points higher than last year's 8.3%. First quarter revenue is expected to be $850 million with adjusted EBITDA margin in the mid-single digits. The year is starting off at a slower production rate than previously anticipated due to severe winter weather in a number of markets, pushing project activity into subsequent quarters. Q1 should be the lowest margin quarter of the year. Again, recast 2024 results for the revised segment can be found in the guidance summary.

From a consolidated perspective, we are projecting 2025 annual revenue of $13.45 billion with adjusted EBITDA range from $1.100 billion to $1.150 billion. Adjusted earnings per share is expected to range between $5.35 to $5.84. We expect Q1 revenue of $2.700 billion, adjusted EBITDA of $160 million and adjusted earnings per share of $0.34. Our 2025 expectations include the significant year-over-year improvements laid out for our non-pipeline segments, partially offset by the induced outlook for pipeline activity. We expect to generate approximately $700 million of cash flow from operations in 2025, assuming DSOs average in the mid-60s over the course of the year. At our current leverage, we have full flexibility around capital allocation and will continue to drive our distance based on maximizing return on investment. Supporting organic growth will be a priority, complemented by acquisitions and strategic investments. Share repurchases will remain opportunistic.

I'll now turn the call over to the operator for Q&A.

[Operator Instructions]. We'll go first to Jamie Cook with Truist.

Congratulations on a nice quarter, in particular, the cash flow. I guess my first question, Jose, I feel like I heard you say for the pipeline business that revenues in 2026 and beyond can exceed 2024 revenue levels. So can you just confirm that? And I guess what gives you that confidence? I thought that was interesting just because that's not in the consensus estimates that are out there. So just why so confident if that's true? And color around that.

And then, I guess, my second question, just given the strong free cash flow and where your net leverage is, Jose, how are we thinking about M&A just given the organic growth opportunity you have out there?

Sure, good morning Jamie. Thank you for the questions. There's no question that we've seen a significant shift in the mindset of our pipeline customers. There is more optimism today than there's been in years. That's going to translate into a lot of projects coming in line that we didn't expect, and that will create a lot of growth in our pipeline business. So you are correct. We expect 2026 revenues to exceed 2024 revenues in our pipeline segment, and we think that trend is going to continue for a number of years. The market is incredibly active right now. And I think we're in an incredible position based on our history there and the fact that we've kind of stayed with it for a long time. So we feel great about our positioning there.

On the M&A question, look, we never stopped looking. Obviously, we were in a very difficult position relative to be able to do anything that was meaningful. Today, the organic growth opportunities in front of us are awesome. That is where we will focus first. We will look at potentially some tuck-ins across the country to help us meet some of our goals and objectives quicker. So that's -- it's there, it's potentially there, but we are focused on organic growth first.

We'll go next to Sangita Jain with KeyBanc Capital Markets.

So I was looking at your Clean Energy margins for the quarter. Are they surprised us to the upside. I know 4Q can be tricky with weather. So wondering what you may have seen during the quarter, whether there were [indiscernible] or it's just structural improvements that you guys have been working on?

So thank you. The margins were driven by execution. I think going into the quarter, our internal projections were higher than what we put out in guidance. Obviously, the third quarter was a strong quarter. We hadn't had a quarter like that in a long time. So we didn't want to get ahead of ourselves in Q4. So I think we build Q4 with a lot of conservatism. The team delivered what it said was going to deliver and thus, the margins were driven by execution in the business.

I think that as we look at 2026 -- I'm sorry, as we look at 2025, we've modeled somewhat conservatively as well, right? We think we've got a lot of potential to be both in top line and bottom line. I think that's probably one of the areas that if we exceed our guidance, it's one of the areas where we probably have the most opportunity to do so.

Great. And if I can ask one more on the Clean Energy segment. I know Jose, you've been talking about [ RFPs ] out to data center type work. So can you give us an update on how that may have looked? And if there's any backlog that you ended up booking in the 4Q because your book-to-bill was again pretty strong.

Sure. We've got a significant number of opportunities out. I'd say we probably did somewhere in the $200 million plus range in data center activities for 2024. We like that number to increase significantly in '25, but still not to the levels of what we ultimately think we can achieve. We're probably shooting for about a $300 million number in '25. The opportunity there is multiples of that. And I think the bidding for that kind of supports it. It was not a big driver of the backlog growth in the fourth quarter.

We'll take our next question from Andy Kaplowitz from Citigroup.

Good morning everyone, nice quarter. You grew backlog sequentially as you said, in all segments in Q4, which is good to see and you obviously sound extremely confident in the environment moving forward. But do you think [ MasTec ], can continue to grow backlog in all segments in [ '27 ]? I know you said you'll growing Clean Energy. Have you seen any change in the project environment markets such as renewables or any delays? And did you incorporate a period of award lumpiness in your guidance at all?

Andy, it's a good question. And we've talked about lumpiness in backlog for a long time. We actually went back the last time that we had every segment in the company grow backlog was in the first quarter of 2018. And subsequent to that, we had 2 amazing years of growth in earnings. So I feel really good about where we sit. I know there's a lot of concern out there relative to especially renewables and what is potentially could happen in the administration. We talk to our customers a lot about that, and we are unbelievably optimistic.

So as I think about the end of '25, I would expect every segment to have higher backlog than it has today. I would love to be able to say that for every quarter, but again, backlog is lumpy, and you don't necessarily know when awards are coming in. But generally, we expect backlog growth in every segment during 2025..

Helpful. And then could you give more color into the growth profile in communications. You've got communications up low double digits in '25. How much of that growth is, call it, your own self-help with the new contracts Lumen, new wireless versus what the overall wireline or wireless market is growing at? And is there any BEADs money that you're counting on in '25 at all?

Yes. So BEADs makes up a very, very small negligible piece of what we're thinking about for '25. We do think that it will have significant impact in '26 and beyond. Obviously, the contract with AT&T that we discussed at the end of '23, which kind of took effect in the second half of '24. We saw that come through our numbers in the second half of '24 as part of what drove our revenue and earnings BEAD.

With that said, we've been awarded a number of new contracts, obviously, we spoke about the Lumen one in the last quarter. There's a lot of other customers that were either in late negotiations with or projects that have actually been awarded. A lot of that work, quite frankly, we won't even start until the second half of '25. So I think what we're talking about '25 is a lot about what we've already announced. I think what's yet to come is the buildup in the '26, I expect '26 to be a really good year, another further year of growth. So we're really bullish about where we stand today and what the opportunities in that business are.

Just this week, there's a show called Metro Connect. It's one of the largest U.S. digital infrastructure telecom conferences in the country. And the level of optimism there was just incredible. There was a number of new entrants to the market. All of our existing customers were there and just the -- how upbeat and what they're seeing from fiber builds and the requirement of demand that their customers are placing on them that will ultimately make it to us, it's just a fantastic market.

We'll go next to Justin Hauke with Robert W. Baird.

Great A lot of my questions have answered either in your prepared remarks or people have already asked about it. I just had one, obviously, the cash flow was excellent here as you guys have already talked about. The factoring in the quarter or the selling of receivables, it looks like you sold about [ $350 ] million quarter-over-quarter. And I guess I was curious is that ahead as we think about 2025 and just maybe the economics on that decision? Because relative to your $700 million guide for the year, it looks like that was kind of the factor here in 4Q.

So Justin, you remember, with the [ AR ] programs [indiscernible] you have to look at amount that's outstanding in the period. So in the quarter -- in the year, had a $20 million impact so it's really negligible. So it's not a factor in the in the [ capital ] generation. The [ capital ] generation was driven by reduction in [ WIP ] as a day of sale outstanding and an increase in mobilization payments associated with renewable and [ DOT ] projects. Those are really the drivers. The [ AR ] program is negligible.

Okay. Great. I guess my other question was just now that you guys are naming the large transmission contract, the Greenlink contract, can you give the amount of backlog, 18-month backlog attributed to that contract specifically?

Well, there wouldn't have been a change in the fourth quarter because that was booked prior to. So it didn't really have a significant impact in the fourth quarter backlog.

No, I know. I was just curious about the amount of it. How much you is it?

About the annual revenue contribution. So I think we said [ $500 ] million annually and there's 1.5 years of it. So I think that's a reasonable estimate.

So that does make up a significant portion of the $900 million growth that we had from beginning of the year to end of the year. So of the $900 million, you could assume about half of it came from that one project.

We'll go next to Adam Thalhimer with [ Thomas ] (sic) [ Thompson ] Davis.

Nice quarter, nice outlook. I wanted to [ zero ] in on your margin improvement commentary. I was curious what gives you the comments there? Is it tight resources and industry pricing? Or is it more about process improvement that you can do internally?

I think it's everything, right? If you look at the third quarter of '24, margin dollars improved 28% year-over-year in our non-pipeline. I think the way that we're trying to play out the story is obviously, our pipeline business has performed great. When work is there, we performed great. I think everybody knows that. We've demonstrated that over a lot of years. I think the story about MasTec has always been, how are the non-pipeline business is going to do, how are they going to grow both from a top line perspective and how are they going to ultimately execute the margin profiles that we've laid out over the years? And that's been a theme for a long time.

And I think in the third quarter of '24, we started to demonstrate that. EBITDA grew in our non-pipeline businesses by 28% in the third quarter. It was a tall order to try to beat in the fourth quarter, and yet it grew again by 57% in the fourth quarter, which we're really proud of. And if you fast forward to Q1, it's supposed to grow 47% year-over-year in the first quarter. I think that the trends that we're showing financially are supporting that. And it's a combination of everything, right? It's a combination of improved performance. It's a combination of growth in revenues. And we're -- with that said, with all that said, because I think it's a great improvement, we still have a ton of opportunity. And we know we've got the ability to continue to increase margins in all 3 of our non-pipeline segments.

And hopefully, throughout '25, we can execute on that and demonstrate that a long time ago, we laid out a path to get to $15 billion in revenue with double-digit margins. That's our goal. We feel a lot more confident about our goal today and our ability to do that over the next couple of years based on the performance that we've been able to deliver in the second half of '24. And we hope we can keep demonstrating that throughout '25.

Okay. And then I had one more on the communications segment. I was curious, what's the rough mix now between wireless and wireline? And maybe you can just expand on the outlook for both.

Yes, I'd say our wireless business is just over $1 billion. And with the new restated kind of numbers, our comms business will be $2.8 billion in 2025. So it's about 40% of our business and we've done a great job of growing the wireline side of that business over the last few years. It's obviously where a lot of the existing opportunities sit based on the fiber demand.

With that said, I think there's a -- there's going to be a strong wireless cycle that's coming. It won't be in '25, but we're really bullish about that in future years, especially with increased investments by T-Mobile and Verizon. So we think that the mix is probably permanently different than what it historically had been. And for a period of time, our wireless business was bigger with the demand in wireline, we expect it to be a bigger business for the foreseeable future.

We'll go next to Ati Modak with Goldman Sachs.

Jose, you talked about the growth in the pipeline business. I was just curious if you can talk about the mix as well. It sounds like you're talking about the base business opportunity growing around gathering lines and maintenance maybe. But are you also baking in large pipeline projects that could potentially be incremental from the Permian?

That's what will drive our revenue up, right? I think if you think about our 2025 year, a lot of it is base business. It's kind of -- that's kind of the level that we've been talking about for a long time. We said $1.5 billion to $2 billion. We obviously did better in 2024 because we had the one big project in Mountain Valley. I think we're back to a base level. There's no question that activity of larger lines is dramatically increasing. Even for our pipeline business, we've had 5 quarters of shrinking backlog for every quarter, and this was the first quarter where we actually had an uptick in backlog and again, in 5 quarters. So we're excited about that. I think that throughout '25, backlog will increase significantly in the business to support growth in '26 and beyond. And again, we're seeing a ton of activity and our commentary is more towards larger [ product ] than it is just growth in the base business.

That's super helpful. And then on the power delivery side, I mean there's been some recent announcements for 765 kV lines in the PJM market under the joint venture. It seems like it's a significant project. So I was just curious if you have any thoughts around your exposure to that project or those customers of the market there in general?

I would say as an overarching theme, one of the things that I think that has been difficult to communicate or to get people to truly understand is the sheer size of what's going to happen in that market. Our transmission grid in this country is severely under-invested in. We are going to see a dramatic growth in transmission lines across the country out of every region. Our customers are talking about it a lot, obviously, there's these projects take a long time to plan. I think that if there's anything that the administration, the new administration can do in terms of infrastructure, it's actually improving the timeline around transmission lines and I think they're hyper focused on it. I think that will end up being one of the biggest opportunities for MasTec. And quite frankly, its peers over the course of the next decade. If there's a project out there, we're chasing it, we're involved in. We think we're capable of doing any project in America and we plan to compete for them.

We'll go next to Brian Brophy with Stifel.

I guess just piggybacking off that last one, can you guys talk about how much capacity you guys have to take on more work on the large transmission side outside of Greenlink here?

What we've said over the last few quarters is we're ready to take on a second project, the second major project we've been building towards that for a long time. We're hopeful that during 2025, we'll be awarded another project where we can be working 2 large projects simultaneously in '26. And once we get that under our belt, we're going to start working on trying to get our third large project.

That's helpful. And then wanted to ask on pipeline margins. They were a little bit lower than we were expecting in the quarter. I guess is there anything to call out there. And then your pipeline guidance for '25 assumes a little bit of a decline from '24. I guess with MVP behind us now, I guess why wouldn't we expect margins to be a little bit better in that segment in '25?

Sure. So I'll start with the last part of the question. I mean we're going from $2.1 billion to $1.8 billion revenue. Obviously, there's a fixed cost component of that gets absorbed. I think delivering -- we're guiding mid-teen margins. I think that's a strong guide relative to the revenue drop. With that said, I can't remember the last year we didn't outperform guidance relative to our pipeline business. So hopefully, we get to do that again in '25.

When you look at the fourth quarter [indiscernible] there was actually a lot of weather impacts in a lot of the areas where we were active on the pipeline side. I think that business had a lot of revenue that pushed out of '24 and some increased costs to finish some of the projects that we had to finish in '24. So we're not worried about our margin capabilities and pipeline. It's the work there, we're going to do really well and work is coming. So again, we're really bullish about what we'll deliver in that market.

We'll go next to Brent Thielman with D.A. Davidson.

Congrats, great quarter, great year. Jose, just on the 2025 growth outlook, I just wanted [indiscernible] to your brain on where else you might see kind of the most opportunity to outperform just given the strength of the businesses? I know you sound optimistic around pipeline. But if you could talk about the other segments that the stars align in terms of schedules, no external noise, et cetera. I'd just be curious there.

Sure, Brian. We really tried to highlight what '25 looks like in a little bit of detail because when we sit there and we say 9% revenue growth for the full year, 9% margin growth for the full year, it's those aren't -- those are decent numbers, but we're not jumping up and down about those numbers, right? But if you dissect the year, right, we're having -- we are having a contraction in our pipeline business. I think it will be -- it will be short-lived, but it's what we're facing in '25. So when we focus on the non-pipeline businesses, our guidance is 14% revenue growth, 26% EBITDA growth. I mean those are really impressive numbers, right? I don't -- and that's organic, right? That's not M&A inorganic growth. That's organic growth of 14% and 26% growth in earnings.

Can we do better than that? The answer is yes, right? We talked about earlier that I actually think we've got a good opportunity if things play out. Obviously, there's some uncertainty in the market today, and we've got to be cognizant of that. But I think that on the pipeline side, I think the year can be better than we're saying. There's been a lot of activity here in the last 4 or 5 months since the administration changed. There are a lot of projects trying to be pulled into '24, but there's challenges right and I think we've been really conservative as we've guided to that.

When we look at the non-pipeline businesses, I think we took a very conservative view of what we see in renewables. I think we've got a really good opportunity to do better than what we're saying. When we look at our comp business and the acceleration of what we're seeing from our customers, we've taken, I'd say, a realistic view, but it could be perceived as conservative relative to what's going to happen in the second half there with a lot of the new accounts that we've won. And even in Power Delivery, right, I think we've taken a moderate view of Greenlink what we can accomplish in year 1. So I feel really good about where we stand. We were in a difficult position in '23, where we were used to hitting and beating guidance for many years, in 2003 we had some challenges, and we kind of swear we didn't want to be there again. So as I look at our '25 plan, again, I'm not, 14% revenue growth, 26% earnings growth in our nonpipeline businesses solid, but I do think we can do better, and that's hopefully what we'll deliver in '25.

Got it. And then on Communication, I mean, you've got some really momentum here in both wireless and wireline. And it seems like wireline for years to come. But could you talk about maybe the wireless side beyond 2025, the visibility you have, the confidence you have that, that has some sustained strength beyond this year?

Sure. I think when you look at the injury as a whole, right, we've done really well with AT&T. Obviously, they're going through their Nokia Ericsson's swap out. I mean, for all intents and purposes, that just started, right? So that is not a '25 opportunity, that is a multiyear opportunity that's going to be bigger in '26 than it is in '25.

When you look at the other carriers, whether it's Verizon or T-Mobile, I mean, everybody is so focused on fiber that the wireless market is relatively slowed down investments, right? That's going to come back. There's no question because capacity is going to drive it. And when that happens, we're going to be there, right? We're actually really pleased with the fact that we've kind of been able to build the growth within the AT&T markets that we're supporting in an environment where anything else isn't going crazy because it makes it more challenging. So we feel good about the increase in labor that we have, the growth across the different markets in terms of our labor availability and the crews that we put together, and that's going to position us really well as Verizon and T-Mobile start to spend again.

The next to Avi Jaroslawicz from MasTec (sic) [ UBS ].

Hi good morning from UBS. But on the outlook for the pipeline segment. So I know you've spoken about some building momentum there. Do you feel like you have a line of sight to when we could see that business inflect to growth? Could that be sometime this year, maybe early '26 or even later than that?

So the commentary around potentially beating is obviously driven by timing, right? I think that you will see awards throughout '25. Those awards will primarily impact '26, but could impact '25 so I think that's kind of where we've guided to the [ 1.8 ] to the -- if we have success and some of those projects started a little bit earlier, we feel really good about our ability to beat that. If not through backlog growth throughout '25, you're going to get a really good sense of what we're going to achieve in '26 and beyond again, we fully expect 2026 to be at least at 2024 levels.

Okay. Got it. And then within the renewables business, how far out are you booked there? And are you hearing anything new from the customer base in terms of timing? It sounds like you're not really seeing any permit-related delays or timing shifts due to the policy uncertainty, but I just want to confirm that. And also within the CI segment, what do you still need to book to hit the guide?

Yes. So the reality is that we are in an incredible position relative to backlog and revenue targets for '25. For clarity's sake, and I know we've said it in the past, but when the only renewable business we have in backlog is projects that have actually fully committed. So we're not waiting on things for those projects to start. We have another category that we term that it's not backlog. We can track those projects, but it's not in backlog. So we feel really good about our '25 targets and where we sit on backlog relative to those. We have -- we're in the middle of a very active cycle of negotiations with customers. We're feeling really optimistic about '26 currently. Obviously, there's a lot of noise out there. You had the [indiscernible] [ wind ]. You've got a lot of talk about what's going to potentially happen with IRA or not.

Irrespective of those conversations and what might come out of that, we're still incredible bullish about 2026. If those things end up resolving in a more positive way, then I think that, that optimism only grows. So we feel great. We think '25 is going to be a great year. We've got a lot of bookings currently for '26. We've got a lot of projects that will convert to backlog that are '26 here in the near future. So our multiyear outlook in that business is really, really strong.

Then next to Drew Chamberlain with JPMorgan.

Just a follow-up on that last one. Are you hearing any pull forward from your customers as they kind of mull potential, IRA changes or any other sort of policy [indiscernible]? So maybe that some projects that were once maybe slated a little bit later in the decade or pulling forward the '25, '26 time frame?

Well, not '25 or '26. I don't think that that's really feasible, right? There is talk out, if you shorten the period of the IRA, right, that projects that were slated for the early 2030s would move into the late 2020s. So could we see a significant increase activity in '27, '28, '29 for people trying to get what would ultimately be a shorter time frame in the [indiscernible] to finish their projects potentially. I don't know that -- we're not seeing that in '25 for sure. I don't know that we'll see that '26 but depending on what happens with the legislation, is there an opportunity for '27, '28 and '29 to be significantly bigger because of some pull forward of the IRA. That's -- there is potential for that. There's conversations around that. But at this point through the end of the decade, we see an unbelievably active environment.

Okay. Okay. And then just a quick one on the data center opportunity, are you seeing any bookings or any of that $300 million in '25 is going to be in Power Delivery or generation or fiber build-outs? Or is it still all on the more of the heavy civil and more of the land preparation work?

Yes. So it's both, right? Because, I mean, we obviously announced a large award with Lumen last quarter, which is data center driven. We're not necessarily calling that out when we talk about data center revenue. So our data center revenue is more focused on data center sites. It could be power work, it could be civil work, but it's -- we're not trying to take dollars associated with a third-party customer for example, a big fiber network and fully attributed to data centers. We're really not doing that as we speak about the commentary.

So but it's impacting all of our businesses, right? The reality is that data centers and [ AR ] are going to consume an enormous amount of both power and fiber bandwidth that will have a very significant impact on our business irrespective of whatever we might do for a hyperscaler or a data center developer. And I think that's important. I know there's again, we know there's concerns out there, and we know there's power concerns. When you look at every single projection of what the incremental power usage is going to be. It varies greatly right from low single digits to mid- to high single digits on a yearly basis. Just the real -- the reality of any of those numbers, right, is that the amount of power that's going to be generated to help these industries over the next 10 years, just it's absolutely incredible. And whether you're at the low end of that spectrum or the high end of that spectrum for us, it really doesn't matter because it's so much incremental growth that we should benefit from.

And again, I say that related to multiple businesses that we have, right? It's going to impact our Civil business, it's going to impact our Telecom business, it's going to impact our Power business, it's going to impact our Clean Energy Generation business. So we're just again, we just feel like we're in a great spot right now.

At this time, there are no further questions. I'll turn the call back over to Jose for closing remarks.

Just want to thank everybody for participating today, and we look forward to our first quarter call in a few months. So thank you for joining us.

This does conclude today's conference. We thank you for your participation.