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MasTec is an infrastructure construction company operating primarily in the U.S. and Canada. The company builds infrastructure for wireless and wireline/fiber communications, clean energy, pipeline infrastructure, power delivery services such as electrical and gas transmission, industrial and heavy civil infrastructure, and water infrastructure. MasTec’s customers are in utilities, communications, and government.

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MasTec (MTZ): Company Profile, Stock Price, News, Rankings

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MasTec

mastec

Welcome to the MasTec's Fourth Quarter twenty twenty four Earnings Conference Call initially broadcast on Friday, 02/28/2025. 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, Mark Lewis, MasTec's Vice President of Investor Relations. Mark?

Thanks, Jennifer, and good morning, everyone. Welcome to MasTech'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 events or 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 be 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 two documents associated with today's webcast on the Investor Events and Presentations page of our website at mastek.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 and Paul Demarco, our EVP and Chief Financial Officer. The format of the call will be opening remarks and announcements by Jose followed by financial review from Paul.

These discussions will be followed by a Q and A period and we expect the call to last about sixty minutes. We have another great quarter ahead of expectations and we'll have important things to talk about today. So I'll turn the call over to Jose. Jose?

Thanks, Mark. Good morning and welcome to MasTec's twenty twenty four 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 $3,400,000,000 fourth quarter adjusted EBITDA was $271,000,000 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 $12,300,000,000 20 20 4 adjusted EBITDA was $1,060,000,000 an almost 20% year over year increase 2024 full year adjusted earnings per share was $3.95 and full year cash flow from operations was $1,100,000,000 and net debt was reduced by over $700,000,000 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 non pipeline revenue increased 21% year over year and fourth quarter non pipeline 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 twenty twenty twenty four because of the completion of the Mountain Valley Pipeline, we expect our nine pipeline businesses to grow revenues 14% and EBITDA by over 25%. I'd like to repeat that. For 2025, we expect our non pipeline revenues to increase 14% and non pipeline 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 seventeen 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 multi year 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 $400,000,000 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 this segment increasing by over $500,000,000 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 isn't 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 $150,000,000 sequentially and up about $900,000,000 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 $1,800,000,000 for the segment versus the just over $2,100,000,000 we achieved this year. As we previously discussed, the completion of the Mountain Valley pipeline is impacting twenty twenty five 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 $100,000,000 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 $1,100,000,000 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 biggest 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 long 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 enhanced 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 3,400,000,000 and adjusted EBITDA was $271,000,000 exceeding guidance by approximately $12,000,000 Clean Energy and Infrastructure drove the fourth quarter results with $104,000,000 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 $12,300,000,000 while adjusted EBITDA of $1,060,000,000 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 $470,000,000 bringing the total for 2024 to $1,100,000,000 a MasTec record. DSO continued its positive trend ending at sixty days for the quarter down from sixty eight days at the third quarter and seventy four days for the prior year. Net debt at year end is $1,800,000,000 down over $700,000,000 for the year. Net leverage now stands at 1.8 times 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.

Eighteen month backlog at year end totaled $14,300,000,000 an increase of over $400,000,000 sequentially and almost $2,000,000,000 year over year. This represents a record level for MasTec and all three 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 segments individually. We have very good visibility to support our 2025 outlook and dialogue with customers across all of our end markets continues to indicate strong demand into 2026 and beyond. Turning now to our segment performance and outlook.

Fourth quarter communications revenue was $975,000,000 ahead of our estimate and up 20% year over year. Adjusted EBITDA margin was 9.9% expanding two thirty basis points year over year. We continued the efficient transition into our expanded wireless territories and the pace of activity on wireline projects remained strong. Annual 2024 Communications segment revenue was $3,460,000,000 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 $2,800,000,000 11 percent 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 twenty twenty five is expected to be $600,000,000 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 in our guidance summary. Fourth quarter Clean Energy and Infrastructure segment revenue was $1,260,000,000 18 percent growth year over year with adjusted EBITDA margins of 8.3% increasing 80 basis points from our strong third quarter and over three forty basis points year over year. Once again, we had strong performance across all three segment verticals with renewables, infrastructure and industrial all posting their highest margins of the year.

Full year segment revenue was approximately $4,100,000,000 with adjusted EBITDA margins of 6.3%, up 200 basis points from 2023. Backlog for the segment now stands at $4,200,000,000 up 36% year over year. Our revenue visibility continues to improve for this segment. For 2025, we expect Clean Energy segment revenue to approximate $4,750,000,000 approximately 16% growth. Adjusted EBITDA margins are expected to be approximately 7%.

Q1 revenue is expected to be $950,000,000 representing 26% growth year over year with adjusted EBITDA margins in the mid single digits two fifty to 300 basis points higher versus last year. Fourth quarter pipeline infrastructure revenue was four thirty million dollars with adjusted EBITDA margins of 13.6%. For the full year, revenue was $2,100,000,000 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 $1,800,000,000 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 $325,000,000 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 multi year expansion cycle for this segment that we are uniquely positioned to capitalize on.

Fourth quarter Power Delivery segment revenue was $762,000,000 and adjusted EBITDA margin was 7.1%, both in line with our expectations. Annual twenty twenty four Power Delivery segment revenue was approximately $2,700,000,000 with annual adjusted EBITDA margin of 7%. Two important developments occurred in the fourth quarter. First, we began construction of the Green Link transmission line, which which is moving along well. Second, two Midwest utility clients resolved the rate case appeals and have indicated a path to increase capital expenditures in 2025.

Our 2025 outlook incorporating the realigned utility operations previously reported in communications calls for revenue of $4,150,000,000 15 percent 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 $850,000,000 with adjusted EBITDA margins 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 $13,450,000,000 with adjusted EBITDA ranging from $1,100,000,000 to $1,150,000,000 dollars Adjusted earnings per share is expected to range between $5.35 and $5.84 We expect Q1 revenue of $2,700,000,000 adjusted EBITDA of $160,000,000 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 reduced outlook for pipeline activity. We expect to generate approximately $700,000,000 of cash flow from operations in 2025, assuming DSO is average in the mid-60s over the course of the year. At our current leverage, we have full flexibility around capital allocation and we'll continue to drive our decisions 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 and A.

Thank you. We'll go first to Jamie Cook with Truist.

Good morning and 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 and A just given the organic growth opportunity you have out there? Thank you.

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 and 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 Sangeetha Jain with KeyBanc Capital Markets.

Good morning. Thank you for taking my questions. So I was looking at your Clean Energy margins for the quarter and they surprised us to the upside. I know 4Q can be tricky with weather.

So wondering what we may have seen during the quarter, whether there were closeouts or it's just structural improvement 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 built Q4 with a lot of conservatism. The team delivered what it said it 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 $200,000,000 plus range in data center activities for 2024. We expect that number to increase significantly in 2025, but still not to the levels of what we ultimately think we can achieve. We're probably shooting for about a $300,000,000 number in 2025.

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 with Citigroup.

Jose, 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 Masa could continue to grow backlog in all segments in 2025? I know you said you'll grow in 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 twenty eighteen. And subsequent to that, we had two amazing years of growth in earnings. So I feel really, 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 twenty twenty five, 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 2025. 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 2025 at all?

So beads makes up a very, very small negligible piece of what we're thinking about for 2025. We do think that it will have significant impact in 2026 and beyond. Obviously, the contract with AT and T that we discussed at the end of twenty twenty three, which kind of took effect in the second half of twenty twenty four. We saw that come through our numbers in the second half of twenty twenty four as part of what drove our revenue and earnings beat. 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 twenty twenty five. So I think what we're talking about 2025 is a lot about what we've already announced. I think what's yet to come is the buildup into 2026.

I expect 2026 to be a really good year, another further year of growth. So we're really bullish about where we stand today, 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 Hocky with Robert W. Baird.

Great. Yes, a lot of my questions have been answered either from 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 $350,000,000 quarter over quarter. And I guess I was just curious if that's a headwind as we think about 2025 and just maybe the economics on that decision because relative to your $700,000,000 guide for the year, it looks like that was kind of the factor here in 4Q.

So, Justin, remember with AR programs, you have to look at the amount that's outstanding in the period. So in the quarter, in the year, it had about $20,000,000 impact. So it's really negligible. So it's not a factor in the capital generation. The capital generation was driven by reduction in WIP from a as a day of sale outstanding and an increase in mobilization payments associated with renewable and DOT projects.

Those are really the drivers. They are programs negligible.

Okay, great. Thank you. I guess my other question was just now that you guys are naming the large transmission contractor, the Green Leaf contract, can you give the amount of backlog, the eighteen month backlog contributed 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.

About the annual revenue contribution. So I think we said $300,000,000 to $500,000,000 annually and there's a year and a half of it. So I think that's a reasonable estimate.

does make up a significant portion of the $900,000,000 growth that we had from beginning of year to end of year. So of the $900,000,000 you could assume about half of it came from that one project.

We'll go next to Adam Thalhimer with Thomas Davis.

Hey, good morning guys. Nice quarter, nice outlook. Hey, Jose, I wanted to zero in on your margin improvement commentary. I was curious what gives you the confidence 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 twenty twenty four, margin dollars improved 28% year over year in our non pipeline businesses. I think the way that we're trying to really play out the story is obviously our pipeline business has performed great. When the work is there, we perform 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? 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 twenty twenty four, we started to demonstrate that.

EBITDA grew in our non pipeline businesses by 28% in the third quarter. That 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. So 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 with that said, with all that said, because I think it's great improvement, we still have a ton of opportunity. And we know we've got the ability to continue to increase margins in all three of our non pipeline segments. And hopefully throughout 2025, we can execute on that and demonstrate that. A long time ago we laid out a path to get to $15,000,000,000 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 twenty twenty four and we hope we can keep demonstrating that throughout 2025.

Okay. And then 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 $1,000,000,000 And with the new restated kind of numbers, our comms business will be $2,800,000,000 in 2025. So it's about 40% of our business and we've done a great job at 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 going to be a strong wireless cycle that's coming. It won't be in 2025, 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.

Hi, good morning, team. 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?

Yes. 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 $1,500,000,000 to $2,000,000,000 billion dollars 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 five quarters of shrinking backlog quarter over quarter and this is the first quarter where we actually had an uptick in backlog and again in five quarters. So we're excited about that. We think that throughout 2025 backlog will increase significantly in the business to support growth in 2026 and beyond.

And again, we're seeing a ton of activity and our commentary is more towards larger projects than it is just growth in the base business.

That's super helpful. Thanks. And then on the power delivery side, I mean, there's been some recent announcements for seven sixty five kV lines in the PJM market under a 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 or 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 timelines around transmission lines and I think there's 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.

MasTec (MTZ) Q4 2024 Earnings Call Transcript

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