MasTec, Inc. Q2 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Revenue: $3.0B (slightly below expectations; down ~4% vs guidance).
  • Adjusted EBITDA: $268M (beat by $8M; 65 bps above guidance).
  • Adjusted EPS: $0.96 (beat by $0.08).
  • Backlog: $13.3B, up $500M sequentially; record backlogs in multiple segments.
  • Net leverage: under 2.5x after ~$200M debt reduction.
  • Operating cash flow: $265M (driven by improved margins and DSOs at 69 days).

Business Segment Performance

Pipeline Segment
  • Q2 revenue: $572M (slightly below forecast due to timing).
  • Adjusted EBITDA: $135M (23.6%).
  • FY24 revenue raised to $2.1B (up $100M from prior guide).
  • Margins expected in high teens for FY24 (up 300–400bps vs 2023).
  • Key note: MVP is online; segment demand strong with multiyear visibility.
Communications Segment
  • Q2 revenue: $825M; EBITDA margin: 9.9% (ahead of expectations).
  • FY24 revenue revised slightly down to $3.45B, but margins held steady in high single digits.
  • Q3 revenue expected at $950M (+15% YoY), with margins in low double digits.
  • Backlog reached a record $5.9B.
  • Management expects nearly 20% organic revenue growth in 2H24 vs 2H23.
  • Strong setup for 2025 driven by wireless/wireline ramp and BEAD funding impact.

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Operator: Welcome to MasTec’s Second Quarter 2024 Earnings Conference Call, initially broadcast on Friday, August 2, 2024. 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? Marc Lewis: Thanks, Samara, and good morning, everyone. Welcome to MasTec’s second 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 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 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 today’s call. In today’s remarks by management, we will be discussing adjusted financial metrics, reconciled in yesterday’s press release and supporting schedules. In addition, we may use certain non-GAAP

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