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Greetings, and welcome to Centuri's Third Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce you your host, Nate Tetlow, Centuri's Vice President of Investor Relations. Please, you may begin.

Thank you, Olivia, and good morning, everyone. Today, we issued and posted to Centuri Holdings' website our third quarter 2025 earnings release and earnings slide deck. Please note that on today's call, we will address certain factors that may impact this year's earnings and provide some longer-term guidance. Some of the information that will be discussed today contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are as of today's date and based on management's assumptions on what the future holds, but 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-GAAP measures is included on Slide 2 and Slide 15 of the presentation, today's press release and our filings with the Securities and Exchange Commission. We encourage you to review these documents. Also provided are reconciliations of our non-GAAP measures to related GAAP measures. These risks and uncertainties may cause actual results to differ materially from statements made today. We caution against 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 Izenstark, Chief Financial Officer. I will now turn the call over to Chris.

Thank you, Nate. We're delighted to have you on board, and hello to everybody on the call. We appreciate you joining our third quarter 2025 earnings call. We are proud to have delivered record revenue for the quarter, improved our base profitability and produced third quarter adjusted net income of $16.7 million, an increase of $11.4 million from the same quarter last year. While the concept of discussing our base business performance is not new to us, it does reflect a new way of discussing our results with the market. With today's earnings release, we've introduced a couple of new non-GAAP measures, which are base revenue, base gross profit and base gross profit margin. Each measure simply excludes the impact of storm restoration services, which is out of our control and creates volatility in our reporting numbers. Storm restoration services are an important part of our service offerings for customers. However, we believe that these new measures will provide our stakeholders with better information, better aligned to evaluate the fundamentals of our business performance and provides for improved period-over-period comparisons. In the third quarter, we increased our base revenue by 25% and saw a 28% increase in base gross profit. This is remarkable growth and reflects the dedication of our teams across the U.S. and Canada, and their unwavering commitment to safety, productivity and delivering exceptional services to our customers. As I start with the commercial update, we have continued to make great strides in our business development. Our Q3 bookings of approximately $815 million reflects a book-to-bill of almost 1. Importantly, nearly 80% of the dollar value of the bookings reflects new revenue opportunities, meaning strategic bids on new MSAs. The work includes the 9-figure natural gas steel pipeline replacement project for an existing Midwest customer, driven by the PHMSA Gas Mega Rule pipeline regulations. Additionally, work scopes exceeding $50 million for data center campus projects across Pennsylvania and a sizable contract for a mechanical vapor recompression system serving a renewable natural gas sector. We are seeing continued momentum in the pipeline for bid opportunities, and we are now winning bids at a very constant rate. Total bookings for the year now stand at $3.7 billion, putting us well ahead of the 1.1x targeted book-to-bill for the full year 2025. On the MSA front, we booked $170 million in renewals, which included an extension with a long-standing utility partner in the Northeast. We also secured more than $65 million in incremental MSA work, which included new MSA contracts in the Midwest and Southeast for gas and electric distribution work. Our backlog reached a record high of approximately $5.9 billion, up from the $5.3 billion last quarter. We are experiencing significant growth with many of our existing customers, which gives us line of sight to incremental workload under existing MSA contracts. This is what drove the more than 10% increase in backlog from the last quarter. Our overall opportunity pipeline remains very robust at about $13 billion. We now have over 600 strategic bid opportunities in the pipeline, which collectively represent a little more than half of the $13 billion. The strategic bids also include $1.3 billion related to various data center opportunities. Over the near term, we are tracking $1.7 billion of strategic bids with an award decision expected by the end of the first quarter 2026 and about $1.3 billion across MSA renewals and new MSA awards also due by the end of Q1 2026. With the visibility we have in our backlog, the near-term booking expectations and a conservative baseline for incremental awards in '26, we have line of sight to double-digit revenue growth in 2026. More details on the backlog, pipeline and the growth outlook are on Slide 8 within the investor deck we've posted today. Let's turn to efficiency. We've executed a strategic fleet optimization initiative with the goal of generating more cash for the business. The initiative has 2 key components. First, we're targeting an optimal 50-50 funding mix, maintaining half of our fleet on the balance sheet whilst leveraging leasing structures for the remainder. Second, we are aiming for a 20% plus improvement in fleet efficiency through enhanced supply and pricing, improved utilization rates and optimized allocation across our business units. Last month, we began executing the funding plan by entering into operating lease agreements totaling approximately $50 million. These initial leases are primarily focused on equipment that we had been -- that we have had on the short-term rental agreements. We will continue to keep the market updated as we make more progress -- more significant progress on these initiatives. Recently, in September, we completed our separation from Southwest Gas Holdings upon the closing of their sale of the remaining shares in Centuri. In conjunction with the full separation, we appointed Christopher Krummel as Independent Chair of the Board of Directors. Chris brings over 30 years of financial executive experience in energy and construction and serves well to lead our Board. And lastly, we recently announced the addition of Ryan Palazzo as President of U.S. Gas. Ryan has more than 3 decades of experience, deep industry relationships and leadership capabilities to drive operational excellence, drive further profitability and strategic growth. We are thrilled to have added Ryan to our team. Now over to Greg to discuss the results.

Thank you, Chris, and good morning to everyone joining us today. Third quarter 2025 consolidated revenues totaled $850 million, a new quarterly record and was an 18% increase from Q3 2024. Consolidated gross profit was $78 million compared to $75.8 million in the prior year period, and gross profit margin of 9.2% in the third quarter of 2025 compared to 10.5% last year. When isolating our base results, the strength and growth of the business is clear, with base revenues up 25% and base gross profit up 28% compared to last year. Base gross profit margin was 9.1% in the third quarter versus 8.9% last year. Net income attributable to common stockholders in the third quarter was $2.1 million, or $0.02 per share compared to a net loss attributable to common stockholders of $3.7 million, or $0.04 on a per share basis in the same period last year. In the third quarter of 2025, adjusted EBITDA was $75.2 million, which compares to $78.8 million in the prior year's quarter. Adjusted net income in the third quarter came in at $16.7 million, or $0.19 on a per share basis compared to $5.3 million, or $0.06 per share in the prior year's period. The difference between our GAAP and non-GAAP adjusted net income primarily reflects the after-tax impact of amortization of intangible assets, certain non-recurring costs and non-cash stock-based compensation. Notable in Q3 2025 was $8.2 million, or $0.09 per share in charges related to the debt refinancing executed early in the quarter. Now to our segments. U.S. Gas revenue was $412.4 million, an increase of 13% compared to the prior year. This improvement largely reflects solid growth in MSA volumes and certain bid projects, demonstrating the underlying strength of our customer relationships and market position. Gross profit margin was 7.7% in the third quarter of 2025, modestly improved over last year's 7.6% in the third quarter. We continue to focus on margin improvement and our priority continues to be centered around better contract management and operational execution. Canadian Gas revenue was $74.2 million, up nearly 40% from the prior year period. Operational performance in this segment remains strong against the backdrop of sustained favorable demand as evidenced by the 21.9% gross profit margin in the quarter. Union Electric revenue was $214.5 million, an increase of 25% year-over-year. Base revenue in this segment was $213 million, reflecting a 29% year-over-year increase. Growth has been fueled by robust activity in projects serving industrial end-user segments, particularly substation infrastructure and inside electric work. Gross profit margin in the Union Electric segment was 9.1% in the third quarter of 2025, slightly ahead of the third quarter of last year. Base gross profit margin improved to 9% from 8.1% last year, driven by the strong increase in project work. Non-Union Electric revenue in the third quarter of 2025 was $149 million, an increase of 16% year-over-year. This segment is most relevant to base business comparisons as historically, a majority of storm restoration services related to this segment, including last year's very active hurricane season. Base revenue in Non-Union Electric was also $149 million in the quarter, which is a 58% increase from last year. This growth reflects the significant expansion we've seen in MSA activity, building on the momentum we discussed in recent quarters. Gross profit margin in the Non-Union Electric segment was 7.1% in the current period compared to 16.6% in the prior year period, reflecting the just mentioned significant storm work last year. Base gross profit margin was 7.1% compared to 8.7% in the prior year period. The primary driver of margin pressure in the quarter resulted from ramping crews for new and expanding MSAs. Specifically, headcount increased more than 20% this year to support the growth in workload. As crews gained experience and these operations mature, we expect to improve productivity, resulting in margin improvement. We have already seen margins improve in October, and we expect continued progress throughout the remainder of Q4. Turning to capital expenditures. Net CapEx was $21.5 million, and our free cash flow in the third quarter 2025 was negative $16.3 million. Our free cash flow generation tends to be seasonal in nature, with more generation occurring in the second half of the year. With the strong growth we delivered this year, our accounts receivable balance has increased. However, this is a timing issue, and we expect this to normalize in the fourth quarter. As such, we expect to generate meaningful free cash flow in the fourth quarter. Moving to the balance sheet. On a trailing 12-month basis, our net debt to adjusted EBITDA ratio was 3.8x at September 28, 2025, a slight uptick from 3.7x at June 29, 2025. With the anticipated step-up in fourth quarter free cash flow, we expect our year-end leverage ratio to be approximately 3.3x to 3.4x. We ended the quarter with $16.1 million in cash and cash equivalents on our balance sheet. Early in Q3, we successfully completed a refinancing of our debt arrangements. We extended our revolver maturity to 2030 and increased the facility size to $450 million. We also extended our $800 million Term Loan B maturity to 2032 at a modestly improved interest rate. Finally, turning to our 2025 outlook. We increased our full-year revenue guidance to $2.8 billion to $2.9 billion. The increase is consistent with the significant growth in our base business, which more than offset the lack of storm activity this year. For adjusted EBITDA, we expect between $240 million and $250 million. Again, this revision is consistent with lower forecasted storm activity, including a de minimis amount of storm work assumed in the fourth quarter. Lastly, our net CapEx. We've maintained our planned investment range of $75 million to $90 million. We remain confident in the outlook of our base business and are making the necessary investments in a more capital-efficient manner to optimize the growth opportunities ahead of us. I will now turn it back to Chris to wrap up our prepared remarks. Chris?

Thank you, Greg. As we wrap up today's call, I want to emphasize that Centuri continues to execute on its strategic vision of building a premier standalone utility services company capable of delivering sustainable and profitable growth. Our third quarter results demonstrate solid progress. Base revenue growth was 25%. Base profit -- gross profit was 28%, reflecting our team's commercial drive, dedication to operational excellence and customer service. Our commercial momentum remains robust with $3.7 billion in bookings through September, a record backlog of $5.9 billion and a total opportunity pipeline of $13 billion. Put together, our commercial success so far in 2025, it positions us well for double-digit revenue growth in 2026. The fundamental drivers supporting our business remains strong, accelerating utility infrastructure investment, the energy transition and expanding customer relationships across North America. As we advance our comprehensive multi-year strategic planning process, we're positioning Centuri to be a differentiated leader in this significant market opportunity. We very much appreciate your time and interest today. And operator, let's begin the Q&A.

[Operator Instructions] Your first question comes from Justin Hauke of Robert W. Baird.

Great. I appreciate the new disclosure with the base revenue and gross profit. That certainly helps. And I guess it leads to my first question is just to maybe understand the EBITDA impact from the storm because you obviously quantified it for the third quarter and gross profit. But the $15 million decline in guidance, how much of that EBITDA impact is the storm? Is that the full $15 million? And then maybe if you can quantify the impact of 3Q versus 4Q in the guide, given that there was a decent amount of storm activity last year in 4Q?

So the decline in the kind of the midpoint of the guidance is all related to storm activities. In fact, our forecasted storm activities were a bit higher, and we've actually been able to make up some of that with just our base business growth. And it was probably 60-40 from a percentage perspective between Q3 and Q4 on a storm basis, but that was our expectations, I think was your second question.

Yes, no, I just was trying to confirm that it was entirely storm and that, that was the $15 million and the split between the quarters. So yes, I think that answers it. I guess my second question -- I got a couple here, but I guess the second one that I would just ask about would be, you called out some of the ramp in the MSA contract work that wasn't at full utilization, I guess, in the Non-Union Electric piece. And I was just hoping maybe you could quantify that impact. And would you expect in 4Q that's at full utilization? Or is that something that's going to linger as a cost until we get into '26 and kind of get the revenue contribution in line with that?

Justin, it's Chris. Let me answer that. If you just look at the process we go through, you've got to deploy capital to find opportunity, deploy capital to bid opportunity. You've then got to win it. You've then got to reposition resources. You bring in new resources. All of that sort of costs the business with no revenue contribution. You then mobilize the teams and it takes a while for them to get productive. So, I think when you've had such a massive ramp-up, I think the Non-Union business in the core is up about 50% year-over-year. There's always going to be a little bit of a lag before you get to that level of performance you want. I actually think as we look at October and we look into November, that more or less is fully recovered. By the time we close out the year, that particular scope of work will be at the levels we expected it to be from a margin standpoint. But I would caution, we will add progressively bigger scopes of work all around the nation, and we'll have a similar phenomenon. It's just the nature of project-related business.

Your next question comes from Sangita Jain of KeyBanc Capital Markets.

So, obviously, a lot of progress on bookings and the core profits improving. Can you help us understand the difference in margins between, let's say, the data center type opportunities versus PHMSA-related work or other bid work?

How do I answer that, Sangita? I would say -- I'll let Greg talk to the general margin profile in the business across the core and the MSAs in a minute. But let me talk more specifically around what we're seeing in the pipeline, first of all, and then to data centers. We've been playing a little bit of catch-up as we've discussed on prior calls to get a sufficient amount of both backlog and coverage to be sure that we're able to grow the business at the core and not rely upon storm. I think it's taken us to maybe the third -- getting into the third quarter to have sufficient backlog, sufficient coverage and a sufficient data set. So, we've really got a good handle on our business so that we can be predictable. We've got volume into the business, and we're basically able to recover the overhead that we need to for the size of the business. We're now coming to a point where as we look to the future and we start to look at new bid opportunities, of which -- we're looking at $2 billion at the moment. We're looking at where it makes sense to put margins up in the competitive environment. It's more difficult on MSAs that are renewals because there's already a price expectations set with the customer, and we're able to do some things. But we are now in a position as we start to look at new market opportunities, bid opportunities, including data center work where we can put our margins up in the core of the business. And that's what we're currently doing. It's been very difficult to do that until we have enough baseload work, until we've got enough volume into the business until we've got a good control on it. But we're now at that point where we've got full coverage for this year. So, we know exactly what work we're going to do between now and the year-end. We've got high visibility for next year, and you saw it in the coverage slide in the deck, I think it was Slide 8, if my memory is good. Our focus now is how do we put margins up and get a better return on our invested capital, simple as that.

And to follow on that, you asked about the margins kind of in our backlog. And while margins project by project might differ a little bit, I think we're very pleased with the bid margin that we're getting on the awarded work. Some of that data center-related activity is a project-based, so it's a bit higher than maybe some of the MSAs, but we're very pleased with what we're getting on award.

Great. That was very helpful. Go ahead.

Sorry, Sangita. I was just going to add one thing is even with the sort of mobilization impacts in the Non-Union business, our core margins have gone up by 0.2% over the past. And that's despite the fact we've added over $100 million of core business of revenue in the quarter. So the work we were booking in the first part of this year, which is now going to the revenue line is already proving to be more profitable and it's still at its early stages of execution.

Right, right. That was very helpful. And then just a quick follow-up. In your double-digit revenue outlook for next year that you just alluded to, is there any kind of storm that you're building in that? I know this year, it was an average of 3 years, but just wondering what you're thinking about for next year?

Sangita, I stress what we said in our text that -- in our spoken word. Storm will always be part of our business because customers want us to do storm work for them when they're in a crisis situation and with that bad weather come. Our customers want that, and the population needs that. But it's very difficult to plan because we can't predict the weather, even though we don't like to be able to do that. So, you will only hear us talk about base business, base backlog, base coverage. And if storm happens, it would be upside to what you see. It will not be in our planning purposes. And the logic being is one, it makes us more predictable. Two is if we add more to the base in terms of people, resources and equipment, it means that if there is a storm event, we get more opportunity and upside. So, we're just going to talk about the base in terms of growth, budgeting and guidance. And we will, of course, continue to let you know what storm has happened over a trailing period of time, so you can factor that in. But coverage is all going to be around base business that we can control.

Your next question comes from Joe O'Dea of Wells Fargo.

Can you just elaborate on the strength of the base revenue growth a little bit more in the quarter when you talk about that 25%? How that compared to internal planning? Anything that you saw coming into Q3 that you thought might be in Q4 versus just a broader acceleration?

Joe, without giving you my budget sheets, I talk generally. There was no -- let me deal with the second question first. There was no desire and no attempt, and there's no underlying pull from Q4 into Q3. That's not the case at all. So it's not like we've had a -- we pulled Q4 revenue into Q3. That's not the case. The $850 million that came out of the third quarter is exactly what it is, the revenue for the quarter. So, we've not looked to highly impressed in the third quarter. We've got really good coverage in the fourth quarter, and that's why we've raised the revenue guidance. So, we expect the momentum in the fourth quarter to continue. The only thing about the fourth quarter is we've clearly got 2 holidays being Thanksgiving and the year-end, and that's really the only factor we've got. In terms of base business performance, I think we've done better overall in our performance in the base business that we all expected and that's a good thing. And that's really driven by the success of our teams in finding the opportunity, getting the organization focused on servicing our customers and doing more for our customers that led to the backlog and has led to the revenue growth. And I think everybody has seen double-digit growth within their base businesses across all of the 4 service lines. And we would push to continue that going into next year. But we've performed better in the base business than we may have expected. But you also remember, Joe, we've only been at this as a team for a few quarters now. We're only just seeing the benefits of the pipeline. And it's good to be impressed and good to be pleased and good to exceed your internal targets on the base business. But we're also learning and we want more out of it, and that's what we seek to do in the future.

And then how do you think about the process for prioritizing the bid opportunities in front of you when you talk about the 600 bid opportunities in the pipeline and how you think about margin as a prioritization focus versus top line growth versus where you've identified regions that you want to get bigger in? Just how all that comes together for prioritization around the bid opportunities?

Yes. That's a big question. Our number -- I think the #1 priority, I think, really rests within the gas business. We've had a fantastic quarter. We've had 2 fantastic quarters of performance in the gas business. And I think Q4 sits really well when we look at the backlog, look at the work the team has done. We've added more strength to the team, some new people. But the priority is to sort of eliminate the seasonality in the business. So, that work we are starting ahead as we come into the first quarter. So on the gas side, the priority is winning work around the U.S. that allows us to work 24/7, 365 days a year, primarily focused on the first quarter. So, that would be number one that jumps to mind immediately because once we're able to fix the seasonality, I think the profitability across the full gas business will completely change for us. Then when it comes to the rest, look, general principle on margins, I'll just repeat. We've now got the sales analytics. We've got the organization positioned to profitable growth. We have a very accurate data set now. We track win rates. We track margins. But we need to monitor this a little bit. We've got -- we believe we don't have a problem finding profitable growth. You've seen that in this year's performance. If you just look at where we're trending from a full-year revenue target, we put the coverage slide into the deck, I've repeated twice now. That demonstrates a further 10-plus percent just on what we know today. So, I frankly don't believe we're at that phase where we're worried about end market opportunity. So, we're going to start to prioritize and get our margins up. We've got to be very selective how we do that because we've got some core customers that we must nurture, continue to support because they rely upon us. But there'll be new opportunities with new customers where we can afford to price it up and we may win a few, we may lose a few. But the win rates are holding good already as we come through to the end of the third -- into the fourth quarter. So, we will be sensitive to trying to put our price margin -- our price up and our margins up as we look to the next phase of our growth going into '26.

Your last question comes from Steven Fisher of UBS.

Just wanted to follow up on a few of these things, particularly starting off with U.S. Gas. And I know you said you're pleased with the result. I'm just kind of curious how the margins and the overall profits from that compared to your expectations. It sounds like it's still somewhat of a business where you're putting some focus operationally. It sounds like there is some new leadership. Where is the focus there just from a sort of an execution perspective? I know you're trying to kind of build it out regionally to reduce the cyclicality. But just operationally, where is the focus there? And how did this quarter compare to your expectations? And then I'll ask my second question now is just with regard to the $3 billion of strategic bids, how are you thinking about the discrete overall project mix relative to sort of distribution work and MSA just kind of flow work. Where are you comfortable having discrete size project as a percentage of the overall business mix?

All right, Steve. I'll try and answer the question for you. Let me talk intimately about the gas business. I think 8 months ago, gas performance was consuming an inordinate amount of time as well as the leadership's time to sort of complete what was started last year, which was sort of simplification of the organization. The delayering that building ahead of me was much needed. There was a refocusing effort. There was some rightsizing needed to be done. There was some accountability and performance management we needed to do. And I think we've really come through that. I think the second quarter performance did better than I expected. The third quarter performance was very predictable with the mix of work we've got. And I think we're -- I wouldn't say we've taken our foot off the gas, nor have we taken our eyes off the ball here, but the team that leads that business is really operating at steady state now. And I don't foresee anything structurally we need to do there. I think we'll well up the experience curve about how we should be operating. And I think the margins are good. I really do. I know there's a lot written about the margin should be better. But if you look at -- and we just benchmark our margins. If you look at the margins in our gas business with the mix of work that we currently execute, we're very pleased with where the margins are. What we're not pleased with is the seasonality. And we had a negative $15 million in the first quarter this year. We've got to fix that as quick as we can. So, that remains to be a priority where we're spending our time talking to different customers and new customers and migration of customers where we know we can work in that first quarter. The second thing I would say to you is we've -- I'm proud of the gas business. I'm proud of the gas team. And I think Dylan and his team have done a fantastic job under difficult circumstances last year going into this year. We've got it at steady state, but we needed more bandwidth in the business so that we can grow with new customers. So the logic for bringing Ryan in -- and I'll talk a bit more about that in a second. Bringing Ryan in was to bring more bandwidth to the leadership team so that we can look at things differently. We can look at pricing. We've got slightly different customers but doing the same services and really much -- and focus the business more strategically about getting margins up. So on the gas side, very pleased where we are. The mix of work and the margins we've got are commensurate with where we are. I don't think there's going to be much that changes there. The real focus is seasonality, new customers that allow us to take the same services at higher margins. And that's why Ryan has been brought in to support the team here. So, that's where the gas business is.

Super helpful.

On the $3 billion, Steve -- on the $3 billion -- so on the last call, and Nate is probably going to tell me, I'm not totally accurate on this. But we had -- I think July 4 week, when I got that sales report, we had about $2.2 billion of opportunities that would be decided in the next 6 months. That's now the $3 billion we referred to. So, this is like-for-like over a quarter period. And so that has increased well over 40%, 45%, which tells me that the opportunities that are in the pipeline are converted to real bids because that $3 billion are either tenders we've already submitted or the tenders we're working on and we're about to submit. It's not really stuff that we'll bid in the future. It's now. Its real and now. Of that mix, most of it is actually accretive bid work. It's about $1.7 billion, if my memory is good. And then $1.3 billion of it is really MSA renewals, most of which -- I think 85% of the $1.3 billion is MSA renewals and the other 15% are new MSAs or additive MSAs to the base business. Meanwhile, the $1.7 billion is new additive bid work that we're working on. The mix within that, I know you was going to ask me, is about 60% electrical work and 40% gas related. That's the mix. Does that answer your question, Steve?

Yes.

We have reached the end of the question-and-answer session. I will now turn the call over to Nate Tetlow. Please continue.

Thank you all for joining the call today, and we appreciate your interest in Centuri. That concludes the call.