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Greetings, and welcome to Centuri Holdings, Inc.'s fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Nate Tetlow, Vice President, Investor Relations. Please, you may begin.

Thank you, Angeline, and hello, everyone. This morning, we issued and posted to Centuri Holdings, Inc.’s website our year-end 2025 earnings press release and investor presentation. 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 and are subject to several risks and uncertainties, including uncertainties surrounding the impacts of future economic conditions and regulatory approvals. A cautionary note, as well as a note regarding non-GAAP measures, is included in today’s press release and the investor presentation and in our filings with the Securities and Exchange Commission, which we encourage you to review. 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 Christian Brown, President and Chief Executive Officer, and Greg Izenstark, Chief Financial Officer. I will now turn the call over to Christian.

Thank you, Nate. Hello to all, and thank you for joining our call today. In 2025, we delivered $3.0 billion of revenue, a record for Centuri Holdings, Inc. We improved our base profitability and produced adjusted net income of $39 million, which was a 49% increase over the prior year.

As a reminder, when speaking of base revenue and base gross profit, we are referring to the measures that exclude the impact of storm restoration services. We believe that base results provide our stakeholders with information that is helpful in evaluating fundamental business performance and provide relevant period-over-period comparisons. In 2025, base revenue increased by 18% and our base gross profit increased by 35% year over year. This exceeded expectations and reflects the strength of our company, the dedication of our teams across the U.S. and Canada, and their unwavering commitment to safety, productivity, and delivering exceptional customer service. I will start with a commercial update. Coming into 2025, we set a goal to achieve a 1.1x book-to-bill ratio. We did not just exceed our goal; we shifted it, delivering a 1.5x book-to-bill for the year. In total, our bookings surpassed $4.5 billion. The mix of bookings included 34% bid work, 21% of new or expanded scope of work on our MSAs, and 45% MSA renewals. Our strong emphasis on business growth was evident with more than half of the bookings representing true incremental, accretive work to our business. We maintained our 100% MSA renewal rate and are actively working to secure new customers and add new work scopes and geographies with existing customers. In 2025, we added new MSAs across Texas, Oklahoma, Arizona, Georgia, Indiana, Wisconsin, and several other states. On the new bid work, we secured over 600 awards with an average size of $2.4 million. A few notable bid awards included a significant natural gas pipe replacement project, major substation upgrade work to strengthen grid reliability and increase capacity, a mechanical vapor recompression system for an ethanol plant, construction of a renewable natural gas facility, several projects to rebuild and construct utility-scale transmission lines, several data center awards with varying scopes of work, and additional scopes of work that include substations, transmission work, heat pump installation, compressor work, HVAC removals and installs, plus many others. We anticipate continued strong bookings due to the multiyear tailwinds within our end markets and our $13.0 billion opportunity pipeline.

Our renewal success and our consistent win rates support our desire for growth. Through February 2026, we have booked approximately $1.1 billion, which includes approximately $800 million of MSA renewals, nearly $150 million of new MSAs, and more than $150 million of bid work. So we are off to a very good start in 2026. For the year, we are targeting a book-to-bill ratio of 1.1x to 1.2x.

Our opportunity set includes about 580 bid opportunities, which collectively amount to $6.7 billion, or just over half of our current opportunity pipeline. At year-end, we had $2.8 billion of near-term opportunities, which are active proposals with award decisions expected by the end of the second quarter. These include about two-thirds of new bid work and one-third MSAs, with over 75% within our electrical segments and the remainder in gas. If we consider our year-to-date bookings, remaining active proposals, and prospects submitted in the new year, the current near-term opportunity sits around $1.3 billion. On data centers, we are actively executing several scopes of work at several data center sites. In our opportunity pipeline, we have more than 20 opportunities with an aggregate value of approximately $1.4 billion. We also have dozens of prospects that are not yet included in our planned pipeline figures because they are early in the evaluation process. We believe the total value of these prospects could reach as high as $2.0 billion. Data center opportunities offer a variety of work scopes for Centuri Holdings, Inc., including power delivery services like simple-cycle turbines, substations, compressors, or metering stations, plus core electric work like switchgear, transformers, UPS units, and generators. On the mechanical side, we handle chiller and HVAC system installs. Additionally, we will bid on traditional infrastructure work like gas, sewer, and water lines, plus telecom and fiber conduit. Now moving over to the backlog. At year-end, our backlog is approximately $5.9 billion, an increase of $2.2 billion, or 59%, from last year. This year-end backlog is forecast to provide over 85% of our 2026 base revenue guidance.

More details on bookings, backlog, and the opportunity pipeline are on slides eight and nine in the investor presentation we have posted. Now moving to margins. In 2025, we reported a base gross margin of 8%, an increase of approximately 100 basis points over 2024. We have several initiatives underway focused on further margin improvement. First, we have initiated a plan to address the first-quarter seasonality in our gas business. The focus is expanding the volume of work in warmer geographies and securing more indoor work. Our goal is to fully address the seasonality over three years, with 2026 year one. Halfway through this current quarter, we are on track to deliver year-over-year improvement, a good first step towards our three-year goal. Second, we are working to improve fleet efficiency through enhanced supplier pricing, improved utilization rates, and optimized allocation across our business units. Through these efforts, we are aiming for at least 20% improvement in the efficiency of our fleet. Third, we are driving improved crew efficiency in our nonunion electric segment, which has delivered significant growth over the last 12 months. As crews gain experience and jobs mature, we expect improved productivity. Base margins in this segment were up in the fourth quarter, and we expect to see more progress throughout 2026. Finally, given the growing number of bid opportunities and our current win rates, we expect our average weighted bid margin to expand over the very near term. Higher bid margins are the first part of the equation, and we will continue to drive operational execution to capture this favorable market dynamic and drive further margin growth. Beyond the commercial and financial success, 2025 also included several important milestones. In September, we became fully separated from our former parent after completing four successful follow-on offerings. In November, we closed the acquisition of Connect Atlantic Utility Services, giving us a Canadian electric service platform, which we can grow and expand our customer relationships. We also made significant strides reducing our leverage, ending the year with net debt to adjusted EBITDA of 2.5x. We are not only driving significant growth in our business, we are doing so on the foundation of a stronger balance sheet and our ownership base. We are extremely well positioned to execute in 2026 and look forward to delivering for our shareholders. I will now turn the call over to Greg to discuss the results.

Thank you, Christian, and thank you, everyone, for joining us today.

I will start with the fourth quarter, which included another company record for revenue and overall strong financial results. Revenues totaled $859 million, a 20% increase from the same quarter last year. Base revenue was $855 million, which was 28% higher than the fourth quarter 2024. Gross profit for the quarter was $80 million, compared to $71 million last year, and the gross profit margin was 9.4%. Base gross profit was $80 million, which was a 50% increase year over year. Net income attributable to common stock in the quarter was $30 million, or $0.32 per share, compared to $10 million, or $0.12 per share, last year. Fourth quarter net income was impacted by a $23.7 million income tax benefit related to deferred tax asset allocations from our former parent. Adjusted net income in the fourth quarter was $16 million, or $0.17 per share, compared to $18 million, or $0.21 per share, in the same quarter last year. Adjusted EBITDA for the quarter was $78 million, compared to $71 million last year. Our cash flow from operations was $84 million and free cash flow for the quarter was $106 million. The remainder of my comments will focus on full-year results.

Revenues totaled $3.0 billion, a record for Centuri Holdings, Inc., and a 13% increase from 2024.

Gross profit was $247 million, compared to $221 million last year, and gross profit margin was 8.3% in 2025. Base revenue was $2.9 billion, or 18% higher year over year. Base gross profit was $234 million, up 35% compared to 2024. Base gross profit margin was 8% in 2025, compared to 6.9% last year. Net income attributable to common stock in 2025 was $23 million, or $0.25 per share, compared to a loss of $7 million, or a loss of $0.08 per share, in 2024. Adjusted net income in 2025 was $39 million, or $0.43 per share, compared to $26 million, or $0.32 per share, in 2024. And finally, adjusted EBITDA for the year was $249 million, compared to $238 million last year. Now to our segments.

U.S. Gas revenue was $1.3 billion, an increase of 5% compared to 2024.

This reflects solid growth in MSA volumes and bid projects, demonstrating the underlying strength of our customer relationships and market position. Gross profit margin was 5.4% in 2025, consistent with prior year. We continue to focus on expanding MSA work and the seasonality initiative that Christian mentioned earlier. Canadian operations revenue was $247 million, up 25% over 2024. Operational performance in this segment remains strong against the solid demand backdrop. Gross profit margin was 18.6%, compared to 15.9% in the previous year. Union Electric base revenue was $800 million, an increase of 21% year over year, and base gross profit margin was 8.7% for the year, an increase of 110 basis points over the prior year. Growth has been fueled by robust activity and projects serving industrial end-user segments, substation infrastructure, and data center-related work. Our nonunion electric segment had base revenue in 2025 of $569 million, an increase of 51% over 2024. This growth reflects the significant expansion in MSA activity. Base gross profit margin was 8.5%, compared to 5.9% in the prior year. As Christian mentioned, in 2026 we are focused on performance management and improving crew efficiency. Now turning to fleet investments and CapEx.

In 2025, we began shifting away from the historic practice of purchasing all fleet equipment to a balanced approach that targets 50/50 buy versus lease. The new funding mix drives better free cash flow generation and more balance sheet flexibility. In 2025, we invested a total of $135 million in fleet assets and funded the investments through $55 million of operating leases, $38 million of sale-leasebacks, and $42 million of net CapEx. For 2026, we forecast fleet investments of $150 million to $180 million, with funding expected to be approximately 50/50 buy versus lease. Moving to the balance sheet.

In November, we executed an underwritten equity offering and concurrent private placement, raising net proceeds of approximately $251 million. We used $58 million of proceeds to fund the Connect acquisition, with the remainder used for net debt reduction. We ended the year with a net debt to adjusted EBITDA ratio of 2.5x, down from 3.6x at year-end 2024. In 2026, we plan to further delever and forecast net debt to adjusted EBITDA of around 2.0x by year-end. Last month, we repriced our Term Loan B, securing a 25 basis point rate reduction. Based on our current debt level and lower interest rates, we expect 2026 interest expense to be about 30% lower than it was in 2025. Finally, turning to our outlook.

Today, we initiated full-year 2026 financial guidance. As we have talked about, base revenue and base gross profit exclude impacts from storm restoration services. For 2026, we expect base revenue of $3.15 billion to $3.45 billion and base gross profit of $255 million to $285 million. Revenue, adjusted EBITDA, and adjusted net income are measures that include storm restoration services. Guidance to these measures includes storm restoration services using a three-year average of $88 million in revenue and $28 million in gross profit. For 2026, we expect revenue of $3.24 billion to $3.54 billion, adjusted EBITDA of $280 million to $310 million, adjusted net income of $55 million to $75 million, and lastly, net CapEx is expected to be between $75 million and $90 million. I will now turn it back to Christian to wrap up our prepared remarks. Christian?

Thank you, Greg.

2025 was a pivotal year for Centuri Holdings, Inc. We demonstrated our ability to identify opportunities, to secure substantial bookings, to expand our footprint and capabilities, to deliver earnings growth, to grow base margins, and to strengthen the balance sheet. The hard work of 2025 has positioned Centuri Holdings, Inc. for continued success going into 2026. The market backdrop remains very strong across multiple years, with our end markets showing no sign of slowing. Centuri Holdings, Inc. offers top-tier growth while maintaining the low-risk profile you expect from us. Our growth has come and will continue to come by focusing on our core capabilities, delivering for our customers, and staying disciplined to who we are. We have a diverse, high-quality, large utility base across gas and electric, union and nonunion, and supported by a high percentage of long-term MSA contracts. In 2025, 78% of our revenue was generated under MSA contracts, and our year-end backlog included 82% MSA work. While we absolutely expect bid work revenue to grow at a faster rate than MSA revenue over the next few years, it is important to note that the scope of work under bid projects is consistent with the services that we deliver under MSAs. It is the same capabilities, only executed under a different type of agreement. Our bid work portfolio is also well diversified, with 285 different projects and an average remaining project value of $3.8 million. For further context, the largest 25 bid projects in the pipeline are expected to contribute about 15% of our total 2026 base revenue. We believe Centuri Holdings, Inc. represents a compelling investment opportunity carrying high growth in strong end markets with a notably low-risk profile, with further potential to drive margin expansion and capital efficiency through solid execution.

In closing, I want to commend our workforce who are executing day in and day out. Your dedication to operational excellence, to safety, and customer service is what earns our reputation as a leading provider of high-quality infrastructure services. I thank you all. We appreciate everybody’s time and interest today. I will hand to the operator so we can start Q&A. Thank you.

In a moment, we will open the call to questions. If you would like to ask a question, you may press number 2. If you would like to remove your question from the queue, for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Kindly limit your participation to one question and one follow-up only. One moment, please, while we poll for questions. The first question comes from Sangita Jain with KeyBanc Capital Markets. Please go ahead.

Good morning, Christian, Greg. Thank you for taking my questions. For the first question, I want to find out—you are including a three-year average storm revenue in your guidance. How much of that was already realized in the January storm?

Good morning. We did, when you refer to adjusted EBITDA and total revenue, include some level of storm. The storm impact thus far this year has been pretty minor. It is largely in line with what we did last year, so nothing unexpected or significant.

Oh, you mean in the January winter storm? That was what I was referring to?

Yeah. And I would say that the deployment activity we have done thus far is largely in line with last year. Nothing of a significant nature. Last year had been a quiet year, Sangita.

Okay. Got it. Thank you. And then on the guidance, if I look at the core guidance, if I exclude storms for a minute, then the gross margin seems to be lower versus this year. Am I reading too much into that? Is there a mix impact that I am misinterpreting? Can you help me understand?

No. The gross profit margin would be largely in line with this year, up a little bit on an annualized basis.

Got it. Thank you.

Thank you. The next question comes from Justin Hauke with Robert W. Baird. Please go ahead.

Oh, great. First of all, thanks for all the color on the awards and the new disclosure. It is helpful for understanding things, so thank you for that. I wanted to follow up on the margin expectations and the guidance. Maybe you could talk a little bit about the seasonality. I know one of the things you talked about as an initiative is reducing that seasonality for the gas segment. I think you said you were expecting margins to be up year over year in 1Q, but I am just curious how much of a gap you are narrowing. I mean, last year there was a little bit of a loss. Are we more likely to breakeven this year? Or what is the expectation for how to think about the seasonality as we go through the year?

So, Justin, I will answer the question and then pass over to Greg for any additional commentary. We are striving to be predictable and consistent and then build continual improvement, and that should be reflected in everything that you have seen of us over the last few weeks and few months. So, when it comes to margins, it is like our confidence level. We feel very good about being able to deliver it. It reflects the current backlog. It does not assume that we have got lots of things to do to get to that margin. So there is an element of conservatism, just to be consistent, that we have in our margins. Then I will go specifically to the initiatives to improve margin. Where is the margin improvement going to come from? The seasonality, which you just mentioned, on the gas business, and where are we at? It is only one month in, but we see many positive signs in our ability to find work, to win work in the gas business, and push that through to the revenue and the income line, to the P&L. It is only January numbers. We are really just getting to February numbers now, but I think we are going to make a big dent in that three-year program to actually make the seasonality in the gas business not exist across the four quarters. I cannot give you much more than that at the moment for obvious reasons, but we are pleased as we close out the January results, and we are pleased with the volume of work that we are tracking. Then the bid work, which drives the margins upwards, we are very selective now in opportunities and the margin that those opportunities can deliver to us, and that is institutionalized across all of our individual businesses that tender work every day, and, as you see in the slides, we have got very good backlog, very good coverage to deliver our budget as well as the guidance this year. There is an opportunity, therefore, with any additional awards to drive margin improvement. It will take a little bit longer. And then the third thing is the efficiency throughout fleet and the indirect costs associated with it. We have mobilized the resources we need. Our priority was to get the funding of our fleet aligned with better industry practices so that we can generate more free cash flow to invest in the business. So we have done that last year, and that has followed through into 2026. And the focus of the team now is to actually figure out better ways to get more return on the existing asset fleet we have got across all of the businesses operated under Centuri Holdings, Inc. I guess the last comment, we did allude to it in the comments, is on the nonunion electric side. We had a massive growth year over year with pretty much a negligible amount of storms. There was a massive mobilization in the second quarter. In the third quarter, we saw, as we signaled to everybody, an improvement in margin. Those margins continued into Q4. The workforce now is really stable and functioning very efficiently, and I suspect we will see further improvement across the nonunion electric as we close out the first quarter and the way through 2026.

Okay. Thank you. My second question before I turn it over would be on the awards front. Data centers are something, obviously, you guys highlighted as newer or tangential to what you were doing. Last quarter, you won $140 million in 2025. You talked about this pipeline, $1.4 billion. I think that is actually up a little bit for the data center versus what you called out last quarter, and I know that you had a fair amount of work that was currently out for bid at the time, and I am just curious on the status of the win rates and how those have come in 4Q and year to date, and the expectation for that pipeline, when those awards will come in over the next couple of quarters.

Just to answer your question, I do not typically look at the win rates just on a quarterly basis. It is more of a trend, and our win rates actually have continued to go up all the way through to where we sit today going into February. So if you go back to the 13 months that we have been really driving performance throughout the sales pipeline, we have seen an improvement. I think the win rates—we are happy where they are. Specifically to data centers, your observations are quite right. I think I have spoken about $2.0 billion of opportunity that we could see, of which we are very disciplined on what we will assume in our forecast and what we really put capital behind to go win and resources to go win, because you can chase a lot of work that actually does not conclude with an award that can pay the bills. So the overall focus on data centers remains very much targeted on those customers that we know have capital, that we know are going to award contracts, and that can deliver our returns and our margins. The wins in data centers so far this year are a little slower than expected, but we have a number—getting into commercial sensitivities—awards that are in our near-term pipeline of about $1.5 billion to $1.6 billion that we are negotiating or tendering now. Thank you.

The next question comes from Joseph O'Dea with Wells Fargo. Please go ahead.

Hi. Good morning. In the release, you talk about how the organization has proven its ability to identify and secure growth opportunities over the course of 2025 and certainly see it in terms of the backlog growth. But can you just outline—this happened pretty quickly—can you outline some of the key changes that were implemented in the business in 2025 to drive this, and how you think about the room and opportunity to further advance those in 2026? Any specific initiatives underway?

Joe, thank you for your question. I will take you all back to the beginning of 2025, and I talked about the block and tackling that was needed in the business. The block and tackling was we needed to get a very effective sales pipeline to predict in a more thoughtful way what work was in the pipeline, what was not in the pipeline, and where we need to find more work so that we could drive growth into the business. So the interaction around all of the opcos on a consistent basis, the pipeline, the institutional sales pipeline across the company is now part of what we do day to day without any hesitation. We speak about that daily, weekly, and monthly. That will continue, and that has driven the predictability in our revenue growth. It has driven the predictability on margins, and it has driven the predictability on what we speak about in forecasting as a business. The second thing we implemented was the business cadence on a weekly and monthly basis—really tight block-and-tackling oversight—and that has allowed us to not only drive accountability, it has also allowed us to identify opportunities to do better and create more returns. So those have been the two operational things which will continue into perpetuity with tweaks along the way. The third thing was capital efficiency. We were funding our fleet with all balance sheet cash year over year. We were cash negative, probably for our prior years. As you have seen from this year’s results, we have managed to fund growth in the fleet using leasing while still being able to improve margins in the base business. So those three block-and-tackling items have just become institutionalized in the last 12 months and will continue to drive growth. Now looking forward, if you look at slide nine in the deck, we have given more color around backlog and pending awards. You can see the shift in the amount of work we have got coming into the fiscal 2026 year, and that has continued to grow. You can add the blocks up. We were over $3.0 billion going into 2026, $2.0 billion of backlog going into 2025, and we are now higher. Our drive now is to capture these market tailwinds in our pipeline to build up more backlog to not only do more this year, but build a bigger backlog going into 2027. So the block and tackling is fundamental to being a predictable service provider, which is our desire and our commitment, and then using the pipeline to continue driving growth across all our opportunities and all of our businesses such that we have a greater backlog going into 2027, and we have committed to double-digit growth year over year, and we still stand by that. We believe the pipeline affords that opportunity without relying upon things we cannot control, like storms, and we will continue to drive the businesses to at least meet that obligation.

That is great color. And maybe sticking with that last point, when you talk about 2025 backlog and the bookings you have had to date this year representing 85% of the 2026 base revenue, you think about how the organization is sized today relative to that 2026 base revenue. What kind of investments are you making, and if the demand backdrop supports something better than the base revenue guide, are you sized for that today, or what kind of additional investments will be required?

I think we have got—if you look at slide nine again and refer back to it, we are not sized to capacity. We have got more capacity that we build, we find, we add to the organization every day of every week. What probably goes unsaid is the work our resourcing teams across the nation do every year. We added over 12%—in fact, it is nearly 15%—headcount in the last 13 months, and our desire is to continue to hire at that rate or better. That is apprentices, that is veterans coming into our veterans program, it is resourcing from parts of the country where we can see people coming out of other adjacent industries, it is cross-training and cross-developing. So in terms of capacity, we will commit in our guidance a conservative level of performance that we know we can meet based upon the backlog we have, the resources we can see and have, and things we can control. We are constantly seeking to add capacity so that we can drive better margins and more volume through the business. So there is upward potential there as our teams continue to build capacity, mainly on the people side. I am less worried about fleet. We can add fleet as much as we need, and we can fund it efficiently, while still being able to generate positive cash flow. But on the people side, it is our focus, and we are doing a number of things, some of which I alluded to on the last call, to operate as one Centuri Holdings, Inc. and not as individual opcos, meaning that we can have a more longer-range plan, a more wholesome one-company approach to resourcing across the entire continent. We think we can, therefore, do better in terms of hiring more than 12% to 15% more headcount per year.

Helpful detail.

Thank you.

The next question comes from Manish Samaya with Cantor. Please go ahead.

Good morning, Christian, Greg, Nate, thank you for getting me in the queue. Greg, I had a question for you on guidance. I just want to be very, very clear on this, that I understand this right. On the base guidance that you have given, the midpoint of the gross margin is 8.2%. And I guess including the storm, you have an EBITDA range, and I was hoping maybe if you can help us with apples-to-apples comparisons and maybe just tell us what that gross margin would be with storms, just like the way you showed it for the base guidance. Just to help us out, please.

Yeah. So we said in our earnings release that the gross profit we are assuming is about $28 million on storm revenue of about $88 million. So when you factor that in, on our midpoint, you would get something higher than 8.2%. I do not have that number handy—but at the midpoint, it is about 8.8%, so just shy of that.

Okay. That is super helpful. That is the number I was guesstimating. I just wanted to confirm that. I appreciate that. The other question, maybe for Christian, is obviously we talked about this huge opportunity—I think $13 billion of opportunities is a fairly big number—through the end of the second quarter. I think $2 billion plus, closer to $3 billion. I know, Christian, you do not talk about win rates, but how should we think about what is baked into the full-year guidance when you look at these opportunities, when you look at this funnel? Thank you so much.

Manish, I could be probably a little bit more direct. If you look at slide nine—we told you within the slide the amount of backlog we have—and then there is a component in addition to that in the histogram of anticipated MSA renewals in 2026. If you add the three blocks up, that takes you to—we do not put the exact scale on it—but it takes you to about $3.2 billion of backlog for this year across the three categories, and that is exactly where we sit today. So how do we do more than the $3.2 billion of backlog? That secured backlog is very predictable. We have got a good handle on that forecast, so I would argue that is as certain and secure as any backlog could ever be. So where is the upside potential? The upside potential is going to come from winning new bids, and we have added within that histogram the work that we have currently bid in addition to awards expected in the first quarter. What is not in there are other opportunities that will pull up through the pipeline and into the bidding during the course of the remaining 10 months of this year.

Okay. Thank you. Thank you. That is super helpful. Christian, thank you.

Thank you. The next question comes from Sherif Al Sabahi with Bank of—please go ahead.

Hi. Good morning. I just wanted to turn to free cash flow for a moment. I understand your attempt to be more capital efficient with your fleet, but what parts of working capital are limiting cash-from-operations flow-through currently? How do you plan to improve them? And then where do you think cash from ops can go in 2026 as a percent of sales?

Good morning. So from a free cash flow perspective, we have done a number of things to improve in 2025, from the fleet efficiency to the refinancing of the debt. We are still hyper-focused as a team on reducing our DSO and working with our customers to bill our revenue quicker and get collected quicker. And so that is the primary focus of 2026. From a free cash flow perspective, beyond the capital efficiency work that we have already discussed, we think we can make some pretty meaningful progress and improvement on that front. From a conversion perspective, we look at it on a free cash flow conversion of adjusted EBITDA. And we look at where our peers are, and we think on a longer-term basis, 50% conversion is where we can target. Thank you.

The next question comes from Avi Haraldlowitz with UBS. Please go ahead.

Hey. Good morning. Thank you. So I saw that you highlighted a fiber project for a data center in the slides. Can you remind us what the base of communications is for your business and what type of growth you are expecting to see from communications this year?

Avi, thank you for the question. I think we have tried to demonstrate in the illustrated diagrams in the deck and maybe some of the talking points that we are not actually bidding very much standalone fiber telecom work. There is a little bit actually north of the border in Canada, but what we are finding is that, as part of the data center scopes of work, customers are rolling in a number of discipline types of work, including fiber, gas connections, electrical connections, and all of the other scopes where you see them. We are not building out a telecom business within Centuri Holdings, Inc. at all. It is mainly complementary to what we already do for those customers.

Okay. Understood. Appreciate that. And then, as we think about the bid work awards that you are thinking of for this year, would you expect it to have a similar revenue-burn phasing as the bid work that you were awarded last year, or could we see that timing differ materially this year?

It is a very good question. I think you will see—it will be exactly the same profile or very similar. Why is that? The average contract size is not changing. The size of the pipeline is mainly remaining very solid. Our teams are very much focused on booking through the four quarters and taking away booking seasonality. So I think the profile will look very similar to last year. I do not see any of the underlying inputs that will change it materially at all. You have got a couple of differences—the MSAs are slightly different, but not the bid work. I think we closed out the year with 30% of the bid work going to the revenue line. If you go back and look at the third quarter numbers—so really nine months of the year—it was a higher number. So clearly, we are booking work earlier in the year. We have to look at it. The big contracts we are booking in the fourth quarter typically are really for 2026, or the following year, which is why the percentage went down from 45% to 30%.

Right. Okay. Makes sense.

Thank you.

The next question comes from Chris Ellinghaus with Siebert Williams Shank. Please go ahead.

Hey. Good morning, guys.

Morning, Chris.

Christian, when you talk about reducing the Q1 seasonality, are you trying to get smoother across the year? And in general, is the goal to make Q1 look a lot more like a traditional Q2?

The answer to the question, Chris, is yes. Our desire is to deliver 7%+ gross profit margin in our gas business for four quarters of the year. We are currently doing it in three quarters. And that is the driver. We absolutely have had some successes on the bookings. You have seen them. We have announced them. We just need to do more. You cannot do it all in the six to seven months that we have been working at it. So the desire is, as you state, to get rid of seasonality across our gas business and deliver 7%+ gross profit each quarter for four quarters of the year. And that is the commitment.

Gotcha. What are you guys seeing—you did the acquisition towards the end of the year—what are you seeing in general in M&A, and what sort of aspirations for tuck-ins do you have at this point?

Again, I will be pretty consistent with what you have heard from me in the past. I think we really like our platform, where we are. We have got good scale. We have got good ability to grow organically. So we are not short of scale in the business. Tuck-in acquisitions, to which you refer, again, I will be consistent. I think we have got some white space in the Midwest. I think we could do with more capability there, and that lends itself to a possible acquisition. And I think on the electrical transmission and, to a lesser degree, the distribution, I think we do need a little bit more of a geographic presence in that end market. So that lends itself to some tuck-in acquisitions. So our focus would be on finding acquisitions that could fit into those two needs that support the business.

Okay. Great. Vis-à-vis the data center potential, what is in your pipeline? Have you got much visibility into timing, and do you expect to have some more tangible bookings throughout 2026?

Yeah. Chris, I will tell you—and I need to be a bit crisper in my commentary—we are very disciplined on what we put into our sales pipeline that forms the basis of our forecasting, and when it comes to data centers, we are hyper-disciplined because there are so many opportunities around that really do not have funding—just developers who are trying to create an option that may never lead to anything. So when I talk about data centers and the discipline, the only thing that goes into the pipeline that we follow are those data centers where we have got dialogue engaged with the developer or with the end user who has capital and is going to deploy capital, and it is a real project. And where we cannot get that confidence does not mean to say we walk away from it. It just remains as a lead within our sales pipeline with no value against it. So there are two numbers I have given out—three numbers, actually. There is about $2.0 billion that we see in the pipeline where we feel there is a high probability that that will get funded and there will be real projects which will allow us to generate revenue and good, solid, high profits from it. Of the $2.0 billion, $1.3 billion is real today where we have got comfort that the client has funding, all the permits are in place, and it is a real contract. We are tendering that $1.3 billion as we speak. We would expect our first share of bookings from that $1.3 billion in the first six months of the year.

Okay. That helps a lot. Lastly, in the guidance for potential storm work, that is kind of the historical norm. But you scaled the nonunion side significantly. So should there be a really good storm season in some year, is the way to think about it that the potential for storm revenues has increased proportionately with your capacity, or are you just going to try to stay within some kind of range?

Go back to principles of how we are explaining our business and how we are driving our business. We cannot control the weather, but we can control our base business—the work we do for our customers 365 days a year. The nonunion business has increased by over 50% year over year. The majority of those resources, almost all year, work on doing the day-to-day work for our customers. The fact that we have increased that headcount in the nonunion business doing the day-to-day services on-system for our T&D customers—if there is a weather event, that gives us more upside potential for the business to generate higher margins and higher revenue from storm. Yes.

Okay. That definitely is clear. Alright. I appreciate it. Thanks for the details, guys.

Thank you, Chris.

Thank you. We have reached the end of the question-and-answer session. I will now turn the call over to Nate Tetlow for closing remarks. Please go ahead.

Thank you all for joining us today and for your interest in Centuri Holdings, Inc. Please feel free to reach out to me with any follow-up questions. This concludes today’s call.