MTZ - NYSE
MasTec, Inc.
MTZ·NYSE
$369.66
+0.92%IndustrialsEngineering & Construction
MasTec, Inc., an infrastructure construction company, provides engineering, building, installation, maintenance, and upgrade services for communications, energy, utility, and other infrastructure primarily in the United States and Canada. It operates through Communications, Clean Energy and Infrastructure, Oil and Gas, Power Delivery, and Other segments. The company builds underground and overhead distribution systems, including trenches, conduits, cell towers, cable, and power lines, which provide wireless and wireline/fiber communications; clean energy infrastructure comprising renewable energy; natural gas, product transport; electrical and gas transmission, and distribution systems; heavy industrial plants; compressor and pump stations, and treatment plants; water and sewer infrastructure, including water pipelines; and other civil construction infrastructure. It also installs electrical and other gas distribution and transmission systems, power generation facilities, buried and aerial fiber optic and other cables, as well as home automation and energy management solutions. In addition, the company offers maintenance and upgrade support services comprising maintenance of customers' distribution facilities, networks, and infrastructure, including communications, power generation, pipeline, electrical distribution and transmission, and heavy civil infrastructure; service restoration for natural disasters and accidents; and routine replacements and upgrades to overhauls. Its customers include public and private energy providers, pipeline operators, wireless and wireline/fiber service providers, broadband operators, install-to-the-home service providers, and government entities. MasTec, Inc. was founded in 1929 and is headquartered in Coral Gables, Florida.
At a Glance
Live SnapshotMarket Cap$29.21B
EPS5.1200
P/E Ratio72.20
Earnings Date07/30/2026
Earnings Call Transcript
MTZ • 2026 • Q1
Operator
Thank you for standing by, and welcome to MasTec's First Quarter 2026 Financial Results conference call. I want to remind participants that today's call is being recorded. I'd now like to turn the call over to Marc Lewis for some opening comments.
Marc Lewis
Thank you, Lisa. Good morning, everyone. Thanks for joining us for MasTec's first quarter conference call. Joining me today are José Mas, Chief Executive Officer, and Paul DiMarco, our CFO. We have prepared slides to supplement our remarks today, which are posted on MasTec's website under the Investors tab and through the webcast link this morning. There's also a companion document with information analytics on the quarter and a guide summary to assist in financial modeling. Please read the forward-looking statement disclaimer contained in the slides accompanying this call. During this call, we'll make certain forward-looking statements regarding our plans and expectations about the future as of the date of this call. Because these statements are based on current assumptions and factors that involve risk and uncertainties, our actual performance and results may differ materially from our forward-looking statements.
Paul DiMarco
Thank you, José, and good morning. We are pleased with the momentum built by our first quarter results and the continued trend of improved first quarter performance. This has been a focused effort in recent years, and 2026 marks the best first quarter in MasTec's history. Off of our strong start, we now expect to generate almost 45% of our full-year EBITDA in the first half of 2026, implying markedly lower seasonality than our business has experienced historically. Our Q1 results represent record levels of first quarter revenue, adjusted EBITDA, EPS, and backlog. Year-over-year, we drove meaningful growth with revenue up 34%, adjusted EBITDA up 73%, EPS 174%, and backlog by 28%. We continue to see strong customer demand for MasTec's broad service offerings and expertise to meet their infrastructure development goals.
Paul DiMarco
Our customers continue to show high confidence in MasTec, seeking deeper integration and partnership through alliance agreements, sole-sourced contracts, and a desire for MasTec to provide turnkey services on strategic infrastructure builds. This is particularly apparent when speed and execution certainty are critical. Our scale, expertise, and focus on mutually beneficial outcomes are key components driving this confidence. I'll share some further details on our first quarter segment performance and our outlook. Our Communications segment had a good start to the year, generating revenue of $802 million, growing 18% year-over-year and 7% ahead of expectations. EBITDA margins were about 100 basis points below last year's first quarter, negatively impacted by cost to exit certain markets in our DIRECTV fulfillment business.
Paul DiMarco
Communications backlog in the first quarter was up slightly from year-end and 12% year-over-year to another record level. We continue to see strong broad-based demand for wireline services, with customers engaging for multiyear turnkey opportunities. Our second quarter Communications outlook calls for $875 million of revenue, with EBITDA margins slightly higher than 2025 in the low double digits. We also expect to achieve double-digit EBITDA margins for the remainder of the year, resulting in approximately 70 basis points of margin expansion versus 2025. First quarter Power Delivery results exceeded our guidance by 10% on revenue and 21% on EBITDA, with solid execution to start the year, resulting in 120 basis points of EBITDA margin expansion year-over-year.
Paul DiMarco
Most notable in the quarter was the continued backlog strength, with a 1.6x book-to-bill driving backlog to a new record of $6.2 billion. We saw a number of new contracts executed in Q1, as well as expanded scope on some existing projects. Regarding Greenlink, our client resolved the transmission permitting review earlier than anticipated, and we are now operating across the full contractual scope. This is one of the factors driving our revenue guidance higher to approximately $4.8 billion or 14% year-over-year growth. Full year EBITDA margins remain on track to approach double digits and are trending higher than our prior guidance. We continue to expect year-over-year margin expansion in each quarter for Power Delivery, with 60 to 70 basis points of margin expansion for Q2 specifically.
Paul DiMarco
Our pipeline segment had a terrific first quarter, generating $682 million of revenue, almost doubling year-over-year, with EBITDA margins of 21%. Margins exceeded our guidance by 165 basis points and increased 270 basis points sequentially. It is important to note that broader pipeline construction demand is still developing, and we are generating these margin results in a competitive environment. Unquestionably, we are executing at a high level, delivering high-quality projects ahead of schedule for our clients. These positive outcomes further illustrate MasTec's position as the leader in this space and will continue to be a differentiating factor as the cycle develops. For the second quarter, we expect revenue of $600 million, with EBITDA margins in the high teens, slightly below the first quarter result.
Paul DiMarco
Full year margins are still forecasted in the mid-teens but trending higher with the first half performance. We are currently taking a conservative view around second half project timing and productivity while we firm up specific resource allocations. Longer term, we continue to see an unprecedented level of project activity and remain very bullish on the opportunity set for this segment in the years ahead. Clean Energy and Infrastructure also started the year off strong, delivering over $1.3 billion of revenue, up 45% year-over-year, almost 10% ahead of our guidance. EBITDA margins of 6.7% expanded 50 basis points from Q1 of 2025, and we generated 56% EBITDA growth. Renewables and general buildings both contributed to the revenue beat with year-over-year growth of 63% and 166% respectively.
Paul DiMarco
While our recent acquisitions were solid contributors to the quarter, organically, we still generated over 30% year-over-year growth. Backlog continued to develop nicely, reaching another record level of $7.3 billion. This represents a total book-to-bill of 1.6x, inclusive of 1.3x organically. Infrastructure led the backlog development, but renewables also extended its streak to 11 consecutive quarters of backlog growth. Demand continues to be robust across the business verticals, leading us to increase our full year revenue guidance to approximately $6.7 billion, up $325 million or 5% higher than previous forecasts. EBITDA margins are still forecasted in the high single digits, comparable year-over-year, largely due to the higher mix of general buildings activity in 2026.
Paul DiMarco
Q2 revenue is expected to increase almost 50% year-over-year to $1.7 billion, with EBITDA margins also comparable to 2025 second quarter. We generated cash flow from operations of $99 million in the first quarter, with higher revenue levels versus guidance driving additional working capital investment. We also saw DSOs increase to 72 days versus 65 days at year-end, resulting in lower cash conversion than anticipated. We expect DSOs to trend back to the mid-60s over the course of the year. Our liquidity stands at approximately $1.8 billion, and net leverage of 1.8x is well within the terms of our financial policy and criteria to maintain our investment-grade ratings.
Paul DiMarco
Our improved Q1 performance, coupled with continued capital efficiency, led to further growth of return on invested capital, expanding almost 100 basis points from year-end to over 10%. We expect this trend to continue, and we'll share more thoughts regarding ROIC targets at our upcoming Investor Day. Moving to our consolidated 2026 guidance. We are raising our full year guidance to reflect the first quarter beat and our improving outlook for the remainder of 2026. We now expect revenue of $17.5 billion or 22% growth year-over-year and 3% higher than our prior forecast. For adjusted EBITDA, we are now forecasting $1.5 billion or an 8.6% margin, with a $50 million increase representing a 10% margin flow through on the increased revenue outlook.
Paul DiMarco
Adjusted EPS is forecast to be $8.79, an increase of almost 35% year-over-year and 5% ahead of our prior guidance. Our cash flow from operations outlook remains unchanged, expecting to exceed $1 billion for 2026. We are increasing our net cash capital expenditure forecast to about $220 million to support the additional revenue growth. Our second quarter outlook reflects another strong quarter of year-over-year growth across all of our major financial metrics, with revenue, adjusted EBITDA and EPS growing 21%, 38%, and 47% respectively. Adjusted EBITDA margins are expected to expand by over 100 basis points compared to the second quarter of 2025. Lastly, I want to remind you that MasTec will be hosting Investor Day on May 12th, which will also be webcast live via a link on MasTec's investor site.
Paul DiMarco
We are excited to introduce additional members of our operational management team to the investment community and provide a medium-term financial outlook. This concludes our prepared remarks. I'll now turn the call over to the operator for Q&A.
Operator
Thank you. If you would like to ask a question, please press star one one on your telephone. You will then hear an automated message advising your hand is raised. If you would like to remove yourself from the queue, press star one one again. We also ask that you would please limit yourself to one question and one follow-up on the same subject. If you have more questions, you can always return back to the queue by pressing star one one again. Please wait for your name and company to be announced before proceeding with your question. One moment while we compile the Q&A roster. Our first question today will be coming from the line of Alex Rygiel of Texas Capital Securities. Your line is open.
Operator
Thank you. One moment for the next question. Our next question will be coming from the line of Andy Kaplowitz of Citigroup. Your line is open.
Operator
Thank you. One moment for the next question, please. Our next question is coming from the line of Steven Fisher of UBS. Please go ahead.
Operator
Thank you. One moment for the next question. Our next question will be coming from the line of Brian Brophy of Stifel. Your line is open.
Operator
Thank you. One moment for the next question. The next question is coming from the line of Ati Modak of Goldman Sachs. Your line is open.
Ati Modak
Awesome. Thanks for that. Maybe one for Paul. You mentioned lower seasonality than previous years. Can you give us more color on the structural element that's driving that going forward? Obviously, Q1 performance was great. Would love to know how you're thinking about the structural elements here.
Paul DiMarco
Yeah. A lot of it's just around project timing and working with our customers to promote higher productivity and, and access to projects, you know, that are executing through the end of the year. That, that was a big focus. You know, you know, the weather helped out a little bit. Weather was a little bit mild in most of the most areas we operate. Overall, it's just being proactive and really working with our clients to, to try to promote opportunities for us to keep our crews and our equipment productive. You know, it balances out. It, it makes the peak to, you know, the summer months, more efficient, and we're excited about how it'll benefit, you know, the business in this year and the years ahead.
Ati Modak
Awesome. Thank you.
Operator
One moment for the next question. Our next question is coming from the line of Jamie Cook of Truist Securities. Please go ahead.
Jamie Cook
Hi. Good morning. Congrats on the next quarter and excited about May 12th. I guess, José, a couple questions. You know, one, as we're thinking about the opportunity that you're gonna lay out, how much do you wanna differentiate, i.e., you know, MasTec is largely an organic growth story versus, you know, relying on M&A or joint venture. Maybe you need to do that to manage risk or get into markets, adjacent markets in a, you know, in a proper way.
Operator
Thank you. One moment for the next question, please. The next question is coming from the line of Sangita Jain of KeyBanc. Please go ahead.
Operator
The next question, please. Our next question will be coming from the line of Liam Burke of B. Riley Securities. Please go ahead.
Operator
Thank you. One moment for the next question. Our next question is coming from the line of Maheep Mandloi of Mizuho. Please go ahead.
Operator
Thank you. One moment for the next question. Our next question is coming from the line of Justin Hauke of Baird. Go ahead.
Operator
Thank you. One moment for the next question. Our next question is coming from the line of Manish Somaiya of Cantor. Please go ahead.
Operator
Thank you. One moment for the next question. Our next question is coming from the line of Brian Russo of Jefferies. Please go ahead.
Operator
Thank you. One moment, please, for the next question. Our next question is coming from the line of Marc Bianchi of TD Cowen. Please go ahead.
Marc Bianchi
Yep. Okay, great. Now the last one is for Paul. This isn't a big increase, but the CapEx number ticked up just a little bit. Could you talk about what's going on there and maybe more broadly, how we should be thinking about kind of capital intensity for the business going forward?
Paul DiMarco
Yeah. I said it in the comments, it's really just about the additional growth we see, you know, not just in 2026, but in the years ahead. I mean, that's our primary objective around capital allocation is supporting organic growth and fixed assets is a big piece of that. Still relatively low, particularly where we've been historically. We're still very comfortable with that level of capital intensity, but, you know, really just focusing on supporting the demand that we see and the needs of our customers.
Operator
Thank you. One moment. Our next question is coming from the line of Philip Shen of Roth Capital Partners. Please go ahead.
Philip Shen
Wanted to check in on the renewables comments you made. Visibility, you said, is as strong as it's ever been. Momentum is strong, you said as well. Wanted to check in with you also on this tax equity pause by four major banks. You know, we're what, four months into the year, and this has kind of become a bit of a topic. You know, I know 2026 is not impacted 'cause it's a Section 48 year, but for 2027, I think more projects might depend on Section 48E.
Operator
Thank you. One moment for the next question. Our next question is coming from the line of Adam Thalhimer of Thompson Davis. Please go ahead.
Operator
Thank you. One moment. Our next question is from the line of Chris Senyek of Wolfe Research. Please go ahead.
Transcript from May 1, 2026
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