MYR Group Q4 2025 Earnings Call Transcript

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Provided by Quartr
February 26, 2026

Key Takeaways

  • Positive Sentiment: MYR reported record 2025 results with $3.7 billion revenue, full‑year net income of $118 million, and improved margins (Q4 gross margin 11.4%), highlighting stronger profitability and operational execution.
  • Positive Sentiment: Total backlog grew ~9.6% to $2.8 billion (T&D $1.0B; C&I $1.8B), driven by healthy bidding, long‑duration MSAs, and expected multi‑year project pipelines across the U.S. and Canada.
  • Positive Sentiment: The C&I segment hit a record Q4 revenue of $443 million, boosted by fixed‑price work and a steady stream of data center awards, helping C&I operating margin rise to 6.6%.
  • Negative Sentiment: Management noted cost inefficiencies on certain projects and higher SG&A and employee incentive expenses; they also flagged weather and permitting delays as ongoing operational risks that could pressure margins or timing.
  • Positive Sentiment: Balance sheet and cash flow strengthened (Q4 operating cash flow $115 million, cash $150M, $408M credit availability, funded‑debt/EBITDA 0.25x), and the company plans to prioritize organic growth and tuck‑in M&A while remaining open to opportunistic buybacks.
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Earnings Conference Call
MYR Group Q4 2025
00:00 / 00:00

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Operator

Morning, everyone, and welcome to the MYR Group Fourth Quarter 2025 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one one on your telephone. You will hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Jennifer Harper, Vice President, Investor Relations and Treasurer, for introductory remarks.

Jennifer Harper
Jennifer Harper
VP of Investor Relations and Treasurer at MYR Group

Thank you. Good morning, everyone. I would like to welcome you to the MYR Group conference call to discuss the company's fourth quarter and full year results for 2025, which were reported yesterday. Joining us on today's call are Rick Swartz, President and Chief Executive Officer, Kelly Huntington, Senior Vice President and Chief Financial Officer, Brian Stern, Senior Vice President and Chief Operating Officer of MYR Group's Transmission and Distribution segment, and Don Egan, Senior Vice President and Chief Operating Officer of MYR Group's Commercial and Industrial segment. A copy of yesterday's press release announcing our fourth quarter and full year 2025 results can be found on the MYR Group website at myrgroup.com under the Investors tab. A webcast replay of today's call will be available on the website for seven days following the call. Please note, today's discussion may contain forward-looking statements.

Jennifer Harper
Jennifer Harper
VP of Investor Relations and Treasurer at MYR Group

Any such statements are based upon information available to MYR Group's management as of this date, MYR Group assumes no obligation to update any such forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Accordingly, these statements are no guarantee of future performance. For more information, please refer to the risk factors discussed on the company's most recently filed annual report on Form 10-K. Certain non-GAAP financial measures will also be presented. A reconciliation of these non-GAAP measures to the most comparable GAAP measures is set forth in yesterday's press release. With that, let me turn the call over to Rick Swartz.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Thanks, Jennifer. Good morning, everyone. Welcome to our fourth quarter 2025 conference call to discuss financial and operational results. I will begin by providing a summary of the fourth quarter and full year results, we'll turn the call over to Kelly Huntington, our Chief Financial Officer, for a more detailed financial review. Following Kelly's overview, Brian Stern and Don Egan, Chief Operating Officers for our T&D and C&I segments, will provide a summary of our segment's performance and discuss some of MYR Group's opportunities going forward. I will conclude today's call with some closing remarks and open the call up for your questions. We closed 2025 with strong financial performance in the fourth quarter and full-year revenues of $3.7 billion.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

A steady backlog of $2.8 billion at the end of 2025 reflects a healthy bidding environment and the continued investment in infrastructure to meet the growing electrification needs across the U.S. and Canada. Our work this year underscores the stability and expansion of our clients' relationships, as well as our measured pursuit of new opportunities. We continue to see strong bidding activity across our business segment, and are closely monitoring these opportunities and positioning ourselves to strategically pursue and execute projects with operational excellence. As always, our success is grounded in an unwavering commitment to our customers through safe and reliable project execution. Our teams are dedicated to helping our customers advance their business objectives, and I'm grateful for their continued hard work. Now, Kelly will provide details on our fourth quarter and full year 2025 financial results.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Thank you, Rick. Good morning, everyone. For the year ended December 31st, 2025, we reached record annual revenues of $3.7 billion, full year net income of $118 million, and EBITDA of $233 million. Our fourth quarter 2025 revenues were $974 million, which represents an increase of $144 million, or 17% compared to the same period last year. Our fourth quarter T&D revenues were $531 million, an increase of 18% compared to the same period last year.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

The breakdown of T&D revenues was $330 million for transmission and $201 million for distribution, with increases of $64 million in revenue on transmission projects and $17 million in revenue on distribution projects from the prior year. Work performed under master service agreements continued to represent approximately 60% of our T&D revenues. C&I revenues were $443 million, a record high for our C&I segment and an increase of 17% compared to the same period last year. C&I segment revenues increased primarily due to an increase in revenue on fixed-price contracts. Our gross margin was 11.4% for the fourth quarter of 2025, compared to 10.4% for the same period last year. The increase in gross margin was primarily due to the fourth quarter of 2024 being negatively impacted by certain T&D clean energy projects and a C&I project.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

In the fourth quarter of 2025, gross margin was also positively impacted by better-than-anticipated productivity, favorable change orders, and a favorable job closeout. These margin increases were partially offset by an increase in costs associated with inefficiencies on certain projects. T&D operating income margin was 7.4% for the fourth quarter of 2025, compared to 6.7% for the same period last year. The increase was primarily related to the fourth quarter of 2024 being negatively impacted by certain clean energy projects. In the fourth quarter of 2025, T&D operating income margin was also positively impacted by a favorable change order and better-than-anticipated productivity. These operating income margin increases were partially offset by an increase in costs associated with project inefficiencies on certain projects.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

C&I operating income margin was 6.6% for the fourth quarter of 2025, compared to 3.9% for the same period last year. The increase was primarily related to a larger portion of our C&I projects progressing at higher contractual margins, some of which are nearing completion. In the fourth quarter of 2025, C&I operating income margin was also positively impacted by better-than-anticipated productivity, a favorable change order, and a favorable job closeout. These operating income margin increases were partially offset by an increase in costs associated with inefficiencies on certain projects. Fourth quarter 2025 SG&A expenses were $65 million, an increase of $8 million compared to the same period last year, primarily due to increases in employee incentive compensation costs and employee-related expenses to support future growth.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Fourth quarter 2025 interest expense was $1 million, a decrease of $1 million compared to the same period last year. The decrease was attributable to lower interest rates and lower average outstanding debt balances during the fourth quarter of 2025 as compared to the same period last year. Our fourth quarter effective tax rate was 21.2%, compared to 40.9% for the same period last year. The decrease was primarily due to changes in state tax rates used to measure our state deferred income taxes and lower permanent difference items. Fourth quarter 2025 net income was a record $37 million, compared to $16 million for the same period last year. Net income per diluted share of $2.33, compared to $0.99 for the same period last year.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Fourth quarter 2025 EBITDA was a record $64 million, compared to $45 million for the same period last year. Total backlog as of December 31st, 2025, was $2.8 billion, a 9.6% increase from the prior year. Total backlog as of December 31st, 2025, consisted of $1.0 billion for our T&D segment and $1.8 billion for our C&I segment. As a reminder, our backlog includes projected revenue for only a three-month period for many of our unit-price, time and equipment, time and materials, and cost-plus contracts, which are generally awarded as part of a master service agreement. However, our master service agreements typically have a much longer duration.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Fourth quarter 2025 operating cash flow was $115 million, compared to operating cash flow of $21 million for the same period last year. The increase in cash provided by operating activities was primarily due to the timing of billings and payments associated with project starts and completion, higher net income, and lower contingent compensation payments associated with a prior acquisition. Fourth quarter 2025 free cash flow was $85 million, compared to free cash flow of $9 million for the same period last year, reflecting the increase in operating cash flow, partially offset by higher capital expenditures to support future growth.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Moving to liquidity, we had approximately $265 million of working capital, $59 million of funded debt, $408 million in borrowing availability under our credit facility, and $150 million in cash and cash equivalents as of December 31st, 2025. We have continued to maintain a strong funded debt to EBITDA leverage ratio of 0.25x leverage as of December 31st, 2025. We believe that our credit facility, strong balance sheet, and future cash flow from operations will enable us to meet our working capital needs, support the organic growth of our business, pursue acquisitions, and opportunistically repurchase shares. I'll now turn the call over to Brian Stern, who will provide an overview of our transmission and distribution segment.

Brian Stern
Brian Stern
SVP and COO of Transmission and Distribution at MYR Group

Thanks, Kelly. Good morning, everyone. The T&D segment delivered steady fourth quarter full and full-year results, supported by a healthy mix of smaller to mid-sized jobs and ongoing master service agreements. Our performance reflects the continued application of our core business principles around safety, quality, and reliable execution. Bidding activity remains healthy as backlog, revenue, margins, and income increased from 2024-2025. We continue to expand relationships with long-term clients and pursue opportunities with new and existing clients, building on the positive industry outlook. This quarter, Great Southwestern Construction executed a new seven-year master service agreement in Kentucky for transmission line construction and maintenance projects. L.E. Myers was awarded a transmission project in Virginia as well as transmission work in Iowa. Sturgeon Electric won two transmission projects in Oregon and transmission work in Arizona.

Brian Stern
Brian Stern
SVP and COO of Transmission and Distribution at MYR Group

Both Sturgeon Electric and High Country Line Construction were awarded station and line work in Washington, California, and Arizona. Harlan Electric was selected to perform multiple jobs throughout New Jersey and Pennsylvania. According to Edison Electric Institute industry data, investor-owned electric companies are projected to invest approximately $178 billion in transmission construction between 2025 and 2028. This level of planned investment reflects an ongoing need for grid modernization and the increased capacity to accommodate load growth. As utilities invest in these upgrades, we believe we are well-positioned to benefit from expanding backlogs and long-duration project pipelines. With our experience, we continue to position ourselves to capture future 765 kV projects, along with 500 kV and 345 kV transmission and substation projects over the next 10 years.

Brian Stern
Brian Stern
SVP and COO of Transmission and Distribution at MYR Group

MYR Group subsidiaries are prepared to pursue and perform these opportunities across the U.S. and Canada. In summary, we are proud of our accomplishments in the fourth quarter and all of 2025. We will continue to actively bid and execute projects of varied capacity, size, and complexity across the U.S. and Canada, while maintaining our consistent focus on safety and the development of our dedicated workforce, who ultimately enable us to take on the important work ahead. I will now turn the call over to Don Egan, who will provide an overview of our commercial and industrial segment.

Don Egan
Don Egan
SVP and COO of Commercial and Industrial at MYR Group

Thanks, Brian. Good morning, everyone. Our C&I segment achieved solid results in the fourth quarter, thanks to the health of our core markets. We continue to see steady bidding activity and increases in backlog as we strategically monitor and pursue new opportunities in collaboration with our valued customers. We believe our ability to safely and skillfully execute projects of various sizes continues to create many long-term opportunities in our core markets. Data centers continue to be one of the most active areas of investment nationwide, fueled by the accelerating need for cloud, AI, and digital infrastructure. Industry researchers expect this demand to remain robust through 2026, with utilities and developers working to expand power capacity to support this surge. Infrastructure-related construction is also benefiting from ongoing commitments in transportation, clean energy, wastewater, and freshwater treatment facilities.

Don Egan
Don Egan
SVP and COO of Commercial and Industrial at MYR Group

Our ever-expanding network of clients continues to engage us early on upcoming opportunities in these segments. Our teams across all subsidiaries continue to execute and pursue an array of work. During this period, we were awarded multiple data center projects in Colorado, Arizona, California, and New Jersey. In addition to data centers, our subsidiaries were awarded projects in clean energy, manufacturing, and industrial projects in California and Arizona. These accomplishments highlight our ongoing momentum and solid market presence throughout the U.S. and Canada. In conclusion, we believe our core markets remain healthy, and the depth of our customer relationships continues to create new opportunities. This success is driven by our dedicated employees, whose commitment to quality and safety is at the heart of everything we do. Thank you, everyone, for your time today. I will now hand the call back to Rick for his closing remarks.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Thank you for those updates, Kelly, Brian, and Don. We are proud of our fourth quarter and full year 2025 performance, which demonstrated the strength of our sound business strategies and our ability to maintain and expand long-term customer relationships across both segments. We believe our core markets are well positioned for continued growth as investment in electrical infrastructure accelerates. We remain committed to safely executing projects, strategically bidding opportunities, and supporting our customers in an ever-changing energy environment. We believe our proven track record of collaboration, integrity, and dependable project delivery puts us in a strong position for opportunities ahead. We are excited to play a meaningful role in strengthening the electrical infrastructure that keeps our communities running. I would like to thank our employees for their invaluable contributions and our shareholders for your continued support of MYR Group.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

I look forward to the year ahead. Operator, we are now ready to open the call up for your comments and questions.

Operator

Thank you. As a reminder, for those of you on the phone, to ask a question, please press star one one on your telephone and then wait until your name will be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Sangita Jain of KeyBanc. Your line is now open.

Sangita Jain
Sangita Jain
Senior Analyst at KeyBanc

Good morning, Rick, Kelly. Thank you for taking my question. First, Rick, can I ask you for your thoughts on the large transmission market out there? I know you were optimistic on late 2026 potential bookings for 2027 revenue. Just wondering if you're seeing the same type of trend right now?

Rick Swartz
Rick Swartz
President and CEO at MYR Group

We are. Nothing's changed on that side. I mean, it takes a while to bring these projects to market, and we've known that, so we're in good conversations with our clients. We believe we'll capture some of that work that will start to burn in 2027.

Sangita Jain
Sangita Jain
Senior Analyst at KeyBanc

Got it. Kelly, maybe for you. Cash flow has been really, really strong this year. I'm trying to figure out if some of that was catch up from the pending payments from last year's solar projects, or if there's any meaningful advances in new projects that we should be aware of?

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Yeah, thank you for that question. Yes, a very strong year for cash flow, and particularly in the fourth quarter. A lot of that is driven by our lower DSOs. You know, we're now, we've been in the mid-50s versus the historical average of around 70. And that's driven by a combination of things. You know, we saw a 16-day improvement, if you look year-over-year, with 11 days of that in the third quarter. Part of it is getting beyond those problem projects that we had in 2024. I'd say a larger factor is just that we have a very strong net overbuild position, really driven by some of the large fixed-price work that we have on the C&I side in particular.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

You know, I think that does represent potentially a little bit of a headwind as we look forward, and part of that will depend on the mix of work that we have as far as awards this year and how much of it is, you know, some of that mid to large size, fixed-price work that can have a, you know, more favorable billing profile versus, more MSA weighted. Which is great work to have, but doesn't have quite as, quite as positive of a cash flow profile.

Sangita Jain
Sangita Jain
Senior Analyst at KeyBanc

Great. Thank you so much.

Operator

Thank you. Our next question comes from Julien Dumoulin-Smith of Jefferies. Your line is open.

Brian Russo
Brian Russo
Managing Director and Senior Equity Research Analyst at Jefferies

Yeah, hi, it's Brian Russo on for Julian. Good morning.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Morning.

Brian Russo
Brian Russo
Managing Director and Senior Equity Research Analyst at Jefferies

Hey, could you just comment more on the strength in the T&D backlog? At $1 billion, looks like it was up about 20% year-over-year. You know, quite a bit of improvement from the year-over-year progression that we've been seeing in the last few quarters. Just curious, are any of the new projects, in particular that Kentucky MSA agreement, included in the December backlog? Also, is there any Xcel Energy $500 million, five-year MSA in that December backlog as well?

Rick Swartz
Rick Swartz
President and CEO at MYR Group

As far as the backlog goes, I'd say on the Xcel stuff, very little of that is in that backlog as of now. I mean, we said it would be a slow start to the year and then kind of progressing throughout the year, an increase. Not too much of that in our backlog right now because we only count 90 days of that MSA work, as Kelly highlighted in her script, within our backlog. When we look at the Kentucky side, that work really will start later this year. Not much of that in there. We've seen great activity in the markets out there, and we're being selective of what we take on and really focused on long-term relationships with clients.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

90% of our business is return clientele. We're always looking for those one-off projects as additive. Again, how do we grow with our existing clients? That's where our focus is at.

Brian Russo
Brian Russo
Managing Director and Senior Equity Research Analyst at Jefferies

Just to follow on there, in T&D, we saw a very large Texas-based wires company, you know, announce a rather robust five-year capital plan update. Could you just remind us what your positioning is currently in Texas? You know, then maybe what your level of activity has been kind of in, you know, in the past, you know, upcycles in capital spend that we've seen.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Yeah, Texas has been a good market for us for the last decade. I mean, it's been a good market. We continue to see that grow. We're excited about some of the opportunities that are out there with some of the 765 kV work, but even some of the 500 kV and 345 kV work, we're, you know, we do that every day. I think the 765 kV's upcoming. We're excited about our positioning on that. Again, we're seeing good activity, not just in Texas, but across the nation. Lots of good opportunities out there.

Brian Russo
Brian Russo
Managing Director and Senior Equity Research Analyst at Jefferies

Okay. And the strong C&I margins in the fourth quarter, +6%, you know, how does that fit into the 5%-7.5% operating margin target step up you're guiding towards this year? Then just kinda tie that into, you know, the backlog. Are there still projects still to be completed that would be in that old kind of 4%-6% target, or are those really nearly all burned, so everything from here on out is really, you know, in the new 5%-7.5% range?

Rick Swartz
Rick Swartz
President and CEO at MYR Group

I would say, you know, our forecast, when we look at it for the year, is operating within the mid part of both our T&D and C&I margin profile. In that mid point of that, we see good opportunities out there. We continue to see good activity in the market. With that being said, we haven't changed from what we said last quarter on both, you know, from a revenue standpoint, we look at that 10%-ish growth in both segments and then as a company overall, and then we look at operating in those, that mid part of that range.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Good opportunities there, and I think we'll continue to do everything we can to increase our margins from our standpoint, as you know, as far as what we do from a prefab standpoint, from efficiency standpoint, from, you know, utilizing our equipment better, and we'll continue to try to maximize on that side.

Brian Russo
Brian Russo
Managing Director and Senior Equity Research Analyst at Jefferies

Okay, great. Thank you very much.

Operator

Thank you.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Thanks.

Operator

Our next question comes from Justin Hauke of Baird. Your line is open.

Justin Hauke
Justin Hauke
VP and Senior Research Associate at Baird

Great. I had two quick ones here. The first one, I was just gonna ask about in your backlog, you break out, you know, what you expect to book over 12 months and what you expect to look beyond 12 months, and it looks like almost all the backlog increase this quarter was kind of the longer duration backlog. I guess I just wanted to understand the components of that. Is that some of the data center work from C&I that you're talking about? Like, the duration of your projects is just extending because the size is getting bigger? Maybe just kind of how to think about that.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Sure. On our larger project side, I would say, those go out, you know, a little way. They go out, you know, some of those data centers take 18 months to construct or so, 18-24 months when you look at the larger projects, and that goes for transportation work. Some of that goes beyond that. They're, you know, 4- or 5-year projects. Again, good activity on the small and mid-size that's burning quickly. The larger projects, it does take a little longer to construct those projects.

Justin Hauke
Justin Hauke
VP and Senior Research Associate at Baird

Okay. I guess my second question, not to be myopic, I guess, but, you know, obviously there's been a lot of winter weather, all over. You know, 1Q is not typically your, you know, productive quarter versus the summer, but, just curious if there's anything you would be thinking about or you'd want to communicate in terms of, you know, potential weather impacts in the first quarter that would be unusual that have, you know, occurred thus far? Maybe it's not, maybe it's just in line with kind of normal seasonality. Thank you.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

I think for us, we always, you know, bid our work on normal seasonality. I think there's always gonna be some storms that take place. If it's, you know, I don't think, you know, snow always affects us in the way that maybe, really wet weather, where we can't traverse the right-of-way. That seems to affect us a little bit more. Again, we're always monitoring the weather, and it really has to do where those, you know, what projects are affected. You know, you can see, you know, in any given area, I mean, you can be 50 mi away, and it really affects one area, and it may not affect the other. Again, the weather hasn't affected our business across, you know, I guess, the country everywhere equally.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

I would say, you know, we continue to look at that. You know, weather's the biggest impact we can have, but again, it hasn't affected us across the country as a whole, just in some select areas. With that, sometimes we have some offset of some storm and other type works that we're doing for repair. Again, our base business is that day-to-day MSA and just construction projects. We like storm work, but again, we're not dependent on it.

Justin Hauke
Justin Hauke
VP and Senior Research Associate at Baird

Yeah.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Yeah, I would just add a little bit broader context, Justin, in looking at first quarter revenues. You know, we are expecting that we will trend in the first quarter a little bit above that full year rate of about 10% growth. That's really driven by, you know, first quarter last year, we had a little bit slower start, so it is a bit of an easier comp compared to the rest of the year. Just as you're thinking about modeling that, would expect a little stronger revenue growth in the first quarter.

Justin Hauke
Justin Hauke
VP and Senior Research Associate at Baird

Got it. Thank you for that. All right, thank you.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Thank you.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Thank you.

Operator

Our next question comes from Caitlin Donohue of Goldman Sachs. Your line is open.

Caitlin Donohue
Caitlin Donohue
Equity Research Analyst at Goldman Sachs

Good morning, thank you for taking my questions. Just focusing on the data centers, you outlined a few awards this past quarter. How are you seeing that project pipeline shape up for 2026, 2027, as you're speaking with your customers?

Rick Swartz
Rick Swartz
President and CEO at MYR Group

The conversations are strong on that side. you know, it's not just 2027 and 2028. I mean, we're having conversations with customers that go well beyond that timeframe. Again, I think our awards are always lumpy, just on how long it takes the projects to get finalized. Again, great conversations going forward. Good activity in that market. Again, not completely dependent on that market by itself. We like the diversification we have with transportation, you know, healthcare, some of that other work we do, good opportunities on that side also.

Caitlin Donohue
Caitlin Donohue
Equity Research Analyst at Goldman Sachs

That's helpful. Thank you. Then just on capital allocation strategy for 2026, we've seen CapEx step up a little bit. You've done buybacks in the past. How are you thinking through MYR Group's strategy for the year?

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Yeah, we are seeing great opportunities to continue to grow our business organically and through acquisitions. I think as we've talked about before, we'll continue to prioritize our capital allocation to growth. You know, we do, we do use share repurchases opportunistically, and I think the last two years are a great example of that, with deploying over $150 million, at an average price of $117. I think at this point, really focused on the growth opportunities that we see, both organically and from acquisitions.

Caitlin Donohue
Caitlin Donohue
Equity Research Analyst at Goldman Sachs

That's helpful. Thank you. I'll turn it back.

Operator

Thank you. Our next question comes from Manish Somaiya from Cantor Fitzgerald. Your line is open. Manish, your line is open. Our next question comes from Brian Brophy of Stifel. Your line is open, Brian.

Brian Brophy
Brian Brophy
Director and Equity Research Analyst at Stifel

Yeah, thanks. Good morning, everybody. Just wanted to kind of continue the conversation on the large transmission opportunity, and some potential awards you may see there. Assuming you see something in the back half of 2026, as you kind of alluded to, would those projects be additive to growth in 2027, or would you have to pull resources from somewhere else to meet some of that demand? Thanks.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

I don't see us having to pull any resources. I mean, we've done a good job of, you know, retaining our employees, recruiting, and developing people. To us, that's additive. You know, it goes into 2027 and beyond. It's not just the work that's gonna start in 2027, we see this cycle being much longer than that, you know. I think it's a decade worth of growth out there, and we're gonna capitalize on it where we can, and there's some great opportunities we feel coming our way.

Brian Brophy
Brian Brophy
Director and Equity Research Analyst at Stifel

Great. Yeah, that's good to hear. Just as a follow-up to that, how do you think about some of the large transmission wins potentially impacting the margin profile of the business at all? Maybe not from an individual project standpoint, but capacity utilization overall. Should we think about that being a margin driver? Thanks.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Yeah, I think it can, I think, you know, it can show I guess, marginal margin increases on that side. Again, it's how can we better utilize our equipment? How can we take labor out of the field and do more things on the prefab or the kitting side? We're always looking at that side and being a solution provider for our customers. I think along with that, we're always looking to enhance our margins. Again, our relationships with our clients are long term, so it's not, you know, always, you know, on this side, they're a regulated business.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

We'll continue to, you know, I guess, push margins where we can, but more from an efficiency standpoint than, you know, what I'd call ever reaching out and trying to gouge our customers or anything like that. We really build on long term. Again, over 90% of our business is return clientele, and we always wanna make sure we maintain those relationships.

Brian Brophy
Brian Brophy
Director and Equity Research Analyst at Stifel

Appreciate it. I'll pass it on.

Operator

Thank you. Our next question comes from Manish Somaiya from Cantor Fitzgerald. Your line is open.

Manish Somaiya
Manish Somaiya
Senior Equity Analyst at Cantor Fitzgerald

Thank you. Can you hear me?

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Yes.

Manish Somaiya
Manish Somaiya
Senior Equity Analyst at Cantor Fitzgerald

Okay, wonderful. Rick, I have the first question for you. In the press release, we talked about the bid environment being steady. Maybe if you can just give us a sense as to what you're seeing in terms of pricing, by geography, by end market, and, you know, when are you walking away from business that may not be attractively priced? Maybe if you can just give us a sense of what's going on in the marketplace.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

I think for us, you know, our, I would say, you know, our, we've got a select client list. We're not trying to be everything to everyone, if that makes sense. If, you know, on the, let's say, C&I as an example, if it's a customer we've done work for a long time with or it's somebody that's a continued relationship, or we can build a continued relationship, we're really focused on that side, not the one-off ones. We're not focused on bidding a project that has 20 bidders on it. We like, you know, the customers that have select bid lists, or we have teaming arrangements with. With that side, good activity, good opportunities there.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

I would say market by market, when you're talking geographies across the U.S., some are a little tighter than others still, but we see those areas that are maybe not as busy as others, getting busy in the future. We're always monitoring that. We've got 65+ offices across the U.S. and some in Canada. With that, we're always using that local expertise to help us pick what work we wanna go after, which ones really fit us and which ones don't. Along the way, we always evaluate those opportunities, and again, we're seeing good activity in all our marketplaces.

Manish Somaiya
Manish Somaiya
Senior Equity Analyst at Cantor Fitzgerald

I know we talked a bit about the data centers. Maybe Don can shed some more light. Are the customers on the data center side, hyperscalers, GCs, developers? Maybe if you can just give us a sense. As it pertains to backlog, is, you know, it seems obviously everybody's doing more data center work, would you say that the backlog on the C&I side is diversified, or is it kind of more concentrated?

Don Egan
Don Egan
SVP and COO of Commercial and Industrial at MYR Group

Well, I'll answer that question first. Our backlog is very diversified. Yeah, you're absolutely correct. There is a lot of activity in the market, and we're having conversations with end users, the hyperscalers, general contractors, developers. It's ongoing conversations on a regular, very regular basis, if that answers your question.

Manish Somaiya
Manish Somaiya
Senior Equity Analyst at Cantor Fitzgerald

In terms of the customers on the data center side, would it be hyperscalers or general contractors, developers?

Don Egan
Don Egan
SVP and COO of Commercial and Industrial at MYR Group

Again, as I stated, it's all the above.

Manish Somaiya
Manish Somaiya
Senior Equity Analyst at Cantor Fitzgerald

Okay.

Don Egan
Don Egan
SVP and COO of Commercial and Industrial at MYR Group

We are having conversations with hyperscalers on a daily, weekly basis, same with general contractors and end users, owners.

Manish Somaiya
Manish Somaiya
Senior Equity Analyst at Cantor Fitzgerald

Thanks for clarifying that. Just lastly, Rick, from a high level, you know, obviously, you guys don't give guidance, but, you know, what would be the puts and takes for 2026, well, as you kind of look at your internal benchmarks and targets? You know, how should we think about the risks and opportunities?

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Let me go back to Don's question real quick, the one you asked for him. I would say the other side on data centers is, you know, it's not just the new construction. I think that's really what has the headline. A lot of it is the retrofits in existing buildings to existing data centers that have been there. I mean, they're living buildings. They're always changing the technology. As that happens, that repeat work for us is very important. Once we're in a data center, we tend to stay there for a long time. It's not just the new builds, it's also that retrofit work. That's the only thing I would add to that.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

When we look at kind of the puts and takes going forward, I would say, you know, the biggest impact we can always have on the T&D side is weather. Other than that, the activity in the market, other than, you know, something that we don't see right now from any of our conversations with our client, would be any kind of slowing of the market. We don't see that, nor do we anticipate it, so it's really the weather on our T&D is the biggest impact, and then the timing of these projects, how quick they roll out, would be the other kind of, you know, risk out there. Because it's not if these projects are gonna be built, it's when. Sometimes you can see a 2-4 month push on projects, but it's not like they're gonna be pushed out years.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

That's kind of how we see it now. The other side, on the T&D side, that I'd probably highlight is permitting. Sometimes that can push a project out a little bit. Again, it's not if the projects are gonna be built, it's when. Again, good activity on both sides, both T&D and C&I.

Manish Somaiya
Manish Somaiya
Senior Equity Analyst at Cantor Fitzgerald

Wonderful. Thank you so much.

Operator

Thank you. Our next question comes from Tim Moore of Clear Street. Your line is now open.

Tim Moore
Equity Research Analyst at Clear Street

Thanks. Great job with your backlog growth and book-to-bill. My equipment utilization tailwind for the T&D side was already asked, so, I just have two questions remaining. Yeah, maybe you can maybe walk us through, or even Kelly, the, you know, elaborate on kind of the trade-off in your selectivity for staffing, you know, for maybe, like, an 18-month data center, you know, versus cross-selling, you know, a more medium-sized utility project. You know, I know they're separate segments, but I'm just kind of wondering if you could talk a bit more to, like, the regional staffing, playing in, cross-selling opportunity, you know, and if it is a new customer, not more than 90%, you know, incumbents.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Yeah, I'll start there. You know, like what you just said, I mean, 90% of our business is return clientele. We're always focused on that. We're always trying to cost cross, you know, sell. There's lots of opportunities on that side, especially on data centers, where, you know, the substation on that side might be on the, you know, within the owner's side of it rather than the utility side. Either way, we're able to construct that portion of the project. I would say we're always looking at those opportunities. We're always gonna focus on our long-term clients first, and then we'll take the one-off ones later. If they're just gonna build one project and out, that's probably not our focus.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

If they're gonna build multiple projects, that's where we're focusing, and I think we've done a very good job on, as an example, some of our data centers where, you know, there are facilities that are, they build 1 building, then they move into the next. As they build out their campus, it's a great place for us. There are some of them where we might be on, you know. As an example, we're on building three of maybe a planned 12 buildings. Again, this goes out for many years forward, and that's really where our focus is. Kelly, do you want to add?

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

I think you covered that well, Rick. Thanks.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Okay.

Tim Moore
Equity Research Analyst at Clear Street

Great. Great, that was really helpful. Thanks for that color. The only other question I had is, you know, given your liquidity and the cash and, you know, the bolt-on acquisitions opportunity, can you maybe just talk high level about the philosophy? Is your priority, you know, within T&D, more the electrical contractors, and then, you know, on the C&I side, is it to build geographic scale, like in the Southeast? Just kind of curious if you can add any color.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Sure, I can start on that one.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Oh, go ahead.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Sorry, go.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Go ahead, Kelly.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

I was just gonna say, on the T&D side, definitely focused on electrical contractors. You know, we do have really good geographic presence across the U.S. and up into Canada and Ontario on the T&D side. We also look at opportunities that would be ancillary services, like right-of-way or foundation or environmental work. Those can be of interest to us as well. On the C&I side, I would say, really two primary screens from a strategic perspective. First would be the geographic fit, because we don't have quite as consistent of coverage as we do on the T&D side. Really taking a close look at the end markets they serve.

Kelly Huntington
Kelly Huntington
SVP and CFO at MYR Group

Does that acquisition opportunity have a similar profile as far as exposed to those higher growth, tend to be less cyclical, more complex, core markets like we are? Those would be the main things we're looking at. Really still focused on tuck-in acquisitions, in the places we know and the risk profiles that we understand as well.

Tim Moore
Equity Research Analyst at Clear Street

Great, Kelly. That's very helpful. Thanks for that granularity. That's it for my questions.

Operator

Thank you. Our next question comes from Jon Braatz of KCCA. Your line is open.

Jon Braatz
Senior Research Analyst at KCCA

Morning, everyone.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Morning.

Jon Braatz
Senior Research Analyst at KCCA

Rick, you know, your markets are very strong. I think you've indicated that, you know, the top line you could see is 7%-10% type of revenue growth. Should the opportunities present themselves, as they might, do you have the ability or the capacity of the labor force and infrastructure in place to maybe accelerate that growth as we go forward?

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Yeah, I mean, we've got that opportunity. I think if you look back in our history, we've grown more than that in certain years, and we've other years, we've, you know, tame that back a little bit. Again, it's timing of the awards, how they happen. I see good opportunities out there, but where we're really focused is, you know, controlled growth also. I think anybody could, you know, really add revenue at this point, but could they do it profitably? For us, it's maintaining that right amount of growth so we can be profitable. We're definitely capable of doing more than that. We have said for, you know, this year, we anticipate, you know, growing in that 10% range.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

You know, a little more than the 7%, but again, making sure we have controlled risk, and then we take on the right opportunities.

Jon Braatz
Senior Research Analyst at KCCA

Sure. Given the strength of your market, and the number of projects out there and so on, I sense that you can be more selective and maybe the risk profile of the work that you're doing, it has improved. Would that be a fair statement?

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Sure. We're always focused on that as we select our projects, is how do we, you know, limit our risk? How do we partner with our customers? How do we make sure that, you know, we have those kind of conversations? Again, de-risking our projects is definitely important to us, and that's one of the evaluations we go through as we look at projects is, you know, I would say we have less risk in our backlog today than we had in our backlog a year ago or 5 years ago.

Jon Braatz
Senior Research Analyst at KCCA

Okay. Thank you.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

Thank you.

Operator

Thank you. I am showing no further questions in the queue. I would now like to turn the call back over to Rick Swartz for additional closing remarks.

Rick Swartz
Rick Swartz
President and CEO at MYR Group

To conclude, on behalf of Kelly, Brian, Don, and myself, I sincerely thank you for joining us on the call today. I don't have anything further. We look forward to working with you in the future and speaking with you again on our next conference call. Until then, stay safe.

Operator

Thank you. This concludes today's conference call. We thank you for your participation. You may now disconnect.

Executives
    • Brian Stern
      Brian Stern
      SVP and COO of Transmission and Distribution
    • Don Egan
      Don Egan
      SVP and COO of Commercial and Industrial
    • Jennifer Harper
      Jennifer Harper
      VP of Investor Relations and Treasurer
    • Kelly Huntington
      Kelly Huntington
      SVP and CFO
    • Rick Swartz
      Rick Swartz
      President and CEO
Analysts
    • Brian Brophy
      Director and Equity Research Analyst at Stifel
    • Brian Russo
      Managing Director and Senior Equity Research Analyst at Jefferies
    • Caitlin Donohue
      Equity Research Analyst at Goldman Sachs
    • Jon Braatz
      Senior Research Analyst at KCCA
    • Justin Hauke
      VP and Senior Research Associate at Baird
    • Manish Somaiya
      Senior Equity Analyst at Cantor Fitzgerald
    • Sangita Jain
      Senior Analyst at KeyBanc
    • Tim Moore
      Equity Research Analyst at Clear Street
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