Centuri Q1 Earnings Call Highlights

Key Points

• Centuri posted strong Q1 growth, with revenue up 31% year over year to $723 million and adjusted EBITDA up 35% to $33 million. Gross profit and margins also improved sharply, while the net loss narrowed from the prior year.
• Bookings were robust and guidance was reaffirmed, with first-quarter bookings of $1.3 billion and a 1.8x book-to-bill ratio. Management kept its 2026 outlook unchanged, including adjusted EBITDA of $280 million to $310 million and free cash flow expected to exceed $60 million for the full year.
• Centuri is targeting long-term growth in electric infrastructure and data centers under its “One Centuri” strategy, alongside selective acquisitions. The company highlighted a $625 billion addressable market, growing transmission opportunities, and about $170 million of data center awards already secured in 2025.

Centuri NYSE: CTRI reported sharply higher first-quarter revenue and gross profit while reiterating its 2026 guidance and outlining a multi-year strategy aimed at expanding in electric infrastructure, data centers and selected geographic markets.

Executive Vice President and Chief Financial Officer Gregory Izenstark said first-quarter revenue rose 31% year over year to $723 million, while base revenue increased 29% to $689 million. Gross profit climbed 76% to $36 million, and base gross profit rose 96% to $28 million. Base gross profit margin improved to 4.1% from 2.7% a year earlier.

The company reported a net loss attributable to common stock of $9 million, or $0.09 per share, compared with a loss of $18 million, or $0.20 per share, in the prior-year period. Adjusted net loss was $2 million, or $0.02 per share, compared with an adjusted loss of $11 million, or $0.12 per share, last year. Adjusted EBITDA increased 35% to $33 million.

Izenstark said net cash used in operating activities was $35 million and free cash flow was negative $54 million, primarily due to the timing of working capital changes. He said first-quarter free cash flow was in line with expectations and that Centuri still expects full-year free cash flow to exceed $60 million.

Segment Results Show Growth Across the Business

In U.S. Gas, revenue increased 44% year over year to $284 million. The segment reported a gross loss of $6 million, improving from a $15 million gross loss a year earlier. Izenstark said the improvement reflected efforts to address seasonal impacts, even as Winter Storm Fern affected work in the Northeast and briefly slowed work on a new multi-year master service agreement in Texas.

Canadian operations revenue rose 51% to $60 million, primarily due to the inclusion of Connect Atlantic Utility Services in the current-year results. Izenstark said operational performance remained strong, while gross profit margin declined slightly to 15% because of the Connect acquisition.

Union Electric base revenue increased 14% to $199 million, with base gross profit margin rising 200 basis points to 8.7%. Izenstark cited strong project activity serving industrial end users, including substation infrastructure and data center-related work.

Non-Union Electric base revenue increased 25% to $151 million. Base gross profit margin declined to 6.3% from 8.7% a year earlier, which Izenstark attributed to the early-year ramp-up of an MSA contract, resource allocations to on-system storm restoration work and seasonal weather impacts in January and early February. He said activity and margins had returned to normal by the end of March.

Bookings and Guidance

Centuri delivered first-quarter bookings of $1.3 billion, representing a 1.8 times book-to-bill ratio. Izenstark said awards included $900 million of MSA renewals, $180 million of new or growth MSAs and $250 million of bid work. He added that momentum continued into April, with about $2 billion of pending bids outstanding, including nearly $200 million of data center work in negotiations.

For 2026, Centuri reiterated its outlook for base revenue of $3.15 billion to $3.45 billion, revenue of $3.24 billion to $3.54 billion, adjusted EBITDA of $280 million to $310 million and adjusted net income of $55 million to $75 million. The company also maintained its net capital expenditure outlook of $75 million to $90 million.

Izenstark said Centuri ended the quarter with a net debt to adjusted EBITDA ratio of 2.7 times, down from 3.5 times a year earlier, and continues to forecast a ratio of about 2 times by year-end.

CEO Outlines “One Centuri” Strategy

President and Chief Executive Officer Christian Brown said the company’s “One Centuri” strategy is intended to unify the business around a common purpose, strategic direction and values. He said the strategy focuses on protecting and deepening Centuri’s core utility work, pursuing growth initiatives and scaling the enterprise through talent, fleet efficiency, operational excellence and risk management.

Brown said North American energy infrastructure spending provides a long-term tailwind. He cited grid modernization, electrification, gas infrastructure replacement and demand from industrial and data center customers. According to Brown, Centuri estimates its total addressable market at $625 billion over the next four years, compared with a current $13 billion pipeline and $6.5 billion backlog.

Centuri expects base revenue to grow at a 10% to 15% compound annual growth rate through 2029 and base gross profit margin to improve by 70 to 170 basis points. Brown said the company expects bid work to grow faster than MSA work, increasing to about 35% of the business by 2029, while the gas and electric mix is expected to move toward 50/50.

Brown also said Centuri expects adjusted earnings per share to grow at a 30% to 45% compound annual rate through 2029. The company expects year-end leverage to remain below 2 times after 2026 and free cash flow conversion to reach 40% to 50% by 2029.

Data Centers, Transmission and M&A in Focus

Brown identified electric transmission as an area where Centuri is currently “underserving” the market. He said the company has transmission capabilities in both its Union Electric and Non-Union Electric businesses, but that transmission generates less than 10% of annual revenue. Centuri intends to focus on projects under $200 million, where Brown said the company can compete against smaller regional players while staying below the typical target size for larger industrial competitors.

Data centers remain a growing adjacent market for Centuri. Brown said the company has secured $170 million of data center-related awards since the start of 2025 and continues to evaluate and bid for about $1.5 billion of additional data center work. During the question-and-answer session, he said Centuri has close to $300 million of data center work for which it believes it has been selected and is negotiating, with potential formalization in the second quarter.

Brown said Centuri will also pursue tuck-in acquisitions, particularly in the Midwest and Southeast and in electric services, including transmission. He said the company is not targeting businesses that need to be fixed, but rather companies with strong operations, cultural fit and established customer relationships. In response to an analyst question, Brown said acquisition targets contemplated in the plan would generally be within the range of the Connect acquisition but below about $100 million of revenue.

Management Defends Conservative Outlook

Analysts asked why Centuri did not raise 2026 guidance after the strong first quarter. Brown said investors should not interpret the decision as a sign of weakness.

“I wouldn’t read into our reaffirming guidance and not change the guidance as anything other than the conservatism that we run the business,” Brown said. He added that every operating business exceeded budgeted revenue and profitability in the first quarter.

Brown also said the company has strong visibility into 2026, with much of the midpoint of guidance under contract and additional bid work expected to support the upper end. He said the current focus is on improving margins for 2026 and building backlog for 2027.

On book-to-bill expectations, Brown said the company continues to target 1.1 times to 1.2 times for the year, despite the first-quarter ratio of 1.8 times. He described that outlook as partly conservative and said the timing of awards can vary by quarter.

Asked about the market’s reaction to the results, Brown said he had not checked the share price but emphasized that the quarter met internal expectations. “I would say this is a strong operating quarter,” he said.

About Centuri NYSE: CTRI

Centuri Construction Group, Inc NYSE: CTRI is a heavy civil contractor specializing in water and wastewater infrastructure projects. The company delivers end-to-end services encompassing design-build, engineering, procurement and construction for water transmission mains, wastewater force mains, treatment facilities, pump and lift stations, and stormwater management systems.

Centuri’s core offerings include pipeline installation and rehabilitation, civil sitework, earthwork, structural concrete and slope protection.

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