Centuri Holdings, Inc. (CTRI) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial performance with a 51% revenue increase, improved debt ratios, and a robust backlog. The Q&A reveals management's focus on consistent margins, growth in data centers, and strategic acquisitions. Despite some vague responses, the overall sentiment is positive due to improved guidance, operational efficiency, and a strong opportunity pipeline.
Key Financial Performance
Revenue $3 billion, a record for Centuri in 2025, representing a 13% increase from 2024. This growth was attributed to strong bookings and increased activity in various segments.
Adjusted Net Income $39 million, a 49% increase over the prior year. This improvement reflects enhanced profitability and operational efficiency.
Base Revenue $2.9 billion, an 18% increase year-over-year. This growth was driven by strong performance in core business areas excluding storm restoration services.
Base Gross Profit $234 million, up 35% compared to 2024. This exceeded expectations due to improved productivity, safety, and customer service.
Book-to-Bill Ratio 1.5x for 2025, surpassing the goal of 1.1x. This was driven by strong bookings of over $4.5 billion, including new and expanded scopes of work.
Backlog $5.9 billion at year-end, an increase of $2.2 billion or 59% from last year. This growth reflects strong bookings and renewals.
Base Gross Margin 8% in 2025, an increase of approximately 100 basis points year-over-year. This was achieved through initiatives to address seasonality, improve fleet efficiency, and enhance crew productivity.
Net Income Attributable to Common Stock $23 million in 2025, compared to a loss of $7 million in 2024. This turnaround was supported by improved operational performance and reduced leverage.
Adjusted EBITDA $249 million in 2025, up from $238 million in 2024. This growth was driven by increased revenue and operational efficiencies.
Free Cash Flow $106 million for the fourth quarter of 2025, reflecting strong cash generation and improved financial management.
U.S. Gas Revenue $1.3 billion, a 5% increase compared to 2024. This growth was supported by solid MSA volumes and bid projects.
Canadian Operations Revenue $247 million, up 25% over 2024. This growth was driven by strong demand and operational performance.
Union Electric Base Revenue $800 million, a 21% increase year-over-year. Growth was fueled by robust activity in industrial end-user segments.
Non-Union Electric Base Revenue $569 million, a 51% increase over 2024. This growth reflects significant expansion in MSA activity.
Net Debt to Adjusted EBITDA Ratio 2.5x at year-end 2025, down from 3.6x in 2024. This improvement was achieved through debt reduction and equity offerings.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
New MSAs: Added across Texas, Oklahoma, Arizona, Georgia, Indiana, Wisconsin, and several other states.
Bid Work: Secured over 600 awards with an average size of $2.4 million, including significant natural gas pipe replacement projects, renewable natural gas facility construction, and utility-scale transmission line projects.
Data Center Projects: Actively executing several scopes of work and pursuing over 20 opportunities worth approximately $1.4 billion.
Geographic Expansion: Expanded operations in multiple U.S. states and Canada, including new MSAs in Texas, Oklahoma, Arizona, Georgia, Indiana, and Wisconsin.
Canadian Market: Acquired Connect Atlantic Utility Services, establishing a Canadian electric service platform.
Fleet Efficiency: Initiated plans to improve fleet efficiency by 20% through enhanced supplier pricing, better utilization rates, and optimized allocation.
Crew Efficiency: Improved crew efficiency in the Non-Union Electric segment, leading to significant growth and productivity gains.
Seasonality Mitigation: Implemented plans to address seasonality in the gas business by expanding work in warmer geographies and securing more indoor projects.
Deleveraging: Reduced net debt to adjusted EBITDA to 2.5x in 2025, with plans to further reduce it to 2x by the end of 2026.
Shift in Fleet Investment Strategy: Transitioned to a balanced approach of purchasing and leasing fleet equipment to improve free cash flow and balance sheet flexibility.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Economic Conditions: Uncertainties surrounding the impacts of future economic conditions could adversely affect earnings and operational performance.
Regulatory Approvals: Delays or challenges in obtaining regulatory approvals may impact project timelines and financial outcomes.
Seasonality in Gas Business: Seasonal fluctuations in the gas business, particularly in colder geographies, could affect profitability. Efforts to address this are expected to take three years.
Fleet Efficiency: Challenges in improving fleet efficiency and utilization rates could impact operational costs and margins.
Crew Efficiency in Non-Union Electric Segment: Underperformance in crew efficiency within the Non-Union Electric segment could hinder productivity and margin growth.
Debt Levels: Although leverage has been reduced, maintaining a strong balance sheet and further deleveraging remain critical to financial stability.
Interest Rate Risks: Fluctuations in interest rates could impact debt servicing costs, despite recent rate reductions.
Bid Work Execution: The growing number of bid projects, while a revenue opportunity, poses execution risks and challenges in maintaining consistent quality and profitability.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Guidance for 2026: Base revenue is expected to range between $3.15 billion and $3.45 billion. Including storm restoration services, total revenue is projected to be between $3.24 billion and $3.54 billion.
Gross Profit Guidance for 2026: Base gross profit is anticipated to be between $255 million and $285 million. Including storm restoration services, gross profit is expected to include an additional $28 million.
Adjusted EBITDA and Net Income for 2026: Adjusted EBITDA is forecasted to range from $280 million to $310 million. Adjusted net income is expected to be between $55 million and $75 million.
Capital Expenditures for 2026: Net capital expenditures are projected to be between $75 million and $90 million. Fleet investments are expected to total $150 million to $180 million, with a balanced funding approach of 50% leasing.
Debt Reduction Goals: Net debt to adjusted EBITDA is targeted to decrease to around 2x by the end of 2026, down from 2.5x at the end of 2025.
Market and Opportunity Pipeline: The company expects continued strong bookings in 2026, targeting a book-to-bill ratio of 1.1 to 1.2x. The Opportunity Pipeline includes $6.7 billion in bid opportunities, with $2.8 billion in near-term opportunities expected to be awarded by the end of Q2 2026.
Margin Improvement Initiatives: Several initiatives are underway to improve margins, including addressing seasonality in the gas business, enhancing fleet efficiency, and improving crew productivity in the Non-Union Electric segment. Higher bid margins are also expected to contribute to margin growth.
Data Center Opportunities: The company is actively pursuing over 20 data center opportunities valued at approximately $1.4 billion, with additional prospects potentially reaching $2 billion.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:How much of the 3-year average storm revenue included in the guidance was realized in the January storm?
A:The storm impact this year has been minor and largely in line with last year, which was a quiet year. Nothing significant or unexpected was realized in the January storm.
Q:Is the gross margin lower in the core guidance excluding storms compared to this year?
A:No, the gross profit margin would be largely in line with this year, up a little bit on an annualized basis.
Q:What are the margin expectations in the guidance and how is seasonality being addressed in the gas segment?
A:The company is striving for predictable and consistent margins, with improvements expected from initiatives like reducing seasonality in the gas segment. Positive signs are seen in the ability to find and win work in the gas business, aiming to eliminate seasonality across all four quarters. The company is also focusing on selective opportunities, efficiency in fleet usage, and improving margins in the Non-Union Electric segment.
Q:What is the status of the data center pipeline and win rates?
A:Win rates have been improving over the past 13 months. The data center pipeline includes $1.5 billion to $1.6 billion in near-term opportunities currently being negotiated or tendered. The company remains disciplined in targeting customers with capital and projects that can deliver returns and margins.
Q:What changes were implemented in 2025 to drive growth and how will they continue in 2026?
A:Key changes included establishing an effective sales pipeline, implementing tight operational oversight, and improving capital efficiency. These measures have institutionalized predictability in revenue growth, margins, and forecasts. The company plans to continue these practices while capturing market tailwinds to build a larger backlog for 2026 and beyond.
Q:How is the organization sized relative to 2026 base revenue and what investments are being made?
A:The organization is not sized to capacity and is actively adding resources, including a 12-15% increase in headcount over the past 13 months. The focus is on hiring and resourcing to support growth, with less concern about fleet capacity as it can be efficiently funded.
Q:What is the gross margin including storms in the guidance?
A:The gross margin including storms is approximately 8.8% at the midpoint of the guidance.
Q:What is the outlook for free cash flow and working capital improvements in 2026?
A:The company is focused on reducing DSO and improving billing and collection processes. Longer-term, the target is a 50% free cash flow conversion of adjusted EBITDA.
Q:What is the base of communications in the business and expected growth in this area?
A:The company is not actively building out a telecoms business but is including fiber and other scopes of work as part of data center projects. Growth in communications is complementary to existing operations.
Q:What is the expected revenue burn phasing for bid work awards this year?
A:The revenue burn phasing for bid work awards is expected to be similar to last year, with consistent booking and execution throughout the year.
Q:What is the goal for reducing Q1 seasonality in the gas business?
A:The goal is to deliver a 7%+ gross profit margin in the gas business consistently across all four quarters, eliminating seasonality.
Q:What are the aspirations for M&A and tuck-in acquisitions?
A:The focus is on tuck-in acquisitions to address white space in the Midwest and enhance geographic presence in the electrical transmission and distribution markets.
Q:What is the visibility and timing for data center bookings in 2026?
A:The company is disciplined in its data center pipeline, focusing on projects with funding and real potential. Of the $2 billion in opportunities, $1.3 billion is currently being tendered, with bookings expected in the first six months of the year.
Q:How does the increased nonunion workforce impact storm revenue potential?
A:The increased nonunion workforce primarily works on system services for customers, but it also provides more upside potential for storm revenue during weather events.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on the exact margin improvement from reducing seasonality in the gas segment, the precise timing of data center awards, and the exact free cash flow as a percentage of sales for 2026. Additionally, they used vague language when discussing the potential for storm revenue and the impact of M&A on growth.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Base
Connect
MSA renewal
Non Union
Opportunity
President Investor
Vice President
acquisition
allocation
base increase
basis income
basis point
basis share
bid opportunity
bill ratio
book bill
compressor
crew efficiency
customer relationship
efficiency fleet
end debt
fleet investment
geography
goal book
income share
income stock
increase basis
increase margin
interest
investor presentation
margin increase
measure storm
mix
parent
proceeds
proposal
prospect
rate
reduction debt
release investor
result Revenues
today record
transmission
work scope
CTRI Transcript
Centuri Holdings, Inc. (CTRI) Q1 2026 Earnings Call Transcript
Positive5-7
The earnings report shows strong financial performance with increased revenue, improved operating margins, and higher net income and free cash flow. Despite not discussing strategic initiatives or returns, the financial health is strong. The mention of economic and regulatory risks is a concern, but the overall positive financial metrics and lack of negative sentiment from the Q&A suggest a positive market reaction.
Centuri Holdings, Inc. (CTRI) Q4 2025 Earnings Call Transcript
Positive2-25
The earnings call highlights strong financial performance with a 51% revenue increase, improved debt ratios, and a robust backlog. The Q&A reveals management's focus on consistent margins, growth in data centers, and strategic acquisitions. Despite some vague responses, the overall sentiment is positive due to improved guidance, operational efficiency, and a strong opportunity pipeline.
Centuri Holdings, Inc. (CTRI) Q3 2025 Earnings Call Transcript
Unknown11-5
The earnings call showed mixed signals: strong revenue growth and improved net income, but a decline in gross profit margin and a slight decrease in adjusted EBITDA. The Q&A highlighted operational challenges, such as the impact of storm activities and resource mobilization costs. While management expressed optimism about future margins and revenue growth, the lack of specific guidance and unclear responses on margin differences suggest caution. Overall, the sentiment is neutral due to the balance of positive growth indicators and underlying operational concerns.
Earnings call transcript: Centuri Holdings misses EPS forecast, stock drops 9% in Q1 2025
Unknown5-12
The earnings call presents a mixed picture: strong improvements in gross profit and EBITDA margins, but persistent net losses and declines in key segments like US and Canadian Gas. Positive elements include an increase in free cash flow and strategic pipeline improvements. However, the lack of specific shareholder return plans and unclear management responses in the Q&A, particularly on strategic changes and profitability, temper optimism. The absence of a market cap suggests moderate volatility, leading to a neutral stock price prediction.
CTRI Slides
CTRI Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
