MYR Group (MYRG) Q4 FY25 earnings call: guidance and Q&A

Asked for thoughts on the large transmission market and if the optimism for late 2026 bookings for 2027 revenue remains.

Management confirmed that their optimistic outlook for the large transmission market, including potential bookings in late 2026 for 2027 revenue, remains unchanged. They are in active discussions with clients.

“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, and we believe we'll capture some of that work that will start to burn in '27.”

asked by Sangita Jain · answered by Richard Swartz

Inquired if strong cash flow was due to catch-up payments from prior projects or advances on new projects.

The CFO attributed strong cash flow to lower Days Sales Outstanding (DSOs) in the mid-50s (historically around 70), driven by moving past problem projects and a strong net overbuild position from large fixed-price C&I work. She noted this could be a slight headwind going forward depending on the mix of work.

“So 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 some of that mid- to large-sized fixed price work that can have a more favorable billing profile versus more MSA weighted, which is great work to have, but doesn't have quite as positive of the cash flow profile.”

asked by Sangita Jain · answered by Kelly Huntington

Asked if new projects like the Kentucky MSA or the Xcel $500 million MSA were included in the $1 billion T&D backlog.

Management clarified that very little of the Xcel work is in the current backlog, as it's expected to start slowly and progress throughout the year. The Kentucky work will also start later in the year. They reiterated that only 90 days of MSA work are counted in the backlog.

“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 and increase. So again, 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.”

asked by Brian Russo · answered by Richard Swartz

Questioned how strong Q4 C&I margins fit into the 5%-7.5% operating margin target for the year and if older, lower-margin projects have been completed.

Management stated their forecast is to operate within the 'midpart' of both T&D and C&I margin profiles for the year. They confirmed no change to the 10% growth outlook and emphasized ongoing efforts to improve margins through efficiency, prefabrication, and better equipment utilization.

“Well, I would say our forecast when we look at it for the year is operating within the midpart of both our T&D and C&I margin profile. So in that midpoint of that, we see good opportunities out there.”

asked by Brian Russo · answered by Richard Swartz

Asked if the increase in longer-duration backlog was primarily due to data center work and extending project sizes.

Management confirmed that larger projects, such as data centers (18-24 months) and some transportation work (4-5 years), contribute to the longer duration of the backlog. Smaller and mid-sized jobs, however, convert more quickly.

“On our larger project side, I would say those go out a little way. So they go out -- some of those data centers take 18 months to construct or so, 18 to 24 months when you look at the larger projects, and that goes for transportation work. Some of that goes beyond that. They're 4- or 5-year projects.”

asked by Justin Hauke · answered by Richard Swartz

Asked about the data center project pipeline for 2026-2027.

Management indicated that conversations regarding data center projects are strong and extend "well beyond that time frame" (2027-2028). While awards can be lumpy, they see good activity in the market and also highlighted diversification into other sectors.

“The conversations are strong on that side. It's not just '27 and '28. I mean we're having conversations with customers that go well beyond that time frame. So again, I think our awards are always lumpy just on how long it takes the projects to get finalized. But again, great conversations going forward. So good activity in that market.”

asked by Caitlin Donohue · answered by Richard Swartz

Asked if large transmission wins would be additive to growth or require pulling resources, and their potential impact on the business's margin profile.

Management believes large transmission wins would be additive, not requiring resource reallocation, due to their ability to retain and develop employees. They see a "decade worth of growth." Such projects could lead to "marginal increases" in margins through efficiency, not by price gouging clients, maintaining long-term relationships.

“I don't see us having to pull any resources. I mean we've done a good job of retaining our employees, recruiting and developing people. So to us, that's additive. And it goes into '27 and beyond. So it's not just the work that's going to start in '27. We see the cycle being much longer than that. So I think it's a decade worth of growth out there, and we're going to capitalize on it where we can, and there's some great opportunities we feel coming our way.”

asked by Brian Brophy · answered by Richard Swartz

Asked if the company has the capacity and labor force to accelerate growth beyond the stated 7%-10% range given strong markets.

Management confirmed they have the capability to grow more but prioritize "controlled growth" to ensure profitability and manage risk. They anticipate growing in the "10%-ish range" for the current year, balancing growth with taking on the right opportunities.

“Yes. 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 -- other years, we've tamed 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 controlled growth also.”

asked by Jon Braatz · answered by Richard Swartz