Revenue: $550.1 million, a 4.2% increase from Q1 2024. Gross Profit: $20.3 million, a 53.1% increase over the prior year period. Gross Profit Margin: 3.7%, up from 2.5% in Q1 2024. Net Loss: $17.9 million, improved from a net loss of $25.1 million in Q1 2024. Adjusted EBITDA: $24.2 million, approximately 20% higher than the prior year quarter. Adjusted EBITDA Margin: 4.4%, up from 3.8% in Q1 2024. US Gas Segment Revenue: $197.7 million, a decrease of 12.7% year-over-year. Canadian Gas Segment Revenue: $39.8 million, down 2.9% from the prior year period. Union Electric Segment Revenue: $175.5 million, a 7.1% increase year-over-year. Non-Union Electric Segment Revenue: $137.1 million, a 41.9% increase year-over-year. Net CapEx: $23.2 million, down from $24.6 million in the prior year period. Free Cash Flow Improvement: $44.6 million compared to Q1 2024. Net Debt to Adjusted EBITDA Ratio: Improved to 3.5 times from 3.6 times at the end of 2024. Cash and Cash Equivalents: $15.3 million at the end of the quarter. 2025 Revenue Outlook: Expected between $2.6 billion and $2.8 billion. 2025 Adjusted EBITDA Outlook: Between $240 million and $275 million. 2025 CapEx Forecast: Net spend between $65 million and $80 million.

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Release Date: May 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Centuri Holdings Inc (NYSE:CTRI) experienced strong commercial momentum in Q1 2025, exceeding expectations. The company achieved a record booking quarter with new bookings totaling $1.2 billion, significantly increasing the backlog to $4.5 billion. The non-union electric segment showed a 41.9% increase in revenue year-over-year, with improved gross profit margins. Centuri Holdings Inc (NYSE:CTRI) is actively expanding its sales pipeline, now approaching $12 billion in revenue opportunities. The company maintains a positive outlook for 2025, expecting to deliver revenue at the upper end of the guidance range.

Negative Points

The US gas segment faced a 12.7% year-over-year decrease in revenue due to adverse weather conditions. Gross profit margin in the US gas segment decreased to negative 7.5% in Q1 2025, impacted by weather disruptions. The company reported a net loss attributable to common stock of $17.9 million in Q1 2025. Offshore wind revenues in the Union Electric segment were down 64.1% as project work winds down. The company experienced a delay in the timing of its earnings announcement due to issues in finalizing financial statements.

Story Continues

Q & A Highlights

Q: Can you discuss the trajectory for 2025 and how you plan to reach the upper end of the revenue guidance despite a weaker Q1 in the US gas segment? A: Christian Brown, President and CEO, explained that the weather affected the gas business in January and February, but it bounced back in March and April. The company has work under contract and backlog pushing towards the upper end of guidance. All operating companies are on track to meet budget expectations, and the gas business is expected to recover fully.

Q: What were the key findings from the strategic review, and what was most valuable from the process? A: Christian Brown highlighted four components: integrating a live sales pipeline across all operating companies, maximizing cross-selling opportunities, instilling a culture focused on identifying more work, and aligning KPIs with growth and profitability targets.

Q: Regarding the US gas segment, is it a business that should generate a profit in Q1, and are there structural changes needed to achieve that? A: Christian Brown noted that weather impacts are unavoidable, but the company is working to build a pipeline of opportunities in states less affected by weather to become profitable earlier in the year. Greg Izenstark, CFO, added that Q1 is seasonally slow for the gas business, but they remain confident in full-year performance.

Q: With a strong Q1 booking, should we expect lighter quarters ahead, and what is the visibility on bookings? A: Christian Brown stated that Q2 bookings remain strong, and the company is confident in achieving or exceeding the 1.1 times book-to-bill target for the year. While Q3 may be quieter, Q2 and Q4 are expected to be solid in bookings.

Q: Can you clarify if the guidance includes the upper end of adjusted EBITDA, and how should we think about seasonality? A: Christian Brown confirmed that the bookings and backlog are pushing towards the upper end of revenue guidance, close to $2.8 billion. There is no expected margin erosion, and all businesses are showing strong performance for the rest of the year, with no further seasonality anticipated.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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