Thank you for standing by, and welcome to MasTec's First Quarter 2025 Financial Results Conference Call. Today's call is being recorded. I'd like to turn the call over to Chris Mecray, Vice President of Investor Relations.

Good morning, and thank you for joining us for MasTec's first quarter 2025 financial results conference call. Joining me today are Jose Mas, Chief Executive Officer; and Paul DiMarco, Chief Financial Officer. We have prepared slides to supplement our remarks, which are posted on MasTec's website under the Investors tab and through the webcast link. There's also a companion document with information and analytics on the quarter, a guidance summary to assist in financial modeling. Please read the forward-looking statement disclaimer contained in the slides accompanying this call. During this call, we'll make forward-looking statements regarding our plans and expectations about the future as of the date of this call. Because these statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially from our forward-looking statements. Our Form 10-K, as updated by current periodic reports include a detailed discussion of principal risks and uncertainties that may cause such differences. In today's remarks, we'll be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules. We may also use certain non-GAAP financial measures in the conference call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measures can be found in our earnings press release. I'll now turn the call over to Marc Lewis for some parting remarks. Marc?

Thanks, Chris. Good morning, everyone. This is my 92nd consecutive quarterly earnings call after more than 23 years as VP of Investor Relations, and MasTec has unquestionably been the highlight of my 50-year professional career. It's been an incredible ride. I've had the best job in America, and I was blessed to work in the best corporate life for two years to keep things running at home while I traveled the world talking about the next big thing in MasTec. There are lots of MasTec people to thank. I'd first like to thank our Chairman, Jose Mas for his leadership and inspiration. Jose taught me that adversity is always only temporary. There are always hidden opportunities, and you just have to look for them and explore them to your full advantage. I'd also like to thank our Board and General Counsel, Alberto de Cardenas, who've been constant sources of guidance and strength. They were steady in good times and bad and never failed in their leadership and wise counsel for the management team. I'd also like to thank our prior CEO, Austin Shanfelter, who hired me in 2002, along with prior CFO, Bob Campbell, who both took us through a very challenging turnaround and recapitalization process in the early 2000s, which put MasTec on the path to growth and future success. I'd like to thank my good friend and longtime COO, Bob Apple, who has led a great team of men and women. A great team is always the foundation of a successful company, and their ever-improving performance has made my job easy. I’d like to thank George Pita for his financial leadership as CFO and the hundreds of financial support and operational staff who supported me in my efforts. And now Paul DiMarco, bringing new outside-the-box thinking to the CFO role. But most of all, I would like to thank Jose Mas. There were a lot of skeptics when he took over as CEO in 2007 at 35 years of age, and he proved them all wrong. His leadership and vision for diversification and growth has turned MasTec into a Fortune 500 company that we're all proud to be a part of. The corporate culture he's created is why I've been here so long and why so many of my coworker friends have been here for 10, 20, and even 30 years. He's the best CEO I’ve ever worked for. I know the best is yet to come from MasTec and his brilliant and success-driven leadership. Finally, I'd like to thank all the thousands of shareholders, portfolio managers, and allies I've worked with over the years. We've had a lot of success together and some fun, and I really miss talking to each of you. Most of all, I'll miss being on the road constantly telling you about MasTec's next pathway to growth and ever-increasing shareholder value. I love this company's history. It's hard to leave a great company and a job you truly love, but the time is right for me and for MasTec. I'm excited to turn IR over to Chris Mecray, a longtime professional who will take Investor Relations at MasTec to the next level. With that said, as I have often said over the last 23 years, MasTec had another great quarter, and there are a lot of good things to talk about. So, it is my pleasure to turn the call over to my good friend, Jose Mas for one last time. Jose?

Thanks, Marc. Good morning, and welcome to MasTec's 2025 First Quarter Call. Before getting started today, I'd like to say a few words about Marc Lewis. Today is bittersweet. I'm excited for Marc as he begins a new chapter in his life and for his successor, Chris, who I think is going to do an amazing job. But obviously, in some ways sad as well. As Marc said, I became CEO of MasTec in 2007 at the age of 35 and, quite frankly, with lots to learn in the Investor Relations world. Marc was a solid constant for MasTec and his guidance and direction not only served me well but all MasTec stakeholders. I also want to commend Marc for his leadership through actions. Marc truly loves MasTec and everything it stands for. He personifies our goal for all MasTec team members, which is to not only be an employee, but rather part of a family where you can dream, excel, grow, and provide a better future for your own family. Marc, thank you for everything. We will miss you, but know that you will always be a part of MasTec. Good luck, my friend. Now I'd like to review our first quarter results as well as provide my outlook for the markets that we serve. I'm pleased to report that we exceeded guidance in revenue, EBITDA, and EPS for the first quarter. We also delivered year-over-year growth despite a difficult comparison quarter. As a reminder, in last year's first quarter, our pipeline business had a strong start as we were completing the Mountain Valley Pipeline. Pipeline segment EBITDA in last year's first quarter was $93 million compared to $45 million in this year's first quarter. So, the balance of our business, our non-pipeline segments, improved EBITDA from $97 million in last year's first quarter to $155 million in this year's first quarter, a 60% year-over-year increase. Non-pipeline revenue was up by over 21%, with every segment delivering double-digit revenue growth. Our Power Delivery segment revenue was up 13%. Our Clean Energy and Infrastructure business was up 22%, and our Communications business saw revenues increase 35% year-over-year. More importantly, backlog was up materially and represented one of the largest sequential increases in the Company's history. Backlog increased over 10% sequentially, and the book-to-bill for the quarter was 1.55x. Every segment delivered backlog growth. With our solid performance across our non-pipeline segments and a significantly improving pipeline market, demonstrated by backlog more than doubling in that segment sequentially, MasTec is incredibly well positioned, and we remain very optimistic about both our full-year and longer-term outlook. In fact, today, we raised guidance for full year 2025, increasing revenue guidance to $13.650 billion, increasing the range of our EBITDA guidance to $1.120 billion to $1.160 billion, and increasing the range of EPS guidance to a midpoint of $6.08 per share. Our midpoint EPS guide is a 54% increase over last year and an over threefold increase from 2023 EPS. Turning to some segment highlights. In our Communications segment, top line growth in the first quarter was 35% year-over-year, coupled with 82% adjusted EBITDA growth with a 180 basis point improvement in margin. Backlog increased 7% sequentially to $4.9 billion. The telecom infrastructure demand backdrop remains robust, and we believe should be fairly well resistant to macro pressures given the capital investments being made to support broadband delivery and enable the AI economy. In the first quarter, we saw revenue growth from nearly all of our top 10 customers. MasTec's wireless business continues to see growth from expanded geography served and from broadening of services. We have a large core customer in this business where ongoing work to support infrastructure technology upgrades continues to perform well. In wireline, overall demand continued to be supported by broadband infrastructure build-outs and federal investment. Middle mile broadband build-outs and the recent surge in hyperscaler CapEx associated with data centers is also driving fiber demand. We see no material slowdown in project opportunities from macro concerns around AI power intensity. The bottom line is there is a race to build data center capacity. The data center opportunity for MasTec crosses all segments, and we coordinate that opportunity from a central office with joint customer outreach to hyperscalers and other customers. Turning to Power Delivery. First quarter revenues increased nearly 13% year-over-year and beat our forecast with profits in line and a slight decline in margins versus the prior year. We were pleased with the solid performance, but note that it could have been even better, as it included weather impacts and some productivity headwinds in select projects. So, it was not representative of optimal segment performance. We still see the full year playing out as expected with double-digit revenue growth and high single-digit margins. The Greenlink transmission project remains on plan and is anticipated to build revenue production as the year develops. We are now actively working on two segments of the transmission line and multiple substations. We continue to see Greenlink producing strong revenue in 2025 estimated now to be between $375 million and $450 million. We are still very bullish on grid investment demand, which is backed by substantial utility customer CapEx spend for years to come as utilities focus on meeting strong power load growth demand. This demand requires large CapEx commitments across transmission, substations, distribution, and new generation capacity. Our backlog this quarter increased 6% sequentially to $5 billion in this segment. We continue to target a broad set of projects of varying scope, and we expect a number of larger award projects to be awarded in late 2025, early 2026. Shifting to Clean Energy and Infrastructure. First quarter revenue grew 22% year-over-year and adjusted EBITDA more than doubled to $57 million with a margin of 6.2%, also a significant increase from the prior year. Our business in Clean Energy and Infrastructure continues to see strong demand, but we are certainly aware of some of the concerns around federal renewable support. I'd note that tariff-driven material inflation or unfavorable policy shifts don't change the fact that renewables represent shovel-ready power at a competitive rate. Near-term political factors will not fundamentally change this backdrop, and we feel very good about the future of renewables as a competitive source of clean power. Backlog for this segment was up sequentially to a record level of $4.4 billion and book-to-bill was nearly 1.2x. Regarding potential changes to the IRA and other legislation or regulatory shifts, there are scenarios that will create some timing headwinds, but if we take a step back, we have an administration that is leaning towards a pro-energy stance and acting to reduce burdensome regulations that could accelerate permitting on projects that we build. So, while we have to be mindful of changes, we don't see a meaningful risk to our 2025 business outlook. Our first quarter renewable performance represents the state of this market today. We grew revenue nearly 25% year-over-year and met our profit plan. Further, we grew backlog despite a strong revenue burn rate. Both wind and solar businesses saw solid backlog growth for the sixth straight quarter, and we are well covered for our 2025 plan from a combination of recent and 2024 bookings. One reason for our confidence is increased work generated from framework agreements with our key customers, which is a testament to our ability to serve larger or more complex projects where others have often struggled. We have a great funnel of projects either in negotiations or bidding, and our 2026 backlog build is off to a great start. Infrastructure and Industrial in the period had solid results with double-digit revenue year-on-year growth, meeting plan and adjusted EBITDA exceeding plan also with strong growth from the prior year. The demand climate remains firm, and we have seen no tariff-related delays. Now turning to our pipeline infrastructure segment. We saw revenue decline 44% with a slightly greater drop in profit of 52%. We've noted the driver here being the challenging comparisons from the MVP project wind down last year. The top line actually beat our projections on stronger-than-expected project starts, though the margin decrease from prior year was more in line. More importantly, backlog bookings were strong, and we expect further increases throughout the year. Bookings in the first quarter included over $1.1 billion of new contracts, more than doubling our 18-month backlog to $1.5 billion, the highest level we've had in six quarters. Our costs continue to invest in pipeline capacity to serve gas-fired power generation needs that are well short of forecasted demand looking out some years. We fully expect to benefit from a multiyear investment curve in this important baseload generation source. So, we see a low point this past quarter in revenue terms and a positive slope of demand and business volume to come. I'm more bullish today about our 2026 outlook. We expect strong revenue growth in our pipeline segment in '26 with continued company-leading margins. Coupled with significant momentum and improvement in our non-pipeline business, we expect a strong multiyear outlook for MasTec. Last quarter, I emphasized MasTec's model strength in our diversity, our strong market position, and our ability to operate at scale for our customers. To follow up on this, I'd note that we are now talking to customers across multiple segments about framework agreements that further solidify our presence in key markets, which is a testament to MasTec's ability to serve our market at scale. We are in a great position to capitalize on market opportunities for scaled service providers over the coming years. With that said, we also need to keep focusing on operational execution and evolving our business processes to ensure both consistency of outcomes and strong structural profitability. Our margin improvement opportunity is real, and we are taking many steps to realize it. We look forward to updating you on the steps we take along the road to achieving our goal of consistent double-digit margins. I'd like to take this opportunity to thank the men and women of MasTec. I'm honored and privileged to lead such a great group. The men and women of MasTec are committed to the values of safety, environmental stewardship, integrity, honesty, and in providing our customers a great-quality project at the best value. These traits have been recognized by our customers, and it's because of our people's great work that we've been able to position ourselves for continued growth and success. I will now turn the call over to Paul for our financial review. Paul?

Thank you, Jose, and good morning, everyone. We are pleased to report solid first quarter results and to exceed the overall expectations that we laid out in our March earnings call. The macro news flow this quarter has been pretty volatile, and our results illustrate that MasTec sits on a foundation of strong structural demand and stable long-term drivers. This is true even if marginal outcomes can be influenced by macro and sector-specific effects from global trade, regulatory, or funding factors downstream from us. As Jose noted, we feel very good about our business today and into the years ahead. Let me start with some first quarter highlights. First quarter revenue was above expectations at $2.85 billion, and adjusted EBITDA was $164 million, exceeding guidance by about 5% and 3%, respectively. Communications and Clean Energy and Infrastructure led the way, both exceeding forecasted adjusted EBITDA by double digits. 18-month backlog at quarter end totaled $15.9 billion, up $1.6 billion from year-end and $3 billion year-over-year. This represents another record for the Company and includes a big improvement in the pipeline segment after waning levels seen during 2024 as the completed MVP. As Jose noted, we have solid visibility to support our 2025 outlook, and we are actively building the book for 2026 and beyond. We generated cash flow from operations of $78 million in the first quarter, with DSOs at 66 days, in line with our expectations. Capital expenditures net of disposals in the period were slightly higher than the prior year as we accelerated certain capital investments, resulting in free cash flow of $45 million versus $93 million in Q1 of '24. We completed $37 million of share repurchases in the first quarter and extinguished our remaining authorization in April, bringing the year-to-date total to $77 million at an average price of $110 per share. Our Board authorized an additional $250 million repurchase program earlier this week, and we will continue to be opportunistic when acquiring MasTec's stock. On tariffs, while nobody is unaffected by potential downstream economic impacts, MasTec is fairly insulated from the direct exposure, and we currently don't see a meaningful impact overall to our 2025 financial forecast. We buy limited foreign source materials, and we carry only about $115 million in inventory. We also have various contractual protections on most projects that further mitigate risk to our job economics. Regarding some highlights from first quarter segment performance. First quarter communication results saw impressive top- and bottom-line growth, easily exceeding our forecast for the period. We saw a strong start to 2025 in our wireless and wireline businesses, both contributing to the revenue growth and earnings beat. The adjusted EBITDA margin increase of 180 basis points year-over-year was also ahead of plan though still below long-term margin potential. We see the first quarter adjusted EBITDA margin of 6.9% as an expected low for the year, held back somewhat by business investments to support expected growth and by reduced operating leverage, largely on the wireline side. Overall, end market strength remains firm, witnessed in the Communications backlog growth that Jose covered. First quarter backlog additions were led by the wireline side and included a significantly diverse set of customers. In Clean Energy and Infrastructure, I'd highlight that the significant year-over-year improvement in adjusted EBITDA margin, up 350 basis points to 6.2% was great to see, and we forecast to hold around that level in Q2, but with further improvement expected in the second half. This would come from volume development across the business as projects ramp, including a few that were slower to start than we initially modeled. We see all three segment verticals contributing to achieve our clear target for margin improvement and volume growth this year. On E&I backlog, visibility for 2025 revenue looks really strong at this point, and we are more focused on developing contracted work for next year with a strong start already in place. I know some are skeptical now about the relative strength of renewables as we look at 2026, especially on the wind market, given a few publicized project approval delays on the offshore side. I note that we really aren't seeing that sentiment with our customers. We are progressing with large projects in various onshore markets. We're seeing it with contract signings in real time, and actually, we could book more work in renewables in the second quarter than we just did in the first. Regarding pipeline infrastructure, Jose noted that we exceeded our top line forecast, but we missed our adjusted EBITDA target primarily due to project mix. I'll reiterate that first quarter was the most challenging comparison for the year with MVP revenue peaking in Q1 '24 and then declining sequentially from there. We should benefit from anticipated volume ramping from the first quarter level. Jose also noted the strong pipeline backlog development. We booked over a dozen jobs this quarter, each with contract values over $10 million, and two of those were over $250 million of book value. There were also numerous other smaller book-and-burn jobs, so we are seeing diverse demand spread across our various service offerings. We also expect to bid on several larger projects currently anticipated for contracting in the second half of this year. Power Delivery saw particularly strong revenue growth this quarter, beating our plan by around $50 million, while adjusted EBITDA was more in line despite some productivity pressures largely in our nonunion business and adverse weather in the Central region. All other regional markets exceeded Q1 forecasts. Power Delivery backlog grew solidly in the first quarter, and we see a double-digit revenue growth year from the segment, further backed by tailwinds for Midwest utility clients that resolved their rate cases in Q4 and our increasing capital expenditures as anticipated so far this year. We talked about our potential for stronger margins, and we're actively taking steps to achieve this through automation tools, but also deliberate steps taken across our business lines to improve and unify processes around total life cycle project management. We have already made great strides in enhancing risk management and contract terms, but there is more to come, and we look forward to talking more about this over time. Achieving stronger structural margins across the business remains a top priority. Shifting to updated consolidated guidance, I'd like to remind you that we posted a supplemental guidance document on our IR website and encourage you to review that for segment and other financial guidance details. We are now raising 2025 annual revenue guidance to $13.65 billion with adjusted EBITDA ranging from $1.12 billion to $1.16 billion. Adjusted EBITDA performance is driven by almost 30% growth in our non-pipeline segments year-over-year. Adjusted EPS is forecasted to be $5.90 to $6.25, with the midpoint of 54% versus 2024. We expect Q2 revenue of $3.4 billion, adjusted EBITDA of $270 million to $280 million, and adjusted EPS of $1.36 to $1.46. Our 2025 expectations include the significant year-over-year improvements laid out for our non-pipeline segments, partially offset by lower levels of pipeline activity due to MVP's contribution in 2024. The 2025 expected results lay a very strong foundation for future value creation as we continue to expect pipeline segment growth to accelerate in 2026 and beyond. We are raising 2025 revenue estimates to account for the first quarter beat and continuing strong visibility to product activity while maintaining our 8.2% to 8.5% EBITDA margin forecast. The improvement in EPS is driven by higher earnings coupled with lower depreciation and tax rate expectations. Just to note, on pipeline infrastructure, our forecast implies that second half expected revenue will be up low double digits as we lap the MVP wind down and new project activity continues to ramp. In Power Delivery, we previously noted that this year we have a slow start, and we continue to anticipate improving project volumes and productivity as the year progresses. We do not see a material impact from either tariffs or other changes to federal infrastructure support in the outlook for the current year and as such, do not factor in any explicit impact that we have considered the broader macro uncertainty of the current policy environment as we discount risk in our forward planning. On cash flow and the balance sheet, we maintain our approximately $700 million of cash flow from operations forecast for 2025, assuming DSOs average around the mid-60s for the balance of the year. We ended the quarter with total liquidity of $2.2 billion and net leverage of 1.9x, both in line with year-end levels. We were pleased that both S&P and Moody's revised MasTec's outlook to stable in March, reflecting the considerable 2024 improvements in our financial metrics and strong outlook for our business. Given our current balance sheet profile, we have substantial capacity and optionality around capital allocation, and we will continue to base decisions on optimizing return on invested capital. Supporting organic growth will continue to be a top priority, complemented by opportunistic and largely tuck-in acquisitions that complement our current service line strengths. We will also continue to maintain a share repurchase authorization, and we'll deploy capital to buybacks on an opportunistic basis when our share price trades below our view of intrinsic value. This completes our prepared remarks, and I'll now turn the call back over to the operator for Q&A.

We'll go first to Sangita Jain with KeyBanc Capital Markets.

Jose and Paul, could you just give us a little more detail on the oil and gas bookings, maybe the geographies where you're seeing most interest, and if these bookings came in maybe a little bit sooner than you were expecting?

So, I'd say a couple of things. I think Paul in his prepared remarks talked about almost a dozen projects. So, I think the surprising part that it wasn't driven by any single one really large project. We had two projects that were over $250 million, as Paul mentioned. But I think we feel great about it. The reality is that we have a lot of other projects that we feel we're in line to win. We have a number of projects that we've been verbally awarded that aren't in backlog yet. So, we actually expect our backlog to increase as the year progresses in '25. And again, we're super bullish on what the pipeline market is going to deliver in '26 and beyond.

Great. And if I can ask a follow-up on capital allocation. I know Paul just mentioned tuck-in type acquisitions or buybacks. Could you help us on end markets that you feel would be more suitable for MasTec at this point where you could look for acquisitions?

Sure. I think we haven't changed. We're still super focused on organic growth. I think there's so much upside to our business, both in terms of the opportunities that we're seeing and more importantly, in the margin progression that we think we're going to be able to deliver. With that said, within the businesses that we are in, there are still a number of pockets of geographies where we think we can strengthen. There are still some customers we think we can do a better job of building relationships with. I think those are the key things that we're looking at as we look at acquisition targets. And we think it's been an improving market. I think there's a lot of interest out there. I think the uncertainty over the course of the last six months has made especially tuck-ins more reasonable, and it's something that we hope we can execute on during '25.

Congratulations on a strong quarter. My first question, Jose, is related to the pipeline business. In the last quarter, you mentioned that based on booking potentials, you expected pipeline revenues in 2026 to possibly align with the 2024 levels. I apologize if I missed this during the multiple calls, but could you provide an update on your thoughts and your confidence level regarding that? Additionally, within the pipeline, what is your take on the competitive landscape? It seems like the projects are yours to lose, given the lack of competition. My second question concerns the power delivery segment; it appears that margins started off slower than anticipated. Can you elaborate on that? You mentioned something similar regarding another business, possibly Clean Energy. I'm trying to gauge the actual earnings potential for the quarter, excluding any noise, and what that may imply for your full-year guidance.

Sure. So, a couple of things. I think as we think about the pipeline business, we haven't changed really our guidance significantly for '25. So, a lot of what we're seeing is really for '26 if things play out the way that they should. There’s some potential in the back half of '25 to be a little bit better than what we're seeing. But a lot of what we're booking and seeing is really for '26 and beyond. We did say last quarter that we were beginning to see '26 shape up to a place where it should be at or exceed '24 levels, we still feel that way. So, we've got, again, a lot of optimism as to what's happening in the pipeline business, and hopefully, that continues. And if gas continues to play a larger role in future energy generation, we're going to be a bigger beneficiary. So again, super exciting what's happening there. And I think what's really important to note there is, obviously, that's our highest margin business. And to the extent that that business grows, it's going to have a significant impact on the overall earnings opportunity of the company. And that's probably what excites us the most. And I think maybe something that a lot of people miss is that it’s not just that the business is growing; our highest margin business is expected to grow nicely for years to come. On the project side, we actually performed really well in the clean energy side. We didn't have any projects of note to call out. We actually exceeded our margin guidance in clean energy and infrastructure quite a bit relative to our previous guide. So, we feel really good about how that business is performing. We were a little light in revenues in clean energy because a couple of projects started early in Q2 rather than late in Q1. On the Power Delivery segment, we did call out a couple of projects. We did have one particular project that was significantly impacted by weather. If not, the margins in that business would have been better. We actually think that the margins would also have exceeded what we originally guided to. When you look at the progression of that business going from Q1 to Q2, it's very similar to what we delivered last year, that business, in particular, had a 290 basis point improvement in Q1 of '24 to Q2 of '24. We're guiding something similar to that. And based on the fact that the margin should have been better in Q1, we feel really comfortable about our ability in hitting that. So, all in all, the quarter could have been better. But quite frankly, I think we've built great momentum going into Q2 and the balance of the year, so we feel great about where we're at.

Marc, it's been a true pleasure. We'll miss you. Jose, could you give us more color into what you're seeing in Communications? You beat your revenue guidance on Q1, raised your outlook for the year. But I think there's some consternation out there that at least fiscal stimulus, whether it's RDOF or BEAD, could be slowed a bit. I know that BEAD hasn't been in your guidance. Is it still wireline growing faster than wireless for you? When do you fully ramp up on all the market share wins that you've had and/or the fiber to data center opportunity?

Sure, that's a great question, Andy. When we consider BEAD, we've always indicated that we didn't anticipate much impact from it in 2025. However, we do believe it will serve as a catalyst for 2026 and beyond, with some awards in 2025. It's clear that AI and middle-mile fiber represent a significantly better and larger long-term opportunity. The size of BEAD is somewhat surprising given our perspective. Overall, the market condition is excellent, and the potential is greater than we had anticipated. Our bookings have been very strong, and we expect this trend to continue, which makes me quite optimistic about the opportunities in that sector. I'm also positive about our potential for margin improvement over time in that business. Even in Q1, we've hired slightly more staff than we initially estimated, leading to higher training costs; however, the revenue growth is compensating for these expenses. If this trend continues over the next few years, we can achieve consistency and improvement in margins. I believe we are still in the very early stages. Regarding your latter question, many of the projects we are initiating are just the initial phases of much larger undertakings. We see this as the start of what will become a very lengthy cycle largely driven by developments in AI.

Just one for me. You guys took down depreciation guidance a bit here. And obviously, it's already down a bit from last year. Can you talk about the drivers for that change? And then how you're thinking about any structural changes to the capital requirements for the business?

From a pure comp perspective, it's pretty clear that our depreciation was running at much higher levels. We've continued to focus on that. We continue to evaluate our useful lives. We still had gains on sale in this period despite the changes we made to our depreciation policy last year. So it will continue to be a focus and the amount of capital we deploy, as we've talked about, is going to be driven by utilization and making sure that we're having high efficiency out of the fleet that we have. So, I think we're still at a moderated level. The growth of the pipeline segment can be a driver. It's obviously our most capital-intensive segment. But our guidance for the year, we took CapEx up a little bit, really to take advantage of some of those opportunities we see, but we'll continue to evaluate the appropriate level of depreciation. And I think it's a downward trend relative to our revenue should be expected.

And maybe just to add, I think that as an overall theme, right, we're hyper-focused on improving margins. And obviously, fleet utilization is a huge driver of that, and one that we're super focused on.

We'll go next to Joseph Osha with Guggenheim Partners.

Just sort of a two-part question. First, looking at your leverage, it ticked back up a little bit. I'm wondering how we should think about the longer-term target. I know there's been some talk about maybe continuing to drive that lower. And then secondly, looking at the buybacks, Jose, you talked about picking up the stock when it falls below intrinsic value. Can we think about some rough time frame in terms of executing this new $250 million? Or is it going to be dependent upon the price of the stock?

Yes, I'll address the buyback question and then let Paul discuss leverage. Our balance sheet is strong and continues to improve, which gives us significant flexibility to consider both buybacks and M&A. Regarding buybacks, we are not regular purchasers; we only buy when we believe the price doesn't reflect the value available. The last time we bought was in 2002 at $72 and before that, in 2020 at $33. We see ourselves as opportunistic buyers. The opportunity that arose recently was too attractive to ignore, and we will keep managing in this way. Paul, would you like to talk about leverage?

From a leverage perspective, our financial policy is below 2x. It's really rounding for the quarter. I think we talked about we did accelerate some CapEx into Q1 to plan for the needs of the business and to hedge against tariffs a little bit. But we think with just the normal cash flow generation that we will continue to generate, we'll delever naturally and give ourselves plenty of opportunity again to deploy capital the manner that we see most attractive at the time.

So based on the commentary today, it sounds like you're expecting continued bookings growth through year-end despite all the tariff uncertainty. What's behind that viewpoint? Is that just based on discussions you're having with your customers? And can you share your perspective on why that tariff uncertainty isn't driving more delays in order activity?

So, a couple of things. I'd say, generally speaking, and forget about order activity for a second. Do I think that there's going to be impacts to the market? I think there's no question that the market has already been impacted. I think that you see it in suppliers. You see it in other companies associated in the space. It's not like the market is off and running. There's no question that there's hesitancy across certain buyers. There are projects that have been pushed out. I think we are bucking the trend. And the reason we're bucking the trend is because we made an enormous amount of effort and gains in aligning ourselves with the right customers and the right projects that would be well ahead of these potential issues. So, I'm not making market statements. I'm not trying to sit here and talk to you about the state of the market because I think there's risk in the state of the market. I don't think there's risk in our portfolio and the projects that we have, the backlog that we have, and the revenue generation that we expect both from '25 and even for 2026. So much of our '26 revenue will be from projects that we started in 2025. So, we feel good about and we've gotten in painstaking detail with our customers about potential tariffs, what items could be tariffed, where they're at in that cycle and what it means to the projects that we're expecting to do, and that's why we're so confident in our ability to manage through this. But again, we're not sticking our head in the sand. We're not blind. We understand that there could be market risk. We just think that they're not going to affect us to the level that they may affect others.

That's really insightful. For my follow-up question, I want to revisit the discussions about the pipeline. You mentioned the possibility of returning to 2023 revenue levels or higher by 2026. Can you elaborate on how we might achieve your previous peak of $3.5 billion from 2017 or the more recent peak of $2.5 billion? I'm trying to understand the potential trajectory for that business, not just in the next year, but over several years.

Look, based on the activity levels that we're seeing, the truth is that that isn't out of the question. And it's quite remarkable that we'd say that because a year or two ago, you would have asked us that question, we would never have dreamed to give that answer. I'm not saying that we're there. I'm not saying that activity levels are the same, but with what we're seeing in potential future projects, the opportunity to maybe one day get there again, it is possible. So again, that's why we're so bullish. We don't have to get there, quite frankly. But if we can get anywhere near those levels, it's a monumental shift to the earnings potential of the Company.

We'll go to our next question from Adam Thalhimer with Thompson Davis.

Good quarter, guys. Marc, congratulations on your retirement. And Chris, welcome to the call. Most of my questions have been asked. I did want to ask you on Power Delivery. The market challenges you saw in distribution last year, are those behind you yet? And as you look at the year-over-year comparisons, when does that flip from a headwind to a tailwind?

Yes. So, thanks for the question. I think that things are officially better. We talked a lot about, especially the Midwest utilities and kind of a lot of the rate case resolutions that they went through in the fourth quarter. Obviously, that doesn't get all fixed in a quarter. So, we actually expect an improving environment throughout the year, although in the first quarter, it was slightly better than where it had been in the second half of the year, but still a tough comp on a year-over-year basis because a lot of that thing start to post Q1 last year. So, we feel good and, quite frankly, expect it to get better. So, I think we're in a great spot.

There are no other questions at this time.

So, I'd just like to take this opportunity to thank everybody for joining us on today's call. We look forward to updating you on our second quarter call. And again, thank the men and women at MasTec for their hard work, commitment, and dedication. Thank you.

This does conclude today's conference call. Thank you for your participation. You may now disconnect.