Jose Mas: Sure, Steve. So I think, look, we had a solid beat in Q1. We left Q2 exactly like we had it originally. We feel very confident in our ability to hit it. I think we lived a really tough year in 2023, as everybody knows. We never want to be in that position again, and we talked extensively about being in a position to not only hit our numbers, but hopefully beat them consistently over time. And that’s not just our view for what hopefully happens in Q2, but it’s our view for what happens for the full year.
Steven Fisher: Okay. And then if I could just follow up on the solar side of clean energy. How smoothly would you say that piece of the business is running at this point? Is the work — obviously, you had good bookings in the quarter. Is the whole regulatory process kind of and transitioning the execution running smoothly? And how far out are you booking work at this point?
Jose Mas: So it’s a good question, Steve. For us, I mean, it’s like a different world. We feel so much better about our business. We feel so much better about what we understand, who our customers are, what our projects are, the risks. Again, 2023 was a really tough year, particularly in that area. We learned a lot of lessons. I think we’ve applied them well in 2024. So I think we have a high level of confidence. There’s no question that we’re building significant backlog that not only impacts 2024, but gives us tremendous opportunity for growth in 2025. As we convert some of those projects we’ve been talking about in the backlog, it’s not even what it means for 2024. It’s the level of growth we’re going to be able to show for 2025, we think is substantial.
We think we’ve really derisked our customer portfolio. I know there’s a lot of talk out there about potentially other investigations relative to solar and circumventions and things like that. And we think we’ve insulated ourselves as well as we could. So we’re really confident about, again, not just with this year and the balance of this year means to our solar business but what it means in the long-term.
Steven Fisher: Perfect. Thank you.
Jose Mas: Thanks, Steve.
Operator: We will have our next question from Brent Thielman with D.A. Davidson.
Brent Thielman: Hey. Thanks. Jose, just back on clean energy. Would you have a look at the opportunity in industrial projects, again just considering all the load demand it seems like there should be more pull on gas facilities? Curious your thoughts there.
Jose Mas: So, I mean, we’re not out of the market. We’ve deemphasized the market, so it’s going to be a much smaller business for us today than it’s been. I mean if you — in Paul’s prepared remarks, he talked about year-over-year backlog in clean energy that obviously, it looks down year-over-year. But when you normalize it for our decisions around industrial, it’s actually up. The industrial work that we’re doing today is predominantly it’s all cost plus. So we think that we’re comfortable around that contract structure, because we don’t have a ton of risk with the complexity of some of these projects. So to the extent that we can continue to deliver and our customers feel we can give them value doing that, we’ll continue to do it. As you said, we’re in a — it’s an incredible market today. There’s a ton of activity out there and there’s — the supply of labor is short. So to the extent that we can help our customers meet their needs, we’re going to do it.
Brent Thielman: Okay. And then just on the updated view for Power Delivery this year. I guess I just wanted to get a sense of how much conservatism that might be factoring in given the movement here. Is the outlook contingent still on certain things falling into place? Or does this feel pretty flushed out?
Jose Mas: Look, I think we talked about it last time. On our last call, we — the decisions in Illinois impacted our business on the distribution side, pretty significantly. It kind of ate away at the growth that we expected for the year, so that the growth is compensating the slowdown there. Those companies have publicly said, they’re moving that distribution CapEx to transmission. We have very moderate assumptions around what we will get relative to that in the numbers that we have. So we do think that if that plays out the way they’ve said, that’s going to provide really nice upside for us in that segment. Our storm expectations for the balance of the year are very muted, and it’s expected to be an active storm season. We have no idea what the reality of that will be.
That provides quite frankly tremendous upside to that unit if that season comes in as normal, as a normal season would. Last year wasn’t, so we’ve kind of replicated what we saw last year. So we do think that we’ve got a very achievable plan. And hopefully, if things play out well, hopefully, we deliver a much better result than what we’ve said.
Brent Thielman: Okay. Thank you.
Jose Mas: Thanks, Brent.
Operator: We will take our next question from Adam Thalhimer with Thompson Davis.
Adam Thalhimer: Hey. Good morning, guys. Nice quarter and good to see the stock over $100 again.
Jose Mas: Thanks, Adam.
Adam Thalhimer: The T-Mobile, I was kind of surprised you mentioned that. Can you talk about the fiber opportunity there, if you’re well positioned and when some work might start?
Jose Mas: We’ve been hearing rumors for a long time that T-Mobile was going to try to build their own fiber network to support their wireless business. I think we saw it in their announcements. They’re actually trying a couple of different things, but their latest announcement is a joint venture with EQT, where they’re going to buy Lumos and be a key tenant and owner of that asset. We think that that shifts — further shifts the wireless business into seeing one where all of the carriers are going to own their networks. It’s a very important part of the business. And when you look at their announcement, it’s not just about them using that network. It’s about continuing to build out that network. So, we do feel we’re well positioned. We have a good relationship with them and I think it could meaningfully impact our business over a long period of time.
Adam Thalhimer: And then Paul, your Q1 cash from ops was way above my forecast, but you didn’t raise the annual guide. Can you is that some conservatism? Or can you just touch on that, please?
Paul DiMarco: No. Listen last quarter I said, I thought, we’re modeling that we stay in the high-70s from a DSO perspective. And with the growth particularly in the middle quarters that’s what’s going to drive a lot of the cash flow, so we kind of — we’re in that range for Q1. We’re optimistic, there’s some opportunities for improvement there, but a lot of it is just timing. We’ll probably consume some working capital in Q2 and Q3 and there should be some release in Q4 just kind of in line with the cadence of revenue.
Adam Thalhimer: Okay. Thanks guys.
Paul DiMarco: Thanks Adam.
Operator: We will take our next question from Justin Hauke with Robert W. Baird.
Justin Hauke: Hey guys. To ask in Oil and Gas, you said you’re expecting it to be more kind of book-and-burn type work going forward less large projects, but there are some larger kind of traditional Permian lines that have made some news and are coming to market for the first time since peak in 2014, 2015. I know you talked about newer things like hydrogen. But I guess what’s your outlook for big pipe there, is that still something that issue or is it kind of intentional to move towards this more book-and-burn work there?
Jose Mas: Well, Justin, we would consider that book-and-burn. Those aren’t projects that get awarded with — those projects don’t get awarded a year in advance or six months in advance. Those projects are being awarded relatively close to start time. Those projects tend to be much shorter in duration, because it’s a lot easier to work in those areas. So that’s part of what we consider our book-and-burn business. It’s greatly enhanced from where it’s been. A lot of it’s — a lot of what you’re reading is, what we talk to our customers about. We think we’re in great position especially in those markets to be very successful. So that’s part of what’s driving our optimism.
Justin Hauke: Second question, in the Power Delivery business, we’ve seen some of your competitors buy some manufacturing capacity in there to deal with some of the speed to market on some of these long lead time issues. Is that something your customers are looking for you to bring to market? Is that something you’d want to move into? Or is that kind of outside of playing in that market?
Jose Mas: I don’t think we need to own it. I don’t think it’s bad to own it either. I just think it could be a different model, right? I think what you’re going to see is, I think we have a lot of relationships in place. We would love to overtime be able to build more exclusivity around those relationships, as it relates to third-party builders of stuff. But I think it’s interesting. It’s been an interesting dynamic in the marketplace. I think our customers are really sophisticated in how they buy, and what they buy. I think they’re very smart. And to the extent that we can add value, we will. But historically especially for the majors they’ve kind of bifurcated those buy decisions. And I don’t expect it to change.
Operator: We do not have any further questions in the queue. I would like to turn the call back to Jose Mas, for closing remarks.
Jose Mas: So I’d just like to thank everybody for participating today. And we look forward to updating you on our second quarter call in a few months. Thank you.
Operator: This concludes today’s call. Thank you for your participation. You may now disconnect.
