Centuri (CTRI) Q2 2024 earnings summary

Executive summary

• Completed IPO and private placement in April 2024, raising $328M–$330M in net proceeds, primarily used to reduce debt and de-lever the balance sheet.

• Announced CEO transition: Bill Fehrman stepping down, Paul Caudill appointed interim CEO, maintaining strategic focus.

• Secured $400M+ in new and extended MSAs, with backlog at $4.7B.

• Deployed over 2,200 employees for storm restoration, generating $45.6M YTD revenue, including $22M–$21.7M in July storm revenue.

• Initiated cost-saving programs expected to yield $29M annualized run-rate savings in 2025.

Financial highlights

• Q2 2024 revenue: $672.1M, down from $805.8M in Q2 2023.

• Gross profit: $60.5M (9% margin), down from $90M (11.2%) year-over-year.

• GAAP net income: $11.7M ($0.14 EPS), down from $17.1M ($0.24 EPS) year-over-year.

• Adjusted EBITDA: $68.6M (10.2% margin), down from $92.9M (11.5%) year-over-year.

• Free cash flow for Q2: $48.6M (conversion 70.8%).

Outlook and guidance

• FY 2024 revenue guidance: $2.5B–$2.7B; adjusted EBITDA margin: 9.0%–9.6%.

• Net capital expenditures guidance: $90M–$99M.

• Backlog at June 30, 2024: $4.7B.

• Management expects separation-related costs to continue through at least FY2025.