MYR Group (MYRG) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues were $829 million, down 6.7% year-over-year, with a net loss of $15.3 million and negative EBITDA of $4.7 million, mainly due to underperforming clean energy projects in T&D and one C&I project.

• First half 2024 revenues totaled $1.64 billion, down 3.3% year-over-year, with net income of $3.7 million, a sharp decline from $45.4 million in the prior year period.

• Backlog as of June 30, 2024, was $2.54 billion, down 7% year-over-year but up sequentially, with T&D backlog decreasing and C&I backlog increasing.

• Demand for data centers, electrification, and infrastructure investment is driving long-term growth opportunities, with new large project awards in both the U.S. and Canada.

• Management remains focused on quality execution, selective bidding, and expanding customer relationships to navigate near-term challenges.

Financial highlights

• Q2 2024 gross margin dropped to 4.9% from 10.1% year-over-year, mainly due to project delays, cost overruns, and inefficiencies.

• Q2 2024 net loss was $15.3 million, or $(0.91) per diluted share, compared to net income of $22.3 million, or $1.33 per diluted share, in Q2 2023.

• Q2 2024 EBITDA was $(4.7) million, down from $47.1 million in Q2 2023.

• Operating cash flow improved to $23 million in Q2 2024 (vs. -$21 million last year); free cash flow was $3 million (vs. -$43 million).

• SG&A expenses increased to $61.8 million in Q2 2024, up $4.0 million year-over-year, mainly due to contingent compensation and higher employee costs.

Outlook and guidance

• Management expects challenged projects to reach mechanical completion in 2024 and sees steady bidding activity in both segments.

• T&D operating margins are expected to be in the mid-range and C&I at the lower end of long-term outlook, excluding troubled projects.

• Revenue in T&D is expected to decline as the company remains selective on solar projects, but growth in small/mid-size projects and C&I may offset this.

• Significant construction on new large projects awarded in 2024 is unlikely to impact 2024 results.

• Large project awards are expected to contribute in future periods, but short-term results may remain lumpy.