ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our business, financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and notes thereto in Item 8 of this Form 10-K. The discussion below contains forward-looking statements that are based upon our current expectations and is subject to uncertainty and changes in circumstances. Actual results may differ materially from these expectations due to inaccurate assumptions and known or unknown risks and uncertainties, including those identified in “Cautionary Statement Regarding Forward-Looking Statements” and Item 1A. “Risk Factors.”
General Economic, Market and Regulatory Conditions
We have experienced, and may continue to experience, direct and indirect negative effects on our business and operations from economic, market and regulatory conditions, including the level of interest rates; inflationary effects on the costs of labor, materials and fuel; supply chain disruptions; uncertainty related to the implementation and pace of spending under governmental programs and initiatives related to infrastructure and other industrial investment, delays and uncertainty related to project permitting and/or other regulatory matters or uncertainty; climate, environmental and sustainability-related matters; changes in technology, tax and other incentives; potential market volatility that could negatively affect demand for future projects, and/or delay existing project timing or cause increased project costs; and public health matters. Additionally, the effects of ongoing geopolitical events that are outside of our control, could potentially increase volatility and uncertainty in the energy and capital markets, which could delay projects and/or negatively affect demand for future projects.
During the year ended December 31, 2025, the U.S. government announced or imposed a variety of tariff or other trade actions, in response to which many countries have announced retaliatory trade actions, including tariffs on U.S. exports or bans by foreign countries on certain of their exports. These actions have increased the cost of importing certain construction materials into the U.S., including steel, concrete, copper and solar panels, and have caused disruption and uncertainty to both international trade and supply chains, in turn affecting project demand and timing. More recently, on February 20, 2026, the U.S. Supreme Court ruled that certain trade tariffs imposed by the U.S. federal government under the IEEPA were unconstitutional. Following the U.S. Supreme Court’s decision, the U.S. presidential administration announced its intention to invoke other laws to collect tariffs and announced new tariffs on imports from all countries, in addition to any existing non-IEEPA tariffs. Significant uncertainty remains regarding the status of existing and newly announced tariffs, potential changes or pauses to such tariffs, tariff levels, and whether further additional tariffs or other retaliatory actions may be imposed, modified, or suspended. While the duration, extent and effects of these tariffs and trade actions cannot be predicted with certainty, these policy changes could impact our ability to execute projects and have a material adverse effect on our business, financial condition, and results of operations.
Further, on July 4, 2025, OBBBA was signed into law in the United States increasing federal support for oil and gas production while reducing support for renewable energy and infrastructure. Notably, the OBBBA accelerates the phaseout of certain clean energy tax credits established under the IRA, including the clean electricity investment and clean energy production credits for solar and wind projects, which may reduce longer term demand for such projects. Under the new provisions, these credits will no longer be available for projects placed in service after December 31, 2027, unless construction begins on or before July 4, 2026, pursuant to a grandfathering rule. Projects that qualify under this rule must still meet continuity requirements to remain eligible. At the same time, the OBBBA contains other provisions to incentivize oil and gas development as well as to support energy infrastructure such as carbon capture and energy storage. The OBBBA, along with other evolving trade and immigration policies, may have both positive and negative effects on our business, including, but not limited to, shifts in the timing, type and scope of customer projects, fluctuations in demand for our services, and changes in capital and labor costs, including availability.
The extent to which general economic, market, political and regulatory conditions could affect our business, operations and financial results is uncertain as it will depend upon numerous evolving factors that we may not be able to accurately predict, and, therefore, any future impacts on our business, financial condition and/or results of operations cannot be quantified or predicted with specificity.
We believe that our financial position, cash flows and operational strengths will enable us to manage the current uncertainties resulting from general economic, market and regulatory conditions. We carefully manage our liquidity and monitor any potential effects from changing economic, market and regulatory conditions on our financial results, cash flows and/or working capital and will take appropriate actions in efforts to mitigate any impacts.
Business
See Item 1. “Business” for discussion pertaining to our business and reportable segments.
We seek to grow and diversify our business both organically and through acquisitions and/or strategic arrangements in order to deepen our market presence and customer base, broaden our geographic reach and expand our service offerings. In 2021, we initiated a significant transformation of our end-market business operations to position us for expected future growth opportunities. This transformation included significant business combination activity, including expansion of our scale and capacity in renewable energy, power delivery, heavy civil and telecommunications services, which resulted in significant acquisition and integration costs in subsequent periods. Although acquisitions continue to be an element of our growth strategy, the integration activities related to the transformation-related acquisitions were completed in the fourth quarter of 2023.
Recent acquisitions . Subsequent to December 31, 2025, we completed one acquisition of an infrastructure services company that specializes in water and wastewater distribution networks in the south central region of the United States, which will be included within our Clean Energy and Infrastructure segment.
During 2025, we completed five acquisitions, which included all of the equity interests of the following: (i) within our Communications segment: a telecommunications construction company, which acquisition was effective in July; (ii) within our Pipeline Infrastructure segment: a construction company specializing in roadway infrastructure, which acquisition was effective in August; and (iii) within our Clean Energy and Infrastructure segment: a construction company specializing in construction management and design-build services, which acquisition was effective
in December. Additionally, we acquired certain operations and assets of a business specializing in install-to-the-home services included within our Communications segment, effective in November, and, effective in July, we acquired certain of the assets of an equipment company, which is included within our Pipeline Infrastructure segment.
During 2024, we completed three acquisitions, including, within our Power Delivery segment, all of the equity interests of a construction company focused on underground utility infrastructure for industrial and municipal projects, with expertise in data center utility systems; certain operations of a heavy civil contractor specializing in transportation projects, which acquisition was included within our Clean Energy and Infrastructure segment; and, within our Pipeline Infrastructure segment, the acquisition of the equity interests of a company focused on pipeline infrastructure and heavy civil projects. In connection with the acquisition within our Pipeline Infrastructure segment, we acquired 60% of the equity interest of the company in exchange for consideration transferred of cash and a 40% equity interest in a MasTec Canadian subsidiary.
During 2023, we completed four acquisitions including, within our Communications segment, certain of the assets of a telecommunications company specializing in wireless services; and a telecommunications construction company specializing in broadband and fiber-to-the-home initiatives in the New England area. Additionally, we acquired certain of the equity interests of two equipment companies, both of which are included within our Pipeline Infrastructure segment.
For additional information, see Note 3 - Acquisitions, Goodwill and Other Intangible Assets, Net in the notes to the audited consolidated financial statements, which is incorporated by reference.
Economic, Industry and Market Factors
We closely monitor the effects of changes in economic, industry and market conditions on our customers, including the potential effects of the factors discussed above in “General Economic, Market and Regulatory Conditions,” which can affect demand for our customers’ products and services and can increase or decrease our customers’ planned capital and maintenance budgets in certain end-markets. Any of these factors and effects, as well as mergers and acquisitions or other business transactions among the customers we serve, could affect demand for our services, or the cost to provide such services and our profitability.
Changes in demand in our customers’ businesses and fluctuations in market prices for energy sources, including oil and gas products, can affect demand for our services. In particular, such changes can affect the level of activity in energy generation projects, including from renewable energy sources, as well as pipeline construction and carbon capture projects. The availability of transportation and transmission capacity can also affect demand for our services, including energy generation, electric grid and pipeline construction projects. These factors, as well as the highly competitive nature of our industry, can result in changes in levels of activity, project mix, and/or the profitability of the services we provide. We strive to maintain our profit margins through productivity improvements, integration and cost reduction programs and/or business streamlining efforts when operating under conditions of increased pricing pressure or other market developments. Market factors, including elevated rates of interest and inflation and the related effects on labor, materials and fuel costs, have had, and could continue to have, a negative effect on our profitability, to the extent that we are not able to pass these costs through to our customers. While we actively monitor economic, industry and market factors that could affect our business, we cannot predict the effect that changes in such factors could have on our future results of operations, liquidity and cash flows, and we may be unable to fully mitigate, or benefit from, such changes. See Item 1. “Business” under “Industry Trends” and Item 1A. “Risk Factors” under “ Unfavorable market conditions, including elevated levels of inflation and/or interest rates, supply chain disruptions, political regulatory or market uncertainty, including economic downturns and heightened geopolitical tensions and conflicts, could reduce capital expenditures in the industries we serve or could adversely affect our customers and result in decreased demand for our services. ” for discussion pertaining to opportunities in the industries we serve and potential effects of market conditions.
Effect of Seasonality and Cyclical Nature of Business
Our revenue and results of operations can be subject to seasonal and other variations. These variations are influenced by customer spending patterns, bidding seasons, project schedules, weather and/or climate-related effects, holidays, regulatory matters and/or timing, in particular, for large non-recurring projects, and the effects of market uncertainty or disruptions, as described within “Economic, Industry and Market Factors,” above.
Our revenue is generally lower at the beginning of the year and during the winter months because harsher weather, such as cold, snowy or wet conditions, can delay projects. Revenue is generally higher during the summer and fall months due to increased demand for our services when favorable weather conditions exist in many of the regions in which we operate, but continued cold and wet weather can often affect second quarter project activity and/or productivity. In the fourth quarter, many projects tend to be completed by customers seeking to spend their capital budgets before the end of the year, which can have a positive effect on our revenue. Customers, however, could also curtail certain of their project activities toward the end of the year as they await capital budget allocations for the next year. The holiday season and inclement weather can cause delays, which can reduce revenue and increase costs on affected projects during the related period. Any quarter may be positively or negatively affected by adverse or unusual weather patterns and/or climate-related effects, including warm winter weather, excessive rainfall, flooding or natural catastrophes such as wildfires, hurricanes, excessive winds or other severe weather, making it difficult to predict quarterly revenue and margin variations.
Additionally, our industry can be highly cyclical and may be adversely affected by industry declines, changes or delays in new projects, and/or changes in consumer or customer demand. Variations in project schedules or unanticipated changes in project schedules, in particular, in connection with large construction and installation projects, can create fluctuations in revenue, which may adversely affect us in a given quarter, even if not for the full year. In addition, revenue from master service and other service agreements, while generally predictable, can be subject to volatility, including from changes in end market customer demand, customer revenue mix, or project timing. The financial condition of our customers and their access to capital; variations in project margins; regional, national and global economic, political and market conditions; regulatory or environmental influences, including climate-related matters; and acquisitions, dispositions or strategic arrangements can also materially affect quarterly results in a given period. Accordingly, our operating results in any particular period may not be indicative of the results that can be expected for any other period.
Understanding Our Results of Operations
Revenue. We primarily provide engineering, building, installation, maintenance and upgrade services to our customers. We derive revenue from projects performed under master and other service agreements as well as from contracts for specific projects requiring the construction and installation of an entire infrastructure system or specified units within an infrastructure system. See Item 1. “Business” for discussion of our business and revenue-generating activities and “Comparison of Fiscal Year Results” below for revenue results by reportable segment.
Costs of Revenue, Excluding Depreciation and Amortization. Costs of revenue, excluding depreciation and amortization, consists principally of employee compensation, including salaries, employee benefits and incentive compensation; certain other employee expenses, including travel and training; subcontracted services; equipment and facility rentals; fuel and other equipment expenses; repairs and maintenance; materials and supplies; insurance expenses; certain legal and settlement matters; and certain other operating expenses. Project profit is calculated by subtracting a project’s costs of revenue, including project-related depreciation, from project revenue. Project profit and corresponding project margins will generally be reduced if actual costs to complete a project exceed our project cost estimates and we are unable to pass the increased costs to our customers. Estimated losses on contracts, or the excess of the total estimated costs to complete a contract over the contract’s total estimated contract transaction price, are recognized in the period in which such losses are determined. Factors impacting our costs of revenue, excluding depreciation and amortization, and project profit, include:
Project Mix. Revenue mix impacts our overall project margins, as margin opportunities and/or risks can vary by project type, industry, and by segment over time. For example, installation work that is performed on a fixed price basis has a higher level of margin opportunity or risk than maintenance or upgrade work, including those under master service and other service arrangements, which is often performed under pre-established fixed price per unit or time and materials pricing arrangements. As a result, changes in project mix between installation work performed on a fixed price basis, and maintenance or upgrade services that are performed under pre-established fixed price per unit or time and materials pricing arrangements, can affect our project margins in a given period.
Seasonality, Weather and Geographic Mix. Seasonal patterns, which can be affected by weather conditions, can have a significant effect on project margins. Adverse or favorable weather conditions can affect project margins in a given period. For example, extended periods of rain or snowfall can negatively affect revenue and project margins due to reduced productivity from projects being delayed or temporarily halted. Conversely, when weather remains dry and temperatures are accommodating, more work can be done, sometimes with less cost, which can favorably affect project margins. The level of demand for restoration and storm work, which, by its nature, is unpredictable, can also favorably or negatively affect our revenue composition and project margins in a given period. In addition, the mix of business conducted in different geographic areas can affect project margins due to the particular characteristics of the physical locations where work is being performed, such as mountainous or rocky terrain versus open terrain. Site conditions, including unforeseen underground conditions, can also affect project margins.
Price and Performance Risk . Overall project margins may fluctuate due to project pricing and job conditions, changes in the cost of labor and materials, crew availability, job productivity and work volume. Job productivity can be affected by factors such as quality of the work crew and equipment, the quality of engineering specifications and designs, as well as unanticipated engineering or design challenges, availability of skilled labor, environmental or regulatory factors and customer decisions or delays. Job productivity can also be influenced by weather conditions, job conditions and job terrain, such as whether project work is in a right of way that is open or one that has physical obstructions, or environmental or legal encumbrances.
Subcontracted Resources . Our use of subcontracted resources in a given period is dependent upon activity levels and the amount and location of existing in-house resources and capacity. Project margins on subcontracted work can vary from those on self-perform work. As a result, changes in the availability and mix of subcontracted resources versus self-perform work can affect our overall project margins.
Material versus Labor Costs. In most cases, our customers are responsible for supplying their own materials on projects; however, under certain contracts, we may agree to provide all or part of the required materials. Project margins are typically lower on projects where we furnish a significant amount of materials due to the fact that margins on materials are generally lower than margins on labor costs. Therefore, changes in the mix of projects with significant materials requirements could affect our overall project margins.
General and Administrative Expense. General and administrative expenses consist principally of employee compensation and benefits, travel expenses and related costs for our finance, treasury, benefits, insurance and risk management, legal, facilities, information technology and executive functions. General and administrative expenses also include non-cash stock-based compensation expense, external professional and accounting fees, certain legal and settlement matters, facilities costs, expenses associated with information technology used in administration of the business, gains or losses from the disposal of property and equipment, acquisition costs, including certain costs related to acquisition integration, business streamlining, and, from time to time, certain restructuring charges.
Interest Expense, Net. Interest expense, net, consists of contractual interest expense on outstanding debt obligations, amortization of deferred financing costs and other interest expense, including interest expense related to financing arrangements. Interest expense is offset, in part, by interest earned on cash and other investments.
Other Income or Expense. Other income or expense consists primarily of gains or losses from changes to estimated Earn-out accruals, certain legal and other settlements, certain acquisition-related adjustments, gains or losses from, or changes in estimated recoveries from, certain assets, including financial instruments, and certain liabilities, gains or losses arising from transactions not denominated in functional currencies, and certain acquisition and integration costs.
Financial Performance Metrics
Our senior management team regularly reviews certain key financial performance metrics within our business, including:
• revenue and profitability on an overall basis, by reportable segment and for selected projects;
• revenue by customer and by contract type;
• costs of revenue, excluding depreciation and amortization; general and administrative expenses; depreciation; amortization; interest expense, net; other income or expense; and provision for income taxes;
• earnings before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA, as defined in our non-U.S. GAAP financial measures discussion following the “Comparison of Fiscal Year Results” section below;
• earnings per share and adjusted earnings per share, as defined in our non-U.S. GAAP financial measures discussion;
• days sales outstanding, net of contract liabilities (“DSO”), and days payable outstanding;
• capital expenditures, net of asset disposals, and investment activities;
• interest and debt service coverage ratios; and
• liquidity and cash flows.
Management’s analysis includes detailed discussions and review of its key performance indicators; proposed investments in property and equipment and new business opportunities; acquisition integration and productivity improvement efforts; strategic arrangement opportunities; and working capital and other capital management efforts, among others. Measuring its key performance indicators and other business metrics is an important tool used by management to make informed and timely operational decisions, which we believe can help us improve our performance.
Critical Accounting Estimates
This discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of our consolidated financial statements requires the use of estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, including the potential future effects of macroeconomic trends and events, such as inflation and interest rate levels; uncertainty from potential market volatility; other market, industry and regulatory factors, including uncertainty related to the implementation and pace of spending under governmental programs and initiatives and project permitting issues, and other regulatory matters or uncertainty; supply chain disruptions; climate-related matters; and global events, such as geopolitical tensions and conflicts, as well as public health matters. These estimates form the basis for making judgments about our operating results and the carrying values of assets and liabilities that are not readily apparent from other sources. Given that management estimates, by their nature, involve judgments regarding future uncertainties, actual results could differ materially from these estimates if conditions change or if certain key assumptions used in making these estimates ultimately prove to be inaccurate. Our accounting policies and critical accounting estimates are reviewed periodically by the Audit Committee of the Board of Directors.
We believe that our accounting estimates pertaining to: Recognition of revenue and project profit or loss, which we define as project revenue, less project costs of revenue, including project-related depreciation, in particular, on construction contracts accounted for under the cost-to-cost method, for which the recorded amounts require estimates of costs to complete and the amount and probability of variable consideration included in the contract transaction price; fair value estimates, including those related to acquisitions, valuations of goodwill, intangible assets and acquisition-related contingent consideration; self-insurance liabilities; income taxes; and litigation and other contingencies, are the most critical in the preparation of our consolidated financial statements as they are important to the portrayal of our financial condition and require significant or complex judgment and estimates on the part of management. Actual results could, however, vary materially from these accounting estimates.
Refer to Note 1 - Business, Basis of Presentation and Significant Accounting Policies in the notes to the audited consolidated financial statements, which is incorporated by reference, for a more detailed discussion of our significant accounting policies and critical accounting estimates.
Revenue Recognition
We recognize revenue from contracts with customers when, or as, control of promised services and goods is transferred to customers. The amount of revenue recognized reflects the consideration to which we expect to be entitled in exchange for the services and goods transferred. We primarily recognize revenue over time utilizing the cost-to-cost measure of progress, which best depicts the continuous transfer of control of goods or services to the customer, and correspondingly, when performance obligations are satisfied for the related contracts.
Contracts. We derive revenue primarily from construction projects performed under: (i) master service and other service agreements, which generally provide a menu of available services in a specific geographic territory that are utilized on an as-needed basis, and are typically priced using either a time and materials or a fixed price per unit basis; and (ii) contracts for specific projects requiring the construction and installation of an entire infrastructure system, or specified units within an infrastructure system, which may be subject to one or multiple pricing models, including fixed price, unit price, time and materials, or cost plus a markup. Revenue derived from projects performed under master service and other service agreements totaled 44% of consolidated revenue for the year ended December 31, 2025.
Cost estimation processes used for recognizing revenue over time under the cost-to-cost method require management to make significant assumptions and judgments. Total transaction price and cost estimation processes are based primarily on the professional knowledge and experience of our project managers, operational and financial professionals, and other professional expertise, as warranted. Management reviews estimates of total contract transaction price and costs on an ongoing basis. Changes in job performance, job conditions and management’s assessment of the
estimated amount and probability of variable consideration are factors that influence estimates of the total contract transaction price, total costs to complete those contracts and our profit recognition. Changes in these factors could result in revisions to the amount of revenue recognized in the period in which the revisions are determined, which revisions could materially affect our consolidated results of operations for that period. Provisions for losses on uncompleted contracts are recorded in the period in which such losses are estimated based on management’s experience and judgment. For the year ended December 31, 2025, project profit was affected by less than 5% as a result of changes in contract estimates included in projects that were in process as of December 31, 2024. Changes in recognized revenue, net, as a result of changes in total contract transaction price estimates, including from variable consideration, and/or changes in cost estimates, related to performance obligations satisfied or partially satisfied in prior periods, for the year ended December 31, 2025, positively affected revenue by approximately 0.8%.
Performance Obligations. A performance obligation is a contractual promise to transfer a distinct good or service to a customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied. Our contracts often require significant services to integrate complex activities and equipment into a single deliverable, and are therefore generally accounted for as a single performance obligation, even when delivering multiple distinct services. Contract amendments and change orders, which are generally not distinct from the existing contract, are typically accounted for as a modification of the existing contract and performance obligation.
When more than one contract is entered into with a customer on or close to the same date, management evaluates whether those contracts should be combined and accounted for as a single contract, as well as whether those contracts should be accounted for as one, or more than one, performance obligation. This evaluation requires significant judgment and is based on the facts and circumstances of the specific contracts.
Variable Consideration. Transaction prices for our contracts may include variable consideration, which comprises items such as change orders, claims and incentives. Management estimates variable consideration for a performance obligation utilizing estimation methods that we believe best predict the amount of consideration to which we will be entitled. Variable consideration is included in the estimated transaction price if it is probable that when the uncertainty associated with the variable consideration is resolved, there will not be a significant reversal of the cumulative amount of revenue that has been recognized. Management’s estimates of variable consideration and the determination of whether to include estimated amounts in transaction prices are based largely on discussions, correspondence or preliminary negotiations and past practices with the customer, engineering studies and legal advice and all other relevant information that is reasonably available at the time of the estimate. The effect of variable consideration on the transaction price of a performance obligation is recognized as an adjustment to revenue, typically on a cumulative catch-up basis, as such variable consideration, which typically pertains to changed conditions and scope, is generally for services encompassed under the existing contract. To the extent unapproved change orders, claims and other variable consideration reflected in transaction prices are not resolved in our favor, or to the extent incentives reflected in transaction prices are not earned, there could be reductions in, or reversals of, previously recognized revenue.
As of December 31, 2025, our contract transaction prices included approximately $229 million of change orders and/or claims for certain contracts that were in the process of being resolved in the ordinary course of our business, including through negotiation, arbitration and other proceedings. These transaction price adjustments, when earned, are included within contract assets or accounts receivable, net of allowance, as appropriate. As of December 31, 2025, these change orders and/or claims primarily related to certain projects in our Clean Energy and Infrastructure and Power Delivery segments. We actively engage with our customers to complete the final approval process for such amounts and generally expect these processes to be completed within one year. Amounts ultimately realized upon final agreement by customers could be higher or lower than such estimated amounts.
Business Combinations
The determination of the fair value of net assets acquired in a business combination requires estimates and judgments of future cash flow expectations for the acquired business and the related identifiable tangible and intangible assets. Fair values of net assets acquired are calculated using expected cash flows and industry-standard valuation techniques. Consideration paid generally consists of cash and, from time to time, shares of our common stock, and potential future payments that are contingent upon the acquired business achieving certain levels of earnings in the future, also referred to as “acquisition-related contingent consideration” or “earn-outs.”
We estimate the fair values of our earn-out liabilities using income approaches such as discounted cash flows or option pricing models, both of which incorporate significant inputs not observable in the market (Level 3 inputs), including management’s estimates and entity-specific assumptions, which inputs are evaluated on an ongoing basis. Key assumptions in estimating the fair values of our earn-out liabilities include the discount rate, which, as of December 31, 2025, ranged from 10.5% to 14.3%, with a weighted average rate of 11.1% based on the relative fair value of the respective Earn-out liabilities, and probability-weighted projections of EBITDA. Significant changes in any of these assumptions could result in significantly higher or lower estimated earn-out liabilities.
Due to the time required to gather and analyze the necessary data for each acquisition, U.S. GAAP provides a “measurement period” of up to one year from the date of acquisition in which to finalize these fair value determinations. During the measurement period, preliminary fair value estimates may be revised if new information is obtained about the facts and circumstances existing as of the date of acquisition, or based on the final net assets and working capital of the acquired business, as prescribed in the applicable purchase agreement. Such adjustments may result in the recognition of, or an adjustment to the fair values of, acquisition-related assets and liabilities and/or consideration paid, and are referred to as measurement period adjustments. Measurement period adjustments are recorded to goodwill. Other changes to fair value estimates, including those relating to facts and circumstances that occur subsequent to the date of acquisition, are reflected as income or expense, as appropriate. See Note 3 - Acquisitions, Goodwill and Other Intangible Assets, Net in the notes to the audited consolidated financial statements, which is incorporated by reference, for information pertaining to acquisition-related fair value adjustments.
Significant changes in the assumptions or estimates for a particular acquisition or in the underlying acquisition-related valuations, including the expected profitability or cash flows of an acquired business or assumptions related to the existence or amount of the acquired assets or assumed
liabilities, could result in materially different estimates of the fair value of net assets acquired for the related acquisition, which could positively or negatively affect our financial results in future periods.
Goodwill and Other Intangible Assets
We have goodwill and other intangible assets that have been recorded in connection with our acquisitions of businesses. Goodwill is not amortized, but instead is tested for impairment at least annually. Other intangible assets are amortized over their useful lives, which are generally based on contractual or legal rights, in a manner consistent with the pattern in which the related benefits are expected to be consumed, or on a straight-line basis if that pattern cannot be reliably determined.
We perform our annual impairment test of goodwill during the fourth quarter of each year, or more frequently if events or circumstances arise which indicate that the fair value of a reporting unit with goodwill is below its carrying amount. Goodwill is required to be tested for impairment at the reporting unit level. A reporting unit is an operating segment, or one level below the operating segment, which is referred to as a component.
During the first quarter of 2025, certain reporting units within our Communications and Power Delivery operating segments were restructured to more closely align with the segments’ end markets and to better correspond with the operational management reporting structures of both segments. Under both the current and previous reporting unit structures, each of the components within the Communications and Power Delivery operating segments is a reporting unit. For additional details of the restructuring and the related assessment, refer to Note 1 - Business, Basis of Presentation and Significant Accounting Policies in the notes to the audited consolidated financial statements, which is incorporated by reference.
Following is a summary of goodwill and other intangible assets, net, by segment as of December 31, 2025:
Communications
Clean Energy and Infrastructure
Power Delivery
Pipeline Infrastructure
Total
Goodwill (in millions)
Percentage of total
Other intangible assets, net (in millions)
Percentage of total
As part of our annual impairment test of goodwill, we perform a qualitative assessment of our reporting units by examining relevant events and circumstances that could have an effect on a reporting unit’s fair value, such as: macroeconomic trends and events, including levels of inflation, market interest rates and/or supply chain disruptions; industry and/or market conditions, including the potential effects of regulatory and other uncertainties, such as uncertainty related to the implementation and pace of spending under governmental infrastructure programs and initiatives and project permitting issues; financial, competitive and other conditions, including declines in the operating performance of our reporting units, and/or long-term changes in consumer behavior; entity-specific events; and other relevant factors or events that could affect earnings and cash flows.
If, after performing a qualitative assessment, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, we then perform a quantitative impairment test for those reporting units. We estimate the fair value of a reporting unit using a combination of market and income approaches using Level 3 inputs. Under the market approach, the fair values are estimated using published market multiples for comparable companies and applying them to revenue and EBITDA. Under the income approach, a discounted cash flow methodology is used, considering: (i) management estimates, such as projections of revenue, operating costs and cash flows, taking into consideration historical and anticipated financial results; (ii) general economic, market and regulatory conditions; and (iii) the impact of planned business and operational strategies. Assumptions used in our quantitative goodwill impairment tests are reflective of the risks inherent in the business models of the applicable reporting units and within the units’ industry. Estimated discount rates are determined using the weighted average cost of capital for each reporting unit at the time of the analysis, taking into consideration the risks inherent within each reporting unit individually.
For the year ended December 31, 2025, we completed our annual impairment test of goodwill as part of which we performed a qualitative assessment of all reporting units and concluded that it was more likely than not that the fair value of each reporting unit was greater than its carrying value. Accordingly, a quantitative goodwill impairment test was not required for any of our reporting units, and no goodwill impairment was recognized in 2025.
As of December 31, 2025, we believe that the recorded balances of goodwill and other intangible assets are recoverable; however, adverse changes in the assumptions or estimates used in our analyses, such as a reduction in profitability and/or cash flows, changes in market, regulatory or other conditions, including decreases in project activity levels and/or the effects of elevated levels of inflation, interest rates or other regulatory or market disruptions, including from geopolitical events and/or changes in asset characteristics, could result in non-cash goodwill and/or intangible asset impairment charges in future periods. See Note 1 - Business, Basis of Presentation and Significant Accounting Policies and Note 3 -
Acquisitions, Goodwill and Other Intangible Assets, Net in the notes to the audited consolidated financial statements, which are incorporated by reference, for additional discussion.
Self-Insurance
We are self-insured up to the amount of our deductible for our insurance policies. We also manage certain of our insurance liabilities indirectly through our wholly-owned captive insurance company, which reimburses claims up to the applicable insurance limits. Liabilities under our insurance programs are accrued based upon our estimate of the ultimate liability for claims, with assistance from third-party actuaries. The determination of such claims and expenses and the appropriateness of the related liability is reviewed and updated quarterly. These insurance liabilities are, however, difficult to assess and estimate due to many factors, the effects of which are often unknown or difficult to estimate, including the severity of an injury or an incident, the determination of our liability in proportion to other parties and the number of incidents not reported. Accruals are based upon known facts, historical trends and claims experience, loss development patterns and other actuarial assumptions. Although we believe such accruals are adequate, a change in experience or actuarial or management assumptions could materially affect our results of operations in a particular period. As of December 31, 2025, MasTec’s estimated gross liability for unpaid claims and associated expenses, including incurred but not reported losses related to these policies, totaled $306.8 million.
Income Taxes
Our provision for income taxes uses an effective tax rate based on annual pre-tax income, statutory tax rates, permanent tax differences and tax planning opportunities in the various jurisdictions in which we operate. Significant factors that can affect our annual effective tax rate include management’s assessment of certain tax matters, the location and amount of taxable earnings, changes in certain non-deductible expenses and expected credits. Although we believe our provision for income taxes is accurate and the related assumptions are reasonable, the final outcome of tax matters could be materially different from what we currently anticipate, which could result in significant costs or benefits to us. See Note 13 - Income Taxes in the notes to the audited consolidated financial statements, which is incorporated by reference, for additional discussion.
In the ordinary course of business, there is inherent uncertainty in quantifying income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based on our evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recognized the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in our financial statements.
We file income tax returns in numerous tax jurisdictions, including U.S. federal, most U.S. states and certain foreign jurisdictions. Although we believe our calculations for tax returns are accurate and the positions taken thereon are reasonable, the final outcome of income tax examinations could be materially different from our expectations and the estimates that are reflected in our consolidated financial statements, which could materially affect our results of operations, cash flows and liquidity in the related period.
Litigation and Contingencies
Accruals for litigation and contingencies are based on our assessment, including advice of legal counsel, of the expected outcome of litigation or other dispute resolution proceedings and/or the expected resolution of contingencies. Significant judgment is required in both the determination of probability of loss and the determination as to whether the amount is reasonably estimable. Accruals are based on information available at the time of the assessment due to the uncertain nature of such matters. As additional information becomes available, we reassess potential liabilities related to pending claims and litigation and may revise our previous estimates, which could materially affect our results of operations in a given period.
2026 Outlook
We believe that we are at the intersection of transformative trends and are well-positioned to benefit from significant market opportunities in each of our business segments. Please see Item 1. “Business - Industry Trends” for additional information on the outlook for the industries we serve and a detailed discussion of our market opportunities. Our future results could be adversely affected by the matters discussed in the “Cautionary Statement Regarding Forward-Looking Statements,” Item 1A. “Risk Factors” and Item 3. “Legal Proceedings” of this Form 10-K.
Comparison of Fiscal Year Results
The following table, which may contain slight summation differences due to rounding, reflects our consolidated results of operations in dollar and percentage of revenue terms for the periods indicated (dollar amounts in millions). Our consolidated results of operations are not necessarily comparable from period to period due to the effect of recent acquisitions and certain other items, which are described in the comparison of results section below. Unless otherwise stated, comparisons are for the years ended December 31, 2025 and 2024.
Year Ended December 31,
Change
Revenue
Costs of revenue, excluding depreciation and amortization
Depreciation
Amortization of intangible assets
General and administrative expenses
Interest expense, net
Equity in earnings of unconsolidated affiliates, net
Loss on extinguishment of debt
Other (income) expense, net
Income before income taxes
Provision for income taxes
Net income
Net income attributable to non-controlling interests
Net income attributable to MasTec, Inc.
NM - Percentage is not meaningful
Comparison of Years Ended December 31, 2025 and 2024
Revenue . On a consolidated basis, revenue increased by $1,996 million driven by our segment results as follows: revenue increased in our Communications segment by approximately $815 million, or 32%, in our Clean Energy and Infrastructure segment by approximately $607 million, or 15%, in our Power Delivery segment by approximately $563 million or 16%, and in our Pipeline Infrastructure segment by approximately $4 million, remaining generally flat as compared with the prior year. See “Analysis of Revenue and EBITDA by Segment” below for additional information and discussion related to segment revenue.
Costs of revenue, excluding depreciation and amortization. Higher levels of revenue contributed an increase of $1,732 million in costs of revenue, excluding depreciation and amortization, and reduced productivity contributed an increase of approximately $99 million. Costs of revenue, excluding depreciation and amortization, as a percentage of revenue increased by approximately 70 basis points to 87.5% of revenue in 2025 compared to 86.8% of revenue in 2024. The basis point increase was due to a combination of reduced project efficiencies and project mix, primarily within our Pipeline Infrastructure and Power Delivery segments, offset, in part, by improved productivity and efficiencies within our Clean Energy and Infrastructure segment. See “Analysis of Revenue and EBITDA by Segment” below for discussion of operating capacity effects by segment.
Depreciation. As a percentage of revenue, depreciation decreased by approximately 90 basis points, due primarily to a net reduction related to a change in the depreciable lives of certain machinery and equipment to better align the respective assets’ lives with their expected useful lives, offset, in part, by higher capital expenditures to support operational growth and the replacement of older machinery and equipment.
Amortization of intangible assets. The decrease in amortization of intangible assets was due to a combination of the effects of timing of amortization for certain assets and the completion of amortization for certain intangible assets associated with prior years’ acquisitions. As a percentage of revenue, amortization of intangible assets decreased by approximately 20 basis points as compared with the same period in 2024 primarily due to higher levels of revenue.
General and administrative expenses . The increase in general and administrative expenses was due primarily due to an increase in professional fees, the effects of timing of ordinary course legal matters, and a decrease in gains on sales of assets, net, offset, in part, by a decrease in the provision for credit losses. Overall, general and administrative expenses decreased by approximately 60 basis points as a percentage of revenue for the year ended December 31, 2025 as compared with the same period in 2024 due to higher levels of revenue.
Interest expense, net. The decrease in interest expense, net, resulted primarily from lower average balances and, to a lesser extent, lower average interest rates on our variable rate debt, which accounted for a reduction of approximately $35 million, offset, in part by an increase in interest expense from our senior notes due to higher average balances including from the June 2024 issuance of our 5.900% Senior Notes, and, to a lesser extent, from finance leases due to higher levels of activity. See “ Financial Condition, Liquidity and Capital Resources ” discussion below for details of our debt instruments.
Equity in earnings of unconsolidated affiliates. For the years ended December 31, 2025 and 2024, equity in earnings from unconsolidated affiliates, net, totaled approximately $32 million and $30 million, respectively, and related primarily to our investments in the Waha JVs.
Loss on extinguishment of debt. We incurred a loss on debt extinguishment of approximately $11 million for the year ended December 31, 2024 in connection with the second quarter 2024 repayment of our 6.625% IEA Senior Notes and Three-Year Term Loan Facility.
Other (income) expense, net. For the year ended December 31, 2025, other income, net, included approximately $3 million of income, net, from changes to estimated Earn-out accruals, approximately $6 million of other miscellaneous income, offset, in part, by approximately $4 million of expense, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business. For the year ended December 31, 2024, other expense, net, included approximately $5 million of expense, net, from changes to estimated Earn-out accruals, approximately $5 million of expense, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business and approximately $6 million of asset impairments related to certain fixed assets, offset, in part, by approximately $3 million of other miscellaneous income, net, including from legal and other settlements.
Provision for income taxes. For the year ended December 31, 2025, our effective tax rate was an expense of 18.1% as compared with an expense of 20.5% for the same period in 2024. Our effective tax rate for the year ended December 31, 2025 included income tax benefits primarily from the reversal of uncertain tax position liabilities, the release of valuation allowances on certain deferred tax assets, benefits from certain tax credits; offset, in part, by the effects of a higher state income tax rate, whereas for the year ended December 31, 2024, our effective tax rate included the effects of a lower state income tax rate and tax credits.
Net income attributable to non-controlling interests. Net income attributable to non-controlling interests was $23 million for the year ended December 31, 2025, as compared with $37 million for the same period in 2024. The decrease was primarily attributable to the decrease in activity of certain entities within the Pipeline Infrastructure and Communications segments with minority interest holders.
Analysis of Revenue and EBITDA by Segment
We review our operating results by reportable segment. See Note 14 - Segments and Related Information in the notes to the audited consolidated financial statements, which is incorporated by reference. Our reportable segments are: (1) Communications; (2) Clean Energy and Infrastructure; (3) Power Delivery; (4) Pipeline Infrastructure and (5) Other. Management’s review of segment results includes analyses of trends in revenue, EBITDA and EBITDA margin. EBITDA for segment reporting purposes is calculated consistently with our consolidated EBITDA calculation. EBITDA margin is calculated by dividing EBITDA by revenue for the same period. See the discussion of our non-U.S. GAAP financial measures, including certain adjusted non-U.S. GAAP measures, as described below, following the comparison of results discussion. The following table, which may contain slight summation differences due to rounding, presents revenue, EBITDA and EBITDA margin by segment for the periods indicated (dollar amounts in millions):
Revenue
EBITDA and EBITDA Margin
Year Ended December 31,
Change
Year Ended December 31,
Change
Segment:
Communications
Clean Energy and Infrastructure
Power Delivery
Pipeline Infrastructure
Other
Eliminations
Segment Total
Corporate
Consolidated Total
NM - Percentage is not meaningful
(a) Recast to reflect 2025 segment changes. See Note 14 - Segments and Related Information in the notes to the consolidated audited financial statements, which is incorporated by reference, for additional information.
Communications Segment Results
Revenue. The increase in revenue was driven primarily by higher levels of wireless and wireline project activity due, in part, to increased customer demand, offset, in part, by a decrease in our install-to-the-home project activity due, in part, to changes in consumer behavior.
EBITDA. As a percentage of revenue, EBITDA increased by approximately 50 basis points, or $18 million, due to improved project efficiencies, including from our wireless and wireline businesses. Higher levels of revenue resulted in an increase in EBITDA of approximately $71 million.
Clean Energy and Infrastructure Segment Results
Revenue . The increase in revenue was due primarily to higher levels of project activity, primarily in our renewable projects.
EBITDA. As a percentage of revenue, EBITDA increased by approximately 110 basis points, or $53 million, due to a combination of project mix, the positive effects of certain renewable project close-outs, and improved productivity and efficiencies, primarily from certain renewable and infrastructure project work. Higher levels of revenue resulted in an increase in EBITDA of approximately $38 million.
Power Delivery Segment Results
Revenue . The increase in revenue was due primarily to higher levels of project activity in transmission and distribution-related project work, as well as higher levels of certain infrastructure-related project work. These increases were offset, in part, by a decrease in substation-related project activity, as well as a decrease in demand for emergency restoration services.
EBITDA. As a percentage of revenue, EBITDA decreased by approximately 20 basis points, or $9 million, primarily due to reduced efficiencies at certain of our project sites and a reduction in emergency restoration services. Higher levels of revenue contributed an increase in EBITDA of approximately $47 million.
Pipeline Infrastructure Segment Results
Revenue. Revenue was generally flat as compared with 2024, due primarily to an increase in other infrastructure-related work, offset by lower levels of midstream pipeline project activity.
EBITDA. As a percentage of revenue, EBITDA decreased by approximately 340 basis points, or $72 million, due primarily to reduced efficiencies, including from a reduction in revenue on midstream pipeline projects, the effects of project mix, and the effects of certain overhead costs incurred to maintain operating capacity in support of expected future project work.
Other Segment Results
EBITDA. EBITDA from Other businesses relates primarily to equity in earnings from our investments in the Waha JVs, offset, in part, by losses from other businesses and investments.
Corporate Results
EBITDA. For the year ended December 31, 2025, Corporate EBITDA included $3 million of income, net, from changes to estimated Earn-out accruals and $4 million of expense, net, from the changes in the fair value of additional contingent payments to former owners of an acquired business. For the year ended December 31, 2024, Corporate EBITDA included approximately $11 million of a loss on debt extinguishment, $5 million of expense, net, from changes to estimated Earn-out accruals, and $5 million of expense from the changes in the fair value of additional contingent payments to former owners of an acquired business. Corporate expenses for the year ended December 31, 2025 not related to the above-described items increased by approximately $7 million as compared with the same period in 2024, due primarily to increases in compensation expense and other administrative expenses, including professional fees, offset, in part, by the effects of timing of ordinary course legal and other settlement matters.
Comparison of Years Ended December 31, 2024 and 2023
Refer to Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Comparison of Years Ended December 31, 2024 and 2023” of the Company’s 2024 Annual Report on Form 10-K (the “2024 Form 10-K”) for a comparison of results for the years ended December 31, 2024 and 2023, which discussion is incorporated herein by reference.
Foreign Operations
Our foreign operations are primarily in Canada. See Note 14 - Segments and Related Information in the notes to the audited consolidated financial statements, which is incorporated by reference.
Non-U.S. GAAP Financial Measures
As appropriate, we supplement our reported U.S. GAAP financial information with certain non-U.S. GAAP financial measures, including earnings before interest, income taxes, depreciation and amortization (“EBITDA”), adjusted EBITDA (“Adjusted EBITDA”), adjusted net income (“Adjusted Net Income”), adjusted net income attributable to MasTec, Inc. (“Adjusted Net Income Attributable to MasTec, Inc.”) and adjusted diluted earnings per share (“Adjusted Diluted Earnings Per Share”). These “adjusted” non-U.S. GAAP measures exclude, as applicable to the respective periods, non-cash stock-based compensation expense; loss on extinguishment of debt; changes in fair value of acquisition-related contingent items; acquisition and integration costs related to certain acquisition activity, as more fully described below; fair value gains or losses, net, on an investment; and, for Adjusted Net Income, Adjusted Net Income Attributable to MasTec, Inc. and Adjusted Diluted Earnings Per Share, amortization of intangible assets, the effects of statutory and other tax rate changes, and the tax effects of the adjusted items. These definitions of EBITDA and Adjusted EBITDA are not the same as in our Credit Facility or in the indenture governing our senior notes; therefore, EBITDA and Adjusted EBITDA as presented in this discussion should not be used for purposes of determining our compliance with the covenants contained in our debt instruments.
We use EBITDA and Adjusted EBITDA, as well as Adjusted Net Income, Adjusted Net Income Attributable to MasTec, Inc. and Adjusted Diluted Earnings Per Share, to evaluate our performance, both internally and as compared with our peers, because these measures exclude certain items that may not be indicative of our core, or underlying, operating results, as well as items that can vary widely across different industries or among companies within the same industry. We believe that these adjusted measures provide a baseline for analyzing trends in our underlying business. Non-cash stock-based compensation expense can be subject to volatility from changes in the market price per share of our common stock
or variations in the value and number of shares granted, and amortization of intangible assets is subject to acquisition activity, which varies from period to period.
Our computation of non-U.S. GAAP financial measures excludes the effects of changes in fair value of acquisition-related contingent items due to their non-operational nature and inherent volatility, as activity varies from period to period. Acquisition-related contingent items consist of (i) changes in fair value of acquisition-related contingent consideration, which is composed of earn-outs, that are contingent upon the achievement of reaching certain post-acquisition levels of earnings and (ii) changes in fair value of additional payments in connection with the 2021 acquisition of Henkels & McCoy Holdings, Inc., formerly known as Henkels & McCoy Group, Inc. (“HMG”), based on the fluctuation of our share price and are contingent upon the post-acquisition collections of certain receivables. We believe that this presentation is common practice within our industry and improves comparability of our results with those of our peers. See Note 3 - Acquisitions, Goodwill and Other Intangible Assets, Net and Note 4 - Fair Value of Financial Instruments in the notes to the audited consolidated financial statements, which is incorporated by reference, for additional details regarding these acquisition-related contingent items.
In 2021, we initiated a significant transformation of our end-market business operations to focus on the nation’s transition to low-carbon energy sources and position the Company for expected future opportunities. This transformation included significant acquisition activity to expand our scale and capacity in renewable energy, power delivery, heavy civil and telecommunications services, and resulted in significant acquisition and integration costs. Due to the extent of the acquisition costs related to this acquisition activity and the extent of the efforts that were required to integrate these acquisitions, we have excluded acquisition and integration costs related to this acquisition activity in our computation of non-U.S. GAAP financial measures. These acquisition and integration activities were completed in the fourth quarter of 2023.
Our adjusted results also exclude fair value gains or losses, net, for our investment in American Virtual Cloud Technologies, Inc. (“AVCT”). We believe that fair value gains or losses for our investment in AVCT, a company in which we had no active involvement and for which fair value activity varied from period to period based on fluctuations in the market price of the investment, are not indicative of our core operations, and that this presentation improves comparability of our results with those of our peers. AVCT filed for bankruptcy in the first quarter of 2023, and our investment was fully written off.
We exclude intangible asset amortization from our non-U.S. GAAP financial measures due to its non-operational nature and inherent volatility, as acquisition activity varies from period to period. We believe that this presentation is common practice within our industry and improves comparability of our results with those of our peers. Note that while intangible asset amortization related to the assets of acquired entities is excluded from our non-U.S. GAAP financial measures, the revenue and all other expenses of the acquired entities are included within our non-U.S. GAAP financial measures, unless otherwise stated. We have also excluded the effects of statutory and other tax rate changes from Adjusted Net Income and Adjusted Diluted Earnings Per Share given their inherent volatility due to uncertainty with regard to our future geographic footprint and the associated tax rates, which may vary significantly from period to period, and, for statutory tax rate changes, due to their non-operational nature.
We believe that these non-U.S. GAAP financial measures provide meaningful information and help investors understand our financial results and assess our prospects for future performance. Because non-U.S. GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-U.S. GAAP financial measures having the same or similar names. Each company’s definitions of these adjusted measures may vary as they are not standardized and should be used together with the provided reconciliations. These financial measures should not be considered in isolation from, as substitutes for, or alternative measures of, reported net income (loss) or diluted earnings (loss) per share, and should be viewed in conjunction with the most comparable U.S. GAAP financial measures and the provided reconciliations thereto. We believe these non-U.S. GAAP financial measures, when viewed together with our U.S. GAAP results and related reconciliations, provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements and publicly filed reports in their entirety and not rely on any single financial measure.
The following table presents a reconciliation of net income (loss) to EBITDA and Adjusted EBITDA in dollar and percentage of revenue terms, for the periods indicated. The tables below (dollar amounts in millions) may contain slight summation differences due to rounding.
Year Ended December 31,
EBITDA Reconciliation:
Net income (loss)
Interest expense, net
Provision for (benefit from) income taxes
Depreciation
Amortization of intangible assets
EBITDA
Non-cash stock-based compensation expense
Loss on extinguishment of debt
Changes in fair value of acquisition-related contingent items
Acquisition and integration costs
Losses on fair value of investment
Adjusted EBITDA
A reconciliation of EBITDA and EBITDA margin to Adjusted EBITDA and Adjusted EBITDA margin by segment for the periods indicated is as follows:
Year Ended December 31,
EBITDA
Non-cash stock-based compensation expense (b)
Loss on extinguishment of debt (b)
Changes in fair value of acquisition-related contingent items (b)
Acquisition and integration costs (c)
Losses on fair value of investment (b)
Adjusted EBITDA
Segment:
Communications
Clean Energy and Infrastructure
Power Delivery
Pipeline Infrastructure
Other
Segment Total
Corporate
Adjusted EBITDA
NM - Percentage is not meaningful
(a) Recast to reflect 2025 segment changes. See Note 14 - Segments and Related Information in the notes to the consolidated audited financial statements, which is incorporated by reference, for additional information.
(b) Non-cash stock-based compensation expense, loss on extinguishment of debt, changes in fair value of acquisition-related contingent items and losses on the fair value of an investment are included within Corporate EBITDA.
(c) For the year ended December 31, 2023, Communications, Clean Energy and Infrastructure and Power Delivery EBITDA included $22.5 million, $37.1 million and $8.5 million, respectively, of acquisition and integration costs, and Corporate EBITDA included $3.8 million of such costs.
The tables below, which may contain slight summation differences due to rounding, reconcile reported net income (loss) and reported diluted earnings (loss) per share, the most directly comparable U.S. GAAP financial measures, to Adjusted Net Income, Adjusted Net Income Attributable to MasTec, Inc. and Adjusted Diluted Earnings Per Share.
Year Ended December 31,
Net income (loss)
Adjustments:
Non-cash stock-based compensation expense
Amortization of intangible assets
Loss on extinguishment of debt
Changes in fair value of acquisition-related contingent items
Acquisition and integration costs
Losses on fair value of investment
Total adjustments, pre-tax
Income tax effect of adjustments (a)
Statutory and other tax rate effects (b)
Adjusted net income
Net income attributable to non-controlling interests
Adjusted net income attributable to MasTec, Inc.
Year Ended December 31,
Diluted earnings (loss) per share
Adjustments:
Non-cash stock-based compensation expense
Amortization of intangible assets
Loss on extinguishment of debt
Changes in fair value of acquisition-related contingent items
Acquisition and integration costs
Losses on fair value of investment
Total adjustments, pre-tax
Income tax effect of adjustments (a)
Statutory and other tax rate effects (b)
Adjusted diluted earnings per share
(a) Represents the tax effects of the adjusted items that are subject to tax, including the tax effects of non-cash stock-based compensation expense, including from share-based payment awards. Tax effects are determined based on the tax treatment of the related item, the incremental statutory tax rate of the jurisdictions pertaining to the adjustment, and their effects on pre-tax income. For the years ended December 31, 2025 and 2024, our consolidated tax amounts were expenses, with effective tax rates, as reported, of 18.1% and 20.5%, respectively, and for the year ended December 31, 2023, such amount was a benefit, with effective tax rates, as reported, of 42.8%. For the years ended December 31, 2025, 2024 and 2023, our consolidated tax amounts, as adjusted, were expenses with effective tax rates of 21.0%, 21.8% and 19.1%, respectively.
(b) Represents the effects of statutory and other tax rate changes for the years ended December 31, 2025, 2024 and 2023.
Financial Condition, Liquidity and Capital Resources
Our primary sources of liquidity are cash flows from operations, availability under our Credit Facility and our cash balances. Our primary liquidity needs are for working capital, capital expenditures, insurance and performance collateral in the form of cash and letters of credit, debt service, income taxes, earn-out obligations and equity and other investment funding requirements. We also evaluate opportunities for strategic acquisitions, investments and other arrangements from time to time, and we may consider opportunities to refinance, extend the terms of our existing indebtedness, retire outstanding debt, borrow additional funds, which may include borrowings under our Credit Facility or debt issuances, or repurchase additional shares of our outstanding common stock under share repurchase authorizations, any of which may require our use of cash. See Note 8 - Debt in the notes to the audited consolidated financial statements, which is incorporated by reference, for details of our recent debt transactions, including the amendment and restatement of our senior credit facility and the repayment of the outstanding loans under the existing credit agreement, our new term loan facility, and the repayment of our five-year term loan.
Capital Expenditures . For the year ended December 31, 2025, we spent approximately $260 million on capital expenditures, or $204 million, net of asset disposals, and incurred approximately $229 million of equipment purchases under finance leases and other financing arrangements. We estimate that we will spend approximately $270 million on capital expenditures, or approximately $200 million, net of asset disposals, in 2026, and we expect to incur approximately $230 million to $255 million of equipment purchases under finance leases and other financing arrangements. Actual capital expenditures may increase or decrease in the future depending upon business activity levels, as well as ongoing assessments of equipment lease and other financing arrangements versus purchase decisions based on management’s evaluation of short and long-term equipment requirements.
Acquisitions and Earn-Out Liabilities . We typically utilize cash for business acquisitions and other strategic arrangements, and for the year ended December 31, 2025, we used $71 million of cash for this purpose. In addition, in most of our acquisitions, we have agreed to make future payments to the sellers that are contingent upon the future earnings performance of the acquired businesses, which we also refer to as “Earn-out” payments. From time to time, our acquisitions may contain certain additional payments if specified conditions are met. Earn-out payments may be paid in cash or, under specific circumstances, MasTec common stock, or a combination thereof, generally at our option. The estimated total value of future Earn-out liabilities as of December 31, 2025 was approximately $73 million. Of this amount, approximately $21 million represents the liability for earned amounts. The remainder is management’s estimate of Earn-out liabilities that are contingent upon future performance. For the years ended December 31, 2025, 2024 and 2023, we made $49 million, $26 million and $39 million, respectively, of payments related to our Earn-out liabilities. In the first quarter of 2026, we completed one acquisition for an aggregate purchase price of $262 million in cash. See “Business” discussion above for details of our recent acquisitions.
Our acquisition of HMG in 2021 provided for certain additional payments to be made to the sellers if certain acquired receivables are collected, which we refer to as the “Additional Payments.” As of December 31, 2025, the estimated fair value of remaining Additional Payments was approximately $18 million, which for the year ended December 31, 2025, includes the effect of fair value adjustments related to the contingent shares totaling losses of approximately $4.1 million. The number of shares that would be paid in connection with the remaining Additional Payments as of December 31, 2025 is approximately 50,000 shares.
Income Taxes. Tax payments, net of tax refunds, totaled $44 million for both the years ended December 31, 2025 and 2024 and $10 million for the year ended December 31, 2023. Our tax payments vary with changes in taxable income and earnings based on estimates of full year taxable income activity and estimated tax rates.
Working Capital. We need working capital to support seasonal and other variations in our business, primarily related to the effects of weather conditions on outdoor construction and maintenance work and the spending patterns of our customers, both of which influence the timing of associated spending to support customer demand. Working capital needs are generally higher during the summer and fall months due to increased demand for our services when favorable weather conditions exist in many of the regions in which we operate. Conversely, working capital needs are typically converted to cash during the winter months. These seasonal trends, however, can be offset by changes in the timing of projects, which can be affected by project delays or accelerations and/or other factors that may affect customer spending.
Working capital requirements also tend to increase when we commence multiple projects or particularly large projects because labor, including subcontractor costs, and certain other costs, including inventory and materials requirements, typically become payable before the receivables resulting from work performed are collected. The timing of billings and project close-outs can also contribute to changes in billed and unbilled revenue. As of December 31, 2025, we expect that substantially all of our unbilled receivables will be billed to customers in the normal course of business within the next twelve months. Total accounts receivable, which consists of contract billings, unbilled receivables and retainage, net of allowance, totaled approximately $3.5 billion as of December 31, 2025 as compared with $2.9 billion as of December 31, 2024, due primarily to higher levels of revenue, as well as the timing of project billings and collections. See below for discussion of our days sales outstanding, net of contract liabilities, which we refer to as days sales outstanding, or “DSO.”
Our payment billing terms are generally net 30 days, and some of our contracts allow our customers to retain a portion of the contract amount, generally from 5% to 10% of billings, until the job is completed, which amounts are referred to as “retainage.” As part of our ongoing working capital management practices, we evaluate opportunities to improve our working capital cycle time through contractual provisions and certain financing arrangements. For certain customers, we maintain inventory to meet the materials requirements of the contracts. Occasionally, certain of our customers pay us in advance for a portion of the materials we purchase for their projects or allow us to pre-bill them for the mobilization of assets and/or crew to project sites and/or for materials purchases up to specified amounts. Vendor terms generally range from 30 to 60 days. Our agreements with subcontractors often contain a “pay-if-paid” provision, whereby our payments are contractually due to subcontractors only after we are paid by our customers.
Summary of Financial Condition, Liquidity and Capital Resources
Including our current assessment of general economic and market conditions on our results of operations and capital resource requirements, we anticipate that funds generated from operations, borrowings under our credit facilities and our cash balances will be sufficient to meet our working capital requirements, anticipated capital expenditures, debt service obligations, insurance and performance collateral requirements, letter of credit needs, earn-out obligations, required income tax payments, as well as potential acquisition, strategic arrangement and investment funding requirements and/or share repurchase activity and other liquidity needs for the next twelve months and the foreseeable future.
Sources and Uses of Cash
As of December 31, 2025, we had approximately $1,058 million in working capital, defined as current assets less current liabilities, as compared with $653 million as of December 31, 2024, an increase of approximately $405 million. Cash and cash equivalents totaled approximately $396 million and $400 million as of December 31, 2025 and 2024, respectively, for a decrease of $4 million. See discussion below for further detail regarding our cash flows and related activity.
Sources and uses of cash are summarized below (in millions):
Year Ended December 31,
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Operating Activities. Cash flow from operations is primarily influenced by changes in the timing of demand for our services and operating margins, but can also be affected by working capital needs associated with the various types of services we provide. Working capital is affected by changes in total accounts receivable, net, prepaid expenses and other current assets, accounts payable and payroll tax payments, accrued expenses and contract liabilities, all of which tend to be related. These working capital items are affected by changes in revenue resulting from the timing and volume of work performed, variability in the timing of customer billings and collections of receivables, as well as settlement of payables and other obligations. Net cash provided by operating activities for the year ended December 31, 2025 was $546 million, as compared with $1,122 million in 2024, for a decrease in net cash provided by operating activities of approximately $576 million. The decrease was due primarily to changes in working capital compared with the prior period, including from the negative effect of timing-related changes in accounts receivable, net, primarily driven by higher levels of revenue and an increase in DSO, and contract liabilities, offset, in part, by the positive effect of timing-related changes in accounts payable and accrued expenses, and an increase in net income as compared with the prior period.
DSO is calculated as total accounts receivable, net of allowance, less contract liabilities, divided by average daily revenue for the most recently completed quarter as of the balance sheet date. A decrease in DSO has a favorable impact on cash flow from operating activities, while an increase in DSO has a negative impact on cash flow from operating activities. Our DSO was 65 as of December 31, 2025, as compared with DSO of 60 as of December 31, 2024. Our DSOs can fluctuate from period to period due to timing of billings, billing terms, collections and settlements, timing of project close-outs and retainage collections, changes in project and customer mix and to a lesser extent the effect of working capital initiatives, including certain accounts receivable financing arrangements. The increase in DSO as of December 31, 2025 as compared with December 31, 2024 was due to timing of ordinary course billing and collection activities. Other than certain ordinary course matters subject to litigation, we do not anticipate material collection issues related to our outstanding accounts receivable balances, nor do we believe that we have
material amounts due from customers experiencing financial difficulties. Based on current information, we expect to collect substantially all of our outstanding accounts receivable balances within the next twelve months.
Investing Activities. Net cash used in investing activities was $267 million as compared to $157 million for the year ended December 31, 2025 and 2024, respectively, for an increase of $110 million. Capital expenditures totaled $260 million, or $204 million, net of asset disposals, for the year ended December 31, 2025, as compared with $149 million, or $83 million, net of asset disposals, for the same period in 2024, for an increase in cash used in investing activities of approximately $121 million, primarily to support operational growth and the replacement of older machinery and equipment.
Financing Activities. Net cash used in financing activities for the year ended December 31, 2025 was $283 million, as compared with net cash used in financing activities of $1,090 million in 2024, for a decrease in cash used in financin g activities of approximately $807 million. For the year ended December 31, 2025, we had $56 million of borrowings, net of repayments, under our credit facility and term loans, as compared with $1,154 million of repayments, net of borrowings, for the same period in 2024, for a decrease in cash used in financing activities of $1,209 million. The decrease in cash used in financing activities from the above was offset, in part, by an increase in net proceeds of Senior Notes for the year ended December 31, 2024 of $326 million, consisting of $550 million in proceeds from our 5.900% Senior Notes and $224 million of repayments made on our 6.625% Senior Notes. Share repurchases totaled approximately $77 million for the year ended December 31, 2025, whereas there were no share repurchases for the same period in 2024. Additionally, payments of acquisition-related contingent consideration included within financing activities increased by $18 million. Total payments of acquisition-related contingent consideration, including payments in excess of acquisition-date liabilities, which are classified within operating activities, totaled $49 million for the year ended December 31, 2025 as compared with $26 million for the same period in 2024.
Senior Credit Facility
On June 26, 2025, we amended and restated our five-year, senior unsecured credit facility (the “Credit Facility”), which matures on June 26, 2030 and is composed of $1.9 billion of revolving commitments. As of December 31, 2025, aggregate outstanding revolving borrowings totaled approximately $118 million and availability for revolving loans totaled $1,725 million. Borrowings under our Credit Facility are used for working capital requirements, capital expenditures and other corporate purposes, including acquisitions, equity investments or other strategic arrangements, and/or the repurchase or prepayment of indebtedness, among other corporate borrowing requirements, including potential share repurchases.
We are dependent upon borrowings and letters of credit under our Credit Facility to fund our operations. Should we be unable to comply with the terms and conditions of our Credit Facility, we would be required to obtain modifications to the Credit Facility or obtain an alternative source of financing to continue to operate, neither of which may be available to us on commercially reasonable terms, or at all. The Credit Facility is subject to certain provisions and covenants, as more fully described in Note 8 - Debt in the notes to the audited consolidated financial statements, which is incorporated by reference.
Senior Notes
4.500% Senior Notes. We have $600 million aggregate principal amount of 4.500% senior unsecured notes due August 15, 2028 (the “4.500% Senior Notes”).
5.900% Senior Notes. We have $550 million aggregate principal amount of 5.900% senior unsecured notes due June 15, 2029 (the “5.900% Senior Notes”).
6.625% Senior Notes. We have $75 million aggregate principal amount of 6.625% senior unsecured notes due August 15, 2029 (the “6.625% Senior Notes”).
The Senior Notes described above are subject to certain provisions and covenants, as more fully described in Note 8 - Debt in the notes to the audited consolidated financial statements, which is incorporated by reference.
2025 Term Loan Facility
On June 26, 2025, we entered into a new $600 million senior unsecured term loan agreement (the “2025 Term Loan Facility”) which matures on June 26, 2028 and the loans thereunder are not subject to amortization. In the second quarter of 2025, we used the proceeds from the 2025 Term Loan Facility, together with available cash, to repay the $328.1 million term loan under our Existing Credit Agreement and the remaining $277.5 million of our Five-Year Term Loan that would otherwise have matured on October 7, 2027. The 2025 Term Loan Facility is subject to certain provisions and covenants, as more fully described in Note 8 - Debt in the notes to the audited consolidated financial statements, which is incorporated by reference.
Debt Covenants
We were in compliance with the provisions and covenants contained in our outstanding debt instruments as of December 31, 2025, and we expect to be in compliance with these provisions and covenants for the next twelve months.
Additional Information
For detailed discussion and additional information pertaining to our debt instruments, including current period balances and rates of interest, see Note 8 - Debt in the notes to the audited consolidated financial statements, which is incorporated by reference.
Contractual Payment Obligations
The following table sets forth our contractual payment obligations as of December 31, 2025 during the periods indicated below (in millions):
Contractual Obligations
Total
Less than
1 Year
Years
Years
More than 5 Years and Thereafter
Senior credit facility
4.500% Senior Notes
5.900% Senior Notes
6.625% Senior Notes
2025 Term Loan Facility
Finance lease and other obligations
Operating lease liabilities
Earn-out obligations (a)
Interest (b)
Total
(a) Under certain acquisition agreements, we have agreed to pay the sellers earn-outs and other amounts based on the performance of the businesses acquired. Certain of these payments may be made either in cash or in MasTec common stock, or a combination thereof, at our option. Due to the contingent nature of these payments, we have only included obligations that we expect will be paid in cash and have been earned as of December 31, 2025.
(b) Represents expected future interest payments on debt, finance lease and other obligations outstanding as of December 31, 2025, and does not include potential letter of credit or commitment fees associated with our senior unsecured credit facility. With respect to our variable rate debt, consisting of our senior unsecured credit facility and 2025 Term Loan Facility, the expected future interest assumes the principal amount outstanding and interest rates in effect as of December 31, 2025 remain the same. With the exception of our senior unsecured credit facility and 2025 Term Loan Facility, all of our debt instruments are fixed rate interest obligations.
Off-Balance Sheet Arrangements
As is common in our industry, we have entered into certain off-balance sheet arrangements in the ordinary course of business. Our significant off-balance sheet transactions include liabilities associated with non-cancelable operating leases with durations of less than twelve months, letter of credit obligations, surety and performance and payment bonds entered into in the normal course of business, self-insurance liabilities, liabilities associated with multiemployer pension plans, liabilities associated with potential funding obligations and indemnification and/or guarantee arrangements relating to our equity and other investment arrangements, including our variable interest entities. These off-balance sheet arrangements have not had, and are not reasonably likely to have, a material impact on our financial condition, revenue or expenses, results of operations, liquidity, cash requirements or capital resources in the next twelve months or in the foreseeable future. Refer to Note 4 - Fair Value of Financial Instruments, Note 15 - Commitments and Contingencies and Note 16 - Related Party Transactions in the notes to the audited consolidated financial statements, which are incorporated by reference, for additional information related to our off-balance sheet arrangements.
Impact of Inflation
The primary inflationary factors directly affecting our operations are labor, fuel and material costs. The labor market remains at low levels of unemployment, creating pressure on the supply of skilled labor. In times of low unemployment and/or high inflation, our labor costs may increase due to shortages in the supply of skilled labor and increases in compensation rates generally. Changes to immigration policy may also affect the availability of labor. Although most project materials are provided by our customers, increases in the cost of materials could negatively affect the economic viability of our customers’ projects, and accordingly, demand for our services. Material and commodity prices are subject to volatility due to events outside of our control, such as tariff and trade actions, fluctuations in global supply and demand, climate-related effects, and geopolitical events, which events have caused and could create heightened global market volatility in the future. Inflation rates in the United States increased significantly over the past several years and, while recent inflationary pressure has somewhat abated, the high-cost environment remains intact and we expect it to continue in 2026 due, in part, to trade actions described above under “General Economic, Market and Regulatory Conditions.”
Elevated levels of labor, fuel and material costs have in the past and could in the future negatively affect our project margins to the extent that we are unable to pass such cost increases along to our customers. In addition, there is uncertainty to what effect, if any, trade tariffs will have on inflation in future periods. Such market and economic volatility and/or uncertainty can also affect our customers’ investment decisions and subject us to project cancellations, deferrals or unexpected changes in the timing, type and scope of project work. Market prices for goods can also be affected by supply chain disruptions, which in the past have negatively affected our operations, as discussed in Item 1. “Business,” under “Suppliers, Materials and Working Capital.”
While inflationary factors have not had a material impact on our business, results of operations and/or financial condition, we closely monitor such factors, and any potential effects they may have on our business operations. While the impact of these factors cannot be fully eliminated, we take proactive steps to mitigate their effects; however, inflationary pressures could adversely affect our business operations in the future.
Recently Issued Accounting Pronouncements
See Note 1 - Business, Basis of Presentation and Significant Accounting Policies in the notes to the audited consolidated financial statements, which is incorporated by reference.
