Welcome to the Primoris Services Corporation first quarter 2026 earnings conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Blake Holcomb, Vice President of Investor Relations. Please go ahead. Good morning. Welcome to the Primoris first quarter 2026 earnings conference call. Joining me today with prepared comments are Koti Vadlamudi, President and Chief Executive Officer, and Ken Dodgen, Chief Financial Officer. Before we begin, I would like to make everyone aware of certain language contained in our Safe Harbor statement. The company cautions that certain statements made during this call are forward-looking and are subject to various risks and uncertainties. Actual results may differ materially from our projections and expectations. These risks and uncertainties are discussed in our reports filed with the SEC. Our forward-looking statements represent our outlook only as of today, May 6th, 2026. We disclaim any obligation to update these statements except as may be required by law. In addition, during this conference call, we'll make reference to certain non-GAAP financial measures. A reconciliation of these non-GAAP financial measures are available on the investor section of our website and in our first quarter 2026 earnings press release, which was issued yesterday. I would now like to turn the call over to Koti Vadlamudi. Thank you, Blake. Good morning, and thank you for joining us today to discuss our first quarter 2026 financial and operational results. Our first quarter results reflected the impact of a small number of solar projects that experienced cost pressures, resulting in lower reported gross profit and margins for the period. These impacts were driven by execution-related factors, including specific labor issues, project redesigns, adjustments to sequencing, and weather-related disruptions. The majority of the impacted projects were subsequent to the project discussed in our Q4 earnings call, which experienced cost overruns driven by unforeseen underground conditions. Through our review, we identified two primary drivers behind these challenges: pre-construction planning and the complexity associated with new geographic labor markets. The rapid pace of growth in the solar market placed increased demands on our organization, and in a limited number of cases, this resulted in gaps during the early planning, estimating, and construction phases. Importantly, since these contracts were executed in the second half of 2024, we have taken decisive actions to address these areas. We made targeted leadership changes and added experienced talent to strengthen our pre-construction estimating and project management functions. In addition, we have adjusted our market expansion approach and have not pursued new work in the geographies where first-time entry contributed to these outcomes. We are confident these actions position us well to mitigate similar risks on projects booked in 2025 and beyond. All of the impacted projects are progressing toward completion and are expected to be substantially complete in 2026, with several concluding within the next month and the final project scheduled for completion in the fourth quarter of 2026. In addition to the margin impacts associated with these projects, we have also seen the timing of new project bookings and starts shift to the right. As a result, we now expect certain bookings originally anticipated in the second quarter to move into the third quarter, and revenue from projects booked late in 2025 to be recognized later than previously forecasted. Based on these timing dynamics, we now expect renewables revenue to be approximately $2.3 billion for 2026. Despite the challenges associated with this limited number of projects and the timing shift in new project starts, we remain very optimistic about the solar market outlook. We continue to see meaningful opportunities ahead this year and beyond to build backlog, and we are confident in our ability to put these issues behind us and return to our strong, consistent track record of delivering profitable projects supported by our industry-leading safety and quality performance. I'll now provide additional comments on our segment performance for the quarter. Starting with the Utility segment, we had a strong year-over-year top-line growth and solid operational performance, leading to improved margins in the quarter. The first quarter is typically a seasonal low point in utilities, so we would expect to see further revenue and margin expansion as activity accelerates in the second quarter. In gas operations, revenue was up double digits, supported by new awards in the Southeast and higher design build volumes in the Midwest. Gross profit was also up, while margins were slightly lower due to a difference in project mix in the 1st quarter of 2026 compared to last year. In Communications, revenues were mostly flat compared to the prior year, but profitability meaningfully improved, driven by improved productivity and a reduction in the indirect labor costs. Communications continues to see increased opportunities in fiber associated with data center builds out, and we are exploring new opportunities for splicing and fiber work within the facilities, which would further expand our addressable market. We do anticipate lower volumes in fiber to the home programs beginning in the second quarter as we transition from legacy programs toward BEAD-related build-outs in certain markets. Power delivery continued its strong execution on increased activity with revenue and margins growing double digits. We are seeing meaningful volume increases in Texas and the Southeast, particularly in the transmission and substation work, which is generally accretive to margins in the business. To support this growth, we remain focused on attracting, developing, and retaining the skilled talent we need while maintaining the highest standards of safety and quality. The labor market is competitive but our strong market position, culture, and robust backlog continue to be an asset in attracting and retaining talent. Turning to the Energy segment, despite the challenges outlined in renewables, the rest of the segment delivered solid performance with increased gross profit year-over-year. Industrial margins improved meaningfully, driven by higher natural gas generation activity. Looking ahead, we expect a significant increase in project awards across both natural gas generation and solar in the coming quarters. Most of these projects are in limited notice to proceed status. We anticipate final awards beginning in the second quarter and accelerating further in Q3. The funnel of opportunities continues to expand. These upcoming awards will help soften the impact of the troubled projects in 2026 and set us up for strong growth in 2027. Pipeline services also had a solid start to the year, with revenue and gross profit up more than 20%, indicating that we are on track to emerge from the cyclical trough we experienced in 2025. We are still expecting growth this year, with new awards beginning to materialize in the coming quarters. That said, as we have previously alluded, the more substantial revenue and margin growth opportunity is likely to come in 2027 and 2028 as the market strengthens and our backlog conversion ramps up. We successfully completed the acquisition of PayneCrest on May first, in line with our expectations. As previously announced, PayneCrest is a St. Louis-based union electrical contractor that provides design, construction, and service solutions to a blue-chip customer base. Their customers span a diverse set of end markets, including data centers, industrial, power and renewables, and commercial. Approximately 40% of revenue is generated from data centers, with another 40%+ percent tied to industrial, power, and renewables infrastructure. We believe this well-balanced mix of end markets and customers enhances opportunities for cross-selling across our platform and expands the breadth of services Primoris can deliver in these growing markets. While the majority of PayneCrest's work is performed within a 500-mile radius of St. Louis headquarters, the company has successfully executed projects in more than 25 states, providing flexibility to expand geographically as opportunities arise. With the transaction closing within our anticipated timeframe, our expectations for revenue and earnings contribution remain unchanged. That said, we see meaningful upside potential should additional scope with a large hyperscaler customer be finalized in the coming months. We are excited to welcome the PayneCrest team to Primoris and see significant long-term growth potential for this business as part of our organization. In summary, we remain optimistic about the opportunities ahead, despite the unexpected renewables execution challenges that impacted our first quarter results. I want to emphasize that the majority of our portfolio remains very healthy, and we believe the underlying fundamentals of our business are strong. As projects continue to ramp and near-term awards are finalized, we would expect to see improvement across revenue, margins, and backlog as we progress through 2026. Now I'll turn it over to Ken to discuss our financial results. Thanks, Koti. Good morning, everyone. Revenue for the first quarter was $1.6 billion, a decrease of $88.2 million or 5.4% from the prior year. This was primarily driven by lower revenue in the Energy segment, partially offset by solid growth in the Utility segment. The Energy segment was down $152.9 million or 13.8% from the prior year, primarily driven by the timing of renewables projects, including slower than anticipated start of new projects. This was partially offset by growth in Pipeline revenue. The Utility segment was up nearly $70 million or 12.3%, supported by continued growth in our power delivery and gas operations compared to the prior year. Gross profit for the first quarter was $134.7 million, down $36 million or 21.1% from the prior year. This was due to lower revenue and margins in the Energy segment, partially offset by higher revenue and margins in the Utility segment. Gross margins were 8.6% for the quarter, compared to 10.4% in the prior year. Turning to the segment results, in the Utility segment, gross profit was $62 million, up $10.4 million compared to the prior year. This improvement was driven by higher revenue in power delivery, supported by increased transmission and substation activity, as well as new service program awards for gas utilities. Gross margins in utilities increased to 9.8% from 9.2% in the prior year. Margin expansion was driven by the revenue growth in both power delivery and gas operations, along with improved gross profit across all three business lines within the segment. We expect to see margins increase in Q2 and Q3, driven by normal seasonality and trend towards the midpoint of our target 10%-12% range for the full- year. In the Energy segment, gross profit was $72.7 million for the quarter, a $46.4 million decrease from prior year. This decline was primarily driven by lower gross profit in our Renewables business, stemming from the previously discussed cost overruns and delays on certain projects. This was partially offset by improved performance in our Industrial and Pipeline Services businesses. As a result, gross margin for the segment was 7.6% compared to 10.7% in the prior year. We anticipate Energy margins to begin improving in the second quarter, supported by new project starts in natural gas and renewables, as well as incremental contributions from the PayneCrest acquisition. For the full- year, we expect Energy segment gross margins to be in the high 9%- 10% low range. Turning to SG&A, first quarter expenses were $105.8 million, an increase of $6.3 million compared to the prior year. The increase was driven by higher personnel costs, including increased stock compensation expense. As a percentage of revenue, SG&A was 6.8% compared to 6% in the prior year, largely reflecting the decrease in revenue this quarter. For the full- year, we continue to expect SG&A to be in the mid to high 5% range. Net interest expense for the quarter was $4.6 million, a decrease of $3.2 million from the prior year, driven by lower debt balances. For the full- year, we now expect net interest expense to be $35 million-$38 million, compared to our prior guidance of $23 million-$26 million, reflecting the approximately $400 million increase in the term loan to fund the PayneCrest acquisition. Our effective tax rate was 12.7% for the quarter due to a one-time tax benefit on equity compensation recognized in the quarter. Our second quarter tax rate is expected to be approximately 29%, with a full year effective tax rate around 28%-29%. Moving on to cash flow for Q1, cash used in operations was $122.6 million, representing a year-over-year decline of $188.8 million. The decrease was primarily driven by a reduction in accounts payable as well as lower operating income during the quarter. Looking at the balance sheet, we maintain strong liquidity of $676.5 million at the end of the quarter. In conjunction with the close of the PayneCrest acquisition, we increased our revolver to $750 million, and we expect our net debt to EBITDA ratio to remain just under 1.5x. This positions us with a strong and flexible balance sheet, providing capacity to continue investing organically to support growth while also maintaining the flexibility to pursue strategic M&A opportunities that meet our financial and operational objectives. With respect to backlog, we ended the quarter with $11.6 billion in total backlog, compared to $11.9 billion at the end of 2025. The Energy segment backlog decreased $780 million, primarily due to the timing of new natural gas generation, pipeline, and solar awards, which we expected to be softer in Q1 after a strong Q4. As Koti mentioned, we are confident we will see meaningful Energy segment bookings as natural gas generation and solar projects progress from limited notice to proceed to final contract awards this year. Historically, our conversion rate from LNTP to FNTP on these type of projects has been very high, even though the exact timing of contract execution can vary. Based on our current expectations for new award signings in the Energy segment, we anticipate our segment book-to-bill to exceed one times for the full- year 2026, with the majority of those bookings occurring in the second half of the year. Utilities backlog increased by $476 million from year-end, driven by continued growth in MSA work. We are seeing rising customer demand, particularly in power delivery, as utilities accelerate capital programs focused on grid reliability and capacity expansion, driving higher volumes and supporting backlog growth. Closing with guidance, we are updating our full- year outlook to reflect the lower revenue and margin impacts discussed earlier and the inclusion of the PayneCrest acquisition. For the full- year, we expect earnings per fully diluted share to be between $4.05 and $4.25 per share and our adjusted EPS to be between $4.80 and $5.00 per share. Our adjusted EBITDA guidance is $480 million- $500 million for 2026. Our guidance does not include the potential benefits from storm restoration work, which is typically accretive to margins, nor upside to our assumptions for PayneCrest revenue and adjusted EBITDA. We expect to see higher revenue and improving margins beginning in Q2, with continued improvement in the back half of the year as we reach substantial completion of the impacted renewables projects. While our first quarter results were below our expectations, we are encouraged by the strong demand environment across our end markets and by our ability to reestablish revenue growth and margin expansion in the quarters ahead. With that, I'll turn it back over to Koti. Thanks, Ken. Prior to opening the call for questions, I want to recap the key takeaways from the quarter. First, I want to reiterate that we believe we have taken necessary steps to improve performance going forward in solar with enhanced oversight in project planning and execution. We have also refined our geographic expansion approach to avoid locations that could present similar execution risks. We have not executed any new contracts in these geographies since the second half of 2024 and are confident in the leadership and talent additions we have made on the front end of projects, both within our existing backlog and work we expect to book in 2026. Second, we are seeing a number of positive trends that we believe position us well to drive higher revenue and margins over time, including within our solar, battery storage and eBOS businesses. Our Utility segment continues to perform at a very high level and the tailwinds, particularly in power delivery, appear to be strengthening. In addition, we are experiencing the most favorable conditions for natural gas generation in more than a decade, along with an improving market for Pipeline services, both of which we expect to be accretive to company revenue and margins. Finally, we expanded our electrical service platform through the acquisition of PayneCrest, which was well aligned with both our strategic and financial acquisition objectives. The transaction adds accretive revenue and margin growth and exceeds our return thresholds. As Ken noted, we continue to maintain a strong balance sheet, providing significant flexibility and optionality in our capital allocation strategy, including the ability to pursue additional acquisitions that meet our disciplined criteria. Overall, I am confident in our team's ability to remain nimble and capitalize on favorable end market conditions, effectively navigate near-term challenges, and consistently deliver safe, high-quality service to our customers while generating long-term shareholder value. We will now open up the call for your questions. At this time, I would like to remind everyone, in order to ask a question, simply press star then the number one on your telephone keypad. Our first question is from the line of Lee Jagoda with CJS Securities. Please go ahead. Hi. Good morning. Good morning. I guess just starting with the project issues. I guess versus prior guidance, if we take out PayneCrest, it's about a $110 million EBITDA reduction at the midpoint. Can you sort of put that $110 million into various buckets and bridge the gap for us? Then any help we can get on in terms of how we should think about the cadence of the year, you know, particularly in Q2. Yeah, Lee, the $110 million, it's kind of in three buckets if you think about it. We talked about the revenue push out and the low revenue in renewables. That's about $400 million for the year. At kind of our normal gross margins, that's about $45 million, give or take. The cost overruns on the jobs in Q1 is about $35 million-$40 million of it. There's about another $25 million or so that will just be lower margins as we finish out the jobs over the course of Q2, predominantly Q2 and Q3. There's 1 job that will linger into Q4, but that's about it. Those are really the three buckets. I think, as you can imagine, you know, these jobs will still have a margin effect on our Q2 and then less so in Q3. Q2 is gonna be kind of a recovery quarter for us with respect to renewables. Q3 will be kind of gravitating back toward normal and ideally by Q4, we're back in that, you know, 10%-12% range for renewables. Got it. Just one follow-up. Just in terms of the renewable revenue forecast, it looks like the new forecast is down about $700 million year-over-year and versus our prior expectation of around flat. Can you give us a little more detail around what's causing the magnitude of the decline and kind of talk to what renewables backlog is today? 'Cause my assumption would have been, if you have the backlog, then why wouldn't you be able to perform the work? Look, $300 million-$400 million is the pull forward of that one project that we talked about all last year. One project that was supposed to be in 2026 and got pulled forward to 2025. The balance of it, frankly, is mostly just continued ripple effects from all the disruption last year. As we talked with our clients last year, you know, we were under the impression from them that it would mostly be resolved by the end of 2025. Unfortunately, you know, clarification on what's qualified for the tax credits, the need to re-engineer projects, a second and a third time in light of safe harboring of certain panels, just involved our clients taking more time and having to delay the start of certain projects. The good news is the funnel is as strong as ever, and we have a large number of projects across renewables and energy where we've been verbally awarded and should sign in the next 2-3 quarters. Koti, I don't know if you want to add anything on that. I'll just add, just on those verbal awards. We've got verbal awards of $1.1 billion and second half of this year, another $2.8 billion that we'll sign. You know, the end market in renewables is still very strong for us, and have optimism for growth going forward. All right. Your next question is from the line of Adam Thalhimer with Thompson Davis. Please go ahead. Hey, good morning, guys. Hoping you can update us. You mentioned power delivery a few times in the script. Just kind of bring all that together and talk about growth rates and margins in that segment. I'll just, you know, talk about the end market. We've had articulated in our growth strategy before that we felt strong secular tailwinds in power delivery, specifically around transmission and substations. We're seeing some anchor clients, these are customers that do capital planning on a longer cycle. I would say what you're seeing in the MSA backlog improvement is a reflection of these customers' CapEx. I'll let Ken talk to the margins. Look, the growth cadence I think is still similar to what we've seen in the past. We had a good Q1 that's reflecting that growth cadence as well as just some good weather in the quarter. The margins are, you know, should be in line with what we've expected. With some storm work, we could even, you know, end up in the upper half of our 10%-12% range for the year. Got it. Koti, second one for me would be, just a question on PayneCrest and how you might want to change their mix over time. I think you said something about a potential hyperscaler opportunity there. Thanks for the question, Adam. First, we're excited about welcoming PayneCrest to the Primoris family. Often the talking points are about the data center exposure, which we're certainly excited about how they can bring their expertise inside the facility. A great opportunity for us to expand. They also have their industrial facility exposure in their market, and the skill sets are fungible. We're really excited about their opportunity to grow with a particular hyperscale client that they've cultivated over the last few years. There are additional opportunities and line of sight to some major program spends that are well within their wheelhouse and geography. Excited about the opportunity for growth there. All right. Look forward to hearing about those next quarter. Thanks. Our next question is from the line of Sean Milligan with Needham & Company. Please go ahead. Hey, good morning. Thank you for taking the question. I think you walked through on the renewable side, the kind of pipeline that you're seeing. I was hoping you could do that on the gas side too, because I think in gas power previously, you talked about pretty aggressive growth this year, like maybe 50% this year and kind of the same thing next year, or doubling the business to next year. Any commentary on the pipeline that you have had outstanding, and like kind of conversion rates there would be helpful. Yeah. Thanks for the question. Yeah, we still have a deep conviction on the end market with gas power generation. Last quarter, I think we articulated the funnel. That overall funnel is actually up, we're talking about verbal awards because we see near-term visibility to adding to backlog. I wanted to speak specifically in this end market that we have nearly $800 million in verbal awards that are imminent to be added to backlog. In 2026, that funnel is an additional $3 billion that we're pursuing in 2026. If I don't restrict that to 2026, if I take it in perpetuity, that funnel is nearly over $7 billion, up from $6 billion that we talked about last quarter. Really strong end market for us and excited about the opportunity to grow. We did see some project starts slip to the right. They haven't been canceled, just delays, and that's due to clients you know, doing more due diligence on cost, and addressing investment decisions. That's really helpful. I wanted to circle back on the renewables piece. I think the question earlier was the expectation was kind of $3 billion in revenue this year, now it's $2.3 billion. I understand the pushouts, but the pull forward from last year, like, was the expectation previously that you were gonna, you know, have new awards to fill that pull forward? I'm just trying to understand the gap with the pull forward from last year not having that, you know, like the $700 million variance in the Renewables business. I think Yeah, good question. I think we, you know, with the pull forwards last year, we had expected this year to be sort of flattish, given that sort of move to the left of all those project accelerations. What we're seeing now is some project delays slip to the right. We had some projects that we thought were gonna be awarded that just moved that straddle over the quarter. I would say, we expected going into the year to be flat. Now what we see is it's gonna be a little bit down based on portfolio shifting to the right. Overall, that market, though, I want to emphasize is the funnel we see, you know, 26 and beyond right now is over $15 billion. Still a very strong end market for us to attack. Okay. Just like confidence in the guide, I mean, you've obviously guided renewables a lot lower this quarter. I'm just kinda trying to understand the audit process there with the projects you had and then, like, maybe things that could go right against that guide. Like, if it's picking up more Storage business now that you have some capacity or something with that, you know, that aspect that could go right versus your guide. I think we feel confident. We've risk assessed the portfolio. We have identified the quantum for the projects that are in this sort of distressed state. We feel confident going forward. There are always risks. I'll mention the projects last quarter, the client program that we identified the subsurface conditions with. Those are now behind us. We achieved mechanical completion or just doing some punch list items. On the ones going forward, many of them reach substantial completion in the next few weeks, and the balance one project finishing at the end of this calendar year. We feel confident we've done appropriate risk assessment of the portfolio and really excited about the opportunity of winning further backlog. I'll reiterate again the changes we made in terms of preconstruction planning, project management, project controls, and additionally being better about discrimination around the geographies where we pursue work all give us confidence in achieving our targets, forecast targets. Our next question's from the line of Julien Dumoulin-Smith with Jefferies. Please go ahead. Excellent. Good morning, team. Thank you guys for the time. I appreciate it. What a morning. A couple things to follow- up on what's been responded here. First, timing-wise, I mean, look, just to come back to the $1.1 billion of verbal awards and the $2.8 that you said you'll sign. When you say it's getting pushed to the right, how would you set expectations for what you're seeing in kind of an FY 2027 context? I mean, is this kind of a shift out with some of the $700 million going to such that you'll get kind of an unusual jump in 2027? How would you just set expectations timeline-wise for some of those awards to be recognized in 2027, 2028? Then at the same time, if I can come back to the question, the core $110 million and the way that you broke down the impacts from the renewal business. Can you speak a little bit to what you've done to mitigate the impacts and speak a little bit more to what those impacts are? Is there a consistency with a single counterparty or geography that really stands out? If you can give us a little bit more details about just where these issues manifested themselves. Why, you know, why now? Maybe said differently. Yeah, thanks for the question, Julien. I'll take and I'll let Ken additionally weigh in. I think on the renewables portfolio overall is a, you know, go forward some projects that have slipped to the right. What gives us confidence is that, you know, I talked about these verbal awards of $1.1 billion. We're still working with our customers, and in many cases helping them with the cost estimates and the preconstruction planning, so have really good visibility to near-term portfolio. I think it sets us up very well for second half of 2026 and into 2027. I would also talk specifically about an emerging growth trend in the BESS portfolio. Within the Renewable segment, our BESS offering, this time last year, if you took a megawatt hours, our funnel was about 18 MW hours. That now is more than quadruple. We see a business there with an aptitude to more than double going forward. Gives us renewed confidence, you know, despite the slip to the right. It does tee us up very well for back half of 2026 and into 2027. On the question of the projects and the gap in the delivery, all of these were projects that were bid in 2024. I would say the common themes here were under appreciation of risk. We previously talked about the geographies. We have places where we're more familiar with the labor market, and it gives us indication of productivity issues. We have geographies where we have a better appreciation for permitting, whether it's soil disturbance or storm water runoff protection. These are things we, you know, probably in 20/20 hindsight went to areas where, knowing what we know now, we'll use better discrimination going forward. I think the additions in project leadership with respect to preconstruction planning, project management, project controls will inform risk and risk mitigation going forward. We feel confident that these measures will remediate the issues that plague these particular basket of projects. Got it. Just if I can flip over to the gas side of the equation, the gas gen. I mean, how are you thinking about coming back later this year, presumably, in terms of providing, like, a more holistic update and a multi-year view? Again, I get that the world has changed a little bit for you guys, but how do you think about the prospects of providing that side of the equation? Specifically, what do you see the ramp on the gas generation side looking like through the decade here? I mean, some of your peers are providing multi-year views this year on what they see as possible. Obviously, with the renewable roll-off, as it's abundantly clear, some of your peers are pivoting rapidly in the gas gen space and seeing an uptick into the end of the decade. I'm just curious how you guys and when you guys intend to come back with a little transparency around that and what that whole thing maybe might look like. Yeah, yeah, sure, you bet. Just so more broadly speaking, we're on a cadence of doing a three-year strategy. We're refreshing that strategy as we speak now, and look forward to announcing Investor Day, where we'll look about our targets for 2027 through 2029. The gas power generation portfolio and our experience in this is an exciting part of the portfolio and very dynamic. Some of the programs that we're currently talking of with customers are quite large. Have a CEO top-to-top next week with a customer that's looking at a combined cycle plant. Potentially these are, you know, multi-billion dollar investments. The clients really are looking forward to a turnkey delivery to de-risk the execution complexities. Yeah, we'll look forward to Investor Day and providing more color around all our end markets, including the gas power gen portfolio. Okay. All right. Fair enough. Thanks, guys. Your next question's from the line of Sangita Jain with KeyBanc Capital Markets. Please go ahead. Great. Thank you so much. Koti, can I ask you a question on how we should reconcile the fact that you stopped taking new backlog in these challenged geographies in 2024 with the issues that you're facing in 2026, and whether those issues will be ring-fenced in 2026 and you can return to your $3 billion+ growth cadence in 2027? I'm just trying to figure out how contained this issue is versus whether you're structurally abandoning new geographies that will slow the renewables base going forward. Good question, Sangita. I think overall market, what we see, and I described that sort of total funnel unrated or undiscounted of $15 billion, that gives us confidence that we don't need to chase revenue in areas where we see further risk. I would also emphasize, we do have a lot of discipline about our risk posture. Even if we know a geography, we don't feel like we need to bend our risk posture to go after and chase revenue for the sake of growing. Just given the strength of the end market, our positive discrimination on where we go, we don't think is gonna impact our ability to hold and grow on a go-forward basis. Got it. On the margin guidance for this year, I appreciate all the color on the revenue being $2.3 billion for renewables. How comfortable do you feel about your margin guidance? It's come down a little bit, not a whole lot, given that you're still working through these challenged projects through the rest of this year. Yeah, Ken, do you wanna take that one? Sangita, I think the margin guidance reflects a couple of different things. First of all, the fact that as a percentage of energy, renewables is now smaller, partially because renewables is, has shrunk a little bit, but also because the rest of our energy segment is growing. So it will be a meaningful impact to renewables margins, but not as impactful to the rest of this segment. In fact, I expect the rest of the entire segment as a whole in Q2 to probably be in the upper single= digits as we continue to work off, work this off. In terms of confidence, I think it goes back to what Koti talked about a couple of questions ago, which is, you know, we've worked through these. We have, you know, risked them. We've tried to evaluate them as much as possible, and bake in as much incremental cost as we believe we're going to incur. Lastly, I think it's also the fact that in a couple of cases, we've completed the jobs. We've got. The rest of them will be completed for the most part within the next 2-3 months. Got it. Appreciate it. Thank you. Your next question is from the line of Steven Fisher with UBS. Please go ahead. Thanks. Good morning. Just to follow- up on Sangita's first question there. On the renewables side, I'm not sure if I heard you say how many projects and geographies are actually involved here. Curious kind of what percent of the solar portfolio was represented there? Then, I guess how you're thinking about the balance there of, you know, now you have experience in these geographies. Does it make sense to, you know, take those lessons learned and do it differently and more successfully in those geographies as we've seen some other contractors do? Or is there something specific to these geographies that just, you know, the risk has to go onto the contractors? Yeah. Thanks for the question, Steven. I think I'll just go backwards in your questions. I think on the geography question, because of the strength of the overall market and our offering, we can be pretty judicious in terms of risk assessment and overall risk posture to say where we're going to play. You know, in any market, should we be brought, should a core client bring us to an area, we will have those learnings to inform, should we decide to go no-go and go into an area. I think we'll have best practices that will inform, better execution going forward. Overall because of the size of the market and our ability to grow in areas, where we better appreciate risk, I don't think this is, this is an area where it's gonna detract from our ability to grow going forward. Then, you know, overall in the renewable, I said we, you know, risk assess the portfolio overall. It's a small minority of the total portfolio of renewables. Most of the projects that had this margin compression are nearing substantial completion in the next few weeks, and one in fourth quarter at the end of this calendar year. We feel pretty confident going forward that we've addressed the issues on these projects that were bid in 2024. Okay. I wanna just follow- up and stay with this topic of risk management. I'm curious how you see the balance of risk versus reward in utilities versus energy. Because, you know, we've talked a lot about transmission and power delivery on this call and the opportunities there, but I think what might come with that is, you know, some new relationships, some new territories, new types of projects. I guess I'm curious how you see the risk versus reward in utilities and power delivery versus what you see in the energy side of the business, and how are you approaching that so that we can make sure we have a very stringent process at the front end of the power delivery cycle here going forward? Thank you. Yeah, great question. I'll just speak to it. From a leadership standpoint, we feel very good both internally and with our customers in the Utility segment when we talk about the transmission and substation scope of work with power delivery. We have some anchor clients that have, you know, long-term relationships. They've been set with it. We had seats at the table with them in terms of resource planning and helping them develop the execution model going forward. A lot of planning and time spent with customers that were very intimate with their CapEx going forward. We do also have some or additional organic growth opportunities with new customers that are really frankly looking to Primoris because they're looking at their overall supply chain and need appropriate capacity. Given the demand environment, we can be very careful and judicious about our risk posture overall, and we don't need to sort of grow beyond our skis. you know, look at the opportunity and make sure we're taking appropriate risk in those portfolios. The other thing I'll mention is training and development of people is a key area for us. we're looking at programs in terms of talent development and giving people the appropriate skills in their, you know, personal development, so we can execute these appropriately. The other thing I'll mention is that when we do lessons learned in project execution, those are shared across the business segments. When one group, like in renewables, saw that very steep climb in growth, they were able to share their execution challenges with both our utility segment leaders as well as our gas power generation, as we see, their growth. Lots of good learnings there for us to take forward. Thanks, Koti. Your next question is from the line of Philip Shen with Roth Capital. Please go ahead. Hey, guys. Thanks for taking my questions. Another follow-up on renewables. I know you've said a lot here, but was wondering if you could share the root cause for the delays in the bookings. You've talked a lot about, you know, why the Q1 performance was weak, but the bookings were also light and the reason why you said was due to project delays. Was wondering if you could give us some of the rationale for the delays. Specifically, you know, is the tax equity pause, did that impact things or the permitting freeze? Would you expect those delays, you know, to sustain? I know you talked about book-to-bill being greater than 1 for the balance of the year for renewables, but could we see book-to-bill less than 1 in Q2, for example? Thanks. Yeah, I'll start with that. Ken actually talked a little bit about this. First I'll say Q1, we always had expected to be a softer booking quarter for renewables. The project delays are probably, you know, two buckets. One is certainty around the tax credits around 48E and customers looking at their scope on how they could, you know, build into their plan to maximize the credits under that act. Then the second area is around just having more clarity in definition of engineering, and we actually think that's a good thing. I think maturing the design solution so there's a little bit more predictability, one, in the cost and two, in the schedule. Those are probably the two main things that drove pushes to the right in the bookings. Got it. Thank you, Koti. On that first point, certainty around the 48E that is tied to the tax equity pause, if that's fair. Is that right? That's correct. Yeah. Okay. Great. Thanks. For my follow-up here, I'd like to, you know, on the same topic of renewables, check in with you on these challenged projects that you guys have had. You know, you guys experienced some of the pain as it relates to margins and so forth. Was wondering if you could share some color on the customer side of these projects. You know, was it also painful for those customers? Did you guys absorb all the pain? Did you share that pain with them? Would you expect repeat business, for example, with these customers? How does that, you know, this kind of situation ultimately impact your ability to win new jobs? Thanks. Yeah, thanks for the question. The answer is the project outcomes are very good for the customers. They're getting, you know, excellent. facilities, we've met all our obligations on the scope. In some cases, we did have some entitlement, unfortunately, even with that, we, you know, we don't meet our financial targets on the projects despite having vested contingencies. On the client relationship side, very, very positive. Most of the work we do is repeat business with customers. Thankfully, there is strong credibility in the quality of the execution of the work, notwithstanding, we underappreciated the risk in the quantum of effort that was required to do the projects. Great. Thanks for the color. I'll pass it on. Our next question is from the line of Jerry Revich with Wells Fargo. Please go ahead. Yes, hi. Good morning, everyone. Let me just ask, on the power part of the business, can you talk about what the multi-year pipeline could look like? Koti, appreciate the comments that you've mentioned on the funnel over the course of this year. You know, we're seeing lead times for equipment running out into 2028 and 2029. I'm wondering if you could just talk about what your pipeline for business could look like beyond the time period that you mentioned. At which point, do you think we could be talking about your lead times extending into that time horizon? Yeah, I mean, when you say power, you're talking about the gas power generation? Yes, that's right. As I said before, I'll reiterate again, we, you know, have verbal awards of nearly $800 million in that end market. Really feel confident with that and look forward to that adding to backlog. As I mentioned before, if I unrestrict the funnel in terms of years, we have visibility line of sight to $7.1 billion of identified opportunities. This is beyond 2026. Feel really good about the overall market. With respect to lead times, one of the interesting things, because these investment decisions for these clients are so large, often we will get limited notices to proceed so that we're able to start advancing, ordering of equipment, site work. Often, prior to the client making a full investment decision, they'll keep augmenting our scope and moving it along. In some cases, even when the program is super mature, we'll finally get the FNTP order for the full amount. There is a reasonable amount of we're starting to realize revenue almost on the, you know, on the heels of the verbal and the limited notice to proceed. It's the cadence of flow here is the clients don't get a lot of time once they feel like the program is gonna go, they wanna mobilize resources quickly. Okay. Can we just shift gears to talk about the renewables projects? Just to maybe put a finer point on it, how many projects are we talking about that have had negative adjustments? How many of them are in a loss position? Have there been to the two projects we spoke about, geology issues last quarter, have those projects had additional costs? Koti, you mentioned you applied a rigorous framework to evaluate the whole portfolio. What number of projects are there in those same markets that are performing well for now, but you're monitoring because they are in the same markets? I'll just address it. It's six projects in the total portfolio that are in this margin compression scenario. Three will complete in the next few weeks, One in the next quarter, and one in Q4. We feel pretty good about risk assessment of the overall portfolio, our ability to, you know, hit those target dates. I will say, you know, some of the conditions around risk and understanding now going forward are weather-related. We could see some productivity impacts overall. You know, we feel we've appropriately vested the right amount of quantum of effort in the estimates to complete. Okay. Sorry, what was the revenue contribution of these projects in 2025, if you're willing to share that? Yeah, we're not gonna share that information at this time. Okay. Thank you. Our next question is from the line of Mark Strouse with JPMorgan. Please go ahead. Hey, good morning. This is Michael Fairbanks on for Marc. We're wondering if you could talk about maybe which geographies are causing the issues in these projects, and then maybe some more detail on what really makes them different from the other geographies that you've historically operated in. Also, are these problem projects with customers that you've worked with before or are these relatively newer customers? Thanks. We're not gonna call out the specific geographies. I think earlier question about would we take the learnings and apply those to those markets going forward. Rather than box us in, I think we're going to record those learnings going forward so that we can apply them should we have an interest with a core client going there. Predominantly, I'd say the issues are around weather impacts. In some cases, we mobilized a workforce, then had to demob and remob. Most of the client contracts have conditions around schedule milestones. When we remob if we're having productivity impacts due to weather, we're adding field labor, in some cases, doing work out of sequence, sort of exacerbates and creates more effort hours in the field, more dollars, and sort of one thing piles upon the other. I think going forward, we'll be much more conscientious. In some jurisdictions, the environmental requirements for ground disturbance, which were exacerbated by lots of rain, also informed the productivity and the labor impacts and the cost overruns. Rather than boxing in and precluding us from or having to defend why we're, like, going to geography down the road, I think we're just gonna record those as lessons learned and be much more disciplined in getting our growth from areas where we're more familiar with both the labor and the environment. Got it. Thank you. Maybe as a follow-up, are you contemplating any changes to kind of contract structures or risk sharing with customers in renewables going forward? Or is this more of a disciplined project and geography selection approach? More of the latter. But I will say we remained very disciplined in terms of what work we take on and the risk posture, overall and that balance. There was a, just anecdotally, a project that we did. We were probably the preferred supplier, couldn't come to terms around the risk, and this quarter decided to walk away from that one You know. We'll be very, very disciplined. Overall, I think the market allows us to be so based on our solution offering. Got it. Thanks. Your next question is from the line of Maheep Mandloi with Mizuho. Please go ahead. Hey, thanks for the question. On the renewable projects, curious if there are any margin impacts for projects for next year or 2028 based on these learnings, for you to change this, you have to go back and make on those bids or those projects then? Did you say 2028? What was the question again? yeah, for next year or for projects which are booked, post 2024 and are delivering in 2027, 2028. No, most of these are projects that were already bid and awarded, from 2024, so nothing in the future. Good. Appreciate it. Thanks. Our next question is from the line of Manish Somaiya with Cantor Fitzgerald. Please go ahead. Good morning. Koti, I was focused on the Utility segment where you did do quite well. Margins were at 9.8%. Looking at your guidance, 10%-12% gross margin for the year, I'm just trying to reconcile how do we get to that upside? You know, what's the pathway to getting us to the high end of that guidance in utilities? Yeah, I'll answer it, and then I'll let Ken additionally respond. You know, I think, Yeah, I'm glad to take that question because sometimes I think the overall portfolio is overshadowed, shadowed by some of these challenges we had in renewables. The power delivery portfolio within utilities gives us a lot of optimism. You see the margin improvement. Some of that is on work that we're executing with current customers and seeing opportunities to be more efficient in project execution and applying those going forward. We also have new opportunities with new customers, and we're able to, based on market demand, price and execution effects allows us to deliver, you know, that higher quality margin going forward. I think that also manifests itself, you know, I talk about the client relationships. The, yeah, MSA backlog went up nicely quarter-over-quarter in specifically utilities. It does give us some, you know, positive tailwinds going forward, again, enhanced by some of the improvements we've made in project. Ken, anything else to add on? Yeah. Look, Somaiya, the only other thing I would add to what Koti said is, you know, there's a lot of dynamics here going on. You know, Q1 and Q4 traditionally kind of shoulder quarters for us. The fact that we were able to get out of the gate a little bit earlier in Q1 and do as well as we did, I think is helpful to the upside. Our percentage of project work, which we've been talking about the past couple of years, has started to gain some traction. That's to the extent that continues throughout the rest of the year, that can be helpful too. Lastly, I mentioned this earlier, you know, storm work and what type of storm work we get during the course of the year. Just as a follow-up, Ken, on the operating cash flow, which was negative in Q1, how should we think about the cash conversion for the balance of 2026? For Koti, I believe there's still a $150 million share auth, buyback authorization. How should we think about that vis-a-vis deleveraging, further M&A, if you can just help us understand that? Yeah. Yeah. Well, Yeah. Well, maybe I'll take that. Oh, go ahead, Ken. Sorry. Yeah, I was just gonna comment on the first part, the cash flows. Yeah, look, the cash flows this quarter were pretty heavily impacted just by the timing of payables. When we kind of did our check run, that was a $100 million swing this quarter, for example. I think that's just noise in the grand scheme of things that will probably turn some time in Q2 or Q3, depending on the timing of the end of the month relative to when we run an AP run. The last part I think is driven by upfront mobilization payments from customers. Our BIE/contract liabilities were down this quarter sequentially because of the cadence of new contract signings. As all those verbals that Koti was talking about earlier start turning into contract signings and mobilization payments over the course of the balance of the year, that will also drive cash. Long way of answering your question, which is, we're still holding firm on our expectation for operating and free cash flow for the year. The Q1 impacts were, we think just mostly timing, and that's it. Yeah. As far as the capital allocation strategy, it really hasn't changed. We do have authorization for buyback at $150 million. We are making investments organically in the business to capitalize on the secular tailwinds in our end markets. We will remain very disciplined in terms of our leverage ratio. Also look at opportunities that strategically, inorganic opportunities that'll strategically be a catalyst for accelerated growth. We'll evaluate those and be opportunistic based on dynamics in the market. Thank you so much. Your next question is from the line of Adam Bubes with Goldman Sachs. Please go ahead. Hi, good morning. We've seen really strong data center revenue growth and margin expansion from the public electrical and mechanical contractors. Can you just talk about what the backlog and margin trajectory has looked like at PayneCrest? What does backlog growth look like on a year-over-year basis? Just how are you thinking about the growth outlook for that business over the next 12-24 months? Yeah. Well, first, in our existing portfolio, it's been a strong You know, the data center related piece of our portfolio is really more around the enabling infrastructure has been very, very solid. I think we booked over $400 million just in Q1 related to that type of work compared to all of last year that was, you know, something like over $800 million-$850 million. Solid opportunity for us to grow in that market and where we currently play. PayneCrest, of course, gets us inside the facility, and roughly 40% of their portfolio is directed towards hyperscaler data center development opportunities. From a revenue perspective, if you do that percentage, I think it's, that's about $112 million of the portfolio. As far as color going forward, we're building them into our plan. You've seen the CapEx portfolios for hyperscaler customers that have come out within the last three months. It does give us a lot of optimism, as they are a key electrical supplier, for one of those hyperscaler customers. Lots of opportunity for us to see growth and over-deliver on what was baked into our valuation. Great. How does the risk profile on combined cycle and simple cycle gas generation projects compare to your core industrial business? You know, what risk parameters give you comfort in pursuing larger opportunities in those areas? I think, you know, just overall risk assessment and project execution, the fundamentals aren't different. We'll do, you know, rigorous review based on scope and maturity of design. You know, combined cycle opportunities are a little bit more complex and longer delivery in terms of schedule. It's why I think we're seeing more single simple cycle opportunities just based on timeline to market. Overall, from a execution delivery standpoint, we have a resume that includes both. As I mentioned earlier on the call, you know, have one very large opportunity in front of us, with a customer that is, you know, looking for a turnkey delivery. In terms of risk assessment, there's nothing fundamentally different. We tend not to put the turbines on our paper, which is different from some of our customers, so would drive our contract value down. That said, we have very strong relationships in our overall supply chain with those OEMs, and often they're part of our sort of extended business development team because their order book, often, you know, when they get serious with a customer that's gonna buy that equipment, they're trying to pair them up with an EPC, so there's a little bit more predictability in terms of the orders coming to fruition. Thanks so much. At this time, I'd like to turn the call back over to Koti for closing remarks. Thank you. First, I wanted to acknowledge and thank our employees at Primoris that enable us to do the critically needed infrastructure solution services on behalf of our clients. You know, lastly, I wanna close out with, you know, despite these challenges that we had in renewables, I wanna emphasize overall the strong fundamentals in the portfolio. We feel we did a really intentional good job in shaping the portfolio towards these strong secular tailwinds in these end markets. We think that is setting us up for a really good second half and more importantly, 2027 and beyond. Thank you for engaging today and look forward to updates as we go forward. Ladies and gentlemen, that concludes today's call. Thank you for joining. You may now disconnect. The line is now clear. Thank you all so much