MasTec (NYSE:MTZ) Exceeds Q2 Expectations, Full-Year Sales Guidance is Optimistic

Infrastructure construction company MasTec (NYSE:MTZ) announced better-than-expected revenue in Q2 CY2025, with sales up 19.7% year on year to $3.54 billion. On top of that, next quarter’s revenue guidance ($3.9 billion at the midpoint) was surprisingly good and 5.5% above what analysts were expecting. Its non-GAAP profit of $1.49 per share was 6.4% above analysts’ consensus estimates.

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"We are pleased that second quarter financial performance exceeded guidance with respect to both revenue and earnings growth as MasTec continues to take advantage of an exceptionally strong demand climate and execute cleanly against this opportunity," said Jose Mas, MasTec's Chief Executive Officer.

Company Overview

Involved in the 1996 Olympic Games MasTec (NYSE:MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, MasTec’s sales grew at an exceptional 14.2% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. MasTec’s annualized revenue growth of 9% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

MasTec also reports its backlog, or the value of its outstanding orders that have not yet been executed or delivered. MasTec’s backlog reached $16.5 billion in the latest quarter and averaged 9% year-on-year growth over the last two years. Because this number is in line with its revenue growth, we can see the company effectively balanced its new order intake and fulfillment processes.

This quarter, MasTec reported year-on-year revenue growth of 19.7%, and its $3.54 billion of revenue exceeded Wall Street’s estimates by 4.2%. Company management is currently guiding for a 19.9% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 9.5% over the next 12 months, similar to its two-year rate. This projection is particularly noteworthy for a company of its scale and suggests the market is baking in success for its products and services.

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Operating Margin

MasTec was profitable over the last five years but held back by its large cost base. Its average operating margin of 3% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Looking at the trend in its profitability, MasTec’s operating margin decreased by 3.7 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. MasTec’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, MasTec generated an operating margin profit margin of 3.4%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

MasTec’s EPS grew at a weak 2.1% compounded annual growth rate over the last five years, lower than its 14.2% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

Diving into the nuances of MasTec’s earnings can give us a better understanding of its performance. As we mentioned earlier, MasTec’s operating margin was flat this quarter but declined by 3.7 percentage points over the last five years. Its share count also grew by 7.9%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For MasTec, its two-year annual EPS growth of 36.5% was higher than its five-year trend. This acceleration made it one of the faster-growing industrials companies in recent history.

In Q2, MasTec reported adjusted EPS at $1.49, up from $0.96 in the same quarter last year. This print beat analysts’ estimates by 6.4%. Over the next 12 months, Wall Street expects MasTec’s full-year EPS of $5.07 to grow 28.9%.

Key Takeaways from MasTec’s Q2 Results

We were impressed by how significantly MasTec blew past analysts’ revenue and EPS expectations this quarter. We were also glad it raised its full-year revenue and EPS guidance. On the other hand, its full-year EBITDA guidance missed. Overall, we think this was a decent quarter with some key metrics above expectations. The market seemed to be hoping for more, and the stock traded down 3.8% to $182 immediately following the results.

Is MasTec an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.