Welcome to MasTec's Fourth Quarter 2023 Earnings Conference Call. Initially, broadcast on Friday, March 1st, 2024. Let me remind participants that today's call is being recorded. At this time, I'd like to turn the call over to our host Marc Lewis, MasTec's Vice President of Investor Relations. Marc?

Thanks, Maddie, and good morning, everyone. Welcome to MasTec's Fourth Quarter Call. The following statement is made pursuant to the Safe Harbor for forward-looking statements described in the Private Securities Litigation Reform Act of 1995. In these communications, we may make certain statements that are forward-looking such as statements regarding MasTec's future results, plans, and anticipated trends in the industries where we operate. These forward-looking statements are the company's expectation on the day of initial broadcast of the call and the company does not undertake to update these expectations based on subsequent events or knowledge. Various risks, uncertainties, and assumptions are detailed in our press releases and filings with the SEC. Should one or more of these risks or uncertainties materialize or should any of our underlying assumptions prove incorrect, actual results may differ significantly from results expressed or implied in these communications today. In today's remarks by management, we will be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules. In addition, we may use certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measure can be found in our earnings press release. Please note that today we have two documents, associated with the webcast on the Events and Presentations page of our website at www.mastec.com. There is a companion document with information analytics about the quarter and year just ended and a guidance summary for 2024 to assist you in developing your financial models going forward. Both PDF files are available for download. With us today we have Jose Mas, Our Chief Executive Officer, and Paul DiMarco, EVP and Chief Financial Officer. The format of the call will be opening remarks analysis by Jose, followed by a financial review from Paul. These discussions will be followed by Q&A period. We expect the call to last about 60 minutes. We had a nice quarter and a lot of important things to talk about today. So I am going ahead and turn it over to Jose. Jose?

Thanks, Marc. Good morning, and welcome to MasTec's 2023 fourth quarter and year-end call. Today, I'll be reviewing our fourth quarter and full year results as well as providing my outlook for 2024 and the markets we serve. First, some fourth quarter highlights. Revenue was $3.3 billion by 9% year-over-year increase. Fourth quarter adjusted EBITDA was $231 million and fourth quarter adjusted EPS was $0.66. For the full year, 2023 revenue was $12 billion, a 23% year-over-year increase. 2023 adjusted EBITDA was $860 million, a 10% year-over-year increase. 2023 full year adjusted earnings per share was $1.97, and full year cash flow from operations was $687 million and net debt was reduced by $535 million since the first quarter. In summary, our fourth quarter performance was slightly better than our guidance with strong performance in our pipeline business and strong cash collections across the entire business. While we enjoyed year-over-year growth in both revenue and EBITDA, our performance was significantly below our original expectations. As we discussed in detail on our last call, we had a number of challenges related to the acquisition of IEA coupled with moderated spending by customers in the second half of the year. While we expect some continued pressure in the early part of 2024, I'd like to walk through a number of positive developments that I believe will have a significant impact on our ability to grow both revenue and earnings and get back to our long-term targeted revenue goals. During the fourth quarter, in our Communications segment, we significantly expanded our relationship with our biggest wireless customer AT&T. In addition to the maintenance contract we announced on our third quarter call, AT&T expanded both our scope and geographic territory on our core wireless work. This expansion, coupled with their recent announcement of a…

Thanks, Jose, and good morning, everyone. Before I turn to the financial review, I wanted to provide color on some key developments for 2023, and financial initiatives going forward. Despite the disappointing financial performance and visibility, we provided last year, we made significant progress on key areas of our integration in Power Delivery and Clean Energy. In power delivery, we are deploying our regional operating model, consolidating leadership over various companies in common geographies to drive efficiency and enhanced customer support. In Clean Energy, we are organizing this segment in the market sectors, namely renewables, infrastructure, and industrial. With the various components of our legacy business and IEA integrated to effectively deliver the full breadth of our operating capabilities to our customers. We are now focused on fully deploying consistent tools and processes across each segment to put all our teams in a position to excel. We are confident these strategic changes will enable us to capitalize on the robust long-term demand afforded by our end markets. From a financial perspective, we are keenly focused on capital allocation to ensure we are generating appropriate returns on the capital we deploy. As we look at investments for organic growth, we have enhanced our evaluation of capital expenditure allocations to drive higher utilization of owned equipment and operating profit. Coupled with our ongoing working capital initiatives, we expect to drive higher returns on invested capital and improve our strategic flexibility. Now, I will turn to our 2023 financial review. Fourth quarter revenue was $3.3 billion, in line with our guidance and adjusted EBITDA was $231 million or 7.1%, exceeding guidance by approximately $10 million. Adjusted earnings per share was $0.66, exceeding guidance by $0.22, driven primarily by the adjusted EBITDA beat. Accordingly, annual 2023 results followed suit. Revenue of $12 billion was…

Thank you. [Operator Instructions] We will take our first question from Sangita Jain with KeyBanc.

Hi. Thanks so much for taking my question. Jose and Paul, if I can ask you on your Power Delivery booking, you expressed a lot of optimism on the bookings momentum. Can you share with us how close we may be to some of those translating into backlog? Is it like a first half event or later? And also given that you're working through these large projects, what gives you the confidence in the high-single-digit margins in this segment? Thanks.

Yeah, so a couple of things. I think that on the project side of our Power Delivery business, we're -- we've been really excited for a period of time. We think we've been really close on a number of projects that we haven't won over the last couple of years. We've obviously been doing a lot of integration as we integrated all the acquisitions that we've made and I think our -- where we stand in the market today versus where we were a year or two ago is a very different place and I think customers recognize that and I think customers are excited about giving us an opportunity to work on large projects and I think we're going to be very successful this year on being able to attain that. So I do think that over the coming quarters, hopefully, we'll have at least something to announce and talk about and add to backlog, which I think could have an impact as early as 2024. With that said, for margins for the year, we're basically guiding relatively flat margins on a year-over-year basis. So there's not a big change in the margin profile for 2024 as it was in 2023.

Great and if I can follow up with one on communications, you talked about the AT&T Ericsson contract, can you help us understand what your scope may be on the AT&T's FirstNet program maybe.

So. Our contract with AT&T is what they call it turf contract, right. So in certain geographic areas we have, exclusivity on specific types of work and that isn't really changing. So, whether -- whatever initiatives they'll be doing in the geographies that we've been awarded, we're going to be the ones that perform those services.

Great, thank you so much.

Thank you.

Thank you.

We will take our next question from Brian Brophy with Stifel.

Yeah, good morning. Thanks for taking my question. Been hearing a lot about the ramp and the tax credit transferability market on the Clean Energy side in recent months. Curious what you guys are seeing here. How impactful it is for your customer base and how important is it to the Clean Energy outlook overall. Thanks.

There's no question that the sentiment has been improving, transferability is having significant impact but I think more importantly, what we've done as a company is we really went through every project that we see potential on in terms of stuff that we expect to happen in 2024. I think we significantly de-risked our expectations relative to understanding where every project stands from a financing perspective, from an interconnect perspective and I think that while we talked a lot about this last year is something that, quite frankly, we don't have to hope to talk a lot about this year. There are a number of other projects that could hit quite frankly that we probably underestimated their ability to be performed in '24, but anything that has significant risk to it, we've kind of moved it aside and not counted it for '24, but there's no question that the sentiment is improving, the opportunity to use different methods to finance projects has improved considerably since the latter part of next year and I think as a total industry, we're going to see a significant increase in what comes out in the second half of 2024.

Okay, that's great. And then another one on Power Delivery. Obviously, low-single-digit guidance on the top line, probably a little bit lower than some expected. It sounds like some of it kind of a customer mix issue in Illinois, but just curious what you guys are embedding on the emergency restoration side in 2024 relative to 2023 given the easier comp there. Thanks.

So, we didn't we haven't assumed that it's going to be any better than 2023. 2023 was a really low storm year, it's very difficult to model that. So we have a very -- we have a baseline budget that you got to include something for. So, it's not much different than what '23 was, so I think there's opportunity there. To be clear on the previous part, I mean, Exelon did announce a significant reduction, right. They've announced $1.25 billion reduction over three years in distribution spend. It is a big area for us, so that is what's having the impact where we slightly moderated our revenue target for 2024 in our Power Delivery business.

That's really helpful. Thanks, I'll pass it on.

Thank you.

Thanks, Brian.

We will take our next question from Andy Kaplowitz with Citigroup.

Hey, good morning, everyone.

Good morning, Andy.

Good morning, Andy.

Jose, I just wanted to go back to your comments on Communications for a second. You did see a significant uptick in sequential bookings, as you guys mentioned, you already talked about the higher scope of work with AT&T and Nokia, there's Ericsson also transition later this year, but could you breakdown what you're thinking in terms of core wireless and wireline for 2024, could you tell us how much larger your contract is with AT&T now maybe versus what it was and did you actually see a positive inflection in your core markets, excluding this new work that you have?

Well, when we look at '23 -- let's start with '23, right. What we've said is our wireless business was down versus '22, our wireline business was up double-digits, right. So, we had another strong wireline year. We've talked a lot about this on our third-quarter call. So, that was really unchanged through the balance of the year. As we think about 2024, we expect our Wireline business to be up again, because it's a very strong market. There's changes in cadence as we did see a slowdown in the second half of '23 versus the first half of '23, but again the demand in that business is extremely high. And when you add-on BEAD's funding which will start impacting the business from '25, it's a very positive development. On the wireless side, it's different, right. On the wireless side, I think this particular award coupled with the change that AT&T is doing in their network will have a significant impact on MasTec and today our wireline, wireless company used to be -- we were bigger on wireless, quite frankly today, we're bigger in wireline. So it's about a 60-40 split. This contract will probably get a closer to 50-50 over the course of the next couple of years and it's going to have a meaningful impact to our Wireless business, our Wireless business has the ability to grow probably 30% to 50% from where it was in '23. So, it's a significant award, it has a significant impact on the total revenues for the segment.

Very helpful, Jose, and then kind of a similar question for Clean Energy side. Could you tell us what you're assuming for IEA in '24? Maybe differences between wind, solar, and Infrastructure. Obviously, you've seen there is still a fair amount of noise in the developer world. I think you said you're only assuming sort of what you can tell was already going forward. So how did you sort of discount like the noise that's out there in the developer world, especially in the IEA side for '24?

Yes, so the first, I think the first thing that's really important to kind of focus on is as we looked at '24 even in late '23, right, we're not viewing it as MasTec legacy versus IEA, we've gone to market with one business. So, we've got a MasTec renewables business. We do have different operating groups that might perform the work but in market -- we're in market as MasTec Renewables with one leadership team. And when we think about the industry as a whole, it ends up being very focused on customers, right. Each customer is in a different place. Each customer has different challenges. So, it's really about understanding where every customer sits on a particular project, irrespective of what's happening across the entire marketplace. The entire marketplace, there is definitely some that have more challenges than others. I think it's going to get better for everybody as the year goes on, but we've really focused on those developers, and projects that we think are primed to-be-built in '24 or going to have less issues and that's kind of how we've built our model. Surprisingly, when we think about '24, the growth in wind and solar has been somewhat equal, we're seeing a lot of strength in the wind market, especially on the repowering side. We've had a lot of bookings there. We think that's what we like about that is the predictability of it, those projects have a lot less potential issues as you think about the constructability during a year. So wind has been -- and quite frankly, it was pretty strong for us in 35, our split -- in '23 our split last year was about 60-40; 40% being wins and I think it's going to be somewhat similar this year in '24, so that the market held. And we feel good about how we built our plan from a bottoms-up perspective. There's opportunity, we know there's going to be challenge in certain projects. So, we took some overall contingencies, but I do think as the year goes on, things will get better and there might be some projects that you get to add on in the second half of '24.

I appreciate all the color, Jose.

Thanks, Andy. Thank you.

We will take our next question from Steven Fisher with UBS.

Thanks. Good morning. Wanted to just follow up on that last question, wondering if you can maybe bridge for us the $4.4 billion of expected revenues in Clean Energy versus the $3.1 billion of year-end backlog, how much of that incremental $1.3 billion is discrete renewable projects that maybe in like limited notice to proceed, that you expect to put into backlog and then burn versus how much is maintenance or small capital projects, just kind of flow work or maybe there is something specific in civil infrastructure or industrial that you have expected to bridge that backlog versus revenue gap.

Yeah. So, I guess, generally, right, when you think about industrial and civil to get it out of the way, backlog is pretty much set in those. We've -- we believe that in our backlog numbers, we have most of the burn required in 2024. There is some work that you're going to book and burn, but for the most part, we think we're sitting in a really good place relative to backlog versus revenue expectations. On the renewable side of the business, the reality is that, in our minds, right, the business is much better than what backlog shows. I think you're going to see considerable backlog build in Q1, I think you'll see considerable backlog build again in Q2, and that will give, in my opinion, at least the outside world that doesn't see our numbers day to day, the comfort that our '24 solidified. In our prepared remarks, we talked about that actually having a really positive impact for '25 because these projects actually have a similar, if not a little bit greater amount of volume activity in '25 than they do in '24 which I think positions us incredibly well for a really strong growth year in '25, but the good thing is we've identified them right. So even though they may not be in backlog, we know every project, we've identified it. We know when they're supposed to sign, most of it is under LNTP, if not all of it, but it's really about at the end of the day, getting into a signed contract and being able to work on it and that's what we hope to be able to deliver in the first and second quarter from a backlog perspective.

Okay. That's helpful. And then just a little bit of near-term cadencing. I guess in terms of your Q1 numbers, we're already starting March here. So two-thirds of the quarter is done. I guess to what extent are there still any notable things that have to happen in order to hit your Q1 numbers. I've seen you factor in all of the January and February weather and timing of solar projects. And then do you have an overall kind of first-half versus second-half EBITDA mix, just to kind of get an early framing of what you're thinking about Q2? Thank you.

Yes, so look, on the first quarter, obviously, we're cheap in the first quarter. So, I think we've taken into account everything that we know as of today. Whether it was a little bit of an issue in certain geographic parts that impact -- that are impacting our first quarter, but it's really not much different than quite frankly what our expectation was coming out of our third quarter call. Maybe with the exception of the Illinois rate case and the impact that that's had on our Power Delivery business in Q1. Outside of that, I think everything is pretty consistent with our expectations. When we think about the second quarter and third quarter, and we do year-over-year comps. We have a pretty similar ramp to what we had last year from an earnings perspective, right. We expect earnings in the second, third, and fourth quarters to be above where they were in '23, but we don't expect any particular quarter to be dramatically above. So, I think margin profiles are going to be consistent with where they were generally last year and it's going to really be driven by the revenue expectations. Paul stated the second and third quarter are going to be our two biggest quarters and I think that we'll be able to show and it has moderate growth, right. So we're going to have a nice growth between the second and third quarters, very similar to last year. So, if you take last year's cadence, I think we're going to have a similar cadence in 2024.

Thanks, Jose.

Thank you.

We will take our next question from Marc Bianchi with TD Cowen.

Hey, thanks. Jose, I think I heard you say that you had some optimism about the oil and gas business in '25 and beyond because the roll-off of this MVP does create a tough comp when you get to '25. So can you talk about where that -- those opportunities are and when we might get some visibility on that as sort of external spectators?

Well. I think it's multiple things, one, I actually think that the gas side of the pipeline business is incredibly active, especially in certain geographic areas. I think you're going to see that materialize as the year goes on, just from -- some of that will be book and burn but I think we'll have a really strong year outside of MVP. And then when we think about '25, we see that continuing just based on the conversations we're having with customers. And then more importantly, we're starting to see real jobs on some of the other alternative types of pipeline builds, right, whether that be carbon capture, hydrogen, we think that becomes real in '25, we think that becomes meaningful. It probably changes the business, right, because it's -- I think that's going to be very consistent in nature for a long period of time. So I think the mix of our business, what we would call -- we view it more as a pipeline business, right. So, I think there's going to be more diversity in our business in '25, which is going to lead to some of that growth that we talked about. It's not specifically what we used to do, but it's a mix of what we're seeing in the future.

And the margin composition of that opportunity, would it be similar to sort of what's implied here in the back -half of the year?

It is.

Great. Thank you. I'll turn it back.

Thank you.

We will take our next question from Neil Mehta with Goldman Sachs.

Yeah, thank you. It's Neil Mehta here. I guess, Jose, I had some industry questions on the utility side which is, there's been a lot of talk about this load growth transition from a market that has flattened power demand inflecting for a variety of reasons including datacenters and electric vehicles and onshoring. Just would love your perspective as you talk to your utility customers about what that means for the CapEx profile of the industry and what does the industry need to do in order to meet growing load.

I think we're seeing it, right. If you look at, not to plug you, Neil, but you actually put out a note yesterday that listed a number of different utilities that had raised our CapEx here in the first quarter, I thought it was a thoughtful note, I thought it was important and reflective of what's really happening in the industry. And that's what we're seeing, right. Our customers are talking about it, our customers aren't just talking about it, but they're raising their CapEx dollars to deal with it. We don't think this is a short-term initiative. We think this is going to last for a really long time and we think we're just starting to see the beginning of it. So this is an incredibly exciting market to be in. Again, there has been some issues with the cadence of that spend over the course of the last year, but there's no question in my mind where the direction of that is going. From our perspective, we think we sit in a really good place. We've added an enormous amount of scale in that business and we think that's really going to start to pay off for us here and the next year or so. So we're really excited about what's happening in the industry and I think that generally, I think, people underestimate the capital requirements to meet the growing demand of energy use, that we're going to have over the coming years.

Yeah, thanks, Jose. There is a related question which is, there's been a lot of talk about the impacts of wildfires across the utility system and certainly unfortunately, we've seen a lot of incidents here over the last year or two. Just, again, your perspective on this, does this represent a challenge that you see yourself as well-positioned to help utilities mitigate and as you think about specifically in the utility system, what are different things that they can do as they think about trying to head off this problem.

I think it's two things, I think one is wildfires and the other is storms and I think that when you think about the West Coast, they've been more impacted by fires, the East Coast has been more impacted by storms. The fixes for either one are somewhat similar. So, the investments in undergrounding systems, in hardening systems across the country become more and more meaningful as we deal with climate change. So I do think that -- those are -- the challenge right is who is going to pay for it and what's -- where the states stand in terms of funding these initiatives and where is the cost of power in a particular state and how willing is their Public Service Commission to grant the utility dollars to be able to do it. We're based here in Florida and in Florida there has been a huge initiative in the state, the Public Service Commission has passed a 30-year program with tens of billions of dollars of funding to allow the utilities here to do that. I think we're going to see more of that as time goes on. I think it's necessary. And I think it's going to be meaningful across the country, in addition to what's happening with load growth, right. This helps offset -- these investments help you manage some of the issues that are going to come with load growth but they are different and they both need to be dealt with. So these are all catalysts and positive trends that we're going to see in this industry for a long time.

Yeah, important issue. Thank you, Jose.

Thanks, Neil.

We will take our next question from Adam Thalhimer with Thompson Davis.

Hey, good morning, guys. Congrats on the strong Q4 cash flow.

Thanks, Adam.

Jose, your comment about double-digit Communications revenue growth next year was interesting, what's the driver of that again.

Just that wireless win, right. That contract by itself should allow us to grow double-digits for the full segment next year.

And then related to that -- given that dynamic, what kind of margins do you think you could generate with that kind of revenue growth?

Improving margins, right, so if we go back a few years, at scale our business has been declining or when you think about our wireline business over the course of last year, it declined, that's challenging for margins. There's obviously a start-up phase where we invest in the business, which is kind of baked into the margin profile that we're expecting for '24, but with scale, right, the incremental revenue comes at a higher margin. And that's going to drive margins up. So, that's a really important part of our '25 and beyond story as well.

Great. Thank you.

Thanks, Adam.

We will take our next question from Brett Castelli with Morningstar.

Thank you. Just on Power Delivery, can you talk about your capabilities today on the transmission side of that business, maybe relative to history?

Sure, so we -- I mean, we actually started that business, I don't know, now maybe 10, 12 years ago, really focused on the transmission side, that's where we started. We did some big projects. Wanted to get into the more predictable cadence of the business. So, we really started focusing on distribution. Our efforts in 2021 and '22 through the acquisitions that we made were really to expand our geographic scope. The primary nature of those acquisitions was also heavy MSA, heavy distribution, although they all add transmission resources available. I think since those acquisitions have made. We've really grown and added to our transmission capabilities in terms of talent and capabilities, and I think today, we're in a position where we've done some jobs here in the last two years that are of size and scale and I think we've really positioned ourselves to be a significant player in that market for a long time. Again, in our prepared remarks, we talked about a number of jobs that we're currently bidding that we feel comfortable and good that we'll be successful on some and have a meaningful impact to our business. So it's -- that's probably going to be the biggest growth part of our Power Delivery business over the next couple of years. There is an incredible amount of demand across the country and there's more coming. So, it's an important part of where we're trying to take that business.

Thanks, Jose. And then I think you mentioned consolidation of contractors by your customer base in your prepared remarks. Is that maybe more pronounced in certain segment or segments or just kind of curious how you're seeing that across the business?

I think it's actually part of the same comments with scale. So, I think we're actually seeing it in all of our businesses, right. We see it in the award of our biggest customer in wireless and communications. We're seeing it with some of the utilities. We did talk about nice awards in our utility business of markets where we feel some of our customers consolidated their vendors. We're seeing it in the Clean Energy space where developer's large utilities are using less vendors for the renewable projects portfolios on a go-forward basis. So, we think as projects get bigger, as consolidation happens across our customers as well. People tend to want to work with less partners and we think that's a really important part of the story. We think scale matters, we think we've built great scale and our customers believe in the scale capabilities that we have and we do think that's a really important part of what's going to make companies successful in the future. And that's really what we've been building towards.

Thank you. I'll leave it there.

Thank you.

We will take our next question from Justin Hauke with Robert W. Baird.

Great. Thanks for taking my questions here. I guess the first one, just truly kind of just a numeric one that I wanted to clarify, in terms of the backlog and what's in it and what's not. So I think you said AT&T scope addition was booked in the fourth quarter, but Nokia and Ericsson equipment scope that you're talking about in the second-half, that's not in backlog yet. That'll be when you go into the second half. And then the other numeric on that aspect will be in the Clean Energy, I think you said that you de-booked the Rochester job that was $200 million. I'm just curious if there were any other significant de-bookings in the quarter in that segment as you kind of scrub the backlog.

There was no other de-bookings. Obviously, we announced the issues with that project in the third quarter and the lifecycle project is on hold. So we've taken it out of backlog. It was a project that we've been working on. So, typically, once the project his backlog, usually we build it, there are very few instances where we've had to take anything out of backlog, obviously lifecycle was its own -- had its own issues. When we think about comps, a portion of it is in backlog. I think that, again, we're not expecting significant impact from that until the latter part of the year and again that's -- our backlog is, we only take the 18-month view. So, there is a component for that, but it's a relative -- we think a much smaller component than what the actual award means over the long term.

Okay and then I guess my second question is just, maybe it's another numeric one, but just kind of quantifying, the Illinois and the Exelon impact in the Power Delivery business, I guess -- I didn't realize that was such a big geography for you. So, maybe you can just give some context to the 2024 guidance assumes like 2% growth for that segment. How much is the Illinois rate case weighing on the revenue growth outlook there?

So, I'd say a couple of things. Exelon was -- is our fourth largest customer at MasTec. So it's not all in Illinois, but it's -- a good chunk of it is. They have a meaningful cut for '24. We originally talked about mid-single-digit revenue growth in this market for '24 versus what we're saying today and I think that entire drop is the impact. So if you want to call it $100 million, $150 million of impact in '24, that's kind of what we've built in, assuming we don't -- we're not able to -- really put those people on other work, which I think there's going to be an opportunity for. So again, we talked about it being somewhat of a conservative view, but that's our view today. So, we've kind of taken the entire impact that we expect in '24 completely out of guidance.

Got it. Okay. Thank you. Appreciate it.

Thanks, Justin.

We will take our next question from Brent Thielman with D.A. Davidson.

Pretty close. Hey, Jose, Paul, just on the $550 million cash from operations bogey, could you talk about the puts and takes that could get you potentially above that this year just given you had a pretty strong finish to 2023?

Yeah, this is Paul. I think the biggest driver is just around the DSO. So I said, we're assuming we kind of spend the year in the high 70s, versus the '74 we ended the year at. So, I think there's some opportunity for us to continue to perform better from a DSO perspective and the revenue levels we're generating each day is north of $30 million of cash flow. So, that's a pretty meaningful opportunity.

Yeah, great and then just back to Clean Energy, Jose, could you just speak to the margin profile, the structure of the contracts, anything else to the new business that you're adding into the backlog at this point and maybe how that all informs your view around higher levels of profitability for that business group kind of over the medium-term. I know you've got your expectation for this year but kind of looking out beyond that.

Yeah, look, it's a great question. One, obviously as '23 played out and even a little bit into early '24, we're still working on our contracts that were won a while ago. Obviously, everybody knows the challenges that have existed with supply chain. So, as you're working on older projects, those businesses sometimes it has negative impact to margins. Historically and even as we look at our '23 performance, our wind's margins significantly outperformed our solar margins, that has everything to do with the fact that we've been deploying for a long time and we're a lot newer to solar. We've got a ton of opportunity to increase our solar margins which we need to do and we need to accomplish. I think that's going to be the bigger driver of the margin growth over time. But wind margins quite frankly are holding with what we've historically done. So, as the wind market comes back and as that becomes a bigger driver of revenues. We do think that the margin profile there is considerably at least from our performance perspective, considerably better. If you go way back, we used to -- there were years where this business performed at double-digits solar segment, a lot of that was driven by wind. We're seeing similar margin potentials in some of those projects on a go-forward basis. We've got to get our solar business there over time, which is what we're working on, obviously, the solar business is what's going to grow faster. So, we're encouraged, '23 again was a tough year. We're going to have ups and downs in '24, we kind of built that into our model, but I really think that our focus today is on executing these projects and driving margins out-of-the business and our goal, our objective is really to increase those margins over time.

Okay. Thank you.

Thanks.

We will take our next question from Min Cho with B. Riley Securities.

Hi. Good morning.

Hi, Min.

Couple of quick questions. Hey there. In terms of, Paul, you mentioned that you're breaking out the Clean Energy section into several market sectors. Can you provide a general revenue breakout right now like the renewables versus Infrastructure Industrial stand?

Yeah, our renewables business is just over 60% of the total segment.

Okay. That's obviously where all the growth potential is going forward.

Yeah, I mean, infrastructure has got some good opportunities as well. Right, I mean, so that business had a meaningful -- both our legacy and IEA had good scale in that business in different geographies, and with the Infrastructure bill , there are a number of opportunities there as well. We have deemphasized industrial in the near term, just in light of some of the challenges we had on projects over '21 and in the latter part of '23. So, I do think there is -- yeah, renewables will, for sure, drive the growth but infrastructure has got some good opportunities as well.

Excellent. That's very helpful. And then just finally, obviously, Jose, you've been scaling up kind of with expectations for growth for the next couple of years and it sounds like there is so much more growth to come. We're just at the very beginning and across all of your end markets and labor, it's always an issue, continues to be an issue, but when do you think the industry gets to kind of a full capacity where you start to see elongation of the cycles where it really benefits margins?

I think each segment is different. I think in some segments, quite frankly, we're almost there. I think one of the really important things is customers recognize it right, they talk about it. They don't necessarily feel it yet, because they know they're still flex in the system, but everybody knows we're going to get to that point. I think coming out of '24 into '25, across all of our segments, we going to fuel some of that. Some more than others and, I do think that at that point, it does start impacting, what we do with customers, how we talk about it, and how we price things.

Excellent. All right. Well, good luck to you in 2024. Thank you.

Thanks, Min.

We currently do not have any further questions. I will turn it back to Mr. Mas for closing remarks.

Just want to thank everybody for participating today and we look forward to updating you on our first quarter call here in short period of time. Thank you.

This concludes today's call. Thank you for your participation. You may now disconnect.