Centuri Holdings, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and corresponding notes in Item 8 — Financial Statements and Supplementary Data within Part II of this Annual Report on Form 10-K. Unless the context otherwise requires, references to “we,” “is,” “our,” and “our company” refer to Centuri Holdings, Inc. and its consolidated subsidiaries. As discussed in “Note 1 — Description of Business” to the consolidated financial statements, all financial information presented herein is the financial information of Centuri Holdings, Inc. and its subsidiaries, including Centuri Group, Inc. (“the Operating Company”). This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed within Item 1A — Risk Factors within part I of this Annual Report on Form 10-K. See “Cautionary Note Regarding Forward-Looking Statements.”

Current wording

Unless the context otherwise requires, references to “we,” “is,” “our,” “the Company,” and “our company” refer to Centuri Holdings, Inc. and its consolidated subsidiaries. This discussion contains forward-looking statements that are based upon current expectations and are subject to uncertainty and changes in circumstances. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those discussed within Item 1A. Risk Factors within part I of this Annual Report on Form 10-K. See “Cautionary Note Regarding Forward-Looking Statements.”

Previous wording

We use a 52/53-week fiscal year that ends on the Sunday closest to the end of the calendar year. Unless otherwise stated, references to months and years throughout relate to fiscal months and years rather than calendar months and years. Fiscal years 2024, 2023 and 2022 ended on December 29, 2024, December 31, 2023 and January 1, 2023, respectively, and each year had 52 weeks.

Current wording

We use a 52/53-week fiscal year that ends on the Sunday closest to the end of the calendar year. Unless otherwise stated, references to months, quarters and years throughout relate to fiscal months, quarters and years rather than calendar months, quarters and years. Fiscal years 2025, 2024, and 2023 ended on December 28, 2025, December 29, 2024, and December 31, 2023, respectively, and each year had 52 weeks.

Previous wording

We are a leading North American utility infrastructure services company that partners with regulated utilities to maintain, upgrade and expand the energy network that powers millions of homes and businesses. We serve as long-term strategic partners to, and an extension of, North America’s electric, gas and combination utility providers, delivering a wide range of infrastructure solutions. Our service offerings primarily consist of the modernization of utility infrastructure through the replacement, maintenance, retrofitting and installation of electric and natural gas distribution and utility-scale transmission networks, and building capacity to meet current and future demands. We also serve complementary, attractive and growing end markets such as renewable energy associated with the expected energy transition, data centers and 5G datacom. Our essential services enable our customers to enhance the safety, reliability and environmental sustainability of the electric and natural gas networks that consumers rely upon to meet their essential and evolving energy needs. Guided by our values and our unwavering commitment to serve as long-term partners to customers and communities, our more than 8,600 employees enable our customers to safely and reliably deliver electricity and natural gas and achieve their goals for environmental sustainability.

Current wording

We are a leading North American utility and energy infrastructure services company, and we partner with regulated utilities to maintain, upgrade and expand the energy network that powers millions of homes and businesses. We serve as a long-term strategic partner to, and an extension of, North America’s electric, gas and combination utility providers, delivering a wide range of infrastructure solutions to ensure safe, reliable and environmentally sustainable energy operations. Our service offerings primarily consist of the modernization of utility infrastructure through the replacement, maintenance, retrofitting and installation of electric and natural gas distribution and utility-scale transmission networks and building capacity to meet current and future demands. We also serve complementary, attractive and growing end markets such as distributed power projects and data centers. Our essential services enable our customers to enhance the safety, reliability and environmental sustainability of the electric and natural gas networks that consumers rely upon to meet their essential and evolving energy needs. Guided by our values and our unwavering commitment to serve as long-term partners to customers and communities, our employees enable our customers to safely and reliably deliver electricity and natural gas and achieve their goals for environmental sustainability.

Previous wording

We were incorporated in Delaware in June 2023 as a wholly owned subsidiary of Southwest Gas Holdings, Inc. (“Southwest Gas Holdings”). We were formed for the purpose of completing an initial public offering, facilitating the separation of the Operating Company from Southwest Gas Holdings and other related transactions in order to carry on the business of the Operating Company, our predecessor for financial reporting purposes. Prior to April 13, 2024, Southwest Gas Holdings owned 1,000 shares of our common stock, representing 100% of the issued and outstanding shares of our common stock. On April 13, 2024, we issued 71,664,592 shares of common stock to Southwest Gas Holdings as consideration for the transfer of assets and assumption of liabilities of the Operating Company (the “Separation”). Following the completion of the Separation, the Operating Company became our wholly owned subsidiary, and all of our operations are conducted through the Operating Company.

Current wording

We were incorporated in Delaware in June 2023 as a wholly owned subsidiary of Southwest Gas Holdings, Inc. (“Southwest Gas Holdings”). We were formed for the purpose of completing an initial public offering, facilitating the separation of Centuri Group, Inc. (the “Operating Company”) from Southwest Gas Holdings and other related transactions in order to carry on the business of the Operating Company, our predecessor for financial reporting purposes. Prior to April 13, 2024, Southwest Gas Holdings owned 1,000 shares of our common stock, representing 100% of the issued and outstanding shares of our common stock. On April 13, 2024, we issued 71,664,592 shares of common stock to Southwest Gas Holdings as consideration for the transfer of assets and assumption of liabilities of the Operating Company (the “Separation”). Following the completion of the Separation, the Operating Company became our wholly owned subsidiary, and all of our operations are conducted through the Operating Company.

Previous wording

On April 17, 2024, the IPO Registration Statement was declared effective, and our common stock began trading on the NYSE under the ticker “CTRI” (the “Centuri IPO”) on April 18, 2024. On April 22, 2024, the Centuri IPO was completed through the sale of 14,260,000 shares of our common stock, par value $0.01 per share, including the underwriters’ full exercise of their option to purchase 1,860,000 shares to cover over-allotments, at an initial public offering price of $21.00 per share. On the same day, the Icahn Group purchased 2,591,929 shares of our common stock in a concurrent private placement at a price per share equal to the IPO price, for gross proceeds of approximately $54.4 million. The total net proceeds to us from the Centuri IPO and the concurrent private placement, after deducting underwriting discounts and commissions of $18.0 million and offering expenses payable of $8.3 million, were $327.7 million. As of the closing of the Centuri IPO, Southwest Gas Holdings owned 71,665,592 shares of our common stock, or approximately 81% of the total outstanding shares of our common stock.

Current wording

On April 17, 2024, the registration statement related to the initial public offering of our common stock was declared effective, and our common stock began trading on the New York Stock Exchange (the “NYSE”) under the ticker “CTRI” (the “Centuri IPO”) on April 18, 2024. On April 22, 2024, the Centuri IPO and a concurrent private placement were completed with total net proceeds of $327.7 million. As of the closing of the Centuri IPO, Southwest Gas Holdings owned 71,665,592 shares of our common stock (“CTRI shares”), or approximately 81% of the total outstanding CTRI shares.

Previous wording

As of and prior to December 31, 2023, we reported our results under the following two reportable segments: Gas Utility Services and Electric Utility Services. In January 2024, we underwent an internal personnel reorganization, causing us to re-evaluate our reportable segments based on the information reviewed by our Chief Operating Decision Maker. We determined that it was appropriate to re-align our reporting structure to the following four reportable segments: (i) U.S. Gas Utility Services (“U.S. Gas”); (ii) Canadian Gas Utility Services (“Canadian Gas”); (iii) Union Electric Utility Services (“Union Electric”); and (iv) Non-Union Electric Utility Services (“Non-Union Electric”). The U.S. Gas and Canadian Gas businesses had historically been part of our Gas Utility Services segment, and the Union Electric and Non-Union Electric businesses had historically been part of our Electric Utility Services segment. Subsequently, in December 2024, NPL Canada Ltd. (“NPL Canada”), the operating company that made up Canadian Gas, amalgamated with WSN Construction Inc. (“WSN Construction”), a subsidiary previously included within the Other caption. As a result, Canadian Gas now also includes the results of the historical WSN Construction entity for all periods presented, and Other now primarily consists of corporate transactions and unallocated costs. All prior year segment financial information has been recast to reflect our current segment structure.

Current wording

We report under the following four reportable segments: (i) U.S. Gas Utility Services (“U.S. Gas”); (ii) Canadian Utility Services (“Canadian Operations”); (iii) Union Electric Utility Services (“Union Electric”); and (iv) Non-Union Electric Utility Services (“Non-Union Electric”). Canadian Operations was previously known as Canadian Gas Utility Services or “Canadian Gas”. Refer to “Business—Our Business Lines” for further discussion of our segments.

Previous wording

Our financial results may be impacted by economic conditions that impact businesses generally, such as inflationary impacts on goods and services consumed in the business, regulatory or environmental influences, rising interest rates, labor markets and costs (including in regard to contracted or professional services), and the availability of those resources. Accordingly, our operating results in any particular period may not be indicative of the results that can be expected for any other period.

Current wording

Our financial results may be impacted by economic conditions that impact businesses generally, such as inflationary impacts on goods and services consumed in the business, regulatory or environmental influences, seasonality and severe weather events, rising interest rates, labor markets and costs (including in regard to contracted or professional services), and the availability of those resources. Accordingly, our operating results in any particular period may not be indicative of the results that can be expected for any other period.

Previous wording

Rising fuel, labor and material costs have had, and could continue to have, a negative effect on our results of operations, to the extent we cannot pass these costs through to our customers. While we actively monitor economic, industry and market factors that could adversely impact our business, we cannot predict the effect that changes in such factors could have on our future results of operations, financial position and cash flows.

Current wording

Rising fuel, labor and material costs have in the past had, and could in the future have, a negative effect on our results of operations, to the extent we cannot pass these costs through to our customers. While we actively monitor economic, industry and market factors that could adversely impact our business, we cannot predict the effect that changes in such factors could have on our future results of operations, financial position and cash flows.

Previous wording

Generally, our contracts provide that the customer is responsible for supplying the materials for their projects. Fluctuations in the price or availability of materials and equipment that we or our customers utilize could impact (positively or negatively, as applicable) costs to complete projects or result in the postponement of projects. Although certain of our customers have experienced recent disruptions in their supply chain for certain project materials, most of our customers have generally been able to procure the necessary materials in a timely manner.

Current wording

Generally, our contracts provide that the customer is responsible for supplying the materials for their projects. Fluctuations in the price or availability of materials and equipment that we or our customers utilize could impact (positively or negatively, as applicable) costs to complete projects or result in the postponement of projects. Although certain of our customers have experienced previous disruptions in their supply chain for certain project materials, most of our customers have generally been able to procure the necessary materials in a timely manner.

Previous wording

Utilities continue to implement or modify system integrity management programs to enhance safety pursuant to federal and state mandates. These programs have resulted in multi-year utility system replacement programs throughout the U.S., and we believe that we are well-positioned to serve the increased demand resulting from these programs.

Current wording

Utilities continue to implement or modify system integrity management programs to enhance safety pursuant to federal and state mandates. These programs have resulted in multi-year utility system replacement programs throughout the U.S., andwe believe that we are well-positioned to serve the increased demand resulting from these programs.

Previous wording

Generally, our revenue is lowest during the first quarter of the year due to less favorable winter weather and related working conditions in many of the areas where we perform work. Revenue typically improves as more favorable weather conditions occur during the summer and fall months. In cases of severe weather, such as following a regional storm, we may be engaged to perform restoration activities related to above-ground utility infrastructure, which typically results in higher margins due to higher equipment utilization and the absorption of fixed costs. Alternatively, these severe weather events can also delay projects, negatively impacting our results of operations. Severe weather events and the related impacts on our performance and results are not solely within the control of management and cannot always be predicted or mitigated.

Current wording

Generally, our revenue is lowest during the first fiscal quarter of the year due to less favorable winter weather and related working conditions in many of the areas where we perform work. Revenue typically improves as more favorable weather conditions occur during the summer and fall months. In cases of severe weather, such as following a regional storm, we may be engaged to perform restoration activities related to above-ground utility infrastructure, which typically results in higher margins due to higher equipment utilization and the absorption of fixed costs. Alternatively, these severe weather events can also delay projects, negatively impacting our results of operations. Severe weather events and the related impacts on our performance and results are not solely within the control of management and cannot always be predicted or mitigated.

Previous wording

Our operations are affected by increases in prices, whether caused by inflation, rising interest rates or other economic factors. We attempt to recover anticipated increases in the cost of labor, equipment, fuel and materials through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. Our actual costs at times can exceed the contractual caps, and therefore negatively impact our operations. Additionally, rising interest rates on our variable-rate debt could have a negative effect on our business, financial condition and results of operations. Overall, our results for fiscal year 2024 were not significantly impacted by inflation when compared to prior years (particularly fiscal year 2022), as we have begun to see slower growth in prices in recent periods.

Current wording

Under the terms of a majority of our MSAs and other customer agreements, materials used in our utility infrastructure service activities are specified, purchased and supplied by customers. However, our operations are affected by increases in prices, whether caused by inflation, tariffs, rising interest rates or other economic factors. We attempt to recover anticipated increases in the cost of labor, equipment, fuel and materials not purchased by customers through price escalation provisions that allow us to adjust billing rates for certain major contracts annually; by considering the estimated effect of such increases when bidding or pricing new work; or by entering into back-to-back contracts with suppliers and subcontractors. However, the annual adjustment provided by certain contracts is typically subject to a cap and there can be an extended period of time between the impact of inflation on our costs and when billing rates are adjusted. Our actual costs at times can exceed the contractual caps, and therefore negatively impact our operations. Additionally, rising interest rates on our variable-rate debt could have a negative effect on our business, financial condition and results of operations. Overall, our results for the fiscal year 2025 were not significantly impacted by increases in prices, including due to tariffs implemented by the Trump Administration. We are currently monitoring the impacts of tariffs on the price and availability of our equipment as well as any potential impacts to project scheduling, but we do not currently expect a material effect on our results of operations.

Previous wording

Backlog represents estimates of revenue to be realized under long-term MSAs and bid agreements. Backlog differs from remaining performance obligations disclosed in “Note 3 — Revenue and Related Balance Sheet Accounts” to the consolidated financial statements, as remaining performance obligations are limited to contractually obligated revenue on our contracts that exceed one year, which is typically only bid projects, whereas backlog is inclusive of all contracts regardless of length and includes estimated future work under MSAs. Generally, customers are not contractually committed to specific volumes of work under MSAs, and MSAs may be terminated by either party upon notice. Revenue estimates for MSAs are based on historical customer trends. As backlog only includes revenue estimates over the contractual life of MSAs, backlog tends to fluctuate based on the timing of MSA renewals. Projects included in backlog can be subject to delays or cancellation as a result of regulatory requirements, adverse weather conditions, customer requirements and other factors that could cause actual revenue to differ significantly from the estimates, or cause revenue to be realized in periods other than originally expected. Backlog as of December 29, 2024 and December 31, 2023 was approximately $3.7 billion and $5.1 billion, respectively. For both periods, approximately 90% of backlog related to MSAs.

Current wording

Backlog differs from remaining performance obligations disclosed in “Note 3 — Revenue and Related Balance Sheet Accounts” to the consolidated financial statements, as remaining performance obligations are limited to contractually obligated revenue on our contracts that exceed one year, which is typically only bid projects, whereas backlog is inclusive of all contracts regardless of length and includes estimated future work over the contractual life of MSAs. Generally, customers are not contractually committed to specific volumes of work under MSAs, and MSAs may be terminated by either party upon notice. Revenue estimates for MSAs are based on historical customer trends. As backlog only includes revenue estimates over the contractual life of MSAs, backlog tends to fluctuate based on the timing of MSA renewals.

Previous wording

Our results of operations, on a consolidated basis and by segment, for the fiscal years ended December 29, 2024 and December 31, 2023 are set forth and compared below. Additionally, revenue and gross profit results under our new segment structure for the fiscal years ended December 31, 2023 and January 1, 2023 are set forth and compared below.

Current wording

Our results of operations, on a consolidated basis and by segment, for the fiscal years ended December 28, 2025 and December 29, 2024 are set forth and compared below. For our discussion of the results of operations for the fiscal year ended December 29, 2024 compared to the fiscal year ended December 31, 2023 refer to "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 29, 2024 which is incorporated by reference herein.

Previous wording

The following tables and discussion summarize our consolidated results of operations for the fiscal years ended December 29, 2024, and December 31, 2023 including as a percentage of revenue, as well as the dollar and percentage change between fiscal years.

Current wording

The following table summarizes our consolidated results of operations for the fiscal years ended December 28, 2025 and December 29, 2024, including as a percentage of revenue, as well as the dollar and percentage change between fiscal years.

Previous wording

The following table summarizes our revenue, gross profit and gross margin for the periods indicated by segment as well as the dollar and percentage change from the prior year period. The discussion that follows highlights key revenue and gross margin changes at the segment level. Changes in gross profit correspond with the discussed changes in revenue and gross margin.

Current wording

The following table summarizes our revenue and gross profit for the periods indicated by segment, as well as the dollar and percentage change from the prior year period. The discussion that follows highlights key revenue changes at the segment level. Changes in gross profit correspond with the discussed changes in revenue.

Previous wording

•Revenue from our Union Electric segment totaled $693.5 million in the fiscal year ended December 29, 2024, reflecting a decrease of $139.6 million, or 16.8%, compared to the prior year. This decrease was driven by a planned decline in offshore wind revenue of $114.4 million due to timing of projects, as well as a reduction in net volumes under certain existing customer MSAs. Emergency restoration services revenue for the Union Electric segment was $29.6 million for the fiscal year ended December 29, 2024 compared to $27.2 million for the prior year. As a percentage of revenue, gross profit increased to 8.4% in the fiscal year ended December 29, 2024 as compared to 6.9% in the prior year due to improved profitability on certain MSA contracts and in part from cost savings realized due to restructuring activities which occurred earlier in fiscal 2024.

Current wording

•Revenue from our Union Electric segment totaled $808.3 million in the fiscal year ended December 28, 2025, reflecting an increase of $114.8 million, or 16.6%, compared to the prior year period. This increase was driven by new bid project wins, partially offset by a planned decline in offshore wind revenue of $38.7 million due to timing of projects and a decrease in storm restoration services revenue of $21.3 million ($8.3 million for the fiscal year ended December 28, 2025 compared to $29.6 million for the prior year period). As a percentage of revenue, gross profit increased to 8.8% in the fiscal year ended December 28, 2025 as compared to 8.4% in the prior year period. This increase was driven by improvements in margin on bid work and more efficient utilization of fixed costs on higher revenue, partially offset by the $21.3 million decrease in storm restoration services revenue, which had a negative gross profit impact of approximately $6.2 million.

Previous wording

•Revenue from our Non-Union Electric segment totaled $485.3 million in the fiscal year ended December 29, 2024, reflecting an increase of $11.3 million, or 2.4%, compared to the prior year. This increase was primarily driven by an increase in emergency restoration services revenue of $47.9 million (which was $107.1 million in the fiscal year ended December 29, 2024 compared to $59.2 million in the prior year), partially offset by a decrease in volumes under existing MSAs. As a percentage of revenue, gross profit increased to 12.7% in the fiscal year ended December 29, 2024, compared to 12.3% in the prior year. Profitability benefited from increased emergency restoration services work, although this benefit was partially offset by unfavorable changes in mix of work and underutilization of fixed costs on certain existing MSAs during the first half of fiscal 2024.

Current wording

•Revenue from our Non-Union Electric segment totaled $599.4 million in the fiscal year ended December 28, 2025, reflecting an increase of $114.1 million, or 23.5%, compared to the prior year period. This increase was primarily driven by an increase in volumes under new and existing MSAs, which was partially offset by a decline in storm restoration services revenue of $77.0 million ($30.1 million in the fiscal year ended December 28, 2025 compared to $107.1 million in the prior year period). As a percentage of revenue, gross profit decreased to 9.8% in the fiscal year ended December 28, 2025 compared to 12.7% in the prior year period. Profitability was negatively impacted by the $77.0 million decrease in storm restoration services, which had a negative gross profit impact of approximately $29.5 million. This decrease was partially offset by better MSA performance in the first half of 2025 compared to the first half of 2024 due to an increase in crew counts and weekly hours worked per crew under existing MSAs, which allowed for better hourly rates and more efficient utilization of fixed overhead costs.

Previous wording

Our effective tax rate for the fiscal years ended December 29, 2024 and December 31, 2023 was (103.3%) and (5.4%), respectively. The effective tax rate for the fiscal year ended December 29, 2024 was impacted by the disproportionate amount of non-deductible expenses in relation to loss before income taxes, while in the prior year the effective tax rate was impacted by goodwill impairment, a significant portion of which was nondeductible for tax purposes.

Current wording

Our effective tax rate for the fiscal years ended December 28, 2025 and December 29, 2024 was (55.3%) and (103.3%), respectively. The effective tax rate for the current year period was impacted by the allocation of $23.7 million in deferred tax assets from Southwest Gas Holdings. The effective tax rate for the prior year period was impacted by a disproportionate amount of non-deductible expenses in relation to loss before income taxes. Additionally, differences in income (loss) before income taxes by jurisdiction caused fluctuations in the effective tax rate when comparing periods.

Previous wording

We prepare and present our financial statements in accordance with GAAP. However, management believes that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share, all of which are measures not presented in accordance with GAAP, provide investors with additional useful information in evaluating our performance. We use these non-GAAP measures internally to evaluate performance and to make financial, investment and operational decisions. We believe that presentation of these non-GAAP measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparisons of results. Management also believes that providing these non-GAAP measures helps investors evaluate the Company’s operating performance, profitability and business trends in a way that is consistent with how management evaluates such matters.

Current wording

We prepare and present our financial statements in accordance with GAAP. However, management believes that EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted Earnings per Share, Base Revenue, Base Gross Profit and Base Gross Profit Margin, all of which are measures not presented in accordance with GAAP, provide investors with additional useful information in evaluating our performance. We use these non-GAAP measures internally to evaluate performance and to make financial, investment and operational decisions. We believe that presentation of these non-GAAP measures provides investors with greater transparency with respect to our results of operations and that these measures are useful for period-to-period comparisons of results. Management also believes that providing these non-GAAP measures helps investors evaluate the Company’s operating performance, profitability and business trends in a way that is consistent with how management evaluates such matters. Because these non-GAAP metrics, as defined, exclude some, but not all, items that affect comparable GAAP financial measures, these non-GAAP metrics may not be comparable to similarly titled measures of other companies.

Previous wording

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for (i) non-cash stock-based compensation expense, (ii) strategic review costs, (iii) severance costs, (iv) securitization facility transaction fees, (v) CEO transition costs and (vi) goodwill impairment. Adjusted EBITDA Margin is defined as the percentage derived from dividing Adjusted EBITDA by revenue. Management believes that EBITDA helps investors compare our performance to our peers and gain an understanding of the factors affecting our ongoing cash earnings from which capital investments are made and debt is serviced, and that Adjusted EBITDA provides additional insight by removing certain expenses that are non-recurring and/or non-operational in nature. Management believes that Adjusted EBITDA Margin is useful for the same reason as Adjusted EBITDA, and also provides an additional understanding of how Adjusted EBITDA is impacted by factors other than changes in revenue.

Current wording

EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted for (i) non-cash stock-based compensation, (ii) acquisition costs, (iii) separation-related costs, (iv) strategic review costs, (v) severance costs, (vi) securitization facility transaction fees, (vii) other professional fees, (viii) CEO transition costs, and (ix) goodwill impairment. Adjusted EBITDA Margin is defined as the percentage derived from dividing Adjusted EBITDA by revenue. Management believes that EBITDA helps investors gain an understanding of the factors affecting our ongoing cash earnings from which capital investments are made and debt is serviced, and that Adjusted EBITDA provides additional insight by removing certain expenses that are non-recurring and/or non-operational in nature. Management believes that Adjusted EBITDA Margin is useful for the same reason as Adjusted EBITDA, and also provides an additional understanding of how Adjusted EBITDA is impacted by factors other than changes in revenue.

Previous wording

Adjusted Net Income is defined as net loss adjusted for (i) strategic review costs, (ii) severance costs, (iii) amortization of intangible assets, (iv) securitization facility transaction fees, (v) CEO transition costs, (vi) loss on debt extinguishment, (vii) non-cash stock-based compensation expense, (viii) goodwill impairment and (ix) the income tax impact of adjustments that are subject to tax, which is determined using the incremental statutory tax rates of the jurisdictions to which each adjustment relates for the respective periods. Management believes that Adjusted Net Income helps investors understand the profitability of our business when excluding certain expenses that are non-recurring and/or non-operational in nature. Adjusted Diluted Earnings per Share is defined as Adjusted Net Income divided by weighted average diluted shares outstanding.

Current wording

Adjusted Net Income is defined as net income (loss) adjusted for (i) separation-related costs, (ii) strategic review costs, (iii) severance costs, (iv) amortization of intangible assets, (v) securitization facility transaction fees, (vi) other professional fees, (vii) CEO transition costs, (viii) loss on debt modification and extinguishment, (ix) non-cash stock-based compensation, (x) tax asset allocation, (xi) acquisition costs, (xii) goodwill impairment, and (xiii) the income tax impact of adjustments that are subject to tax, which is determined using the incremental statutory tax rates of the jurisdictions to which each adjustment relates for the respective periods. Management believes that Adjusted Net Income helps investors understand the profitability of our business when excluding certain expenses that are non-recurring and/or non-operational in nature. Adjusted Diluted Earnings per Share is defined as Adjusted Net Income divided by weighted average diluted shares outstanding.

Previous wording

Using EBITDA as a performance measure has material limitations as compared to net loss, or other financial measures as defined under GAAP, as it excludes certain recurring items, which may be meaningful to investors. EBITDA excludes interest expense net of interest income; however, as we have borrowed money to finance transactions and operations, or invested available cash to generate interest income, interest expense and interest income are elements of our cost structure and can affect our ability to generate revenue and returns for our stockholders. Further, EBITDA excludes depreciation and amortization; however, as we use capital and intangible assets to generate revenue, depreciation and amortization are necessary elements of our costs and ability to generate revenue. Finally, EBITDA excludes income taxes; however, as we are organized as a corporation, the payment of taxes is a necessary element of our operations. As a result of these exclusions from EBITDA, any measure that excludes interest expense net of interest income, depreciation and amortization and income taxes has material limitations as compared to net loss. When using EBITDA as a performance measure, management compensates for these limitations by comparing EBITDA to net income/loss in each period, to allow for the comparison of the performance of the underlying core operations with the overall performance of the Company on a full-cost, after-tax basis.

Current wording

Using EBITDA as a performance measure has material limitations as compared to net income (loss), or other financial measures as defined under GAAP, as it excludes certain recurring items, which may be meaningful to investors. EBITDA excludes interest expense net of interest income; however, as we have borrowed money to finance transactions and operations, or invested available cash to generate interest income, interest expense and interest income are elements of our cost structure and can affect our ability to generate revenue and returns for our stockholders. Further, EBITDA excludes depreciation and amortization; however, as we use capital and intangible assets to generate revenue, depreciation and amortization are necessary elements of our costs and ability to generate revenue. Finally, EBITDA excludes income taxes; however, as we are organized as a corporation, the payment of taxes is a necessary element of our operations. As a result of these exclusions from EBITDA, any measure that excludes interest expense net of interest income, depreciation and amortization and income taxes has material limitations as compared to net income (loss). When using EBITDA as a performance measure, management compensates for these limitations by comparing EBITDA to net income (loss) in each period, to allow for the comparison of the performance of the underlying core operations with the overall performance of the Company on a full-cost, after-tax basis.

Previous wording

As to certain of the items related to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted Earnings per Share: (i) non-cash stock-based compensation expense varies from period to period due to changes in the estimated fair value of performance-based awards, forfeitures and amounts granted; (ii) strategic review and related costs incurred in connection with the separation and stand up of Centuri as its own public company are non-recurring; (iii) severance costs relate to non-recurring restructuring activities, (iv) securitization facility transaction fees represent legal and other professional fees incurred to establish our Securitization Facility, (v) CEO transition costs represent incremental costs incurred to find and hire a replacement CEO, (vi) loss on debt extinguishment relates to the write-off of debt issuance costs on the Company’s term loan and (vii) goodwill impairment can vary from period to period depending on economic and other factors. Because EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Net Income, as defined, exclude some, but not all, items that affect net loss, such measures may not be comparable to similarly titled measures of other companies. The most comparable GAAP financial measure, net loss, and information reconciling the GAAP and non-GAAP financial measures, are set forth below.

Current wording

As to certain of the items related to these non-GAAP metrics: (i) non-cash stock-based compensation varies from period to period due to changes in the estimated fair value of performance-based awards, forfeitures and amounts granted; (ii) separation-related costs represent expenses incurred post-Centuri IPO in connection with the separation and stand up of Centuri as its own public company, including costs incurred in association with Southwest Gas Holdings’ sale of its holdings of our common stock, which are not reflective of our ongoing operations and will not recur following the full separation from Southwest Gas Holdings; (iii) strategic review costs represent expenses incurred during the Centuri IPO and related costs incurred to establish Centuri as a public company leading up to the IPO; (iv) severance costs relate to non-recurring restructuring activities; (v) securitization facility transaction fees represent legal and other professional fees incurred to establish our Securitization Facility; (vi) CEO transition costs represent incremental costs incurred to find and hire a replacement CEO; (vii) other professional fees are non-recurring costs associated with certain one-time events; (viii) loss on debt modification and extinguishment represents non-recurring professional fees expensed as part of our credit facility refinance as well as the non-cash write-off of unamortized debt issuance costs associated with debt extinguishments, (ix) acquisition costs vary from period to period depending on the level of our acquisition activity, (x) goodwill impairment charges can vary from period to period depending on economic and other factors, and (xi) tax asset allocation reflects true-ups to our estimated allocation of tax assets based on Southwest Gas Holdings’ revised estimates of taxable income by jurisdiction. The most comparable GAAP financial measure and information reconciling the GAAP and non-GAAP financial measures are set forth below.

Previous wording

The following table presents reconciliations of net loss to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for the specified periods:

Current wording

The following table presents reconciliations of net income (loss) to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for the specified periods:

Previous wording

The following table presents reconciliations of net loss to Adjusted Net Income for the specified periods:

Current wording

The following table presents reconciliations of net income (loss) to Adjusted Net Income for the specified periods:

Previous wording

(1)Calculated based on a blended statutory tax rate of 25%.

Current wording

(1)Calculated based on a blended statutory tax rate of 25% applied to adjustments except for: tax asset allocation, acquisition costs, and a majority of goodwill impairment as these items generally do not impact taxable income.

Previous wording

The following table presents reconciliations of diluted loss per share attributable to common stock to Adjusted Diluted Earnings Per Share:

Current wording

The following table presents reconciliations of diluted earnings (loss) per share attributable to common stock to Adjusted Diluted Earnings Per Share:

Previous wording

As of December 29, 2024 and December 31, 2023, cash and cash equivalents were $49.0 million and $33.4 million, respectively. Historically, our primary sources of liquidity have been cash flows from operations and debt financing. As discussed in “Note 1 — Description of Business” to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K, the Centuri IPO and concurrent private placement have led to changes in our capital structure and sources of liquidity. As part of the Centuri IPO and concurrent private placement which closed on April 22, 2024, we received total net proceeds of $327.7 million in exchange for 16,851,929 shares of our common stock, with $316.0 million of the proceeds being used to pay down our existing debt. In September 2024, we entered into our Securitization Facility with PNC Bank, National Association ("PNC") to improve cash flows from trade accounts receivable and used all of the proceeds to pay down our existing debt. Under the Securitization Facility, certain designated subsidiaries of the Company have sold and/or contributed, and will continue to sell and/or contribute, their accounts receivable and contract assets generated in the ordinary course of their business and certain related assets to an indirect wholly owned bankruptcy-remote Special Purpose Entity (“SPE”) of the Company created specifically for this purpose. The SPE transfers ownership and control of accounts receivable to PNC for payments as set forth in the agreement. The Company accounts for accounts receivable sold to the banking counterparty as a sale of financial assets and has derecognized the accounts receivable from the consolidated balance sheet for the current period. The total outstanding balance of accounts receivable that have been sold and derecognized is $125.0 million as of December 29, 2024. As of December 29, 2024, we had no available capacity under the Securitization Facility. We believe our capital resources, including existing cash balances, together with our operating cash flows and borrowings under our credit facilities, are sufficient to meet our financial obligations for at least the next 12 months.

Current wording

Our primary liquidity needs have historically related to supporting working capital requirements, funding capital expenditures and servicing our debt. As of December 28, 2025 and December 29, 2024, cash and cash equivalents were $126.6 million and $49.0 million, respectively. We believe our capital resources, including existing cash balances, together with our operating cash flows and borrowings under our credit facilities, are sufficient to meet our financial obligations for the next 12 months and the foreseeable future.

Previous wording

Net cash used in investing activities was $89.4 million in the fiscal year ended December 29, 2024 compared to $94.9 million for the fiscal year ended December 31, 2023, a decrease of $5.5 million.

Current wording

Net cash used in investing activities was $88.2 million in the fiscal year ended December 28, 2025 compared to $89.4 million for the fiscal year ended December 29, 2024, a decrease of $1.2 million.

Previous wording

The construction industry is capital intensive, and we expect to continue to incur capital expenditures to meet anticipated needs for our services. For the fiscal year ended December 29, 2024 and December 31, 2023, we had capital expenditures of $99.3 million and $106.7 million, respectively.

Current wording

The construction industry is capital intensive, andwe expect to continue to incur capital expenditures to meet anticipated needs for our services. For the fiscal year ended December 28, 2025 and December 29, 2024, we had capital expenditures of $86.3 million and $99.3 million, respectively.

Previous wording

These items were partially offset by proceeds from the sale of property and equipment of $10.0 million and $11.8 million for the fiscal years ended December 29, 2024 and December 31, 2023, respectively.

Current wording

These items were partially offset by proceeds from the sale of property and equipment of $44.0 million and $10.0 million for the fiscal years ended December 28, 2025 and December 29, 2024, respectively. As noted previously, proceeds from the sale of property and equipment during the fiscal year ended December 28, 2025 included $37.8 million in proceeds related to our sale-leaseback transactions.

Previous wording

While we primarily operate in the United States, we also have operations in Canada. Therefore, changes in the value of Canadian dollars affect our financial statements when translated into U.S. dollars. The revenue from our Canadian operations was approximately 8% of total revenue for the fiscal years ended December 29, 2024, and December 31, 2023. At times, we also enter into transactions in foreign currencies, primarily in Canadian dollars, that subject us to currency risks. We regularly monitor our foreign currency exposure to determine the most effective foreign currency risk mitigation strategies. Currently, we are not party to any foreign currency exchange contracts.

Current wording

While we primarily operate in the United States, we also have operations in Canada. Therefore, changes in the value of Canadian dollars affect our financial statements when translated into U.S. dollars. The revenue from our Canadian operations was approximately 8% of total revenue for each of the fiscal years ended December 28, 2025 and December 29, 2024. At times, we also enter into transactions in foreign currencies, primarily in Canadian dollars, that subject us to currency risks. We regularly monitor our foreign currency exposure to determine the most effective foreign currency risk mitigation strategies. Currently, we are not party to any foreign currency exchange contracts.

Previous wording

We have a senior secured revolving credit and term loan multi-currency facility. The line of credit portion comprises $400 million, and associated amounts borrowed and repaid are available to be re-borrowed. The term loan facility portion provided approximately $1.145 billion in financing as of August 27, 2021. The term loan facility expires on August 27, 2028, and the revolving credit facility expires on August 27, 2026. This multi-currency facility allows us to request loan advances in either Canadian dollars or U.S. dollars. The obligations under the credit agreement are secured by present and future ownership interests in substantially all of our direct and indirect subsidiaries, substantially all of our tangible and intangible personal property, and all products, profits and proceeds of the foregoing. Assets securing the facility totaled $2.0 billion as of December 29, 2024 and $2.1 billion as of December 31, 2023. During the fiscal year ended December 29, 2024, the maximum amount outstanding on the combined facility was $1.117 billion, at which point $991.4 million was outstanding on the term loan portion of the facility. As of December 29, 2024 and December 31, 2023, $113.5 million and $77.1 million, respectively, was outstanding on the revolving credit facility, in addition to $706.4 million and $994.2 million, respectively, that was outstanding on the term loan portion of the facility. Also as of December 29, 2024 and December 31, 2023, there was approximately $226.1 million and $246.5 million, respectively, net of outstanding letters of credit, of unused capacity under the line of credit. We had $64.6 million and $48.6 million of unused letters of credit available as of December 29, 2024 and December 31, 2023, respectively.

Current wording

During the fiscal year ended December 28, 2025, the maximum amount outstanding on the combined facility was $958.9 million, at which point $800.0 million was outstanding on the term loan portion of the facility. As of December 28, 2025 and December 29, 2024, $91.2 million and $113.5 million, respectively, was outstanding on the revolving credit facility, in addition to $616.0 million and $706.4 million that was outstanding on the term loan portion of the facility as of December 28, 2025 and December 29, 2024, respectively. Also, as of December 28, 2025 and December 29, 2024, there was approximately $302.4 million and $226.1 million, respectively, net of outstanding letters of credit, of unused capacity under the line of credit. We had $68.6 million and $64.6 million of unused letters of credit available as of December 28, 2025 and December 29, 2024, respectively.

Previous wording

We currently have seven equipment term loans with initial amounts totaling approximately $170 million, with certain owned equipment used as collateral. The loans are serviced in U.S. dollars. These term loans have prepayment penalties for the first three years of the agreements. We did not incur any material prepayment penalties on any of our equipment loans during fiscal years 2024, 2023, or 2022.

Current wording

As of December 28, 2025, we had six U.S. equipment term loans with initial amounts totaling approximately $150 million, with certain owned equipment used as collateral. The loans are serviced in U.S. dollars.

Previous wording

Certain of our debt instruments have leverage ratio caps and interest coverage ratio requirements. As of December 29, 2024 and December 31, 2023, we were in compliance with all of our debt covenants. Under the most restrictive of the covenants, as of December 29, 2024 and December 31, 2023, we could have issued approximately $151 million and $108 million, respectively, in additional debt and met the leverage ratio requirement. As of December 29, 2024 and December 31, 2023, we had approximately $28 million and $15 million, respectively, of cushion relating to the minimum interest coverage ratio requirement. Our revolving credit and term loan facilities are secured by our assets. Cash dividends are limited to a calculated available amount, generally defined as 50% of our net income since the beginning of the fourth fiscal quarter of 2020, adjusted for certain items, such as parent contributions, Linetec redeemable noncontrolling interest payments or dividend payments, among other adjustments, as applicable.

Current wording

Certain of our debt instruments have leverage ratio caps and interest coverage ratio requirements. As of December 28, 2025 and December 29, 2024, we were in compliance with all of our debt covenants. Under the most restrictive of the covenants, as of December 28, 2025 and December 29, 2024, we could have issued approximately$302.4 million and $151 million, respectively, in additional debt and met the leverage ratio requirement. As of December 28, 2025 and December 29, 2024, we had approximately $24.8 million and $28 million, respectively, of cushion relating to the minimum interest coverage ratio requirement. Cash dividends are limited to a calculated available amount, generally definedas $65.0 million plus 50% of our consolidated net income since the beginning of the third fiscal quarter of 2025 adjusted for certain items, such as parent capital contributions, redeemable noncontrolling interest payments, and dividend payments, among other adjustments, as applicable.

Previous wording

As of December 29, 2024, we had$843.9 millionand $30.0 million of long-term and short-term debt, respectively, outstanding, excluding finance lease liabilities.

Current wording

As of December 28, 2025, we had$708.1 millionand $29.5 million of long-term and short-term debt, respectively, outstanding, excluding finance lease liabilities.

Previous wording

Fees paid on our Securitization Facility are excluded from the table above, but would be approximately $8 million per year based on the interest rate in effect as of December 29, 2024 and assuming our balance of sold receivables stays consistent at $125.0 million.

Current wording

Fees paid on our Securitization Facility are excluded from the table above, but would be approximately $6.5 million per year based on the interest rate in effect as of December 28, 2025 and assuming our balance of sold receivables stays consistent at $125.0 million.

Previous wording

The liability for unrecognized tax benefits for uncertain tax positions was approximately$0.5 million as of December 29, 2024 and December 31, 2023 and is included in other liabilities on the consolidated balance sheets included elsewhere in this Annual Report on Form 10-K. These amounts have been excluded from the above table as we are unable to reasonably estimate the timing of the resolution of the underlying tax positions with the relevant tax authorities.

Current wording

We had no liability for unrecognized tax benefits as of December 28, 2025, anda liability of approximately $0.5 million as of December 29, 2024, which was included in other liabilities on the consolidated balance sheet included elsewhere in this Annual Report on Form 10-K. These amounts have been excluded from the above table as we are unable to reasonably estimate the timing of the resolution of the underlying tax positions with the relevant tax authorities.

Previous wording

We have various other noncancellable obligations consisting primarily of software licensing fees and consulting and other outsourced services.

Current wording

We have various other noncancellable obligations consisting primarily of software licensing fees, consulting and other outsourced services, and deferred consideration related to our acquisition of Connect.