Centuri Holdings: A Turnaround Story with $4.5B Backlog Fueling 2025 Growth

In an era where utility infrastructure players face cyclical headwinds, Centuri Holdings (NYSE: CTRI) is emerging as a standout story of operational resilience. With its Q1 2025 results and leadership-driven strategy, the company is proving that disciplined execution and a fortress-like backlog can turn the tide for investors. Here’s why this $2.6B revenue player is worth a closer look—and a potential buy.

The Narrowing Loss: Proof of Cost Discipline

Centuri’s Q1 2025 results delivered a critical signal: the company is not just growing revenue but tightening its grip on profitability. Revenue rose 4.2% year-over-year to $550.1 million, while the adjusted net loss narrowed to $10.5 million—a 27% improvement from $14.4 million in Q1 2024. This is no accident. CEO Chris Brown, who took the helm in December 2024, has prioritized restructuring costs and optimizing crew efficiency. For example, the Non-Union Electric segment—a key growth driver—posted a 49.7% revenue surge in 2024, fueled by hurricane recovery work, while management is now focusing on replicating this success in gas and offshore wind segments.

The $4.5B Backlog: A Cashflow Engine

The real star here is Centuri’s backlog, which soared to $4.5 billion as of Q1 2025—up from $3.7 billion at year-end 2024. A staggering 90% of this backlog is tied to Master Service Agreements (MSAs), which lock in recurring revenue with utilities for years. This isn’t just a number; it’s a moat. MSAs provide stable cashflows, insulating Centuri from quarterly volatility. Management has set a target to secure $1.5 billion in late-stage bids and renew 40 MSAs in the next 12 months, aiming for a book-to-bill ratio exceeding 1.1x. With a backlog-to-revenue ratio of ~160% (vs. industry averages of ~100%), Centuri’s pipeline is a buy-and-hold investor’s dream.

CEO Brown’s Playbook: Three Levers of Growth

1. MSA Renewals as a Lifeline: Brown has made MSA renewals a top priority. With 40 renewals expected in 2025, the CEO is leveraging existing customer relationships to secure predictable revenue. This contrasts sharply with peers chasing one-off projects.
2. Sales Pipeline Expansion: The sales pipeline has grown by 33%, with a focus on cross-selling across electric and gas segments. The $1.2 billion in Q1 customer awards—split between new contracts ($505M) and renewals ($700M)—demonstrates execution muscle.
3. Free Cash Flow Focus: Despite sector-wide margin pressures (notably in gas operations), Centuri’s net debt-to-EBITDA ratio improved to 3.6x by end-2024. Brown aims to further deleverage, using free cash flow to reduce debt and fund growth without diluting shareholders.

Risks vs. Catalysts: Navigating the Storm

Risks:
- Gas Margins: The U.S. Gas segment faces headwinds from lower-margin Northeast projects, which could crimp EBITDA.
- Offshore Wind Declines: Union Electric’s offshore wind revenue fell 5.5% in Q4 2024 due to project delays.

Catalysts:
- Offshore Wind Recovery: Centuri’s offshore wind pipeline includes projects tied to states like New York and Massachusetts, which could rebound in 2025-2026.
- MSA Wins: With 90% of the backlog under MSAs, any incremental wins (e.g., a $150M bid) could add meaningfully to 2025’s $2.6–2.8 billion revenue target.

Why Buy Now?

Centuri is a bet on two things: structural demand for utility infrastructure and execution under new leadership. With a backlog that guarantees ~$2.6 billion in 2025 revenue (per the full-year guidance), the company is de-risked compared to peers chasing uncertain project wins. Meanwhile, Brown’s focus on MSA renewals and cost discipline creates a path to EBITDA margins expanding from 9% (2024) toward double digits.

At a forward EV/EBITDA of ~8x (vs. sector averages of ~10–12x), CTRI is priced for skepticism. But with a backlog that’s 70% larger than its annual revenue target, this is a stock primed to outperform as utilities spend accelerates. For investors willing to look past short-term gas margin noise, Centuri is a compelling play on the $1.2 trillion U.S. energy infrastructure boom.

Bottom Line: Buy CTRI. The backlog is loaded, the leadership is sharp, and the valuation is too cheap to ignore.