Up next, we have Sterling Infrastructure, traded on NASDAQ under symbol STRL. On behalf of the company, we have Sharon Villaverde, CFO, and Noelle Dilts, VP of IR. Take it over.
Hi everyone. Again, I'm Noelle Dilts. Thanks for joining us. Obviously, they saved the best for last today, but I know we're the last thing between you and cocktail hour, so we'll try to keep it snappy, so we're a leading infrastructure services provider in the U.S. Our market cap here is a little bit dated. We're now running close to about $5.8 billion in market cap. We're almost $2 billion in revenue and running at about 13% EBITDA margins. We have net cash per share of $10.44, so we're operating in three segments today. I'll talk about each of these in more detail, but about half of our business is coming from our E-Infrastructure segment, where we're doing site preparation work, meaning land clearing, taking all of the topography and making it flat so that a large manufacturing center, data center, e-commerce distribution center is ready to get built.
And that's our highest margin segment. About 30% of our business, and this is the historical core of the company, and I'll talk about that in more detail as well, is Transportation Solutions, where we're doing a lot of alternative delivery, highway work in the Rocky Mountain region. We also do a lot of work in the aviation markets and in a little bit of rail work as well. And finally, about 20% of our business is tied to Building Solutions, where the majority of that business is concrete slabs that we're foundations, basically, that we're providing to the homebuilders in Dallas, our largest market, Houston, and Phoenix. And so we're working for the major homebuilders, D.R. Horton, Lennar, Pulte, HistoryMaker. And we also have acquired a plumbing business where we're doing some plumbing work in Dallas as well.
Our footprint is, we think we have an attractive geographic footprint. We like to call this the Money Smile, where we're doing a lot of work along the East Coast, really strong in that southeastern region where you're seeing a lot of industrial activity, and then coming up into that Rocky Mountain region as well, really strong in Utah, Colorado, Wyoming, etc., Nevada. So we like that geographic footprint we have today, so as much as we are transformed, I think you still have to understand our transformation to really have a sense of who we are today, and the Sterling of today really started in 2015 when our CEO, Joe Cutillo, was brought in to really fix what was essentially a broken company at that time, so back in 2015, the bulk of our business was low-bid, heavy highway work in Texas, and our core competency was losing money.
So we really started when Joe came in and our previous CFO, Ron Ballschmiede, they came into the business and it sounds simple, but they did an assessment. Where are we making money? Let's do more of that. Where are we losing money? Let's do less of that. And so it really, we had to change how we thought about opportunity at that time. And this has become a fundamental tenet of the company. It's don't chase revenue, chase profit. You know, at that point, and this happens with a lot of contractors, is you see a big high-dollar job, big Texas highway job, and you tend to, you know, you go after it, but you tend to underestimate the risk. The projects aren't fully baked from an engineering perspective, and it can cause cost overruns. And overall, it's a challenging situation.
So we really tried to start to move away from that work. We started to move into more of this alternative delivery work in the Rocky Mountain region with Utah, with Nevada, with Colorado. And we're more of a trusted partner with that work, and you're getting paid for the capabilities that you bring to the table. We'll talk more about that in a moment, but really started to shift that business. So the Transportation Solutions piece is this yellow. So you can see the revenue hasn't grown that much, but over this time period that we've talked about from 2015, where we were losing 5% on every dollar, today, this most recent quarter, we generated an 8% profit margin in that business.
So it's been hundreds and hundreds of basis points of margin improvement while keeping the top line relatively flat up until this past year when we really started to grow that business. In 2019, I'm sorry, in 2017, we acquired our Tealstone business, which is the core of that Building Solutions business that we talked about today. It's low capital intensity, great cash returns, and really helped to start to build the cash position to grow, sorry, to acquire into the E-Infrastructure business. We acquired Plateau in 2019, which is our southeastern operation, and we acquired Petillo in 2021, which is our union operation. And so that's been a really nice on a pro forma basis. Those businesses were growing about 30% per year when we talk about this timeframe on the slide.
Overall, from 2019 to 2023, we grew revenue by 21%, which we think is pretty good considering we weren't focused on revenue, but we were able to drive bottom line growth of about 38% over that same period. Really, that's again that focus of the company: drive bottom line growth in excess of top line growth. We feel that by focusing on margin opportunities, that kind of leads you into good growth markets. Getting into our businesses again, three segments. If you look at each of those, first in E-Infrastructure, I'll start with our largest segment. What's really important here is that we are the first element of construction on these larger projects, and we're also the most variable part of construction. Every site is different. You have different ground conditions.
You're dealing with the elements, but we're also critical because if you miss the date you're supposed to be finished with that initial phase of construction, when all the trades are coming in, your ultimate project can slip by months. And so as we're working on large data centers, large manufacturing centers, it is so important to those customers that we're able to hit that completion date on time. And so we're willing to commit to that completion date. On the flip side, our contracts are structured to take up some of the risks we can't control. So weather, certain ground conditions that might be different from what was indicated in initial studies. If it rains, we go out, we stabilize the soil with lime or cementitious material. We work around the clock 24 hours to get that job back on track.
We will get that job done for you on time, but you know, again, there's this risk mitigation factor, and that's allowed us to just become very valuable to our customers in this space. So today, our largest end market is data center. It's running around 50% of our E-Infrastructure backlog. Our next largest market would be large, complex manufacturing projects. Our largest project that we've talked about in that market is the Hyundai SK battery plant outside of Atlanta. And then we also do distribution center work for Amazon and Walmart and others. So we feel like there are some really nice drivers behind that business at the moment around data centers, onshoring of manufacturing, and even the e-commerce distribution piece that's starting to accelerate after being softer for a couple of years. In Transportation Solutions, again, as I mentioned, we're working in that Rocky Mountain region.
We have now entered into a market we think is. We just said on our conference call, it's the strongest it's been in the company's history. A lot of the states in which we worked were pretty flush with cash coming out of the COVID, with the COVID relief funds. Then we had the IIJA get passed. It increased funding into the transportation markets by 38% overnight, and so we're now in a market where we're able to cherry-pick attractive projects, and we think we can continue to grow that business and drive margin expansion as we move forward. In Building Solutions, Dallas, Houston, and Phoenix, we really like the long-term dynamics around these markets. We think they're population growth markets with structural housing shortages. We did start to see some slowdown in Dallas in the second quarter. It continued into the third quarter.
We're seeing a little bit of a pause there, but we again feel confident in and like the multi-year dynamics in those markets. Some of that opportunity is reflected in our backlog, although not fully. When you look at our backlog, a couple of points here on this slide. Margins, and these are bid margins, have continued to grow. This chart kind of shows that overall trend. We tend to execute above our bid margins. Over time, it's been half a point to a point, so that's one source of upside to our bid margins. On top of that, this does not reflect our residential business, which tends to, and plumbing businesses, which tend to be higher margin, but that's more of book and burn work.
The other piece that's, and really this is the most important piece to understand, is that our work, as we've started to move more into the data center space, those projects are awarded in phases. And so we're only putting the first phase or building. It's basically they're built in a series of buildings on a site. So we'll do the first site, and then when we complete that, we'll get the second phase. And so only that first phase is reflected in our backlog. So what backlog does not reflect at this point is about $500 million, a bit more than $500 million of future phase work on projects that we're on, where there's very high probability that we'll pick up that work, but it's not captured in our backlog metrics. And with that, I'll hand it over to Sharon.
Good afternoon, so this is just a summary of our most recent results. As you can see here, you know what I find most interesting about this and is key to our business model is, although we only had 6% in revenue growth, which is still a nice revenue growth number, we had a 50% increase in the bottom line, and so that is a consistent message that we communicate with our business unit managers, management teams. I'm relatively new to the Sterling team. I just joined in March, and what I find interesting about one of the things that Noelle said earlier about the turnaround in the business, it's really obvious to say, stop doing what you're not making any money at and do what you are making money at. There's an incredible amount of discipline that's required to actually execute that. It means shrinking businesses.
So I think she may have mentioned our Texas business back in 2015 was about $350 million in revenue. It was almost all heavy, low-bid, heavy highway. And that business is now in the $70 million range. So that requires a lot of discipline. And I think that discipline is what's reflected here in the bottom line growth numbers. The EPS was a record number for us. I think last year in total, our EPS was in the high, excuse me, the mid-threes, and so we, excuse me, mid-fours, and we should approach $6 this year. We also are generating a significant amount of cash. In the current quarter, we generated about $150 million in cash. Generally speaking, we guide to our operating cash flow being equal to our operating income.
We have been very successful at getting favorable working capital, basically in negotiating that into our agreements where we are working off of our customers' cash. So in both transportation and E-Infrastructure, we structure those agreements in such a way that we're getting paid before and we're getting paid before work is performed. And they're not deposits. We can be clear about that. They're not deposits, but it's just the structure of those payments and when we receive them. So we expect this year, last year, I think, well, there's another slide on that. I'll wait until then. So she talked about the backlog and the backlog margin. Again, I think it's the trend that we're talking about there that is most important and that it is up to the right. So this is our historical cash flow.
You can see here last year, approaching $500 million in cash generated, operating cash generated. We're expecting that number to be about $400 million this year. So continuing to exceed operating income. So we have an incredibly strong balance sheet. We closed the third quarter with about $650 million in cash and about $320 million in debt. Our primary focus for capital allocation is M&A, with the key focus being in our E-Infrastructure space, followed by Building Solutions. And I think the next slide, Noelle will go into more detail on those M&A opportunities and our focuses in that area. Secondarily, we do have an active share repurchase program, but that is really focused on being opportunistic. We're not in the market every day. We have a 10b5-1 in place to go out and acquire shares when the price reaches, drops to certain levels.
And so we will continue to do that.
So again, as Sharon sort of mentioned, given our strong balance sheet, we think we're in a great position to continue to grow the company through M&A. So historically, we've been very disciplined, right, on the M&A front. We tend to look for businesses that have leaders that are hungry, that are looking to stay with the business and grow the business. And we try as an organization to help them really unlock and unleash that growth potential. And so we really look at M&A in a few ways. In terms of our priorities around the infrastructure, we're continuing to try to add services to what we're already doing. So we have great relationships with our data center customers, our manufacturing customers. They're always asking us to do more.
So what are those adjacent services that make sense to bring into the portfolio? And secondly, we again have a very strong geographic footprint. There are a couple of areas that are interesting that we would look at for geographic expansion. Next, we would look at potentially Building Solutions. We love the plumbing acquisition that we did in that business in Dallas. We would like to take that into Houston and Phoenix. And we think there's some opportunity to continue to bolt on services there. We're less likely to acquire in the transportation space. It would have to be something very strategic. We continue to evaluate fourth leg opportunities. So we built three platforms at Sterling. We look at what are some adjacent markets that also have secular multi-year tailwinds that could see sustained growth opportunities.
So things we've talked about in the past are the power grid, electrical, and mechanical services, and so we like that multi-year grid trend, but have been wanting to find the right business or the right niche way to play that space. Sharon kind of touched on our guidance for this year. We're at revenue of $2.15-$2.175 billion and running at EPS of $5.85-$6 and EBITDA of $3.10-$3.15, so we really think that, again, given our backlog position, the secular tailwinds behind some of these markets, this continued focus we have on driving profitability expansion, we're in a good position to continue to execute to our guidance, so overall, you know, I think when we look at the company and where we are today, we believe we've really undergone the successful transformation that has laid the foundation for growth.
So we're now positioned to take advantage of these multi-year tailwinds across each of our markets. You know, again, tremendous opportunities that relates to data center, the onshoring of manufacturing in the U.S., and then on the transportation side, this continued build-out of aging infrastructure in the U.S., particularly in that Rocky Mountain region, and then we like, again, the long-term population growth dynamics of the markets we're in and the Building Solutions piece. We do see continued opportunity for margin expansion. This has been a key focus for investors. Our margins this year are quite strong, particularly in E-Infrastructure, as we've moved the business toward more of these mission-critical projects and executed well on our mission-critical projects, but we do continue to see opportunity to drive margins higher through a combination of focusing on those larger projects and the mix and execution within E-Infrastructure.
And then in transportation, the market opportunities, again, moving the mix in the right direction and cherry-picking attractive projects. That's allowing us to both grow and drive margin expansion in transportation. We feel good about our free cash flow profile and where we stand from a balance sheet perspective. And we believe that we have historically delivered strong returns to shareholders and try to continue to execute on this model to continue to deliver for our shareholders. With that, we can take any questions.
I think that it's something that you always have to remain focused on, right? Or you can easily slip back into bad habits. I would say that there's. I mentioned the Texas business has gone from about $350 million in revenue down to $70. There's probably a little bit of opportunity there.
You know, we're looking at potentially, can the yellow iron that we have in Texas be reallocated to work on E-Infrastructure projects that have much higher margins? That culture that Joe and Ron instilled back in 2015 and 2016 is very much alive and well, and if you, with any of our business unit leaders, if you start talking to them about revenue, they're like, what are you doing? We focus on bottom line. That's all we focus, or not all we focus on, but it is very deep within the culture. It is not something that I see much risk of going backwards. You always have to remain focused and continue to sharpen your skills, but it's very heavily embedded in our culture.
Yes. Yes. There's no bonuses for revenue. There's bonuses for EBITDA and EPS.
Some businesses like retail, you don't make money on the front end. You make money on the back end. Okay? In some cases, in some businesses, you don't make money on the first project, but it's the lifetime value of a customer is where you make the money. How do you make that distinction, and your business may not be that kind of business, but you know our business is quite like that. You don't make money on the first entry. You make it over the lifetime.
I don't feel we are mostly new build, right? And we're focused on making sure we're getting paid for the value we bring. And we know that we are an important part of, let's say, E-Infrastructure. We know we're an extremely critical part of that construction piece. We deliver on time. Our customers know that we deliver on time and trust us to do so. And so, you know, we get paid a bit of a premium for that. Our CEO says he wishes it was double. It's not. So we try to get paid for our value. That said, you know, it's always the first job and win with a new customer is always harder, but we're not, you know, we're not going to give up on price. But what does happen is once we're not going to low bid that project is the better way to say that.
But once we're ingrained and they start to really understand the value proposition that we bring and how important we are, we get pulled into these programs, right? So this is getting a little bit nuanced, but we'll have a direct relationship with, say, like a Meta or an Amazon. We'll talk to them years in advance about they'll just want advice on should we build on Site A, Site B, Site C, or Site D? What are some of the considerations? So we're getting pulled into these programs early. When they start to build these facilities, they know what we're, and they might have multi-year plans. You know, we're getting pulled in and we're not, we're working and discussing with our customer on these projects. It's not, it's oftentimes kind of negotiated type work as opposed to being a big competitive bid situation.
So we become like a partner in a lot of these, in a lot of these programs. And so I would say the first win is always toughest, but then we try to prove out how valuable we are and we become like a trusted partner to a lot of these customers. But we are mostly new build, but an important part of that. That makes sense.
Growing by acquisitions. So what are your criteria? Geographical? What kind of parameters do you look at?
Yeah. So we have, it's different for each segment, of course, right? So there are certain geographies that we're interested in. There are other geographies we're less so. But more from a, when we're looking at acquisitions, and this is what's most important is we're looking to buy high-quality companies. We always say, you know, we're looking at this as a marriage. It's forever. We're buying people, we're buying culture. We want to make sure we're buying, you know, a business that really fits in with the Sterling, with Sterling's culture, with how we think about business. We're looking for people who know how to run a good business. But maybe, you know, they've hit a constraint to growth or they need to get to that next level and we want to help them get there. So high-quality businesses is the first thing.
We're typically looking for businesses that are accretive from day one and have the potential to, Joe would say, double, you know, within a three-year time period. So it's more about the quality of the business. That's like non-negotiable. High-quality businesses looking for folks to stay with those businesses who can run and will fit with the entrepreneurial model of Sterling. But in terms of then around specific services, we do try to, you know, find pain points or whether it's for us or for our customers, what services can we add that will really enhance this, you know, again, this already strong service that we're bringing to the customer? What more can we add that can make that even more valuable? From a geographic perspective, it's just where might we be able to, what's an attractive geography, say in the infrastructure?
We're interested in Texas, parts of Texas. Ohio is another market that's interesting. But historically, it hasn't paid to, like Arizona, we're not involved in the chip plants down there because it's pretty flat. You know, historically, it hasn't paid to make flat ground flatter. So we evaluate all of those types of elements when we're looking at a deal. And from a geographic perspective for Building Solutions, we've talked about Florida being the next logical market to go to, given we're doing slabs. And that is a slab market that also has, you know, long-term population growth. But again, we're going to look for the right fit from a business perspective.
We have tended to look at privately owned companies. We really do look at the gamut of size for some of the bolt-ons. You know, we're typically in that 10-30, you know, million type range of EBITDA that we're looking at. But then we will look at some significantly larger things. Again, Joe has said, our CEO has said he'd like to do some larger deals. It's just as hard to do a small deal as a large deal. And so we have been looking at some opportunities of size.
So on the data center side, we're overweight. So we'll just kind of talk through our segments. On the data center side, we do a lot of work for the hyperscalers. The one we don't do as much work for is Microsoft. We think that tends to be because of where they're building. And then on the manufacturing side, again, this is something I should have brought up earlier, but we really are end market agnostic. Like we've built EV battery plants. We have built solar panel component manufacturing facilities. We think that mix will evolve over time into things like pharma, food and beverage, you know, more traditional manufacturing. And the chip plant opportunity is a really big opportunity as we look out into 2026, 2027. So, you know, the customer, the end customer there on the manufacturing side will move around.
But we don't care if a project is data center, manufacturing, distribution center. Any of those large mission-critical projects are really where we shine. On the distribution center side, if you went back again a few years ago when Amazon was really building a lot, Amazon was our largest customer. Again, we shifted that business. Then we've moved now more into manufacturing and data center. So I would say it's more with the end customer than with like a big property REIT. On the data center side, we work with hyperscalers. We do work with colocation providers and REITs. So it is a combination. But as it relates to Amazon, it's more directly with an Amazon that we'd be working with. I'll let Sharon.
Yeah.
My biggest thing that keeps me up at night probably drives Noelle nuts when I say this every time is just finding the right target, right? We've got close to $700 million on the balance sheet. We want to acquire a business. It's key to our strategy. You know, we want to double the business in the next three to five years, and that's not all going to be organic, but you know, we have a very proven track record of being slow and methodical about that, and as a result, those acquisitions have been very successful, so being new to the team, I recognize the value that that patience has brought in the past, and so we need to continue to do that. We look consistently. We come close consistently, but just not quite there, so hopefully that will come soon.
All right, well, thank you all for coming.
I appreciate it. Enjoy your coffee.