MasTec, Inc.

Thank you for standing by and welcome to MOSTEC's second quarter 2026 financial results conference call originally broadcast on Friday, July 31st, 2026. Today's call is being recorded. I'd now like to turn the call over to Mark Lewis for some opening comments.

Thanks Dan and good morning everyone and thank you for joining us for MOSTEC's second quarter earnings conference call. Joining me today are Jose Mas, Chief Executive Officer and Paul Dimarco, Chief Financial Officer. We have prepared slides to supplement our remarks which are posted on the MOSX website on the Investors tab and through the webcast link. There is also a companion document with information and analytics on the quarter and a guidance summary to assist in future financial modeling. Please read the forward-looking statement disclaimer contained in the slides accompanying this call. During this call, we will make forward-looking statements regarding our plans and expectations about the future as of the date of this call. Because these statements are based on current assumptions and factors that involve risks and uncertainties, Our actual performance and results may differ materially from our forward-looking statements. Our Form 10-K, as updated by our current and periodic reports and findings with the SEC, include detailed discussion of risks and uncertainties that may cause such differences. In today's remarks, we will also be discussing adjusted financial metrics, reconciling yesterday's press release and supporting schedules. We may also use certain non-GAAP financial measures on this call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measures found in our earnings release, our slides, and companion documents. We had a nice in-line quarter, and now I'd like to turn the call over to Jose for his commentary. Jose?

Thanks, Mark. Good morning, and welcome to Moss Tech's 2026 second quarter call. Today, I'll be reviewing our second quarter results as well as providing my outlook for the markets we serve. First, some second quarter highlights. Revenue for the quarter was $4,374,000,000, up 23% year-over-year. Adjusted EBITDA was $384,000,000, a 40% year-over-year increase. And adjusted earnings per share was $2.22, a 49% year-over-year increase. And backlog of quarter end was $21.4 billion, A nearly $5 billion year-over-year increase and a billion dollar sequential organic increase. A new record level. In summary, we delivered another excellent quarter. In fact, we set new highs across virtually every key financial metric. More importantly, the underlying demand driving these results continues to strengthen. Revenue, EBITDA, and EPS were all above guidance with strong year-over-year double-digit growth. EBITDA margins improved 100 basis points versus last year's second quarter and total company book-to-bill was over 1.2 times, setting yet another backlog record. 2026 is on track to be a record year and the recent acquisition of the Superior Group only adds to the momentum we are building as we look ahead to 2027 and beyond. Maybe more importantly, beyond the second quarter performance, what we're seeing across our end markets continues to reinforce our confidence in the longer-term opportunity in front of us. Just a few months ago in May, we held an investor day in New York. We had the chance to provide more detail around the opportunities for each of our business segments and set longer term financial targets, including specific 2028 organic targets. We believe we've made a lot of progress in the two months since Investor Day. While we recognize there has been increased noise in recent weeks related to market dynamics, the pace of project bids, negotiations, and longer term development is as strong as we've ever seen. In fact, during the second quarter, we have seen a meaningful increase in large project pursuits. To reiterate, we are seeing unprecedented demand across our business, and we expect that to translate into further continued strong backlog growth. Also since Investor Day, we've now closed on the largest acquisition in our history. I'd again like to welcome the superior family to Maastricht. While Superior is a great company with incredible growth opportunities ahead, we're very bullish on our ability to further the impact of Superior by coupling other MassTech services to enhance our growth across the mission-critical space. We believe this acquisition enhances our capabilities, deepens our customer relationships, expands our highly skilled workforce, and broadens our addressable market. More importantly, it positions Maastricht to lead what we believe will be a generational infrastructure investment cycle driven by AI, electrification, and the continued growth of digital infrastructure. For the balance of 2026, while we expect continued strength across pipeline, power delivery, and our clean energy and infrastructure segment, we are experiencing some pressure in our communications segment. While our longer-term outlook in communications is unchanged, we are experiencing some short-term pressure. The two primary drivers are lower wireless revenues in the second half of 2026 relative to the first half, as well as certain wireline project deferrals. Wireless revenues exceeded our plans for the first half, and the next wave of growth will be driven by the rollout of new spectrum where the related equipment won't be available until next year. On the Wireline side, we're being impacted by RDoF projects rolling off and the replacement projects we've won are having delayed starts. We see fiber expansion as the greatest opportunity within that segment and are seeing significant capital investments from our customers there. While wireless has historically represented a larger portion of our communications business, the investments we have made in Wireline over the last several years are an important part of our growth story. Our communications business grew organically by more than 30% last year, and as we continue to shift more towards wireline, we've seen some variability in project cadence and quarter revenue timing. We've continued to win work associated with hyperscaler connectivity and are currently pursuing billions of dollars of opportunities related to that end market within our communications segment. Moving on to power delivery, Revenue was up nearly 20% year-over-year and EBITDA grew by 24%. Margins were up sequentially by 220 basis points and we expect continued strong performance for the balance of 2026. Backlog for the segment was up nearly $1.3 billion over last year and we've had an excellent start to the third quarter in new bookings. Utilities are spending heavily on transmission, system hardening, and reliability, and that's being driven by both aging infrastructure and increasing demands. A big part of that demand is coming from mission critical, where we see really strong long-term demand and significant expansion of the grid, new transmission lines, substations, and upgrades across the system. When you combine load growth, resilience, and energy transition, it creates a long duration and a highly visible opportunity set. The combination of MOSTEC and Superior enhances our ability to meet those demands while also providing Superior and its customers with the benefits of MOSTEC's financial strength, broader geographic reach, and diversified infrastructure platform. Again, we see meaningful opportunities to expand relationships with existing customers by offering a broader range of services across both organizations. In clean energy and infrastructure, segment revenues increased 43% year-over-year, EBITDA was up 54%, and segment backlog increased sequentially by $500 million, representing a book-to-bill of 1.3 times. Backlog growth was driven primarily by renewables, where we continue to see really strong demand for both near and long term. We're also very excited about the demand around power generation. As we covered in our investor day, we are focused on simple cycle and rice engines. The number of pursuits has increased materially, and our bullishness has only increased since investor day. We're also seeing strong demand for our water infrastructure business and that integration has gone very well. Our recent turnkey data center project is also progressing well and is a strong example of the demand for the breadth of MOSTEC's platform with multiple sister companies working together on the same project. Demand for the skill set that MOSTEC has developed in construction management coupled with the capabilities we have in civil, power, telecom, and maintenance creates a significant opportunity to substantially expand this part of our business. We are currently in the midst of several large pursuits and fully expect additional awards in 2026. Our focus remains on partnering with customers early in the development process helping them solve complex infrastructure challenges and positioning MosTec to capture opportunities across the full lifecycle of mission-critical projects. Coupled with our ability to self-perform a significant portion of the work, we expect this part of our business to be a meaningful driver of solid long-term growth. On the pipeline side, the fundamentals are also very solid. For the quarter, pipeline segment revenue was up 19% year-over-year and EBITDA nearly doubled. Backlog increased just over $450 million sequentially and backlog hit its highest level since the second quarter of 2023. With that said, our long-term visibility is far better than our reported backlog number represents. The mission critical power generation opportunity is also creating significant demand for pipeline infrastructure. Our customers are committing to future gas deliveries that will drive significant pipeline investment. This, coupled with current pipeline bottlenecks and constraints, has significantly enhanced our longer-term prospects in this segment. In closing, we expect 2026 to be a great year. With record performance across revenue, profitability, and backlog, these results reflect strong execution across the business and the strength of our diversified platform. More importantly, the amount of investment going into critical infrastructure right now is significant and is being driven by some very durable trends, whether that's AI and data centers, grid reliability, energy demand, critical infrastructure, or connectivity. We believe MOSTIC is uniquely positioned at the center of these critical infrastructure trends with the capabilities, customer relationships, and backlog to drive sustained growth. Given our performance, momentum, and the addition of Superior, we are increasing our full-year guidance. We now expect revenues of $18.2 billion, adjusted EBITDA of $1.6 billion, and earnings per share of $9.30, representing year-over-year growth of 27%, 39%, and 42%, respectively. Reflecting on our updated guidance, It's important to recognize that our exposure to the mission-critical market at scale is still in its early stages. The acquisition of Superior, together with the Turnkey Data Center award we received in the fourth quarter of last year, has fundamentally expanded MOSTECH's position in this market. Despite nearly $2.5 billion of backlog growth over the past two quarters, only a modest portion contributes to 2026 revenue. with the majority expected to benefit 2027. We believe that timing reinforces the long-term earnings power of the business. We believe we're in the early stages of one of the largest infrastructure investment cycles we've ever seen, and Mostec is better positioned today than at any point in our history to capitalize on that opportunity. I'd like to take a moment to thank the men and women of Mostec, It is both an honor and a privilege to lead such an outstanding team. Our people are deeply committed to the values that define us, safety, environmental stewardship, integrity, and honesty, while consistently delivering high-quality projects at the best possible value for our customers. These principles have not gone unnoticed. Our customers recognize and appreciate the dedication and excellence our team brings to every project. It is through the hard work and commitment of our people that we have positioned ourselves for continued growth and long-term success. I will now turn the call over to Paul for our financial review. Paul?

Thank you, Jose, and good morning, everyone. We are pleased with our second quarter performance and the continued execution across our business. For the quarter, revenue was approximately $4,375,000, adjusted EBITDA was approximately $384,000,000, and adjusted EPS was approximately $2.22. with each metric exceeding guidance and representing another quarter of strong year-over-year growth across all major financial metrics. Adjusted EBITDA margins expanded approximately 100 basis points year-over-year, reflected solid operating performance for the consolidated business. Our second quarter results were driven by broad-based strength across most of the portfolio. Power delivery generated approximately $1.25 billion of revenue with EBITDA margins exceeding 9%, benefiting from strong execution and continued utility infrastructure investment. Pipeline infrastructure delivered another excellent quarter, generating approximately $643 million of revenue, with EBITDA margins approaching 20%, reflecting both strong project execution and favorable project mix. Clean energy and infrastructure generated approximately $1.6 billion of revenue and $120 million of EBITDA, supported by continued growth across renewables, infrastructure, and mission-critical construction activity. Together, these businesses continue to benefit from substantial demand for infrastructure construction across power generation and delivery, natural gas, heavy civil, and data centers. Backlog increased to another record level of approximately $21.4 billion at quarter end, growing roughly 5% sequentially and 30% year-over-year. Total company booked to bill was approximately 1.2 times, led by strong performance in pipeline infrastructure and clean energy infrastructure. while power delivery backlog also increased to a new record level. The continued growth in backlog provides us with excellent visibility entering the second half of 2026 and reinforces our confidence in the medium-term outlook for the business. One of the most important takeaways from the quarter is the strength and resiliency of our business model. While we are reducing communications outlook for the remainder of 2026, the strength of our other businesses is expected to offset the communications impact and support our full year outlook. Power Delivery, Pipeline, and Clean Energy Infrastructure are all performing at or above our expectations supported by strong execution and attractive backlog development. This highlights the significant benefits of the diversification strategy we have built over many years and demonstrates our ability to deliver growth even when conditions vary across individual end markets. In particular, We continue to see substantial investment activity tied to electrical modernization, power generation, data center development, industrial infrastructure, and natural gas infrastructure. These markets benefit from durable, long-term demand drivers and collectively represent a much larger portion of our business today than they did just a few years ago. As a result, we believe MossTech is increasingly positioned to deliver more consistent growth and less dependence on any single infrastructure cycle. In July, we closed the acquisition of the Superior Group, which further strengthens our position in several of the fastest-growing infrastructure markets we serve. Superior expands our electrical infrastructure capabilities within mission-critical facilities and data centers, adds a highly skilled workforce of approximately 3,000 team members, and broadens our ability to provide integrated solutions to many of our largest customers. We continue to be excited about the long-term strategic and financial benefits this transaction creates. Now I'll share some additional details on our second quarter segment performance and outlook. Our communications segment generated approximately $890 million of revenue and $73 million of EBITDA for the second quarter, resulting in EBITDA margins of approximately 8.2%. Revenue was generally consistent with our expectations for the quarter. However, execution challenges on certain projects, coupled with higher indirect fuel and equipment expenses, led to lower profit flow through than anticipated. While we remain very constructive on the long-term outlook for broadband infrastructure, fiber deployment, and data center interconnect opportunities, we are seeing near-term project deferrals that are expected to moderate the pace of upcoming customer spending. As a result, we are reducing our communications revenue and earnings expectations for the balance of 2026. We now expect full-year communications revenue of approximately $3.25 billion and EBITDA margins in the high single digits, approximately 100 basis points lower year-over-year. While disappointing in the near term, we are using this period as an opportunity to right-size our operational support model and rationalize select markets that do not align with our longer-term growth and margin objectives. For the third quarter, revenue is expected to be approximately $800 million with high single-digit adjusted EBITDA margins. Our power delivery segment delivered another solid quarter. Revenue was approximately $1.25 billion with EBITDA of $113 million, both exceeding our expectations and representing margins of just over 9%, expanding over 30 basis points year over year. Demand across our utility and transmission business remains very strong driven by grid modernization, electrification, system reliability investments and the growing power requirements associated with data center development. Power delivery backlog increased to another record level of approximately 6.3 billion with book to bill of 1.1 times despite record quarterly revenue. We continue to see strong award activity expanding scope on existing projects and increasing interest from customers in larger, more integrated product delivery models. For the third quarter, we now expect power delivery, inclusive of superior results, to generate approximately $1.6 billion in revenue with EBITDA margins in the low double digits and full year revenue of approximately $5.725 billion with EBITDA margins also in the low double digits. Our pipeline infrastructure segment continued to perform very strong. Revenue for the quarter was approximately $643 million, with EBITDA of approximately $119 million, or 18.4% EBITDA margin. Strong project execution continues to drive EBITDA results, while broader market demand continues to build. Backlog increased to approximately $1.8 billion, up 35% sequentially, a book to bill of 1.7 times, representing the strongest growth rate of any of our segments this quarter. In addition, as we've discussed previously, our reported backlog does not fully capture the level of customer engagement and project development activity we continue to see. For the third quarter, we expect revenue of approximately $645 million in EBITDA margins in the mid-teens, consistent with our prior outlook, reflecting project timing and mix moderating somewhat from strong first half levels. Our full-year outlook remains largely unchanged as we position the business for the expected ramp into 2027. Our clean energy and infrastructure segment generated over $1.6 billion of revenue and $128 million of EBITDA during the quarter. Demand remained strong across renewables, civil infrastructure, industrial construction, and general building, with the modest revenue miss driven by timing. Backlog increased to approximately $7.8 billion, growing roughly $500 million sequentially, with a book to bill of 1.3 times, despite another record quarterly revenue. Renewables also continued their streak of sequential backlog growth. Looking to the third quarter, we expect revenue to increase to approximately $1.9 billion, 40% growth year-over-year, with EBITDA margins in the high single digits, in line with 2025's third quarter, despite a higher revenue contribution from general buildings at mid-single-digit margins. For the full year, we now expect revenue of approximately $6.8 billion in EBITDA margins in the high single digits, both ahead of our prior expectations. From a consolidated perspective, we now expect full-year revenue of $18.2 billion, adjusted EBITDA of $1.6 billion, and adjusted EPS of $9.30. For the third quarter, we expect revenue of $4.9 billion, adjusted EBITDA of $482 million, and adjusted EPS of $2.98. Cash flow from operations was essentially flat for Q2, with working capital investment offsetting the strong sequential and year-over-year earnings growth. Overall, We expect over $1 billion of cash flow from operations for 2026, with the majority anticipated to come in Q4. Net leverage at Q2 was 1.8 times and would have been 2.2 times for a former Superior acquisition. We expect net leverage to be below 2 times by year end, consistent with our financial policy. Overall, we are pleased with our Q2 results and outlook for 2026. Our broadly diversified service offerings continue to provide resiliency to MOSFET's consolidated earnings profile. We entered the second half of the year with record backlog, strong visibility, and increasing momentum. When we combine the strength with the expected contribution from Superior, we believe the company is well positioned to continue delivering profitable growth while benefiting from some of the most attractive infrastructure investment trends in North America. This concludes our prepared remarks. I'll now turn the call over to the operator for Q&A.

To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We have a lot of participants on the call today, so we ask that you please limit to one question and one related follow-up and get back into the queue as a courtesy to other analysts on the call. Please stand by while we compile the Q&A roster. Our first question comes from Alex Regal, with Texas Capital. Your line is open. Alex, your line is open. Please check your mute button. Our next question comes from Liam Burke with B Reilly Securities. Your line is open.

Yes, thank you. Good morning, Jose. Good morning, Liam. Jose, there's been a lot of noise in your telecom business, and some of the opportunistic long-term opportunities are discussed in fiber to the home and beads. How does the outlook for long-haul upgrade and construction look over time as you get through the puts and takes of wirelessness?

Yeah, so Liam, let me address a little bit more off script. So obviously we're disappointed with our comms, both results in the quarter and our guidance for the balance of the year. We underperformed a little bit as we started to see pressure at the tail end of the quarter. I want to make a couple points, right? One is that the capital investment in the industry isn't really declining, it's changing. So if you take, for example, Spectrum. There's been a lot of news on Spectrum. There's been multiple carriers that have bought Spectrum this year. Carriers have to make a decision. If they buy Spectrum and they have to do... Add capacity to sites. Do they do it now and then have to go back and redo that with new spectrum early next year, or do they hold off and do it all at the same time? And I think that's what we're seeing, and that's impacting negatively our wireless business, right? It actually is a positive in the long term of the business because those spectrum build-outs is good news for MOSTIC over the long term, but in the short term, it's creating delays on projects that we expected to complete on the second half. In addition, what we're seeing in the business is that The best part of that business is going to be the hyperscaler build-outs. And we're winning our share. We talked about pursuits of multiple projects north of a billion dollars. But those take time, right? Those aren't 27 builds. We're seeing some RDoC projects fall off a little bit earlier than we expected. And some of the work that we had won to replace that is facing some delays and some permitting challenges. So again, we're disappointed about what it means to the second half. but we believe that the long-term fundamentals of that business are unchanged. We believe our customers' capital plans are unchanged. They're just changing how they spend it. The fact is that historically we've been more skewed to wireless. We've changed that over the last few years. We've done a great job of building our wireline business and unfortunately we're getting caught up in timing here as some project shifts and move. But overall we're pretty excited about where that business is going and again we think the long-term fundamentals of it are unchanged.

Just as a follow-on, on the wireline side, you're getting involved now in the planning stages of all these projects, giving you better visibility, probably not in 26, but in the longer haul.

there's no question right and I think you know look this is this is a legacy business for us I think we've got a great reputation in this business we have great customer relationships I think we're very close to our customers I think we fully understand what's going on we're disappointed that we didn't catch it earlier and really communicated earlier but We're managing the best that we can. And outside of comms, quite frankly, our business is doing great. So we're in a position to kind of manage through this and hopefully see it shift in 2027. Great.

Thank you, Jose.

Thanks, Liam.

Thank you. Our next question comes from Andy Kaplowitz with Citigroup. Your line is open.

Good morning, everyone.

Morning, Andy.

Jose, just maybe a little more detail on the telecom stuff. Is it more, you think, broad-based deferrals across a bunch of wireline customers or more a couple customers delaying with the art of transition? And we think about that $400 million in lower communications guidance. Are delays something like 75% wireless, 25% wireline? Are they more even? Just any color would be helpful.

Yeah, I'd say a couple things. I'd say it's pretty specific to a couple customers on the wireline side, especially as it relates to our business. We had some wins that we expected to kick off that are getting pushed by a couple months. I'd say it's roughly 50-50, maybe a little bit more skewed to wireless.

Okay, very helpful. And then Paul mentioned using this time to right-size the communication business a bit. Maybe you could give us a little more color into what that means, and can it help you offset the higher fuel and other costs that Paul mentioned that's impacting your business to ultimately get that margin back into the double digits over time?

Yeah, look, a couple things. One is, you know, the margin profile for the second half of the year is actually much improved from the first half. We expect second half margins in that business to be up about 200 basis points in the second half versus the first half, despite the revenue challenges. You know, some of that we're doing through exactly what Paul talked about, right, is we're really trying to max. We've grown a lot in that business over the last year, so we're taking this opportunity to really, create more efficiencies and build into that, but also understanding that we expect it to come back pretty strong, so we can't cut too deep, but I think we're taking our time to manage as best as we can through this and take advantage to the extent that we can of short-term pressure.

Appreciate the call, Jose.

Thanks, Andy. Thank you. Our next question comes from Alex Regal with Texas Capital. Your line is open.

Thank you. Apologize for that, Jose.

Very nice quarter.

How are you, Alex?

Good. You mentioned that you're seeing an increase in large project pursuits. Can you expand upon what segments these opportunities are in and give us some color on the timing of these?

Yeah. One of the things that we really tried to outline today is kind of talk about the entire industry, right? And if you think about even across our peer group, right, if you see who's having success and what areas of the business are having success, Everything tied to mission critical is doing extremely well right now, and I think, again, part of the prepared remarks were about what we've seen in the market over the course of the last few months with people's concerns around that industry. We're seeing quite the opposite. We're seeing unbelievable demands, and we're seeing no end in sight to that. The truth is that as a percentage of revenues. Our business, relative to Mission Critical, has been quite small, smaller than our peers when you look at it. And if you look at the areas that were most impacted by those industries, which would be in clean energy and in power delivery, those businesses are doing unbelievably well for us, for us to grow our and many more. by that part of the business are doing unbelievably well. So what we've done over the course of the last six months and even over the course of the last week since we closed Superior is we feel like we've significantly increased our exposure to that market. That will lead to a lot more work. It will lead to a lot more growth. We tried to highlight the fact that we've won $2.5 billion of additional backlog, of backlog growth in the first half of the year, of which very little has impacted 26, right? So we're beginning to see what you're seeing in a lot of other people's reports, right, which is those businesses are good, those businesses offer significantly outsized growth. Unfortunately, we haven't been in a position to benefit the same way others have here over the course of 26, but I think we've positioned ourselves to do that going forward, and we're really excited about what that means for us.

At a high level, do you anticipate backlog ending 2026 at a higher level than today, inclusive of Superior? And if so, what segments may see the greatest near-term growth?

So the answer to the question is absolutely yes, and we expect it to be in power delivery, clean energy, and infrastructure and pipeline. We think those three will drive backlog growth. Obviously, as it relates to mission critical, power delivery and clean energy and infrastructure will be the most impacted by those. But we do expect nice growth between now and the balance and the end of the year.

Thank you.

Thanks, Andy.

Thank you. Our next question comes from Sangeeta Jain with KeyBank Capital Markets. Your line is open.

Thanks for taking my questions. I'm going to ask one on pipelines. So contrary to what we've seen in the last few quarters, your backlog grew this quarter, but you kept the revenue guide unchanged. So just wondering if there's a read into that that you may be moving to other geographies for some larger pipeline projects?

No, nothing to read into it. I think, you know, we've been really clear about pipeline. We came into the year with the level of expectation. We said it would be hard to beat that because of materials. We still feel the same way. We just want a project that, you know, got contracts signed. The work is actually for 27. It's not even for 26. It kind of drew a lot of that backlog. So, again, you know, we've always said backlog's tricky in that business. Our visibility is fantastic. for multiple years out. We feel really good about 27. We feel amazing about 28 and 29. So it's just, you know, unfortunately, backlog isn't representative of the strength of that business. You see a little bit of that changing now if we expect further projects to book between now and the balance of the year. But that, you know, that big increase in backlog doesn't really impact 26.

And should we consider a similar margin profile for second half versus first half? for the projects that you do have in backlog currently?

You know, I think that our guidance hasn't changed. We normally guide to the same levels. You know, we might have slightly lower revenue in the second half than the first half. I think that's what's called out in guidance. So, you know, I would expect, you know, similar – I would expect a margin profile that we're guiding to.

Thank you. Our next question comes from Jamie Cook with Truist. Your line is open.

Hi, good morning. I guess a couple questions. Just one, you know, obviously we announced Superior and the acquisition is closed. I'm just wondering, Jose, how conversations have evolved with customers now that this is public and they understand Your broadens, I guess, skill set and have conversations involved in that. You think that could create potential revenue synergies? So I guess that's my first question. And then my second question. Sorry, go ahead.

Answer that one first. I think we've been pleasantly surprised. Conversations, customers has gone unbelievably well. We think there's incredible opportunity. I think it's why we spend so much time in our prepared remarks talking about it. I think it will definitely translate into a lot more business for all of MOSTIC and I think it will be evident before year end. We'll be able to get into a lot of detail around that.

Okay, and then I guess just a second question. Obviously the backlog growth was strong in the quarter, in particular CE&I. I'm just wondering as we look at that backlog growth, was it larger awards? Was it just sort of You know, base hits, because I'm trying to think about that backlog growth with the backdrop that you're pursuing these large billion dollar awards and what that can mean for, you know, backlog as we exit the year. Thank you.

Yeah, it was not inclusive of any of those large type of pursuits. Those were not the wins that drove the backlog in the second quarter. It was more, you know, our normal type work, normal size projects.

Okay, thanks. I'll get back in queue.

Thanks, Jamie.

Thank you. Our next question comes from Mark Bianchi with TD Cowan. Your line is open.

Hey, thanks. I guess the first one, just on the communications and the deferrals and sort of how you see 27 shaping up, I mean, should we be thinking that you can get back to sort of first half 26 run rate in the first half of 27, or does it take longer for the business to come back?

You know, I think it's definitely going to be better than the Then our run rate in the second half, I think we've got to come back to that as we know more. Again, we're chasing a lot of big pursuits right now. That's going to have a big impact on 27 overall. So as some of that comes to fruition, I think we'd be in a better position to answer that question.

Okay, thanks for that, Jose. And then just on Superior, you've mentioned a billion-four of backlog for them. That was in May. You've got another month, I guess, under the belt. I'm curious how that backlog has evolved. And when you say 1.4, is that synonymous with the 18-month backlog that you guys talk about?

So a couple things. I think that we're really pleased with the progression of Superior's business with their backlog build, with the expected backlog build through the balance of 26. will be able to report that next quarter. I think we're really bullish as to what's happening with their customers with longer-term pursuits. We're in discussions for lots of projects over a very long and extended period of time. The 1.4 was similar to how we would look at our backlog build, and we look forward to updating the street on those numbers when we report our third quarter numbers.

Great. Thanks, Jose. I'll turn it back.

Thank you. Thank you. Our next question comes from Brian Brophy with Stifel. Your line is open.

Yeah, thanks. Good morning. I appreciate you taking the question. Jose, curious your thoughts on pursuing international pipeline opportunities and how you think about those projects from a risk mitigation standpoint, both from margin profitability standpoint as well as a collection standpoint. Thanks.

Sure, so I think a couple things about maybe broader international work. I think one of the interesting things about these businesses that we're building is they're people light, right? So whether you're thinking about turnkey data centers or even there's an enormous amount of activity that we're seeing around the world in pipelines. to the extent that we can participate with Light Touch, which is kind of just supervision and management. We've talked a lot about that in our data center business. I think it becomes really interesting around the world. Obviously, when you think about data centers, one of the primary drivers is the cost of power, and there's lots of areas in the world where cost of power is a lot lower than what it is in the U.S., and we're seeing a lot of customers really start to focus on that, and I think the opportunity to play there is going to exist for Mastec. and along with pipelines, right? I think there's, you know, we've seen the world shift here over the course of the last few months with, you know, some of, with the war and what we're seeing with commodity prices in general around the world and I think ways to improve the system and provide conventional fuels differently is something that everybody's exploring. So I think there's great opportunities that that's going to bring to companies like Mostec over the coming years.

Appreciate it. I'll pass it on. Thanks.

Thank you. Our next question comes from Philip Shen with Roth Capital Partners. Your line is open.

Hey guys, thanks for taking my questions. First one is on data center and New York State recently put a ban on or at least a pause on data center development and we recently published that there could be 10 more states that pursue data center bans or pauses by year end. These states include Michigan, Virginia, Washington, Oregon, California, Jersey, and other Northeast states. What are your thoughts on this potential risk and how could this impact your business over time? When you think about your backlog for data center, have these projects all cleared, the required permits, environmental approvals, and received the community support needed to make sure that these things happen? To what degree is there a risk that some of these state bans or pauses could and many more.

You know, lots of parts of the country where communities are embracing data centers. There's a lot of good things that data centers are bringing relative to local economies. We're seeing quite the opposite. We're engaged in lots of governmental affairs conversations across multiple states where they're actually looking to expand and bring data centers in that currently don't have, which I think creates some great opportunities for us. The truth is that the kind of the geographies that you kind of listed aren't really strong geographies from Aztec. But with that said, we think that at the end of the day it's not going to have a huge impact on the business but I'll also refer back to the previous question right to the extent that it does I do think that we're not going to stop data centers data centers are going to get built whether it's in the United States or somewhere else and I think that's an interesting way to think about the long-term fundamentals of that business is to being somewhat geographically exposed to different markets in the world as well okay thank you and then recently there was the

There was this FCC ban on inverters that was announced. To what degree could that impact you guys? Are you thinking about this at all? Maybe it hasn't been elevated yet. But there could be a ban on Chinese inverters specifically. Thanks.

Yeah, there's a lot of language in there about grandfathering a lot of stuff in as well. So I think that a lot to see on that. We're not as concerned as the headline. would dictate, but we're paying attention to it. I think we understand it. I think as it relates to the projects that we're working on, at least for the next few years, it has no impact.

Great. Okay. Thanks, Jose.

Thanks, Phil.

Thank you. Our next question comes from Julian DeMullen-Smith with Jefferies. Your line is open.

Hey, Jose team. Thank you guys very much. Appreciate it. Let me just come back to the comp side of the business. As much as You allude to an uptick in a recovery wireless 27 with the spectrum dynamic you described earlier, but obviously also there's other adjacencies, fees, etc. Look, I know you don't want to guide 27 per se, but even when could you start to see some of that visibility into the back of 27 to affirm what you're talking about here? When does those confirmation for people who are holding off on that spectrum integration start to feed in? And also, ultimately, when you think about the 27 guide that you guys have out there, how do you think about... More from the analyst's perspective, how do you think about that relative to what you're seeing coming together here? Both the comments on comms and otherwise. Jose, you've been very positive here. Just how is it trending relative?

Well, let me answer the last part first. I think we gave out 2028 guidance. It was organic. It didn't include superior. I think people can make their own choices about what they think that adds for it, but we think that the superior acquisition... In addition to the 28 targets that we put out, I think we were really clear about acquisitions during Investor Day 2 and what we were trying to accomplish there. So I think, again, since the two months that we've had that, we think we've made tremendous progress, especially as it relates to that front. Our comms business, if we think about the 28 numbers that we put out there, look, I mean, we've obviously made it a little bit of a harder hill to climb, but we're really bullish on the industry. Again, there's some really large projects, A, that we've won that are being delayed that we do think kick back up, but more importantly, Thank you for joining us. The drivers haven't changed, right? Data centers need to be interconnected. Everybody's chasing it. Every customer that we have is trying to win that. Tons of private equity money is coming into that space too, trying to play in that game. So I think there's really interesting prospects there. I think there's ways to contract differently and do different things there. We're bullish on that. Again, obviously disappointed about the performance for the second half in there, but we don't think it has a long-term impact. But obviously the build becomes a little bit more aggressive, and we'll just have to be able to see what happens over the course of the next months and provide better guidance around that over the next two years.

Got it. So it sounds like at the end of the day, there's a little bit of a potential mix shift in the 28 composition, even if you're feeling good against the 28 targets, et cetera. It sounds like the mix that you'd articulated earlier could very well be shifting, again, not necessarily unnatural given how meaningful a data center opportunity is, but B, just again, the visibility you're articulating today doesn't suggest entirely that it's, at least as it stands today, that you have the visibility on 28.

Well, but let me be clear, right? Since investor date two and a half months ago, Thank you for the clarity. Cheers guys.

Thank you. Our next question comes from Stephen Fisher with UBS. Your line is open.

Thanks. Good morning. If I back out the superior contribution to power delivery in the second half, the margins that you have embedded in the power delivery guidance still look like they assume double digits for the core. Just curious kind of what drives the step up to that and the confidence in the step up to double digits from single digits in the core.

Yeah, I think if you do the math, it's actually 9.8%, Steve. So that's kind of the embedded number, which is higher than we were previously. So I think that if you look at, and there's been a lot of questions, so maybe let me rectify, right? If you take our previous guidance and you kind of look at the ins and outs, right? We took out $400 million of revenue in comms. We beat second quarter by 75. We added about $125 million in revenues for both clean energy and power delivery for the second half of the year. And that nets out to about $100 million less by adding $800 million of superior. So we can argue that guidance is about $100 million less for the back half of the year for legacy business. But EBITDA is unchanged at $1.5 billion. So I think that that's driven by higher margins. Obviously, less revenue, same EBITDA, signifies higher margins. obviously communications is going to be down a little bit based on the revenue so all the other businesses are making up for it and you basically have an eight hundred million dollar increase for superior with a hundred million in EBITDA and that's kind of how our guidance lays out again we you know at this point we felt it's very prudent guidance we're hoping to do better than that and but that's exactly how the math lays out so yeah you will see improved guidance from a margin perspective in both clean energy and power delivery with our recast numbers for the second half of 26. Thanks.

That's helpful. I was asking specifically within power delivery.

Within power delivery, it's 9.8% for the full year now, which is higher than our original guidance.

Okay. Thank you very much.

Thank you.

Thank you. Our next question comes from Justin Hawkey with Bayer. Your line is now open.

Great. I wanted to ask, you know, obviously the transmission side of power delivery is really strong. There's been a couple of rate case issues that have just kind of been across the space the last couple months. And I remember, you know, a couple years ago that that was an issue with some of the distribution crew counts. is specifically in Illinois for you guys. I don't know if it's the same kind of geographic exposure, but are you seeing anything just on kind of that day-to-day MSA low voltage work where there would be any change from some of those rate cases?

It's a good question. I think obviously what's driving the business today is demand, and demand is not going anywhere which is going to force everybody to find ways to meet the demand. I think when you think about rate cases, the big challenge across all geographies is how do you do this in a way where the typical rate payer isn't impacted? And I think that utilities, that's their job to manage to it. That's what they're working on. I think they've done a really good job. I ultimately think that there's an opportunity for The average residential user to actually see some benefit related to everything that's happening. But that's what most government agencies are really focused on as they look at rate cases. And we don't see the pressure today in those that we saw historically based on all the growth opportunities that exist for utilities.

Okay. And then I guess my second question. Maybe it's a little esoteric. I don't know. But we've seen the balance of revenue from unapproved change orders has been pretty steadily rising for the last couple of years. And that hasn't been the case for you guys for a while. I don't know if it's just, you know, the size of projects being bigger. But do you have any comments on that? You know, kind of what's been driving that is, you know, broad base or is it, you know, maybe a couple of project specific issues?

Justin, this is Paul. It's really, I'd say, ordinary course, just timing of approvals from clients. If you look at it as a percentage of revenue earnings, I think it's still pretty low, and it moves around over time. So we're just over 200 million of unapproved change orders today. We've been at that level before with lower consolidated company revenue. So we're very comfortable with our practice around booking those, and generally it's just timing, booking through with clients.

Okay.

All right.

Fair enough.

Thank you.

Thank you. Our next question comes from Adam Tallheimer with Thompson Davis. Your line is open.

Hey, good morning, guys. Jose, can you comment on the timing of two things? One would be when the recent bookings and pipelines start to burn, and then also the billions of dollars you talked about in hyperscaler fiber, when that might hit backlog and start to burn.

Yeah, so on a backlog perspective for comms, I actually think there's already some in there, right? So the fact that revenue declined in the second half and yet our backlog declined modestly, I think, is telltale that we're winning other things to put in backlog that are for future revenue. I think that stuff starts to impact 2027. And on the pipeline... Look, pipeline, again, we don't think backlog really demonstrates our visibility in the business. Again, we feel really good about, you know, 27, 28. We expect the back half of 27 to be a lot bigger than the first half of 27. But it's, you know, we feel really good about the project mix and flow and the expectations around that.

Okay, thank you.

Thanks, Adam.

Thank you. Our next question comes from Joseph Osha with Guggenheim. Your line is open.

Hi, good morning. I'm not going to ask about communications. I'm wondering if you can talk a bit about within your renewables, the wind and solar mix. I know it's been tilting towards solar, but I'm wondering if the shift in that mix is accelerating given all of the permitting challenges we've heard about on the wind side. Thank you.

Yeah, look, we've been trending to more solar for a while now. I think obviously solar is a bigger piece of the business than wind for us. With all that said, I think wind has been incredibly resilient. We feel good about that market. We're having a good year. We actually have good bookings around that. We've got really good backlog going into 27 there as well. So we're not negative on that market by any stretch, but obviously the bigger growth opportunities are on the solar side.

Would you be willing to share some rough sense as to what the mix of the business looks like?

Yeah, I don't have it handy. I would say it's 60%, 65% solar at this point.

Okay. Thank you very much.

Thank you.

Thank you. Our next question comes from Alexa Patrick Brenna with Goldman Sachs. Your line is open.

Hey team, and thanks for taking our question. With the close of Superior, just wanted to ask a follow-up. Can you just talk a little on the integration timeline and the impact of margins? I think when we look at guide revision, the EBITDA margin implied seems the same, but how should we think about that over the longer term?

Yeah, I mean, I think obviously when you look at our second half guide, it's hundreds of basis points higher than the first half. A lot of that is driven by the addition of Superior. Obviously, our net power delivery business is performing better than we thought, but the bigger driver of that is the enhanced margins of Superior. We feel like from an integration standpoint, it's gone, again, it's been a week, but it's gone incredibly well. We spent a lot of time together with the teams. Again, we're not They're kind of a standalone entity which doesn't require an enormous amount of integration like we've seen in some of their other deals. It's a different business. But again, we think one of the most exciting parts of that deal are the cross-selling opportunities, and we've been all over that since the announcement of the transaction. So feeling really good about the integration, the remaining integration required, and more importantly, we feel really good about the business, their prospects, and their ability to outperform.

Okay, great. We'll turn it over.

Thank you. Thank you. I'm showing no further questions at this time. I would now like to turn it back to Jose Mas for closing remarks.

Yeah, just want to thank everybody for participating today, and we look forward to updating everybody on our third quarter call. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.