MASTEC INC (MTZ) Q2 2026 Earnings Call Transcript

Thank you for standing by. And welcome to MasTec's Second Quarter 2026 Financial Results Conference Call. Originally broadcast on Friday, July 31, 2026. Today's call is being recorded. I would now like to turn the call over to Marc Lewis for some opening comments.

Thanks, Dan, and good morning, everyone, and thank you for joining us for MasTec's second quarter earnings conference call. Joining me today are Jose Ramon Mas, Chief Executive Officer, and Paul DiMarco, Chief Financial Officer. Prepared slides to supplement our remarks are posted on MasTec's 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 and updated current and periodic reports and filings 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 reconciled in yesterday's press release and supporting schedules. We may also use certain non-GAAP financial measures on this call. Reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measures can be found in our earnings release, our slides, and companion documents. We had a nice in-line quarter, and now I would like to turn the call over to Jose for his commentary. Jose?

Thanks, Marc. Good morning, and welcome to MasTec's second quarter 2026 call. Today, I will 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 $4.37 billion, up 23% year over year. Adjusted EBITDA was $384 million, a 40% year over year increase. Adjusted earnings per share was $2.22, a 49% year over year increase. And backlog at quarter end was $21.4 billion, a nearly $5 billion year over year increase and a $1 billion 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 1.2x, 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 are 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 have 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 long-term development is as strong as we have 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 have now closed on the largest acquisition in our history. I would again like to welcome The Superior family to MasTec. While Superior is a great company with incredible growth opportunities ahead, we are very bullish on our ability to further the impact of Superior by coupling other MasTec 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 MasTec 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 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. 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 will not be available until next year. On the wireline side, we are being impacted by RDOT projects rolling off and the replacement projects we have 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 have seen some variability in project cadence and quarter revenue timing. We have 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 22 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 have had an excellent start to the third quarter in new bookings. Utilities are spending heavily on transmission, system hardening, and reliability and that is 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 MasTec and The Superior Group enhances our ability to meet those demands, also providing Superior and its customers with the benefits of MasTec'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 1.3x. Backlog growth was driven primarily by renewables, where we continue to see very strong demand for both near- and long-term projects. We are also very excited about the demand around power generation. As we covered in our Investor Day, we are focused on simple cycle and reciprocating engines. The number of pursuits has increased materially and our bullishness has only increased since Investor Day. We are 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 MasTec's platform. With multiple sister companies working together on the same project, demand for the skill set that MasTec 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 MasTec 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 2020. 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 is AI and data centers, grid reliability, energy demand, critical infrastructure, or connectivity. We believe MasTec 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 The Superior Group, 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 is 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 MasTec'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 are in the early stages of one of the largest infrastructure investment cycles we have ever seen and MasTec is better positioned today than at any point in our history to capitalize on that opportunity. I would like to take a moment to thank the men and women of MasTec. 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 $4.38 billion, adjusted EBITDA was approximately $384 million, and adjusted EPS was approximately $2.22, with each metric exceeding guidance 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, reflecting solid operating performance across 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 book-to-bill was approximately 1.2x, led by strong performance in Pipeline Infrastructure and Clean Energy and Infrastructure, while Power Delivery backlog also increased to a new record level. 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 and 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 grid 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 MasTec is increasingly positioned to deliver more consistent growth less dependent 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 will 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 price 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 rightsize 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 1.1x 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's 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. Pipeline Infrastructure continued to perform very strongly. Revenue for the quarter was approximately $643 million with EBITDA of approximately $119 million, or an 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 with a book-to-bill of 1.7x, 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 and EBITDA margins in the mid-teens, consistent with our prior outlook, reflecting product 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 a modest revenue miss driven by timing. Backlog increased to approximately $7.8 billion, growing roughly $500 million sequentially, with a book-to-bill of 1.3x, 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 and EBITDA margin 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 1.8x, and would have been 2.2x pro forma for the Superior acquisition. We expect net leverage to be below 2.0x 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 MasTec's consolidated earnings profile. We entered the second half of the year with record backlog, strong visibility and increased momentum. When we combine this 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.

Now we'll open the call for Q&A. We have many participants on the call today, so we ask that you please limit to one question and one related follow-up and then 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 live question comes from Liam Burke with B. Riley Securities. Your line is open.

Jose, there has been a lot of noise in your telecom business and some of the opportunistic long-term opportunities discussed in fiber-to-the-home and BEADs. How does the outlook for long-haul upgrades and construction look over time as you get through the puts and takes of wireless?

Liam, let me address this a bit off-script. We are obviously disappointed with our Communications results in the quarter and our guidance for the balance of the year. We underperformed a little as we started to see pressure at the tail end of the quarter. I want to make a couple of points. First, capital investment in the industry is not declining; it is changing. If you take, for example, spectrum, there has been a lot of activity this year with multiple carriers buying spectrum. Carriers must decide whether to add capacity to sites now and then redo that with new spectrum early next year, or hold off and do it all at the same time. I think that is what we are seeing and it is impacting our wireless business negatively in the short term. That is actually a positive in the long term because those spectrum build-outs are good for MasTec over time. But in the short term, they are creating delays on projects we expected to complete in the second half. In addition, the best part of this business going forward will be the hyperscaler build-outs, and we are winning our share. We are pursuing multiple projects north of a billion dollars, but those take time and will drive growth in 2027. We are seeing some RDOT projects fall off earlier than we expected, and some replacement work we had won is facing delays and permitting challenges. So again, we are disappointed about what it means for the second half. We believe the long-term fundamentals of that business are unchanged and our customers' capital plans are unchanged; they are just changing how they spend it. Historically we've been more skewed to wireless. We have changed that over the last few years by building our wireline business. Unfortunately, we are caught up in timing as some projects shift, but overall we are excited about where that business is going and we think the long-term fundamentals are unchanged.

As a follow-up on the wireline side, you are getting involved now in the planning stages of these projects, giving you better visibility — probably not in 2026, but in the longer haul?

There is no question. This is a legacy business for us. We have a great reputation, strong customer relationships, and we are very close to our customers. We fully understand what's happening. We are disappointed that we did not catch it earlier and communicate sooner, but we are managing the best we can. Outside of Communications, our business is doing great, so we are in a position to manage through this and hopefully see the activity ramp in 2027.

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

Good morning. Could you provide a bit more detail on the telecom deferrals? Is it broad-based deferrals across many wireline customers or a couple customers delaying RF transitions? And how do we think about the roughly $400 million lower Communications guidance — is the delay something like 75% wireless and 25% wireline, or more even? Any color would be helpful.

A couple of things: it is pretty specific to a couple customers on the wireline side as it relates to our business. We had some wins we expected to kick off that are being pushed by a couple of months. I would say it is roughly 50/50, maybe a little more skewed to wireless.

Paul mentioned using this time to rightsize the Communications business. Could you give more color on what that means and whether it can help offset the higher fuel and other costs impacting the business to ultimately get margins back into the double-digits over time?

A couple of things. First-half margins for the business are actually much improved versus the first half, and we expect second-half margins in Communications to be up about 200 basis points in the second half versus the first half, despite the revenue challenges. We are taking the opportunity to create more efficiencies and rightsize where appropriate, while recognizing we expect the business to come back strong. So we are taking our time to manage through this and take advantage to the extent we can of a short-term pressure.

Thank you. Our next question comes from Alex Riegel with Texas Capital. Your line is open.

Thanks, and apologies for earlier. Very nice quarter. You mentioned that you are seeing an increase in large project pursuits. Can you expand upon which segments these opportunities are in and give us some color on timing?

One of the things we tried to outline is that everything tied to mission-critical is doing extremely well right now. Over the last few months, we've seen very strong demand across that industry. As a percentage of revenues, MasTec's exposure to mission-critical has been smaller than many peers, but the areas impacted by mission-critical — Clean Energy & Infrastructure and Power Delivery — are doing exceptionally well. Clean Energy and Infrastructure grew 43% in revenue year over year for the quarter and EBITDA by 54%. In Power Delivery, we grew roughly 20% and EBITDA by 24% in the quarter. With the closing of Superior, we have significantly increased our exposure to the mission-critical market, which will lead to more work and growth. We won $2.5 billion of additional backlog in the first half of the year, but very little contributes to 2026 revenues, so the benefit is expected to be greater in 2027. We are excited about the prospects going forward.

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

Absolutely yes. We expect backlog to be higher by year-end, and we expect Power Delivery, Clean Energy & Infrastructure, and Pipeline to drive that backlog growth, with Power Delivery and Clean Energy & Infrastructure being most impacted by mission-critical demand.

Our next question comes from Sangita Jain with KeyBanc Capital Markets. Your line is open.

Thanks. A question on Pipeline. Contrary to recent quarters, your backlog grew this quarter but you kept the revenue guide unchanged. Is there a read into whether you may be moving to other geographies for some larger pipeline projects, or what's driving that dynamic?

Nothing specific to read into geographically. We have been clear about Pipeline: backlog can be tricky in that business. We booked a project whose contract was signed but the work is scheduled for 2027, and that drove a lot of the backlog increase. We've always said backlog is not fully representative of the business's strength. Our visibility is fantastic for multiple years out; we feel really good about 2027, and very strong about 2028 and 2029. While the large backlog increase does not meaningfully impact 2026, we do expect further projects to book between now and year-end.

Should we consider a similar margin profile for second half versus first half for the projects you have in backlog?

Our guidance has not materially changed. We might have slightly lower revenue in the second half than the first half, which is reflected in guidance, and I would expect the margin profile to be consistent with the levels we are guiding to.

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

Hi, good morning. First, now that Superior is closed, how have conversations evolved with customers? Do you expect revenue synergies from cross-selling those broader skill sets, and have these conversations progressed meaningfully? Second, on the backlog growth in Clean Energy & Infrastructure, was it driven by larger awards or many smaller projects?

Customer conversations have gone unbelievably well. We see incredible opportunity for cross-selling and integrated solutions across MasTec and Superior, and we think it will translate into more business for all of MasTec. We expect to see evidence of that before year-end. Regarding the backlog growth in the second quarter, it was not driven by the very large billion-dollar pursuits; it was driven by more typical project wins and our normal-sized projects.

Our next question comes from Marc Bianchi with TD Cowen. Your line is open.

On Communications and the deferrals, how do you see 2027 shaping up? Should we think you can get back to the first-half 2026 run rate in the first half of 2027, or will it take longer for the business to come back?

I think it will definitely be better than our run rate in the second half of 2026. We are pursuing a lot of big opportunities that will have a big impact on 2027. As those pursuits come to fruition, we will be in a better position to answer exactly how quickly we can return to earlier run rates, but I expect improvement in 2027.

You mentioned $0 of backlog for Superior in May and have had another month under your belt. How has Superior's backlog evolved and is the $1.4 billion figure synonymous with the 18-month backlog you reference?

We are pleased with Superior's business progression, backlog build, and expected backlog growth through the balance of 2026. We will report those details next quarter. We are bullish on their customer pipeline and longer-term pursuits. The $1.4 billion figure was consistent with how we look at backlog; we'll update the Street on specific numbers when we report third quarter results.

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

Thanks. Curious about pursuing international pipeline opportunities. How do you think about pursuing those projects and managing risks from a margin, profitability, and collection standpoint?

International work can be compelling, especially when we can play a light-touch role in supervision and management. We've discussed this in our data center business and see similar opportunities in pipelines. Data centers are also driven by cost of power; some international geographies have much lower power costs, which creates opportunities for customers and for contractors like MasTec. The global environment, including changes in commodity pricing and supply chains, have increased interest in improving systems and diversifying fuel sources. We see great opportunities for MasTec internationally over the coming years, especially for light-touch participation or integrated solutions where appropriate.

Appreciate it. I'll pass it on.

Our next question comes from Philip Shen with ROTH Capital Partners. Your line is open.

Thanks. New York State recently paused data center development and we've seen reports that other states might pursue similar pauses. How do you view this potential risk and could it impact your data center business or backlog? To what degree have those projects cleared permits and received community support to ensure they proceed?

Good morning. I think some of the headlines are a bit overblown. Several of the states you mentioned are not very active for data centers for us, and in other areas communities are embracing data centers for the economic benefits they bring. We are engaged in governmental affairs conversations across multiple states that are actually looking to expand data center activity. The geographies you listed are not primary for MasTec, and we don't think this will have a huge impact on our business. Even if a local pause occurs, data centers will continue to be built somewhere — in the U.S. or internationally — and that speaks to the long-term fundamentals of the business. Geographic diversification can be a benefit.

Thanks. There was also an FCC prohibition referenced on certain inverters, particularly those of specific origin. To what degree could that impact projects you work on?

There is a lot of language around grandfathering existing equipment in many of the proposals, so we are not as concerned as some headlines might suggest, but we are paying attention. For the projects we're working on over the next few years, we do not see a material impact at this time.

Our next question comes from Julien Dumoulin-Smith with Jefferies. Your line is open.

Thanks. On the Communications business, you alluded to an uptick and potential recovery in wireless in 2027 due to the spectrum dynamic. When might you start to see visibility into the back half of 2027 to confirm that? Also, how should investors think about your 2028 targets relative to what you're seeing now?

We provided 2028 organic targets at Investor Day that did not include Superior. We continue to believe those targets are achievable. Since Investor Day, our visibility has improved and the number of large pursuits has increased. For Communications specifically, while the short-term performance is disappointing, the long-term drivers haven't changed. We have won large pursuits that are being delayed and new projects we did not expect two months ago that could significantly add to the business. As those pursuits progress and convert, we will have clearer visibility into 2027 and 2028. Outside of Communications, our visibility and bullishness across other segments have improved since Investor Day.

So it sounds like the composition of revenue in 2028 could shift relative to what was articulated earlier, and that you have improved visibility on several segments since Investor Day, but Communications remains more uncertain.

Yes. Since Investor Day, our visibility has significantly improved across most of our business. Communications is the exception in the near term, but overall we are more bullish today than we were 2.5 months ago, especially given the addition of Superior.

Our next question comes from Steven Fisher with UBS. Your line is open.

Thanks. If I back out Superior's contribution to Power Delivery in the second half, the margins you have embedded still look like they assume double-digits for the core business. What drives the step-up to double-digit margins from single-digits in the core business and what gives you confidence in that step-up?

If you do the math, the embedded full year margin for Power Delivery is 9.8%, which is higher than our original guidance. We beat second quarter by about $75 million and added about $125 million in revenues for both Clean Energy and Power Delivery for the second half. We reduced Communications by $400 million of revenue, added $800 million of Superior revenue, and that nets about $100 million less legacy revenue for the back half. Legacy EBITDA is unchanged, so higher margins result from less revenue with the same EBITDA. Superior's addition increases EBITDA and margins as well. So the improved guidance from a margin perspective in Power Delivery and Clean Energy reflects those changes. We believe this is prudent guidance and we hope to do better.

Thanks. That is helpful. Specifically within Power Delivery, thanks.

Our next question comes from Justin Hauke with Wedbush Securities. Your line is open.

Transmission activity in Power Delivery is really strong. A couple of rate case issues have come up in the industry recently. Are you seeing any changes in the day-to-day MSA low-voltage work or pressure from rate cases similar to what you've seen historically in certain geographies?

What's driving the business today is demand, and that demand isn't going away, which will force everyone to find ways to meet it. When you think about rate cases, regulators are focused on how to manage costs so the typical ratepayer isn't unduly impacted, and utilities are working on that. We don't see the kind of pressure today that we saw historically, given the growth opportunities for utilities.

Second question: we've seen revenue from unapproved change orders rise in the industry. For you, has that been more broad-based or project specific?

Justin, this is Paul. It's mostly ordinary course and timing of approvals from clients. As a percentage of revenue or earnings, it's still pretty low and it moves around over time. We're just over $200 million of unapproved change orders today. We've been at that level before with lower consolidated company revenue. We're comfortable with our practices around booking those; generally it's timing with clients.

Okay, fair enough. Thank you.

Our next question comes from Adam Thalhimer with Thompson Davis. Your line is open.

Good morning. Can you comment on the timing for when the recent Pipeline bookings will start to burn and, separately, on the billions of dollars you mentioned in hyperscaler fiber pursuits — when might those hit backlog and start to burn?

On Communications, there is already some future work in backlog. The fact that revenue declines in the second half while backlog only modestly declines suggests we are winning future projects with revenue that starts to impact 2027. For Pipeline, backlog doesn't fully capture our visibility; we feel really good about 2027 and expect the back half of 2027 to be significantly larger than the first half. For hyperscaler fiber, many of those pursuits are multi-year and will begin to impact backlog and revenue in 2027 and beyond as projects are awarded and mobilized.

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

Thanks. Within Renewables, how is the mix between wind and solar shaping up? Has the shift to more solar accelerated given permitting challenges for wind?

We've trended toward more solar for a while. Solar is a bigger piece of the business, though wind has been resilient and we're having a good year with solid bookings and backlog for wind as well. We're not negative on wind, but the larger growth opportunities are on the solar side. Roughly speaking, our renewable work is currently about 60-65% solar.

Our next question comes from Alex Patrick Brennan with Goldman Sachs. Your line is open.

With the close of Superior, can you talk about the integration timeline and the impact on margins? Your guide revision implies similar consolidated EBITDA margin, so how should we think about Superior's margin contribution over the longer term?

Integration has gone very well so far, and we've spent a lot of time with the Superior teams. Superior can operate largely as a standalone entity and does not require a heavy-handed integration approach. One of the most exciting aspects of the deal is the cross-selling opportunity across MasTec, and we've already been working on that since announcing the transaction. Superior's mix and margins will enhance our consolidated margins, particularly in Power Delivery and mission-critical work. We feel very good about the integration, the business, and the potential for Superior to outperform over time.

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

Yes. I just want to thank everybody for participating today. We look forward to updating everyone on our third quarter call. Thank you.

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