MasTec, Inc. 2026 Q3 Earnings Call

Please go ahead. Good morning, and thank you for joining us for MasTec's third quarter 2026 earnings conference call.

Joining me today are José Mas, Chief Executive Officer, and Paul DiMarco, Chief Financial Officer. We have prepared slides to supplement our remarks, which are posted on MasTec's website under 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 our press release and 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 filings, includes a detailed discussion of risks and uncertainties that may cause such differences. In today's remarks, we will be discussing adjusted financial metrics reconciled in yesterday's press release and supporting schedules. We may also use certain non-GAAP financial measures in this conference call. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measures can be found in our press release, earnings slides, or companion document. I'll now turn the call over to Jose for his commentary.

Jose? Thank you, Ati. Good morning, and welcome to MasTec's 2026 third quarter earnings call.

Today, I'll review our third quarter results and provide an update on the markets we serve, the opportunities we're seeing, and our outlook as we head into 2027. Let me start with some third quarter highlights. Revenue for the quarter was $5.152 billion, up 30% year-over-year. Adjusted EBITDA was $486 million, a 30% year-over-year increase. Adjusted earnings per share were $2.96, up 19% year-over-year. Backlog at quarter end reached $24.5 billion, an increase of more than $7 billion year-over-year and $3 billion sequentially, establishing another all-time record. In fact, in addition to backlog, revenue, EBITDA, and earnings per share all reached record levels during the quarter.

Our total company book-to-bill was 1.6 times, including an organic book-to-bill of 1.3 times, reflecting the significant demand we continue to see across our businesses. Importantly, we expect another strong quarter of backlog growth in the fourth quarter and anticipate ending 2026 at yet another record level of backlog. That gives us tremendous visibility heading into 2027 and reinforces our confidence in the long-term growth opportunities ahead of us. The strength of the quarter was led by our power delivery segment, which delivered outstanding results. Revenue increased 65% year-over-year, while EBITDA grew 132%. While Superior had a strong quarter, I want to emphasize that our legacy power delivery business also delivered exceptional performance. Revenue, EBITDA, and margins were all significantly ahead of our expectations, meaningfully exceeding our previous forecast.

Backlog in this segment increased by more than $2.5 billion sequentially, of which approximately $1.8 billion came from Superior, with the balance generated by our legacy power delivery business. That translates into an organic book-to-bill of more than 1.5 times for the segment. In fact, it was the strongest quarter of backlog booking in the segment's history. I think that's an important point because it demonstrates that the strength we're experiencing is broad-based and extends well beyond the contributions from Superior. The demand for our services across power delivery continues to accelerate. Whether it's transmission, distribution, grid modernization, or the electrical infrastructure required to support data centers and other mission-critical facilities, we're seeing tremendous opportunities across virtually every part of this business. And we're not just seeing those opportunities, we're converting them into awards, expanding customer relationships, and gaining market share.

Our customers are making increasingly large and long-term commitments to their electrical infrastructure, and we're seeing that translate into larger programs, stronger backlog, and meaningful opportunities to expand our market share. When you combine that organic momentum with the capabilities and customer relationships we've added through Superior, I believe we've created one of the strongest electrical infrastructure platforms in the country. We expect another strong backlog build in the fourth quarter, and I'm increasingly optimistic about our ability to continue winning work, expanding our position in the market, and delivering strong operational and financial performance. Importantly, we're still in the early stages of realizing the benefits of our integrated approach. Moving to our Clean Energy and Infrastructure segment, we also delivered another strong quarter. Revenues increased 34% year-over-year, while EBITDA grew approximately 30%. Backlog increased $500 million sequentially, resulting in a book-to-bill of 1.3 times.

Our renewable energy, water, and civil infrastructure businesses are all performing well, and we continue to see attractive opportunities across those markets heading into 2027 and beyond. But today, I want to spend a little more time highlighting two areas where we believe the opportunity for growth is particularly significant. The first is our gas generation business. We're experiencing tremendous demand for natural gas-fired power generation. As we discussed during our investor day in May, our strategy in this market is focused primarily on simple cycle generation and reciprocating engine projects. These projects are increasingly attracting the customers looking for reliable power solutions that can be developed and constructed on accelerated timelines. What has surprised us is just how quickly demand has accelerated. In fact, the level of activity we're seeing today is meaningfully greater than what we anticipated just five months ago during investor day.

While these opportunities did not contribute to third quarter backlog bookings, we have now received limited notice to proceed on projects representing more than $1 billion in total value, which we expect to convert to backlog over the next few quarters. Based on the opportunities we are pursuing and the conversations we are having with customers, we expect further project awards to accelerate. I want to emphasize that this is a market where our opportunity has changed dramatically in a very short period of time. We are seeing demand from a broad range of customers looking to bring reliable generation capacity online as quickly as possible, and we are very excited about what this business can become. The second area I would like to highlight is our turnkey data center business.

Our existing turnkey data center projects are progressing very well, and the response we are receiving from customers regarding our capabilities has been extremely encouraging. What makes MasTec unique is our ability to bring together virtually every critical infrastructure capability required to develop and construct these facilities. From construction management and civil infrastructure to inside electrical power delivery, telecommunications, ongoing maintenance, we can offer customers a fully integrated solution, and that capability is becoming increasingly valuable. As data center projects become larger and more complex, customers are looking for partners who can help solve infrastructure challenges early in the development process, coordinate multiple scopes of work, and ultimately deliver projects more efficiently. That is exactly where we believe MasTec is uniquely positioned. Our strategy is to engage customers early, help them solve these challenges, and position ourselves to participate across the entire life cycle of their projects.

While we had strong backlog build in this business in the third quarter, we are currently pursuing several large opportunities, some of which already received early work agreements on. We expect additional large awards during the remainder of 2026. When you combine these opportunities with our expanding electrical capabilities through Superior, our growing power generation business, and our existing infrastructure platform, we are creating a very compelling position in this mission-critical market, and I believe we are in the very early stages of realizing that full potential of that opportunity. While power delivery and Clean Energy and Infrastructure are performing at very high levels, we are managing through some near-term challenges in our other two segments. Let me start with pipeline infrastructure. Before discussing the third and fourth quarters, I think it is important to take a broader view of what is happening in this market.

As we look out over the next five years and beyond, the pipeline market is developing at an an incredible pace. The need for additional natural gas infrastructure is accelerating, driven by the growing electricity demand, new power generation capacity, LNG exports, and the continued expansion of energy-intensive industries. In just the last two months, more than 1,000 miles of new pipeline projects have been announced, adding to an already significant pipeline of opportunities. The level of activity we are seeing is unprecedented, and I want to be very clear, MasTec is exceptionally well-positioned to capitalize on this market. During our investor day in May, we discussed our belief that this business had the potential to meet or exceed its historical financial records. As a reminder, our previous record EBITDA for this segment was $634 million.