MasTec, Inc. (MTZ) 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'd 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 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 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 slide accompanying this call. During this call, we'll 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 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. A reconciliation of any non-GAAP financial measures not reconciled in these comments to the most comparable GAAP financial measures may be found in our earnings release, our slides and companion documents. We had a nice in-line quarter, and I'd now like to turn the call over to Jose for his commentary. Jose?

Thanks, Marc. Good morning, and welcome to MasTec'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 billion, up 23% year-over-year. Adjusted EBITDA was $384 million, a 40% year-over-year increase. And 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'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 2 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 MasTec. 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 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 Pipeline, Power Delivery and our Clean Energy & 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 2 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, were 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 demand. 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 Superior enhances our ability to meet those demands while 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 & 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 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 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 life cycle 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 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 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 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 MasTec's position in this market. Despite nearly $2.5 billion of backlog growth over the past 2 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 MasTec 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 at 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 approximately $4.375 billion, adjusted EBITDA was approximately $384 million 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 & 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 & 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 MasTec is increasingly positioned to deliver more consistent growth and 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. As a highly skilled workforce of approximately 3,000 team members, it 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 $72 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're 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 project 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. 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 1.7x, 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 product 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 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 & Infrastructure segment generated over $1.6 billion of revenue and $128 million of EBITDA during the quarter. Demand remains strong across renewables, civil infrastructure, industrial construction and general building, with a modest revenue mix 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 investments 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 Superior acquisition. We expect net leverage to be below 2x 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 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.

[Operator Instructions] Our first question comes from Alex Rygiel with Texas Capital. Our next question comes from Liam Burke with B. Riley Securities.

Yes. 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 wireless?

Yes. 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 of points, right? One is that the capital investment in the industry isn't really declining, it's changing, right? So if you take, for example, spectrum, right, 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, right? 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 MasTec over the long term. But in the short term, it's creating delays on projects that we expected to complete in 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 $1 billion. But those take time, right? Those aren't '27 builds. We're seeing some RDOF 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 for 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 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.

So 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 -- look, 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.

Our next question comes from Andy Kaplowitz with Citigroup.

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

Yes, I'd say a couple of things. I'd say it's pretty specific to a couple of 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 of 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 rightsize 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?

Yes. Look, a couple of things. One is 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. Some of that we're doing through exactly what Paul talked about, right, is we're really trying to -- 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.

Our next question comes from Alex Rygiel with Texas Capital.

I apologize for that, Jose, a very nice quarter. 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?

Yes. One of the things that we've 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 demand and we're seeing no end in sight to that. The truth is that as a percentage of revenues, right, our business relative to mission-critical has been quite small, right, 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, right? For us to grow our Clean Energy & Infrastructure business by 43% in revenues year-over-year for the quarter, EBITDA by 54% in that market. In Power Delivery, we grew 20%. We grew EBITDA by 24% in the quarter. We've got similar results expected for the full year. So those businesses that are touched or impacted by that part of the business are doing unbelievably well, right? So what we've done over the course of the last 6 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 or 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.

Then 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 & Infrastructure, and Pipeline. We think those 3 will drive backlog growth. Obviously, as it relates to mission-critical, Power Delivery, and Clean Energy & 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.

Our next question comes from Sangita Jain with KeyBanc Capital Markets.

I'm going to ask one on Pipeline. So contrary to what you'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 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 won a project that -- 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, we've always said backlog shrinking 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 -- 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 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?

I think that our guidance hasn't changed. We normally guide to the same levels. 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 I would expect similar -- I would expect the margin profile that we're guiding to.

Our next question comes from Jamie Cook with Truist.

I guess a couple of questions. Just one, 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 broadened, I guess, skill set and have conversations evolved 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 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 spent so much time in our prepared remarks talking about it. I think it will definitely translate into a lot more business for all of MasTec, 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 second question. Obviously, the backlog growth was strong in the quarter, in particular, C&I. I'm just wondering, as we look at that backlog growth, was it larger awards? Was it just sort of 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 could mean for backlog as we exit the year?

Yes. It was not inclusive of any of those large type of pursuits. Those are -- those were not the wins that drove the backlog in the second quarter. It was more our normal type normal-size projects.

Our next question comes from Marc Bianchi with TD Cowen.

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 to -- for the business to come back?

I think it's definitely going to be better than the -- than 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 better -- in a better position to answer that question.

Got it. Okay. And then just on Superior, you mentioned [ $1.4 billion ] of backlog for them. That was in May. You got another month, I guess, under the belt. Curious how that backlog has evolved. And when you say $1.4 billion, is that synonymous with the 18-month backlog that you guys talk about?

So a couple of 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. We'll 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 billion was similar to how we would look at our backlog built. And we look forward to updating the Street on those numbers when we report our third quarter numbers.

Our next question comes from Brian Brophy with Stifel.

Yes. Jose, I was curious your thoughts on pursuing international pipeline opportunities and how you think about those projects from a risk mitigation standpoint, both from a margin profitability standpoint as well as a collection standpoint?

Sure. So I think a couple of 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 pipeline. 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 from MasTec. And along with pipelines, right? I think there's -- we've seen the world shift here over the course of the last few months with 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 is exploring. So I think there's great opportunities that, that's going to bring to companies like MasTec over the coming years.