STRL

A month has gone by since the last earnings report for Sterling Infrastructure (STRL). Shares have lost about 15.8% in that time frame, underperforming the S&P 500. But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Sterling Infrastructure due for a breakout? Well, first let's take a quick look at the latest earnings report in order to get a better handle on the recent drivers for Sterling Infrastructure, Inc. before we dive into how investors and analysts have reacted as of late. Sterling Infrastructure, Inc. delivered a strong second quarter of 2026, with adjusted earnings and revenues topping the Zacks Consensus Estimate and increasing sharply year over year. Results were driven by outsized growth in E-Infrastructure Solutions, supported by strong organic execution and contributions from the CEC and Stone Ridge acquisitions.Transportation Solutions revenues declined as Sterling accelerated the reallocation of resources toward higher-margin E-Infrastructure opportunities. Meanwhile, Building Solutions remained pressured by relatively flat homebuilder activity and continued housing affordability challenges. Adjusted earnings were $5.80 per share, beating the consensus mark of $5.20 by 11.5%. In the year-ago quarter, the company reported adjusted earnings per share (EPS) of $2.69.Revenues of $1.17 billion surpassed the consensus estimate of $1.07 billion by 9.2% and increased 90.1% from $614.5 million in the year-ago quarter. Acquisitions, including CEC and Stone Ridge, contributed $250.8 million to revenues during the quarter.Signed backlog ended the quarter at $4.33 billion, up 116% year over year, while combined backlog increased 150% to $5.62 billion. Second-quarter book-to-burn ratios were 1.4x for signed backlog and 1.3x for combined backlog, excluding the impact of the Stone Ridge acquisition.Beyond signed work, the company’s pipeline of high-probability future-phase opportunities exceeded $1.4 billion. Sterling’s signed backlog, unsigned awards and future-phase opportunities represented a total addressable pool of more than $7 billion, up more than $2.5 billion from the end of 2025. Operating leverage remained a key highlight as profit growth outpaced the top line. Gross profit increased to $290 million from $143.1 million a year ago, while gross margin improved to 24.8% from 23.3%, an expansion of roughly 150 basis points.Operating income reached $219.3 million compared with $104.6 million in the prior-year quarter. Adjusted EBITDA rose 104% year over year to $256.7 million, while adjusted EBITDA margin improved to 22% from 20.4%. E-Infrastructure Solutions was the primary growth engine, with segment revenues, which accounted for 78% of total revenues, jumping to $905 million from $310.4 million in the year-ago quarter. Management attributed the performance to strong results across organic and acquired operations. The legacy site development business generated 111% revenue growth, reflecting expansion across all regions, while CEC’s electrical services revenues increased 140% from the pre-acquisition second quarter. Profitability in the segment also increased sharply. Adjusted operating income climbed to $217.8 million from $87.7 million. E-Infrastructure signed backlog rose 165% year over year, with mission-critical projects, including data centers, manufacturing and semiconductor facilities, representing 92% of segment backlog.Transportation Solutions revenues, which represented 13% of total revenues, declined to $156.7 million from $196.8 million. The decrease reflected Sterling’s ongoing shift of resources from transportation projects toward higher-margin E-Infrastructure opportunities. Despite lower revenues, adjusted operating income increased to $30.5 million from $28.3 million, and adjusted operating margin expanded to 19.5% from 14.4%.Building Solutions remained the softer spot. Revenues, which accounted for 9% of total revenues, slipped to $106.5 million from $107.3 million. Adjusted operating income declined to $10.5 million from $11.8 million as relatively flat homebuilder activity and affordability pressures weighed on performance. Cash generation remained a notable support for the balance sheet. Net cash provided by operating activities totaled $328 million during the first six months of 2026, up from $170.3 million in the year-ago period. Cash and cash equivalents ended June at $464.5 million, up from $390.7 million at the end of 2025. Sterling repurchased $35.3 million of common stock during the first half of the year. Long-term debt stood at $268.7 million at quarter-end compared with $275.9 million at the end of 2025, while capital expenditures totaled $69.6 million. Confidence in its operating momentum translated into higher full-year targets. Sterling raised its 2026 revenue guidance to $4-$4.15 billion from the prior range of $3.70-$3.80 billion, indicating strong execution, expanding backlog and contributions from the Stone Ridge acquisition. Earnings are now expected to be $17.25-$17.85 per share, up from the previous forecast of $16.50-$17.15. Adjusted earnings are projected at $19.70-$20.30 per share compared with the prior outlook of $18.40-$19.05. The company also lifted EBITDA guidance to $829-$854 million from $801-$831 million and adjusted EBITDA guidance to $891-$916 million from the earlier range of $843-$873 million. It turns out, estimates review have trended upward during the past month. Currently, Sterling Infrastructure has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Interestingly, Sterling Infrastructure has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Sterling Infrastructure belongs to the Zacks Engineering - R and D Services industry. Another stock from the same industry, Tetra Tech (TTEK), has gained 2% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Tetra reported revenues of $1.11 billion in the last reported quarter, representing a year-over-year change of -3.9%. EPS of $0.42 for the same period compares with $0.43 a year ago. Tetra is expected to post earnings of $0.47 per share for the current quarter, representing a year-over-year change of +4.4%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Tetra. Also, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report Tetra Tech, Inc. (TTEK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Tuesday, Aug. 4, 2026 at 8:00 a.m. ET Vice President of Investor Relations and Corporate Strategy - Noelle Dilts Chief Executive Officer - Joseph Cutillo Chief Financial Officer - Nicholas Grindstaff Chief Operating Officer - Dan Govin Operator: Good morning, ladies and gentlemen, and welcome to the Sterling Infrastructure Second Quarter Webcast and Conference Call. [Operator Instructions] As a reminder, this call is being recorded on Tuesday, August 4, 2026. I would now like to turn the conference call over to Noelle Dilts, Vice President of Investor Relations and Corporate Strategy. Please go ahead. Noelle Dilts: Good morning to everyone joining us, and welcome to Sterling Infrastructure's Second Quarter 2026 Earnings Conference Call and Webcast. I'm pleased to be here today to discuss our results with Joe Cutillo, Sterling's Chief Executive Officer; Nick Grindstaff, Sterling's Chief Financial Officer; and Dan Govin, Sterling's Chief Operating Officer. As a reminder, there are accompanying slides on the Investor Relations section of our website. These slides include details on our full year 2026 financial guidance. Before turning the call over to Joe, I will read the safe harbor statement. The discussion today may include forward-looking statements. Actual results could differ materially from the statements made today. Please refer to Sterling's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events or otherwise. Please also note that management may reference EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income or adjusted earnings per share on this call, which are all financial measures not recognized under U.S. GAAP. As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures on our earnings release issued yesterday afternoon. I'll now turn the call over to our CEO, Joe Cutillo. Joseph Cutillo: Thanks, Noelle. Good morning, everyone, and thank you for joining Sterling's Second Quarter 2026 Earnings Call. Sterling delivered another outstanding quarter with revenue growth of 90% and adjusted diluted EPS growth of 116% from $2.69 to $5.80. These results reflect the strength of our strategy, accelerating demand across our markets and the exceptional execution by our teams. Adjusted EBITDA more than doubled in the quarter with margins expanding 150 basis points year-over-year to reach 22%. The current market demand allows us to be selective. Rather than chasing every opportunity, we are concentrating on the projects that strengthen our customer relationships, position us for future growth and enhance our margins. Signed backlog at quarter end totaled $4.3 billion, up 116% year-over-year and combined backlog increased 150% to reach $5.6 billion. In addition, we have visibility into high probability future phase opportunities that exceed $1.4 billion. Together, our signed backlog, unsigned awards and future phase opportunities provide visibility into a total addressable pool of work of more than $7 billion, an increase of more than $2.5 billion since year-end. The growth in our backlog and future phase work in the quarter, together with our visibility into customers' multiyear capital plans further strengthens our confidence in our multiyear outlook. Now I'd like to discuss our segment results for the quarter in more detail. In E-Infrastructure, second quarter revenue grew 192%. Mission-critical activity, including work on data centers and semiconductor campuses, was the primary growth driver in the quarter. E-Infrastructure adjusted operating income increased 148% and adjusted operating margins remained strong at 24%. Margins continue to benefit from our strong execution on large time-sensitive mission-critical projects. Revenue for our site development operations more than doubled on an organic basis, and adjusted operating margins expanded both year-over-year and sequentially. We saw robust growth across each of our geographies with particular strength in our Rocky Mountain division, where revenue increased nearly 700%. We also saw strong increases in our Northeast business as work on our large semiconductor campus ramped up. CEC delivered 140% revenue growth compared to its prior year second quarter with margins strengthening both year-over-year and sequentially. The Texas market remains exceptionally strong. During the quarter, CEC secured several additional project wins contributing to a $1.7 billion increase in its combined backlog since year-end 2025. Additionally, we are seeing continued success on winning projects where we are performing electrical and site work in an integrated manner. We continue to see tremendous opportunities ahead in both electrical and site development. In aggregate, our E-Infrastructure signed backlog, unsigned electrical awards and future phase site development opportunities now exceed $6 billion, representing an increase of $2.7 billion since year-end. Mission-critical work, including data centers, large manufacturing projects and semiconductor represented more than 92% of E-Infrastructure signed backlog at the end of the quarter. Future phase work is predominantly related to mission-critical projects. Moving to Transportation Solutions. Second quarter revenue declined 20%, reflecting our ongoing reallocation of resources from transportation projects to higher-margin E-Infrastructure projects. This shift is now taking place at an accelerated pace as activity on our E-Infrastructure projects in the Rocky Mountain and Texas regions has increased. This was the first quarter that our Rocky Mountain operation generated more E-Infrastructure revenue than transportation revenue. In addition, we are continuing to wind down our low-bid heavy highway work in Texas, which is nearing completion. Transportation Solutions adjusted operating margins reached 19.5% in the quarter, up more than 500 basis points from the prior year period, and adjusted operating income grew 8%. The strength in margins and profitability was driven by our focus on pursuing the most attractive opportunities within the transportation market. We ended the quarter with Transportation Solutions backlog at $969 million, a 35% year-over-year increase. This primarily reflects the conversion of unsigned backlog to signed backlog. On a combined backlog basis, Transportation Solutions is up 8% from second quarter 2025 and is down 11% from year-end 2025. Shifting to Building Solutions. Segment revenue declined 1% in the quarter, driven by relatively flat homebuilder activity and adjusted operating margins were 9.9%. We continue to anticipate that the residential market will face strong headwinds throughout 2026. The strength of Sterling's diversified portfolio and strategy to focus on growth in high-margin end markets enabled us to deliver another fantastic quarter. With that, I'd like to turn it over to Nick to give you more details on some of our financial metrics and 2026 guidance. Nick? Nicholas Grindstaff: Thanks, Joe, and good morning. I'll begin with our consolidated backlog metrics. Our second quarter backlog totaled $4.3 billion, a 116% year-over-year increase. Backlog increased 50% year-over-year on an organic basis despite the strong revenue burn in the quarter. Combined backlog of $5.6 billion increased 150% or 36% on an organic basis. Second quarter 2026 book-to-burn ratios were 1.4x for backlog and 1.3x for combined backlog, exclusive of the impact of the Stone Ridge acquisition. Turning to cash flow. Cash flow from operating activities for the first half of 2026 was $328 million. We expect continued strength in operating cash flow for the full year. Cash flow used in investing activities included $70 million of CapEx. Given the significant increase in our full year 2026 revenue expectation over the past 6 months and our visibility into future demand, we are increasing our CapEx guidance to $130 million to $140 million, which is a $30 million increase from prior guidance. These incremental investments in our fleet will drive productivity and expand capacity. First half 2026 cash flow from financing activities was a $48 million outflow, including share repurchases of $35 million at an average price of $511.18 per share. Remaining availability under the existing repurchase authorization was $339 million at the end of the quarter. We will remain opportunistic in our approach to share repurchases. Moving to our balance sheet. We ended the quarter with $464 million of cash and debt of $284 million for a cash net of debt balance of $181 million. On July 2, we closed on the extension and expansion of our revolving facilities to $1.5 billion and extended the maturity to July 2031. We used this facility to pay off our existing term loan. The amended facility provides additional flexibility as we look to grow the business, both organically and through M&A. Our current backlog, visibility, and strong market tailwinds position us for an even better year than we originally anticipated. We are increasing our guidance ranges for 2026 to reflect both the improved outlook for the core business as well as the addition of Stone Ridge. Our guidance ranges are revenue of $4 billion to $4.15 billion, diluted EPS of $17.25 to $17.85, adjusted diluted EPS of $19.70 to $20.30, EBITDA of $829 million to $854 million, adjusted EBITDA of $891 million to $916 million. Now, I will turn the call back to Joe. Joseph Cutillo: Thanks, Nick. Positive trends we've been talking about over the past several quarters have continued to accelerate. We're seeing projects become larger, more complex, and longer in duration, which reflects both the scale of what's being built and the importance of these assets to our customers. Our customers are asking us to do more. We are continuing to get pulled into new geographies because they know Sterling can deliver complex projects faster and safer than anyone else. Our customers' recognition of our critical contribution to their success has allowed us to participate in their long-term planning process. What we're seeing ahead is going to be far greater than we originally anticipated. Our focus today is making sure we stay ahead of what's coming. Internally, we are working to ensure that we have the right people, resources and capacity in place to support sustained strong growth in the years ahead. I'm going to hand the call over to Dan Govin, our Chief Operating Officer, to discuss some of these key areas of focus. Dan? Daniel Govin: Thanks, Joe. Planning for the future is a core part of our strategy. We aren't just focused on meeting today's demand. We're making the investments now in our people, equipment and capabilities that will support sustained growth for years to come. Our people remain our greatest competitive advantage. As our customers undertake larger, time-sensitive, mission-critical projects across the country, our experienced project managers and operating teams are setting us apart through exceptional operational execution. That's why we are increasing our investments in developing, attracting and retaining the industry's best talent. Through expanded recruiting efforts and training programs like Sterling Academy and CEC University, we're building the workforce skill sets that will support our accelerated growth. Combined with our strong reputation for safety, quality and execution, these investments position Sterling as the employer of choice, helping us to attract talent as we enter into new markets. We're also investing strategically in our equipment fleet. As we grow and upsize our fleet, we're increasing our capacity and improving productivity and operational efficiency in new geographies. This creates benefits that support margin expansion over time. At CEC, we are making great progress in ramping up production at our prefabrication facilities, which will drive productivity with our field electricians and provide cost savings. And finally, we're complementing these organic investments with tuck-in acquisitions. These acquisitions bring us strong local leadership while expanding our presence in attractive markets. The recent Stone Ridge acquisition is a great example of this strategy in action as it positions us well for coming activity in the Pacific Northwest. Together, these strategic investments ensure we're well positioned to capitalize on significant opportunities ahead. Now I will hand the call back to Joe. Joseph Cutillo: Thanks, Dan. Turning to our segment expectations for 2026. In E-Infrastructure Solutions, we continue to see exceptionally strong demand for large mission-critical infrastructure, and we believe this will support meaningful growth for many years to come. In the data center market, customer activity is stronger than ever. Projects are becoming larger, lasting longer and expanding into more markets across the country. Not only are we seeing more new projects, we're seeing many of our existing projects grow well beyond their original scope. Much of this incremental opportunity is not yet reflected in our backlog or future phase opportunities, giving us additional confidence in the runway ahead. With the CEC acquisition, we have broadened our capabilities and are even better positioned to serve our data center customers. In the semiconductor market, we are making very good progress on our Northeast project and are running ahead of schedule. We expect to generate significant revenue on this project in the third quarter with a weather-related slowdown in the fourth quarter. We believe our exceptional performance on this project will position us in the semiconductor market as the go-to solution for large complex projects, just like we have done in the data center market. In addition to the data centers and semiconductors, we are seeing some momentum in the broader manufacturing market. During the second quarter, we were awarded the initial scope of work on an electric vehicle plant in Atlanta. In addition, there are still several opportunities we believe could be awarded in 2026 or early 2027. For full year 2026, we now expect to deliver E-Infrastructure segment revenue growth of over 100%, including the contribution from CEC and Stone Ridge. We anticipate that the legacy site development business will grow at rates approaching 70% or higher as several of our large projects accelerate. Adjusted operating profit margins for E-Infrastructure are expected to be in the mid-20% range. In Transportation Solutions, we are in the final year of the current federal funding cycle, which concludes September 2026. We have built over 2 years of backlog and are continuing to pursue select attractive opportunities. For 2026, we are now anticipating a decline in Transportation Solutions revenue in the 7% to 10% range as we are shifting resources towards e-infrastructure work at a faster pace. We expect significant year-over-year adjusted operating margin expansion, roughly in the range of 150 to 200 basis points. In Building Solutions, we anticipate that revenue will decline modestly in 2026 and that adjusted operating margin will be in the high single to low double digits. We continue to see opportunities for share gain coming out of the down cycle. Shifting gears, as we look forward to the second half of the year and early 2027, we believe that the strong levels of bid activity we are seeing today will translate into strong awards. However, given the lumpiness in timing, we could see softer third quarter awards with higher levels in the fourth quarter and early 2027. This, coupled with our forecast for strong revenue burn in the third quarter could result in a sequential backlog decline in the third quarter. This would reflect award timing, not a change in demand. On the acquisition front, we are continuing to look for acquisitions that are the right strategic fit to enhance our service offering, expand our geographic footprint and add capacity. We are seeing more high-quality acquisition targets in the market today than a year ago. Moving to our full year 2026 guidance, the midpoints of our ranges versus prior year would represent a 64% revenue growth, an 84% adjusted EPS growth and a 79% adjusted EBITDA growth. With that, I'd like to turn it over for questions. Brent Thielman: Congrats on a great quarter. Joe, maybe first question, if I look at the backlog, you're up 2x where you were a year ago. You have Stone Ridge also contributing here in the back half. Maybe a little surprised you wouldn't see a bigger step-up in revenue in the second half. And I guess I'm wondering, are there longer than usual lead times associated with some of the backlog? Or just more work start kind of later in the year or 2027? Maybe you could just flesh that out. Joseph Cutillo: Yes. No, we feel very confident in the backlog that's there, Brent, and the projects are happening on schedule and taking place. I will tell you, we're being very conservative in the fourth quarter right now. We never know what the weather is going to be in the fourth quarter. If we have weather like last year, I think we'll have a much stronger fourth quarter than we have in our forecast. But frankly, we're just being conservative on the outlook. We got plenty of work ahead of us and plenty of opportunities coming, especially as we get into the fourth and first quarter, we see some really strong bid activity that's going to take place there. So no, nothing of a slowdown, more of a cautious behavior on us. We've raised guidance a couple of times. We've come up significantly in all the areas. We would have never expected CEC. We've had them about a year now, and we've doubled that business already. So we're seeing great progress, just the conservative nature we have. Brent Thielman: Yes. Understood. Okay. And then on that point on CEC, Joe, maybe just the profile of the new work awarded or pending. It seems like you've seen a huge step-up in award activity at the electrical business. Just talk about maybe how the size and scope has changed of some of the pursuits, maybe the profile of margins you're starting to see come through and kind of your thought process on how margins evolve for the business going forward? Joseph Cutillo: Yes. We're tickled to death with CEC and what they're doing. If we step back and think when we made the acquisition, we thought it would take us a year to fill their capacity, and we actually had talked about shifting some resources to the Southeast. We filled their capacity up in about 90 days. And as a result, they've grown nicely. I think what you don't see in the numbers is kind of what's happening and what's coming from CEC. One of the strategic things we said we're going to do is they're in some end markets with some services that we said we were going to get out of. We're in the process of getting out of those. It takes a little time. So when we look at the business, we look at it from the old pieces that we're getting out of and then the remaining business as it goes forward. And when we look at that piece, the margins are going up very, very nicely in that area. But also the job size is going up significantly. And I think one of the really rewarding things for us in the quarter, again, that doesn't show up is CEC is now getting the second buildings on data centers that they're at, which says they're performing at or above customer expectations and they're giving them the next phases and the next levels of work. So everything is coming together exactly as we had hoped. They're doing a great job. They're growing very, very rapidly and adding capacity. And we see, candidly, if we had 1,000 or 2,000 more electricians, we'd be growing it even faster. So we've got a lot of programs in place on not only developing the electricians, but we got a full recruiting team that's recruiting every week to bring those electricians in. So -- it's been great. The only downside, which is the only reason I could see that our stock is not up exponentially today and looks like it's down is the mix makes our margin look like it's lower. And if you look at every element of E-Infrastructure, margins were up in every single piece of it. The only thing that drove the difference in margin is mix. When we have CEC grow 140%, we love that. We'll take that all day long. When we have our Rocky Mountain business and we convert it from transportation to E-Infrastructure and they grow 700% in a year, we'll take that. Brent Thielman: Yes. Understood, Joe. I appreciate the clarification there. Just the last one, maybe an update on the cross-selling opportunities between for CEC and the legacy site development business and how that's progressing? Joseph Cutillo: Yes. So we're on more sites today than we were on in the second quarter. And as we look forward, a lot of the data centers that will be coming out, we've had -- let me step back. Let me just say this, we've had more opportunities to have joint efforts than we have capacity in the electrical side. So as we're building up that capacity, Brent, that number will grow. The reason it's not growing even faster than it is, it's growing faster than we thought. We thought it would take us until this time to be on our first one. We're on 3 or 4 now. It's just pure capacity. Our customers are asking us for it. If we had a union operation, I would tell you, we'd be on a semiconductor plant up in New York right now with the electrical side. So we're getting asked. They see the value proposition. Frankly, it's even stronger than we anticipated. We're pretty bullish on it. So we're very happy with that. The faster we can ramp up additional capacity or as you know, we're looking at -- continue to look at acquisitions in and around the space. We can add some capacity there, the more joint projects we'll be on. Louie Dipalma: Joe, you mentioned how the CEC has lower margins relative to site development and how the CEC margins should grow very nicely. From a high level, can you discuss like where like CEC margins could grow to in the long term? And just in general, explain why is there such a significant variation between the margins for site development versus electrical services? And could those margins converge over time? Joseph Cutillo: Yes. So let me make sure people don't get too delusional. We don't ever expect electrical margins to be up at the peak of our site development. There are so many more complexities and differences with the site development and things we can do to truly change the scope and drive productivity in those projects versus an electrical project that's pretty laid out, right? I mean the design is there, the amount of wire, et cetera, et cetera, I'm overly simplifying it, but it's laid out. So there's only so much you can get there. However, we're not happy with the margins nor CEC with where they are today. And as we move to a better mix of projects, we see 300 to 500 basis points on top of some things we're doing internally of margin improvement and we've said over 12 to 18 months. I think we'll see some of that sooner. The faster we get out of some of this other stuff, the faster that's going to come through. We're watching that very closely. We watch it every month, Louie, and we have seen great progress. The team is doing a fantastic job there. If I step back and think 3 to 5 years, I don't know why. Today, the electrical world is kind of low double-digit margins, call it, 10% to 12% EBITDA margins. I don't know why we can't get that close to 20%. I really don't. Based on the project size, scopes and the quality of the projects, that's our goal is over a long period of time to get there. And we've been pretty successful at driving margins in our businesses much higher than anybody else, and we feel like we can do the same. Louie Dipalma: Excellent color. And I was also wondering, could you provide more detail in terms of why the future phase work metric doesn't always capture the full visibility that you have in terms of your pipeline? Joseph Cutillo: Yes. Great question. One of the things is you spend enough time with us and most of the people on the phone spend enough time with us, we're pretty conservative. And if anything, we want to overperform and make people happy. But one of the things we do not include, and we're thinking about how we should be communicating this better is we're on a lot of projects today that have a defined scope to build out a piece of property. So let's just say we have 600 acres of land and they say we're going to build 5 buildings on the first 300 acres, and then we're going to build 5 buildings on the next 300 acres. We only talk about the first 300 acres, okay? We know that when they're finished with that, we're going to move the equipment to the next one. But that project hasn't been perfectly defined and articulated. But we know that on other projects we've been on, that happens. But the other thing that's happening, Louie, that it is a relatively new dynamic, is we are seeing them purchase incremental property on projects that we're on. So let's just say we're on a 300-acre project today. There happens to be one that's close to that. They have now purchased another 600 acres touching that property that they're going to expand and grow that. That's not in any of our numbers. Now we're there. We're working with the customers. We're working with them on plans. We're working with that on the future. These projects we historically have said have been 3 years. We just got out of our executive leadership team meeting, and we're looking at projects with our team. And a number of projects we're going to be on for 5 to 8 to 12 years if they continue to expand on this property is unbelievable. So we don't put any of that into right now our future phase book. And we're trying to figure out a way to still remain extremely conservative, but I don't feel like we're painting adequate picture for the outside community to understand when our guys say they're going to be on a job for 5 to 8 years, we don't talk about that a lot. We talk about the 3 years because that's the project scope we're doing. The people just don't understand the size and scope of these jobs and the duration. It is getting significantly bigger, which is perfect for us. Now remember, not only do we have the site side, now we have the electrical side that stays there after the site is done for another couple of years. So our visibility keeps getting better and better. Project size keeps growing. So we feel very confident the opportunity is much bigger than we've been talking about. But what it's also done strategically for us, is we had a very, very aggressive organic growth strategy put in place, we felt and a strategy to build that capacity. When we step back and we started looking at these projects and the size of the ones we're just on in addition to the ones that are coming, we said, my goodness, we've got to really accelerate the rate in which we're adding capacity just to keep up with this. So that's all exciting stuff. It's a challenge for us, obviously. We've always felt comfortable with 20% to 30% organic growth. This year, we're growing a hell of a lot more than that. And we've got to figure out how to keep up with that pace. Brian Brophy: Nice quarter. Can you give us a sense for how pricing and terms and conditions are trending within your E-Infra backlog today versus a year ago? Joseph Cutillo: We're not seeing anything fundamentally shift. We've seen a few attempts on the electrical side to add some terms and conditions into some things that we have not accepted, frankly. But we haven't really seen a fundamental shift in any of that, right? Nick, are you aware of that? Nicholas Grindstaff: No. Brian Brophy: Appreciate it. And then just touching on the capacity comments. Maybe a little bit more color on spare capacity that you have at the moment. Where are things tightest for you? How are you thinking about your ability to add project managers and equipment if we remain in this healthy demand environment that you're seeing? Joseph Cutillo: Yes. So definitely, the tightest is around electricians. I'll start there. That's always the tightest part of the market. Our teams have done a really good job at making sure we have an adequate supply or adequate number of electricians to do the jobs we have. It certainly has curtailed us from taking on more jobs than we could, frankly. There's more opportunities out there, some of the joint opportunities we talked about earlier. So we're working hard on that. As you get into the site side, we've done a really good job. But I will tell you, for the first time, we're getting really tight on the capacity piece. We've been able to flex up proactively. We've done some stuff proactively several years ago to make sure we're preparing for some of this. And as we're stretching further and further geographically, and let me remind everybody, geographic expansion for us historically when we had Plateau and Petillo was kind of one state further from where they were to maybe 2 states. Now we're serving the East part of Texas out of Atlanta and the west part of Texas out of Utah. That's a much further stretch than moving 1 or 2 states. So as a result, it requires a few more resources. You can't lever local resources as much if you can bounce around. So we're getting tight on the capacity there. So we're doing -- as Dan talked about, we're doing stuff on the equipment side. We're doing stuff on the people side. But another big part of this is we are going to have to make more acquisitions in and around the geographic expansions that we are, that we can add that pure human capital resource to execute these jobs. So I think as we go forward, we're starting to look at a little bit smaller players where we would like to have really large players, but unfortunately, there's really not that many out there and augmenting them with some of our resources. So we don't have to put a full team in Texas. We can put a partial team with an acquisition in Texas or in New Mexico or Oklahoma, wherever that may be. And that helps us build that capacity quicker and faster and it's a little bit of what we're doing with Stone Ridge, frankly, and why we made that acquisition. Alexander Rygiel: Very nice quarter, gentlemen. When additional phases of work come out, are these being competitively bid? Or do you find Sterling just basically directly negotiating on these additional phases? And kind of same question, but are you seeing an increase in competition for additional phases of work? Joseph Cutillo: Yes. So if we perform, which we have on every month, I'm not aware of anything where we've lost future phase of it. We generally are negotiating those prices with the customer on the future phase work. Unless it's an extreme change of scope, let's just say it's not part of our project and they want something else added to that project that's outside our normal scope, that would be a normal bid. We give them a number would not be atypical for them to maybe get another number. A perfect example of that is they need to put a road through to get to a new phase and they need paving and curbs and a bunch of stuff like that. They may ask us to give them a bid on that. We may subcontract that or they may bid it out to somebody else. But for the most part, once we're on the job, and this is really important, and I'll talk strategically on what we're doing and why we're advancing so quickly in Texas and some of the other markets is, the way our teams would tell you is once we plant our flag, we are there. We're not leaving. And that gives us an opportunity to drive project productivity along the way, as you've seen, our future phase work margins tend to get better than our early phase work, right? So we're going to be incredibly competitive to plant that flag. And then we're going to use productivity and technology to drive margins up through the rest of that project and get better margins for each of the phases as we go on. Alexander Rygiel: And secondly, can you speak to some of the other end markets that are seeing green shoots like pharma and semi and other factories? Joseph Cutillo: Yes. And then just back, the one thing I didn't answer is on the competition side. We always see local competition, especially when we go into a new market. There's a lot of small players. But generally, after we do one job, that gets a lot smaller. The first one is always the hardest one for us to get, frankly. But we have not seen an influx of major new players or anything along those lines, especially on these large jobs. Somebody wins a $20 million or $30 million data center in one of our markets, probably. We don't even generally look at those unless the customer forces us to. So those sort of things are going to continue to happen. But we haven't seen any major influx of large competitors in our markets. I'm sorry, what was the next question, please? Alexander Rygiel: Other end markets like pharma, semi and other factories, any progress there? Joseph Cutillo: Yes. So we're -- we still see all of that progressing. We think pharma is '28. Semis are around 2030. I will tell you the team up in New York is doing an outstanding job. I mean they've made -- not by name, but they've made all the local and some of the national news up there on how far ahead of schedule they are on this project. I will tell you that the general contractors on the job and the end customer on this job is extremely happy and frankly, has never seen progress like these guys are making. I think that's going to be the entry point to a lot more semiconductor plants for us coming around 2030. But I think there might be some intermediate opportunities on some facilities that are being built today in regions and geographies we have historically not been in that we may get pulled into. In addition, we saw the start of the EV plant in Atlanta, just outside of Atlanta this quarter. So we're seeing some mixed activities in the manufacturing space, one-off, two-offs, those sort of things. But we haven't seen any delays in the pharma or the next generation of semiconductors so far. Manish Somaiya: Congrats on the quarter. Joe, a couple of questions. One, from a big picture standpoint, obviously, we're seeing a lot of news about data centers being banned in a lot of new markets. I guess there was an article yesterday on Texas on Greg Abbott banning new data center approvals. Maybe if you could just help us understand the dynamics of what's going on, on the ground because obviously, you're closer to what's happening. Are things really getting delayed? Or is it just politics as usual? That's my first question. Joseph Cutillo: Yes. We haven't -- we certainly -- we haven't seen anything that's impacted any of our schedules at this time. There's going to be states. I think people have to realize, there's going to be states and geographies that will never have data centers or will have very few in New York, seems to be against everything that brings revenue to the state and they have banned the data centers is one of those. In Texas, they're moving forward very quickly. I think we'll continue to see like anything new and anything big, there's always the political side that's raising ruckus, I guess, is the best way to put it. But so far, we have not seen any issues or delays with the projects we're on nor the projects coming. Do I think realistically down the road, could there be other supply chain delays once the build starts out on some of these projects? I think some of the upstream or downstream, however you want to look at it, supply chain elements or the companies are getting pressured on capacity and stuff. You certainly could see some of that stuff. But on the site side, they want to get that done as soon as possible. It's the only place they can pick up time and be prepared. So we have not seen any delays there. And candidly, on the electrical side, our teams have not seen any -- they may see a week delay or a couple of days, but I have not seen anything of significance that's concerned us. Manish Somaiya: That's helpful, Joe. And then just on the E-Infrastructure margins, obviously, in the second quarter, we had about 24.1%. I think you addressed some of the factors there. Mix was a big factor. But how should we think about normalized margins at least for this year and possibly into '27? And perhaps if you can just kind of help us understand where the margin improvement for CEC is coming from? I think you mentioned 12 to 18 months. But if you can just kind of help us understand the different buckets of margin improvement. And then finally, on Stone Ridge, I guess, the margins there are mid-teens. If you can also kind of frame that same pathway for us. Joseph Cutillo: Yes. So let me step back a little bit in time when we bought Plateau, who has fantastic margins today, their margins were in that 15% to 18% range. And it's taken us a few years, and we've moved those margins up significantly. If you take a look at the Plateau business, they're getting close to peak margins. They'll still have some small incremental gains, but we're not going to see the monumental gains in that business that we've seen projects change to a further degree. But in the rest of our E-Infrastructure pieces, the Petillo business has always been a lower-margin business. As they're getting into bigger and bigger jobs, data centers, chip plants, those margins will come up. Margins on bigger jobs are better. Our Rocky Mountain Transportation business that we've shifted, grown 700% into E-Infrastructure. E-Infrastructure margins there, even with their small equipment suite, even with what they're doing from not being vertically integrated as an example, are still significantly better than transportation. But it's going to take us a little time to do some vertical integration. We don't have enough critical mass in the market to make vertical integration worth its while, right? So as we build enough critical mass, as we build up their equipment suite and the really simple way to think of it is, if I have a bucket that's 3x the size of an existing bucket for every scoop, I scoop 3x as much dirt. It's really that simple, right? So it takes me 1/3 the time to move the dirt. So we'll continue to improve and grow their equipment suites, their margins have come up. On CEC, there's really 2 big drivers here. One is we're getting out of some legacy business segments that have relatively low margin, that will improve their margin, right? It's just portfolio management. The second piece is, as they're getting more and more engaged on these data centers and the data centers are getting bigger, we're watching their margins go up as job sizes go up. So it's a combination of things. So we'll continue to see those go up. Where people are going to get confused every single quarter because it's not perfect math, is the mix of that is going to change. And when CEC grows at a much greater rate than E-Infrastructure, it's going to appear our margins are going down, even though their margins are going up and site development margins are going up, it's -- that's just mix. There's nothing we can do. But if you look at the returns we're getting on the dollars and the growth, I think most people would take that any day of the week. Manish Somaiya: So just quickly then, Joe, if you can just help us frame what the legacy E-Infrastructure margins are versus what the CEC margins are? Joseph Cutillo: Do you have the exact numbers, Nick, on what that is? Nicholas Grindstaff: In the second quarter on an adjusted basis were on the high 20s. Joseph Cutillo: Yes. So you're looking at -- if you take the site side, you're in upper 20s and the CEC side, roughly 12%. So there's a big difference. It's over 2x the margin profile. So it doesn't take a lot of mix shift or incremental growth in CEC to dilute the overall margin. That's just for the quarter. Sangita Jain: Can I follow up on the margin question? I kind of just want to understand the go-forward guidance and whether it's a function of CEC growing a lot faster than you had anticipated, let's say, a few months ago when you gave us this guidance? Joseph Cutillo: Yes. So the easy way to think of margins is if you take E-Infrastructure, you break it down into site development and electrical, right? We'll keep it that simple. In the quarter, we saw improved margins in site and electrical. But the revenue mix of the electrical being growing at a much faster rate brings down that overall margin. As we go to the rest of the year, the margin is diluted by the accelerated growth rate of CEC, okay? So it's really -- this is purely mix, we're not losing margin in our businesses. I want to make sure everybody understands that. This is purely a mix of revenue that drives that. And then the other piece you have on the site side, where we saw the increase -- the trajectory of growth in margins slow down is we have, 1, new projects where the beginning phases of new projects are lower. But 2, we also have that 700% growth in the Rocky Mountains transportation business, which has that smaller equipment suite that isn't vertically integrated, grow at a faster rate than our Southeast business. So when that happens, their margins are lower. I will tell you that. Their margins are improving, but they're still lower than our Southeast margins. So that blend makes it appear that the total margin is down, but the individual elements are all going in the right direction. Noelle Dilts: So relative to our previous expectations, yes, the growth at CEC has been higher and the ramp on some of those newer projects have been faster. Adam Thalhimer: Great quarter. Joe, the E-Infrastructure orders came in at a record level, and I couldn't believe that they're even up sequentially. Can you give more color about what was in there and maybe how much Stone Ridge added? Joseph Cutillo: Yes. So what makes it even more impressive is that we're able to do that on a really strong revenue quarter, which is always tough to do. Nick, do you want to go through some of the backlog numbers? Stone Ridge certainly added some of that. CEC had a great quarter with their bookings on that. I don't know, Nick, if you have the detailed numbers there. Nicholas Grindstaff: Yes. So CEC was at about $2.4 billion combined backlog for the quarter, June. Stone Ridge was then at about $140 million for committed backlog signed and I think it's $140 million for signed backlog. Joseph Cutillo: Yes. The biggest driver, though, for the quarter, CEC has some great bookings. And Adam, what they are, that's the next phases and next sets of buildings of projects that they're currently on. So for us, everybody likes to look at just the pure raw number, but what's really encouraging for us is the fact that they are winning those next phases and winning those next level of projects, which is just proof in the pudding that they're executing well. They're delivering to the customer. They're doing what they need. And as part of the portfolio, we see the same thing happening with them as we have with Plateau or RLW or Petillo. Adam Thalhimer: Got it. Okay. And then, Joe, your comment about the potential for softer Q3 awards. I think you talked about the stock being down. That's probably the biggest reason. Can you provide additional color on what you meant by that and maybe more color on what you're seeing in the bidding? Joseph Cutillo: It's just timing. I wish we could get our customers to bid equal amounts every quarter through the year and make our lives a lot easier. But the reality is they don't. We can have a quarter where they bid 3 or 4 new projects and we look like the greatest things and sliced spread. In the next quarter, they bid one or none. It's just the timing of their cycle when it comes out. The important thing for us, and I get if you're not kind of in the mix of things, people are looking for indicators. But for us, we're in conversations with them all the time. We know what's coming. As long as we know what's coming, we feel good. When it hits, less of a concern for us, right, whether it's third quarter or fourth quarter. But we see really strong activity that's going to take place in the fourth quarter and first quarter of next year. And there's just a little bit of a lull in the third quarter. So we're trying to give people a heads up that we see that coming. We know it's coming. Don't panic. It's not a problem. But instead of telling people after the facts, when we know it's -- that's just going to probably happen. Could something slip in the third quarter and we look like idiots and it comes in early, possibly, but I wouldn't plan that. Julio Romero: Maybe starting off here, you recently upsized the revolver to $1.5 billion. You're carrying a net cash position. How should we think about that? Should we read that larger facility as kind of the M&A acquisition candidate size moving up? Is it purely optionality? Just help us think about that here. Joseph Cutillo: Yes. Nick, do you want to answer that? Nicholas Grindstaff: Yes, sure. I mean we upsized the facility certainly to take advantage of opportunities for acquisitions and to have that dry powder to be able to execute on those. Also, we paid off our existing term loan and moved to an all-revolver structure. And so we enhanced pricing. We added some key relationship banks to the mix. And so overall, I feel really good about our revolver and how it positions us going forward. Joseph Cutillo: On the uses, there's no question, we've always been acquisitive. Our acquisitions turned out pretty good. If we could double every acquisition like CEC in a year, I think we get the acquisition price of a year. I don't know if that is. So we've been very good. We're going to need to add more acquisitions for capacity. With what we're seeing, the part that everybody is missing, put down the newspapers, reading the craziness that's out there. What we are seeing just from our top hyperscalers, the amount of work that is coming, we have to add capacity significantly faster just to keep up with them. That's not including all the other players that are entering the market and building stuff. It is unbelievable what is coming down the tracks. And so we are going to have to make more acquisitions, not only just from a strategic geographic standpoint, but from a pure capacity add standpoint to keep up with that demand that's coming. Julio Romero: Excellent. And kind of relates to my follow-up here is just CEC is running well ahead of the revenue expectations you set at the announcement. Obviously, it's making up more of the infrastructure mix as we've talked about today. And I'm curious how that and your comments about more capacity needed related to your M&A priorities, kind of ranking them today, where do your priorities kind of sit at with regards to geographical, electrical versus specialty mechanical, more site development? Just help us think about those priorities here. Joseph Cutillo: Yes. The answer is a little bit of all of the above. But if you would ask me kind of in the third quarter last year after we purchased CEC, would you look for more electrical capacity in the Texas market? I would have said no, we're probably going to focus more on the Southeast. Today, if the right opportunities came up, I would add 2 or 3 more CECs to the Texas market. That's how big we believe that market is going to be. We certainly would like to add the electrical capabilities in the Southeast. We think that's obviously a large market for us and the value proposition is the same. So we continue to look hard for the right acquisition in that market. And then on the site side, especially as we're moving further and further from the west east and from the east west to Texas and some of the surrounding markets, the Texas market is going to be bigger in the next 3 years than any other market related to data centers, everything else. It is coming. And I guess there's always something that could stop it, but I don't know what that is right now. And so we're working really, really hard on what do we need to do to add that incremental capacity today to start getting ahead of that curve, just like we did with Stone Ridge because we believe in '20 -- late '27, '28, some of the upper Pacific Northwest areas are going to start taking off as well. I sound like a broken record, but we have great visibility to multiyear projects that are coming and we are continuing to position ourselves to be there. So we look really smart when they come out, but it's just our customers telling us where they're going. Operator: Thank you. That concludes our question-and-answer session for today. I would now like to turn the conference call back over to Joe Cutillo for the closing remarks. Joseph Cutillo: Great. I want to thank everybody again for joining our call today. If you have any follow-up questions, please feel free to contact Noelle Dilts. Our contact information can be found in the press release. Thanks, everybody, and have a great day. Operator: Thank you. Ladies and gentlemen, the conference call has now ended. Thank you all for joining. You may now disconnect your lines. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. If you’d invested $5,000 then, you’d be sitting on $2,907,996 today.* Now, for the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. It’s a key player in the $1.8 trillion space race, and with the stock recently sitting 20% off its highs, the window to get in early is closing fast. Continue » *Stock Advisor returns as of August 3, 2026 This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Sterling Infrastructure. The Motley Fool has a disclosure policy. Sterling Infrastructure (STRL) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Sterling Infrastructure, Inc. STRL used its second-quarter 2026 earnings call to frame capacity, not demand, as the central constraint on growth. The company is accelerating hiring, fleet investment and acquisitions as mission-critical projects expand in size, duration and geography. Adjusted earnings of $5.80 per share beat the Zacks Consensus Estimate of $5.20 by 11.50%. Revenues of $1.17 billion topped the consensus estimate by 9.20%. Sterling Infrastructure, Inc. price-consensus-eps-surprise-chart | Sterling Infrastructure, Inc. Quote Chief financial officer Nicholas Grindstaff raised 2026 guidance to revenues of $4 billion to $4.15 billion and adjusted earnings of $19.70 to $20.30 per share. Adjusted EBITDA is projected at $891 million to $916 million. CFO Nicholas Grindstaff said the ranges reflect a stronger core outlook and the Stone Ridge acquisition. Capital spending guidance rose by $30 million to $130 million to $140 million to expand and upgrade the fleet. CEO Joseph Cutillo told an Oppenheimer analyst that fourth-quarter assumptions remain conservative because of weather. He said backlog is progressing on schedule and the caution does not reflect weaker demand. CEO Joseph Cutillo highlighted $4.3 billion of signed backlog, $5.6 billion of combined backlog and more than $1.4 billion of high-probability future-phase opportunities. Together, they provide visibility to more than $7 billion of work. CEO Joseph Cutillo said the future-phase measure excludes some customer expansions that are not fully defined. Several active sites could keep Sterling working for five to 12 years as customers add acreage and buildings. A Thompson, Davis analyst asked about softer third-quarter awards. CEO Joseph Cutillo attributed the expected lull to customer timing and pointed to stronger bid activity in the fourth quarter and early 2027. E-Infrastructure revenues rose 192% as data centers and semiconductor campuses drove activity. CEO Joseph Cutillo said mission-critical work represented more than 92% of the segment's signed backlog at quarter-end. Sterling is moving labor and equipment away from lower-return transportation work. Transportation revenues fell 20%, but adjusted operating margin rose more than 500 basis points to 19.5% on a more selective project mix. CEO Joseph Cutillo expects 2026 E-Infrastructure revenue growth above 100% and legacy site-development growth approaching 70% or higher. Transportation revenues are expected to decline 7% to 10%. Analysts repeatedly questioned E-Infrastructure's 24.1% adjusted operating margin. CEO Joseph Cutillo said margins improved within site development and electrical operations, but faster growth at lower-margin CEC diluted the segment rate. CEO Joseph Cutillo told a Cantor analyst that site-development margins were in the upper 20% range, while CEC was near 12%. Larger data-center jobs and the exit from lower-margin legacy work are the main improvement drivers. In response to a William Blair analyst, CEO Joseph Cutillo outlined 300 to 500 basis points of potential CEC margin improvement over 12 to 18 months. His longer-term goal is to move electrical EBITDA margins toward 20%. Chief operating oficer Daniel Govin said Sterling is investing in recruiting, training, prefabrication and larger equipment. He identified project managers, operating teams and electricians as critical resources. CEO Joseph Cutillo told a Stifel analyst that electricians remain the tightest constraint and site-development capacity is also becoming stretched. Tuck-in acquisitions can add local leadership and labor faster than internal expansion alone. CFO Nicholas Grindstaff said the expanded $1.5 billion revolver provides acquisition flexibility. CEO Joseph Cutillo identified electrical capacity in Texas and the Southeast, plus site-development capacity around Texas, as priorities. CEO Joseph Cutillo emphasized disciplined project selection, favoring work that strengthens customer relationships, supports future phases and protects margins. Management's near-term focus is adding people and equipment without weakening execution. Award timing and weather remain the key cautions, while multiyear customer plans drive the capacity strategy. STRL currently sports a Zacks Rank #1 (Strong Buy), a favorable earnings-estimate-revision signal for the next one to three months. You can see the complete list of today’s Zacks #1 Rank stocks here. Its Growth Score of A is supportive, while the Value Score of F, Momentum Score of C and VGM Score of C show uneven style characteristics. The strongest Zacks combinations pair a Rank #1 or #2 with an A or B Style Score. STRL meets that standard for growth, not for value, momentum or VGM. The Zacks Rank can change as estimates are revised after the reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Sterling Infrastructure, Inc. STRL delivered a strong second quarter of 2026, with adjusted earnings and revenues topping the Zacks Consensus Estimate and increasing sharply year over year. Results were driven by outsized growth in E-Infrastructure Solutions, supported by strong organic execution and contributions from the CEC and Stone Ridge acquisitions.Transportation Solutions revenues declined as Sterling accelerated the reallocation of resources toward higher-margin E-Infrastructure opportunities. Meanwhile, Building Solutions remained pressured by relatively flat homebuilder activity and continued housing affordability challenges. Adjusted earnings were $5.80 per share, beating the consensus mark of $5.20 by 11.5%. In the year-ago quarter, the company reported adjusted earnings per share (EPS) of $2.69.Revenues of $1.17 billion surpassed the consensus estimate of $1.07 billion by 9.3% and increased 90.1% from $614.5 million in the year-ago quarter. Acquisitions, including CEC and Stone Ridge, contributed $250.8 million to revenues during the quarter. Sterling Infrastructure, Inc. price-consensus-eps-surprise-chart | Sterling Infrastructure, Inc. Quote Signed backlog ended the quarter at $4.33 billion, up 116% year over year, while combined backlog increased 150% to $5.62 billion. Second-quarter book-to-burn ratios were 1.4x for signed backlog and 1.3x for combined backlog, excluding the impact of the Stone Ridge acquisition.Beyond signed work, the company’s pipeline of high-probability future-phase opportunities exceeded $1.4 billion. Sterling’s signed backlog, unsigned awards and future-phase opportunities represented a total addressable pool of more than $7 billion, up more than $2.5 billion from the end of 2025. Operating leverage remained a key highlight as profit growth outpaced the top line. Gross profit increased to $290 million from $143.1 million a year ago, while gross margin improved to 24.8% from 23.3%, an expansion of roughly 150 basis points.Operating income reached $219.3 million compared with $104.6 million in the prior-year quarter. Adjusted EBITDA rose 104% year over year to $256.7 million, while adjusted EBITDA margin improved to 22% from 20.4%. E-Infrastructure Solutions was the primary growth engine, with segment revenues, which accounted for 78% of total revenues, jumping to $905 million from $310.4 million in the year-ago quarter. Management attributed the performance to strong results across organic and acquired operations. The legacy site development business generated 111% revenue growth, reflecting expansion across all regions, while CEC’s electrical services revenues increased 140% from the pre-acquisition second quarter.Profitability in the segment also increased sharply. Adjusted operating income climbed to $217.8 million from $87.7 million. E-Infrastructure signed backlog rose 165% year over year, with mission-critical projects, including data centers, manufacturing and semiconductor facilities, representing 92% of segment backlog.Transportation Solutions revenues, which represented 13% of total revenues, declined to $156.7 million from $196.8 million. The decrease reflected Sterling’s ongoing shift of resources from transportation projects toward higher-margin E-Infrastructure opportunities. Despite lower revenues, adjusted operating income increased to $30.5 million from $28.3 million, and adjusted operating margin expanded to 19.5% from 14.4%.Building Solutions remained the softer spot. Revenues, which accounted for 9% of total revenues, slipped to $106.5 million from $107.3 million. Adjusted operating income declined to $10.5 million from $11.8 million as relatively flat homebuilder activity and affordability pressures weighed on performance. Cash generation remained a notable support for the balance sheet. Net cash provided by operating activities totaled $328 million during the first six months of 2026, up from $170.3 million in the year-ago period. Cash and cash equivalents ended June at $464.5 million, up from $390.7 million at the end of 2025.Sterling repurchased $35.3 million of common stock during the first half of the year. Long-term debt stood at $268.7 million at quarter-end compared with $275.9 million at the end of 2025, while capital expenditures totaled $69.6 million. Confidence in its operating momentum translated into higher full-year targets. Sterling raised its 2026 revenue guidance to $4-$4.15 billion from the prior range of $3.70-$3.80 billion, indicating strong execution, expanding backlog and contributions from the Stone Ridge acquisition.Earnings are now expected to be $17.25-$17.85 per share, up from the previous forecast of $16.50-$17.15. Adjusted earnings are projected at $19.70-$20.30 per share compared with the prior outlook of $18.40-$19.05.The company also lifted EBITDA guidance to $829-$854 million from $801-$831 million and adjusted EBITDA guidance to $891-$916 million from the earlier range of $843-$873 million. Sterling currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.Comfort Systems USA, Inc. FIX delivered impressive second-quarter 2026 results, with earnings and revenues surpassing the Zacks Consensus Estimate. Both metrics increased sharply year over year.Comfort Systems’ quarterly performance reflected continued strength across the end markets, robust execution by the operating teams and sustained demand that drove record backlog growth, reinforcing its confidence in the business momentum. Backlog as of June 30, 2026, totaled $14.06 billion, increasing 12.9% from $12.45 billion on March 31, 2026, and jumping 73.2% from $8.12 billion reported a year ago.United Rentals, Inc. URI reported solid second-quarter 2026 results, with adjusted earnings per share and total revenues beating the Zacks Consensus Estimate and increasing year over year.Record rental revenues, higher fleet productivity and robust specialty demand supported United Rentals’ results. Fleet productivity improved 3.4% year over year. Rental revenues increased 12.7% year over year to a quarterly record of $3.85 billion. Management raised its 2026 revenue outlook to $17.5-$17.8 billion from $16.9-$17.4 billion. The adjusted EBITDA forecast increased to $7.98-$8.13 billion from $7.63-$7.88 billion.PulteGroup, Inc. PHM reported better-than-expected second-quarter 2026 results, with adjusted earnings and total revenues topping the Zacks Consensus Estimate, but declining year over year.The quarterly results reflect reduced home-closing volumes, softer average selling prices and margin compression. Ongoing softness in the housing market because of weaker consumer confidence and ongoing affordability challenges due to high mortgage rates hurt the top-line growth. The number of homes closed declined 8.4% year over year to 6,997 units. Net new orders increased 6.4% year over year to 7,536 homes. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report PulteGroup, Inc. (PHM) : Free Stock Analysis Report United Rentals, Inc. (URI) : Free Stock Analysis Report Comfort Systems USA, Inc. (FIX) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue Growth: 90% year-over-year increase in the second quarter. Adjusted Diluted EPS: Increased 116% to $5.80, up from $2.69 in the prior year period. Adjusted EBITDA: More than doubled in the quarter, with margins expanding 150 basis points year-over-year to 22%. Signed Backlog: Totaled $4.3 billion at quarter end, up 116% year-over-year. Combined Backlog: Increased 150% to $5.6 billion. E-Infrastructure Revenue: Grew 192% in the second quarter. E-Infrastructure Adjusted Operating Income: Increased 148%, with adjusted operating margins remaining strong at 24%. Transportation Solutions Revenue: Declined 20% in the second quarter. Transportation Solutions Adjusted Operating Margins: Reached 19.5%, up more than 500 basis points from the prior year period. Building Solutions Revenue: Declined 1% in the quarter, with adjusted operating margins of 9.9%. Operating Cash Flow: $328 million for the first half of 2026. Capital Expenditures: $70 million in the first half; full-year guidance increased to $130 million to $140 million. Share Repurchases: $35 million at an average price of $511.18 per share in the first half. Cash and Debt: Ended the quarter with $464 million of cash and $284 million of debt, for a cash net of debt balance of $181 million. 2026 Revenue Guidance: Increased to $4 billion to $4.15 billion. 2026 Diluted EPS Guidance: $17.25 to $17.85. 2026 Adjusted Diluted EPS Guidance: $19.70 to $20.30. 2026 EBITDA Guidance: $829 million to $854 million. 2026 Adjusted EBITDA Guidance: $891 million to $916 million. Warning! GuruFocus has detected 2 Warning Sign with STRL. Is STRL fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Sterling Infrastructure Inc (NASDAQ:STRL) delivered exceptional Q2 2026 results with revenue growth of 90% and adjusted diluted EPS growth of 116% to $5.80. Adjusted EBITDA more than doubled, with margins expanding 150 basis points year-over-year to 22%. Signed backlog surged 116% year-over-year to $4.3 billion, with combined backlog up 150% to $5.6 billion, providing strong multi-year visibility. E-infrastructure segment revenue grew 192%, driven by robust demand in mission-critical data center and semiconductor projects, with margins remaining strong at 24%. Transportation Solutions achieved significant margin expansion of over 500 basis points to 19.5%, despite a 20% revenue decline, reflecting a strategic shift to higher-margin work. The company raised its full-year 2026 guidance, now expecting revenue of $4.0-$4.15 billion and adjusted EPS of $19.70-$20.30, reflecting strong market tailwinds. CEC, the electrical business, delivered 140% revenue growth and is seeing improved margins and larger project wins, including integrated site and electrical work. Strong cash flow from operations of $328 million in the first half of 2026, with a net cash position of $181 million and an expanded $1.5 billion revolver for M&A flexibility. The company is investing in capacity, including a $30 million increase in CapEx guidance, to support sustained growth and meet accelerating demand. Management sees significant future opportunities, including $1.4 billion in high-probability future phase work and expanding project scopes that could extend durations to 5-12 years. Transportation Solutions revenue declined 20% in Q2 2026 due to the reallocation of resources to e-infrastructure projects, and full-year revenue is expected to decline 7-10%. Building Solutions revenue declined 1% and is expected to face strong headwinds throughout 2026 due to a weak residential market. E-infrastructure margins were diluted by the faster growth of lower-margin CEC electrical work, which may cause confusion and pressure on overall margin perception. The company anticipates a potential sequential backlog decline in Q3 2026 due to lumpy award timing, which could raise concerns about demand sustainability. Capacity constraints, particularly in electricians and site development resources, are limiting the ability to take on additional work and may require more acquisitions. The company is facing increased competition and pricing pressure in some markets, though it remains selective in project selection. Fourth-quarter revenue guidance is conservative due to weather-related uncertainties, which could lead to underperformance if conditions are unfavorable. The residential market is expected to remain weak, with Building Solutions revenue declining modestly and margins in the high single to low double digits. The company is experiencing higher costs and resource strain from geographic expansion, requiring additional investments in fleet and personnel. There is a risk of project delays or cancellations in the data center market due to political or regulatory actions, though none have impacted current schedules. Q: Can you provide more detail on why the future phase work metric doesn't always capture the full visibility you have in your pipeline? A: Joe Cutillo, CEO, explained that the company is conservative in its reporting and does not include several key opportunities. These include expansion phases on existing projects where customers have purchased adjacent land, and projects where the company is already working with customers on long-term plans that could extend project durations from the typical three years to five, eight, or even 12 years. He emphasized that the actual opportunity is much larger than what is currently being communicated, and the company is accelerating its capacity-building efforts to keep up with this demand. Q: When additional phases of work come out, are these being competitively bid or directly negotiated, and are you seeing an increase in competition? A: Joe Cutillo, CEO, stated that as long as Sterling performs well, it generally negotiates prices for future phases directly with the customer. He noted that the company has not lost any future phase work. While local competition exists, especially in new markets, it tends to diminish after the first job is completed. He has not seen an influx of major new competitors on large projects, and the company's strategy is to "plant a flag" and use productivity and technology to drive margins up on subsequent phases. Q: Can you discuss the margin profile of CEC versus the legacy site development business and where CEC margins could grow to in the long-term? A: Joe Cutillo, CEO, clarified that the site development business has margins in the upper 20s, while CEC's margins are roughly 12%, creating a significant mix effect on overall e-infrastructure margins. He does not expect electrical margins to reach the peak of site development margins due to the nature of the work, but he believes CEC can improve by 300 to 500 basis points over 12-18 months as it exits lower-margin legacy work and takes on larger data center projects. His long-term goal is to get CEC's EBITDA margins close to 20%. Q: Can you give us a sense for how pricing and terms and conditions are trending within your e-infrastructure backlog today versus a year ago? A: Joe Cutillo, CEO, stated that there has been no fundamental shift in pricing or terms and conditions. While there have been a few attempts on the electrical side to add new terms and conditions, Sterling has not accepted them. Overall, the company has not seen any significant changes in the bidding environment. Q: Can you provide more color on the record e-infrastructure orders and how much StoneRidge added? A: Joe Cutillo, CEO, highlighted that the bookings were driven by CEC winning next phases and next sets of buildings on projects they are currently on, which is proof of their strong execution. Nick Grindstaff, CFO, added that CEC's combined backlog was about $2.4 billion for the quarter, and StoneRidge contributed approximately $140 million to signed backlog. The most encouraging aspect is that CEC is winning follow-on work, validating their performance. Q: You recently upsized the revolver to $1.5 billion and are carrying a net cash position. Should we read that as the M&A candidate size moving up? A: Nick Grindstaff, CFO, confirmed that the upsized facility provides dry powder to execute on acquisitions and enhances the company's financial flexibility. Joe Cutillo, CEO, added that the company will need to make more acquisitions to add capacity, not just for strategic geographic reasons, but to keep up with the "unbelievable" amount of work coming from top hyperscalers. He emphasized that the company must add capacity significantly faster to meet the demand. Q: How should we think about the go-forward e-infrastructure margin guidance, and is it a function of CEC growing faster than anticipated? A: Joe Cutillo, CEO, explained that the margin dilution is purely a mix issue. While both site development and electrical margins improved in the quarter, the electrical business (CEC) is growing at a much faster rate, which brings down the overall blended margin. He also noted that the rapid growth of the Rocky Mountain business, which has a smaller equipment suite and is not yet vertically integrated, also contributes to the mix effect. All individual elements are moving in the right direction. Q; You mentioned the potential for softer Q3 awards. Can you provide additional color on what you meant by that and what you're seeing in bidding? A: Joe Cutillo, CEO, clarified that the softer Q3 awards are purely a matter of timing in customer bidding cycles, not a change in demand. He stated that the company has strong visibility into a significant amount of bid activity expected in the fourth quarter and first quarter of next year. He wanted to give investors a heads-up that a sequential backlog decline in Q3 would reflect award timing, not a deterioration in market conditions. Q: Can you speak to the progress in other end markets like pharma, semi, and other factories? A: Joe Cutillo, CEO, stated that pharma is expected around 2028 and semiconductors around 2030. He highlighted the outstanding performance of the team on the semiconductor project in New York, which is running ahead of schedule and has garnered positive attention from the general contractor and end customer. This performance is expected to position Sterling as a go-to solution for future large semiconductor projects. He also noted the start of an electric vehicle plant project in Atlanta and some one-off activities in the broader manufacturing space. Q: There is a lot of news about data centers being banned in new markets. Are things really getting delayed or is it just politics as usual? A: Joe Cutillo, CEO, stated that Sterling has not seen any impact on its schedules from political pushback. He acknowledged that some states will have very few data centers, but noted that Texas is moving forward very quickly. While he anticipates potential supply chain delays downstream, the site work is being prioritized by customers to pick up time. Neither the site nor electrical teams have seen any significant delays that would cause concern. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Revenue growth of 90% was primarily driven by E-Infrastructure activity, specifically mission-critical data centers and semiconductor campuses. Management is intentionally reallocating resources from Transportation Solutions to higher-margin E-Infrastructure projects, resulting in a 20% revenue decline in the transportation segment. The Rocky Mountain division saw a 700% revenue increase as it transitioned from a transportation-heavy focus to E-Infrastructure site development. CEC (electrical) revenue grew 140% year-over-year, filling its capacity within 90 days of acquisition and securing follow-on phases for existing data center projects. Consolidated margin expansion of 150 basis points was achieved through selective project bidding and strong execution on time-sensitive, complex infrastructure. The company is leveraging integrated electrical and site development capabilities to win larger, multi-year projects that embed Sterling into customers' long-term capital plans. Full-year 2026 guidance was raised to reflect the Stone Ridge acquisition and accelerated demand for data centers and semiconductor facilities. Management anticipates a sequential backlog decline in Q3 due to the timing of project awards rather than a shift in underlying demand. CapEx guidance was increased by $30 million to $130 million-$140 million to expand fleet capacity and drive productivity in new geographies. The company expects significant revenue from the Northeast semiconductor project in Q3, followed by a planned weather-related slowdown in Q4. Strategic focus is shifting toward aggressive capacity expansion, including recruiting electricians and pursuing tuck-in acquisitions to meet hyperscaler demand. Building Solutions revenue declined 1% as the residential market continues to face strong headwinds expected to persist throughout 2026. The Transportation Solutions segment is winding down low-bid heavy highway work in Texas as the current federal funding cycle nears its conclusion in September 2026. Management noted that overall E-Infrastructure margins are being diluted by the rapid growth of the CEC electrical business, which carries lower margins than legacy site development. Geographic expansion into Texas and the Pacific Northwest is stretching resources, requiring more localized human capital and equipment to maintain efficiency. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management is maintaining a cautious outlook for the fourth quarter due to potential weather volatility, despite high confidence in the project schedule. The current guidance reflects a 'conservative nature' following multiple previous raises and the rapid doubling of the CEC business. Electrical margins (CEC) are currently around 12% compared to site development in the high 20s, creating a mix-driven dilution in the total segment margin. Management aims to improve electrical margins by 300 to 500 basis points over 12-18 months by exiting low-margin legacy segments and improving project productivity. The $1.4 billion future phase metric is conservative and only includes defined property scopes, excluding potential expansions on adjacent land already purchased by customers. Project durations are extending from a historical 3-year average to 5-12 years as customers expand the scale of data center campuses. Management has not seen any project delays or schedule impacts from political discussions regarding data center bans in states like Texas. They noted that while some states like New York may restrict development, demand in core markets like Texas remains robust and moving forward quickly.

Interested in Sterling Infrastructure, Inc.? Here are five stocks we like better. Strong Q2 performance: Revenue increased 90% year over year, adjusted diluted EPS rose 116% to $5.80, and adjusted EBITDA margins expanded to 22%, driven by surging demand for data centers and semiconductor campuses. Backlog and outlook expanded: Signed backlog reached $4.3 billion, while total potential work exceeded $7 billion. Sterling raised its full-year guidance to $4.0–$4.15 billion in revenue and $19.70–$20.30 in adjusted EPS. Growth comes with execution constraints: Management expects E-Infrastructure revenue to grow more than 100% but cautioned that award timing could temporarily reduce backlog in the third quarter. Electrician shortages and capacity limitations are prompting greater investment in hiring, equipment, prefabrication and acquisitions. 3 Infrastructure Stocks Fueling the Data Center Building Boom Sterling Infrastructure (NASDAQ:STRL) reported sharply higher second-quarter results as demand for mission-critical infrastructure work, including data centers and semiconductor campuses, drove growth in its E-Infrastructure Solutions segment. Management also raised its full-year outlook to reflect improved expectations for its core operations and contributions from the StoneRidge acquisition. Chief Executive Officer Joe Cutillo said second-quarter revenue rose 90% from a year earlier, while adjusted diluted earnings per share increased 116% to $5.80 from $2.69. Adjusted EBITDA more than doubled, and its margin expanded 150 basis points year over year to 22%. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control 3 Small Caps Drawing Insider and Institutional Support “The current market demand allows us to be selective,” Cutillo said, adding that the company is focusing on projects that support customer relationships, future growth and margins rather than pursuing every available opportunity. Signed backlog totaled $4.3 billion at quarter-end, up 116% from the prior-year period. Combined backlog, which includes unsigned awards, reached $5.6 billion, a 150% year-over-year increase. Sterling also cited more than $1.4 billion in high-probability future-phase opportunities. → Financials Hit Record Highs as the AI Trade Unravels—Can They Keep Leading? Will Fed Rate-Hike Pause Lead To Small-Cap Outperformance? Together, signed backlog, unsigned awards and future-phase opportunities represented more than $7 billion of potential work, up more than $2.5 billion since year-end, according to management. Excluding the StoneRidge acquisition, signed backlog grew 50% year over year and combined backlog increased 36%. E-Infrastructure signed backlog, unsigned electrical awards and future site-development phases exceeded $6 billion, an increase of $2.7 billion from year-end. Mission-critical work, including data centers, manufacturing projects and semiconductor projects, accounted for more than 92% of E-Infrastructure signed backlog. → Why Rare Earth Processing Could Be the Real 2027 Opportunity Management said future phases are not necessarily a full measure of the company’s visibility. Cutillo said some customers are expanding projects beyond initially defined property or building plans, and that Sterling is seeing potential assignments that could last five to 12 years. The company does not currently include all such potential expansions in its future-phase figures. E-Infrastructure revenue climbed 192% in the second quarter, led by data-center and semiconductor-campus work. Adjusted operating income in the segment grew 148%, while adjusted operating margin remained at 24%. Sterling’s site-development operations more than doubled revenue organically, with particularly strong growth in the Rocky Mountain division, where revenue increased nearly 700%. The Northeast business also benefited from a ramp-up in work on a large semiconductor campus. CEC, the company’s electrical-services business, delivered 140% revenue growth from the prior-year quarter. Management said CEC has continued to win additional buildings and phases at data-center projects where it is already working. The company is also pursuing projects that combine electrical and site-development services, though Cutillo said the availability of electricians has limited the pace at which it can expand those integrated assignments. Management said E-Infrastructure margins were affected by business mix, as CEC’s rapid growth increased the proportion of electrical work. Noelle Dilts, vice president of investor relations and corporate strategy, said adjusted second-quarter margins were in the high-20% range for E-Infrastructure site development and 11.4% for CEC. Cutillo said Sterling sees 300 to 500 basis points of potential CEC margin improvement over 12 to 18 months through a better project mix and the exit from lower-margin legacy business lines, although he said electrical margins are not expected to reach site-development levels. Transportation Solutions revenue declined 20%, reflecting the reallocation of labor and equipment to higher-margin E-Infrastructure work. The Rocky Mountain operation generated more E-Infrastructure revenue than transportation revenue for the first time, while Sterling continued to wind down low-bid heavy-highway work in Texas. Despite the revenue decline, Transportation Solutions adjusted operating margin rose by more than 500 basis points to 19.5%, and adjusted operating income increased 8%. Building Solutions revenue declined 1%, as home-builder activity remained relatively flat. The segment’s adjusted operating margin was 9.9%, and management said it expects residential-market headwinds to continue through 2026. Chief Financial Officer Nick Grindstaff said cash flow from operating activities totaled $328 million during the first half of 2026. Sterling raised its full-year capital expenditure forecast by $30 million to a range of $130 million to $140 million, citing the need to expand its fleet, increase capacity and improve productivity. The company ended the quarter with $464 million in cash and $284 million in debt, producing a cash net of debt position of $181 million. Sterling also expanded and extended its revolving credit facilities to $1.5 billion, with a maturity of July 2031, and used the facility to repay its existing term loan. During the first half, Sterling repurchased $35 million of shares at an average price of $511.18 per share. It had $339 million remaining under its repurchase authorization at quarter-end. Revenue guidance: $4.0 billion to $4.15 billion Diluted EPS guidance: $17.25 to $17.85 Adjusted diluted EPS guidance: $19.70 to $20.30 EBITDA guidance: $829 million to $854 million Adjusted EBITDA guidance: $891 million to $916 million At the midpoints of those ranges, management said the outlook would represent 64% revenue growth, 84% adjusted EPS growth and 79% adjusted EBITDA growth from the prior year. For 2026, Sterling expects E-Infrastructure revenue to grow more than 100%, including contributions from CEC and StoneRidge. Legacy site-development revenue is expected to grow at rates approaching 70% or more, while E-Infrastructure adjusted operating margins are projected in the mid-20% range. Transportation Solutions revenue is expected to fall 7% to 10% as resources are shifted toward E-Infrastructure, though adjusted operating margin is expected to expand by roughly 150 to 200 basis points. Building Solutions revenue is projected to decline modestly, with margins in the high-single-digit to low-double-digit range. Cutillo cautioned that awards could be softer in the third quarter before increasing in the fourth quarter and early 2027, based on the timing of customer bid activity. Combined with expected strong third-quarter revenue burn, this could result in a sequential decline in backlog. Management said such a decline would reflect award timing rather than weaker demand. Sterling said it is investing in recruiting, training, equipment and prefabrication capacity while considering tuck-in acquisitions to expand geographically and add labor capacity. Cutillo identified electricians as the tightest resource and said the company may need additional acquisitions to meet anticipated demand, particularly in Texas and other markets where it is expanding. Sterling Infrastructure, Inc (NASDAQ: STRL) is a diversified manufacturer and distributor of essential infrastructure products serving municipal, utility and industrial customers across North America. Through its network of wholly owned subsidiaries, the company designs, engineers and produces a wide range of cast and fabricated solutions tailored to the needs of the waterworks, natural gas, telecommunications, electric, traffic safety and parks & recreation markets. The company's product portfolio encompasses ductile iron and composite fittings, valve boxes, manhole frames and covers, water and gas meter sets, street light poles and mounting accessories, traffic sign posts with breakaway systems, bollards and related system components. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Sterling Infrastructure Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

THE WOODLANDS, TX, Aug. 3, 2026 /PRNewswire/ -- Sterling Infrastructure, Inc. (NasdaqGS: STRL) ("Sterling" or the "Company") today announced strong financial results for the second quarter of 2026. The financial comparisons herein are to the prior year quarter, unless otherwise noted. Second Quarter 2026 Results: Revenues of $1.17 billion increased by 90%. Acquisitions(1) contributed $250.8 million of revenue in the quarter. Net income of $155.8 million, or $5.00 per diluted share, increases of 120% and 116% respectively. EBITDA(2) of $233.6 million, an increase of 101%. Adjusted Results: Adjusted net income(2) of $180.8 million, or $5.80 per diluted share, increases of 118% and 116%, respectively. Adjusted EBITDA(2) of $256.7 million, an increase of 104%. Additional Financial Metrics: Cash flows from operations totaled $328.0 million for the six months ended June 30, 2026. Cash and cash equivalents totaled $464.5 million at June 30, 2026. Backlog at June 30, 2026 was $4.33 billion, up 116% from the prior year period. Backlog increased 50% year-over-year on an organic basis. Combined Backlog(3) at June 30, 2026 was $5.62 billion, up 150% from the prior year period. Combined backlog increased 36% year-over-year on an organic basis. Second quarter 2026 book-to-burn ratios were 1.4x for Backlog and 1.3x for Combined Backlog, exclusive of the impact of the Stone Ridge acquisition. CEO Remarks and Outlook "We delivered an outstanding second quarter, with adjusted net income increasing 118% to deliver adjusted diluted EPS of $5.80. Revenue grew 90%, including organic growth of approximately 50%, and strong adjusted EBITDA margins of 22%. Year-to-date operating cash flow generation totaled $328 million," stated Joe Cutillo, Sterling's Chief Executive Officer. "These results are a testament to the outstanding execution of our teams across the organization, and we are incredibly proud of their continued performance." "Demand across our end markets remains strong, as reflected in robust bidding and award activity during the quarter and continued expansion of our multi-year visibility. We ended the quarter with signed backlog of $4.3 billion, up 116%, and combined backlog of $5.6 billion, up 150%. In addition, our pipeline of high-probability future phase work continues to expand and now exceeds $1.4 billion. Collectively, our signed backlog, unsigned awards, and future phase opportunities provide visibility into a total addressable pool of work of more than $7.0 billion, an increase of more than $2.5 billion since year-end 2025." Mr. Cutillo continued, "Looking more closely at our segment performance, E-Infrastructure Solutions delivered another outstanding quarter, with revenue increasing 192% and adjusted operating income growing 148%. These results were driven by strong performance across both organic and acquired operations. The legacy site development business generated 111% revenue growth, reflecting significant growth across all regions, and operating margins expanded both year-over-year and sequentially. Demand for CEC's electrical services also remained exceptionally strong, with revenue increasing 140% compared to the pre-acquisition second quarter and margins improving on both a year-over-year and sequential basis. E-Infrastructure signed backlog increased 165% over the prior year quarter. Mission-critical projects—including data centers, manufacturing, and semiconductor facilities—represented 92% of E-Infrastructure backlog at quarter end. We continue to see significant opportunities for both Sterling's best-in-class site development services and CEC's mission-critical electrical services, reinforcing our confidence in the multi-year growth trajectory of this business. In Transportation Solutions, revenue declined 20% compared to the prior year period, while adjusted operating income increased 8%. The revenue decline reflects our ongoing reallocation of resources from transportation projects to higher-margin E-Infrastructure opportunities; this shift is now taking place at an accelerated pace. In Building Solutions, revenue declined 1%, reflecting relatively flat levels of homebuilder activity, while adjusted operating income decreased 11%. We expect market conditions to remain challenging through 2026 as housing affordability pressures continue to affect prospective homebuyers, but remain optimistic on the long-term growth opportunities in our key geographies." "Our strong second quarter results strengthen our conviction that 2026 will be another exceptional year for Sterling. As a result, we are raising our 2026 guidance to reflect the momentum across our businesses, the continued expansion of our backlog and future phase opportunities, our increasing visibility into future growth, and the contribution from the Stone Ridge acquisition. At the midpoint, our 2026 guidance would represent 64% year-over-year revenue growth, 84% growth in adjusted diluted earnings per share, and 79% growth in adjusted EBITDA—positioning Sterling for another year of exceptional execution, profitable growth, and long-term value creation," Mr. Cutillo concluded. Full Year 2026 Guidance Revenue of $4.00 billion to $4.15 billion Net Income of $536 million to $555 million Diluted EPS of $17.25 to $17.85 EBITDA(1) of $829 million to $854 million Full Year 2026 Adjusted Guidance Please see the "Adjusted Net Income Guidance Reconciliation" and "EBITDA Guidance Reconciliation" sections below for reconciliations of GAAP to non-GAAP measures and comparable 2025 results. Adjusted Net Income(1) of $612 million to $631 million Adjusted Diluted EPS(1) of $19.70 to $20.30 Adjusted EBITDA(1) of $891 million to $916 million Conference Call Sterling's management will hold a conference call to discuss these results and recent corporate developments on Tuesday, August 4, 2026 at 9:00 a.m. ET/8:00 a.m. CT. Interested parties may participate in the call by dialing (800) 836-8184. Please call in 10 minutes before the conference call is scheduled to begin and ask for the Sterling Infrastructure call. To coincide with the conference call, Sterling will post a slide presentation at www.strlco.com on the Events & Presentations section of the Investor Relations tab. Following management's opening remarks, there will be a question and answer session. To listen to a simultaneous webcast of the call, please go to the Company's website at www.strlco.com at least 15 minutes early to download and install any necessary audio software. If you are unable to listen live, the conference call webcast will be archived on the Company's website for 30 days. About Sterling Sterling operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and Building Solutions in the United States, primarily across the Southern, Northeastern, Mid-Atlantic and Rocky Mountain regions and the Pacific Islands. E-Infrastructure Solutions provides advanced, large-scale site development services and mission-critical electrical services for data centers, semiconductor fabrication, manufacturing, distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems. Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work, plumbing services, and surveys for new single-family residential builds. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society's quality of life. Caring for our people and our communities, our customers and our investors – that is The Sterling Way. Joe Cutillo, CEO, "We build and service the infrastructure that enables our economy to run, our people to move and our country to grow." Important Information for Investors and Stockholders Non-GAAP Measures This press release contains "Non-GAAP" financial measures as defined under Regulation G of the amended U.S. Securities Exchange Act of 1934. The Company reports financial results in accordance with U.S. generally accepted accounting principles ("GAAP"), but the Company believes that certain Non-GAAP financial measures provide useful supplemental information to investors regarding the underlying business trends and performance of the Company's ongoing operations and are useful for period-over-period comparisons of those operations. Non-GAAP measures may include adjusted net income, adjusted operating income, adjusted EPS, EBITDA and adjusted EBITDA, in each case excluding the impacts of certain identified items. The excluded items represent items that the Company does not consider to be representative of its normal operations. The Company believes that these measures are useful for investors to review, because they provide a consistent measure of the underlying financial results of the Company's ongoing business and, in the Company's view, allow for a supplemental comparison against historical results and expectations for future performance. Furthermore, the Company uses each of these to measure the performance of the Company's operations for budgeting and forecasting, as well as for determining employee incentive compensation. However, Non-GAAP measures should not be considered as substitutes for net income, EPS, or other data prepared and reported in accordance with GAAP and should be viewed in addition to the Company's reported results prepared in accordance with GAAP. Reconciliations of Non-GAAP financial measures to the most comparable GAAP measures are provided in the tables included within this press release. Cautionary Statement Regarding Forward-Looking Statements This press release contains statements that are considered forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about: the anticipated benefits of the CEC and Stone Ridge acquisitions; our business strategy; our financial strategy; our industry outlook; our guidance; our expected earnings and margin growth; our pool of future work; and our plans, objectives, expectations, forecasts, outlook and intentions. All of these types of statements, other than statements of historical fact included in this press release, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expect," "plan," "project," "intend," "anticipate," "believe," "estimate," "predict," "potential," "pursue," "target," "guidance," "continue," the negative of such terms or other comparable terminology. The forward-looking statements contained in this press release are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management's assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this press release are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors listed in the "Risk Factors" section in our filings with the U.S. Securities and Exchange Commission and elsewhere in those filings. Additional factors or risks that we currently deem immaterial, that are not presently known to us or that arise in the future could also cause our actual results to differ materially from our expected results. Given these uncertainties, investors are cautioned that many of the assumptions upon which our forward-looking statements are based are likely to change after the date the forward-looking statements are made. The forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements for any reason, whether as a result of new information, future events or developments, changed circumstances, or otherwise, notwithstanding any changes in our assumptions, changes in business plans, actual experience or other changes. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf. Company Contact:Sterling Infrastructure, Inc.Noelle Dilts, VP Investor Relations and Corporate Strategy281-214-0795 View original content to download multimedia:https://www.prnewswire.com/news-releases/sterling-reports-record-second-quarter-results-and-raises-full-year-2026-guidance-302841538.html

Sterling Infrastructure (STRL) came out with quarterly earnings of $5.8 per share, beating the Zacks Consensus Estimate of $5.2 per share. This compares to earnings of $2.69 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +11.54%. A quarter ago, it was expected that this civil construction company would post earnings of $2.29 per share when it actually produced earnings of $3.59, delivering a surprise of +56.77%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Sterling Infrastructure, which belongs to the Zacks Engineering - R and D Services industry, posted revenues of $1.17 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 9.24%. This compares to year-ago revenues of $614.47 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Sterling Infrastructure shares have added about 94.9% since the beginning of the year versus the S&P 500's gain of 9.4%. While Sterling Infrastructure has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Sterling Infrastructure was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #1 (Strong Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $5.75 on $1.15 billion in revenues for the coming quarter and $19.01 on $3.96 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Engineering - R and D Services is currently in the top 32% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Fluor (FLR), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 7. This engineering, construction and operations company is expected to post quarterly earnings of $0.73 per share in its upcoming report, which represents a year-over-year change of +69.8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Fluor's revenues are expected to be $3.8 billion, down 4.5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report Fluor Corporation (FLR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research