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Presentation

Operator: Good morning, ladies and gentlemen, and welcome to the Sterling Infrastructure, Inc. First Quarter Webcast and Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press 0 for the operator. As a reminder, this call is being recorded on Tuesday, 05/05/2026. I would now like to turn the conference call over to Noelle Christine Dilts, Vice President of Investor Relations and Corporate Strategy. Please go ahead.

Noelle Christine Dilts: Good morning to everyone joining us, and welcome to Sterling Infrastructure, Inc.’s 2026 First Quarter Earnings Conference Call and Webcast. I am pleased to be here today to discuss our results with Joseph A. Cutillo, Sterling Infrastructure, Inc.’s chief executive officer, and Nicholas M. Grindstaff, Sterling Infrastructure, Inc.’s chief financial officer. Joseph A. Cutillo will open the call with an overview of the company and its performance in the quarter. Nicholas M. Grindstaff will then discuss our financial results and 2026 guidance, after which Joseph A. Cutillo will provide some additional commentary on our markets and outlook. We will then open the call up for questions. 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 Joseph A. Cutillo, 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 Infrastructure, Inc.’s most recent 10-Ks 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 in our earnings release issued yesterday afternoon. I will now turn the call over to our CEO, Joseph A. Cutillo.

Joseph A. Cutillo: Thanks, Noelle. Good morning, everyone. Thank you for joining Sterling Infrastructure, Inc.’s First Quarter 2026 Earnings Call. Sterling Infrastructure, Inc. is off to a fantastic start, delivering strong revenue growth of 92% and adjusted diluted EPS growth of 120%. Adjusted EBITDA more than doubled with margins expanding over 150 basis points year over year to reach a new first quarter record of 20%. During this period of unprecedented demand, our focus remains on pursuing projects that offer the most attractive returns. We are not looking to win all projects. We are looking to win the best projects. Signed backlog at the end of the quarter totaled $3.8 billion, a 78% year-over-year increase, and combined backlog grew 131% to reach $5.2 billion.

Additionally, we have visibility into high-probability future phase opportunities that now total over $1.3 billion. Together, our signed backlog, unsigned awards, and future phase opportunities provide visibility into a total pool of work approaching $6.5 billion. This has grown by approximately $2.0 billion since year end. Notably, during the quarter, we were awarded the first phase of a multi-phase semiconductor fabrication campus. This first phase, which will be executed under a joint venture, totals over $500 million and is expected to be completed in late 2027 or early 2028. The campus build is expected to span a multi-decade period and presents opportunities for additional scopes of work through 2027 and beyond. The growth in our backlog and future phase work in the quarter, combined with our visibility into our customers’ multi-year plans, strengthens our confidence in our outlook.

We believe we are perfectly positioned to continue to deliver strong earnings growth and returns for our shareholders for many years to come. The Sterling Way—our commitment to take care of our people, our environment, our investors, and our communities while we work to build America’s infrastructure—remains our guiding principle as we execute our strategy and grow the company. Now I would like to discuss our segment results for the quarter in more detail. In E-Infrastructure, first quarter revenue grew 174%, including organic growth of over 100%. The data center market was again the primary growth driver in the quarter. E-Infrastructure adjusted operating income increased 177% as margins expanded, despite the dilutive impact of the CEC acquisition.

Revenue for our site development operations more than doubled and operating margins expanded both year over year and sequentially. Margins continue to benefit from our strong execution on large, time-sensitive, mission-critical projects. CEC delivered 78% revenue growth compared to its prior-year first quarter, with margins performing in line with our expectations. The Texas market remains exceptionally strong, with robust award activity in early 2026. During the quarter, CEC secured several large project wins, contributing to a $1.2 billion increase in its combined backlog since year end 2025. We continue to see tremendous opportunities ahead for both electrical and site development. In aggregate, our E-Infrastructure signed backlog, unsigned electrical awards, and future phase site development opportunities now exceeds $5.0 billion, representing an increase of $2.0 billion since year end.

Mission-critical work, including data centers, large manufacturing projects, and semiconductor, represented over 90% of the E-Infrastructure signed backlog at the end of the quarter. Future phase work is predominantly related to mission-critical projects. Moving to Transportation Solutions, first quarter revenue grew 10%, driven by strong activity in the Rocky Mountain region, which benefited from favorable weather conditions and some earlier-than-anticipated project starts. Adjusted operating income grew 26%, reflecting strong execution and a mix shift towards higher-margin projects. We ended the quarter with Transportation Solutions backlog at $1.04 billion, a 20% year-over-year increase. Shifting to Building Solutions, in the first quarter segment revenue grew 3%, driven by a pickup in homebuilder activity, and adjusted operating margins were 8.7%.

While we are encouraged by the slight revenue increase in the quarter, we continue to anticipate that the residential market will face strong headwinds throughout 2026. The strength of Sterling Infrastructure, Inc.’s diversified portfolio and strategy to focus on high-growth and high-margin end markets enabled us to deliver another fantastic quarter. With that, I would like to turn it over to Nicholas M. Grindstaff to give you more details on some of our financial metrics and 2026 guidance. Nicholas?

Nicholas M. Grindstaff: Thanks, Joseph, and good morning. I will begin with our consolidated backlog metrics. Our first quarter backlog totaled $3.8 billion, a 78% year-over-year increase, or 51% excluding CEC. Combined backlog of $5.2 billion increased 131%, or 46% excluding CEC. First quarter 2026 book-to-burn ratios were 2.1x for backlog and 3.5x for combined backlog. Moving to our cash flow metrics, cash flow from operating activities for 2026 was a strong $166 million. We expect continued strength in operating cash flow for the full year. Cash flow used in investing activities included $20 million of CapEx. For 2026, we are forecasting CapEx in the range of $100 million to $110 million, which is unchanged from prior guidance.

Cash flow from financing activities was a $27 million outflow, including share repurchases of $12 million at an average price of $305.14 per share. Remaining availability under the existing repurchase authorization is $362 million. We will remain opportunistic in our approach to share repurchases. We are in great shape from a balance sheet perspective. We ended the quarter with $512 million of cash and debt of $287 million, for a cash net of debt balance of $224 million. Additionally, our $150 million revolving credit facility remained undrawn during the period. Given our strong liquidity, we are in an excellent position to continue to take advantage of both organic and inorganic growth opportunities in the years ahead. 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 as follows. Revenue of $3.7 billion to $3.8 billion, which at the midpoint is a 20% increase over previous guidance and represents more than 50% growth over 2025. Diluted EPS of $16.50 to $17.15; adjusted diluted EPS of $18.40 to $19.05, which at the midpoint is a 36% increase from previous guidance and represents 72% growth over 2025. EBITDA of $800 million to $831 million; adjusted EBITDA of $843 million to $873 million. I will now turn the call back to Joseph.

Joseph A. Cutillo: Thanks, Nicholas. For quite some time, we have been communicating a bullish view on our markets and outlook. As we sit here today, that outlook is stronger than ever and continues to surpass our expectations. Customers are continuing to ask for more, with projects growing in size, complexity, and duration. At the same time, we are being pulled into new geographies with urgency, as customers prioritize alignment with partners who have the capability and capacity to execute over the long term. Together, these dynamics reinforce our conviction in the multi-year opportunities across our markets. Moving to our segment expectations for 2026, in E-Infrastructure Solutions, we anticipate that the current strength in data center demand will continue for the foreseeable future.

We continue to have conversations with our customers regarding how we can best support their strong multi-year capital deployment programs. As part of this, we are getting pulled more rapidly into new geographies, including Texas, the Pacific Northwest, and the Midwest. In the semiconductor market, our industry-leading capabilities enabled us to be selected as the site development partner for a mega-fab semiconductor campus. This award highlights how Sterling Infrastructure, Inc.’s highly differentiated capabilities make the company the partner of choice for large, mission-critical projects in the U.S. We believe that this is just the beginning of a wave of semiconductor fabrication activity that will begin to accelerate at the end of the decade.

In addition, there are still several opportunities in the broader manufacturing market that we believe could be awarded in 2026 or early 2027. We are gaining meaningful traction in our cross-selling efforts between site development and electrical services. We are currently in active construction on two data center projects where we are executing both services in an integrated capacity. These joint awards have materialized approximately six to eight months ahead of our original expectations. For the full year 2026, we expect to deliver E-Infrastructure revenue growth of 80% or higher, including the full-year contribution of CEC. We anticipate that the legacy business will grow at rates approaching 60% or higher, as several of our larger 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 in September 2026. We have built over two years of backlog and continue to see good levels of bid activity. For 2026, we anticipate continued growth in our core Rocky Mountain market. The downsizing of our low-bid heavy highway business in Texas is progressing according to plan, resulting in some moderation of Transportation Solutions’ top line and backlog, but should continue to drive margin improvement as we move through the year. We expect Transportation Solutions revenue to grow in the low to mid-single-digit range in 2026. After the strong first quarter, we anticipate a moderation of growth rates in the remaining quarters.

This is driven by three factors: the early start of projects in the first quarter that we originally expected to start in the second quarter; the allocation of resources towards E-Infrastructure projects; and the final wind-down of our Texas low-bid work. In Building Solutions, we believe the business is well positioned for growth over a multi-year period. Our key geographies of Dallas–Fort Worth, Houston, and Phoenix are expected to see population growth driving new home demand. Additionally, there is an opportunity for share gain coming out of the down cycle. We anticipate that Building Solutions revenue will be modestly down in 2026 and that adjusted operating margins will be in the low double digits. On the acquisition front, we continue to look for acquisitions that are the right strategic fit to enhance our service offering and geographic footprint.

We are seeing more high-quality acquisition targets in the market today than a year ago. Our significant balance sheet firepower positions us to take advantage of these opportunities. Moving to our full-year 2026 guidance, the midpoint of our guidance ranges would represent 51% revenue growth, 72% adjusted EPS growth, and 70% adjusted EBITDA growth. We will now open the call for questions.

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Operator: Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speaker phone, please lift the handset before pressing any keys. One moment for your first question. Your first question comes from Sangeeta with KeyBanc. Please go ahead.

Analyst: Maybe, Joseph, you can help us understand what you think went a lot better in 1Q versus expectations, maybe on revenue and margins, since usually we consider 1Q to be a seasonally slower quarter? And then if I can ask a follow-up on the comment you made on M&A targets and the fact that you are seeing better targets now, can you tell us how you define these services as being better than what you saw before?

Joseph A. Cutillo: Sure. Q1 is, and will probably be consistently, our lowest quarter. A couple of things helped us. We certainly had some very good weather through the Rocky Mountains and some of the other regions, which enabled us in the Transportation segment to start some projects a little earlier and execute projects through the winter months when we normally shut down. That definitely helped us. But more importantly, as we look at E-Infrastructure, we are really starting to see the impact of the new projects that are coming in larger and more complex, and what the added values of our vertical integration are adding to the margin profile and productivity through the build of these projects. We are far enough along—again, a little bit of history—you know, we started this journey when data centers became really data campuses.

We went from 100 acres to now doing projects that are north of 1,000 acres, and the future projects coming out look like they are multi-thousand acres. The larger they get, the more complex they get, the more we can leverage our vertical integration, and our size and scope, which drives more productivity. And that is why we have said all along, and we feel even more confident as we are executing, we will continue to see nice margin growth in E-Infrastructure. On M&A, we have some significant criteria that we look at. We always say we buy people; we do not buy businesses. So it is absolutely critical on the caliber of the talent and the willingness of the key team to stay. But our primary focus is in E-Infrastructure. If we take a look in a couple different areas—either geographic expansion of capabilities that we have, more focus on the site development from a geographic expansion standpoint, and then on the electrical side, a combination of geographic expansion and incremental services or products that we can offer.

I will tell you we are looking beyond electrical as well. We are looking at the whole portfolio. We really spend a lot of time with our customers and understand what are their needs and what are driving the success or the complexity of these projects. And we will constantly look for those services to add to our portfolio. It is how we moved into electrical.

Analyst: Appreciate it. Thank you.

Operator: Your next question comes from Noah with William Blair. Please go ahead.

Analyst: Joseph, Nicholas, and Noelle, thanks for taking my questions, and great quarter. You highlighted a robust bidding environment in Texas. Can you walk us through your current presence in that state as it relates to capacity and project manager availability, and how you would characterize Texas’ data center market today versus where, say, the Atlanta or greater Georgia market is at today, and your ability to gain share over there in Texas? And then as it relates to CEC, can you walk us through your current level of assimilation with the business as it relates to what you are seeing with revenue and cost synergies? You mentioned the two active projects involving both the legacy site development work with CEC’s electrical, but how much of their collective bidding pipeline is collaborative with this cross-selling? And then what is the progress on CEC’s margin expansion opportunity?

Joseph A. Cutillo: Our approach in Texas is, we have CEC located up in Dallas—call that North Central Texas—and we are attacking Texas from the west and from the east. We are using our Rocky Mountain assets and businesses to come from the west to hit western Texas, and then we are leveraging the Atlanta folks and Southeast team to come from the east. They will make it all the way to Dallas and both of those teams will meet in the middle. So we have current capabilities and capacity to do that. We are constantly looking for acquisitions in the upper Pacific Northwest and also in Texas, so that we can add capacity as we move along the way. If I look at the market, I would tell you that the Atlanta/Southeast market is more mature with a longer runway and today is probably a larger market.

As I look forward the next four to five years, I think people will be shocked with the size and scope and quantity of data centers, along with some other stuff, being built in the Texas market. We are in the early innings, but the projects are extremely big, they are coming out extremely quickly, and we see not only this year and next year, but what our core customers are talking about starting in 2028–2029. These projects, on top of being large, will take longer time frames to complete. A typical project today is more like three years; these will be pushing out more like four- and five-year projects. On CEC, we call it assimilation, not integration, and we have been really happy with the progress. We really did not think we would see a joint effort take place until late second quarter or early third quarter of this year; we started those in the first quarter, which is fantastic.

We have had great reception from the hyperscalers, and they quickly see the benefit of combining these together and what it does to the cycle time of the build process. On margin expansion, we are still extremely bullish that we are going to see 300 to 500 basis points of margin improvement in 12 to 18 months. There are a couple end markets and products that we knew CEC was in that have much lower margin. We are exiting those, and as we exit those, margins will come up. On the core business ex those markets, we saw really nice margin expansion in the quarter—actually ahead of what we anticipated. In addition, it has taken off so quickly that we talked about expanding our modular capabilities. We just locked down a lease to triple the size of our modular build capabilities.

We are building a world-class manufacturing site to do that, and we think we will ultimately expand that to other locations in the U.S. over the next 18 months. I just wish I had 2,000 or 3,000 more electricians—we would grow it even faster.

Noelle Christine Dilts: One other thing to add here is we are getting pulled into these new geographies by our customers. It is not like we are just going into these new geographies cold. They are looking for partners that can support their builds in these new areas, and that is really a continuation of the geographic expansion strategy we have had since the beginning. It is just taking that one step further.

Joseph A. Cutillo: Yes, and to add to that, our customers—if you look at our geographic expansion from the beginning—we have let the major hyperscalers pull us into new markets. They are more than pulling now; they are kind of screaming to get into these markets faster with the capital spending they are going to do. Our challenge is how do we grow as fast as we can and still deliver at the same levels and caliber. It also allows us to be extremely picky on the projects we decide to do and the projects we are not going to do, which helps us long term on margins and capacity planning.

Operator: Your next question comes from Manish with Camper. Please go ahead. We lost them. If you are still there, please call back in. Otherwise, I will go to the next caller. Your next question comes from Brian with Stifel. Please go ahead.

Analyst: Thanks. Good morning, everybody, and congrats on the great quarter here. Just a follow-up on Texas. In your traditional site development business, how much do you expect Texas to account for as a percentage of revenue there, putting CEC aside? And can you remind us where it was last year? And then is there any notable difference in the margin profile in the site development business in Texas relative to some of your other regions? And as a follow-up on CEC, in the release you talked about approximately $600 million contribution to backlog, but a $1.9 billion contribution to combined backlog. Can you help us understand the delta here?

Joseph A. Cutillo: It is really hard to say where Texas will be as a percent of revenue. I will tell you it is growing extremely quickly, but so is the Southeast, and we have been pulled into the Midwest by one of our customers. So it is hard for me to give you a number without being wrong. Margin profiles—as long as the projects are getting bigger and more complex—will be fine. We have certainly seen in some of the far Pacific Northwest projects early on, where we have a smaller equipment group and are not as fully vertically integrated as we are in the Southeast, margins are a little lower, but they would be margins everybody would love to have. Part of our acquisition strategy is to look at how we start putting in those elements, or even organically adding those elements of vertical integration.

We are really seeing the benefits of these ancillary goods and services—not only from time reduction of the project because we control more of it—but that is what is helping drive these margins. Everybody keeps asking us if we are getting more price. The answer is no, we are not getting more price. This is all around effectiveness and efficiency and what we are able to drive to the execution of these projects for our customers. On the CEC backlog versus combined backlog question, it is a combination—both external and internal electrical work—and that will be on upcoming centers and existing centers. The contracts with CEC are very similar to what we have talked about in our site development where the work is phased. They will release a small phase.

We know that the scope of the project—say an internal electrical package—is $300 million to $500 million generally. We know the total scope, but they will release those in small pieces along the way. That is why you see some in backlog and some in future phase work. Those are projects that we are either actively working on or getting ready to work on.

Noelle Christine Dilts: Just one thing to add. Within some of that work that fell into combined backlog, the terms and conditions are already finalized on that piece of the contract that may be unsigned but would fall into combined backlog, and some of that has subsequently moved into signed here as we have moved into the second quarter—a pretty big chunk of it.

Analyst: Understood. That is very helpful. Thank you.

Operator: Your next question comes from Alex with Texas Capital. Please go ahead.

Analyst: Thank you, and good morning. Should we think about your new work being competitively bid versus negotiated, and how has that changed or how might that change? And congratulations on the semi campus—sounds really exciting. Do you see other opportunities developing outside the data center markets this calendar year, or is that more of a 2027 event?

Joseph A. Cutillo: In theory, everything is bid. In certain instances, we are asked to go work on specific projects—consider that negotiated. Our pricing—people need to understand—we have done a tremendous amount of work for customers in the past. It is not like we can raise our prices 20% or 30% even if we are negotiating it. They know what the price range is going to be. It is our ability to execute faster than anybody else and be on time every single time that gets us pulled into these jobs. As we go forward, we are looking at these multi-year programs of our core customers and the size and scope, and it is causing us to look harder at those. We will be passing up on more jobs that may be smaller in size or scope, or may have lower margin profiles because they are not as complex as some of these bigger jobs.

We will keep moving assets to where the most money is. With the combination of electrical and site, it really gives us another avenue on some of these extremely large projects coming out in the future. On the semiconductor fab, this is going to be one of the bigger jobs in the U.S.—the biggest semi fab plant in the U.S. We actually participated in the process because we did not know if we wanted to do the project or not, and it was fascinating to see the differentiation we had. There was no one else in the room that was going to have a chance at this. It is the first semiconductor project we have done; it is not a market we have been in in the past. A lot of the GCs and engineering firms in that space are not people we deal with every day—now we are dealing with them every day.

When we show them our capabilities, we feel confident that, just like in data centers, we will be the supplier of choice for every chip plant that comes out in the future. We do not see the huge rush of chip plants coming out until 2029–2030. We are positioned perfectly for that.

Operator: Okay, thank you. Your next question comes from Julio with Sidoti. Please go ahead.

Analyst: Thanks, and good morning. I wanted to ask about how your competitive positioning is evolving due to these shifting and increasing customer needs. As you said, these customers are no longer asking you to scale, but kind of screaming for you to go into other geographies. As they act with more urgency, are you realizing a better pricing environment? Are you negotiating better payment terms? Related to that, how do you maintain risk discipline and not allow these large customers to force your hand into taking on more work than you would typically handle? And as a follow-up, on expanding production capacity, how would you rank order the levers you have to pull to continue to grow—both in the near term and in the longer term?

Joseph A. Cutillo: If we are going to get criticized for something, it would be that we are probably not aggressive enough on price. We have a philosophy that we have a fair price and we make our money on execution. If we take care of customers, they will have us back. There is no reason for us to try to take advantage of a situation—history says at some point that comes back to bite you. We will keep growing margins with vertical integration and productivity. On risk, the beauty of all of this coming at us is we are not afraid to say no. Sometimes our biggest customers may not like that. There may be a geography or a small job that, for the time and effort, would take away significant capacity from doing their bigger jobs.

We proactively tell them which jobs we will do and which we will pass on, and in some cases help them find someone else. We are incredibly risk averse; we will not take on high-risk jobs that are going to get us in trouble. Our biggest challenge is they would like to have us in two, three, or four new markets tomorrow. We have had to say no to some of those. Over the long term, that enhances our credibility with them because we will never let them down. On capacity, electrical is very different than site development. Electrical comes down to electricians. We have the university—great—but it is a four-year program to get someone through apprenticeship into a certified electrician. They can work along the way, but it is lengthy. Second, as we get larger multi-year jobs, you can attract electricians from smaller shops who want to be on projects for 18, 24, or 36 months.

Third is acquisition: can we buy something larger that gives us geographic expansion, or smaller tuck-ins with 150–200 electricians we can convert to mission-critical work. The modular strategy is another lever—anything we can build in a factory where a certified electrician does not have to do 100% of the work saves field hours and adds quality. On site development, we have a waiting list of operators; it is really about project managers. Our AI project focused on PMs and we picked up about 15% capacity. We have an internship program—hiring people in their sophomore year, running them through college and our program—graduating four or five a year into real PM roles. We are also looking hard for acquisitions, but it is challenging to find the right ones at our size and scale; many small players have limited equipment and rely on tight rental/lease markets.

If we find the right ones, we will buy them, alongside our internal development.

Operator: Your next question comes from Adam with Thompson Davis. Please go ahead.

Analyst: Good morning, and congrats on putting up one of the best earnings reports I have ever seen. You had some large awards recently for CEC—what should our expectation be for continued awards? And as they get out of some of their lower-margin ventures, does that free up electricians that you can move back into more mission-critical work? And on the M&A side, since your electrical deal has worked out so well, where are customers asking you to add scope, and could that include something purely on the manufacturing side?

Joseph A. Cutillo: We get a double benefit from the low-margin stuff we want to exit—you free up people and your margins move up significantly. We have more opportunities than we have capacity to get to with CEC, so, like everything else, we will focus more where we get joint awards, because we can really leverage that on total project scope, take out significant time, and drive significant productivity. Net margins will go up as well. It has been fun to watch CEC over eight months transform—shifting more resources and capabilities to these joint opportunities. If I had 2,000 more electricians, we could put them to work in a quarter. On scope expansion, there is a lot more to these projects than people realize. There are underground components manufactured by others that we purchase and install—that may make sense for us to do.

As we look at modular, we are starting with basic stuff, but there is no reason we cannot go to whole modules being built in a factory and set on-site. We see that expanding rapidly for two reasons: electrical capacity relief and opening up other end markets we are not in today.

Operator: Your next question comes from Manish. Please go ahead.

Analyst: Good morning, and congrats again. Joseph, two questions for you. One is on E-Infrastructure: the margins we are seeing—are they structurally sustainable, or are they peak margins? Is there more room to be had? And how should we think about margins and risk profile between data center and advanced manufacturing work? Lastly, on Residential and Transportation segments—how should we think about those two segments long term? Are they core or non-core? Would you monetize them if you found a bigger acquisition that gives you more scale in E-Infrastructure?

Joseph A. Cutillo: On sustainability—if you consider margins going higher than they are now, then they are not at a peak because they will continue to go up. Margins will improve for a couple reasons. As jobs become more complex, we drive better productivity. As we vertically integrate through the Rocky Mountains and add larger equipment suites, we get further productivity—both drive margins. As we combine the site and electrical packages, there is another element of productivity, and the inherent margin of that is better for our CEC business on top of it. When you couple all of those, and exit lower-margin end markets at CEC, we will continue to see margins tick up in E-Infrastructure. You may see some quarter-to-quarter variability due to volumes, but the margin trend line will continue to grow.

On margins by end market, fundamentally the same—size matters. A 50-acre data center will not have the margins a 1,000-acre data center has; same for manufacturing. There are opportunities for some large projects either late this year or early next year with similar margin profiles. The only variance we see is geographic—historically, our Northeast region has had lower margins due to generally smaller project size and some projects mandating vertical integration with the union base. Think of it as size, not end market. On Transportation, seven years ago I might have answered differently, but today we have turned Transportation. It is like the Rodney Dangerfield of our business—it does not get enough respect. Their margins are now almost 2x better than best in class.

They have done a phenomenal job. We have turned that into a cash cow that throws off great cash we use to grow our high-margin, high-growth E-Infrastructure product line. We are also shifting assets towards E-Infrastructure. For example, we started with a pilot with Meta in the Pacific Northwest using yellow iron and assets out of our highway business in Utah with project management teams out of Atlanta. They executed at very high levels, and we have five or six projects out of that with customers and GCs. We are closing down our low-bid heavy highway business in Texas, and shifting those underground assets to E-Infrastructure—helping with underground utilities and duct bank work—converting them into E-Infrastructure. It is now so intertwined with E-Infrastructure that it would be hard to break out even if we wanted to.

Building Solutions has been a great cash cow business. We will look for opportunities to grow it. We evaluate strategic fit every day. Right now, we believe it still has great long-term growth potential. We are in the best three markets in the U.S., so we have no plans other than to grow it.

Operator: Your next question comes from Louis with William Blair. Please go ahead.

Analyst: Good morning, Joseph, Nicholas, and Noelle. Following up, is your large semi fab project for your Patillo division? And secondly, what is the timing for the expansions into the Northwest and the Midwest? I think you referenced a trial project with Meta in the Northwest—has that already started?

Joseph A. Cutillo: The semiconductor fab is being done in the Northeast and by our union operation, and that would be Patillo doing that. It is an exciting project for us right in our backyard and should be a great project. On the Pacific Northwest, that is one we started two years ago—that was our foray into transitioning RLW into E-Infrastructure site development, and we have both to pull through there. We believe, based on conversations with our customers, that in 2027–2028 there will be some nice projects coming out in the Pacific Northwest. Believe it or not, the Pacific Northwest and western Texas are a lot closer than people think. From our Salt Lake City office to our West Texas job is plus or minus 200 miles difference compared to us driving from Houston.

Texas is a pretty big state. So we are using those resources to come further east as well. We believe 2028 is going to be the start of some really nice projects in the Pacific Northwest, so you will see us adding capacity and capabilities in that area over the next six to twelve months. We will be able to talk more about that probably in the second or third quarter.

Operator: Your next question comes from Julio. Please go ahead.

Analyst: Thanks for taking a quick follow-up here. You guided to legacy E-Infrastructure growth of 60% for 2026, which I think implies some moderation of the year-over-year growth rates above the 102% that was this quarter. Given the larger order intake this quarter, which I assume has some timing variability, how would you have us think about the year-over-year legacy growth rates over the remaining three quarters of the year to get to that 60%?

Joseph A. Cutillo: I have not laid it out in that level of detail. On the timing around big wins, it is all about when these kick off, when they start, and how fast they go. If we get great weather through the rest of the year and projects kick off earlier, we will be really happy and we will beat those numbers. There are just a lot of variables left from now until the rest of the year. Julio, we can lay that out exactly for you and talk more about what that does quarter by quarter; I just do not have that here.

Operator: There are no further questions at this time. I will turn the call back over to Joseph A. Cutillo. Please go ahead.

Joseph A. Cutillo: Thank you, Melissa. I want to thank everybody again for joining today’s call. We are off to a great start, and we are going to have an amazing year. If you have any follow-up questions or want to schedule further calls, feel free to contact Noelle Christine Dilts. Her contact information is in the press release. Hope everybody has a great day, and again, thank you very much.

Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.

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