Revenue of $5.2 billion beat the $4,941.17 million estimate; adjusted diluted EPS of $2.96 beat the $2.95 estimate. GAAP diluted EPS fell 7.7% to $1.89 from $2.04.
Full-year 2026 guidance updated: revenue $18,300 million, adjusted EBITDA $1,565 million to $1,600 million (8.6% to 8.7% margin), adjusted diluted EPS $8.92 to $9.30, GAAP diluted EPS $5.69 to $6.01, and operating cash flow over $1 billion. The CFO puts the adjusted EBITDA change at about 1% at the midpoint versus previous guidance, citing delayed Pipeline starts.
Orders are the strength: record 18-month backlog of $24,546 million, up 46.3% and up $3.2 billion from the prior quarter. Power Delivery revenue rose 65.2% to $1,835.2 million with EBITDA margin at 13.2% from 9.4%.
Two segments are slipping: Pipeline EBITDA margin fell 500 bps to 10.4% on permitting-related access delays, and Communications revenue fell 11.8% with EBITDA down 47.6% and margin at 6.7%.
The one thing that matters: demand is not the issue, execution is. Backlog rose $3.2 billion in the quarter, but 30% reported growth is 12% organic, and Pipeline and Communications margins fell 500 and 460 bps, so conversion of that backlog now sets the earnings path.
Key metrics
Metric
Reported
Prior year
Change
18-month backlog (millions)
$ 24,546
$ 16,780
46.3 %
Power Delivery revenue (millions)
$ 1,835.2
$ 1,110.7
65.2 %
Adjusted EBITDA (millions)
$ 486
$ 373
30.2 %
Adjusted diluted earnings per share
$ 2.96
$ 2.48
19.3 %
GAAP net income margin
3.3 %
4.2 %
( 90 ) bps
Cash provided by operating activities (millions)
$ 267
$ 89
200.6 %
Guidance changes
Item
New guidance
Prior guidance
Full Year 2026E revenue (millions)
$ 18,300
—
Full Year 2026E adjusted EBITDA (millions)
$ 1,565 - 1,600
—
Full Year 2026E adjusted EBITDA margin
8.6 % -8.7 %
—
Full Year 2026E adjusted diluted earnings per share
$ 8.92 -9.30
—
Full Year 2026E GAAP diluted earnings per share
$ 5.69 - 6.01
—
Full Year 2026 operating cash flow
over $ 1 billion
—
Quality of earnings
Most of the growth is bought. Organic revenue rose approximately $469 million, or 12%, while acquisitions contributed $716 million; Superior, closed July 20, cost $1,828.0 million in net consideration.
Adjusted earnings lean on acquisition add-backs. Adjusted net income of $253.2 million compares with GAAP $167.7 million, as pre-tax adjustments rose to $110.7 million from $44.6 million, led by intangible amortization of $75.3 million versus $32.7 million; adjusted EPS rose 19.3% while GAAP EPS fell 7.7%.
Cash conversion improved sharply. Operating cash flow was $267 million versus $89 million and free cash flow $206 million versus $36 million.
Gotchas & watch items
The cash target is back-end loaded: nine-month operating cash flow of $387.8 million leaves most of the over $1 billion full-year target to the fourth quarter.
Leverage is up sharply: net debt reached $3,686.7 million versus $1,934.7 million at December, after the $700 million term loan and $650 million of 5.850% notes.
The Superior earn-out has no cap: the three-year earn-out carries no maximum payment, with contingent consideration valued at $179.4 million, and fair-value changes of $7.5 million in the quarter were added back.
Communications backlog is shrinking: $5,053 million versus $5,461 million in June, consistent with the customer spending deferrals management cited.