MasTec, Inc. (MTZ) | The Buildout — AI Infrastructure
The Verdict
MasTec is a specialty contractor, not an owner of assets. It performs engineering, construction and maintenance work for owners — stringing fiber, building transmission and substations, laying pipeline, and constructing data centers and power generation. Its link to the AI buildout runs through three paths: fiber that connects data centers, the grid and pipelines needed to power them, and the mission-critical electrical work inside the facilities themselves. Management describes the demand as broad-based across those paths, but says MasTec's mission-critical business at scale is still early relative to its peers.
| Market Cap | — |
| Revenue (TTM) | $16.1B |
| Revenue Growth | +23.5% |
| EBITDA Margin (TTM) | 8.7% |
| Net Debt | $2.9B |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Record backlog of $21.4B at Q2 FY2026, up nearly $5B year over year and about $1B sequentially on an organic basis, with total company book-to-bill above 1.2x.
- Superior Group closed in July 2026 — management calls it the largest acquisition in MasTec's history — adding roughly $800M of revenue and about $100M of EBITDA to the 2026 guidance, about 3,000 team members, and mission-critical electrical capability.
- Two consolidated guidance raises in three months: from $17.0B/$1.45B/$8.40 to $17.5B/$1.5B/$8.79, then to $18.2B/$1.6B/$9.30.
- Legacy EBITDA held at $1.5B even with legacy revenue about $100M lower in the back half; management said "less revenue, same EBITDA, signifies higher margins."
- A broad customer base of about 1,065 customers and no customer above 10% of consolidated revenue in Q1 2026, with a track record of beating analyst estimates in 7 of 7 tracked quarters.
What We’re Watching
- Communications full-year revenue was cut to roughly $3.25B, removing about $400M, with margins guided to high single digits and about 100 bps lower year over year; management said it "did not catch it earlier."
- Backlog conversion timing: nearly $2.5B of backlog growth over two quarters, but only a modest portion contributes to 2026 revenue, with the majority expected in 2027.
- Leverage was 1.8x at Q2 and 2.2x pro forma for Superior, with management targeting below 2.0x by year-end; Q2 operating cash flow was essentially flat on working capital.
- Top-ten customer concentration rose to about 41% of revenue in Q1 2026 from about 36% a year earlier.
MasTec's direction moved in 2026 toward data center, mission-critical and power infrastructure — record backlog, two guidance raises, and the Superior acquisition — while Communications, its fiber and wireless segment, deteriorated. Management drew a sharp line between the two, saying that excluding Communications it is "more bullish today than we were 2.5 months ago." The open question is whether the Communications cut is timing, as management says, and whether the pursuit pipeline and the backlog weighted to 2027 convert on the schedule the guide now depends on.
Earnings Beat
Q2 FY2026 revenue was about $4.38B, up 23% year over year and above guidance, with adjusted EBITDA of $384M, up 40%, and adjusted EPS of $2.22, up 49%. Backlog reached a record $21.4B and total company book-to-bill was over 1.2x. Gross margin was 12.7%, and consolidated EBITDA margin rose about 100 bps year over year. Communications was the exception: about $890M of revenue, $73M of EBITDA and roughly 8.2% margin, with the full-year revenue guide cut to about $3.25B.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $4.4B | $3.8B | $3.5B | +23.4% |
| Gross margin | 12.7% | 9.3% | 12.3% | +40bps |
| EBITDA | $350M | $264M | $259M | +35.1% |
| EPS | $1.65 | $0.88 | $1.08 | +52.0% |
| Backlog | $21.4B | $20.3B | n/a | +~$5B y/y |
| Book-to-bill (total company) | over 1.2x | 1.4x | n/a | — |
We are disappointed that we did not catch it earlier and really communicated earlier.— Jose Ramon Mas, Chief Executive Officer, 2026-07-31
Management tone: The tone shifted between the two calls. On the Q1 call, Jose Mas said he could not remember a time where every business was "just humming." On the Q2 call, management expressed confidence in the broad business while being explicitly disappointed in Communications, saying it "underperformed a little bit" and that the company did not catch the slowdown early. Management framed the quarter as broad-based demand with one segment under pressure, and said that excluding Communications it is "more bullish today than we were 2.5 months ago."
Management Guidance
FY2026 guidance is $18.2B revenue, $1.6B adjusted EBITDA and $9.30 adjusted EPS, representing 27%, 39% and 42% year-over-year growth. Q3 FY2026 is guided to $4.9B revenue, $482M adjusted EBITDA and $2.98 adjusted EPS. By segment: Communications about $3.25B at high-single-digit margins, roughly 100 bps lower year over year, with Q3 at about $800M and second-half margins improving about 200 bps versus the first half; Power Delivery about $5.725B at low-double-digit margins with the core business at 9.8%; CE&I about $6.8B at high-single-digit margins with Q3 up 40% year over year to about $1.9B; and Pipeline roughly unchanged with Q3 at about $645M and mid-teens margins. Management said Superior is additive to the 2028 organic targets. Management reaffirmed operating cash flow above $1B, weighted to the fourth quarter, and net leverage below 2.0x by year-end.
Trajectory
Trailing revenue moved unevenly: $3,967M in Q3 FY2025, $3,940M in Q4, $3,829M in Q1 FY2026, then $4,374M in Q2, up 14.2% sequentially. Gross margin was 12.7% in Q2 versus 9.3% in Q1. Underneath, the mix is rotating: Communications revenue is being cut while Power Delivery and CE&I are being raised and Superior is added, though management said a lot of the pricing improvements had not yet started hitting the financials. Pipeline has carried the highest segment margin, at 21.2% in Q1 and 18.4% in Q2 on an EBITDA basis.
The Model
The model projects FY+1 revenue of $18.2B with EBITDA of $1,565M, an 8.6% margin, and FY+2 revenue of $21.8B with EBITDA of $2,027M, a 9.3% margin. The near-term projection sits in line with management's own 2026 guidance of $18.2B revenue and $1.6B adjusted EBITDA. The step up to FY+2 depends on backlog currently weighted to 2027 converting on schedule, hyperscaler connectivity and pipeline pursuits booking into revenue, and Superior's mission-critical electrical work scaling beyond its initial contribution.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $14.3B | $18.2B | $21.8B |
| YoY Growth | — | +27.3% | +19.8% |
| EBITDA | $1.2B | $1.6B | $2.0B |
| EBITDA Margin | 8.3% | 8.6% | 9.3% |
Projections are the median of 5 independent model runs. The model’s revenue sits 10.4% above analyst consensus.
FY2026 guidance is $18.2B revenue, $1.6B adjusted EBITDA and $9.30 adjusted EPS, representing 27%, 39% and 42% year-over-year growth. Q3 FY2026 is guided to $4.9B revenue, $482M adjusted EBITDA and $2.98 adjusted EPS. By segment: Communications about $3.25B at high-single-digit margins, roughly 100 bps lower year over year, with Q3 at about $800M and second-half margins improving about 200 bps versus the first half; Power Delivery about $5.725B at low-double-digit margins with the core business at 9.8%; CE&I about $6.8B at high-single-digit margins with Q3 up 40% year over year to about $1.9B; and Pipeline roughly unchanged with Q3 at about $645M and mid-teens margins. Management said Superior is additive to the 2028 organic targets. Management reaffirmed operating cash flow above $1B, weighted to the fourth quarter, and net leverage below 2.0x by year-end.
What Could Go Right — and Wrong
- Hyperscaler connectivity pursuits, which management describes as billions of dollars, convert into reported backlog and 2027 revenue.
- Superior cross-sell becomes evident before year-end and its backlog is disclosed at the Q3 call.
- Communications recovers in 2027 as carriers take delivery of new spectrum equipment and delayed wireline replacement projects start.
- Pipeline books further contracts for 2027 execution, supporting the expected ramp into that year.
- Power Delivery core margins hold at 9.8% and CE&I holds high-single-digit margins despite a larger contribution from General Buildings at mid-single-digit margins.
- Communications weakness extends into 2027, turning what management calls a timing issue into a demand or share problem.
- Backlog conversion slips beyond 2027, leaving near-term earnings dependent on a narrower set of segments.
- Data center state bans or pauses broaden beyond the geographies management called "a little bit overblown."
- Leverage stays above 2.0x or working capital keeps consuming cash; Q2 operating cash flow was essentially flat and $650M of senior notes were priced in August 2026.
- Labor, tariffs, or fuel and equipment costs pressure margins; the 10-K said tariffs raised the cost of importing steel, concrete, copper and solar panels.
Looking Ahead
Over the next year the tests are the Q3 report and the year-end backlog. Management expects backlog to exit 2026 higher than it is now, led by Power Delivery, CE&I and Pipeline, and expects the Communications margin to improve about 200 bps in the second half versus the first. Management also said CE&I backlog should be "a lot higher" by the end of the year. The larger question sits in 2027, when hyperscaler connectivity builds, BEAD work, booked pipeline contracts and a wireless recovery are all expected to land.
- Q3 2026Q3 FY2026 results — Guided to $4.9B revenue, $482M adjusted EBITDA, $2.98 adjusted EPS.
- Q3 2026 callSuperior backlog disclosure — Management deferred Superior backlog detail to the Q3 call.
- 2H 2026Communications margin recovery — Guided to improve about 200 bps versus the first half.
- End of 2026Year-end backlog — Expected higher than current, led by Power Delivery, CE&I and Pipeline.
- End of 2026Superior cross-sell proof — Management said cross-sell would be evident before year-end.
- 2027Pipeline and fiber ramp — 2027 builds, BEAD work and wireless recovery expected to land.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $12.3B | $14.3B | $16.1B | +16.2% |
| Gross Margin | 10.7% | 11.7% | 11.5% | +103bps |
| EBITDA | $943M | $1.2B | $1.4B | +25.6% |
| EBITDA Margin | 7.7% | 8.3% | 8.7% | +62bps |
| Net Income | $163M | $399M | $503M | +145.3% |
| Free Cash Flow | $973M | $286M | $245M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)11.5%
- EBITDA Margin (TTM)8.7%
- Net Margin (TTM)3.1%
- ROIC11.5%
- FCF Conversion17.6%
- SBC / Revenue0.3%
The Company
MasTec describes itself as "a leading North American infrastructure engineering and construction company," and including predecessor companies it has been in business over 95 years. It is an EPC and specialty contractor rather than an owner of physical assets: it performs work for owners on data centers, transmission, pipelines, renewables and heavy civil projects, and discloses no company-owned generating assets, power purchase agreements or offtake agreements. It reports four segments — Communications, Clean Energy and Infrastructure, Power Delivery, and Pipeline Infrastructure — plus an Other category covering equity investees and small international units.
Substantially all of its equipment comes from third-party vendors, and the 10-K says the company is not dependent on any one vendor for project materials or on any single independent contractor. Operations are conducted primarily in the United States and Canada, with headquarters in Coral Gables, Florida; foreign revenue was $54.0M in Q1 2026, mostly from Canadian pipeline work. Management calls the workforce a moat — it was up about 6,000 people year over year at Q1 — and Superior adds roughly 3,000 team members, run as a standalone entity that management said does not require an enormous amount of integration.
Business Segments
Competitive Landscape
MasTec competes as one of a handful of large publicly traded North American contractors. Peer filings name it directly — one states that competitors "include Quanta Services, Inc., MYR Group, Mastec, Inc., Primoris Services Corporation and Everus Construction Group, Inc." Management says customers are seeking deeper integration through alliance agreements, sole-sourced contracts and turnkey services, particularly when speed and execution certainty are critical. Management also acknowledges that MasTec's mission-critical business has been "quite small, smaller than our peers when you look at it."
- Quanta Services (PWR)Named in peer filings among the companies that compete with MasTec.
- MYR Group (MYRG)Named in peer filings among the companies that compete with MasTec.
- Primoris Services (PRIM)Named in peer filings among the companies that compete with MasTec.
- Everus Construction Group (ECG)Named in peer filings among the companies that compete with MasTec.
- EMCOR (EME)Listed among documented competitors from peer filings; the intel file also cites EMCOR's argument that "trades are very distinct," a counterpoint to MasTec's cross-sell thesis.
Supply Chain
MasTec buys equipment and materials from third-party vendors and performs construction for owner-customers — hyperscalers, telecom carriers, utilities and pipeline operators. The 10-K says it is not dependent on any one vendor for project materials or any single vendor for equipment.
More on MTZ: Earnings recap