Q2 2026 Cardinal Infrastructure Group Inc Earnings Call

August 11, 2026

Operator: Good morning, ladies and gentlemen, and welcome to Cardinal Infrastructure Group Q2 2026 earnings conference call and webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you would need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Emily Lear, Cardinal's Director of Investor Relations. Please go ahead.

Speaker #1: Good morning, ladies and gentlemen, and welcome to Cardinal Infrastructure Group Q2 2026 earnings conference call and webcast. At this time, all participants are in the listen-only mode.

Speaker #1: After the speaker's presentation, there will be a question-and-answer session. To ask a question during this session, you would need to press star 11 on your telephone you will then hear an automated message advising your hand is raised.

Speaker #1: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Emily Lear, Cardinal's Director of Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Good morning, everyone, and welcome to Cardinal Infrastructure Group Q2 2026 earnings conference call and webcast. I'm pleased to be here today to discuss our results with Jeremy Spivey, Cardinal's Chairman and Chief Executive Officer.

Emily Lear: Good morning, everyone, and welcome to Cardinal Infrastructure Group Q2 2026 earnings conference call and webcast. I am pleased to be here today to discuss our results with Jeremy Spivey, Cardinal's Chairman and Chief Executive Officer, Benji Wood, Chief Operating Officer, and Mike Rowe, Chief Financial Officer. Please note there are accompanying slides available on the Events and Presentations section of our website. Today's call will present certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margins, and adjusted gross profit. For more information about those non-GAAP financial measures and a reconciliation to the most comparable GAAP measure, please see our earnings release, the accompanying slides posted on our website, and the current Form 10-K filed with the SEC. This information is also available in the Investor Relations section of the Cardinal website. Today's call will also include forward-looking statements as defined by the United States securities laws.

Speaker #2: Benji Wood, Chief Operating Officer, and Mike Rao, Chief Financial Officer. Please note there are accompanying slides available on the events and presentation section of our website.

Speaker #2: Today's call will present certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margins, and adjusted gross profit. For more information about these non-GAAP financial measures, and a reconciliation to the most comparable GAAP measure, please see our earnings release, the accompanying slides posted on our website, and the current Form 10-K filed with the SEC.

Speaker #2: This information is also available in the Investor Relations section of the Cardinal website. Today's call will also include forward-looking statements, as defined by United States securities laws.

Speaker #2: These statements relate to future events, operating results, or financial performance, and are subject to risks and uncertainty that could cause actual results to differ materially.

Emily Lear: These statements relate to future events, operating results, or financial performance and are subject to risks and uncertainty that could cause actual results to differ materially. Cardinal Infrastructure Group takes no obligation to publicly update or revise any forward-looking statements, except as legally required, whether due to new information, future developments, or otherwise. Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in the company's SEC filings. With that, I will now turn the call over to Jeremy.

Speaker #2: Cardinal Infrastructure Group takes no obligation to publicly update or revise any forward-looking statements, except as legally required, whether due to new information, future developments, or otherwise.

Speaker #2: Information regarding these factors that may cause actual results to differ materially from these forward-looking statements is available in the company's SEC filings. With that, I'll now turn the call over to Jeremy.

Speaker #3: Thank you, Emily. Good morning, everyone, and thank you for joining us today. Before I get into our second quarter results, I wanted to start by covering this morning's acquisition announcement.

Jeremy Spivey: Thank you, Emily. Good morning, everyone, and thank you for joining us today. Before I get into our Q2 results, I wanted to start by covering this morning's acquisition announcement. Today, we announced the acquisition of Allied Paving, based in Atlanta, our ninth acquisition since 2021. We closed our follow-on equity offering just weeks ago, and we are already putting that capital to work quickly and on accretive terms. I will let Benji cover the specifics of the transaction, but importantly, this deal was sourced and executed by the ALGC leadership team with guidance and a playbook from Cardinal. It has been a little over 5 months since we closed the ALGC acquisition, and the team in Atlanta has absorbed how we operate. They sat with us through Piedmont Pipe to see how we onboard and integrate, and now they have gone out and found, negotiated, and closed a deal themselves.

Speaker #3: Today, we announced the acquisition of Allied Paving, based in Atlanta—our ninth acquisition since 2021. We closed our follow-on equity offering just weeks ago, and we're already putting that capital to work quickly and on creative terms.

Speaker #3: I'll let Benji cover the specifics of the transaction, but importantly, this deal was sourced and executed by the ALGC leadership team, with guidance and a playbook from Cardinal.

Speaker #3: It's been a little over five months since we closed the ALGC acquisition, and the team in Atlanta has absorbed how we operate. They sat with us through Piedmont Pike to see how we onboard and integrate, and now they've gone out and found, negotiated, and closed a deal themselves.

Speaker #3: That's the best proof point we could ask for, and it's what frees me and the rest of the leadership team to pursue additional organic and M&A opportunities.

Jeremy Spivey: That's the best proof point we could ask for, and it's what frees me and the rest of the leadership team to pursue additional organic and M&A opportunities. Now let's get into the quarterly results, starting on slide 4. This was a record quarter for Cardinal. Building on an already strong start to the year, revenue increased 114% from the prior year, driven by a continued strength across C&I and residential end markets. Our ability to flex crews and equipment across our established markets and to build out full turnkey capability as we enter new ones is exactly why we're winning larger, more complex projects, expanding with the customers we already serve, and bringing new logo customers onto the platform.

Speaker #3: Now, let's get into the quarterly results, starting on slide 4. This was a record quarter for Cardinal. Building on an already strong start to the year, revenue increased 114% from the prior year, driven by continued strength across commercial, industrial, and residential end markets.

Speaker #3: Our ability to flex crews and equipment across our established markets, and to build out full turnkey capability as we enter new ones, is exactly why we're winning larger, more complex projects.

Speaker #3: We are expanding with the customers we already serve and bringing new logo customers onto the platform. Cardinal is increasingly becoming the contractor these developers call first, and I'm excited by the continued momentum across our footprint, which positions us well for further strength in the coming quarters.

Jeremy Spivey: Cardinal is increasingly becoming the contractor these developers call first, and I'm excited by the continued momentum across our footprint, which positions us well for further strength in the coming quarters. Total backlog at the end of Q2 was $866 million, up 35% from the same period last year, with balanced growth across both C&I and residential. Commercial retail and retail distribution additions in the quarter were meaningful, a sign of recovery in a relatively slower-moving part of the broader C&I space. Adjusted EBITDA margins came in below where we expected them to be for Q2. While adjusted EBITDA dollars grew 43% year-over-year on higher volumes, the cost of meeting customer demand at this level, plus intense weather-related impacts in Georgia, ran ahead of plan. Mike will cover the specifics in a few minutes.

Speaker #3: Total backlog at the end of the second quarter was $866 million, up 35% from the same period last year. With balanced growth across both commercial and industrial and residential, commercial retail and retail distribution additions in the quarter were meaningful, a sign of recovery, and a relatively slower moving part of the broader CNI space.

Speaker #3: Adjusted EBITDA margins came in below where we expected them to be for the second quarter. While adjusted EBITDA dollars grew 43% year over year on higher volumes, the cost of meeting customer demand at this level, plus intense weather-related impacts in Georgia, ran ahead of plan.

Speaker #3: Michael covered the specifics in a few minutes. Given this strong performance and the vibrancy across our end markets, we're raising the midpoint of our full-year revenue guidance from $680 million to $890 million.

Jeremy Spivey: Given this strong performance and the vibrancy across our end markets, we're raising the midpoint of our full year revenue guidance from $680 million to $890 million, just shy of 100% growth from where we ended 2025. We're gaining share, diversifying our end markets, and seeing strong demand signals across the board. Along that raise, we're updating our adjusted EBITDA margin expectation to a range of 16% to 18% for the year. That reflects the one-time cost from this quarter, as well as an expected step-up in general and administrative expense through the back half. The demand in front of us right now means we have to invest in the people and resources to keep pace for our customers as much as for ourselves. This opportunity is bigger than anything we've seen, and we're not going to leave it on the table.

Speaker #3: Just shy of 100% growth from where we ended 2025. We're gaining share, diversifying our end markets, and seeing strong demand signals across the board.

Speaker #3: Along that raise, we're updating our adjusted EBITDA margin expectation to a range of 16% to 18% for the year. That reflects the one-time cost from this quarter as general and administrative expense through the back half.

Speaker #3: The demand in front of us right now means we have to invest in the people and resources to keep pace—for our customers as much as for ourselves.

Speaker #3: This opportunity is bigger than anything we've seen, and we're not going to leave it on the table. Visibility into customers' multi-year capital deployment and investment plans is encouraging.

Jeremy Spivey: Visibility into customers' multi-year capital deployment and investment plans is encouraging, and we're seeing that strength broadly. Continued momentum in C&I site work, and recently, a genuine recovery in commercial retail. In residential, demand across our Southeast markets continues, driven by the migration and population growth into our footprint, even as builder margins compress more broadly nationally. National home builders continue to move forward with large multi-phase residential communities, supported by the persistent structural undersupply of housing in our core markets. The Raleigh market is one clear illustration of these supportive housing fundamentals. Raleigh's mayor recently emphasized that the city is currently facing a severe 37,000 unit housing shortage, declaring that increasing the housing supply is a top policy priority. A recent statewide housing analysis from the North Carolina Home Builders Association shows just how big this gap really is.

Speaker #3: And we're seeing that strength broadly. Continued momentum in commercial and industrial site work, and recently a genuine recovery in commercial retail. In residential, demand across our Southeast markets continues, driven by the migration and population growth into our footprint.

Speaker #3: Even as builder margins compress more broadly nationally, national homebuilders continue to move forward with large multi-phase residential communities, supported by the persistent structural undersupply of housing in our core markets.

Speaker #3: The Raleigh market is one clear illustration of these supportive housing fundamentals. Raleigh's mayor recently emphasized that the city is currently facing a severe 37,000-unit housing shortage.

Speaker #3: Declaring that increasing the housing supply is the top policy priority. A recent statewide housing analysis from the North Carolina Home Builders Association shows just how big this gap really is.

Speaker #3: Wake and Mecklenburg counties are expected to face housing shortfalls of over 110,000 homes each by 2029, as population growth in Raleigh and Charlotte significantly outpaces new construction.

Jeremy Spivey: Wake and Mecklenburg counties are expected to face housing shortfalls of over 110,000 homes each by 2029 as population growth in Raleigh and Charlotte significantly outpace new construction. This dynamic is not unique to Raleigh or Charlotte. According to the US Census Bureau's most recent population estimate, North Carolina and Georgia, the two states where we operate today, both ranked among the fastest growing states in the country over the year ended July 2025, with North Carolina adding the most residents of any state nationally, 84,000. That same data shows South Carolina, Tennessee, and Florida among the 10 fastest growing states. We are not in those markets today, but the same demographic tailwinds driving our growth in the Carolinas and Georgia are building across the broader Southeast. That is exactly the kind of long-term backdrop we look for as we continue to evaluate where this platform expands next.

Speaker #3: This dynamic isn’t unique to Raleigh or Charlotte. According to the U.S. Census Bureau’s most recent population estimates, North Carolina and Georgia—the two states where we operate today—both ranked among the fastest-growing states in the country over the year ended July 2025, with North Carolina adding the most residents of any state nationally, 84,000.

Speaker #3: That same data shows South Carolina, Tennessee, and Florida among the 10 fastest-growing states. We aren't in those markets today, but the same demographic tailwinds driving our growth in the Carolinas and Georgia are building across a broader Southeast.

Speaker #3: And that's exactly the kind of long-term backdrop we look for as we continue to evaluate where this platform expands next. Let me step back for a moment and reflect on our journey since our IPO.

Jeremy Spivey: Let me step back for a moment and reflect on our journey since our IPO. We have consistently focused on our three-part growth strategy, driving vertical integration, diversifying our end markets, and pursuing selective acquisitions that build local density and expand our geographic footprint. These last 7 months have been a period of remarkable execution, operational scaling, and strategic expansion for Cardinal Infrastructure Group, reflected in this quarter's 114% revenue growth and today's raised full year revenue guidance. Our performance continues to demonstrate the strength of our self-performing, vertically integrated business model across our high-growth Southeastern footprint. Beyond the strong execution from our crews, we hit several strategic milestones for the broader platform this quarter. In May, we added Piedmont Pipe in Charlotte, building further density in a market we already knew well.

Speaker #3: We've consistently focused on our three-part growth strategy: driving vertical integration, diversifying our end markets, and pursuing selective acquisitions that build local density and expand our geographic footprint.

Speaker #3: These last seven months have been a period of remarkable execution, operational scaling, and strategic expansion for Cardinal Infrastructure Group, reflected in this quarter's 114% revenue growth and today's raised full-year revenue guidance.

Speaker #3: Our performance continues to demonstrate the strength of our self-performing vertically integrated business model across our high-growth Southeastern footprint. Beyond the strong execution from our crews, we hit several strategic milestones for the broader platform this quarter.

Speaker #3: In May, we added Piedmont Pipe in Charlotte, building further density in a market we already knew well. We completed construction of our first asphalt manufacturing facility, which will reduce reliance on third-party asphalt suppliers in Raleigh and, in time, will give us the ability to serve outside customers.

Jeremy Spivey: We completed construction of our first asphalt manufacturing facility, which will reduce reliance on third-party asphalt suppliers in Raleigh, and in time, will give us the ability to serve outside customers. In June, we completed a follow-on public offering to strengthen the balance sheet to fund our strategy going forward. With our record backlog, expanding service lines, robust end markets

Speaker #3: And in June, we completed a follow-on public offering to strengthen the balance sheet to fund our strategy going forward. With our record backlog expanding service lines, robust end markets, and an M&A pipeline unlike anything we've seen before, we believe Cardinal is exceptionally well-positioned for the second half of 2026 and beyond.

Jeremy Spivey: An M&A pipeline unlike anything we have seen before, we believe Cardinal is exceptionally well-positioned for the H2 2026 and beyond. With that, I will hand over the call to our Chief Operating Officer, Benji Wood, to discuss our operational execution and the details of today's acquisition announcement. Benji, the floor is yours.

Speaker #3: With that, I'll hand over the call to our Chief Operating Officer, Benji Wood, to discuss our operational execution and the details of today's acquisition announcement.

Speaker #3: Benji, the floor is yours.

Speaker #2: Thank you, Jeremy, and good morning, everyone. I'll start with Allied Paving and close with a broader operational and safety update across the platform before turning it over to Mike.

Benji Wood: Thank you, Jeremy, and good morning, everyone. I will start with Allied Paving and close with a broader operational and safety update across the platform before turning it over to Mike. Let me start with Allied Paving since it is a highlight of the day. Allied brings an experienced paving crew and complementary equipment to the North Atlanta market, and it fits neatly alongside ALGC's existing grading and site work capabilities. With Allied's paving crew now part of the platform, we can sequence paving directly behind our own grading and site work teams, which compresses project timelines and keeps that margin in-house instead of passing it to a subcontractor. It also takes ALGC a massive step closer to the kind of fully self-performing, full-stack model we have built in Raleigh, where we control a project from start to finish.

Speaker #2: Let me start with Allied Paving, since it's a highlight of the day. Allied brings an experienced paving crew and complementary equipment to the North Atlanta market, and it fits neatly alongside ALGC's existing grading and site work capabilities.

Speaker #2: With Allied's paving crews now part of the platform, we can sequence paving directly behind our own grading and site work teams. Which compresses project timelines and keeps that margin in-house instead of passing it to a subcontractor.

Speaker #2: It also takes ALGC a massive step closer to the kind of fully self-performing, full-stack model we've built in Raleigh, where we control a project from start to finish.

Speaker #2: As Jeremy mentioned, this transaction was sourced and run by the ALGC team, using the playbook in capital we've built as a platform. We couldn't be more excited to have Allied join the team, and our confidence in ALGC's ability to find and execute deals like this will become a real differentiator for Cardinal as we keep growing.

Benji Wood: As Jeremy mentioned, this transaction was sourced and run by the ALGC team using the playbook and capital we have built as a platform. We couldn't be more excited to have Allied join the team, and our current and ALGC's ability to find and execute deals like this will become a real differentiator for Cardinal as we keep growing. Sourcing and executing bolt-on deals to finish building out the turnkey stack. This is how we would expect future platforms we may acquire to grow going forward, and it is exactly why finding motivated, aligned leaders and retaining them is so core to who we are. Getting to watch my own team be the ones to prove that out is personally pretty rewarding. Looking beyond Allied, we continue to see strong crew productivity across the Cardinal footprint in a quarter. Charlotte is a good example of what density does for us.

Speaker #2: Sourcing and executing bolt-on deals to finish building out the turnkey stack—this is how we’d expect future platforms we may acquire to grow going forward, and it’s exactly why finding motivated, aligned leaders and retaining them is so core to who we are.

Speaker #2: Getting to watch my own team be the ones to prove that out is personally pretty rewarding. Looking beyond Allied, we continue to see strong crew productivity across the Cardinal footprint in the quarter.

Speaker #2: Charlotte is a good example of what density does for us. We already had wet utilities capabilities in that market, and Piedmont Pipe adds meaningful additional density there, alongside our existing grading and site work capabilities.

Benji Wood: We already had wet utilities capabilities in that market, and Piedmont Pipe adds meaningful additional density there alongside our existing grading and site work capabilities. That means faster sequencing between scopes and less reliance on subcontracted labor to get a project across the finish line. Charlotte is now nearly a turnkey as a result. Though still early in its growth trajectory, Greensboro continues building toward that same turnkey capability. Our Georgia operations, while impacted by weather in Q2, are gaining significant momentum with backlog up 10% since 31 March at ALGC. Our first asphalt processing plant, operating under the Aviator brand near Raleigh, continues to ramp as expected. With the land already secured for a second facility, we look forward to applying the operational lessons from our first plant to our future asphalt plant builds.

Speaker #2: That means faster sequencing between scopes and less reliance on subcontracted labor to get a project across the finish line. Charlotte is now nearly a turnkey as a result.

Speaker #2: Though still early in its growth trajectory. Greensboro continues building toward that same turnkey capability. Our Georgia operations, while impacted by weather in the second quarter, are gaining significant momentum with backlog up 10% since March 31st at ALGC.

Speaker #2: Our first asphalt processing plant, operating under the Aviator brand near Raleigh, continues to ramp as expected. With the land already secured for a second facility, we look forward to applying the operational lessons from our first plant to our future asphalt plant builds.

Speaker #2: We're also investing heavily in fleet deployment and equipment management, using updated systems to make sure we have the right equipment in the right place at the right time across our newer acquisitions.

Benji Wood: We are also investing heavily in fleet deployment and equipment management, using updated systems to make sure we have the right equipment in the right place at the right time across our newer acquisitions. We are in the process of rolling out a new CRM system that will give us better real-time visibility into both operations and consolidated financials, while helping ensuring SOX 404 compliance as we continue to mature as a public company. Beyond the equipment and system investments, our people remain the biggest driver of Cardinal's success, and planning for the growth ahead means investing in them now, not just keeping pace with today's demand. As we take on larger, more complex projects and move into new markets, we are expanding our recruiting and training efforts to build the bench strength our crews and project managers need to keep executing at this level.

Speaker #2: And we're in the process of rolling out a new CRM system that will give us better real-time visibility into both operations and consolidated financials.

Speaker #2: While helping ensure SOX 404 compliance as we continue to mature as a public company, beyond the equipment and system investments, our people remain the biggest driver of Cardinal’s success. Planning for the growth ahead means investing in them now.

Speaker #2: Not just keeping pace with today's demand. As we take on larger, more complex projects and move into new markets, we're expanding our recruiting and training efforts to build the bench strength our crews and project managers need to keep executing at this level.

Speaker #2: That investment in our people is just as important to sustaining this growth as the equipment and systems we're putting in place. During the quarter, our field teams completed over 9,000 documented safety activities, an increase of over 60% year over year.

Benji Wood: That investment in our people is just as important to sustaining this growth as the equipment and systems we are putting in place. During the quarter, our field teams completed over 9,000 documented safety activities, an increase of over 60% year over year. Across 57,800 individually inspected safety items on weekly site inspections, over 99% met our standards, and the deficiencies our crews proactively self-identified triggered same-day automated alerts to safety leadership for corrective action. That shows we do not sacrifice safety for speed, whether on delivery, on integration, or otherwise. With that, I will pass the call over to Mike to cover the financials and our updated outlook.

Speaker #2: Across 57,800 individually inspected safety items on weekly site inspections, over 99% met our standards, and the deficiencies our crews proactively self-identified triggered same-day automated alerts to safety leadership for corrective action.

Speaker #2: That shows we don't sacrifice safety for speed—whether on delivery, integration, or otherwise. With that, I'll pass the call over to Mike to cover the financials and our updated outlook.

Speaker #1: Thank you, Benji, and good morning, everyone. I'll begin with a review of our second quarter financial results before covering our updated outlook for 2026.

Mike Rowe: Thank you, Benji, and good morning, everyone. I will begin with a review of our Q2 financial results before covering our updated outlook for 2026. In total, Q2 revenue was $227 million, an increase of $115 million from the Q2 of 2025, reflecting organic growth of approximately 56%. Growth accelerated meaningfully as the quarter progressed, with May and June both stepping up significantly over April. In our Raleigh market, sustained demand across our C&I customer base drove continued share gains and another quarter of 40% organic growth. The depth of our crews and equipment let us win outsized project awards even as competition for skilled labor increased across the region.

Speaker #1: In total, second quarter revenue was $227 million, an increase of 115 million from the second quarter of 2025, reflecting organic growth of approximately 56%.

Speaker #1: Growth accelerated meaningfully as the quarter progressed, with May and June both stepping up significantly over April. In our Raleigh market, sustained demand across our commercial and industrial customer base drove continued share gains and another quarter of 40% organic growth.

Speaker #1: The depth of our crews and equipment led us to win outsized project awards, even as competition for skilled labor increased across the region. Our ability to deploy crews and source labor and equipment quickly in areas like Charlotte, which also printed over 40% growth, and Greensboro met strong share gains across a diversified end market mix in what continues to be very high-growth markets for Cardinal.

Mike Rowe: Our ability to deploy crews and source labor and equipment quickly in the areas like Charlotte, which also printed over 40% growth, and Greensboro, with strong share gains across a diversified end market mix in what continues to be a very high-growth market for Cardinal. ALGC continues to build on the momentum as part of the platform and is winning larger and more complex work, reinforcing Atlanta as one of the most attractive growth markets in the Southeast. The cost associated with delivering on this level of growth, specifically in our new yet turnkey markets, ran ahead of expectations. As such, margin performance for the quarter was below our expectations. Gross profit was $24.5 million, up 67 from the prior year, and adjusted gross profit was $36 million, a year-over-year increase of 60%. Adjusted gross margins ended the quarter at 15.9, down 540 basis points from the prior year.

Speaker #1: ALGC continues to build on the momentum as part of the platform and is winning larger and more complex work, reinforcing Atlanta as one of the most attractive growth markets in the Southeast.

Speaker #1: The cost associated with delivering on this level of growth, specifically in our new yet turnkey markets, ran ahead of expectations. As such, margin performance for the quarter was below our expectations.

Speaker #1: Growth profits was 24.5 million up 67 from the prior year, an adjusted gross profit was 36 million, a year-over-year increase of 60%. Adjusted gross margins ended the quarter at 15.9, down 540 basis points from the prior year.

Speaker #1: This year-over-year variance is the result of three things. First, subcontracted labor and equipment rental costs increased, primarily in new markets where we do not yet own full turnkey delivery capability.

Mike Rowe: This year-over-year variance is a result of three things. First, subcontracted labor and equipment rental costs increased primarily in new markets where we do not yet own full turnkey delivery capability. Second, we intentionally shifted towards a more diversified end market mix. Larger C&I projects ran on a different deployment schedule than residential work our operations were built around. That mismatch left us with some underutilized crew capacity as we adjusted our deployment models to the new mix more than we had modeled for. Finally, intense weather events in Georgia slowed our ability to deploy high margin work at ALGC. General administrative expenses for the quarter were $9 million, or 4% of revenue, driven largely by the cost of maturing our corporate infrastructure to responsibly support a scaling public platform.

Speaker #1: Second, we intentionally shifted towards a more diversified end-market mix. Larger commercial and industrial projects ran on a different deployment schedule than the residential work our operations were built around.

Speaker #1: And that mismatch left us with some underutilized crew capacity as we adjusted our deployment models to the new mix, more than we had modeled for.

Speaker #1: And finally, intense weather events in Georgia slowed our ability to deploy high-margin work at ALGC. General administrative expenses for the quarter were $9 million, or 4% of revenue, driven largely by the cost of maturing our corporate scaling public platform.

Speaker #1: As we continue to scale this platform and position Cardinal as the acquirer and contractor of choice across the Southeast, we believe these investments are in the best interests of our employees and our shareholders.

Mike Rowe: As we continue to scale this platform and position Cardinal as the acquirer and contractor of choice across the Southeast, we believe these investments are in the best interest of our employees and our shareholders. Adjusted EBITDA for the quarter was $28.1 million, up 43% year over year, and adjusted EBITDA margins were 12.4%, down from 18.6% in the prior year, reflecting the impacts we just covered. Capital expenditures for the quarter were $24.7 million, reflecting completion of the asphalt manufacturing facility and continued fleet investments across the markets. For the full year of 2026, we are reiterating our capital expenditure guidance of $58 million, excluding acquisitions. We ended the quarter with $195 million outstanding on our term loan and nothing drawn on our $75 million revolving credit facility.

Speaker #1: Adjusted EBITDA for the quarter was $28.1 million, up 43% year over year, and adjusted EBITDA margins were 12.4%, down from 18.6% in the prior year, reflecting the impacts we just covered.

Speaker #1: Capital expenditures for the quarter were 24.7 million, reflecting completion of the asphalt manufacturing facility and continued fleet investments across the markets. For the full year of 2026, we are reiterating our capital expenditure guidance of 58 million, excluding acquisitions.

Speaker #1: We ended the quarter with $195 million outstanding on our term loan, and nothing drawn on our $75 million revolving credit facility. With $339 million of cash on hand, we ended the quarter in a net cash position.

Mike Rowe: With $339 million of cash on hand, we ended the quarter in a net cash position, giving us substantial capacity to keep funding both organic investments and our acquisition pipeline, thanks to our successful follow-on offering. As you heard, that capacity is already being put to work with the acquisition of Allied Paving, which brings $108 million of annual revenue at 20.3% adjusted EBITDA margin onto the platform at roughly 5.5x EBITDA. A meaningfully accretive multiple and exactly the kind of disciplined use of our follow-on proceeds we said we'd pursue. Turning to our updated outlook for 2026 on slide eight. Given the strong top-line performance, up 110% year to date, we are raising the revenue to a range of $880 million to $900 million, reflecting total year over year growth of 95% at the midpoint.

Speaker #1: Giving us substantial capacity to keep funding both organic investments and our acquisition pipeline, thanks to our successful follow-on offering. As you heard, that capacity is already being put to work with the acquisition of Allied Patent.

Speaker #1: Which brings $108 million of annual revenue at a 20.3% adjusted EBITDA margin onto the platform at roughly 5.5 times EBITDA. A meaningfully accretive multiple, and exactly the kind of disciplined use of our follow-on proceeds we said we'd pursue.

Speaker #1: Turning to our updated outlook for 2026 on Slide 8, given the strong top-line performance, up 110% year to date, we are raising the revenue to a range of $880 million to $900 million, reflecting total year-over-year growth of 95% at the midpoint.

Speaker #1: That raise is built on real, broad-based customer demand and the visibility we have into the remainder of 2026 and beyond. Our backlog stands at a record $866 million, and our close relationship with customers across our footprint gives us strong conviction in both the timing and the profitability of that pipeline as it converts to revenue.

Mike Rowe: That raise is built on real, broad-based customer demand and the visibility we have into the remainder of 2026 and beyond. Our backlog stands at a record $866 million, and our close relationship with customers across our footprint gives us strong conviction in both the timing and the profitability of that pipeline as it converts to revenue. We're bidding on and winning larger and more complex C&I projects than we have historically, including work that's bringing in new logo customers into the platform. While H1 adjusted EBITDA sits at $55 million ahead of plan, we are adjusting our adjusted gross margin guidance to a range of 16% to 18% for the full year.

Speaker #1: We're bidding on and winning larger and more complex commercial industrial projects that we have historically including work that's bringing in new logo customers into the platform.

Speaker #1: While first-half adjusted EBITDA sits at $55 million, ahead of plan, we are adjusting our adjusted gross margin guidance to a range of 16% to 18% for the full year.

Speaker #1: It's worth noting that even at this updated rate, the size of our revenue raise means full-year adjusted EBITDA is increasing versus our original guidance—from roughly $136 million to over $150 million at the midpoint of today's range.

Mike Rowe: It's worth noting, even at this updated rate, the size of our revenue raise means full year adjusted EBITDA are increasing versus our original guidance from roughly $136 million to over $150 million at the midpoint of today's range. We recognize one-time costs for the Q2, a portion of which we expect to recover as the year progresses. The remainder of the shift reflects the pace and scale of our growth. We are investing in systems and processes that will give us better visibility into cost trends going forward. This corporate infrastructure investment reflects the reality of running a business growing at this pace, and we expect it to moderate as a percentage of revenue as we can grow into it.

Speaker #1: We recognize one-time costs for the second quarter, a portion of which we expect to recover as the year progresses. The remainder of the shift reflects the pace and scale of our growth.

Speaker #1: We are investing in systems and processes that will give us better visibility into cost trends going forward. This corporate infrastructure investment reflects the reality of running a business growing at this pace.

Speaker #1: And we expect it to moderate as a percentage of revenue as we grow into it. Similarly, as we continue to build out this platform across the Southeast and reduce our concentration in any single market, we'd expect the impact from localized disruptions—like weather in a single region—to become more muted on our overall results over time.

Mike Rowe: Similarly, as we continue to build out this platform across the Southeast and reduce our concentration in any single market, we would expect the impact from localized disruptions like weather in a single region become more muted on our overall results over time. Our conviction in the near term profitability of this platform in the low 20s is unchanged. As we look ahead, without getting into 2027 guidance specifically, that trajectory only strengthens as we recognize synergies across the platform, finalize vertical integration into our newer markets, and rightsize our cost structure as we scale. Separately, we have also been extremely active in the M&A front. Three acquisitions this year alone, each with a different stage of integration. That is a lot happening across the platform at once, and we are staying disciplined about how we bring each one in.

Speaker #1: Our conviction in the near-term profitability of this platform in the low 20s is unchanged. And as we look ahead—without getting into 2027 guidance specifically—that trajectory only strengthens as we recognize synergies across the platform, finalize vertical integration into our newer markets, and right-size our cost structure as we scale.

Speaker #1: Separately, we've also been extremely active in the M&A front. Three acquisitions this year alone each with a different stage of integration. That's a lot happening across the platform at once.

Speaker #1: And we're staying disciplined about how we bring each one in. As you heard from Jeremy and Benti, we're incredibly optimistic about the road ahead.

Mike Rowe: As you heard from Jeremy and Benji, we are incredibly optimistic about the road ahead. We have record backlogs, strong and strengthening customer relationships, and some of the best crews in the company, and an opportunity set ahead of us that we believe is unmatched. We are delivering on the strategy that we built this business around. Incredible strong organic growth, solid and improving margins, a stronger balance sheet, and an acquisition pipeline that gives us multiple paths to compound from here. With that, I will turn the call over to Jeremy for some quick remarks before Q&A. Jeremy? Thanks, Mike. Just a quick word before we open it up. This was a record quarter for Cardinal. Record revenue, record backlog, and our ninth acquisition since 2021, sourced this time by our own team in Atlanta.

Speaker #1: We have record backlog, strong and strengthening customer relationships, and some of the best crews in the company. The opportunity set ahead of us, we believe, is unmatched.

Speaker #1: We're delivering on the strategy that we built this business around: incredibly strong organic growth, solid and improving margins, a stronger balance sheet, and an acquisition pipeline that gives us multiple paths to compound from here.

Speaker #1: With that, I'll turn the car over to Jeremy for some quick remarks before Q&A. Jeremy?

Speaker #2: Thanks, Mike. Just a quick word before we open it up. This was a record quarter for Cardinal—record revenue, record backlog, and our ninth acquisition since 2021.

Jeremy Spivey: Thanks, Mike. Just a quick word before we open it up. This was a record quarter for Cardinal. Record revenue, record backlog, and our ninth acquisition since 2021, sourced this time by our own team in Atlanta.

Speaker #2: Sourced this time by our own team in Atlanta. Real proof that our platforms can grow their own businesses and free up the rest of us to keep executing.

Jeremy Spivey: Real proof that our platforms can grow their own businesses and free up the rest of us to keep executing. We are growing faster than we planned and gaining share in every market and customer segment we serve. Our balance sheet is strong, our acquisition pipeline is as deep as it has ever been, and we are going to keep moving. I have never felt better about where this platform is headed because we are just getting started. With that, let us turn it over to questions. Operator?

Speaker #2: We're growing faster than we planned and gaining share in every market and customer segment we serve. Our balance sheet is strong, our acquisition pipeline is as deep as it's ever been, and we're going to keep moving.

Speaker #2: I've never felt better about where this platform is at because we're just getting started. With that, let's turn it over to questions. Operator?

Speaker #3: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again.

Operator: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We ask that you please limit to two questions. The first question will come from Louie DiPalma with William Blair. Your line is now open.

Speaker #3: We ask that you please limit to two questions. And the first question will come from Louis De Palma with William Blair. Your line is now open.

Louie DiPalma: Jeremy, Benji, Mike, and Emily, good afternoon.

Speaker #4: Jeremy, Benji, Mike, and Emily, good afternoon.

Speaker #5: Hey, Louis.

Jeremy Spivey: Hey, Louie.

Speaker #6: Hey, Louie.

Jeremy Spivey: Hey, Louie. Good.

Speaker #4: Hey. The revenue growth was exceptional, though the margin was disappointing. Can you discuss how much of the margin pressure was related to the one-time cost and the weather?

Louie DiPalma: Hey, the revenue growth was exceptional, though the margin was disappointing. Can you discuss how much of the margin pressure was related to the one-time costs and the weather? Was the margin pressure focused in Georgia, or was it generally distributed throughout Georgia and the North Carolina markets?

Speaker #4: And was the margin pressure focused in Georgia, or was it generally distributed throughout Georgia and the North Carolina markets?

Speaker #2: Hey, Louie, Mike. Great question. And I think it kind of leads down the path of talking about guidance too as well. So we had four headwinds that helped us or hurt us in those four things were we talked about it increased one-time labor, sub-labor, subcontractor labor, rental cost, rental expense cost that we had to deploy to keep up with the customer pace.

Mike Rowe: Hey, Louie, Mike. Great question, and I think it kind of leads down the path of talking about guidance too as well. We had four headwinds that helped us or hurt us, and those four things were, we talked about it, increased one-time labor, sub-labor, subcontractor labor, rental cost, rental expense cost that we had to deploy to keep up with the customer pace. The operational improvements that we are going to make, the recent acquisitions that we're doing are going to help to recover these one-time in nature costs. Then on top of that, we had deployment shifts from our diversified project mix and crew retention that went with that. Finally, the weather in Georgia, which slowed deployment of our ALGC crews and network hurt us as well. Then finally, the SG&A, let's not forget about it too.

Speaker #2: The operational improvements that we are going to make, and the recent acquisitions that we're doing, are going to help to recover these one-time, in-nature costs.

Speaker #2: Then on top of that, we had deployment shifts from our diversified project mix and crew retention that went with that. Finally, the weather in Georgia, which slowed deployment of our ALGC crews and that work, hurt us as well.

Speaker #2: And then finally, the SG&A—let's not forget about it, too. Being a brand new publicly traded company, with a corporate maturity that requires those costs, they're coming in and they're starting to level off, but they're still higher than we originally expected.

Mike Rowe: Being a brand-new public traded company with the corporate maturity that requires, those costs are coming in and they're starting to level off, but they're still higher than we originally expected. As such, that's the reason why we're also, the question, I'm addressing the same question at the same time. We are changing from 20% plus to 16% to 18% for our margins. It's transitional. It's not structural. It's very much transitional, Louie.

Speaker #2: And as such, that's the reason why we're—also to your question, I'm addressing the same question at the same time—we are changing from 20% plus to 16% to 18% for our margins.

Speaker #2: And it's transitional. It's not structural. It's very much transitional, Louie.

Speaker #4: Great. And what is the visibility for the second half margin increase? I think the guidance implies a margin in the 19s range in the second half.

Louie DiPalma: Great. What is the visibility for the H2 margin increase? I think the guidance implies a margin in the 19s range in the H2. Also, what is the visibility for the medium-term target that you said in the low 20s?

Speaker #4: And also, what is the visibility for the medium-term target that you said is in the low 20s?

Speaker #2: Yeah. So both of those are the reasons why we have increased guidance for the second half. I mean, ALGC feels very strongly—we've been very strong—about their projection for the second half. Not only is the revenue higher, and a bigger percent of our total revenue.

Mike Rowe: Yeah. Both of those are the reasons why we have increased guidance for the H2. I mean, ALGC feels very strongly. We feel very strongly about their projection for the H2. Not only is the revenues higher and a bigger percent of our total revenue, their margins are going to be much, much higher. Then on top of that, we just announced Allied. Allied's going to have 3 months of revenue at a 20-plus percent adjusted EBITDA margin. Then finally, we have a $1 to $2 million of one-time costs that we can recover. Some we can't recover, but that's going to help us. Then we have our costs that we have from the asphalt plant that are coming to line that'll help us as well.

Speaker #2: Their margins are going to be much, much higher. And then on top of that, we just announced Allied. Allied is going to have three months of revenue at a 20% plus, just EBITDA margin now.

Speaker #2: Then finally, we have $1 to $2 million of one-time costs that we can recover. Some we can't recover, but that's going to help us.

Speaker #2: Then we have our costs that we have from the asphalt plant that are coming online that will help us as well. And then finally, some of the, what we call deployment, that we did for the project mix, now we've got it online.

Mike Rowe: Finally, some of what we call deployment that we did for the project mix, now we've got it aligned, now it's coming together. Now we're not going to have those same misses.

Speaker #2: Now it's coming together. We're not going to have those same misses.

Speaker #6: Yeah, Louie, this is Jeremy. We also had some delayed starts in Charlotte. Are those projects now starting to kick off, including a couple of very large projects?

Jeremy Spivey: Yeah. Louie, this is Jeremy. We also had some delayed starts in Charlotte with those projects now starting to kick off a couple of very large projects. That's a smaller growing market for us. So two projects of significant size having a delay has an impact, and those are getting started. We'll see those start to run through the H2 of the year.

Speaker #6: That's a smaller growing market for us. So, two projects of significant size having a delay has an impact, and those are getting started. So we'll see those start to run through the second half of the year.

Speaker #2: And that's why we are encouraged and believe with conviction that we will hit the 16 to 18 percent guidance for adjusted EBITDA, which at that midpoint allows us to say we're going to be well above the $136 million implied that we had for our forecast, and that's at the midpoint of $890 million.

Mike Rowe: That's why we are encouraged and believe in with conviction that we'll hit the 16% to 18% guidance for adjusted EBITDA. Which at that midpoint allows us to say we're going to be well above the 136 implied that we had for our forecast and that's at the midpoint of 890.

Speaker #4: Great. And how much are you including the contributions from the Allied acquisition beginning in the third quarter?

Louie DiPalma: Great. How much are you including the contributions from the Allied acquisition beginning in the Q3?

Mike Rowe: In Q4.

Speaker #2: In the fourth quarter.

Speaker #4: In the fourth quarter. Okay, great. And one final one: as it relates to the demand environment, it's pretty staggering. Has that been spread across the Georgia market, ALGC, in addition to Raleigh, Greenfold, and Charlotte?

Jeremy Spivey: Yes, we are.

Mike Rowe: Yeah, Q4.

Louie DiPalma: Okay, great. One final one. As it relates to the demand environment, it is pretty staggering. Has that been spread across the Georgia market, ALGC, in addition to Raleigh and Greensboro and Charlotte? Can you provide some market commentary in terms of the demand, Jeremy and Benji, and how sustainable do you see that demand going into 2027 and beyond?

Speaker #4: Can you provide some market commentary in terms of the demand, Jeremy and Benji? How sustainable do you see that demand going into 2027 and beyond?

Speaker #6: Yeah, Louie, this is Jeremy. We continue to see uptake on CNI. We're seeing a lot more opportunity in that space across all the markets that we serve.

Jeremy Spivey: Yeah. Louie, this is Jeremy. We continue to see uptake on C&I. We are seeing a lot more opportunity in that space across all the markets that we serve. The residential volume continues at a reasonable pace. Obviously, the national home builders have had some margin compression. Macro, we still have the same number of looks that we have had for probably the last 12 months. That has not deteriorated at all. What we are seeing there in the residential market is that some of the clients are asking for some pricing concessions from us, and we are just determining if it is a good fit for us or not. The good news there is that we are not having to bid at low margin, but to be in the conversation, we are supplying our normal bids. Then we are determining, does this make sense?

Speaker #6: The residential volume continues at a reasonable pace. Obviously, the National Home Builders have had some margin compression. Macro, we still have the same number of looks that we've had for probably the last 12 months.

Speaker #6: That hasn't deteriorated at all. What we are seeing there in the residential market is that some of the clients are asking for some pricing concessions.

Speaker #6: From us, and we're just determining if it's a good fit for us or not. So the good news there is that we're not having to bid at low margin, but we're in the conversation, we're supplying our normal bids, and then we're determining, does this make sense?

Jeremy Spivey: Is there an opportunity for us to make up a reduced margin through schedule compression, additional resources, that kind of thing? Or do we just want to go focus on the other end markets that are providing better margin and come back to it when the margins start to rebound? I will say that also, because of our high degree of involvement in the budgetary services for our residential clients, we have seen activity specifically in the tribal market, which is our largest, pick up almost three times versus what it was six months ago. This visibility indicates to us that we should start seeing a significant rebound in projects in the next 18 to 24 months, because that is the typical entitlement cycle for residential projects.

Speaker #6: Is there an opportunity for us to make up a reduced margin through schedule compression, additional resources, that kind of thing? Or do we just want to focus on the other end markets that are providing better margins and come back to it when the margins start to rebound?

Speaker #6: I will say that, also because of our high degree of involvement in the budgetary services for our residential clients, we have seen activity specifically in the Triangle market, which is our largest, pick up almost three times.

Speaker #6: Versus what it was six months ago. So this visibility indicates to us that we should start seeing a significant rebound in projects in the next 18 to 24 months.

Speaker #6: Because that's a typical entitlement cycle for residential projects. So this would lead us to believe that 2028 is going to be the year when things start to begin to return to normal on a margin basis for the residential end market.

Jeremy Spivey: This would lead us to believe that 2028 is going to be the year when things start to begin to return to normal on a margin basis for the residential end market. That being said, we are seeing high activity across C&I, and again, I mentioned in my recorded call or comments, that we are seeing a lot of retail activity, which is quite uncommon. So we feel really good about the opportunity. It is very strong across all our MSAs we serve. As we continue to expand and move geographically, it is going to start to smooth things out for us because we, again, one location gets impacted, and it has an impact that is noticeable.

Speaker #6: That being said, we're seeing high activity across CNI. And again, I mentioned in my prepared call or comment that we're seeing a lot of retail activity, which is quite uncommon.

Speaker #6: So, we feel really good about the opportunity. It's very strong across all our MSAs we serve, and as we continue to expand and move geographically, it's going to start to smooth things out for us. Because again, when one location gets impacted, it has an impact that's noticeable.

Speaker #4: Great, thanks for the color. And thanks, everyone.

Louie DiPalma: Great. Thanks for the color, and thanks, everyone.

Speaker #1: Thank you. And our next question will come from Brian Brophy with C4. Your line is open.

Operator: Thank you. Our next question will come from Brian Brophy with Stifel. Your line's open.

Speaker #5: Yeah, thanks. Good morning, everybody. I was wondering if you could touch on the data center end market and pipeline. How is execution on that first project going thus far?

Brian Brophy: Yeah, thanks. Good morning, everybody. Wondering if you could touch on the data center end market and pipeline. How is execution on that first project going thus far? Just the latest thoughts on that opportunity in that end market. Thanks.

Speaker #5: And just the latest thoughts on that opportunity in that end market. Thanks.

Speaker #6: Yeah. Hey, Brian. Good morning. Yeah. So where we're continuing on that project is going well. We're ahead of schedule. There has been a lot of revisions and change of scope adding work to this first contract of ours.

Jeremy Spivey: Yeah. Hey, Brian. Good morning. Yeah, so we're continuing on that project. It's going well. We're ahead of schedule. There has been a lot of revisions and change of scope, adding work to this first contract of ours as they get ready for the next phases. I can't speak too much about what it is and where it is and who it's for, but it continues to go well. We are active in the Georgia market, too, and in the Carolinas, looking at other opportunities. I will say that from conception to actual award in that end market seems to be a lot longer than other traditional end markets. There's a lot more effort going into the bidding process, and it's not we're awarded really quickly, so it takes a little bit longer. But we're very active there.

Speaker #6: As they get ready for the next phases, I can't speak too much about what it is, where it is, or who it's for, but it continues to go well.

Speaker #6: We are active in the Georgia market too and in the Carolinas looking at other opportunities. I will say that from conception to actual award in that end market seems to be a lot longer than other traditional end markets.

Speaker #6: So there's a lot more effort going into the bidding process, and it's not awarded really quickly, so it takes a little bit longer. But we're very active there.

Speaker #6: We have a large distribution facility for a very large retailer that's getting started in the Atlantic market, very similar in nature to a data center.

Jeremy Spivey: We have a large distribution facility for a very large retailer that's getting started in the Atlanta market, very similar in nature to a data center in terms of size and complexity and schedule. Had we not begun the integration process with ALGC when we did as quickly as we did and had Allied as a component, I'm not sure that we would've been very aggressive in being able to meet the schedule that was required to do it. So having all these resources now in-house allowed us to bid this at really good margins, comfortably knowing that we're going to meet the scheduled demand from the client. We continue to see opportunity in the data center. It's new for us. The one that we're doing is going really well. Client's very happy, and we're looking forward to capturing more opportunities throughout the next H2 of the year.

Speaker #6: In terms of size and complexity and schedule, that have we not begun the integration process with the ALGC when we did as quickly as we did and add an Allied as a component?

Speaker #6: I'm not sure that we would have been very aggressive in being able to meet the schedule that was required to do it. So having all these resources now in-house allowed us to bid this at a really good margins, comfortably knowing that we're going to meet the schedule demand from the client.

Speaker #6: So we're we continue to see opportunity in the data center. It's new for us. The one that we're doing is going really well. Client's very happy and we're looking forward to capturing more opportunities throughout the next half of the year.

Speaker #5: That's great. And then just following up on some of the margin conversation, was there a particular geographic market where you saw some of the subcontractor costs and crew utilization challenges?

Brian Brophy: That's great. Just following up on some of the margin conversation, was there a particular geographic market where you saw some of the subcontractor costs and crew utilization challenges? Is that related to one project, multiple projects? Is there any particular end market that it was concentrated in? Thanks.

Speaker #5: And is that related to one project, multiple projects? And is there any particular end market that it was concentrated in? Thanks.

Speaker #2: Yeah, it was in the Charlotte market. And it wasn't really concentrated with one customer. It was really related to situations where we had multiple customers that had delays on jobs, and with those delays, we had to absorb all the costs because we couldn't deploy those resources in terms of the work being done.

Mike Rowe: Yeah. It was in the Charlotte market, and it wasn't really concentrated with one customer. It was really related to things that we had multiple customers that had delays on jobs. With those delays, we had to absorb all the costs that we couldn't deploy that in terms of the work being done. Now that that work's started, now that we've given it a lot of attention, Brian, a lot of attention, we feel comfortable we're going to see some improvement, and long term, we feel really good about it.

Speaker #2: Now that that work has started, now that we've given it a lot of attention—Brian, a lot of attention—we feel comfortable we're going to see some improvement, and long-term, we feel really good about it.

Speaker #6: Yeah. And from the subcontractor costs and resources, when you have these delays and you have your workforce, once it gets deployed and everything gets started and you have other projects coming online, at the same time, it was causing the necessity for us to go out and partner with some of our former trade partners to help expedite that work and get every so we didn't compromise schedule.

Jeremy Spivey: Yeah, from the subcontractor costs and resources, when you have these delays and you have your workforce, once it gets deployed and everything gets started, and you have other projects coming online at the same time, it was causing the necessity for us to go out and partner with some of our former trade partners to help expedite that work so we didn't compromise schedule. As we get back on plane there, and you saw the Piedmont acquisition helps to solve that issue, we're adding what utility resources that we're having to subcontract out. As we get those tucked in and continue our organic growth mission there in the Charlotte market, it should do nothing but improve over the next quarter and year.

Speaker #6: And as we get back on plan there, and you saw the Piedmont acquisition helps to solve that issue. We're adding wet utility resources that we were having to subcontract out, right?

Speaker #6: And so as we get those tucked in and continue to our organic growth mission there in the Charlotte market, it should do nothing but improve over the next quarter and year.

Speaker #5: Okay. And I guess just I want to follow up to that. As you look through July, have you seen kind of a decrease in the subcontractor cost and crew utilization bouncing back here?

Brian Brophy: Okay. I just want to follow up to that. As you look through July, have you seen a decrease in the subcontractor cost and crew utilization bouncing back here?

Speaker #5: Thanks.

Jeremy Spivey: Yeah, very much so.

Speaker #2: Yeah. Very much so.

Speaker #5: Okay. And then just last one for me. In one of the prior answers you mentioned some customers asking for pricing concessions. Did you see any impact from that in the quarter?

Brian Brophy: Okay. Just last one from me. In one of the prior answers, you mentioned some customers asking for pricing concessions. Did you see any impact from that in the quarter? Are you expecting any impact from that in the back half?

Speaker #5: And are you expecting any impact from that in the back half?

Speaker #6: No, we didn't. If it doesn't meet— or I mean, if it doesn't meet our requirement, we obviously have a red line. If we have the opportunity to look at a project and see if there's anything that we can do with resources to maintain margin and still execute for our client, we're going to do it.

Jeremy Spivey: No, we didn't. If it doesn't meet our requirement, we obviously have a red line. If we have the opportunity to look at a project and see if there's anything that we can do with resources to maintain margin and still execute for our client, we're going to do it. If it doesn't exist, we move on. The ask has come, it's not from all our clients, it's from certain ones that their corporate mandate is go out and ask for concessions. That's across the board. We're an isolated region, so we hadn't seen it up until recently, but it's come, it's asked, and we'll take a look at it because we value relationships with our clients, but if it doesn't work out, it doesn't work out, and we just move on.

Speaker #6: And if it doesn't exist, we just move on. So, the ask has come—it's not from all our clients, it's from certain ones where the corporate mandate is to go out and ask for concessions.

Speaker #6: And that's across the board. Whether it's and we're not isolated region, so we hadn't seen up until recently, but it's come, it's asked, and we'll take a look at it because we value relationships with our clients.

Speaker #6: But if it doesn't work out, it doesn't work out and we just move on.

Speaker #5: Understood. I appreciate the caller. I'll pass it on.

Brian Brophy: Understood. Appreciate the call. I'll pass it on.

Speaker #1: Thank you. And the next question is coming from Brent, Fieldman with Oppenheimer. Your line is open.

Operator: Thank you. The next question is coming from Brent Thielman with Oppenheimer. Your line is open.

Speaker #3: Hey, thanks. Good morning. Hey, Morgan. I'm Mike. On the guidance and the increase in revenue, it sounds like you have three months, roughly, of Allied Paving in there.

Brent Thielman: Hey, thanks. Good morning.

Jeremy Spivey: Morning.

Brent Thielman: Hey, morning. Mike, on the guidance and the increase in revenue, it sounds like you have three months, roughly, of Allied Paving in there. Can you just clarify how much revenue you have baked into that?

Speaker #3: Can you just clarify how much revenue you've baked into that?

Speaker #2: Yeah, $28 million is what we baked in for that.

Mike Rowe: Yeah. $28 million is what we baked in for that.

Speaker #3: Okay. And then it sounds like your investments in CRM and some other back office things—you need to make those. Maybe if you could just level-set us on what the new corporate overhead run rate should be, especially as we think about moving into next year.

Brent Thielman: Okay. And then it sounds like investments in CRM, some other back office things you need to make. Maybe if you could just level set us on what the new corporate overhead run rate should be as we think of moving into next year.

Speaker #2: Yeah. Yeah. By the way, I'm glad you brought that up. Even with the levels we're at for SG&A, we still believe in Epstein we're ahead of our peers.

Mike Rowe: Yeah. By the way, I am glad you brought that up. Even with the levels we are at for SG&A, we still believe and have seen we are ahead of our peers. We are going to make sure we do all we have to make sure we do everything as a new public traded company, that we are in where we need to be with the compliance, where we need to be in terms of our systems and our processes and our information to help us see this stuff happening more real time. But that said, the percentage we had for the second quarter was 4%, and I think that is probably a number that we are going to be looking at in the future going forward.

Speaker #2: And we're going to make sure we do all we have to, to make sure we do everything as a new public trading company—that we are where we need to be with compliance, where we need to be in terms of our systems and our processes, and our information to help us see this stuff happening more in real time.

Speaker #2: That said, the percentage we had for the fourth—for the second quarter—was 4%. And I think that's probably a number that we're going to be looking at in the future, going forward.

Speaker #3: Okay. I guess this last one—maybe Jeremy or Benji, I think you mentioned that one of the other aspects to the margins this quarter was maybe a bit of a shift towards customers outside of residential.

Brent Thielman: Okay. I guess just last one, maybe Jeremy or Benji. I think you mentioned one of the other aspects to the margins this quarter was maybe a bit of a shift towards customers outside of residential, and I just wanted to understand what is different about those projects that require some of the investments you have had to make and what exactly causes that near-term pressure as you look at that shift.

Speaker #3: And I just wanted to understand what’s different about those projects that require some of the investments you’ve had to make, and what exactly causes that near-term pressure as you look at that shift.

Speaker #6: Yeah. So the deployment schedules are what have impact there. And we're shifting end markets and the timing of some of these larger, more complex projects. I mentioned with data centers, you see it across the CNI space.

Jeremy Spivey: Yeah. So the deployment schedules is what has impact there. We are shifting end markets and the timing that some of these larger, more complex. I mentioned with data centers, you see it across the C&I space. The start time and the schedules to utilize all the resources to get on a project and get it on plane are just completely different from the residential end market. As we shift to get more diversified, that all smooths out over time, and we will have a good mix and be able to bounce back and forth between customers and end markets where it has little to no impact.

Speaker #6: The start time and the schedules to utilize all the resources, get on the project, and get it on plane are just completely different from the residential end market.

Speaker #6: And as we shift to get more diversified, that all smooths out over time. We'll have a good mix and be able to balance back and forth between customers and end markets, where it has little to no impact.

Speaker #3: Okay. Great. Thank you.

Brent Thielman: Okay, great. Thank you.

Speaker #1: Thank you. And the next question will come from Noah Levitz with William Blair. Your line's open.

Operator: Thank you. The next question will come from Noah Levitz with William Blair. Your line's open.

Speaker #7: Great, thanks, guys. My first question: on the call or in your prepared remarks, you mentioned that you had secured land for the second asphalt plant. Given that you're about a month and change into having the first one operational, what have you learned so far?

Noah Levitz: Great. Thanks, guys. My first question, on the call or prepared remarks, you mentioned that you had secured land for the second asphalt plant. Given that you are about a month and change into having the first one operational, what have you learned so far? What are you liking, not liking? What is the ideal timing for plant number two? Would this be a different geography than your existing one? How are you thinking about that?

Speaker #7: What do you like and not liking? And then what's the ideal timing for plant number two? And would this be a different geography than you're in, existing one?

Speaker #7: How are you thinking about that?

Speaker #6: What I don't like is the red tape with municipality approvals. When you meet all the requirements that you need in order to get the plant up and running operational.

Jeremy Spivey: What I do not like is the red tape with municipality approvals. When you meet all the requirements that you need in order to get the plant up and running operational, I feel for anybody who is in the entitlement space in any end market, in any different municipality, and the requirements that are ongoing and just come out of nowhere. We are going to get this plant on plane. The other plant has the approvals from a zoning standpoint and from an air quality permit standpoint. We have not begun the process of site plan or ordered the equipment. We will probably give this one to two quarters of runs before we completely have a full grasp on what size and model and all the different There are 100 different types of sizes of these plants.

Speaker #6: I mean, I can just I feel for anybody who's in the entitlement space in any end market in any different municipality, and the requirements that are ongoing and just come out of nowhere.

Speaker #6: But we're going to get this plan on plane. The other plant has the approvals from a zoning standpoint and from an air quality permit standpoint.

Speaker #6: We have not begun the process of site plan, or ordered the equipment. We'll probably give this one to two quarters of run before we completely have a full grasp on what size and model and all the different—there’s a hundred different types of sizes of these plants.

Speaker #6: And once we really get our feet underneath us and get this thing going and seeing what it looks like on plane is when we'll make that determination.

Jeremy Spivey: Once we really get our feet underneath us and get this thing going and seeing what it looks like on the plant is when we will make that determination. But the land is secured, it is owned, the permits are in place. All we have to do is go get the site plan and infrastructure zone approvals from the municipality.

Speaker #6: But the land's secured. It's owned. The permits are in place. All we have to do is go get the site plan and construction drawing approvals from the municipality.

Speaker #7: Great. And then would that be a similar just pure margin uplift situation, or would this second plant in theory be where you start selling materials to third parties?

Noah Levitz: Great. Would that be a similar just pure margin uplift situation, or would this second plant, in theory, be where you start selling material to third parties?

Speaker #6: It'll be both. It'll be both. And again, we anticipate this is going to serve Aviator Paving in the Triangle market. So, when this plant—our first plant—comes online, we anticipate that bringing a lift to revenue eventually, because we're going to be able to do more work.

Jeremy Spivey: It will be both. Again, we anticipate this is going to serve Aviator Paving in the Raleigh market. So when our first plant is online, we anticipate that bringing a lift to revenue eventually because we are going to be able to do more work. We can spend a lot of time talking about this, but having a plant compresses schedule and does a lot of things for us to allow us to do more work, which equals more revenue. So once we get to a level where we can support it on our own is when we will pull the trigger. Then naturally, we will have additional capacity where we can start focusing on outside sales to third parties. That will just be an added benefit to those, and it is not modeled in our forecast.

Speaker #6: It compressed and we can spend a lot of time talking about this. But having a plant compress a schedule and does a lot of things for us to allow us to do more work, which equals more revenue.

Speaker #6: So once we get to a level where we can support it on our own is when we'll pull the trigger. And then naturally, we'll have additional capacity where we can start focusing on outside sales to third parties.

Speaker #6: And that will just be an added benefit to the it's not modeled in our forecast.

Speaker #7: Gotcha. Thank you. And then my last question, it seems like Raleigh today is your only fully turnkey vertically integrated market. Charlotte, you've made four acquisitions now.

Noah Levitz: Got you. Thank you. My last question. It seems like Raleigh today is your only fully turnkey, vertically integrated market. Charlotte, you have made four acquisitions now, Georgia with ALGC, plus organic activity, bringing in some crews from North Carolina, plus now Allied Paving. How turnkey are your markets outside of Raleigh? What inning would you say they are in for Charlotte, Atlanta, and Greensboro? Thank you.

Speaker #7: Georgia, with ALGC plus organic activity, is bringing in some crews from North Carolina. Plus, now Allied Paving. How turnkey are your markets outside of Raleigh?

Speaker #7: What inning would you say they're in for Charlotte, Atlanta, and Greensboro? Thank you.

Speaker #6: Yeah. So Greensboro is in the second inning, Charlotte's in the sixth or seventh inning, and Atlanta's probably in the fifth inning. We have a lot of specialized services that we start bringing in-house—retaining walls, erosion controls, some other things, clearing and grubbing.

Jeremy Spivey: Yeah. Greensboro is in the second inning. Charlotte's in the sixth or seventh inning, and Atlanta's probably in the fifth inning. We have a lot of specialized services that we start bringing in-house, retaining walls, erosion control, some other things, clearing and grubbing. There's a lot of specialty services that complete the full mix. In Charlotte, Piedmont helps us because the only way to start adding all these specialized services and having it be running efficient is with scale, and you can't scale this business without the right utilities. You have to have that capacity in-house to keep everybody moving without gaps in schedule. As we get those to an elevated level, then we start layering in some of these smaller, more specialized services like retaining walls, clearing and grubbing, and these others.

Speaker #6: There's a lot of specialty services that complete the full mix. In Charlotte, Piedmont helps us because the only way to start adding all these specialized services and having it be running efficient to scale.

Speaker #6: And you can't scale this business without the wet utilities. You have to have that capacity in-house to keep everybody moving without gaps in schedule.

Speaker #6: And so, as we get those to an elevated level, then we start layering in some of these smaller, more specialized services like retaining walls, clearing and grading, clearing and grubbing, and these others.

Speaker #6: So again, I think Charlotte's in the sixth or seventh inning. And ALGC and Georgia's probably in the fifth or sixth. And Greensboro, which is a very immature market for us, is in the second or third inning.

Jeremy Spivey: Again, I think Charlotte's in the sixth or seventh inning, and ALGC in Georgia is probably in the fifth or sixth, and Greensboro, which is a very immature market for us, is in the second or third inning. That one, all these we'll be responsibly scaling as we continue to focus also on other markets and other platforms that we want to enter into.

Speaker #6: And that one—all of these—will be responsibly scaling as we continue to focus also on other markets and other platforms that we want to enter into.

Speaker #7: Great. Thank you.

Noah Levitz: Great. Thank you.

Speaker #1: Thank you. And that concludes our question and answer session. I would like to turn the call back to Jeremy for any closing remarks.

Operator: Thank you. That concludes our question and answer session. I would like to turn the call back to Jeremy for any closing remarks.

Speaker #6: Thank you, operator. And thank you all for joining us this morning. I want to thank the Cardinal team again for everything they've accomplished so far this year.

Jeremy Spivey: Thank you, operator, and thank you all for joining us this morning. I want to thank the Cardinal team again for everything they've accomplished so far this year. We have a lot of runway ahead of us, and we are going to keep using it. Thank you, and hope you have a great day.

Speaker #6: We have a lot of runway ahead of us. And we're going to keep using it. Thank you. And I hope you have a great day.

Operator: Ladies and gentlemen, this does conclude today's conference call. We thank you for your participation, and you may now disconnect. Have a great day.

Q2 2026 Cardinal Infrastructure Group Inc Earnings Call

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