MasTec (MTZ) Q3 2026 earnings review
MasTec's order book hits a record, but delays trim profit
MasTec's electrical utility business is booming while permitting delays and telecom deferrals hold back its other divisions. The North American infrastructure builder grew third-quarter sales 30% to $5.2 billion and lifted its 18-month order backlog to $24.5 billion, led by its Power Delivery division and the July purchase of electrical contractor Superior. However, chief executive Jose Mas kept pipeline crews on payroll while waiting for project permits, which squeezed profit margins and trimmed the middle of the full-year profit outlook.
| Revenue | $5.15B +29.9% from a year ago |
|---|---|
| Profit per share, excluding one-offs | $2.96 +19.3% from a year ago (plan was $2.98) |
| 18-month backlog | $24.55B +46.3% from a year ago |
| Full-year profit per share outlook | Cut $0.19 middle of the range: $9.11 (prior $9.30) |
⚖️ Verdict: ⚪ Neutral
The story is unchanged because booming utility and clean-energy orders offset near-term execution hiccups in pipelines and telecom. Even excluding Superior's pre-deal order book, MasTec added about $1.8 billion to its backlog in a single quarter by our math, backing management's claim that missing 2026 pipeline profit is shifting into 2027. The bad news: telecom revenue and backlog both shrank, and acquisition borrowing pushed net debt up 91% from year-end to $3.7 billion.
The question now is whether the $24.5 billion backlog converts into higher margins and cash in the fourth quarter, or whether project delays and working capital keep absorbing the growth. By our math, MasTec must collect at least $612 million of operating cash flow in the final quarter to meet its $1 billion full-year goal. Fourth-quarter cash flow and pipeline margins will settle it.
🐂 Bull Case
Power Delivery Carries Revenue and Profit Growth
Power Delivery, the division that builds electrical transmission lines, substations and power systems for utilities and data centers, is driving MasTec's growth. In July, the infrastructure builder closed its purchase of The Superior Group, an electrical contractor for large-load facilities, and folded it into this division. Chief executive Jose Mas said performance came from "both legacy operations and Superior, with both groups exceeding revenue and EBITDA guidance for the quarter".
- Power Delivery revenue: $1.84 billion, up 65.2% from a year ago
- Division EBITDA (earnings before interest, taxes, depreciation and amortization): $241.5 million, up 131.6%
- Division EBITDA margin: 13.2%, up 3.8 percentage points from 9.4% a year ago
- Division 18-month backlog: $8.91 billion, up 73.8% from a year ago and 40.4% from last quarter
This matters because Power Delivery is now the group's largest and most profitable division by dollar earnings, offsetting profit drops in pipelines and telecom. However, the release combines Superior with existing utility operations, so investors cannot see how much of the 65.2% revenue jump came from businesses owned a year ago.
What to watch: the quarterly filing's acquisition note for Superior's standalone revenue and profit since July. A strong underlying growth rate in the older utility business would show the margin jump to 13.2% is not just from changing the business mix.
Backlog Reaches $24.5 Billion on Utility and Pipeline Awards
MasTec's 18-month backlog — the revenue it expects to earn over the next year and a half from signed contracts and service agreements — rose to a record $24.55 billion. That is up $3.16 billion, or 14.8%, from last quarter. Even if you strip out the $1.4 billion backlog Superior reported before the deal closed, the builder added about $1.76 billion of new backlog by our math.
- Clean Energy and Infrastructure backlog: $8.32 billion, up $524 million from last quarter for a seventh straight gain
- Pipeline Infrastructure backlog: $2.27 billion, up 26.4% from last quarter, helped by new awards and an August acquisition
- Power Delivery backlog: up $2.57 billion from last quarter to $8.91 billion
What to watch: fourth-quarter contract awards and the conversion of this record order book into 2027 revenue. Continued sequential additions in Clean Energy and Power Delivery would confirm that utility and renewable customers are still signing multi-year build programs.
🐻 Bear Case
Pipeline Permitting Delays Cut Full-Year Profit Plan
Finance chief Paul DiMarco described the full-year outlook update as "a range that results in Adjusted EBITDA change of ~1% at the midpoint versus our previous guidance". That framing downplays a rare step back: after raising its full-year profit plan two quarters in a row, MasTec cut the middle of its Adjusted EBITDA range by $17.5 million and its Adjusted diluted earnings per share range by 19 cents, while its former single-point targets now sit as the ceiling.
The cut happened because "permitting related access delays on certain Pipeline projects impacted margins, as crews and equipment were underutilized", Mas said. Rather than lay off workers, the contractor kept its crews on payroll for upcoming work, which pushed Pipeline EBITDA margin down 5.0 percentage points from a year ago to 10.4%. Across the whole business, costs of revenue (the direct expense of labor, equipment and materials) rose by 0.7 percentage points of sales to 87.2%, and intangible asset amortization rose by 0.6 percentage points to 1.5%, pulling operating margin down 0.9 percentage points to 5.3%.
What to watch: fourth-quarter Pipeline EBITDA margin and whether delayed revenue arrives in early 2027. DiMarco said "Revenue and earnings not recognized this year as a result of project timing are expected to shift into 2027", so a rebound in Pipeline margins next quarter would show that production has ramped now that construction has started.
Telecom Spending Deferrals Shrink Segment Profit and Backlog
Communications, the division that installs wireless towers and fiber-optic cables for telecom carriers, weakened further in the third quarter. Telecom customers delayed spending in the second half of the year, and MasTec is now "streamlining our operations, procurement strategies, and support models to reduce indirect costs, including exiting underperforming markets", Mas said.
- Communications revenue: $806.9 million, down 11.8% from a year ago
- Division EBITDA: $54.0 million (6.7% margin), or $61.1 million (7.6% margin) excluding $7.1 million of restructuring charges, down from 11.3% a year ago
- Division 18-month backlog: $5.05 billion, down $408 million (7.5%) from last quarter
- Full-year restructuring charges: $14 million to $16 million planned for 2026
This matters because the division's margin fell from 8.2% in the second quarter to 7.6% excluding one-offs, missing management's prior goal of a second-half margin recovery, and Mas does not expect the cost cuts to lift profit until 2027.
What to watch: fourth-quarter Communications backlog and revenue. Another sequential drop in the division's order book would indicate that telecom carriers are holding back 2027 budgets rather than just pausing late-2026 work.
Acquisition Borrowing Nearly Doubles Net Debt
To buy Superior and a pipeline contractor in the third quarter, MasTec drew on a new $700 million term loan "to finance a portion of the cash consideration for the acquisition of Superior" and issued $650 million of 5.850% notes due in 2036. That borrowing pushed net debt (total debt minus cash) up to $3.69 billion, up 90.6% from $1.93 billion at the end of 2025.
Operating cash flow improved in the third quarter to $267 million from $89 million a year ago, bringing the nine-month total to $387.8 million. However, DiMarco repeated the company's plan to generate over $1 billion in operating cash flow for the full year. By our math, hitting that $1 billion floor requires at least $612 million of operating cash flow in the fourth quarter alone — 64% more than the $373 million it generated in the fourth quarter of last year.
What to watch: fourth-quarter operating cash flow and customer collection speed in the full-year report. A cash shortfall in the final quarter would leave net debt elevated heading into 2027.
Risks this quarter didn't answer
Four standing concerns could not be tested from the earnings release because their numbers live in the quarterly filing or conference call.
- Data-center and large-load concentration: the release highlights utility and large-load demand across segments, but does not quantify what share of revenue or backlog depends on data-center construction.
- Renewable energy policy and input costs: the release lists the One Big Beautiful Bill Act, tariffs and interest rates as risk factors, though Clean Energy backlog still rose 6.7% from last quarter; the call will test customer ordering behavior.
- Workforce additions and labor utilization: Pipeline kept crews on payroll during permit delays, and the release gives no updated employee headcount.
- Related-party transactions: construction revenue and receivables tied to businesses owned by the founding family are disclosed in the quarterly 10-Q filing, which is not yet published.
👓 Other Themes
Regulatory Permitting and Clean Energy Policy Risks Remain
MasTec's projects depend on government permits and energy policy, which creates scheduling risk across its divisions. In the third quarter, permitting delays held back Pipeline construction starts, while the release's risk disclosures highlight potential cuts to renewable energy support under the One Big Beautiful Bill Act, alongside tariff and trade actions that can raise steel, aluminum and equipment costs for customers.
💲 Other KPIs
Revenue in the renewable energy and civil construction division rose 33.9% from a year ago, after growing 45.2% in Q1 and 43.4% in Q2. Division EBITDA rose 29.3% to $149.3 million, while its EBITDA margin edged down 0.3 percentage points from a year ago to 8.2%.
Free cash flow — operating cash flow minus capital equipment purchases, plus cash from selling used equipment — rebounded to $206 million from negative $59 million last quarter and $36 million a year ago. For the first nine months of 2026, free cash flow reached $158.5 million against $35.6 million a year ago.
Diluted weighted average shares rose 1.5% from a year ago and 1.2% from last quarter's 78.87 million. The increase reflects shares issued as part of the purchase price for Superior in July, while the company has not bought back shares for five straight quarters.
🔮 Guidance
Raised. The full-year revenue plan moved up $100 million to $18.3 billion, or 28.0% growth for the year. By our math, that leaves $4.95 billion of revenue for the fourth quarter, up 25.5% from a year ago against 29.9% in the third quarter. It is the third raise this year, and smaller than the prior two: +$500M, +$700M, +$100M.
Cut. The engineering group replaced its $1.60 billion target with a range whose middle is $1,582.5 million (+37.6% for the year), down $17.5 million. By our math, that leaves $428.2 million for the fourth quarter (+26.6% from a year ago), down from $486.4 million in the third quarter because pipeline permit delays slowed production. Prior moves this year were +$50M and +$100M.
Cut. The full-year margin plan stepped down from 8.8% to a range of 8.6% to 8.7%, compared with 8.0% in 2025. By our math, the middle of the full-year profit and sales plan points to an 8.66% margin in the fourth quarter, down from 9.4% in the third quarter.
Cut. Reported net income is now planned at $511 million at the middle of the range (+21.1% from 2025), down $28 million from the prior $539 million outlook. By our math, that leaves $127.9 million for the fourth quarter, down from $167.7 million in the third quarter, weighed down by $14 million to $16 million of full-year restructuring charges and $9 million of acquisition and debt charges.
Cut. Profit excluding one-offs (before non-controlling interests) is now set at a $770 million middle (+43.1% from 2025), down $15 million from the prior $785 million target. By our math, that leaves $208.1 million for the fourth quarter, down from $253.2 million in the third quarter.
Cut. The middle of the range is $5.85 per share (+15.4% from 2025), down 35 cents from the prior $6.20 target. It is the second straight cut to reported profit per share this year (+$0.15, -$0.57, -$0.35), driven by higher intangible amortization ($236 million for the year), restructuring charges and a higher share count.
Cut. Profit per share excluding one-offs is planned at $9.11 at the middle of the range (+39.1% from 2025), down 19 cents from the prior $9.30 single-point plan. By our math, that leaves $2.54 per share for the fourth quarter (+22.7% from a year ago), compared with $2.96 in the third quarter. Prior moves this year were +$0.39 and +$0.51.
Unchanged. Management still expects over $1 billion of operating cash flow for 2026. With $387.8 million collected in the first nine months, the plan requires at least $612.2 million in the fourth quarter by our math, a 64.1% jump over the $373 million generated in the fourth quarter of 2025.
❓ Key Questions
What were Superior's standalone revenue, profit and backlog in Q3?
Management committed on last quarter's call to updating Superior's $1.4 billion backlog in the third quarter, but the release blends Superior into Power Delivery. Without the standalone numbers, investors cannot calculate underlying sales or backlog growth.
What share of revenue and backlog comes from data centers?
The release points to utility and large-load infrastructure as a primary growth driver, yet MasTec has never disclosed what percentage of its $24.5 billion backlog or revenue is tied to data-center construction.
How much of the $612 million Q4 cash flow target comes from overdue bills?
Reaching over $1 billion of full-year operating cash flow requires at least $612 million in Q4. Investors need to know whether billing collection days (DSO) finally fell from 72 days in Q3.
Which telecom markets is MasTec exiting, and what will the savings be?
MasTec booked $7.1 million of Communications restructuring charges in Q3 and expects $14 million to $16 million for the year. Management has not yet quantified the expected 2027 annual cost savings or the revenue lost from exited markets.