Sterling Infrastructure, Inc. (STRL) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Sterling Infrastructure Second Quarter Webcast and Conference Call. [Operator Instructions] As a reminder, this call is being recorded on Tuesday, August 4, 2026. I would now like to turn the conference call over to Noelle Dilts, Vice President of Investor Relations and Corporate Strategy. Please go ahead.

Good morning to everyone joining us, and welcome to Sterling Infrastructure's Second Quarter 2026 Earnings Conference Call and Webcast. I'm pleased to be here today to discuss our results with Joe Cutillo, Sterling's Chief Executive Officer; Nick Grindstaff, Sterling's Chief Financial Officer; and Dan Govin, Sterling's Chief Operating Officer. As a reminder, there are accompanying slides on the Investor Relations section of our website. These slides include details on our full year 2026 financial guidance. Before turning the call over to Joe, I will read the safe harbor statement. The discussion today may include forward-looking statements. Actual results could differ materially from the statements made today. Please refer to Sterling's most recent 10-K and 10-Q filings for a more complete description of risk factors that could affect these projections and assumptions. The company assumes no obligation to update forward-looking statements as a result of new information, future events or otherwise. Please also note that management may reference EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income or adjusted earnings per share on this call, which are all financial measures not recognized under U.S. GAAP. As required by SEC rules and regulations, these non-GAAP financial measures are reconciled to their most comparable GAAP financial measures on our earnings release issued yesterday afternoon. I'll now turn the call over to our CEO, Joe Cutillo.

Thanks, Noelle. Good morning, everyone, and thank you for joining Sterling's Second Quarter 2026 Earnings Call. Sterling delivered another outstanding quarter with revenue growth of 90% and adjusted diluted EPS growth of 116% from $2.69 to $5.80. These results reflect the strength of our strategy, accelerating demand across our markets and the exceptional execution by our teams. Adjusted EBITDA more than doubled in the quarter with margins expanding 150 basis points year-over-year to reach 22%. The current market demand allows us to be selective. Rather than chasing every opportunity, we are concentrating on the projects that strengthen our customer relationships, position us for future growth and enhance our margins. Signed backlog at quarter end totaled $4.3 billion, up 116% year-over-year and combined backlog increased 150% to reach $5.6 billion. In addition, we have visibility into high probability future phase opportunities that exceed $1.4 billion. Together, our signed backlog, unsigned awards and future phase opportunities provide visibility into a total addressable pool of work of more than $7 billion, an increase of more than $2.5 billion since year end. The growth in our backlog and future phase work in the quarter, together with our visibility into customers' multiyear capital plans further strengthens our confidence in our multiyear outlook. Now I'd like to discuss our segment results for the quarter in more detail. In E-infrastructure, second quarter revenue grew 192% and mission-critical activity, including work on data centers and semiconductor campuses was the primary growth driver in the quarter. E-Infrastructure adjusted operating income increased 148%, and adjusted operating margins remained strong at 24%. Margins continue to benefit from our strong execution on large time-sensitive, mission-critical projects. Revenue for our site development operations more than doubled on an organic basis, and adjusted operating margins expanded both year-over-year and sequentially. We saw robust growth across each of our geographies with particular strength in our Rocky Mountain division, where revenue increased nearly 700%. We also saw strong increases in our Northeast business as work on our large semiconductor campus ramped up. CEC delivered 140% revenue growth compared to its prior year second quarter, with margins strengthening both year-over-year and sequentially. The Texas market remains exceptionally strong. During the quarter, CEC secured several additional project wins contributing to a $1.7 billion increase in its combined backlog since year-end 2025. We Additionally, we are seeing continued success on winning projects where we are performing electrical and site work in an integrated manner. We continue to see tremendous opportunities ahead in both electrical and site development. In aggregate, our E-Infrastructure signed backlog, unsigned electrical awards and future phase site development opportunities now exceed $6 billion, representing an increase of $2.7 billion since year-end. Mission-critical work, including data centers, large manufacturing projects and semiconductor represented more than 92% of E-Infrastructure signed backlog at the end of the quarter. Future phase work is predominantly related to mission-critical projects. Moving to Transportation Solutions. Second quarter revenue declined 20%. The reflecting our ongoing reallocation of resources from transportation projects to higher-margin infrastructure projects. This shift is now taking place at an accelerated pace as activity on our infrastructure projects in the Rocky Mountain and Texas regions has increased. This was the first quarter that our Rocky Mountain operation generated more infrastructure revenue than transportation revenue. In addition, we are continuing to wind down our low bid heavy highway work in Texas, which is nearing completion. Transportation Solutions adjusted operating margins reached 19.5% in the quarter, up more than 500 basis points from the prior year period, and adjusted operating income grew 8%. The strength in margins and profitability was driven by our focus on pursuing the most attractive opportunities within the transportation market. We ended the quarter with Transportation Solutions backlog at $969 million, a 35% year-over-year increase. This primarily reflects the conversion of unsigned backlog to sign backlog. On a combined backlog basis, Transportation Solutions is up 8% from second quarter 2025 and is down 11% from year-end [ 2025 ]. Shifting to Building Solutions. Segment revenue declined 1% in the quarter driven by relatively flat homebuilder activity and adjusted operating margins were 9.9%. We continue to anticipate that the residential market will face strong headwinds throughout 2026. The strength of Sterling's diversified portfolio and strategy to focus on growth in high-margin end markets enabled us to deliver another fantastic quarter. With that, I'd like to turn it over to Nick to give you more details on some of our financial metrics and 2026 guidance. Nick?

Thanks, Joe, and good morning. I'll begin with our consolidated backlog metrics. Our second quarter backlog totaled $4.3 billion, a 116% year-over-year increase. Backlog increased 50% year-over-year on an organic basis despite the strong revenue burn in the quarter. Combined backlog of $5.6 billion increased 150% or 36% on an organic basis. Second quarter 2026 book-to-burn ratios were 1.4x for backlog and 1.3x for combined backlog exclusive of the impact of the Stone Ridge acquisition. Turning to cash flow. Cash flow from operating activities for the first half of 2026 was $328 million. We expect continued strength in operating cash flow for the full year. Cash flow used in investing activities included $70 million of CapEx. Given the significant increase in our full year 2026 revenue expectation over the past 6 months, and our visibility into future demand, we are increasing our CapEx guidance to $130 million to $140 million, which is a $30 million increase from prior guidance. These incremental investments in our fleet will drive productivity and expand capacity. First half 2026 cash flow from financing activities was a $48 million outflow including share repurchases of $35 million at an average price of $511.18 per share. Remaining availability under the existing repurchase authorization was $339 million at the end of the quarter. We will remain opportunistic in our approach to share repurchases. Moving to our balance sheet. We ended the quarter with $464 million of cash and debt of $284 million for a cash net of debt balance of $181 million. On July 2, we closed on the extension and expansion of our revolving facilities to $1.5 billion and extended the maturity to July 2031. We used this facility to pay off our existing term loan. The amended facility provides additional flexibility as we look to grow the business, both organically and through M&A. Our current backlog, visibility and strong market tailwinds position us for an even better year than we originally anticipated. We are increasing our guidance ranges for 2026 to reflect both the improved outlook for the core business as well as the addition of Stone Ridge. Our guidance ranges are: revenue of $4 billion to $4.15 billion, diluted EPS of $17.25 to $17.85 and adjusted diluted EPS of $19.70 to $20.30, EBITDA of $829 million to $854 million, adjusted EBITDA of $891 million to $916 million. Now I will turn the call back to Joe.

Thanks, Nick. Positive trends we've been talking about over the past several quarters have continued to accelerate. We're seeing projects become larger, more complex and longer in duration, which reflects both the scale of what's being built and the importance of these assets to our customers. Our customers are asking us to do more. We are continuing to get pulled into new geographies because they know Sterling can deliver complex projects faster and safer than anyone else. . Our customers' recognition with our critical contribution to their success has allowed us to participate in their long-term planning process. What we're seeing ahead is going to be far greater than we originally anticipated. Our focus today is making sure we stay ahead of what's coming. Internally, we are working to ensure that we have the right people, resources and capacity in place to support sustained strong growth in the years ahead. I'm going to hand the call over to Dan Govin, our Chief Operating Officer, to discuss some of these key areas of focus. Dan?

Thanks, Joe. Planning for the future is a core part of our strategy. We aren't just focused on meeting today's demand. We're making the investments now in our people, equipment and capabilities that will support sustained growth for years to come. Our people remain our greatest competitive advantage. As our customers undertake larger time-sensitive, mission-critical projects across the country, our experienced project managers and operating teams are setting us apart through exceptional operational execution. That's why we are increasing our investments in developing, attracting and retaining the industry's best talent. Through expanded recruiting efforts and training programs like Sterling Academy and CEC University, we're building the workforce skill sets that will support our accelerated growth. Combined with our strong reputation for safety, quality and execution, these investments position Sterling as the employer of choice, helping us to attract talent as we enter into new markets. We're also investing strategically in our equipment fleet as we grow and upsize our fleet, we're increasing our capacity and improving productivity and operational efficiency in new geographies. This creates benefits that support margin expansion over time. At CEC, we are making great progress in ramping up production at our prefabrication facilities, which will drive productivity with our field electricians and provide cost savings. And finally, we're complementing these organic investments with tuck-in acquisitions. These acquisitions bring a strong local leadership while expanding our presence in attractive markets. The recent Stone Ridge acquisition is a great example of this strategy in action as it positions us well for coming activity in the Pacific Northwest. Together, these strategic investments ensure we're well positioned to capitalize on significant opportunities ahead. Now I will hand the call back to Joe.

Thanks, Dan. Turning to our segment expectations for 2026. In E-Infrastructure Solutions, we continue to see exceptionally strong demand for large mission-critical infrastructure, and we believe this will support meaningful growth for many years to come. In the data center market, customer activity is stronger than ever. Projects are becoming larger, lasting longer and expanding into more markets across the country. Not only are we seeing more new projects. We're seeing many of our existing projects grow well beyond their original scope. Much of this incremental opportunity is not yet reflected in our backlog or future phase opportunities, giving us additional confidence in the runway ahead. . With the CEC acquisition, we have broadened our capabilities and are even better positioned to serve our data center customers. In the semiconductor market, we are making very good progress on our Northeast project and are running ahead of schedule. We expect to generate significant revenue on this project in the third quarter with a weather-related slowdown in the fourth quarter. We believe our exceptional performance on this project will position us in the semiconductor market as the go-to solution for large complex projects, just like we have done in the data center market. In addition to the data centers and semiconductor, we are seeing some momentum in the broader manufacturing market. During the second quarter, we were awarded the initial scope of work on an electric vehicle plant in Atlanta. In addition, there are still several opportunities we believe could be awarded in 2026 or early 2027. For full year 2026, we now expect to deliver E-Infrastructure segment revenue growth of over 100%, including the contribution from CEC and Stone Ridge. We anticipate that the legacy site development business will grow at rates approaching 70% or higher as several of our large projects accelerate. Adjusted operating profit margins for E-Infrastructure are expected to be in the mid-20% range. In Transportation Solutions, we are in the final year of the current federal funding cycle, which concludes September 2026. We have built over 2 years of backlog and are continuing to pursue select attractive opportunities. For 2026, we are now anticipating a decline in Transportation Solutions revenue in the 7% to 10% range as we are shifting resources towards E-Infrastructure work at a faster pace. We expect significant year-over-year adjusted operating margin expansion roughly in the range of 150 to 200 basis points. In Building Solutions, we anticipate that revenue will decline modestly in 2026 and that adjusted operating margin will be in the high-single to low-double digits. We continue to see opportunities for share gain coming out of the down cycle. Shifting gears as we look forward to the second half of the year and early 2027, we believe that the strong levels of bid activity we are seeing today will translate into strong awards. However, given the lumpiness and timing, we could see softer third quarter awards with higher levels in the fourth quarter and early 2027. This, coupled with our forecast for strong revenue burn in the third quarter would result in a sequential backlog decline in the third quarter. This would reflect award timing not a change in demand. On the acquisition front, we are continuing to look for acquisitions that are the right strategic fit to enhance our service offering, expand our geographic footprint and add capacity. We are seeing more high-quality acquisition targets in the market today than a year ago. Moving to our full year 2026 guidance. The midpoint of our ranges versus prior year would represent a 64% revenue growth and 84% adjusted EPS growth and a 79% adjusted EBITDA growth. With that, I'd like to turn it over for questions.

[Operator Instructions] Our first question is from Brent Thielman from Oppenheimer.

Congrats on a great quarter. Maybe first question, if I look at the backlog, you're up where you were a year ago. You have Stone Ridge also contributing here in the back half. Maybe a little surprised you wouldn't see a bigger step up in revenue in the second half? And I guess I'm wondering, are there longer than usual lead times associated with some of the backlog? Or is this more work start kind of later in the year or 2027? Maybe you could just cash that out.

Yes. No, we feel very confident in the backlog that's there, Brent, in the projects are happening on schedule and taking place. I will tell you, we're being very conservative in the fourth quarter right now. We never know what the weather is going to be in the fourth quarter. If we have weather like last year, I think we'll have a much stronger fourth quarter than we have in our forecast. But frankly, we're just being conservative on the outlook. We got plenty of work ahead of us and plenty of opportunities coming, especially as we get into the fourth and first quarter, we see some really strong bid activity that's going to take place there. So no, nothing of a slowdown, more of a cautious behavior on us. We've raised guidance a couple of times. We've come up significantly in all the areas. We would have never expected CEC. We've had about a year now, and we've doubled that business already. So we're seeing great progress just the conservative nature we have.

Understood. Okay. And then enough point on CEC, Joe, maybe just the profile of the new work awarded or pending, it seems like you've seen a huge step-up in award activity at the electrical business. Just talk about maybe how the size and scope has changed on some of the pursuits maybe the profile of margins you're starting to see come through and kind of your thought process I know margins all for the business going forward.

Yes, we're tickled to death with CEC and what they're doing. If we step back and think when we made the acquisition, we thought it would take us a year to fill their capacity. And we actually talked about shifting some resources to the Southeast. We filled their capacity up in about 90 days. And as a result, they've grown nicely. I think what -- what you don't see in the numbers is kind of what's happening and what's coming from CEC. One of the strategic things we said we're going to do is they are in some end markets with some services then we said we were going to get out of it. We're in the process of getting out of those. It takes a little time. So when we look at the business, we look at it from the old pieces that we're getting out of and then the remaining business as it goes forward. And when we look at that piece, the margins are going up very, very nicely in that area. But also the job size is going up significantly and I think one of the really rewarding things for us in the quarter, again, that doesn't show up is CEC is now getting the second buildings on data centers that they're at, which says they're performing at or above customer expectations and they're giving them the next phases and the next levels of work. So everything is coming together exactly as we had hoped. They're doing a great job. They're growing very, very rapidly and adding capacity. And we see, candidly, if we had 1,000 or 2,000 more electricians, we'd be growing it even faster. So we've got a lot of programs in place on not only developing the electricians, but we got a full recruiting team that's recruiting every week to bring those electricians in. So it's been great. The only downside, which is the only reason I could see that our stock is not up exponentially today and looks like it's down is the mix makes our margin look like it's lower. And if you look at every element of E-Infrastructure margins were up in every single piece of it, the only thing that drove the difference in margin is mix. When we have CEC grow 140%, we love that. We'll take that all day long. When we have our Rocky Mountain business and we convert it for transportation to E-Infrastructure, and they grow 700% in a year, we'll take that.

Understood, Joe. I appreciate the clarification there. Just the last one, maybe an update on the cross-selling opportunities between our CEC and the legacy site development business and how that's progressing?

Yes. So we're on more sites today than we were on in the second quarter. And as we look forward, a lot of the data centers that will be coming out we've had -- let me step back, let me just say this, we've had more opportunities that have joint efforts that we have capacity in the electrical side. So as we're building up that capacity, Brent, that number will grow. The reason it's not growing even faster than it is, it's growing faster than we thought. We thought it would take us until this time to be on our first one. We're on 3 or 4 now, it's just pure capacity. Our customers are asking it for it. If we had a union operation, I would tell you we'd be on a semiconductor plant up in New York right now with the electrical side. So we're getting asked. They see the value of our acquisition. Frankly, it's even stronger than we anticipated. We're pretty bullish on it. So we're very happy with that. The faster we can ramp up additional capacity or as you know, we're looking at -- continue to look at acquisitions in and around this space, we can add some capacity there. The more joint projects will be on.

And our next question is from Michael Louie DiPalma from William Blair.

Joe, you mentioned how the CEC has lower margins relative to site development and how the CEC margin should grow very nicely. From a high level, can you discuss like where CEC margins could grow to in the long term? And just in general, explain and why is there such a significant variation between the margins for sick development versus electrical services. And should those margins converge over time?

Yes. So let me make sure people don't get too delusional. We don't ever expect electrical margins to be up at the peak of our site development. There are so many more complexities and differences with the site development and things we can do to truly change the scope and drive productivity in those projects versus an electrical project is pretty laid out, right? I mean, the design is there, the amount of wire, et cetera, et cetera, I'm overly simplifying it, but it's laid out. So there's always so much you can get there. However, we're not happy with the margins or CEC with where they are today. And as we move to a better mix of projects, we see 300 to 500 basis points on top of some things we're doing internally of margin improvement, and we've said over 12 to 18 months. I think we'll see some of that sooner. The faster we get out of some of this other stuff, the faster that's going to come through. We're watching that very closely. We watch it every month, Louie and we have seen great progress. The team is doing a fantastic job there. If I step back and think 3 to 5 years, I don't know why today, the electrical world is kind of low double-digit margins, call it, 10% to 12% EBITDA margins. I don't know why we can get that close to 20%. I really don't. Based on the project size, scope and the quality of the projects that's our goal is over a long period of time to get there. And we've been pretty successful at driving margins and our business is much higher than anybody else, and we feel like we can do the same.

And I was also wondering, could you provide more detail in terms of why the future phase work metric doesn't always capture the full visibility that you have in terms of your pipeline?

Great question. One of the things is you spend enough time with us, and most of the people have spent enough time with us, we're pretty conservative. And if anything, we want to overperform and make people happy. But one of the things we do not include and we're thinking about how we should be communicating this better is we're on a lot of projects today that have a defined scope to build out a piece of property. So let's just say we have 600 acres of land. And they say, we're going to build 5 buildings on the first 300 acres. And then we're going to build 5 buildings on the next 300 acres. We only talk about the first 300 acres, okay? We know that when they're finished with that, we're going to move the equipment to the next one. But that project hasn't been perfectly defined and articulated. But we know that other projects we've been on that happens. But the other thing that's happening, Louie, that it is a relatively new dynamic is we are seeing them purchase incremental property on projects that we're on. So let's just say we're on a 300-acre project today. There has to be one that's close to that. They have now purchased another 600 acres touching that property that they're going to expand and grow that. That's not in any of our numbers. Now we're there. We're working with the customers. We're working with them on plans. We're working with that on the future. These projects we've historically have said have been 3 years, we just got out of our executive leadership team meeting, and we're looking at projects with our team. And a number of projects, we're going to be on 5 to 8 to 12 years. If they continue to expand on this property is unbelievable. So we don't put any of that into right now our future face work. And we're trying to figure out a way to still remain extremely conservative, but I don't feel like we're painting adequate picture for the outside community to understand what our guys say they're going to be on a job for 5 to 8 years. We don't talk about that a lot. We talk about the 3 years because that's the project scope we're doing. The people just don't understand the size and scope of these jobs and the duration. It is getting significantly bigger, which is perfect for us. Now remember, not only do we have the site side, now we have the electrical side that stays there after the site is done for another couple of years. So our visibility keeps getting better and better, project size keeps growing. So we feel very confident the opportunity is much bigger than we've been talking about. But what it's also done strategically for us is we had a very, very aggressive organic growth strategy put in place we think and a strategy to build that capacity. When we step back and we started looking at these projects and the size of the ones we're just on, in addition to the ones that are coming, we said, my goodness, we've got to really accelerate the rate in which we're adding capacity, just to keep up with this. So that's all exciting stuff. It's a challenge for us, obviously. We've always felt comfortable with 20% to 30% organic growth. This year, we're growing a hell of a lot more than that. And we've got to figure out how to keep up with that pace.

Our next question is from Brian Brophy from Stifel.

Yes. Nice quarter. Can you give us a sense for how pricing in terms and conditions are trending within your end for a backlog today versus a year ago?

We're not seeing anything fundamentally shift. We've seen a few attempts on the electrical side to add some terms and conditions into some things if we have not accepted frankly. But we haven't really seen a fundamental shift in any of that, Brian. Nick, are you aware of?

No. No.

Appreciate it. And then just touching on the capacity comments, maybe a little bit more color on spare capacity that you have at the moment. Where are things tightest for you -- how are you thinking about your ability to add project managers and equipment if we remain in this healthy demand environment that you're seeing?

Yes. So definitely, the tightest is around electricians. I'll start there. That's always the tightest part of the market. Our teams have done a really good job at making sure we have adequate supply or adequate number of electricians to do the jobs we have. It certainly has curtailed us from taking on more jobs than we could, frankly, there's more opportunities out there, some of the joint opportunities we talked about earlier. So we're working hard on that. As you get into the site side, we've done a really good job. But I will tell you, for the first time, we're getting really tight on the capacity piece. We've been able to flex up proactively. We've done some stuff proactively several years ago to make sure we're preparing for some of this and as we're stretching further and further geographically, and let me remind everybody, geographic expansion for us historically when we had plateaued in Petillo was kind of 1 state further from where they were to maybe 2 states. Now we're serving the east part of Texas out of Atlanta in the west part of Texas out of Utah, that's a much further stretch than moving 1 or 2 states. So as a result, it requires a few more resources. You can't lever local resources as much as you can bounce around so we're getting tight on the capacity there. So we're doing -- as Dan talked about, we're doing stuff on the equipment side. We're doing stuff on the people side. But another big part of this is we're going to have to make more acquisitions in and around the geographic expansions that we are that we can add that pure human capital resource to execute these jobs. So I think as we go forward, we're starting to look at a little bit smaller players where we would like to have really large players, but unfortunately, there's really not that many out there and augmenting that with some of our resources. So we don't have to put a full team in Texas. We could put a partial team with an acquisition in Texas or in New Mexico or Oklahoma, wherever that may be, and that helps us build that capacity quicker and faster is a little bit of what we're doing with Stone Ridge, frankly, and why we made that acquisitions.

Our next question is from Alex Rygiel from Texas Capital.

Very nice quarter, gentlemen. An additional when additional phases of work come out, are these being competitively bid? Or do you find Sterling just basically directly negotiating on these additional phases? And kind of same question, but are you seeing an increase in competition for additional phases of work?

Yes. So if we perform, which we have on everyone, not aware of anything where we've lost we to phase it. We generally are negotiating those prices with the customer on the future phase work unless it's an extreme change of scope. Let's just say it's not part of our project and they want something else added to that project that's outside our normal scope that would be a normal bit. We give them a number would not be atypical for them to maybe get another number. A perfect example of that is they need to put a road through to get to a new phase and they need paving and curbs and a bunch of stuff like that. They may ask us to give them a bid on that. We may subcontract that or they may bid it out to somebody else. But for the most part, once we're on the job, and this is really important, and I'll talk strategically on what we're doing and why we're advancing so quickly in Texas and some of the other markets is the way our teams would tell you is once we plant our flag, we are there. We're not leaving. And that gives us an opportunity to drive project productivity along the way as you've seen, our future phase where margins tend to get better than our early phase work, right? So we're going to be incredibly competitive to plant that flag and then we're going to use productivity and technology to drive margins up through the rest of that project and get better margins for each of the phases as we go on.

And secondly, can you speak to some of the other end markets that are seeing green shoots like pharma and semi and other factories?

Yes. And then just back, the one thing I didn't answer is on the competition side. We always see local competition, especially when we go into a new market. There's a lot of small players, but generally, after we do 1 job that gets a lot smaller. The first one is always the hardest one for us to get, frankly. But we have not seen an influx of major new players or anything along those lines, especially on these large jobs, somebody went a $20 million or $30 million data center in one of our markets. probably, we don't even generally look at those unless the customer forces us to. So those sort of things are going to continue to happen. But we haven't seen any major influx of large competitors in our markets. I'm sorry, what was the next question?

Other like pharma, semi and other factories. Any progress there?

Yes. So -- we're -- we still see all of that progressing. We think pharma is '28 semis are around 2030. I will tell you the team up in New York is doing an outstanding job. I mean it made not by name, but they've made all the local and some of the national news up there on how far ahead of schedule they are on this project. I will tell you that the general contractors on job and the end customer on this child is extremely happy and frankly, has never seen progress like these guys are making. I think that's going to be the entry point to a lot more semiconductor plants for us coming around 2030. But I think there might be some intermediate opportunities on some facilities that are being built today in regions and geographies we have historically not been in that we may get pulled into. In addition, we saw the start of the EV plant in Atlanta, just outside Atlanta this quarter. So we're seeing some mixed activities in the manufacturing space, one-off, two-off, those sort of things. But we haven't seen any delays in the pharma for the next generation of semiconductors so far.