Suncrete (RMIX) Q3 2026 Earnings Call Transcript

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DATE

Fri, Nov. 13, 2026

CALL PARTICIPANTS

• Investor Relations - Rick Black
• Chief Executive Officer - Randall Edgar
• Chief Financial Officer - Thomas Wentroth
• Executive Chairman - Ned Fleming

TAKEAWAYS

• Revenue -- $141 million, representing a 45% increase compared to the second quarter of 2026 and a 163% increase year over year.
• Net Income -- $78,000, improving from a net loss of $37.1 million in the second quarter of 2026 due to the integration of acquired businesses.
• Adjusted EBITDA -- $22.4 million, representing a 15.9% margin and a 66% increase over the prior quarter.
• Supplemental Adjusted EBITDA -- $23.3 million, reflecting a 60% increase compared to the second quarter of 2026.
• Supplemental Adjusted EBITDA Margin -- 16.5%, increasing 150 basis points sequentially driven by operational performance and acquisition integration.
• Organic Revenue Growth -- Approximately 10%, supported by active local markets across the Sunbelt region.
• Ready-Mix Volume -- Increased 32% sequentially and 125% year over year, following the contribution of newly acquired businesses.
• Revised 2026 Revenue Guidance -- $408 million to $434 million, adjusted for residential construction weakness and large project delays.
• Revised 2026 Adjusted EBITDA Guidance -- $60 million to $64 million, reflecting current market conditions and project timing.
• Revised 2026 Supplemental Adjusted EBITDA Guidance -- $63.6 million to $67.6 million, incorporating updated full-year performance expectations.
• Revised 2026 Adjusted Net Loss Guidance -- $16.8 million to $12.8 million, as corrected by management during the earnings call.
• Revised 2026 Net Loss Guidance -- $43.7 million to $39.7 million, following a management correction regarding overstated initial projections.
• Total Liquidity -- $206.5 million as of Sept. 30, 2026, providing flexibility for the execution of the company's growth strategy.
• Cash and Cash Equivalents -- $49 million, reflecting seasonal working capital investments and the funding of second-quarter acquisitions.
• Revolving Loan Facility Capacity -- $44.5 million, available to support future operations and strategic growth initiatives.
• Selling, General, and Administrative Expenses -- $31.1 million, which management expects to maintain as a quarterly run rate to support 2027 scaling.
• Future Acquisition Revenue -- $200 million to $250 million expected in 2027 from the full-year contribution of acquisitions completed in 2026.
• Target Leverage -- 2.5 to 3.2 times, with management indicating it intends to stay within this range.
• Materials Margin -- Decreased slightly from 53% in the first half of 2026 due to the integration of assets with lower margin profiles.
• Data Center Backlog -- Over two years of scheduled projects across the footprint, specifically in the Texas and Oklahoma markets.
• Employee Headcount -- More than 1,100 people, supporting the company's delivery reliability and service-oriented model.
• Organic Growth Composition -- Approximately two-thirds of the 10% organic growth was driven by volume increases, while one-third came from pricing.

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RISKS

• Edgar stated, "we lowered our full year outlook ranges to reflect the current weakness in our residential construction due to elevated interest rates, and multiple larger projects have been delayed as a result of the uncertainty following the midterm election and continuing geopolitical concerns," indicating factors contributing to the revised 2026 guidance.
• Management noted that the North Texas market remains highly competitive, which requires the implementation of the company's 12 to 18-month integration playbook to achieve target margins.

SUMMARY

Suncrete, Inc. (NASDAQ:RMIX) reported a sequential revenue increase of 45% and expanded its supplemental adjusted EBITDA margin by 150 basis points to 16.5% during the third quarter. Management stated that acquisition integration is progressing according to its 12 to 18-month playbook, with North Texas showing operational improvement despite competitive pressures. The company updated its full-year guidance to account for delays in large commercial projects and continued weakness in the residential sector caused by high interest rates. Management indicated that the M&A pipeline remains active, though several anticipated closures have shifted into the first half of 2027.

• CEO Edgar stated, "We continue to advance operating initiatives and remain confident in our ability to bring this year's acquisitions for the target margin profile."
• Executive Chairman Fleming noted that governors in Oklahoma and Louisiana are seeking to attract data center projects that face moratoriums in other states, providing a potential source of demand.
• Management is implementing a tech-enabled dispatch infrastructure to provide teams with visibility into truck activity, plant performance, and financial results.
• The company intends to address supplier price increases for aggregates and cement through its normal 2027 pricing cycle to maintain historical margins.
• CEO Edgar indicated that two-year data center backlogs exist in Texas, citing projects that were approved and about to begin construction prior to recent regional moratoriums.

INDUSTRY GLOSSARY

• Ready-mix concrete: A custom-formulated concrete mixture manufactured in a batch plant and delivered to construction sites in a plastic or unhardened state.
• Supplemental Adjusted EBITDA: A non-GAAP financial metric that excludes interest, taxes, depreciation, amortization, and recurring affiliated consultant compensation.
• Adjusted EBITDA: A non-GAAP measure that adjusts net income for interest, taxes, depreciation, amortization, and one-time costs such as acquisition expenses.
• Sunbelt: A region of the United States stretching across the Southeast and Southwest, including states such as Texas, Oklahoma, Louisiana, and Arkansas.
• Materials Margin: A metric calculated as revenue less the cost of cement and aggregates.

Full Conference Call Transcript

Operator: Greetings, and welcome to the Suncrete Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Rick Black, Investor Relations. Please go ahead.

Rick Black: Thank you, operator, and good morning, everyone. We appreciate you joining us for the Suncrete conference call to review third quarter 2026 results. This call is also being webcast, and it can be accessed through the audio link on the Events and Presentations page of the Investor Relations section of suncrete.com. Information recorded on this call speaks only as of today, November 13, 2026. Please be advised that any time-sensitive information may no longer be accurate as of the date of any replay listening or transcript reading.

I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectations or future events or future financial performance are considered forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. We will be making forward-looking statements as part of today's call that, by their nature, are uncertain and outside of the company's control. Actual results may differ materially. Please refer to our earnings press release for our disclosures on forward-looking statements. These factors and other risks and uncertainties are described in detail in the company's filings with the Securities and Exchange Commission.

Management will also refer to non-GAAP measures, including adjusted net income, adjusted EBITDA and supplemental adjusted EBITDA. Reconciliations to the nearest GAAP measures can be found at the end of our earnings press release. Suncrete assumes no obligation to publicly update or revise any forward-looking statements. And now with that, I would now like to turn the call over to Suncrete's CEO, Randall Edgar. Randall?

Randall Edgar: Thank you, Rick, and good morning, everyone. Joining me today are Tommy Wentroth, our Chief Financial Officer; and Ned Fleming, our Executive Chairman, along with other members of our management team. I'll begin with our third quarter operating performance and the progress we are making across our acquired businesses. Tommy will then review our financial results and 2026 outlook, followed by Ned's remarks before we open the call for questions. There are 3 things I want investors to take away from the quarter. First, our local markets across the Sunbelt remain active, and I'm pleased with our operational performance that generated approximately 10% organic growth.

In addition, we increased the supplemental adjusted EBITDA margin by 150 points -- basis points compared to the second quarter. Also, revenue was up 45% and supplemental adjusted EBITDA was up 60% compared to last quarter. Second important takeaway is that our acquisition integration plans are progressing as expected with several businesses now approaching Suncrete target margin levels. We took a significant step forward on this front with our North Texas work. Third, our M&A pipeline remains robust, while our balance sheet gives us the flexibility to continue executing our growth strategy. Before going any further, I want to thank our more than 1,100 employees for their commitment to our customers and to one another. Ready-mix is a service business.

The quality of our product and the reliability of deliveries depend on the local teams who manage the plants, maintain the equipment and work with customers every day. We believe people and culture are fundamental to our ability to consistently execute to grow the business and to create long-term value. Activity across the Sunbelt market supported both year-over-year and sequential volume growth. However, we lowered our full year outlook ranges to reflect the current weakness in our residential construction due to elevated interest rates, and multiple larger projects have been delayed as a result of the uncertainty following the midterm election and continuing geopolitical concerns. We remain confident in the persistent volume demand across our specific markets.

Since we have navigated through similar economic times, we know that many new growth and margin opportunities will arise. The revised outlook reflects adjusted year-end time lines for integration in certain markets. We continue to advance operating initiatives and remain confident in our ability to bring this year's acquisitions for the target margin profile. Throughout Suncrete's footprint, our markets remain underbuilt compared to the demand created by population growth in Oklahoma, Arkansas, North Texas and Louisiana. This trend is not slowing. Population and business growth across the Sunbelt continues to support long-term demand opportunities in commercial, infrastructure and residential construction. Data centers are a growing part of that mix.

In our Oklahoma market, several projects are under construction today, and we expect them to support activity into 2027. Additionally, we continue to see at least 2 years of data center backlog scheduled across our footprint. Our local relationships and ability to reliably execute large, complex pours is a competitive advantage and positions us well for these projects. Our strategy has always been to build a balanced customer base across commercial, infrastructure and residential construction, which has served us well in times of economic uncertainty. Activity varies by sector and geography, and a key component for our continued success is strong customer relationships. Turning now to our growing platform and the integration of acquisitions.

We continue to implement the playbook and are making progress with all of the businesses we acquired last quarter. Notably, North Texas remains highly competitive, but our performance improved steadily throughout the quarter, as shown by the margin expansion. Our playbook is built around 5 key areas: people and culture, procurement, commercial opportunities, logistics and technology. It starts with people, where we work to retain local leadership and bring each team into a shared culture of safety and accountability. In procurement, greater purchasing scale can improve how we source materials, equipment and maintenance service. On the commercial side, our broader capabilities can help local teams serve regional customers and pursue projects that may previously have been beyond their reach.

In logistics, we concentrate on dispatch, routing, maintenance and fleet productivity. Technology supports those efforts by giving teams better visibility into truck activity and efficiency, plant performance and financial results. We evaluate progress through measures such as yards delivered per driver hour, plant and fleet utilization, on-time delivery and profitability. Turning now to strategy. The 2026 acquisitions provide a larger revenue base for 2027 and further margin expansion opportunities. At present, we expect these acquisitions to contribute approximately $200 million to $250 million of revenue in 2027. Depending on project timing and market activity, representing a meaningful full year contribution.

Continued integration should support further margin improvement, and we expect gross profit to expand and SG&A to grow more slowly than revenue. Turning to the cost environment. We generally address material price increases through annual customer base price adjustments. We expect limited aggregate cost impact in Q4 and plan to incorporate anticipated supplier increases into our normal 2027 pricing cycle. Our acquisition pipeline remains active. We are in advanced discussions with several prospects that would be highly accretive, expanding existing markets and entering adjacent markets. We continue to exercise discipline in capital deployment and believe our balance sheet supports our future growth.

While the timing of several acquisitions has shifted to the first half of 2027, our number of opportunities continues to expand. We are committed to growing the platform and integrating our playbook to scale the business and drive operating performance. As we build density in our local markets, we have an opportunity to serve more customers, improve the productivity of our plants and trucks and expand margins across the businesses we acquire. I'll now turn the call over to Tommy.

Thomas Wentroth: Thank you, Randall, and good morning, everyone. As a reminder, our third quarter results reflect the full contributions from all acquisitions closed to date. Now reviewing our third quarter results and key financial metrics. Revenue in the third quarter was $141 million, an increase of 45% compared to the second quarter of 2026 and up 163% compared to Q3 last year. Net income in the third quarter was $76,000 (sic) [ $78,000 ] compared to a net loss of $37.1 million in the second quarter of 2026 and net income in the same quarter last year of $4.6 million. Adjusted EBITDA in the third quarter was $22.4 million, representing a 15.9% adjusted EBITDA margin.

This increased 66% when compared to the second quarter of 2026 and 64% compared to Q3 last year. Supplemental adjusted EBITDA in the third quarter was $23.3 million, representing a 16.5% supplemental adjusted EBITDA margin. This increased 60% compared to the second quarter of 2026 and 62% compared to Q3 last year. You can find GAAP to non-GAAP reconciliations of net income, adjusted EBITDA and supplemental adjusted EBITDA financial measures at the end of today's earnings release. Turning now to the balance sheet. As of September 30, we had total liquidity of approximately $206.5 million, including $49 million of cash and cash equivalents and $44.5 million available capacity under our revolving loan facility. Turning now to our outlook.

Today, we are revising our outlook for 2026 to the following ranges: revenue in the range of $408 million to $434 million, net loss in the range of $48.7 million to $44.7 million, adjusted net loss in the range of $21.8 million to $17.8 million, adjusted EBITDA in the range of $60 million to $64 million, supplemental adjusted EBITDA in the range of $63 million to $67 million. And with that, I'd like to turn the call over to our Executive Chairman, Ned Fleming. Ned?

Ned Fleming: Thank you, Tommy. Suncrete is built to deliver sustained profitable growth through organic expansion and disciplined acquisitions across the Sunbelt, and our team continues to advance that strategy. As Randall mentioned, success in this business starts with the people. Randall, Tommy and Mark Jones lead an outstanding team with experienced leaders and over 1,100 disciplined, dedicated workers throughout the organization, driving execution every day. This team has successfully led and grown the business over the last 18 years, year after year. We are increasing local market share by earning customer loyalty through reliable service, providing exacting specifications for required materials and partnering with high-quality suppliers.

Our acquisition and growth model preserves customer relations by supporting local leadership and creating an entrepreneurial culture, while simultaneously providing capital and expertise and administrative services to support sustainable profitable growth. Population and business growth continue to drive opportunities across our markets. Data centers, our customers, including projects under construction in Oklahoma, add another source of demand into 2027. Our local relationships and ability to execute large, complex pours strengthen our ability to win and do this work. As we expand, we build market density, increased purchasing power and improve fleet utilization to lift the acquired businesses' margins and generate attractive returns on invested capital. We invest, we reinvest the resulting cash flow in our people, operations and additional acquisitions.

This repeatable model allows us to scale Suncrete, sustain profitable growth and compound shareholder value over time. As a result of this, we believe the future for Suncrete is very bright. And now we'd like to turn the call over for questions. Operator?

Operator: [Operator Instructions] The first question comes from Kathryn Thompson with Thompson Research.

Kathryn Thompson: I just first want to focus on some of your commentary that you had in today's release, just about certain larger projects getting pushed into '27. That's certainly something that we heard from a wide variety of our industry contacts during our survey season. And some of it were for different reasons. One was just to get beyond elections. Second was just pausing as we look at reauthorizing the next federal highway bill. So in other words, is a way to create some urgency with Congress. And then some are just high rates. When you look at the book of your business and backlog, what is the mix of those kind of 3 buckets for delays for projects into 2027?

Randall Edgar: Kathryn, right now, we still have a robust backlog. But you're correct in some of the points you made is that we have seen a couple of jobs kind of delay. We think that's related to the election, the unknown outcome of that, the geopolitical uncertainty going on. But we think now that we're past the election, things will settle back down and those jobs probably come back on the books. You also mentioned interest rates, and we all know those went up, which has not helped improve the residential sector. We think that's going to remain depressed until that turns around. But again, we feel like '27 will be a good year.

We have some good projects that we are actually starting in this fourth quarter that are sizable and then some that will start after the first quarter. Another component of that, some of the integration processes, I mean, we're still confident about our 12- to 18-month window playbook, but we see that some of them might be closer to 18 months than the 12. But overall, we feel good about '27.

Kathryn Thompson: Okay. That's helpful. And could you also just how this plays into your margin profile? Going the quarter, some of your acquired companies have lower margins than legacy. How much of the quarter was just those acquired assets and bringing down margins versus pressures in the market? And then also, too, could you just give a little bit more of a color because I know that you're working on improving your market mix. So in other words, you might be willing to give up a little bit of your top line in order to improve overall margins. And give what kind of update what you're seeing with your acquired companies towards that margin improvement goal?

Randall Edgar: Well, Kathryn, I think you kind of hit the nail on the head. It is the acquisitions. And again, we still feel confident we'll get them to the margins, but it's going to be in that 12- to 18-month window. Repeat the second part of your question there for me.

Kathryn Thompson: Really, how much of the quarter impact was from acquired margins versus seeing margin pressures from the overall market with your legacy business?

Randall Edgar: Well, the legacy businesses are doing well. I mean, again, our margins are still outstanding and they continue to be that. And we think we'll hold those into '27. So again, it is about bringing up the acquisitions to the legacy margin. Before we move to the next question, we'd like to quickly correct the number that was in our press release related to our outlook. Clearly, the massive e-mail outage yesterday was a challenge to work around. The good news is that the correct numbers are an improvement, and I'll have Tommy walk you through it. Tommy?

Thomas Wentroth: In the full year 2026 guidance, the numbers for the net loss were overstated. The correct numbers are as follows: a net loss of $43.685 million to a net loss of $39.685 million, and the adjusted net loss should be $16.81 million to adjusted net loss of $12.81 million. Revenue, adjusted EBITDA and supplemental adjusted EBITDA guidance remain the same.

Operator: Yes -- the next question comes from Philip Ng with Jefferies.

Philip Ng: I guess a question for you, Randall. Margins, as you kind of pointed out, still under pressure for some of the deals you've integrated, but you sound pretty constructive and certainly encouraging that margins improve sequentially. Certainly, there's some element of seasonality there. If there's no deals from here on out, if we just kind of look at your book of business now, from the outside looking in, we're certainly going to look at EBITDA dollars and EBITDA margins. Do you think you're going to be at a good spot where, one, your overall business will see EBITDA margin expansion on a year-over-year basis, call it, first half of next year, maybe 2Q?

Or it's still going to take some time because as you kind of pointed out, it's more on the 18-month window versus 12 months. Just kind of help us contextualize how the integration progress is progressing and milestones that we could look at from the outside to see if you're making progress.

Randall Edgar: Simple answer is yes. So we do believe we will. And if you look at last quarter compared to this quarter, I think we've improved that over 150 basis points. So that reflects that we are making progress on the acquisition and bringing them up to our standards. And we think 2027 will be a good year for us. We have a good backlog going into it. Like so we have projects kicking off this month that are just the beginning of sizable projects. So those will immediately roll into '27. We've adjusted to the downturn in the residential and yet we still managed to keep a fairly good diversity of project work and being diversified.

We think volumes will be up, revenues will be up and EBITDA will be up in 2027.

Philip Ng: Okay. But you're not comfortable like calling out when that inflection could happen on a year-over-year basis at this point? Our margins?

Randall Edgar: Well, we'll provide the outlook for 2027 and then which we expect significant growth, both acquisitively and organically.

Philip Ng: Okay. Helpful. Was freight and just inflation at large contributed to the margin compression in 3Q? Was your price cost pretty neutral, little compressed? And what's the outlook for the back half of the fourth quarter? And I think you kind of alluded to your suppliers announcing price increases, i.e., the aggregates guys and cement guys, I think, have price increases broadly. Is that helpful in terms of your cost in terms of getting price increases through 2027? Kind of how should we think about your ability to take perhaps incremental price and how you're managing that price cost spread?

Randall Edgar: Yes. We're at the time of the year where all those suppliers are putting up their price increase notices, and we systematically will meet with those suppliers and talk about what 2027 looks like. And we've been successful at something we do every year. Nothing new. It happens this time every year. In the markets where we feel like we have the strong ability to pass that through, we pass it through. In the markets we think might be a little tighter, we'll negotiate through that. We have been successful for 20 years of maintaining our margins and the aggregate increases are this time every year.

Philip Ng: Okay. And was price cost a pinch point in the back half? Or this is mostly demand and just the incremental acquisitions?

Randall Edgar: I'm sorry, you broke up on me there for a little.

Philip Ng: Sure. Was price cost a bad guy in terms of how margins are going to impact you in 3Q and 4Q? Or this is just largely the deals and perhaps volumes being a little softer?

Randall Edgar: It was largely what you just said.

Operator: Next question comes from Rohit Seth with B. Riley Securities.

Rohit Seth: Just on the materials margin, which is revenue less cement and aggs, it was about 53% in the first half. Did it hold above 52% in the third quarter with the full quarter of acquisitions?

Randall Edgar: We're having a hard time hearing...

Ned Fleming: Can I ask that again, please?

Randall Edgar: Please.

Rohit Seth: So on the materials margin, it was about 53% in the first half of the year. Did it hold above 52% this quarter with the full quarter of acquisitions in there?

Randall Edgar: I'm going to hand that off to Tommy.

Thomas Wentroth: It was down slightly from 9%.

Randall Edgar: It's kind of like you're at -- it's hard to understand here.

Rohit Seth: Are you not able to hear me? Is that what you're saying?

Randall Edgar: That's much better, Rohit. Yes.

Rohit Seth: All right. So your materials margin was about 53% in the first half. Did it hold above 52% in the third quarter with all the acquisitions in there?

Thomas Wentroth: The acquisitions brought it down slightly.

Rohit Seth: Okay. And then what about on the plant and delivery costs? Those are 24% of sales in the second against 22% in the first. Maybe you can give a sense of what it was in the third quarter with your -- with the acquired fleets in your dispatch system?

Thomas Wentroth: They were better in the third quarter.

Rohit Seth: Okay. So material margin down, plant and delivery costs better. Okay. And then on the SG&A, it was about $31 million in 3Q. In August, I think you said it was going to be about $25 million. So what's the right quarterly run rate we should model going forward?

Thomas Wentroth: I think $31 million on a quarterly basis. That will slightly increase, but we've got to get prepared for the growth that we're expecting throughout 2027.

Rohit Seth: Okay. Okay. And then maybe you can comment on what you're seeing in the acquisition pipeline. You guys are talking about doing some deals in the third and potentially the fourth. We didn't see any in the third. Do you have something lined up for the fourth that we should be expecting?

Randall Edgar: Yes.

Rohit Seth: Okay. And so your net debt -- your leverage is -- you got it with your guide is going to be at 3.4x on your pro forma guide numbers. So are you willing to take leverage up a little bit from here?

Thomas Wentroth: No. I believe it to stay within the previous range that we've mentioned 3.5 -- or I'm sorry, 2.5 to 3.2x.

Operator: The next question comes from Andy Wittmann with Baird.

Andrew J. Wittmann: I guess I wanted to just get a little bit of understanding in the quarter and the guidance revision on the top line to start. You cited some delays on the commercial side and obviously, interest rates on the residential side. I guess maybe just talking about the commercial side and getting some project delays there. You said there's a couple of delays there. It seems like -- it sounds like this is the smaller factor. Is my understanding that right? It's more of a residential if you had to attribute it to one of these 2 factors? And are the couple of projects that you said are delayed, are those projects stopped currently?

Or are they just sequenced differently than what you previously expected? And they're still under construction, the site work still preparing for you guys to come and deliver. I just want to understand that this is really just a deferral and you've got some visibility to it rather than something that's on hold until further notice.

Randall Edgar: Well, it's a combination of all those things, Andy. Yes, residential is a factor. Of course, it's been down over the last couple of quarters as we know. But I think with the recent rise in interest rates, it's maybe dipped a little bit more. Some of the statistics we gathered kind of indicate that the trough has not quite hit the slowest point. That being said, we adapted to that months ago, and that hasn't truly adversely affected. Now when it comes back, that would be great. We're used to manage. We managed around 2008. So we're used to managing around the residential effect. The jobs that went -- they're really just a couple.

The rest of them are all proceeding. But we did see a couple just in the last 30 days, and we really attribute it mostly to the election, okay? So we think those will come back, but we just had the election. So we might find out next week, everything is back. But those wouldn't impact us. They're not material in our total volume picture. So we see a lot of robust jobs coming through Oklahoma. Data centers are still a big deal in Oklahoma, and we think they'll be -- they'll come back in other regions we're in also.

Andrew J. Wittmann: Okay. Great. And then I guess my next question is just on cash. Obviously, the third quarter is always the seasonally highest burn rate. So it's going to consume some capital. But now that we're getting into a seasonally slower period, I would imagine that the company is going to start releasing some capital. I was hoping that you would comment on what you would expect here in the next 3- or 6-month period in terms of cash inflows. I just want to make sure that all the integration is able to deliver the working capital as it unwinds here.

It looks like there's been some injection certainly here in the quarter, which would be expected, but it's always hard to know how much given that the company's profile and acquisitions have changed it so much. So I want to just get your sense or your comments on how and what we should expect here in the next -- really in the nearer term for cash.

Randall Edgar: Well, Andy, Calvin is kind of on the front line on that. So I'm going to defer that to Calvin.

Calvin Bocanegra: Andy, what you see in this business is cash flow conversion is really good. This business converts a lot of its EBITDA into free cash flow, and you see we've got roughly $50 million of cash today. You're right. We did sink some working capital into those deals that we did in Q2 throughout Q3, but there were working capital true-ups, many of which came through in Q4. So I would not expect the business to burn cash outside of M&A during Q4.

Andrew J. Wittmann: Okay. So that's -- I'm glad you answered the question that way. So I just want to make sure I understand this correctly. When you guys have done these acquisitions, are you not buying their working capital so that you have to refill basically that working capital in addition to the cash purchase price? I know that in the early days at Construction Partners, that was how it was done. And I wasn't familiar if that was how you guys at Suncrete are also doing your M&A. Is that right? Am I understanding that correctly or not correctly?

Calvin Bocanegra: That's right. We are acquiring working capital, of course, at various levels depending on the business, and we have the right working capital targets for those businesses, which are addressed through the post-close true-up process.

Andrew J. Wittmann: Okay. That makes sense. And just I wanted to do a clarification, I think, for everyone's benefit. You had the comment that in 2027, you expect $200 million to $250 million of revenue from the acquisitions, again, in 2027. I think those are the acquisitions starting with Hope and then onwards, stuff in Louisiana, Nelson Bros., ABC Block. That's not the contribution from any other deals. It's just those, I guess, those handful of deals. Is that correct? I just want to make sure that we're all kind of working off the same numbers as we kind of refine our '27 numbers.

Thomas Wentroth: Yes, that's correct.

Andrew J. Wittmann: Okay.

Operator: The next question comes from Adam Thalhimer with Thompson, Davis.

Adam Thalhimer: Can you give an update on the ABC Block business and Louisiana overall?

Randall Edgar: Yes. That's a great question. It's going fantastic. I mean seriously, Adam, it's been a great performer, great management team there and their results are actually above expectations. So we couldn't be happier with the block performance.

Adam Thalhimer: And then maybe you could update us also on the North Texas acquisitions, how that integration is going? And kind of what inning are they in, in terms of getting that combined business where you want it?

Randall Edgar: Well, again, we are making progress, as you can see quarter-over-quarter. We still have plenty to make. We've got a good plan. We're implementing it, but it's going to take a little bit of time. So we feel confident we will get them up to our standards. But it's -- we -- as you know, Adam, we've got various examples where some of them we got them up there within 6 months. But this is a little more challenging, but we've identified and we've got the playbook and we're implementing it. So we will get it there within the 18 months, we believe.

Adam Thalhimer: Okay. And then, Randall, I think it was you mentioned you have a 2-year data center backlog. What do you mean by that?

Randall Edgar: Well, a little -- our data -- everybody has read all the news about Texas and moratoriums and all that. But what nobody is reading is there were already several data projects in play, approved and about to build. And if you look at what's already out there and about to build, that's over 2 years backlog just in Texas data centers. And of course, we expect the data centers -- the political outlook to change on those now the election is done and that the certain moratoriums, et cetera, we think those will probably be worked through.

Ned Fleming: Adam, this is Ned. Let's just take a step back. Number one is we had a really good quarter. We're executing the plan. Unfortunately, for everybody, it's not a straight line, right? I mean it is up and to the right with a little ups and downs along the way. Everything is going pretty much according to plan. Some things are moving to the left. Some things are better than we expected. We've had a real positive outlook for 2027. When you talk about data centers, we've had the opportunity to meet with both the Louisiana governor as well as the Oklahoma governor.

And they would love for every data center that Texas doesn't want to come to Louisiana and Oklahoma. So there is a -- we are in states where a lot of the things, not only do we have a backlog in Texas, but we have a backlog in Oklahoma. We have a backlog in Louisiana. So those are very, very positive. In fact, I think these governors would prefer to call them digital factories and not data centers anymore, candidly. So we're going to continue to grow this business. I think as far as the margins improvements, it's been a question asked. We see that happening month-to-month. We can see it business by business.

Texas has done, North Texas did a lot better this quarter than last quarter. We expect them to do better next quarter. We will continue to make acquisitions and continue to compound wealth into the foreseeable future.

Operator: The next question comes from Michael Francis with William Blair.

Michael Francis: This is Mike on for Ryan. I wanted to start on residential because it does seem like it softened. Can you give a sense on how that's trended through the quarter and into October? And then as we look forward, is your expectation there that what's happening or what's happened in October continues through November and December? Or is there any sort of additional caution baked in for that potentially softening more?

Randall Edgar: Well, I think we've hit the bottom of the trough. So I think it will probably stay that way for a little bit. So there's a lot of macroeconomic factors and the new election and where interest rates will trend. But we've adapted to that. That's why we take the whole approach we do from day 1 of a segmented commercial, infrastructure, residential. So that resi market has been flat for a long time, and it may stay flat for a little bit longer, but we don't think -- we've already factored that in. That's been in place since the beginning of the year.

So we have been fortunate with infrastructure and commercial projects offsetting -- one large commercial project offsets a whole lot of housing, okay? And so we've been able to maintain our volumes and our margins in spite of the housing downturn.

Michael Francis: Okay. And then on the commercial piece, the projects you called out, are you confident that those will just shift into 2027? It's just sort of a delay and not sort of a situation where some of those might get canceled?

Randall Edgar: Yes. So again, it was just 1 or 2 projects. There are several large projects that are again about to kick off and that we've already secured. Keep in mind, we're well positioned to get those type of large job. Other people don't have the resources. They don't have the equipment, they don't have the personnel. So we'll continue to get those large-scale jobs. Keep in mind, we had a 10% organic increase in Q3. Now probably about 2/3 of that is volume and 1/3 of it is price. But still yet, it's 10% organic growth.

Michael Francis: And that answered my last question there.

Operator: The next question comes from Alex Rygiel with Texas Capital.

Alexander Rygiel: Can you speak to pricing more broadly in the quarter and thoughts about it going into 2027?

Randall Edgar: Well, we think pricing will vary by market. Some markets have more latitude to accept a price increase than others. So our goal is just to maintain our margin, and we've been successful with that for 20 years. There are -- I could go back 35 years in this business. There are years where the market may not be right for a price increase. and you just have to successfully manage your cost inputs. And if you can't pass them on, you have to try to maintain what they are. And we just -- I think we've been very successful at that year-over-year, and that's what we'll continue to do.

Alexander Rygiel: And then was there any abnormal weather impact in the quarter?

Randall Edgar: October historically can be one of your biggest months in concrete. It just -- but October can be a very rainy month, too. So it's -- this October was fairly rainy, but I don't think we're going to blame -- it didn't harm us. It just didn't turn out where we had -- October was the biggest month of the year. If you go back, though, speaking of weather, some of the -- where we pushed revenue to change the guidance, you don't lose that yard of concrete that day.

But the day of rains or the 2 or 3 days of rain where we had all this abnormal excessive rain pattern in the second quarter, there's also -- that also retards the ability to do all the dirt work for these large-scale projects. And of course, that's a massive task and nothing gets done until that's done. So part of why we're pushing some things into '27 is we didn't lose those yards, but there's a point where that push doesn't just get caught up by the end of that fiscal or calendar year. So it will just be reflected in the next year. So we have seen some of that.

We are feeling some of that because, again, the second quarter was abnormal. And -- they're just -- people are behind on their projects time-wise, but they're still out there. They're still moving forward, and we'll still get the full volume of concrete.

Operator: Thank you. At this time, I would like to turn the call back to management for closing comments.

Randall Edgar: Thank you. Goodbye.

Operator: Thank you. This does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.

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