Suncrete Q3 2026 Earnings Results & Report

Suncrete EPS Results

• Actual EPS: -$0.01
• Consensus EPS: $0.10
• Beat/Miss: Missed by -$0.11
• One Year Ago EPS: N/A

Suncrete Revenue Results

• Actual Revenue: $140.96 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Haymaker Acquisition Corp. 4 is a blank check company. It focuses on effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or other business combination with one or more businesses or entities. Haymaker Acquisition Corp. 4 is based in New York.

Suncrete Q3 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Third-quarter revenue rose 45% sequentially to $141 million, while supplemental adjusted EBITDA increased 60% to $23.3 million. Management reported approximately 10% organic growth and a 150-basis-point sequential improvement in supplemental adjusted EBITDA margin.
• Negative Sentiment: Suncrete lowered its 2026 outlook, citing weakness in residential construction and delays to some larger projects; corrected guidance calls for revenue of $408 million–$434 million and adjusted EBITDA of $60 million–$64 million. The company also expects some acquisition integrations to take closer to 18 months than 12.
• Positive Sentiment: Management expects acquisitions completed in 2026 to contribute approximately $200 million–$250 million of revenue in 2027, with continued integration offering further margin improvement. It expects growth in 2027, though several prospective acquisitions have shifted to the first half of that year.
• Positive Sentiment: Management pointed to population and business growth, ongoing infrastructure and commercial activity, and data-center projects as sources of demand across its Sunbelt markets. It cited at least two years of data-center backlog schedules across its footprint, while acknowledging that residential construction remains pressured by elevated interest rates.

Presentation

[Operator]

Greetings, and welcome to the Suncrete third quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Rick Black, Investor Relations. Please go ahead.

[Rick Black, Head of Investor Relations at Suncrete]

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 13th, 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.

[Rick Black, Head of Investor Relations at Suncrete]

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. Now with that out, I would now like to turn the call over to Suncrete CEO, Randall Edgar. Randall?

[Randall Edgar, CEO at Suncrete]

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 will 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 three things I want investors to take away from the quarter. First, our local markets across the Sunbelt remain active, and I am pleased with our operational performance that generated approximately 10% organic growth. In addition, we increased the supplemental adjusted EBITDA margin by 150 basis points compared to the second quarter. Also, revenue was up 45%, and supplemental adjusted EBITDA was up 60% compared to last quarter.

[Randall Edgar, CEO at Suncrete]

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.

[Randall Edgar, CEO at Suncrete]

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 timelines for integration in certain markets. We continue to advance operating initiatives and remain confident in our ability to bring this year's acquisitions toward 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.

[Randall Edgar, CEO at Suncrete]

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 two years of data center backlog schedules 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.

[Randall Edgar, CEO at Suncrete]

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 five 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 services. On the commercial side, our broader capabilities can help local teams serve regional customers and pursue projects that may previously 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.

[Randall Edgar, CEO at Suncrete]

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-$250 million in 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.

[Randall Edgar, CEO at Suncrete]

We are in advanced discussion 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.

[Tommy Wentroth, CFO at Suncrete]

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 compared to a net loss of $37.1 million in the second quarter of 2026, and net income in the same quarter last year, $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.

[Tommy Wentroth, CFO at Suncrete]

This increased 60% compared to the second quarter of 2026 and 62% compared to Q3 last year. You can find GAAP and 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 30th, 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-$434 million, net loss in the range of $48.7 million-$44.7 million, adjusted net loss in the range of $21.8 million-$17.8 million, adjusted EBITDA in the range of $60 million-$64 million, supplemental adjusted EBITDA in the range of $63 million-$67 million.

[Tommy Wentroth, CFO at Suncrete]

And with that, I would like to turn the call over to our Executive Chairman, Ned Fleming. Ned?

[Ned Fleming, Executive Chairman at Suncrete]

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.

[Ned Fleming, Executive Chairman at Suncrete]

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, increase purchasing power, and improve fleet utilization to lift the acquired businesses' margins and generate attractive returns on invested capital. 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 would like to turn the call over for questions. Operator?

[Operator]

Thank you. We will now conduct a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment while we poll for the first question. The first question comes from Kathryn Thompson with Thompson Research. Please proceed.

[Kathryn Thompson, Analyst at Thompson Research]

Good morning, and thank you for taking my questions today. I just first want to focus—

[Ned Fleming, Executive Chairman at Suncrete]

Good morning.

[Kathryn Thompson, Analyst at Thompson Research]

Good morning. 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 2027. 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 bills. In other words, it's 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 three buckets for delays for projects into 2027?

[Randall Edgar, CEO at Suncrete]

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, and 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 pressed till that turns around. But again, we feel like 2027 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 we'll start after the first quarter.

[Randall Edgar, CEO at Suncrete]

Another component of that, some of the integration processes are I mean, we're still confident about our 12-month to 18-month window playbook, but we see that in some of them, we might be closer to 18 months than the 12 months.

[Randall Edgar, CEO at Suncrete]

But overall, we feel good about 2027.

[Kathryn Thompson, Analyst at Thompson Research]

Okay. That's helpful. Could you also just, how this plays into your margin profile? Going into 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? Could you just give a little bit more of a color, because I know that you're working on improving your market mix. In other words, you might be willing to give up a little bit of your top line in order to improve overall margins. Give what kind of update what you're seeing with your acquired companies towards that margin improvement goal. Thank you.

[Randall Edgar, CEO at Suncrete]

Well, again, Kathryn, I think you kind of hit the nail on the head. It is the acquisitions. 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 now.

[Kathryn Thompson, Analyst at Thompson Research]

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, CEO at Suncrete]

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 will hold those into 2027. It is about bringing up the acquisitions to the legacy margin.

[Kathryn Thompson, Analyst at Thompson Research]

Okay, perfect. Excellent. Thank you.

[Randall Edgar, CEO at Suncrete]

Thank you. Before we move to the next question—

[Operator]

The next question—

[Randall Edgar, CEO at Suncrete]

We would like to quickly correct a number that was in our press release related to our outlook. Clearly, the massive email outage yesterday was a challenge to work around. The good news is that the correct numbers are an improvement, and I will have Tommy walk you through it. Tommy?

[Tommy Wentroth, CFO at Suncrete]

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]

Thank you.

[Randall Edgar, CEO at Suncrete]

Okay, next question, please.

[Operator]

Yes, the next question comes from Phil Ng with Jefferies. Please proceed.

[Phil Ng, Analyst at Jefferies]

Hey, guys. 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?

[Phil Ng, Analyst at Jefferies]

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, CEO at Suncrete]

Well, the simple answer is yes. We do believe we will. 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, to bring them up to our standards. We think 2027 will be a good year for us. We have a good backlog going into it. Like I said, we have projects kicking off this month that are just the beginning of sizable projects, so those will immediately roll into 2027. We've adjusted to the downturn in residential, yet we still managed to keep a fairly good diversity of approach to work and being diversified. We think volumes will be up, revenues will be up, and EBITDA will be up in 2027.

[Phil Ng, Analyst at Jefferies]

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

[Randall Edgar, CEO at Suncrete]

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

[Phil Ng, Analyst at Jefferies]

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

[Randall Edgar, CEO at Suncrete]

Yes. We are at the time of the year where all those suppliers are putting out their price increase notices, and we systematically will meet with those suppliers and talk about what 2027 looks like. We have been successful. That is 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 will pass it through. In the markets we think might be a little tighter, we will negotiate through that. We have been successful for 20 years of maintaining our margins, and the aggregate increases are this time every year.

[Phil Ng, Analyst at Jefferies]

Okay. Was price cost a pinch point in the back half, or is this just mostly demand and just the incremental acquisitions?

[Randall Edgar, CEO at Suncrete]

I am sorry, you broke up on me there for a little.

[Phil Ng, Analyst at Jefferies]

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

[Randall Edgar, CEO at Suncrete]

Yeah, it was largely what you just said. Yes.

[Phil Ng, Analyst at Jefferies]

Okay. All right, helpful. Thank you.

[Randall Edgar, CEO at Suncrete]

Thank you.

[Operator]

Next question comes from Rohit Seth with B. Riley Securities. Please proceed.

[Rohit Seth, Analyst at B. Riley Securities]

Hey, thanks for taking my question. 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, CEO at Suncrete]

I am not— We are having a hard time hearing you.

[Rick Black, Head of Investor Relations at Suncrete]

Could you ask that again, please?

[Randall Edgar, CEO at Suncrete]

Yes, please.

[Rohit Seth, Analyst at B. Riley Securities]

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, CEO at Suncrete]

I am going to hand that off to Tommy.

[Tommy Wentroth, CFO at Suncrete]

It was down slightly from 9%.

[Rohit Seth, Analyst at B. Riley Securities]

It was down 9%?

[Randall Edgar, CEO at Suncrete]

It is kind of like you are in a cave. It is hard to understand, hear you.

[Rohit Seth, Analyst at B. Riley Securities]

Are you not able to hear me? Is that what you are saying?

[Randall Edgar, CEO at Suncrete]

That is much better, Rohit. Yes.

[Rohit Seth, Analyst at B. Riley Securities]

All right. Your materials margin, it was about 53% in the first half. Did it hold above 52% in the third quarter with all the acquisitions in there?

[Tommy Wentroth, CFO at Suncrete]

The acquisitions brought it down slightly.

[Rohit Seth, Analyst at B. Riley Securities]

Okay. 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 me a sense of what it was in the third quarter with the acquired fleets in your dispatch system?

[Tommy Wentroth, CFO at Suncrete]

They were better in the third quarter.

[Rohit Seth, Analyst at B. Riley Securities]

Okay, so material margin down, plant and delivery costs better. Okay. 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. What is the right quarterly run rate we should model going forward?

[Tommy Wentroth, CFO at Suncrete]

I think $31 million on a quarterly basis. That will slightly increase, but we have got to get prepared for the growth that we are expecting throughout 2027.

[Rohit Seth, Analyst at B. Riley Securities]

Okay. Okay, then maybe you can comment on what you are seeing in the acquisition pipeline. You guys are talking about doing some deals in the third and potentially the fourth. We did not see any in the third. Do you have something lined up for the fourth that we should be expecting?

[Randall Edgar, CEO at Suncrete]

Yes.

[Rohit Seth, Analyst at B. Riley Securities]

Okay. So your net debt, your leverage is cut. You got it with your guide, it is going to be out 3.4x on your pro forma guide numbers. So, you are willing to take leverage up a little bit from here?

[Tommy Wentroth, CFO at Suncrete]

No. I believe it to stay within the previous range that we have mentioned, 3.5x, or I am sorry, 2.5x-3.2x.

[Operator]

The next question comes from Andy Wittmann with Baird. Please proceed.

[Andy Wittmann, Analyst at Baird]

Great. Thanks for taking my questions. 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 is a couple of delays there. It sounds like this is the smaller factor. Is my understanding that right? It is more of a residential, if you had to attribute it to one of these two 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 are still under construction, the site work is still preparing for you guys to come and deliver?

[Andy Wittmann, Analyst at Baird]

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. Thanks.

[Randall Edgar, CEO at Suncrete]

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 gather kind of indicate that the trough has not quite hit the slowest point. That being said, we adapted to that months ago. That hasn't truly adversely affected us. Now, when it comes back, that'll be great. We've 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?

[Randall Edgar, CEO at Suncrete]

We think those will come back, but, again, we just had the election, so we might find out next week everything's back. But those wouldn't impact us. They're not material in our total volume picture.

[Andy Wittmann, Analyst at Baird]

Okay.

[Randall Edgar, CEO at Suncrete]

We see a lot of robust jobs coming through Oklahoma. Data centers are still a big deal in Oklahoma, and we think they'll come back in other regions we're in also.

[Andy Wittmann, Analyst at Baird]

Okay, great. I guess my next question is just on cash. Obviously, the third quarter is always the seasonally highest burn rate, so it is going to consume some capital. But now that we are 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 three or six-month period in terms of cash inflows. Just want to make sure that all the integration is able to deliver the working capital as it unwinds here. It looks like there has been some injection certainly here in the quarter, which would be expected, but it is always hard to know how much, given that the company's profile and acquisitions have changed it so much.

[Andy Wittmann, Analyst at Baird]

I wanted 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. Thank you.

[Randall Edgar, CEO at Suncrete]

Well, Andy, Calvin is kind of on the front line on that, so I am going to defer that to Calvin.

[Calvin Bocanegra, Treasurer and Head of Business Development at Suncrete]

Andy, good morning. 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 have got roughly $50 million of cash today. You are right, we did sink some working capital into those deals that we did in Q2 throughout Q3, but they were working capital true-ups, many of which came through in Q4. I would not expect the business to burn cash outside of M&A during Q4.

[Andy Wittmann, Analyst at Baird]

Okay. I am 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 their cash purchase price? I know that in the early days at Construction Partners, that was how it was done, and I was not 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, Treasurer and Head of Business Development at Suncrete]

That is 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.

[Andy Wittmann, Analyst at Baird]

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-$250 million of revenue from the acquisitions, again, in 2027. I think those are the acquisitions starting with Hope, and then onwards, stuff from Louisiana, Nelson Bros., ABC Block. That is not the contribution from any other deals. It is just those, I guess, those handful of deals. Is that correct? I just want to make sure that we are all kind of working off the same numbers as we kind of refine our 2027 numbers.

[Calvin Bocanegra, Treasurer and Head of Business Development at Suncrete]

Yes, that is correct.

[Andy Wittmann, Analyst at Baird]

Okay. I think I will leave it there. Thank you.

[Randall Edgar, CEO at Suncrete]

Thank you, Andy.

[Operator]

The next question comes from Adam Thalhimer with Thompson Davis. Please proceed.

[Adam Thalhimer, Analyst at Thompson Davis]

Hey, good morning, guys.

[Randall Edgar, CEO at Suncrete]

Good morning.

[Adam Thalhimer, Analyst at Thompson Davis]

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

[Randall Edgar, CEO at Suncrete]

Yes, that is a great question. It is going fantastic. I mean, seriously, Adam, it has been a great performer, great management team there, and their results are actually above expectations, so we could not be happier with Block's performance.

[Adam Thalhimer, Analyst at Thompson Davis]

Maybe you could update us also on the North Texas acquisitions, how that integration is going, and kind of what inning are they in terms of getting that combined business where you want it?

[Randall Edgar, CEO at Suncrete]

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

[Adam Thalhimer, Analyst at Thompson Davis]

Okay. Randall, I think it was you who mentioned that you have a two-year data center backlog. What did you mean by that?

[Randall Edgar, CEO at Suncrete]

Well, not a little. Our data tells. 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. If you look at what is already out there and about to build, that is over two years backlog just in Texas data centers alone. Of course, we expect data centers to the political outlook to change on those now that the election is done, and the 17 moratoriums, et cetera, we think those will probably be worked through.

[Ned Fleming, Executive Chairman at Suncrete]

Hey, Adam, this is Ned. Let us just take a step back. Number one is we had a really good quarter. We are executing the plan. Unfortunately for everybody, it is not a straight line, right? I mean, it is a 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 have had a real positive outlook for 2027. When you talk about data centers, we have 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.

[Ned Fleming, Executive Chairman at Suncrete]

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. Those are very, very positive. In fact, I think these governors would prefer to call them digital factories and not data centers anymore, candidly. We are going to continue to grow this business. I think as far as the margins improvements, it has been a question asked, we see that happening month-to-month. We can see it business by business. Texas is 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.

[Adam Thalhimer, Analyst at Thompson Davis]

Perfect. I will leave it there. Thanks, guys.

[Randall Edgar, CEO at Suncrete]

Thanks, Adam.

[Operator]

The next question comes from Michael Francis with William Blair. Please proceed.

[Michael Francis, Analyst at William Blair]

Hi, guys. This is Mike on for Ryan. Thanks for taking the question. I wanted to start off residential, because it does seem like it has softened. Can you give a sense on how that has trended through the quarter and into October? As we look forward, is your expectation there that what is happening in October continues through November and December, or is there any sort of additional caution baked in for that potentially softening more?

[Randall Edgar, CEO at Suncrete]

Well, I think we have hit the bottom of the trough, so I think it will probably stay that way for a little bit. There is a lot of macroeconomic factors and the new election and where interest rates will trend. We have adapted to that. That is why we take the whole approach we do from day one, that segmented commercial infrastructure residential. That resi market has been flat for a long time, and it may stay flat for a little bit longer, but we do not think. We have already factored that in. That has been in place since the beginning of the year. We have been fortunate with infrastructure and commercial projects offsetting. One large commercial project offsets a whole lot of housing. We have been able to maintain our volumes and our margins in spite of the housing downturn.

[Michael Francis, Analyst at William Blair]

Okay. On the commercial piece, the projects you called out, are you confident that those will just shift into 2027? It is just sort of a delay and not sort of a situation where some of those might get canceled?

[Randall Edgar, CEO at Suncrete]

Again, it was just one or two projects. There are several large projects that are, again, about to kick off and that we have already secured. Keep in mind, we are well-positioned to get those types of large jobs. Other people do not have the resources, they do not have the equipment, they do not have the personnel. We will continue to get those large-scale jobs. Keep in mind, we had a 10% organic increase in Q3. Probably about 2/3 of that is volume and a third of it is price, but still, it is 10% organic growth.

[Michael Francis, Analyst at William Blair]

Okay. And that answered my last question there, so I will pass it back.

[Randall Edgar, CEO at Suncrete]

Okay. Well, great, Michael. Thanks.

[Operator]

The next question comes from Alex Rygiel with Texas Capital. Please proceed.

[Alex Rygiel, Analyst at Texas Capital]

Thank you. Good morning, gentlemen. Can you speak to pricing more broadly in the quarter and thoughts about it going into 2027?

[Randall Edgar, CEO at Suncrete]

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

[Alex Rygiel, Analyst at Texas Capital]

Was there any abnormal weather impact in the quarter?

[Randall Edgar, CEO at Suncrete]

You know, October historically can be one of your biggest months in concrete. But October can be a very rainy month too, so 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 it rains or the two or three days of rain where we had all this abnormal excessive rain pattern in second quarter, that also retards the ability to do all the dirt work for these large-scale projects. Of course, that's a massive task, and nothing gets done until that's done.

[Randall Edgar, CEO at Suncrete]

Part of why we're pushing some things into 2027 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. It'll just be reflected in the next year. So, we have seen some of that. We are feeling some of that because, again, second quarter was abnormal, and people are behind on their projects time-wise, but they're still out there, they're still moving forward, and they'll still get the full volume of concrete.

[Alex Rygiel, Analyst at Texas Capital]

Very helpful. Thank you.

[Randall Edgar, CEO at Suncrete]

Thank you.

[Operator]

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

[Randall Edgar, CEO at Suncrete]

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.

Participants

Executives

• Rick Black, Head of Investor Relations
• Randall Edgar, CEO
• Tommy Wentroth, CFO
• Ned Fleming, Executive Chairman
• Calvin Bocanegra, Treasurer and Head of Business Development

Analysts

• Kathryn Thompson, Analyst at Thompson Research
• Phil Ng, Analyst at Jefferies
• Rohit Seth, Analyst at B. Riley Securities
• Andy Wittmann, Analyst at Baird
• Adam Thalhimer, Analyst at Thompson Davis
• Michael Francis, Analyst at William Blair
• Alex Rygiel, Analyst at Texas Capital