Everus (ECG) Q3 2026 Earnings Call Transcript

DATE

Wed, Nov. 4, 2026

CALL PARTICIPANTS

• Chief Executive Officer - Jeffrey S. Thiede
• Chief Financial Officer - Maximillian J. Marcy

TAKEAWAYS

• Revenue -- $1.38 billion, representing 40.3% growth versus the prior-year period driven by performance in both the electrical and mechanical and transmission and distribution segments.
• Organic Revenue Growth -- 35.8%, excluding the impact of acquisitions completed during 2026.
• EBITDA -- $140.2 million, an increase of 57.5% due to robust top-line growth and efficient project execution.
• EBITDA Margin -- 10.1%, expanding 110 basis points compared to 9.0% in the previous year.
• Total Backlog -- $5.48 billion, an increase of 86.1% year over year reflecting record demand in electrical and mechanical markets.
• Electrical and Mechanical Revenue -- $1.14 billion, up 48.0% primarily from demand in commercial and industrial end markets.
• E&M Organic Revenue Growth -- 42.3%, driven by continued expansion in data center and high-tech submarkets.
• E&M EBITDA Margin -- 10.5%, increasing 180 basis points due to gross margin improvement and project timing.
• Transmission and Distribution Revenue -- $255.6 million, up 14.4% reflecting higher demand in the utility end market.
• T&D EBITDA Margin -- 15.0%, maintaining parity with the prior-year performance.
• Net Leverage -- 0.7x, remaining well below the targeted range of 1.5x to 2.0x.
• Nine-Month Operating Cash Flow -- $267.3 million, up from $108.6 million in the first nine months of 2025 due to working capital timing and higher results.
• Nine-Month Free Cash Flow -- $221.2 million, compared to $74.8 million in the prior-year period.
• Acquisition Backlog Contribution -- $742.3 million, representing contracts added through the purchases of SE&M and Epsilon Industries.
• Fiscal 2026 Revenue Guidance -- $5.0 billion to $5.1 billion, raised from the previously forecasted range of $4.5 billion to $4.7 billion.
• Fiscal 2026 EBITDA Guidance -- $485 million to $495 million, increased from the prior range of $410 million to $425 million.
• Project Settlement Benefit -- $7.6 million, resulting from a dispute resolution on prior billings.
• Acquisition Capital Deployment -- Over $500 million, utilized for growth initiatives including the acquisitions of SE&M and Epsilon Industries.
• Incentive Compensation Expense -- $13.4 million increase, reflecting improved business performance relative to targets.
• Capital Expenditure Guidance -- $90 million to $100 million, representing 1.8% to 2.0% of forecasted annual revenue.
• Diluted EPS -- $1.79, representing 61.3% growth versus the third quarter of 2025.
• Net Income -- $91.9 million, an increase of 61.2% over the prior-year period.

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RISKS

• Marcy warned that modular construction projects follow a lumpy revenue cadence that differs from the company traditional engineering and construction cycles.
• Marcy stated, "long term in this space, you know, there is, you know, a labor challenge," acknowledging that industry-wide workforce constraints remain a systemic hurdle for construction firms.

SUMMARY

Everus Construction Group, Inc. (NYSE:ECG) reported record quarterly results for the third quarter of 2026, driven by expansion across its electrical and mechanical and transmission and distribution segments. Management increased full-year guidance for revenue and EBITDA, citing sustained demand from hyperscale data center customers and the integration of the Epsilon Industries acquisition. The company maintained a net leverage ratio significantly below its long-term target, providing capital flexibility for additional organic investments and acquisitions. Operational focus remains on the use of modular construction and prefabrication to address labor constraints and enhance project execution efficiency.

• Thiede stated, "Our data center end customers tend to be large hyperscalers, and we remain deeply involved in the project planning process for these customers."
• Marcy noted that by utilizing prefabrication and modular construction, the firm can "continue to support further growth even faster than we can grow our labor force."
• The company reported that its geographic footprint in the semiconductor submarket includes a new geography where work is ramping up after entry in late 2025.
• Management stated that utility sector opportunities are expected to be driven by master service agreements to address aging infrastructure and projected load growth.
• Thiede noted, "The institutional market also generated solid backlog growth, building on momentum we saw during the second quarter."
• Management reported a labor force at record levels, having increased fourfold over the previous 10 to 12 years.

INDUSTRY GLOSSARY

• E&M: Electrical and Mechanical specialty contracting services.
• T&D: Transmission and Distribution specialty contracting services for utility infrastructure.
• Hyperscaler: Large-scale cloud service providers that require significant data center capacity.
• Modular Construction: An offsite construction process where components are manufactured in a facility before final installation.
• Backlog Burn: The rate at which existing contract commitments are converted into recognized revenue, typically measured over 12 months.
• Net Leverage: A financial ratio measuring net debt relative to EBITDA to assess a company's borrowing capacity.

Full Conference Call Transcript

Operator: Hello, everyone. Thank you for joining us and welcome to Everest Third Quarter 26 Earnings Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Paul Bartolai. Please go ahead.

Paul Bartolai: Thank you. Good morning, everyone. And welcome to Everest Construction Group's third quarter 26 results conference call. Leading the call today are CEO, Jeffrey S. Thiede CFO, Maximillian J. Marcy. We issued a news release yesterday, detailing our third quarter 26 operational and financial results. This release, the accompanying presentation materials are available on our website at investors.everest.com. I would like to remind you that management's commentary and responses to questions on today's conference call may include forward-looking statements. Which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results could differ materially.

For a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of our latest filings with the SEC. Additionally, please note that you can find reconciliations of historical non GAAP financial measures in the news release issued yesterday and in the appendix of today's presentation. Today's call will begin with prepared remarks from Jeffrey S. Thiede, who will provide a review of our recent business performance. And an update on the progress against our strategic priorities, followed by Maximillian J. Marcy, who will provide a more detailed financial update before wrapping up with our guidance.

At the conclusion of these prepared remarks, we will open the line for your questions. And with that, I will turn the call over to Jeffrey S. Thiede.

Jeffrey S. Thiede: Thank you, Paul, and good morning to everyone joining us today. Everest delivered another quarter of strong financial results, Achieving new quarterly revenue, earnings and backlog records. Our results reflect the robust demand we are seeing across our diverse end markets. As well as our team's disciplined execution and ongoing focus on our forever strategic priorities. We continue to see sustained demand across our business, as demonstrated by our strong backlog growth. The trends are broad based, with growth across each of our E&M markets. We are experiencing robust bidding activity, strong order patterns,, and continued positive tone from our customers. Keeping us on pace for a strong finish to the year and continued momentum into 2027.

Turning to our quarterly highlights, beginning with slide 4. We delivered record third quarter revenues of $1.4 billion up 40% from the prior year. With growth across both our E&M and T&D segments. Our strong top line performance was complemented by another quarter of excellent execution resulting in a 58% increase in third quarter EBITDA compared to last year with EBITDA margin up 110 basis points. Record results underscore the strength of our position in the industry our disciplined focus on our operational playbook, and the deep long standing relationships we have with our customers.

Our backlog at the end of the third quarter was $5.5 billion up 86% from the same period last year, driven by continued strength in E&M, and including contributions from our recent acquisitions of SE&M and Epsilon. The outlook for our data center business remains robust, and this was a key driver of our backlog growth in the quarter. Our data center end customers tend to be large hyperscalers, and we remain deeply involved in the project planning process for these customers. These plans can extend beyond our backlog burn giving us good visibility into the continued momentum in the industry.

Our long track record of successful project execution our deeply talented and experienced workforce, and our geographic footprint positions us very well for these attractive industry trends. That said, we also continue to see strong demand trends across other areas of our business. And we are strategically positioned to benefit from our diverse end markets Within industrial, we continue to see strong trends in the high-tech submarket. Mainly semiconductor including the ongoing ramp up of work in the new geography we entered around this time last year. The initial project for this new customer is progressing nicely. And we remain encouraged by the multiyear opportunity we see in this geographic region.

The institutional market also generated solid backlog growth, building on momentum we saw during the second quarter. We have seen strong growth in our government and healthcare submarkets, 2 industries where we have a long history of success. After having some large projects finish up in 2025, we are excited to see the renewed activity in these 2 key submarkets. Our recent acquisitions of SE&M and Epsilon are also contributing to the diversity of our growth drivers. SE&M significantly expanded our presence in the pharma and health care submarkets. And increased our volume of mechanical work. Momentum remains strong in SC&M's business, and the integration process is progressing extremely well.

We remain excited by the opportunities of the attractive Mid-Atlantic market. We are very pleased to welcome the Epsilon team to Everest with the acquisition closing on September 1. Offsite construction is clearly a critical driver of success in our business. So we are excited by the expanded modular construction capabilities that Epsilon brings to our company. It also enhances our business diversification by broadening our geographic footprint into several attractive regions, And we expect to have meaningful cross-selling opportunities with the customer relationships that Epsilon has. We look forward to keeping you updated as we make progress on integrating Epsilon into our operations. Epsilon has strong business momentum.

And we are excited about the contributions it will make to our growth strategy. I would like to wrap up my comments with an update on our key strategic initiatives. As a reminder, our value creation framework is based on targeted growth, operational excellence, and disciplined capital allocation. In terms of growth, I already highlighted the sustained momentum we are experiencing across our E&M business. While E&M has been the primary growth driver recently, we remain encouraged by the favorable outlook in our T&D business. We are experiencing solid backlog momentum across our utility submarkets, and we are optimistic about the growth outlook for our T&D business in the coming years.

Utility investment to address aging infrastructure and support projected load growth will provide opportunities in the coming years. We have long term relationships with utility customers in our key geographies. And we are well positioned through our long standing master service agreements to benefit from the expected ramp in transmission and distribution spending. Now turning to operational excellence. Efficient project execution is contributing to our outstanding results. Including EBITDA margin of 9.8% through the first 9 months of 2026, which is up 120 basis points compared to last year.

Our strong performance is a direct result of our disciplined focus on the Everest operational playbook the use of modular construction and prefabrication services, and the hard work and dedication of our team members across the company. Our commitment to our forever strategic framework that focuses on employees, value, execution and relationships remains a driving force behind our continued success. And the last initiative I wanted to update you on is our disciplined capital allocation. As we have stated since our spin off almost exactly 2 years ago, our capital allocation framework prioritizes investments that support our growth. Both organic opportunities and through acquisitions. Our 2 acquisitions this year align with the acquisition strategy that we have described.

Which is to expand our geographic footprint, diversify our business, and deepen our market presence. Our corporate development team remains busy and we are excited about the opportunities we are evaluating in our acquisition pipeline. Even with the recent transactions, our net leverage is well below our 1.5 to 2x targeted range, so we have continued flexibility to execute on our growth strategy. In summary, we remain committed to our strategic priorities and our encouraged by the continued momentum across our business. We expect a strong finish to the year and are pleased to once again be raising our full year outlook. Which Max will discuss in more detail.

I would like to thank our stockholders for their ongoing support our employees for their dedication to safely building America's future, and our customers for their trust and ongoing partnership. With that, I will turn it over to Maximillian J. Marcy.

Maximillian J. Marcy: Thank you, Jeffrey S. Thiede, and good morning, everyone. I will provide additional details on the quarter, give an update on our liquidity and balance sheet, and wrap up with our updated guidance. Beginning on slide 10 of the presentation, revenues for the third quarter were $1.38 billion an increase of 40% compared to the same period last year. The increase was driven by growth in both our E&M and T&D segments, including contributions from the acquisitions of SCE&M and Epsilon. Excluding the acquisitions, third quarter revenues were up 36% on an organic basis. Total EBITDA was $140.2 million during the third quarter.

An increase of 57.5% from the same period in 2025 driven by robust revenue growth and continued excellent project execution. In addition, results included a 1-time net gain of $7.6 million related to the settlement of outstanding billings on a past project. Our third quarter EBITDA margin was 10.1%, up 110 basis points from 9.0% in the prior year period. At September 30, total backlog was $5.48 billion, up 86% from September 30 of last year. The increase was driven by strong growth in our E&M backlog, which was up about 100% As Jeff detailed, the robust backlog growth reflects increases across each of our E&M markets.

As well as roughly $742 million in contributions from SE&M and Epsilon at quarter end versus the prior year. Now turning to our segment results. Let's first look at E&M our third quarter revenues increased 48% to $1.14 billion The increase was driven primarily by growth in our commercial and industrial end markets, as well as contributions from our recent acquisitions. Excluding acquisition revenue, our E&M revenue was up 42% organically. Our E&M EBITDA was $119.8 million in the third quarter. An increase of 79% compared to the third quarter of 2025. The increase was driven by our strong revenue growth higher gross margin due to strong project execution.

As a result, our E&M segment EBITDA margin was 10.5%, up 180 basis points compared to 8.7% in the third quarter of 2025. Our third quarter T&D revenues were $255.6 million, up 14% from third quarter of last year. Driven by growth in our utility end market. T&D segment EBITDA was $38.3 million in the third quarter, up 13.3% from the prior year period, due to higher revenues. T&D segment EBITDA margin was 15% during the third quarter, on par with the same period last year. Turning now to our balance sheet and liquidity.

As of September 30, we had $245 million of unrestricted cash and cash equivalents, $572 million of gross debt, and $248 million available under the credit facility. Our net debt increased sequentially, reflecting the closing of the acquisition. Partially offset by our strong operating results. Net leverage, defined as net debt to trailing 12 month EBITDA was 0.7x as of September 30. Well below our 1.5 to 2x targeted range. Operating cash flows were $267.3 million for the first 9 months of 2026. Compared to $108.6 million in the same period last year due to our strong operating results and favorable working capital timing.

Capital expenditures were $53.4 million for the first 9 months of 2026, up modestly from $42.1 million in the prior year period. Our capital expenditures for the first 9 months represented 1.5% of revenues below our targeted 2% to 2.5% of revenues, due in part to our strong revenue growth and timing of investments. We continue to see significant opportunities to invest in our business to support our organic growth initiatives, and we remain committed to our long term capital spending targeted range. For the 2026 fiscal year, we continue to that we will invest $90 to $100 million in capital expenditures.

Combined with the acquisitions of Epsilon and SE&M, we have deployed over $500 million of capital in support of our growth initiatives thus far in 2026. Even with these investments, our net leverage remains modest. Giving us significant balance sheet capacity and ample flexibility to continue investing in our strategic growth initiatives. We generated free cash flow of $221.2 million for the first 9 months of 2026. Up from $74.8 million in the same period last year. While our 2026 free cash flow had some timing benefits, our teams are managing the working capital dynamics very effectively as we grow with customers.

Wrapping up with guidance, Based on our strong results and the inclusion of Epsilon, combined with the continued momentum we see across our business, we are raising our full year 2026 guidance. We are now forecasting revenues in the range of $5 to $5.1 billion and EBITDA in the range of $485 million to $495 million. At the midpoint of our range, our guidance implies EBITDA margins of around 9.7% for the year, essentially in line with our year to date performance, which reflects the execution upside as well as the margin accretion from SC&M and Epsilon. That completes our prepared remarks. Operator, we are now ready for the question and answer portion of our call.

Operator: We will now begin the question-and-answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question from the line of Brent Thielman with Oppenheimer and Co. Brent Thielman, your line is open. Please go ahead.

Brent: Hey, thanks. Good morning. it is a great quarter.

Jeffrey S. Thiede: Thanks, Brent Thielman. Jeffrey S. Thiede, I guess just the first question. You know, any anecdotes or visibility you can share into potential new business and the overall pipeline that maybe goes beyond the robust backlog you reported this quarter? And I guess any risks that you see as a result of the outcome of the elections?

Brent: Yeah. If you think about the history of our company over 30 years, we have been able to navigate successfully through a strategy to take advantage of opportunities in the current market, but also looking ahead in the future.

Jeffrey S. Thiede: We are really proud of our team to be able to grow our record backlog. And our backlog increases in many of our markets, and some markets, is encouraging to us to be able to further diversify our business and capture the opportunities today but meanwhile looking ahead. I think that is also demonstrated by our most recent acquisitions. from SCNM, which closed in April, and also Epsilon, which closed in September. Okay.

Brent: And then, yeah, it looks like Epsilon added pretty significant backlog here in the quarter. I think you have some capacity plans underway for that business. Just your thoughts on ability to convert that in 2027 to some of that work extend beyond next year? Just how we should think about that?

Jeffrey S. Thiede: Yeah. Hey, Brent Thielman. Go ahead, Maximillian J. Marcy.

Maximillian J. Marcy: it is Maximillian J. Marcy. So, you know, the modular activity that Epsilon has typically has a longer backlog burn than we see in our business. So we feel very confident in their ability to continue to generate good opportunities and solid backlog, but it will convert at a slower pace just given that the nature of the business.

Jeffrey S. Thiede: And adding to that, Brent Thielman, you know, we look at this every. At least every quarter, every month. Our backlog burn, as we have reported previously, is about 80% over a 12-month period. Got it.

Brent: Okay. I will pass it on. Thank you.

Operator: Your next question from the line of Brian Brophy with Stifel. Brian, your line is open. Please go ahead. Brian, your line is open. Please go ahead. Your next question from the line of Kurt Yinger with DA Davidson. Kurt, your line is open. Please go ahead.

Kurt: Brent Thielman. Thanks, and good morning, everyone.

Jeffrey S. Thiede: Good morning, Kurt. I just wanted to go I guess, high level. I mean, obviously, refresh news from an election perspective, but would just love to kind of hear high level thoughts, you know, just less data center friendly rhetoric. You know, talking about potential moratoriums or new construction positives? I guess, how do you think big picture around that may be impacting your business? Maybe sports specifically whether that has any impact in terms of things you have in backlog? Just high level thoughts would be much appreciated.

Kurt: Yeah. Thanks for the question.

Jeffrey S. Thiede: We have not seen any change of behavior from our customers or our outlook for data centers is strong. it is as we have reported previously and the same for this quarter. The largest part of our backlog. If you look at the increases in the other submarkets we have in our backlog, we have an increase in hospitality and warehouse, our industrial work. Semiconductor work within industrial, in addition to manufacturing is also up on a year over year basis for backlog. Our institutional work, government and healthcare, which include. Also includes pharmaceutical is up year over year. And even renewables and our special projects and service work is up on a year over year backlog basis.

Our utility work is up as well. Most notably in the substation transmission and utility work. So the diversification strategy of our business is working. So today, we have a lot of data center work, and we are executing that work incredibly well, which is reflected in some of the margin uplift that we have had in this quarter and year to date.

Kurt: Okay. Okay. That. that is helpful. And I guess maybe sticking to that kind of diversification theme and looking ahead at future opportunities. I mean, if we were to kind of take today as a representation of maybe greater project risk or, you know, more uncertainty around how certain projects might progress. I guess, does that change your appetite to continue to pursue more opportunities in that data center area if that strength continues, I guess, you know, I get it is a knee jerk reaction, but would just love any thoughts there. Thank you.

Jeffrey S. Thiede: Yeah. We are very involved. We are in the planning stages with the hyperscalers, which we are working mostly for and we are confident that we are going to continue to see opportunities with data centers. And then throughout our organization, to be able to exercise our diversification strategy We are anticipatory on making sure that we are looking ahead to be able to optimize the opportunities that we see coming up like pharmaceutical, like manufacturing, industrial and healthcare. And some of our institutional work.

Kurt: Okay. Okay. Appreciate that. And maybe just lastly on Epsilon. You mentioned some opportunities for cross sell. I was hoping having owned that business for 2 months now, if there are maybe any specific examples or specific areas where you know, you really see an opportunity to scale that business or areas where you have you have been able to kinda leverage it to a greater extent as part of the your larger platform.

Jeffrey S. Thiede: We see a lot of opportunity for cross selling. Epsilon had its own customers before we acquired them. And of course, Everest, we had our own customers as well. We have visited their plant and got our presidents together, and we have the discussions moving forward with being able to cross sell. Epsilon is pretty well diversified too. They, of course, do some data center work, but they also have experience in automotive and in the healthcare industry. So we think it is a great compliment to our business. We think that the cross selling opportunities are going to provide an expansion and we are going to support that business through capital in our CapEx program.

Operator: Your next question from the line of Michael Stratenhely with Guten Securities. Michael, your line is open. Please go ahead.

Jeffrey S. Thiede: Morning, Michael.

Michael: Hi. Thanks for taking the question, and sorry. I hope this was not asked already. But looking past integration with Epsilon, how much of the E&M backlog do you think could realistically shift to off-site prefab work? And if that is the case, you know, would that potentially increase the CapEx going forward in the out years? Thanks.

Jeffrey S. Thiede: Yes, we see continued growth in the opportunities to be able to do offsite construction. We have had an initiative within our company for many years, and organically we have been able to grow both on prefabrication and modular. If you take a look at what Epsilon brings to our company as well, they are 100% offsite construction And the lessons learned from, you know, what we have done in the past successfully and you compliment that with Epsilon, we are going to continue to expand that part of our business and it is going to continue to grow.

Our customers also have a big part in this, because they make those early commitments for us to be able to secure the engineering and the equipment and the tools that are necessary in order for us to be able to build upon our success. We are really excited about Epsilon. it is a great part of our business today. And we see tremendous opportunity in the future.

Maximillian J. Marcy: And I would just add to that, Michael. I mean, obviously, we had lots of, you know, capital plans ahead of buying Epsilon that focus both on, you know, equipment and trucks for our businesses, but also on prefab and module opportunities. Right? So I think this just supplements that. I do not think it changes the long term dynamic. Of our kind of 2% to 2.5% of revenue in CapEx. I think, you know, with what we want to do with Epsilon and then, of course, internally, our prefab and modular still fits into that rubric. We still feel confident that we can deliver lots of opportunity and continue to convert backlog to modular within that framework.

Michael: Thank you.

Operator: Your next question from the line of Brian Brophy with Stifel. Brian, your line is open. Please go ahead.

Brian: Thanks. Good morning. Can you guys hear me?

Jeffrey S. Thiede: Yes. Good morning, Brian.

Brian: Oh, awesome. Appreciate it. Thanks for taking the question. I guess just to kind of pile on to the Epsilon conversation here. Can you give us a sense for how fast Epsilon has grown in the past and how we should think about the pace of growth there relative to your stick built business? Thanks.

Jeffrey S. Thiede: Yeah. I will start and I would like to have Maximillian comment on that, but of course, we built a model and dove into the details very thoroughly to be able to track against what we originally planned. And Epsilon was closed September 1, as you know. We are tracking very well on a business that we see as a great complement to our company.

Maximillian J. Marcy: Yeah. So, Brian, you know, I mean, obviously, modular construction has a little different cadence. Right? it is not maybe as smooth as what you see in our typical E&C. On They have had good growth. Maybe it has not been quite as fast as where we have grown, but it is held in there with kind of market growth rates over the last several years. But it is just a little bit lumpier. We feel good about our ability to continue to convert what they are doing into good revenue in the future.

Brian: Okay. And, yeah, just a follow-up to that. You may have just answered my next question. But the acquisition contribution for electromechanical, I think, was a little bit less than some of the annual run rates would imply for SCNM and Epsilon. Just curious what the driver is. Is some of that the lumpiness in timing of deliveries at Epsilon as you were kind of alluding to and the business only being in the quarter for 1 month. Or is there something else driving it?

Maximillian J. Marcy: Yeah. Yeah, Brian. it is a little bit the light you know, the former that you were talking about. Right? So, I mean, this is, you know, maybe a little bit lumpy. You know, first month purchase accounting, all that all that stuff and getting the business integrated into our financials. So we feel very, very confident in the long-term run rates of the business. Appreciate it.

Brian: I will pass it on. Thanks, Brian.

Operator: Your next call from the line of Svea Herbst-Bayliss with Cantor Fitzgerald. Svea, your line is open. Please go ahead.

Analyst: Hi, Jeffrey and Maximillian J. Marcy. Congrats on another solid quarter. Having a few connectivity issues, so excuse me if this has been already answered. But Jeff, with E&M organic revenue up more than 40%, and the acceleration that you mentioned in data center activity, which is still ongoing, are you thinking about skilled labor availability heading into 2027?

Jeffrey S. Thiede: Yeah. I think I got most of that. I apologize for. it is probably on our end. But, yeah, I think the growth of our business is going to be, of course, reflected in our backlog and our record backlog comes across many of our end markets and submarkets as I previously stated. Yeah.

Analyst: And so-- Can I-- Sorry.

Maximillian J. Marcy: And labor availability, I mean, I think, obviously, we have done a very, very good job of growing our labor force, you know, to support the long term, you know, backlog conversion in our business. I think we have probably grown revenue faster. I think that is probably the continued goal is we will continue to get access to labor as we need it to complete the projects that we are taking on our backlog. But we also are using prefabrication and modular to continue to do more with less.

So, obviously, long term in this space, you know, there is, you know, a labor challenge, but we have been successful in quadrupling our labor over the last 10 to 12 years. And of course by using prefab and modular, we continue to support further growth even faster than we can grow our labor force.

Jeffrey S. Thiede: Yeah. We are a record employment, and we have got a strong history of developing our people technically, but even soft skills to have good solid succession planning to be able to continue our growth and support our goals for the future.

Analyst: Right. Thank you for giving that color. Maximillian J. Marcy, I had another question on margin normalization. Q3 EBITDA margin was 10.1%, but accounting for the benefit that you had from the dispute resolution of 55 basis points, it comes down to 9.6. So should we think of that as the new starting point for 2027?

Maximillian J. Marcy: Well, we are not quite ready to provide 2027 guidance yet. You know, we will give a give that in February. But I think if you think about, you know, the benefits that we have had, I think, you know, some of it is through execution. Right? So there is still some execution benefits that we saw during the third quarter. So I would not call execution benefits, you know, normalized margin. But then we also have seen, you know, some upticks, continued upticks in our core margins as well. So, you know, the guidance in Q4 is.

You kind of did the math already in Q3, so our Q4 guidance kind of suggests that we continue upon that similar margin trend in the fourth quarter based on the visibility to the projects we have and some execution benefits in the fourth quarter.

Analyst: Okay. Thank you. I will pass it on.

Operator: There are no further questions at this time. I will now turn the call back to Jeffrey S. Thiede for closing remarks. Thank you, operator.

Jeffrey S. Thiede: I want to thank you all again for joining us today. We will be attending several upcoming investor events. Including the Baird Industrial Conference in Chicago, the Wolf Virtual Small and MidCap Conference, the Oppenheimer Winter Industrial Summit, and the Stifel Frontier Tech 2.0 Energy Summit in New York. If we are not able to connect during the next few months, we look forward to speaking with you on our next quarterly earnings call. Thank you for your time and your interest in Everest.

Operator: This concludes today's call.

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