Conference Transcript - CDNL 2026-06-03

Louis De Palma, Analyst — William Blair

I am Louie De Palma. I cover smart infrastructure on William Blair's equity research team. We have an overcapacity crowd on hand here for this session of day two for the 46th annual William Blair Grow Stock Conference. We are very pleased to be hosting a presentation with Cardinal Infrastructure's management team. Joining me today are Chairman and CEO Jeremy Spivey, Chief Operating Officer Benji Wood, and Director of Investor Relations Emily Lear. Cardinal IPO'd in December, and it has been an auspicious start to shares, as your CFO Mike Rowe would say, knock on wood. But Jeremy, Benji, and Emily, thank you for joining me, and following the session, there will be a breakout in the Burnham Bee Room. I am also required to inform the audience that a complete list of research disclosures and potential conflicts of interest are available on our website. Jeremy, thanks for joining us, and please take it away.

Jeremy Spivey, CEO

Thank you, Louie. Appreciate you guys joining us here today. I'm Jeremy Spivey. I'm CEO and chairman of Cardinal Infrastructure Group. As Louie indicated, we had a successful IPO in December of 2025. We are a turnkey infrastructure services platform serving and rolling up in the southeast. What we are is we are a comprehensive infrastructure service platform. What we do and what we deliver is all the civil services turnkey that are provided for all in markets within the development world and and what we do is we leave with residential and development and all that all the markets that we enter and we we vertically integrate services get to scale and then we diversified to all the other end markets starting with residential the reason we do that is because it has very sticky relationships it is a service that is led with wet utilities due to the complexity schedule always drives the success of these projects and we leave the schedule and in turn we also get unmatched quality I'll go through some of these services real quick so what we do is we we deliver all the services it's clearing and grubbing we do surveying we do erosion control we do drilling and blasting of rock which is specific to certain regions of the southeast we do grading and mass earthwork we do retaining walls we do wet utility insulation which is water sewer and storm drain and then finally we do stone curb and paving we grow the platform in a few different ways first we enter new states through M&A next we advance the vertical integration advantage that we've developed across our footprint both organically and through tuck-in opportunities and finally we diversify in markets as we scale into new MSA's again we lead with residential we start off in new markets Benji's here with us ALGC was our first acquisition as a public company they provided a few of the services but not all the services and led with residential development that was their primary and market once we get into these new markets and we start to integrate and add all the services that provides for a complete turnkey package we can then go off into other end markets and be not only competitive but provide a host of solutions and services that those end markets aren't used to typically when you see end markets that are outside of the residential world it involves general contractors who are sourcing a number of different services and then kind of compiling them to deliver a finished product and what that what that does is that provides and creates pain points through handoffs right so you have a service the service comes in you have a master schedule that service requires a handoff to a new trade provider and if they're busy doing another project or they don't have the resources to come step in at that handoff point you have you have an issue because you have a gap in schedule and so that has downstream impacts all the down to the completion of the project and what we do is we solve for that when you hand the project to a Cardinal infrastructure group or one of their platforms underneath it the handoff is one time and then we are facilitating all the resources required to execute all the services to deliver a final product so the handoff is seamless there's no gaps in schedule we're able to move and reallocate resources as needed to provide not only you know schedule completion on time if not on time expedited but also we're solving the quality issues so when you have different trades and different service providers executing the different work you never know kind of what you're gonna get there's different eyes on the product once you go to get your final acceptance and approvals from whatever municipality or engineering third party who's doing the the certification you oftentimes due to the handoffs and the and and the change of the guard if you will with the service providers there's there's an there's issues with either not being fully completed or not being completed to the municipality's standards and specifications and then you have to go back and find out who's responsible get that work repaired and then move on throughout the completion and warranty process and so when when when that's seamless when there's only one handoff and one service provider there's one set of eyes on the project from start to finish and so what you know when we hand off a project to a customer or a developer then of the project there's been there's been no gap and so that's that's part of the value add prop that we we deliver to all the end markets and that specifically becomes very important with respect to the commercial the industrial the manufacturing the infrastructure or retail in markets because they're used to the multi trades providing providing the service so slide eight here what we're good we're gonna continue rolling up in the southeast Cardinal has a proven M&A engine we've done eight acquisitions we have a discipline playbook with both the companies we're looking to bring in and the multiples for which we're willing to pay so we start you know when we're entering a new market we're focusing on you know service providers in that market we're meeting with them we have multiple ways that we source and identify potential M&A targets we do that through friends and family we do it through equipment providers we do it through material providers we do it through insurance agents we do it through a whole network of opportunity or connections that we have in those markets to be able to identify and get introduced to potential fits for our company we leave with culture so that's the first thing we're looking for we're looking for a cultural fit not only with with management but all the way down the aligned to the the skilled labor workforce out in the field. ALGC is a perfect example of this you know we go through you know anytime we out of the eight acquisitions that you've seen us done we've probably looked at a hundred different companies so it's not that we're just looking at a company and trying to figure out a way to make it work we're very deliberate and finding the exact right fit we partner with great management who shares in the vision who wants to be part of the team who wants to be a part of the success he's always wanted to do what we've done never had the resources or never wanted to take the risk to get it done this is you know this is a very fragmented industry we operate in mom-and-pop multi-generational operations who have run their company to a level and provide a number of services where they're just comfortable they they have either they have multiple family members or they're they're the sole founder operating partner of the company and they've reached a level to where they're making you know comfortable distributions they know what the revenue is going to be on annual level or an annual runway and they know what they're going to be distributed at the end of the year and so they're not looking to take the risk to reinvest that cash back into the business in order to try to accomplish what we've done there's there was nobody in the market when we started doing acquisitions in the in the Carolinas there was nobody in that space doing it at the time which is you know kind of a testament to the vision but also signals that nobody's willing to take that risk the integration processes has to be flawless you're dealing with employees and skilled labor and management who who run the engine and so if they're not comfortable if you're not letting these individuals know that day two is going to be better than the day one then you run the risk of having some attrition and so you know making sure that that integration process that letting the employee base know that the culture that you're trying to create is better at or better than what they're used to is is key and and there's there's just not a lot of people out there who have the experience or the willingness to take

Louis De Palma, Analyst — William Blair

that step to try to figure it out Jeremy on the subject of M&A and culture I think it'd be great to hear from Benji in terms of how you connected with Jeremy and Cardinal and like how the culture fit has been for yeah so my

Benji Wood, COO

brother and I owned our business and been in Atlanta for over 30 years. We've been approached over the years several times from different PE groups and so forth and so I'm 51 and we're at a point of maybe exploring that option and so we've gone through the process had our book out and you know there were deals on the table to be had right but to what Jeremy's touched on you spend your whole life building a business and those options are just just never were really what you're looking for if you want to throw the keys at it and go away maybe you can do that but uh it wasn't the best option that we were looking for we have a lot of people we've built our business with really important to us in our culture so you know fortunately we met with Jeremy and the team late in our process but once we got to know each other spend a little time together like like like Jeremy had touched on like the cultures fit the interest aligned and and that's the key so the people are everything in the company right so if you get if you get aligned with the right people at the table a lot of great things happen and and so that's the way we felt and we were excited about what Jeremy's done in Raleigh and in the Carolinas it's different than no one's done in Atlanta land is a larger a little bit more mature super efficient market so people tend to stay narrow focused in their lane versus the vertical integration it is high risk it's high capital our business is capital intensive naturally and that was a rate the path my brother and I had been on and so we thought about it just never crossed those lanes and so when we sat down with Jeremy and the team and seeing what they've done the opportunities were obvious and they're kind of in front of you no one else was doing it so we didn't feel like we were missing it or behind the ball in Atlanta we're one of the top four contractors in Atlanta without question so it just really brought some exciting opportunities and ideas to the table and it's been really exciting thus far just to you know to have again the people at the table with aligned interest aligned expertise and backgrounds just really bringing these ideas together it's exciting to see what's happening so far and what you see

Jeremy Spivey, CEO

here is you see the acquisitions that we've done and the strategy kind of looks like this there's a platform and then there's a tuck-in and what I'll call the hybrid tuck-in and I'll go through a little bit here our platform is our expansion into a new market ALGC is a perfect example we acquire that company we started to integrate it not only in the back office and and with with the management team but then we're we're focusing on integrating vertically with services what can we do organically right off the bat to grow this business in Atlanta you know there was a few services that did they didn't already provide in-house drilling and blasting retaining walls asphalt paving Kermit gutter what we were able to do off the bat was bring our drilling and blasting resources into that market and help facilitate getting that work done in house and now the the remaining services that we're looking at are the asphalt paving and curbing gutter and then the retaining walls and then from there we'll start to scale that business and then look at tuck-in opportunities if if needed with the wet utility installation component and you'll see there are several tokens here all but one was a was a wet utility company the reason that we do these tokens is not only one to facilitate roll-up in that space but this is the most complex portion a service that we provide from a civil contracting standpoint it is the most complex work it requires the most skilled labor it is very hard to train these individuals there's no school no trade school to teach these individuals they learn the field real time and we we what we've seen through the execution of our initial platform in Raleigh is that you reach an inflection point with with your with your growth where you can't organically acquire and train the utility service providers those crews fast enough to keep up the backlog and that's where we first stepped into our M&A was with the Harrelson utility repair acquisition in 2021 this was done because our backlog was outstripping our ability to get that work done in-house so we did our first acquisition we got 12 utility crews continue to facilitate the growth in that space our backlog we were able to service it and continue to vertically integrate all the all the remaining services we did that all that organically and then we did goodwin enterprises in 2022 same story and now fast-forward to Charlotte there's our platform acquisition Monroe Roadways we're growing scaling that business organically adding vertical services then we did the Purcell tuck-in and that was a wet utility provider same issue same story what what most people don't know is that you cannot truly vertically integrate this business without having density in the wet utility portion of our services it's the longest in duration it's a critical path of the project and all the other services are not as long so if you don't have density and scale there you cannot facilitate efficient all the other services efficiently because they would have gaps in schedule and finally I said hybrid tuck-in the paving the asphalt paving and concrete work this is shortest in duration of all the services for a civil project and I'll just give you a quick example if it takes eight eight to twelve months for a utility crew to do one project it could take two to three weeks for a paving crew to do that same project so there is a need for a substantial amount of third-party contracts for an asphalt paver to be engaged in in order to facilitate efficiency for that service and not have gaps in schedule. So while they're servicing any other Cardinal Platform companies, they're also outsourcing and contracting their own contracts offline. So that company flies its own flag in the Carolinas, it's Aviator Paving. As we recently moved into the Georgia market and we start to integrate, we will do a tuck-in, hybrid tuck-in which will be its own namesake and it will continue to you know scale and grow third party outside of the outside of the ALGC umbrella next year you see what it shows our multi-year track record growth 36% revenue CAGR and 30% plus EBITDA CAGR this is this is just showing our track record from 23 to 25 the birth of Cardinal preparing for the platform and then elevating our place in the industry 2023 for for for references when we when we started to scale and enter new markets outside of the Raleigh market specifically Charlotte here you'll see our full year 2026 outlook we expect revenues of 680 million dollars 50% from 50% increase from the prior year and adjusted it even on margins of 20% plus and here why the site Southeast and why now and and the reason is there's a lot of room for Cardinal our runway is is pretty substantial the opportunities in front of us and not only in the markets that we're already in but the markets that we have yet to enter is is is pretty wild to say the least we're in the very early innings you know of not only the Charlotte and and Greensboro High Point market in the Carolinas but we're very early on in the Atlanta market the Atlanta market is about seven times bigger than the Charlotte market for reference and it's also about eight times bigger than the Raleigh market so we're very early on we're supported by convergence of a number of cyclical drivers on shoring net positive migration there's all kinds of factors that that apply to the southeast and markets that were yet to to enter but we're focused on entering soon and we're excited about the road ahead and and we appreciate all the interest so far in Cardinal and I will say this is the first time I've done this so I appreciate you guys bearing with me I wasn't expecting this and that think that that wraps it

Louis De Palma, Analyst — William Blair

up Louie great my first question and that was a wonderful job for your your first time it has been very well documented that there has been industry shortages of skilled construction labor has being public assisted with recruiting new talent and retaining talent I'll speak from my side and then

Jeremy Spivey, CEO

Benji can speak to now he's part of a public platform so yes there's been multiple iterations of when we start to get a track what you see in this industry or people get comfortable and you know they've worked for these family there this is multi-generational family-owned family-oriented businesses and so if you have the right culture it becomes a family and so people don't move just to move and so you know as we scaled and growed have grown the business in the Carolinas I'll speak to that there's been iterations and points and when we start doing things differently than our competitors where it became that tipping point that would acquire people who ordinarily wouldn't have moved and now being public is another one of those those points where okay well there's there's sustainability people are looking for you know certainty and they're in their jobs and that adds a new layer of certainty and the fact that we're here to stay so yes right yeah I would say the same thing I

Benji Wood, COO

mean it it's been advantageous for us thus far so just since since the news announced and stuff it's a great story and a lot of people are wanting to be a part of it so yeah we have people reaching out to us with interest and a lot of story and you know in our industry to to have a public company but to have our different platforms but everyone's not having to travel that's an attractive thing that hasn't been in our industry thus far to where your bigger companies you can go with them but you're you know you might be shipped to Kentucky or who knows where you're gonna be next week and so what the platforms bring into Atlanta it's been exciting yeah I want to add one more

Jeremy Spivey, CEO

thing Louie the the multi-generational mom-and-pop aspect of this industry is such that when you enter into this industry whatever level skilled labor management you tend to hit your head on the ceiling really quick the opportunity is very limited with whatever company you're going to what you know one of the byproducts that i i saw early on but now i see it at scale is opportunity that we create through how we're growing our business uh through organic growth uh and all the levels of opportunity not only in the in the market that these individuals are in but if they want to go to a new market there's opportunity everywhere and so if you're a go-getter an out performer and you want to move up the ladder it is very unique for our industry to offer that and we we do so it's that that's been another driver would would acquire talent not only on

Louis De Palma, Analyst — William Blair

the skilled labor set but on the management set great and I also have another question that you can each answer I'm during the IPO process I I think one of the pertinent aspects to Cardinal was how, at the time, you only operated in North Carolina. And your biggest market was Raleigh, and the other markets of Charlotte and Greensboro, they were less mature. But you were noted as a company that only operated in one state. And, Jeremy, you're from North Carolina and the Raleigh area. And so the question was, does Cardinal have the ability to replicate its success outside of North Carolina? A very valid question. And then you guys, I believe it was in February, acquired ALGC. And that's when your stock took the next major leg up, because that partially answered the question that, yes, you can expand outside of North Carolina. And so my question is, are there other ALGCs out there? Are there other platforms out there in the Georgia region, in the broader southeast, so that you can rinse and repeat this strategy to take advantage of how hot the southeast market is?

Jeremy Spivey, CEO

The quick answer is yes. And we have a great pipeline opportunity. and you'd be shocked at how very similar to ALGC the opportunities are that are out there again we we are hyper focused on who we're partnering with and making sure that those partners are aligned and not only the vision but the cultural aspect of what we're trying to provide for our employees we're very unique and that you know the company that went public was a founder and founder in business it wasn't sponsored and so I have a different outlook and take on how I want to treat the employees and create opportunity for them and so you know going to meet Benji and his brother and having that conversation early on we weren't even public yet kind of saying here's kind of you know he's buying in to me as much as I'm buying into him right and he's taking a big leap of faith and because we weren't public you know and and I would say he took a bigger risk than we did and that and and so but the the opportunities that are out there for us are you know it's it's just simply a function of picking the best match for what we're trying to do and accomplish and and making sure that they have the skill set and the bandwidth to be able to go

Louis De Palma, Analyst — William Blair

execute the vision and yeah Benji are there more either platform acquisitions or tuck-in acquisitions in the Georgia region that that you can see yeah

Benji Wood, COO

absolutely I mean Jeremy's alluding to it I mean there's more opportunities than there's not right so there's a lot out there and even the news of us it's amazing how many people how many phone calls you get a hey listen let's catch up and do lunch soon you know so there's a lot but again it goes back to people and so Jeremy touched on this I mean doing it just for the sake of doing it not the answer right so it's the discipline of execution which these guys have done historically and I think we'll continue that going forward is the key to success but the opportunities yeah it's more than you can shake a stick

Louis De Palma, Analyst — William Blair

and that's and that's the M&A aspect of the story and then I think in the first quarter you organically grew by 64% which is a pretty staggering number and in the residential market that is by all accounts struggling in a huge way and so I guess my other question is for the more mature markets so Raleigh and Atlanta is there are the growth drivers in place for for sustained double-digit growth or how are you viewing your more mature markets right now we feel you

Jeremy Spivey, CEO

know that that number is obviously a sizable number and the way that we are currently set up and the way that we will be executing for the foreseeable foreseeable future is that that will be lumpy we'll have acquisitions they'll start to integrate there'll be big spikes and then kind of the standard you know 30% ish plus growth so that mean that's that's really where the number should should should live but you'll see some spikes and bumps in that along the way depending on where we're at in the cycle of integration and new market Charlotte is very early on we're integrated but we're now scaling and we're now diversifying in market so we were focused on residential in Charlotte and now that we're fully integrated now we're diversifying in markets we got our first data center we got a distribution large distribution facility in Fort Mills South Carolina and so we don't focus on in market diversification until we're fully we're fully baked on the vertical integration side and and that's because of the relationships with residential we have those relationships that are sticky that are long that will be there no matter where we're at in the cycle uh and and we're able to build and integrate off that backbone because of those relationships they know who we are they know what we're going to deliver and they'll be patient as we start to scale uh and and integrate right and with the the final um minute you you recently announced uh

Louis De Palma, Analyst — William Blair

your your first um data center win um are you able to and are you currently bidding on other data center projects across your current states of operation and just can you generally characterize or are you seeing the data center market as as hot as everybody else yeah i'll you know for for

Jeremy Spivey, CEO

the carolinas it's really the charlotte-ish area there's some stuff that is in the northern part of the state kind of on the on the virginia line that our our greensboro office is uh engaged in but I see more opportunity in the Atlanta market it's a more mature market for data centers than Charlotte or any other part of the Carolinas but you know we're doing our first it's a multi-phase site they're happy with what we're doing we were looking at the second phase now and there are some other opportunities in the Charlotte market we're looking at and I know Benji and his group are our projects in Atlanta we're pursuing addressing some some opportunities in that market and we'll take it if if it provides for uh you know we're looking for relationships uh and so um we're navigating that because that's a very transient in market uh there's gc's travel and we don't like the one relationship and done we're looking for long-lasting relationships so we're navigating that at the same time fantastic thanks jeremy

Louis De Palma, Analyst — William Blair

and benji we are going to continue the conversation in the burnham b room as part of the breakout

Jeremy Spivey, CEO

session. Thanks. Thank you, thank you.