Sep 9, 2026 earnings call — Treatment plants, data centers, and record share buybacks
Net sales were approximately $2.1 billion in the second quarter.
Revenue $2.1B (est $2.1B) · EPS $0.94 (est $0.91) · Next-quarter revenue outlook $7.8B–$7.9B
Key quotes
"Our treatment plant initiative delivered another quarter of strong double-digit growth and remains one of the most compelling growth opportunities within our municipal platform."
"Growth in the quarter was driven by continued strength in treatment plant solutions and fire protection, along with a growing contribution from data center projects, which has nearly doubled year-over-year."
"We deployed $169 million to repurchase 3.7 million shares, marking our second consecutive quarter of record open market repurchases."
Analyst Q&A 11
municipal, nonresidential, residential markets
Q (Brian Biros · Thompson Research Group): He asked how the municipal end market is performing now and near term. He also asked how you measure fire protection share gains and who you are taking share from.
A: Municipal is steady and strong, roughly up in the low single digits. Nonresidential was flat to slightly up, helped by more data center projects; residential was down high single digits and is expected to be mid-single digits down for the full year. Fire protection growth came from steel-related price moves, added branch coverage, and share gains from competitors of all sizes.
"Municipal continues to be strong, stable, steady, kind of up in that low single digits range." — Robyn Bradbury (CFO)
full-year guide and margins
Q (Matthew Bouley · Barclays): He asked whether gross margin was lower than you expected and what offsets exist within the unchanged guide. He also asked about the smart utilities/meters business visibility.
A: Everything is coming in line with expectations and the guide is unchanged. Margins were down from Q1 but SG&A improvement made up for it; the company expects positive year-over-year EBITDA rate in the second half, mostly driven by the fourth quarter, with some gross margin and SG&A improvement to meet the guide.
"Everything is coming in line with our expectations." — Robyn Bradbury (CFO)
smart utilities meters backlog and timing
Q (Bradford Cowles · Barclays): He asked whether smart-utilities growth was from price or volume and whether large project timing is affecting volumes and near-term visibility.
A: There was a little bit of price but volume was essentially flat for the quarter. The installed base gives steady flow, the company is winning large, complex smart utility projects, and the early pilots and start phases create timing variability; they have a strong backlog and expect execution starting later in the year into 2027.
PVC and HDPE pricing; Miami-Dade meters
Q (Matthew Johnson · UBS): He asked what you saw for municipal PVC and HDPE pricing this quarter and into the back half. He also asked for an update on the Miami-Dade meter contract timing and any margin impact from large meter projects.
A: PVC pricing has stabilized and remains mostly flat; the market has not supported price increases. Corrugated HDPE pricing is relatively steady while fusible HDPE has seen spikes tied to resin disruption. Miami-Dade is moving through multiple pilot stages, some volume may move toward the end of the year (about 5% to 10% initially), and the project should reach full run rate in 2027; services and software in large projects can carry attractive margins.
"That said, it probably exemplifies the amount of pilot work and prework that has to be done before that project really hits its stride." — Bradford Cowles (PRESIDENT)
gross margin drivers and M&A/greenfields
Q (Goldman Sachs): He asked what would drive sequential or year-on-year margin expansion in the back half and how private label contributes. He also asked about M&A focus, greenfields, and balancing buybacks.
A: Gross margins fluctuate quarter-to-quarter based on local project mix and seasonality; the company expects EBITDA expansion in the back half, mostly Q4, driven partly by gross margin and partly by SG&A leverage. The company is pursuing organic growth (7 greenfield locations opened year-to-date), proprietary M&A opportunities (several LOIs in diligence) focused on bolt-ons in waterworks and fire protection, and has been able to repurchase stock when M&A closings were lighter.
"As we look into the back half of the year, we do expect EBITDA expansion, like I mentioned, in the back half of the year, most of that driven by Q4." — Robyn Bradbury (CFO)
data center share and water demand effects
Q (David Manthey · Baird): He asked for the size of data center projects as a percent of sales and whether Core & Main cares if a data center uses evaporative or closed-loop cooling.
A: Data center activity has doubled year-over-year and moved from low single digit to the mid-single-digit range of total business, and is high single-digit as a share of nonresidential work. Data centers always need water in some mix; cooling approach changes water volume, and a key factor is whether local municipalities can supply treated water or if private/near-site treatment is required, which can increase local municipal demand.
"That's taken it from, I would say, low single digit to the mid-single-digit range in terms of our total business." — Bradford Cowles (PRESIDENT)
residential outlook and municipal funding
Q (Richard Reid · Wells Fargo): He asked how you model residential in the back half versus the high single-digit Q2 decline. He also asked whether ARPA rolloff and other funding affect muni volumes.
A: Residential was down low double digits in Q1 and high single digits in Q2; the company expects the back half to be flat or down slightly, which results in mid-single-digit decline for the full year assuming flattish markets. Municipal funding is primarily local (rate increases), with federal/state programs (ARPA, IIJA) supportive historically; availability of federal funds exists but municipalities must have capacity to access them, and overall the company sees a positive funding backdrop across 50,000-plus municipalities.
"So, for resi, the way that the year is trending, it was down about low double digits in the first quarter." — Robyn Bradbury (CFO)
fire protection growth and Canada tariffs
Q (Anthony Pettinari · Citi): He asked how much of fire protection sales growth was price versus volume and whether comps get tougher. He also asked if Canadian tariffs affect prices or Canadian demand.
A: For the quarter fire protection growth was split between price and volume, slightly more weighted to volume and driven by share gains and locations added; about 2/3 of the growth was pricing related to steel. The team expects a good finish to the year for fire protection. On Canadian tariffs, current exposure is light and they do not see major implications today.
"For the quarter, it was split between price and volume, a little bit more weighted towards volume." — Robyn Bradbury (CFO)
gross margin mix and recent momentum
Q (Michael Dahl · RBC): He asked what mix or other drivers will push gross margin up in the second half versus the second quarter. He also asked how the quarter ended and how Q3 is shaping up so far.
A: Gross margin depends on local project mix and seasonality; if gross margin is lower from mix, SG&A should also be lower which supports EBITDA. Momentum built into July and August, supporting bidding and project wins; easier residential comps in the back half and PVC stability should help show better growth in the second half.
"But the good news is that if that gross margin is a little bit lower because of project mix, then we would expect the SG&A to be lower." — Robyn Bradbury (CFO)
acquisition contribution and treatment plants
Q (Keith Hughes · Truist): He asked how much acquisitions added in the quarter. He also asked what M&A could contribute to future growth and whether data centers are included in the treatment plant growth number.
A: Acquisitions added a little less than 1 point in the quarter. Long term the company expects M&A to contribute in the 2 to 4 points of growth range, though it can exceed that in an active year; several deals are in LOI and diligence. Treatment plant is mid-single-digit percent of overall sales and grew double digits in the quarter; treatment can be core municipal work or related to data center needs.
"Yes, Keith, we've laid out in terms of our long-term strategy, we expect M&A to contribute in the, kind of, 2 to 4 points of growth range." — Mark Witkowski (CEO)
lumpiness of large projects and smart meter pricing
Q (Ryan Merkel · William Blair): He asked where the lumpiness in large projects occurred and whether there are issues or better visibility for second-half releases. He also asked how much of smart meter growth was price versus volume and the price contribution.
A: There are no fundamental issues; large meter implementations have timing variability because of multiple municipal systems and pilot phases, so release timing is the main factor. They expect some smart meter releases in the second half and more activity in 2027. Smart meter growth included a small amount of price; overall smart meters added 1 point of growth in the quarter and volume was neutral to slightly positive.
"I'd say there's no issues or problems, but it's just a part of the nature of doing large meter implementations in a municipality." — Mark Witkowski (CEO)