Financial Gurkha | New York City | August 4, 2026

Disclaimer: This article is for educational purposes only and is not investment advice. Trading and investing are subject to volatility and market risk, including partial or entire loss of capital. Please consult your financial advisor before making investment decisions. Financial Gurkha and its writers are not liable for your losses, nor do we take credit for your gains. Figures are drawn from Caterpillar Inc.'s second-quarter 2026 earnings release (Exhibit 99.1, filed August 4, 2026) and management commentary from the accompanying earnings call.

Caterpillar's First $20 Billion Quarter

The 60-Second Version

Caterpillar Inc. (NYSE: CAT) crossed $20 billion of quarterly sales and revenues for the first time in its 101-year history, raised full-year guidance, and disclosed a record backlog. Everything you need in one screen:

The seven things that matter:

1. First $20 billion quarter ever. $20.543 billion, up 24%. Volume — not price — drove $3.1 billion of the $4.0 billion increase.
2. Record $72 billion backlog, with 59% ($42.5 billion) scheduled for delivery within 12 months. Some Power & Energy orders now extend to 2030.
3. Full-year guidance raised to mid-to-high teens sales growth, up from the April outlook, with stronger expected growth in all three primary segments.
4. Power generation grew 29%, explicitly driven by data center demand. Caterpillar has quietly become an AI infrastructure company.
5. North American construction sales grew 50%, with dealers restocking — a signal end demand is believed to be durable.
6. Margins beat, but $392 million was tariff recovery. Excluding it, management expects full-year adjusted margin near the bottom of its target range.
7. MP&E free cash flow of $5.7 billion in the first half, tracking comfortably inside management's $6–15 billion annual target.

The one-line thesis: three cycles — data center power, North American construction, and mining — turned up simultaneously, and Caterpillar sells into all three. The risk is that they can also turn down together.

What's in this report

• Caterpillar's First $20 Billion Quarter
  • The 60-Second Version
    • What's in this report
  • The Milestone
  • The Numbers, From the Release
  • The Outlook: A Record $72 Billion Backlog
    • Guidance raised across the board
    • The backlog is the number
    • The margin guidance has a catch
    • The free cash flow target, straight from the company
  • Where the Growth Came From
  • The Real Story: Caterpillar Is an AI Infrastructure Company
  • North American Construction Grew 50%
  • What the Balance Sheet Is Telling You
  • The SkyCatch Acquisition: A Small Cheque With a Large Idea
  • Two Things Working Against the Headline
  • The Math on Full-Year Revenue and Free Cash Flow
  • Capital Returns
  • Peers, Competitors and the Earnings Calendar
    • 1. The Yellow Iron Rivals (Construction & Earthmoving)
    • 2. The Power & Energy Competitors (The AI Trade)
    • 3. The Mining Equipment Specialists
    • 4. The Read-Across Names (Customers, Not Competitors)
    • Three tests that will confirm or break this thesis
  • Financial Gurkha Takeaways
  • Frequently Asked Questions
  • About This Analysis

The Milestone

"This is the first time in company history that we have generated over $20 billion in sales and revenues in a single quarter. Strong order rates and a growing backlog reflect broadening momentum across all three of our primary segments." — Joe Creed, Chairman and CEO, Caterpillar Inc.

For a 101-year-old machinery manufacturer, in a sector the market had filed under "late cycle," those are not normal numbers. And the reason they happened is not the reason most coverage will assume.

The Numbers, From the Release

Two derived figures the release does not print, but which tell you more than any of the above:

The incremental margin was 36%. Operating profit grew $1.435 billion on a $3.974 billion revenue increase. For every extra dollar of revenue, 36 cents fell to operating profit — the signature of a manufacturer whose factories are running hot and whose fixed costs are already covered.

Net margin hit 17.5%, up from 13.2%. Caterpillar now converts a higher share of revenue into profit than many software companies did a decade ago, while building 70-ton mining trucks.

The Outlook: A Record $72 Billion Backlog

This is the section that should move the stock, and it comes from the call rather than the release.

Guidance raised across the board

Management increased full-year 2026 sales and revenues expectations to mid-to-high teens growth, citing "healthy demand across all three of our primary segments." Critically, they now expect stronger full-year growth in every one of the three primary segments than they guided in April — not a mix shift, a broad upgrade.

They also flagged capacity expansion progress and higher throughput in the second half. Read that carefully: Caterpillar is telling you the constraint has been its own factories, not customer demand. That is the same message Microsoft delivered about datacenters last week, in a different industry.

Services revenue is also guided to grow faster than the prior outlook — the highest-quality revenue line Caterpillar has, because it recurs.

The backlog is the number

Three observations most coverage will skip:

1. Roughly $42.5 billion is already contracted for the next twelve months. Against a full-year 2026 revenue expectation of approximately $78–80 billion, that means more than half of the forward year is already booked. Caterpillar is not forecasting demand; it is scheduling deliveries.

2. The 59% share has been stable for three quarters — and that is the real signal. A backlog can grow for a bad reason: orders stretching further out because the company cannot deliver, or customers double-ordering into shortage. If the near-term share of a growing backlog holds steady, the book is growing proportionally at both ends. Near-term demand and long-term demand are rising together. That is a healthy backlog, not a queue.

3. Power & Energy customers are placing orders into 2030. Data center operators and power producers are sharing long-term forecasts and reserving production slots four years out. Nobody books capital equipment that far ahead for a trade they expect to fade. This is the single most durable piece of evidence in the entire report that the AI-power buildout is being planned as infrastructure rather than a cycle.

The margin guidance has a catch

Management expects full-year adjusted operating margin above their prior expectation — but added the qualifier that matters: excluding the favourable IEEPA tariff recoveries booked in Q2, they expect full-year adjusted operating margin near the bottom of the target range communicated at the 2025 Investor Day.

That is management pre-empting the extrapolation. The 21.9% adjusted margin printed this quarter is not the run-rate. Strategic growth investments and ongoing tariff costs are absorbing margin, and the company is saying so plainly. Credit where due — it is easier to let the number speak and stay quiet.

The free cash flow target, straight from the company

At its 2025 Investor Day, Caterpillar set an MP&E free cash flow target range of $6 billion to $15 billion annually (MP&E free cash flow = Machinery, Power & Energy operating cash flow less capital expenditures, excluding discretionary pension contributions).

Here is the first-half result, computed from the supplemental data in today's filing:

$5.7 billion in six months, against a $6–15 billion annual target. Caterpillar is tracking to land comfortably inside its own range, likely in the $11–13 billion area if the second half holds.

This also corrects something important. The enterprise free cash flow figure — $6.241 billion of consolidated operating cash flow less $2.162 billion of total capex, or about $4.1 billion — materially understates the industrial business, because it is diluted by Cat Financial. Cat Financial consumes cash by design as it grows its receivables book (additions to finance receivables were $8.639 billion in the half). That outflow is a demand signal, not a weakness. MP&E free cash flow is the metric management targets, and it is the one to use.

Where the Growth Came From

The revenue bridge is unusually clean: volume contributed $3.1 billion, price realization $595 million, currency $199 million. This is not a pricing story dressed as growth — nearly 80% of the increase came from selling more machines to more customers.

All three primary segments grew, and all three now expect stronger full-year growth than guided in April. Caterpillar's segments historically move on different cycles; simultaneous strength across construction, power and mining is rare enough to be a macro signal in itself.

The Real Story: Caterpillar Is an AI Infrastructure Company

Inside Power & Energy, sales by application:

Power generation is Caterpillar's fastest-growing application, and the company attributes it to "large reciprocating engines and in turbines and turbine-related services, primarily in data center applications."

Connect this to Microsoft's FY26 filing, which we covered last week. Microsoft spent $115.9 billion on property and equipment in a single fiscal year, nearly doubling prior-year capex, and said demand for AI compute still exceeds available capacity. Amazon, Google, Meta and a dozen neoclouds run the same playbook.

Every one of those datacenters needs power. Grid interconnects take years; generators take months. So hyperscalers buy reciprocating engines and gas turbines — and only a handful of companies on earth build them at scale. Caterpillar is one, and its customers are now booking that capacity out to 2030.

This is the second-derivative AI trade, showing up in the P&L of a company most investors file under "industrials." The chips get the headlines. Someone still has to power the building.

North American Construction Grew 50%

Construction Industries' North American sales rose 50%, from $3.369 billion to $5.065 billion, with segment margin expanding 3.2 points to 23.3%.

The release attributes this to "higher sales of equipment to end users and by the impact from changes in dealer inventories." That second clause matters. Caterpillar sells through an independent dealer network, so reported sales reflect both end demand and what dealers choose to stock. Dealers restock when they believe demand is durable — they do not finance inventory into a market they expect to soften.

Resource Industries added its own signal: mining, heavy construction and quarry sales up 22%, and rail up 15% on higher international locomotive deliveries. Mining capex has been the market's favourite bear case for three years. It is now growing at 20%.

What the Balance Sheet Is Telling You

Three lines on the June 30 balance sheet work as forward indicators:

Customer advances: $4.777 billion, up from $3.314 billion at year-end — a 44% increase. Cash customers pay before delivery. It is the balance-sheet fingerprint of that record $72 billion backlog.

Inventories: $20.627 billion, up from $18.135 billion. Caterpillar is building ahead of shipment — consistent with management's stated plan to raise second-half throughput.

Cat Financial past dues fell to 1.31%, from 1.62%. Allowance for credit losses sits at 0.84% of finance receivables. Cat Financial lends to contractors, miners and small construction firms — the exact borrowers who default first when the real economy cracks. Their delinquency rate is a genuine leading macro indicator, and it just improved materially.

The SkyCatch Acquisition: A Small Cheque With a Large Idea

Also from the call: Resource Industries completed the acquisition of SkyCatch, described by management as technology that captures "high frequency, high precision, large-scale spatial data" paired with "a suite of AI capabilities" enabling customers to "identify, measure and interact with the data, resulting in improved decision-making, reduced delays and greater confidence in daily operations."

Plainly: Caterpillar bought the ability to generate a continuously updated, centimetre-accurate digital model of a working mine site — how much material moved, where the haul roads are, how the pit changed overnight — plus an AI layer that reads it. SkyCatch built its reputation on drone-based photogrammetry and 3D site capture for large mining and construction operations.

No price was disclosed, and it is almost certainly small. The balance sheet bounds it: goodwill rose $538 million and intangibles rose $179 million since year-end, against $802 million of "investments and acquisitions" in first-half MP&E cash flow — the total for all first-half deal activity, not SkyCatch alone. Nobody should model 2026 revenue from this.

Model the strategy instead:

1. It targets Caterpillar's weakest margin. Resource Industries earned 14.9% this quarter against 23.3% for Construction and 24.6% for Power & Energy. Mining is where Caterpillar makes the least per revenue dollar, and that is exactly where the software landed. Data services carry structurally higher gross margins than steel, and this is the segment with the most room to improve.

2. Recurring revenue answers the cyclicality problem. The strongest bear argument on Caterpillar is that it is the most cyclical large-cap in the index. Machines sell in bursts; subscriptions do not. Every dollar shifted from one-time equipment sales toward recurring site intelligence survives the next downturn. It is the same trade Microsoft made moving from boxed licences to metered cloud — and the market pays a materially higher multiple for it.

3. It feeds the autonomy stack. Caterpillar's MineStar and Command systems already run driverless haulage at major mines. Autonomous equipment is only as good as its map: a machine that does not know the pit changed overnight stops. High-frequency spatial data is the input layer autonomy runs on. Caterpillar bought the eyes for a system it spent a decade building the brain and body for.

4. It deepens switching costs. Once a mine's survey history, volumetrics and haul-road geometry live inside Caterpillar's platform, moving to Komatsu stops being a procurement decision and becomes a data migration. Equipment is replaceable; operating systems are sticky.

The competitive read: Komatsu has pushed Smart Construction for years, Sandvik runs OptiMine, Epiroc has built out mine automation, and Hexagon and Trimble sell site intelligence to everyone. Buying rather than building suggests Caterpillar judged itself behind on data capture. That is a reasonable read of the timing, and a mildly unflattering one.

The caveats: industrial software acquisitions have a poor historical hit rate. Integration into a segment with its own margin problems is not trivial. Mining customers can be genuinely reluctant to hand operating data to their equipment vendor, since the same data that improves uptime also reveals negotiating position. And none of this shows up in reported results for several quarters.

What to watch: whether Caterpillar begins disclosing services or connected-asset revenue as a separate metric, and whether Resource Industries' margin starts closing the gap to the other two segments.

Two Things Working Against the Headline

We do not write victory laps. Two caveats from the same release:

1. $392 million of operating profit is tariff recovery. The quarter included "$392 million of expected International Emergency Economic Power Act (IEEPA) tariff recoveries." Strip it out and operating profit is roughly $3.9 billion with a margin near 19.0% — still well up from 17.3%, but about 0.9 points below the reported 20.9%. Management explicitly guided that, excluding this benefit, full-year adjusted margin lands near the bottom of the target range. Do not extrapolate the printed number.

2. Consolidated cash conversion looks weak — for a good reason. First-half consolidated operating cash flow was $6.241 billion against $6.141 billion of profit, roughly 1.0x. Receivables grew $3.182 billion and inventories $2.553 billion. That working capital build is a growth signal, and as shown above, MP&E free cash flow of $5.7 billion tells a considerably healthier story than the consolidated view.

The Math on Full-Year Revenue and Free Cash Flow

There has been chatter about Caterpillar doing a $100 billion year with $20 billion of free cash flow in 2026. Management's own guidance settles both.

Revenue. Guidance is mid-to-high teens growth on 2025's $67.6 billion base. That is roughly $78–80 billion for 2026. First-half sales were $37.958 billion, implying $40–42 billion in the second half — consistent with the stated capacity expansion and higher throughput. A $100 billion year is a plausible 2028–2029 milestone at this growth rate, not a 2026 result.

Free cash flow. Management's own MP&E free cash flow target is $6–15 billion annually. First-half MP&E free cash flow was $5.7 billion, tracking toward roughly $11–13 billion. A $20 billion figure sits above the top of the company's own stated target range.

We flag this because these are exactly the numbers that circulate unchecked. Caterpillar being extraordinary does not require the estimates to be inflated. Approximately $79 billion of revenue and $12 billion of free cash flow from a machinery manufacturer is already a remarkable outcome.

Capital Returns

In the quarter, Caterpillar deployed $2.2 billion: $1.5 billion in buybacks and $0.7 billion in dividends. Year to date, $6.522 billion of repurchases and $1.399 billion of dividends — $7.9 billion returned in six months.

The balance sheet effect is dramatic. Treasury stock stands at $54.533 billion against total shareholders' equity of just $19.394 billion, which declined from $21.318 billion at year-end despite $6.1 billion of first-half profit. Diluted share count fell from 471.5 million to 462.5 million, a 1.9% reduction in a year.

Caterpillar has been shrinking its own equity base for years, which mathematically inflates return on equity (annualizing first-half profit against average equity gives something north of 60%) and makes ROE a poor lens here. The simpler read: management believes the shares are worth buying, at roughly $13 billion a year.

Peers, Competitors and the Earnings Calendar

Caterpillar does not have one competitor. It has three sets, because it is three companies wearing one badge. Here is the field, and what each name confirms or contradicts about the thesis above.

1. The Yellow Iron Rivals (Construction & Earthmoving)

Deere & Company (NYSE: DE) — The closest American analogue at comparable scale. Deere skews agricultural, but its Construction & Forestry segment competes directly with Caterpillar in North America. Deere has been fighting a farm-income downturn while Caterpillar rode construction strength, which makes the divergence instructive: if Deere's C&F segment also turns up, the North American construction recovery is real rather than a share-gain story. Next earnings: August 20, 2026

Komatsu Ltd. (TYO: 6301 / OTC: KMTUY) — The world's second-largest construction and mining equipment maker and Caterpillar's true global rival, with heavy Asia-Pacific and mining exposure. Caterpillar's Asia/Pacific sales grew only 4% this quarter — the weakest region by far. Komatsu's Asia commentary will tell you whether that is a regional demand problem or a Caterpillar positioning problem. Next earnings: October 29, 2026

CNH Industrial (NYSE: CNH) — Case and New Holland construction equipment plus agriculture. Smaller and more mid-market, making it a useful read on whether demand strength extends below the large-fleet buyer. Just reported earnings: August 03, 2026

Terex (NYSE: TEX) and Oshkosh (NYSE: OSK) — Specialty and access equipment. Neither competes across CAT's full range, but both are cleaner reads on non-residential construction without the mining or power distortion. Next earnings: October 29, 2026 / October 28, 2026

Privately held Liebherr, JCB, and China's SANY and XCMG complete the field. The Chinese manufacturers matter most on price — they compete aggressively in emerging markets, and their behaviour is the standing threat to Caterpillar's price realization line, which contributed $595 million this quarter.

2. The Power & Energy Competitors (The AI Trade)

The group to watch most closely, because it confirms or breaks the data center thesis.

Cummins Inc. (NYSE: CMI) — The most direct competitor in reciprocating engines and standby power. Its Power Systems segment sells into the same data center demand driving Caterpillar's 29% power generation growth. Similar strength at Cummins makes this a sector-wide secular trend; weakness means Caterpillar is taking share — a different, arguably better story. Next earnings: **August 4, 2026. Today **

GE Vernova (NYSE: GEV) — The heavyweight in gas turbines and grid equipment, competing with Caterpillar's Solar Turbines at the larger end. Its order backlog is the best public dataset on how much power generation capacity the world is actually contracting for — the direct comparison to Caterpillar's $72 billion. Next earnings: October 28, 2026

Generac (NYSE: GNRC) — Smaller-scale standby and backup power, a leading indicator for grid stress at the low end. Next earnings: October 28, 2026

Rolls-Royce (LON: RR) — mtu, Wärtsilä (HEL: WRT1V), Siemens Energy (ETR: ENR) and Mitsubishi Heavy Industries (TYO: 7011) complete the international field in large engines and turbines. Siemens Energy in particular has become a barometer for European grid and turbine order cycles. Next earnings: RR reported earnings July 20, 2026

3. The Mining Equipment Specialists

Epiroc (STO: EPI-A) and Sandvik (STO: SAND) — Swedish specialists in mining drilling, rock excavation and crushing. More leveraged to mining capex and less diluted by construction or power, making them cleaner reads on whether the mining upcycle Caterpillar just reported is broad.

Hitachi Construction Machinery (TYO: 6305) and Weir Group (LON: WEIR) — Large mining trucks and mineral processing. Weir's aftermarket revenue is a good proxy for how hard existing mines are being run, as distinct from new capex.

4. The Read-Across Names (Customers, Not Competitors)

Arguably more useful than the competitors, because they sit on the demand side of Caterpillar's order book.

United Rentals (NYSE: URI) and Herc Holdings (NYSE: HRI) — The largest North American equipment rental companies, and among Caterpillar's largest customers. Their fleet capital expenditure guidance is a direct forward indicator for Construction Industries volumes. When rental companies raise fleet capex, Caterpillar's next two quarters are effectively pre-sold. Ashtead Group (LON: AHT), owner of Sunbelt Rentals, is the UK-listed equivalent. Next earnings: October 21, 2026

Vulcan Materials (NYSE: VMC) and Martin Marietta (NYSE: MLM) — Aggregates producers, the customers behind Caterpillar's Quarry & Aggregates line and a clean signal on US infrastructure activity. Next earnings for VMC: October 29, 2026 Most recent earnings for MLM: July 30, 2026

Three tests that will confirm or break this thesis

1. Does Cummins' Power Systems segment show data-center-driven growth? If yes, the AI-power trade is structural. If no, Caterpillar is winning share and the story is company-specific.
2. Do United Rentals and Ashtead raise fleet capex? The most direct forward read on Construction Industries volume — and it comes from the buyer rather than the seller.
3. Do Epiroc and Sandvik confirm the mining upturn? Caterpillar's Resource Industries grew 20%. Two Swedish pure-plays agreeing would make it a cycle rather than a quarter.

We will cover each as they report. Financial Gurkha reads the releases the morning they drop.

Financial Gurkha Takeaways

1. The backlog is the story, not the $20 billion. A record $72 billion with 59% deliverable inside twelve months means more than half of the next year's revenue is already contracted. Caterpillar is scheduling, not forecasting.

2. Orders to 2030 change the character of the AI trade. Power & Energy customers reserving production slots four years out is the strongest available evidence that the data center power buildout is being planned as infrastructure rather than traded as a cycle.

3. Management raised guidance and lowered margin expectations in the same breath. Sales growth to mid-to-high teens; adjusted margin ex-tariff-recovery near the bottom of the target range. That combination — more revenue, honestly framed margins — is more credible than either alone.

4. Use MP&E free cash flow, not consolidated. $5.7 billion in the first half against a $6–15 billion annual target. The consolidated figure is diluted by Cat Financial's receivables growth, which is itself a demand signal.

5. The cycle risk has not been repealed. Caterpillar remains the most cyclical large-cap in the S&P 500 for a reason. Construction growing 35% off a soft comparison is not a permanent run-rate, mining capex has broken hearts before, and a hyperscaler capex pause would hit power generation directly. The bull case is that three cycles happen to be aligned — not that cyclicality has ended. Aligned cycles can also turn together.

Frequently Asked Questions

How much revenue did Caterpillar make in Q2 2026? Caterpillar reported sales and revenues of $20.543 billion for the second quarter of 2026, up 24% from $16.569 billion in Q2 2025 — the first quarter in company history above $20 billion.

What was Caterpillar's Q2 2026 EPS? Profit per share was $7.77 on a GAAP basis and $8.17 adjusted, versus $4.62 and $4.72 in Q2 2025 — a 73% increase on an adjusted basis.

What is Caterpillar's backlog? A record $72 billion, with 59% (approximately $42.5 billion) expected to be delivered within the next 12 months. That 59% share has been stable for three quarters. Some Power & Energy orders extend as far as 2030.

What is Caterpillar's 2026 guidance? Management raised full-year 2026 sales and revenues expectations to mid-to-high teens growth, above the April outlook, with stronger expected growth in all three primary segments and faster services revenue growth. On the 2025 base of $67.6 billion, that implies roughly $78–80 billion for 2026.

What is Caterpillar's free cash flow target? At its 2025 Investor Day, Caterpillar set an MP&E free cash flow target range of $6–15 billion annually. First-half 2026 MP&E free cash flow was approximately $5.7 billion.

Why is Caterpillar growing so fast in 2026? Three drivers hit simultaneously: North American construction sales rose 50%, power generation grew 29% on data center demand, and mining and quarry sales rose 22%. Volume contributed $3.1 billion of the $4.0 billion revenue increase.

Is Caterpillar an AI stock? Indirectly, yes. Its Power & Energy segment sells the reciprocating engines and gas turbines that power data centers, and it attributes 29% power generation growth primarily to data center applications — with orders now extending to 2030. It is a second-derivative play on AI infrastructure spending.

What is Caterpillar's operating margin? 20.9% in Q2 2026 (21.9% adjusted), up from 17.3%. Approximately 0.9 points came from $392 million of IEEPA tariff recoveries. Excluding that benefit, management expects full-year adjusted margin near the bottom of its target range.

Will Caterpillar reach $100 billion in annual revenue? Not in 2026. Guidance of mid-to-high teens growth implies roughly $78–80 billion. $100 billion is a plausible 2028–2029 milestone if current growth persists.

Why did Caterpillar acquire SkyCatch? SkyCatch captures high-frequency, high-precision spatial data of large sites and pairs it with AI analysis. Caterpillar placed it inside Resource Industries — its lowest-margin segment at 14.9% — to add higher-margin software and services revenue, feed its MineStar and Command autonomous mining systems, and deepen switching costs by owning the customer's operating data layer. The price was not disclosed and is likely small.

Who are Caterpillar's main competitors? Construction equipment: Deere (DE), Komatsu (6301.T), CNH Industrial (CNH), plus private Liebherr, JCB, SANY and XCMG. Power generation and engines: Cummins (CMI), GE Vernova (GEV), Generac (GNRC), Rolls-Royce mtu, Wärtsilä and Siemens Energy. Mining equipment: Komatsu, Epiroc (EPI-A.ST), Sandvik (SAND.ST) and Hitachi Construction Machinery.

Which competitor best confirms Caterpillar's data center story? Cummins. Its Power Systems segment sells standby and prime power into the same data center demand driving Caterpillar's power generation growth. GE Vernova's gas turbine backlog is the other key dataset.

About This Analysis

Financial Gurkha is an independent markets research desk run by Kanchan Sharma from New York City. We read the filings other coverage summarizes — every figure above is sourced to Caterpillar's Q2 2026 earnings release and management's call commentary, and where we have computed or adjusted, we have shown the arithmetic.

Need a full intrinsic valuation — for a public company, a private target, or your own business? Schedule a consultation with the Financial Gurkha desk.

Reported from New York City. Sources: Caterpillar Q2 2026 earnings release (SEC Exhibit 99.1) and Q2 2026 earnings call commentary.