Granite Construction Stock Earnings Reports

Granite Construction reported a strong start to 2026 driven by M&A and organic growth. Q1 highlights: revenue rose 30% to $912M, gross profit up 31% to $110M, adjusted EBITDA grew to $58M and adjusted net income to $12M. Construction backlog (CAP) increased to $7.2B despite a rare cancellation of a California highway project; federal CAP stands at $1.3B with ~$640M tactical infrastructure exposure. Materials had a strong seasonal start aided by acquisitions (notably Warren Paving) with cash gross profit up and pricing meeting expectations. Management closed privately negotiated transactions to settle $100M principal of convertible bonds (net cash used $233M), drew on the revolver to fund the Kenny Sain Construction acquisition, and ended the quarter with $1.4B debt and $415M revolver availability. Management raised 2026 revenue guidance to $5.2B–$5.4B (from $4.9B–$5.1B) and raised adjusted EBITDA margin guidance to 12.25%–13.25% (from 12%–13%), while SG&A as a percent of revenue guidance was lowered to 8.25%–8.75%. Key strategic themes: disciplined M&A (Kenny Sain adds ~$150M/year revenue run-rate and a high-teens adjusted EBITDA margin), continued build out of federal, rail and mission-critical data center end markets, and continued transformation/scale in Materials (Warren Paving integration performing above expectations). Near-term risks/considerations: seasonal working capital use (Q1 operating cash outflow), energy price volatility (liquid asphalt/diesel) though management uses hedging, surcharges, storage and contractual escalators to mitigate, and execution risks on fast-burn tactical federal projects (schedule, remoteness, subcontractor capacity). Overall, management is confident in meeting 2026/2027 financial targets while continuing opportunistic bolt-on and targeted acquisitions.