Earnings

Granite Introduces 2029 Targets After Record Backlog

The Tip Desk · October 31, 2026 · 3 min read

Adjusted EBITDA reached $283 million as the contractor lifted 2026 revenue guidance to as much as $5.5 billion.

Granite Construction Incorporated (GVA) reported third-quarter revenue of $1.8 billion, up 23% from a year earlier, and adjusted EBITDA of $283 million, up 32% from $216 million.

The year-over-year revenue pace slowed from 29% in the second quarter. Adjusted EBITDA growth accelerated from 22% in that period.

GAAP net income attributable to Granite was $3 million, or $0.07 a share, compared with $103 million, or $1.98 a share, a year earlier. The company said current-period net income was unfavorably impacted by $162 million of net non-operating charges associated with settling conversions of its 3.75% convertible notes, which it elected to settle primarily in cash to limit dilution. Those items were excluded from adjusted results. Adjusted net income was $173 million, or $3.81 a share, versus $124 million, or $2.70 a share, a year earlier.

Construction remained the growth engine. Segment revenue was $1.47 billion, up 26.8% from $1.16 billion, and construction gross profit was $274.3 million, up 42.6% from $192.3 million, lifting the gross margin to 18.6% from 16.5%. The company said revenue for the three-month period increased on higher committed and awarded projects entering the quarter and incremental revenue from acquisitions. Excluding acquisitions, revenue increased approximately 20%.

Materials revenue was $292.3 million, up 7.9% from $271.0 million. Materials gross profit was $61.4 million, down 9.9% from $68.2 million, and the gross margin fell to 21.0% from 25.2%. Cash gross profit was $89.8 million. The company said materials revenue rose on recently acquired businesses and that gross-profit and cash gross-profit margins declined primarily due to the margin impact of energy surcharges offsetting elevated diesel costs.

Committed and awarded projects rose $37 million sequentially to a record $7.5 billion, up $1.1 billion from a year earlier. The sequential build was smaller than the $250 million increase recorded in the second quarter. Federal CAP was $1.3 billion as of September 30, including $569 million of tactical infrastructure projects for U.S. Customs and Border Protection that the company said should be substantially realized through the second quarter of 2028.

President and Chief Executive Officer Kyle Larkin said the company delivered strong execution and continued progress on its strategy, with attractive opportunities in core transportation markets and expanding capabilities in federal, mission-critical infrastructure, rail and other targeted end markets.

Granite left most of its 2026 fiscal-year guidance unchanged except for the revenue range, which it raised to $5.4 billion to $5.5 billion from $5.3 billion to $5.5 billion. Adjusted EBITDA margin remains in a range of 12.25% to 13.25%, SG&A expense as a percent of revenue in 8.25% to 8.75% inclusive of an estimated $48 million of stock-based compensation, the effective tax rate for adjusted net income in the mid-20s, and capital expenditures of approximately $140 million to $160 million, including about $50 million in planned strategic materials investments.

Chief Financial Officer Staci Woolsey said that at the midpoint of the updated 2026 revenue guidance the company expects approximately 15% organic revenue growth, with an additional 9% contribution from acquired companies, and that this organic growth is consistent with the 10% to 12% CAGR in the new 2029 targets. Those targets also call for adjusted EBITDA margin of 14% to 16%, SG&A of approximately 7.5% of revenue, operating cash flow of approximately 13% of revenue, capital expenditures of approximately 3% of revenue and free cash flow of approximately 10% of revenue, with continued expansion through M&A and a 2.5x net leverage target.

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