Concrete Pumping Holdings, Inc. (BBCP) Earnings

Management highlights

- Overall Q2 2026 Performance * Consolidated revenue grew 14% year-over-year to $106.8 million, and adjusted EBITDA grew 17% year-over-year to $26.4 million, driven by strong U.S. operations, disciplined execution, and favorable end-market conditions * Gross margin was 38.6% (up 10 bps year-over-year), adjusted EBITDA margin improved 80 bps to 24.7%, and G&A as a percentage of revenue improved to 27.3% from 29.7% year-over-year, reflecting operating leverage and cost discipline * The company generated healthy free cash flow, ended the quarter with $346.3 million in available liquidity, and maintained a net leverage ratio of 3.8x adjusted EBITDA - U.S. Market Conditions * Strong activity in large-scale commercial and infrastructure end-markets, including data centers, chip plants, roads, bridges, healthcare, education, energy, and warehousing, driving improved fleet utilization * Favorable weather in H1 supported higher activity levels compared to the prior year period, complementing price discipline and operational execution to deliver strong margin performance * Interest rate-sensitive segments (office, light commercial) and residential construction remain subdued, pressured by elevated financing costs, mortgage rates, and affordability constraints * U.S. infrastructure project activity and bidding remain healthy, especially for large, long-duration projects * Ecopan continues to deliver strong results, with through-cycle resilience and strong complementarity to core concrete pumping operations - UK Market Conditions * Market conditions remain challenging, with elevated interest rates, inflation, and broader economic uncertainty weighing on commercial construction activity, and less favorable public infrastructure funding dynamics than the U.S. * Infrastructure activity (energy projects, HS2 construction) remains resilient, and the company maintains focus on disciplined cost management - Strategic Updates * Completed the acquisition of Templant Hire in the UK in early April, advancing the strategy to build a diversified multi-service platform for construction and infrastructure sectors * Progress is on track for other strategic initiatives, including Republic of Ireland expansion and entry into the UK temporary power market, with modest near-term revenue contribution but strong long-term growth upside * Capital allocation remains disciplined: the company repurchased 392,000 shares for $2.6 million in Q2, with $11.9 million remaining under the current repurchase authorization through December 2026

Guidance

- The company raised full-year fiscal 2026 guidance driven by strong H1 performance and continued momentum in U.S. operations: * Revenue outlook raised to $410–$425 million, from the prior guidance range of $390–$410 million * Adjusted EBITDA outlook raised to $98–$105 million, from the prior guidance range of $90–$100 million * Full-year free cash flow expectation increased to at least $45 million, from the prior expectation of ~$40 million - Guidance continues to assume no meaningful recovery in broad residential or light commercial construction activity during fiscal 2026 - Year-over-year growth is expected to moderate in the second half of fiscal 2026 due to lapping accelerated data center project growth that began in Q3 2025 - Seasonality is expected to be more balanced than historical trends, with H1 revenue expected to represent 47% of full-year revenue and H2 53%, compared to the traditional 45%/55% split - The free cash flow outlook assumes ~$23 million in net replacement capex and $32 million in net cash interest, excluding accelerated capex pulled forward from future years

Segment performance

1. U.S. Concrete Pumping (Brundage Bone): Revenue increased 15% year-over-year to $71.5 million, contributing 67% of total consolidated revenue. Adjusted EBITDA increased 23% year-over-year to $15.6 million. Growth was driven by strong large-scale commercial and infrastructure project activity, partially offset by continued softness in light commercial and subdued residential demand. 2. U.S. Concrete Waste Management (Ecopan): Revenue increased 13% year-over-year to $20.3 million, contributing 19% of total consolidated revenue. Adjusted EBITDA increased 16% year-over-year to $7.7 million. Growth came from organic volume increases, new customer penetration, and pricing improvements. 3. UK Operations: Revenue increased 8% year-over-year to $14.9 million, contributing 14% of total consolidated revenue. Adjusted EBITDA was $3.1 million, down slightly from $3.2 million year-over-year. The 8% top-line gain included a $600,000 favorable currency impact and $1.4 million contribution from recent acquisitions; underlying commercial construction activity remains soft due to macroeconomic headwinds.

Risks & headwinds

- Elevated interest rates and broader economic uncertainty continue to pressure interest rate-sensitive construction segments (office, light commercial) and residential construction, suppressing demand in these areas - Ongoing inflationary pressures (including higher repair and maintenance costs, wear part inflation, and tariffs on certain replacement parts, as well as labor and fuel cost inflation in the UK) create margin headwinds that require ongoing pricing and cost discipline to offset - UK construction markets face persistent macroeconomic challenges including elevated rates, inflation, economic uncertainty, and less favorable public infrastructure funding dynamics relative to the U.S. - Supply chain and regulatory complications for new concrete pumping equipment (related to new emissions standards, chassis availability, and horsepower requirements) could delay planned capital expenditures

Analyst Q&A

• Q: An analyst asked what share of current revenue comes from data center and chip plant work, how that has changed year-over-year, and what the growth outlook is. /

  A: Management stated that in the first half of last year, this work made up 4-5% of total revenue. Growth accelerated in the second half of 2025, and the current share of revenue from data center and chip plant projects is now 10-12%. Favorable consistent weather has supported steady project execution for this work.

• Q: The same analyst asked whether margin expansion comes from better fleet operating leverage or if data center work itself carries a higher margin than other segments. /

  A: Management confirmed that improved fleet utilization from higher volume does deliver operating leverage that lifts margins. They added that data center projects often require specialized longer equipment in remote locations, so pricing is higher, which improves the margin profile of this work. This margin benefit has been supported by prior cost-cutting work and ongoing operational discipline that offsets ongoing inflation pressures.

• Q: An analyst asked for the acquisition multiple paid for Templant Hire, and asked about the expected margin and strategic benefits of the deal. /

  A: Management declined to disclose the specific acquisition multiple, noting it is consistent with multiples the firm has paid for prior acquisitions. They explained the deal allows expansion into the UK temporary power market, a complementary line of business that leverages Templant's strong existing leadership team, and management expects to rapidly grow this new business segment over time.

• Q: An analyst asked for an update on the $22 million in accelerated capex pulled forward from 2027, including how much has been incurred to date and how much will be spent in H2 2026. /

  A: Management stated they are still working to advance the purchases, and are aiming to pull as much forward as possible to avoid expected delays related to new emissions standards and chassis supply constraints for large equipment. They noted the final cadence of spending is still being sorted out, and will provide more detail during the Q3 2026 earnings call.