Arcosa, Inc. Q4 FY2025 earnings call

2025 key growth businesses construction materials and engineer structures grew y-o-y supported by cyclical expansion. Announced to sell barge business for $450 million cash, expected to close in Q2 2026. Jess Collins retiring. Construction products Q4 results all organic; aggregates Q4 freight-adjusted revenues up ~8%, full-year volumes up 6%. Specialty materials and asphalt Q4 revenues impacted by lower asphalt freight revenue, trench shoring business y-o-y double-digit revenue and EBITDA growth with strong margin expansion. Engineered structures utility structures performed well with margin expansion each quarter in 2025, wind towers focused on right-sizing. Company generated $120 million operating cash flow in Q4, full-year free cash flow $202 million, net debt to adjusted EBITDA 2.3 times. 2026 CapEx expected $220 - $250 million including $70 - $80 million growth CapEx and $150 - $170 million maintenance CapEx.

2025 was an outstanding year for ARCOSA with record revenues of $2.9 billion, up 12%, record adjusted EBITDA of $583 million, up 30%, and record adjusted EBITDA margin of 20.2%, up 180 basis points. For construction products, Q4 segment revenues decreased 2%, adjusted segment EBITDA grew 3% with margin expanding 140 basis points; full-year freight-adjusted sales price grew 8% and adjusted cash profit per ton increased 10%. Specialty materials and asphalt Q4 revenues decreased 5%, adjusted EBITDA and margin declined slightly. Engineered structures Q4 revenues increased 15% led by 20% growth in utility and related structures, adjusted segment EBITDA for utility structures grew 22% with margin up 100 basis points to 18.5%, wind towers adjusted EBITDA flat. Transportation products Q4 revenues up 19%, adjusted segment EBITDA increased 24% with 90 basis points margin expansion.

2026 revenues expected $2.95 - $3.1 billion, adjusted EBITDA $590 - $640 million (excluding barge divestiture impact); barge business full-year revenues $410 - $430 million, adjusted EBITDA $70 - $75 million. Construction products 2026 expected record revenues and adjusted EBITDA, mid to high single-digit adjusted EBITDA growth; aggregates expected low single-digit volume growth and mid single-digit pricing improvement. Engineered structures expected strong double-digit adjusted EBITDA growth and higher margins, utility structures positive outlook, wind towers short-term volume decline in 2026 but recovery in 2027.

Ian Zaffino asked about proceeds redeployment, Antonio and Gail responded about M&A and organic growth. Trey Grooms asked if utility structures growth can offset wind towers decline in 2026, Gail responded on utility structures strength. Garrick Schmoys asked about Northeast weather impact on Stavola and Q1 EBITDA share, relevant persons responded. Julio Romero asked about drivers of utility structures demand acceleration, relevant persons responded. Brent Thielman asked about engineered structures margin sustainability and barge sale M&A, relevant persons responded.