Granite Construction Incorporated Q1 FY2026 earnings call

• Recent acquisitions: Guided by disciplined M&A framework. Recently acquired Kenny Sane Construction, expected to add ~$150M annual revenue with high EBITDA margin. - Construction segment: Cap at $7.2B, $200M increase from Q4. Federal business positioned to generate >15% of construction segment revenue. State and private sectors have strong funding and bidding opportunities. - Materials segment: Strong start, demand across geographies, margin improvement on track. Mitigate energy price fluctuations through various methods.

Construction segment: Revenue increased $151 million, or 25% year-over-year, to $766 million. $43 million from acquired businesses, $108 million organic. Gross profit increased with higher revenue but margin decreased due to prior year claim settlement revision. Materials segment: Revenue increased $61 million year-over-year to $146 million, gross profit up $9 million to $8 million. Cash gross profit increased $15 million to $26 million, 18% of revenue. Acquired businesses led growth, organic volume also increased.

• Increased revenue guidance to $5.2 - $5.4B from $4.9 - $5.1B, due to tactical infrastructure contract and Kenny Sane Construction. - Decreased SG&A as % of revenue to 8.25 - 8.75% from 8.5 - 9%. - Increased adjusted EBITDA margin guidance to 12.25% - 13.25% from 12% - 13%. - CAP-X guidance $140 - $160M unchanged. Estimated adjusted effective tax rate mid-20s unchanged.

• Actual results could differ materially from forward-looking statements. - Risks related to construction project cancellations, energy price fluctuations, and market conditions affecting business performance.

Q: Congrats on good results, good acquisition. Talk about growth story for KSC on revenue/margin.

A: KSC does ~$150M revenue annually, expects $100M in 2025, high EBITDA margin. Can support scale, bring different end markets.

Q: Warren deal going well, talk about demand.

A: Warm paving acquisition performing well, materials business had nice quarter with volume and cash gross profit growth.

Q: SG&A leverage, break out border wall work vs KSC.

A: SG&A change driven by revenue increase, $200M from tactical infrastructure job and $100M from KSC.

Q: Federal exposure, compare margins/risk/collections.

A: Federal business grown from <5% to around 10%, expects to be >15% of revenue. Have experience in various federal projects.

Q: CAP outlook, California job, construction margins.

A: Cap growing, California project unique, scope exceeded funding. Construction margins adjusted for one-time recovery are on track.

Q: Tactical infrastructure projects, risk parameters, margins.

A: Two projects in Texas, quick burn. Mitigate risks like schedule, remoteness, contractors/suppliers. Energy costs mitigated by surcharges, fixed-forward contracts, etc.