Titan America S.A. Q2 FY2026 earnings call

Consolidated Financial Overview

• Q2 2026 consolidated revenue was $471 million, a 9.6% year-over-year increase from $429 million in Q2 2025, with $20 million of revenue contributed by the newly completed Keystone acquisition.
• Q2 2026 adjusted EBITDA was $101 million, a 1.3% year-over-year increase, with an adjusted EBITDA margin of 21.4% (down 180 basis points year-over-year, driven by extended maintenance outage costs).
• Q2 2026 net income was $43 million ($0.23 EPS), down from $51 million ($0.28 EPS) in Q2 2025; approximately 3 cents of the 5 cent EPS decline is attributable to Keystone-related transaction and one-time reorganizational tax costs.
• H1 2026 operating cash flow was $137 million (up from $108 million H1 2025), and free cash flow was $50 million (up from $26 million H1 2025).
• As of Q2 end 2026, the leverage ratio was 1.37x trailing 12 months adjusted EBITDA, remaining at a low absolute level with strong financial flexibility.

Recent Acquisitions and Growth Initiatives

• Completed the acquisition of Kiston Cement Company (Keystone) in Q2 2026, expanding Titan America's geographic footprint across Pennsylvania, Ohio, Delaware, and Maryland, and strengthening its vertically integrated position in the Mid-Atlantic region.
• Targeting at least $30 million in annual run-rate synergies from the Keystone acquisition by 2029, with synergy realization building over three years (the largest contribution coming in the third year as operational and commercial initiatives take full effect).
• Titan America is capitalizing on high growth in Virginia's data center construction market: the company participates in over 50% of all currently under construction data centers in its serviceable Virginia market (77 out of 148 active projects in 2026), with an additional 250 data centers in pre-construction. Data center investment creates multiplier demand for construction materials via follow-on power, infrastructure and commercial development.
• Subsidiary Separation Technologies is developing a first-of-its-kind landfill fly ash recycling plant at Brunner Island steam electric station in Pennsylvania, with a total planned investment of approximately $30 million. The plant will have annual capacity to process 600,000 tons of landfill material, producing 400,000 tons of concrete-grade fly ash per year, and is expected to be fully operational in Q3 2027. This initiative secures long-term fly ash supply to complement Keystone's product offerings and aligns with the company's low-carbon construction material strategy.

Product Volume and Pricing Performance

• Cement volumes increased 10% year-over-year including Keystone; like-for-like volumes were flat, held back by Florida import supply chain disruptions.
• Aggregate volumes declined 1.3% year-over-year, as growth in external sales was offset by lower internal consumption in Florida tied to the Pensuco maintenance outage.
• Fly ash volumes increased 12% year-over-year, ready-mix concrete volumes increased 2.6%, and concrete block volumes increased 8.3% year-over-year.
• Year-over-year pricing: cement decreased 1.5% (Mid-Atlantic like-for-like improvements offset Florida softness), aggregates decreased, fly ash was flat, ready-mix concrete increased 4.4%, and concrete block decreased 2.6%.

Capital Allocation and Shareholder Returns

• H1 2026 net capital expenditures were $87 million, focused on expanding domestic cement and aggregate capacity, improving logistics efficiency, and strengthening downstream market positions. Further targeted capex will be invested to realize Keystone synergies as integration progresses.
• The Board of Directors approved a $0.04 per share special distribution, payable October 9, 2026 to shareholders of record as of October 1, 2026.

1. Mid-Atlantic Segment: Q2 2026 external revenue was $214 million, a 27% increase from $168 million in Q2 2025. The $20 million Keystone acquisition contribution, double-digit ready-mix concrete revenue growth, and strong legacy cement operations drove this increase. Q2 2026 adjusted EBITDA was $53 million, a 30% increase from $41 million in Q2 2025, with an adjusted EBITDA margin of 24.7% (up from 24.1% year-over-year). Year-to-date external revenue was $359 million, a 16.7% increase from $308 million in H1 2025, and year-to-date adjusted EBITDA was $65 million, a 27% increase from $52 million in H1 2025, with a year-to-date adjusted EBITDA margin of 18.2% (up from 16.7% year-over-year). Mid-Atlantic contributed 45.4% of total Q2 2026 external consolidated revenue.

2. Florida Segment: Q2 2026 external revenue was $257 million, a 1.6% decrease from $261 million in Q2 2025. Lower ready-mix concrete volumes and reduced pricing for aggregates and concrete blocks were partially offset by higher concrete block and external aggregate volumes. Q2 2026 adjusted EBITDA was $51 million, down from $62 million in Q2 2025, with an adjusted EBITDA margin of 19.7% (down from 23.8% year-over-year). Total negative impact from temporary headwinds was approximately $7 million in Q2. Year-to-date external revenue was $510 million, a slight decrease from $514 million in H1 2025, and year-to-date adjusted EBITDA was $123 million, down from $133 million in H1 2025, with a year-to-date adjusted EBITDA margin of 24.2% (down from 25.9% year-over-year). Florida contributed 54.6% of total Q2 2026 external consolidated revenue.

• Management updated full year 2026 guidance to high single-digit revenue growth compared to 2025, up from prior low single-digit growth guidance, driven entirely by the addition of the Keystone acquisition; legacy organic business guidance remained unchanged.
• Full year 2026 adjusted EBITDA margin is expected to see a modest decline of 25 to 50 basis points year-over-year, reflecting the lower initial margin contribution of the newly acquired Keystone assets.
• The $7 million negative impact from Q2 2026 Florida temporary headwinds (extended maintenance outage and import disruptions) is not expected to create material lingering impacts in the second half of 2026, supporting a margin step-up in H2 2026.
• Management expects better second half performance in Florida's ready-mix business based on current order book visibility, with seasonal and weather factors remaining typical variable risks.

• Residential construction demand remains subdued across both operating regions, with project delays and softer cement demand weighing on Florida results in particular.
• Extended scheduled maintenance at the Pensuco cement and aggregates plant in Florida created longer outages than in prior years, reducing Q2 2026 segment results by a combined $7 million in direct negative impacts.
• Temporary shipping and port disruptions in the Mediterranean caused substantial delays to cement imports into Florida in Q2 2026, forcing higher-cost third-party sourcing to meet customer demand; while management expects logistics conditions to normalize in H2 2026, elevated spot sea freight rates may create modest cost pressure in the second half.
• Inflationary pressure from higher fuel, electricity, and raw material costs continues, though the company's operational excellence initiatives have largely offset these pressures to date.
• Proposed tariffs on imported Canadian cement for the Northeast U.S. market have an undetermined impact on Mid-Atlantic markets, and management is taking a wait-and-see approach.
• Unusual weather can impact construction activity and results in the second half of the year, as is typical for the industry.

Q: Analyst asks what caused the cement pricing softness in Florida, what the pricing outlook is for both regions, and how the company is managing higher input costs. / A: Management notes Florida pricing has been broadly stable, rather than meaningfully declining, but the company was unable to implement price increases amid Q2's temporary challenges: soft residential demand, extended plant outages, and import delays that forced third-party sourcing. Pricing is more dynamic in the Mid-Atlantic, driven by strong demand from non-residential, infrastructure and data center projects. While broad input cost inflation persists, operational excellence initiatives have kept margins well managed: Mid-Atlantic margins improved year-over-year, and Florida's margin decline is fully explained by temporary one-time impacts.

Q: Analyst asks when the Florida Pensuco outage and Mediterranean import issues will be resolved, what lingering impacts might exist in Q3, and how proposed Canadian cement tariffs will affect the Mid-Atlantic. / A: Management says the extended Q2 Pensuco outage is fully behind us, with only a normal short planned outage remaining in H2, with no material lingering impacts. The import disruptions are also expected to be resolved, though elevated spot sea freight rates may create modest higher cost exposure in the second half. Proposed Canadian cement tariffs are too early to assess, and management will wait to see how policy develops before estimating market impacts.

Q: Analyst asks for the magnitude of the expected full year adjusted EBITDA margin decline, and what drivers will support the expected H2 margin step-up. / A: Management confirms the expected full year margin decline is 25 to 50 basis points, driven entirely by the lower initial starting margin of the newly acquired Keystone assets. The step-up in H2 margins comes from the removal of the $7 million one-time Q2 headwind, and a stronger expected order book for Florida ready-mix concrete in the second half, though weather remains a typical variable risk.

Q: Analyst asks whether the $30 million 2029 Keystone synergy target is entirely cost synergies, or includes revenue synergies. / A: Management explains the target includes substantial revenue synergies: improved plant reliability will enable higher production and sales, commercial and logistics network synergies across the expanded Mid-Atlantic footprint will unlock new customer demand, and planned expansion of Keystone's high-quality aggregate reserves will grow sales over time. The target also includes cost and operational synergies from raw material sourcing, operational efficiency improvements, and alternative fuel capability upgrades.