In This Article:
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Revenue Increase: $28 million or 4% increase in the first quarter.
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Gross Profit Increase: $30 million or 54% increase.
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Adjusted Net Income Improvement: $9 million improvement.
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Adjusted EBITDA Improvement: $14 million improvement.
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Operating Cash Flow: Positive $4 million.
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Construction Segment Revenue: $615 million, a $19 million or 3% increase year-over-year.
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Construction Segment Gross Profit: $85 million with a gross profit margin of 14%.
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Materials Segment Revenue: $85 million, an $8 million increase year-over-year.
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Materials Segment Gross Loss: Decreased by $1 million to a loss of $2 million.
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2025 Revenue Guidance: $4.2 billion to $4.4 billion.
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Adjusted EBITDA Margin Guidance: 11% to 12%.
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Cash and Marketable Securities: $513 million as of the end of Q1.
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Debt: Largely unchanged at $740 million.
Release Date: May 01, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Granite Construction Inc (NYSE:GVA) reported a strong start to 2025 with revenue increasing by $28 million or 4% and gross profit increasing by $30 million or 54%.
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The company confirmed its 2025 guidance and 2027 financial targets, indicating confidence in its future performance.
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Granite Construction Inc (NYSE:GVA) has seen a record increase in its Committed and Awarded Projects (CAP) to $5.7 billion, reflecting a strong bidding environment.
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The Materials segment showed significant improvement with increased reserves and new plants, leading to margin improvements in aggregates and asphalt.
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The company is actively pursuing mergers and acquisitions to strengthen its market position, with a target of completing two to three deals in 2025.
Negative Points
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Granite Construction Inc (NYSE:GVA) faces uncertainty in the macroeconomic environment, particularly concerning tariffs which could impact costs.
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Despite a strong start, the company experienced some project delays due to wet weather in March, affecting revenue recognition.
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The Materials segment reported a gross loss of $2 million, although this was an improvement from the previous year.
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The company is exposed to risks related to inflation and price increases in commodities like natural gas, diesel, and liquid asphalt.
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There is a potential risk of project disruptions due to changes in federal administration policies, although none have been experienced yet.
Q & A Highlights
Q: Can you discuss the current bidding environment and the trajectory of your Committed and Awarded Projects (CAP)? A: Kyle Larkin, President and CEO, noted that the market is very strong, particularly in the public sector, which is reflected in their record CAP levels. They expect CAP to continue increasing throughout the year, supported by the Infrastructure Investment and Jobs Act (IIJA) and potential future bills with similar or greater spending levels.