Key Highlights

  • Revenue of USD 1.77 billion rose 23% and topped the consensus estimate of USD 1.70 billion.
  • Adjusted diluted EPS of USD 3.81 topped the USD 3.27 consensus estimate; GAAP diluted EPS was USD 0.07.
  • A USD 162 million net charge from settling convertible note conversions cut Net Income to USD 3 million.
  • Committed and awarded projects hit a record USD 7.5 billion, and adjusted EBITDA rose 32% to USD 283 million.

Granite Construction Incorporated (NYSE:GVA) reported third quarter 2026 Revenue of USD 1.77 billion, up 23% from USD 1.43 billion and above a consensus estimate of USD 1.70 billion. Adjusted Diluted Earnings per Share of USD 3.81 were above a consensus estimate of USD 3.27 and up from USD 2.70, while GAAP diluted EPS was USD 0.07 versus USD 1.98 a year earlier. Net income attributable to the company was USD 3 million, reduced by USD 162 million of net non-operating charges from settling conversions of its 3.75% convertible notes primarily in cash to limit dilution.

Construction Margins Lead the Operating Gains

Gross profit rose USD 75 million to USD 336 million. Construction segment revenue increased 26.8% to USD 1.47 billion, with growth of about 20% excluding acquisitions, and Gross Profit climbed 42.6% to USD 274.3 million at an 18.6% Margin versus 16.5%. Materials segment revenue grew 7.9% to USD 292.3 million, but gross profit fell 9.9% to USD 61.4 million as the margin dropped to 21.0% from 25.2% because energy surcharges offset elevated diesel costs.

Selling, general and administrative expense stayed near USD 104 million, improving to 5.9% of revenue from 7.1%. Adjusted EBITDA increased to USD 283 million from USD 216 million, with the margin at 16.0% against 15.0%. Year to date Operating Cash Flow reached USD 404 million, up USD 114 million. Chief Executive Officer Kyle Larkin said the record Backlog and market position set up the company well entering 2027.

Guidance and the 2029 Targets

The company left 2026 guidance unchanged except for narrowing the revenue range to USD 5.4 billion to USD 5.5 billion from USD 5.3 billion to USD 5.5 billion. Adjusted EBITDA margin is guided to 12.25% to 13.25%, SG&A to 8.25% to 8.75% of revenue, and capital expenditures to roughly USD 140 million to USD 160 million, including about USD 50 million of strategic materials investments. The chief financial officer said the revenue midpoint implies about 15% organic growth plus 9% from acquired companies.

New 2029 targets include an organic revenue compound annual growth rate of 10% to 12%, adjusted EBITDA margin of 14% to 16%, SG&A near 7.5% of revenue, free cash flow near 10% of revenue and a 2.5 times net Leverage target alongside continued acquisitions.

Backlog and Balance Sheet Signposts

Several concrete markers stand out. Committed and awarded projects rose USD 37 million sequentially to USD 7.5 billion, up USD 1.1 billion from a year earlier, so conversion into revenue is one item. Federal backlog of USD 1.3 billion includes USD 569 million of tactical infrastructure work for U.S. Customs and Border Protection that is projected to be substantially realized through the second quarter of 2028.

Materials margin is a second item, given the 420 basis point decline in gross margin. Third is the full year adjusted EBITDA margin range of 12.25% to 13.25% against 12.7% for the nine months. Fourth is liquidity: cash and cash equivalents were USD 480.3 million, down from USD 529.2 million at year end, with long-term Debt of USD 1.17 billion.