Construction Partners lifts guidance as backlog hits record
The infrastructure contractor raised its full-year revenue outlook for the second straight quarter.
Construction Partners (ROAD) reported second-quarter results that showed slowing growth but a record backlog and a second consecutive increase to its full-year guidance. The Dothan, Alabama–based infrastructure contractor posted revenue of $769.2 million for the quarter ended June 30, a 34.5% increase from the prior-year period. That marked a deceleration from the 44.1% year-over-year growth recorded in the first quarter.
The quarter underscored a shift in the company’s growth trajectory. Adjusted EBITDA rose 34.6% to $93.3 million, down from a 63.1% increase in the prior quarter. Adjusted EBITDA margin held nearly steady at 12.1%, compared with 13.9% in the first quarter. Adjusted net income growth slowed sharply to 136% from 99% in the prior quarter, though the company noted that first-quarter results included a one-time benefit from a prior-year loss.
Backlog reached a new high of $3.14 billion, up from $3.09 billion in the first quarter and $2.84 billion a year earlier. The increase was driven by strong demand for highway and road projects, particularly in the Southeast and Texas. Gross profit margin compressed to 12.9% from 15.0% in the prior quarter, while general and administrative expenses as a percentage of revenue ticked up to 8.3% from 7.7%.
Acquisitions continued to play a key role in the company’s expansion. Construction Partners acquired Ellsworth Construction, LLC, which expanded its presence into the Tulsa and Oklahoma City markets. The company completed eight acquisitions in less than 15 months, including four in Texas and three platform companies, accelerating from two deals in the first quarter.
The company raised its full-year revenue guidance to a range of $3.59 billion to $3.65 billion, up from $3.48 billion to $3.56 billion in the prior quarter. Adjusted EBITDA margin guidance remained unchanged at 15.34% to 15.45%. Cash and cash equivalents declined to $76.9 million from $104.1 million at the end of the first quarter.
Diluted earnings per share for the quarter were $0.16, down from $0.31 in the prior quarter, which included a one-time benefit. The company remains focused on executing its acquisition strategy while managing costs amid rising project complexity.