Great Lakes Dredge & Dock Corporation

Q3 revenue was $195.2 million, up $4 million from the prior-year quarter. Net income was $17.7 million versus $8.9 million last year. Adjusted EBITDA was $39.3 million with a 20.1% margin, and gross profit was $43.8 million with gross margin of 22.4%, versus $36.2 million and 19.0% in Q3 2024. Operating income was $28.1 million, up from $16.7 million, and net interest expense was $4.6 million versus $4.9 million a year ago. Backlog was $935 million, with $194 million in awards and options pending, and the company said it received $136 million of new project awards in the quarter. Capex for Q3 was $32.8 million, and full-year capex guidance remains $140 million to $150 million including capitalized interest. For Q4, management expects another very strong quarter, with every vessel working most of the quarter except two hopper dredges in dry dock, and said 2025 is on pace to be the highest EBITDA year in company history by a large margin.

Lasse Petterson emphasized that momentum carried from the first half into Q3, supported by strong project execution, high utilization and a backlog concentrated in capital and coastal protection work. He said the company has not been affected by the government shutdown, that current and upcoming projects are fully funded, and that the backlog gives clear visibility into 2026. He also highlighted the fleet milestone of completing the hopper dredge newbuild program with delivery of the Amelia Island, and said the Acadia should broaden offshore energy opportunities beyond U.S. wind.

Scott Kornblau focused on the operating leverage in the quarter: revenue rose to $195.2 million, gross margin improved to 22.4%, operating income reached $28.1 million, and net income doubled to $17.7 million. He said total capex was $32.8 million in Q3, full-year capex is still expected at $140 million to $150 million, and the company ended the quarter with $12.7 million in cash and no revolver borrowings. He also noted the revolver was upsized to $430 million and the $100 million second-lien notes were repaid, cutting interest expense by almost $6 million per year; trailing 12-month net leverage was 2.5x, liquidity was nearly $300 million, and weighted-average debt cost is now under 6%.

Analysts pressed on the 2025-2026 dredging bid outlook, and management said coastal protection and maintenance dredging should continue normally under the continuing resolution, while new port deepening projects are more likely to come later, with work expected to start around 2027. Questions also focused on how the company is still being paid during the shutdown; management said only about 1,000 of more than 30,000 Army Corps employees are furloughed and that project-funded accounts are allowing work and payments to continue. Analysts asked about Acadia utilization and margins, and management said the vessel is now effectively fully booked for 2026 through Empire Wind, Sunrise Wind and added scope, with Europe also being pursued as a work-in-progress expansion market.