Knife River Corporation

Knife River reported first-quarter revenue up 16% year over year and adjusted EBITDA up 16%, with adjusted EBITDA margin expanding 290 basis points. Product-line results were positive: aggregates volume increased 26%, ready-mix volume increased 33%, and asphalt volume increased 42%; aggregates gross profit margin expanded 390 basis points, and Energy Services EBITDA improved 40%. Backlog was approximately $1.2 billion, about 75% of which is expected to be completed in 2026. Capital spending in the quarter included $42 million of maintenance and improvement CapEx and $209 million of growth initiatives, including $174 million for the 3 acquisitions and $35 million for aggregate expansions and greenfield projects. Management reaffirmed February guidance and said 2026 is expected to trend toward the upper half of the company’s revenue and adjusted EBITDA ranges; it also expects year-end 2026 to have no borrowing on the $500 million revolver, cash on hand, and net leverage near 2.5x.

Brian Gray’s message was centered on confidence in Knife River’s strategy, market footprint, and vertical integration. He emphasized that the company is entering construction season with record backlog, strong demand in higher-growth midsized markets, and multiple levers for growth, including pricing, cost control, and M&A. His tone was upbeat and assertive, especially around 2026, the acquisitions, and the company’s ability to use vertical integration to create a “profit multiplier.”

Nathan Ring highlighted that the quarter benefited from broad-based volume, revenue, and gross profit improvement across aggregates, ready-mix, and asphalt. He noted aggregates pricing was up 1% as reported but 4.1% on a mix-adjusted basis, and reaffirmed full-year expectations for mid-single-digit reported pricing improvement and at least 200 basis points of aggregate margin expansion. He also said full-year ready-mix volume is expected to be up mid-teens, asphalt volume mid-single digits, SG&A should be comparable with 2025 as a percent of revenue, and the company expects to end 2026 with no revolver borrowing and net leverage near 2.5x. CapEx was $42 million for maintenance/improvement and $209 million for growth, mostly acquisitions.

Analysts focused on aggregates pricing mix, diesel inflation, M&A cadence, dynamic pricing rollout, and whether management would raise guidance after a strong first quarter. Management said the apparent pricing weakness was largely geographic and product mix, with Mountain sales carrying lower pricing but similar margins, and reiterated confidence in mid-single-digit full-year pricing. On diesel, management said mitigation tools such as fuel surcharges, escalation clauses, fixed forward contracts, and dynamic pricing cover about 80% of annual diesel exposure. On M&A, they said the 3 acquisitions were bought at high single-digit multiples and support the upper half of guidance, while balance sheet capacity and liquidity remain strong enough to support further deals.