Construction Partners, Inc.

Third-quarter fiscal 2026 revenue was $999.4 million, up 28.2% year over year, including 8.9% organic growth and 19.3% acquisitive growth. Gross profit was $168.4 million, up approximately 28%, and gross margin was 16.8% versus 16.9% last year. Net income was $59.6 million; adjusted net income was $60.6 million; adjusted EPS was $1.08; adjusted EBITDA was $163 million, up 24%, with adjusted EBITDA margin of 16.3%. Cash flow from operations was $93.1 million versus $83 million in Q3 fiscal 2025. At June 30, cash and cash equivalents were $95 million, availability under the credit facility was $599 million, and debt-to-trailing-12-month EBITDA was 3.1x. Fiscal 2026 guidance was raised to revenue of $3.64 billion to $3.68 billion, net income of $165 million to $168 million, adjusted net income of $177.6 million to $181.4 million, adjusted EBITDA of $559 million to $569 million, and adjusted EBITDA margin of 15.36% to 15.46%. Backlog was a record $3.36 billion, with about 80% to 85% of the next 12 months' contract revenue covered.

Jule Smith emphasized that CPI's culture and people are a competitive advantage and said the company executed well despite energy inflation and unusually wet weather in May. He highlighted strong public and commercial demand, especially data centers, and said the company is well positioned in its existing 8-state footprint because 70% to 75% of new U.S. data center construction is expected to occur there. He also framed federal funding risk as manageable, saying a continuing resolution would not meaningfully affect fiscal 2027, and pointed to record backlog, a strong acquisition pipeline, and the company's ROAD 2030 discipline.

Gregory Hoffman walked through the quarter's metrics, including $999.4 million of revenue, $168.4 million of gross profit, $59.6 million of net income, $60.6 million of adjusted net income, $1.08 of adjusted EPS, and $163 million of adjusted EBITDA. He noted the balance sheet had $95 million of cash and $599 million of credit availability, and said the company amended its credit agreements by increasing the revolver from $500 million to $700 million, refinancing Term Loan B, and adding $300 million of incremental term loans. He said leverage improved to 3.1x and management still targets about 2.5x, while cash flow from operations was $93.1 million and should convert at 75% to 85% of EBITDA in fiscal 2026. He also said fourth-quarter results should benefit from acquisitions becoming fully integrated and from the seasonal absorption of fixed costs.

Analysts pressed on how much asphalt pass-through pricing lifted revenue, with management estimating about $8 million to $10 million of additional revenue in the quarter, split across organic and acquisitive reporting depending on location. Questions also focused on weather impacts, with management saying wet days delay work but are often made up on weekends and that weather usually evens out over the year. On federal funding, management said a continuing resolution would likely shift activity toward more short-term maintenance work, but would not disrupt operations, and on margins they said fourth-quarter improvement reflects pass-through pricing, acquisitions, and seasonal leverage rather than a single unusual factor.