Granite Construction Inc (NYSE:GVA) Reports Mixed Q2 2025 Results with Earnings Beat but Revenue Miss

Granite Construction Incorporated (NYSE:GVA) reported its second-quarter 2025 results, delivering mixed performance relative to analyst expectations. The company posted revenue of $1.13 billion, falling short of the consensus estimate of $1.17 billion. However, adjusted diluted earnings per share (EPS) came in at $1.93, significantly exceeding the estimated $1.71.

Key Financial Highlights

• Revenue Growth: Revenue increased by 4% year-over-year (YoY) to $1.13 billion, though it missed expectations.
• Profitability Strength: Adjusted net income attributable to Granite rose to $86 million ($1.93 per share), up from $77 million ($1.73 per share) in Q2 2024.
• Gross Profit Expansion: Gross profit climbed to $199 million (17.7% margin) from $165 million (15.3% margin) in the prior-year quarter, reflecting improved project execution and favorable claim settlements.
• Adjusted EBITDA: Increased to $152 million, up from $130 million YoY.

Market Reaction

Despite the earnings beat, Granite’s stock saw a slight pre-market decline of -0.26%, suggesting investor caution. The muted reaction could stem from the revenue miss, despite strong profitability metrics. Over the past month, the stock has been relatively flat (-0.7%), indicating a wait-and-see approach ahead of earnings.

Segment Performance

• Construction Segment: Revenue grew modestly to $937.4 million (up 2.1% YoY), with gross profit improving to 16.4% from 14.7%.
• Materials Segment: Revenue surged 14.6% YoY to $188.5 million, with gross profit margins expanding to 24.1% from 17.8%, driven by higher aggregates and asphalt volumes.

Outlook vs. Analyst Estimates

Granite updated its full-year 2025 guidance, projecting revenue between $4.35 billion and $4.55 billion, which includes approximately $150 million from recent acquisitions. This compares to the current analyst consensus of $4.33 billion, suggesting the company expects to meet or slightly exceed expectations.

The company also raised its adjusted EBITDA margin guidance to 11.25%-12.25%, reflecting confidence in operational efficiency and accretive acquisitions.

Strategic Moves & Future Prospects

CEO Kyle Larkin highlighted record Contract Awarded but Not Yet Recorded (CAP) of $6.1 billion, signaling a strong backlog. The company recently completed two acquisitions—one in the Southeast (expanding aggregate supply) and another in California (bolstering civil construction capabilities). CFO Staci Woolsey emphasized that these deals align with Granite’s capital allocation strategy and are expected to be immediately accretive.

Conclusion

Granite’s Q2 results underscore solid profitability but reveal a slight revenue shortfall. The market’s tepid reaction may reflect concerns over top-line growth, though the raised EBITDA margin outlook and strong backlog suggest underlying strength.

For more detailed earnings estimates and historical performance, visit Granite Construction’s earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.