Construction Partners, Inc. Announces Fiscal 2026 Second Quarter Results
Rhea-AI Summary
Construction Partners (NASDAQ: ROAD) reported Q2 FY2026 results with revenue $769.2M (+34.5% YoY), adjusted EBITDA $93.3M (+34.6% YoY), and adjusted net income $10.4M (+136% YoY). Backlog reached a record $3.14B. The company raised FY26 guidance for revenue, net income, adjusted net income, adjusted EBITDA, and adjusted EBITDA margin.
Positive
- Revenue $769.2M, up 34.5% YoY
- Adjusted EBITDA $93.3M, up 34.6% YoY
- Record backlog of $3.14B at March 31, 2026
- Raised FY26 guidance: Revenue $3.59B–$3.65B and Adjusted EBITDA $552M–$564M
- Completed strategic acquisition of Four Star Paving in April 2026
Negative
- General & administrative expenses rose to $63.6M (8.3% of revenue)
- Reported GAAP net income of $9.2M and diluted EPS $0.16, modest versus adjusted metrics
Key Figures
Market Reality Check
Peers on Argus
ROAD was down 2.66% pre-results while peers showed mixed moves: IESC -2.27%, FLR -6%, KBR -5.98%, DY -6.63%, and PRIM +5.8%, suggesting stock-specific dynamics rather than a uniform sector trend.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Apr 02 | Earnings call schedule | Neutral | +2.8% | Announced Q2 FY26 earnings release date and conference call details. |
| Apr 01 | Tennessee acquisition | Positive | -6.2% | Completed Four Star Paving acquisition to expand middle Tennessee capacity. |
| Feb 12 | Investor conferences | Neutral | -0.6% | Planned participation in two institutional investor conferences in Feb–Mar 2026. |
| Feb 05 | Q1 2026 earnings | Positive | +11.2% | Reported strong Q1 growth, record Adjusted EBITDA margin, and record backlog. |
| Feb 02 | Texas acquisition | Positive | +3.9% | Acquired GMJ Paving, adding a Houston-area asphalt plant and capacity. |
Positive fundamental updates (earnings beats, backlog records, acquisitions) have often coincided with favorable price reactions, though the April 1 acquisition headline saw a negative divergence.
Over the last few months, ROAD has reported multiple growth milestones. On Feb 5, Q1 FY26 results showed strong revenue, Adjusted EBITDA, and record backlog, with shares up 11.22%. Subsequent acquisitions in Texas (Feb 2) and Tennessee (Apr 1) expanded its footprint, though the latter saw a 6.21% decline. Investor conferences and the Q2 earnings date announcement had modest price effects. Today’s Q2 results and raised FY26 outlook build on this trajectory of growth and integration.
Regulatory & Risk Context
The company has an effective Form S-3ASR shelf registration dated August 15, 2025, which has not yet been used according to the provided context (usage_count 0). This provides pre-cleared flexibility to issue registered securities if management chooses, without indicating any specific intention or size for such offerings.
Market Pulse Summary
This announcement highlights substantial Q2 FY26 revenue growth, higher Adjusted EBITDA of $93.3M, and a record project backlog of $3.14B, alongside raised full-year guidance for revenue and profitability metrics. It follows earlier FY26 milestones, including strong Q1 results and multiple acquisitions expanding the Sunbelt footprint. Investors may focus on execution against the enlarged backlog, integration of recent deals, future use of the effective S-3ASR registration, and whether margins track within the guided 15.38%–15.45% range.
Key Terms
adjusted net income financial
adjusted ebitda financial
ebitda margin financial
AI-generated analysis. Not financial advice.
Revenue Up
Adjusted Net Income Up
Adjusted EBITDA Up
Record Backlog of
Company Raises FY26 Outlook
Fred J. (Jule) Smith, III, the Company's President and Chief Executive Officer, said, "We delivered a strong quarter, driven by exceptional execution across the business. Our teams throughout our family of companies performed at a high level, consistently outperforming on project delivery, productivity, and safety. Favorable weather conditions further supported our ability to advance work efficiently and exceed expectations. Additionally, energy cost volatility had a limited impact on results due to the pass-through nature of our project contracts, as well as the physical hedge inherent to our vertical integration. Strong financial performance in the quarter led to 35 percent growth in both revenue and Adjusted EBITDA, including 11 percent organic revenue growth. Our local teams across our Sunbelt footprint continued to capture meaningful project wins, driving our backlog to a record
Revenues were
Gross profit was
General and administrative expenses were
Net income was
Adjusted net income(1) was
Adjusted EBITDA(1) in the second quarter of fiscal 2026 was
Project backlog was a record
Smith added, "Our performance is a testament to the hard work and dedication of our people. A deeply embedded culture of operational excellence, disciplined project execution, and an unwavering commitment to safety continues to unite our family of companies, driving results and reinforcing CPI's reputation as an acquirer of choice across our eight-state footprint. We were pleased to have completed our latest strategic acquisition in April with the purchase of Four Star Paving by our
Fiscal 2026 Outlook
The Company is raising its outlook for fiscal year 2026 with regard to revenue, net income, Adjusted net income, Adjusted EBITDA and Adjusted EBITDA margin as follows:
- Revenue in the range of
$3.590 billion $3.650 billion - Net income in the range of
$159.0 million $162.0 million - Adjusted net income(1) in the range
$170.4 million $174.2 million - Adjusted EBITDA(1) in the range of
$552.0 million $564.0 million - Adjusted EBITDA margin(1) in the range of
15.38% to15.45%
Ned N. Fleming, III, the Company's Executive Chairman, stated, "We are pleased with our team's strong execution this quarter as we continue to advance CPI's proven growth strategy. Our differentiated business model, built on cost pass-through, vertical integration, and a decentralized partnership approach, remains a powerful and often underappreciated driver of sustainable results. Supported by a strong balance sheet, disciplined leadership, and an expanding Sunbelt footprint, CPI is well-positioned to compound shareholder value through both geographic expansion and increasing operational scale. The long-term demand environment remains compelling. Growing infrastructure repair and maintenance needs, sustained population migration, economic expansion, and rising roadway capacity demands across the Sunbelt continue to create a durable and growing addressable market for our services. Against this powerful backdrop, the Board and I remain highly confident in CPI's long-term trajectory and the significant opportunities ahead."
Conference Call
The Company will conduct a conference call today at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) to discuss financial and operating results for the fiscal quarter ended March 31, 2026. To access the call live by phone, dial (412) 902-0003 and ask for the Construction Partners call at least 10 minutes prior to the start time. A webcast of the call will also be available live and for later replay on the Company's Investor Relations website at www.constructionpartners.net.
About Construction Partners, Inc.
Construction Partners, Inc. is a vertically integrated civil infrastructure company operating in local markets throughout the Sunbelt in
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained herein that are not statements of historical or current fact constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934. These statements may be identified by the use of words such as "may," "will," "expect," "should," "anticipate," "intend," "project," "outlook," "believe" and "plan." The forward-looking statements contained in this press release include, without limitation, statements related to financial projections, future events, business strategy, future performance, future operations, backlog, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management. These and other forward-looking statements are based on management's current views and assumptions and involve risks and uncertainties that could significantly affect expected results. Important factors could cause actual results to differ materially from those expressed in the forward-looking statements, including, among others: our ability to successfully manage and integrate acquisitions; failure to realize the expected economic benefits of acquisitions, including future levels of revenues being lower than expected and costs being higher than expected; failure or inability to implement growth strategies in a timely manner; declines in public infrastructure construction and reductions in government funding, including the funding by transportation authorities and other state and local agencies; risks related to our operating strategy; competition for projects in our local markets; risks associated with our capital-intensive business; government requirements and initiatives, including those related to funding for public or infrastructure construction, land usage and environmental, health and safety matters; unfavorable economic conditions and restrictive financing markets; our ability to obtain sufficient bonding capacity to undertake certain projects; our ability to accurately estimate the overall risks, requirements or costs when we bid on or negotiate contracts that are ultimately awarded to us; the cancellation of a significant number of contracts or our disqualification from bidding for new contracts; risks related to adverse weather conditions; our substantial indebtedness and the restrictions imposed on us by the terms thereof; our ability to maintain favorable relationships with third parties that supply us with equipment and essential supplies; our ability to retain key personnel and maintain satisfactory labor relations; property damage, results of litigation and other claims and insurance coverage issues; risks related to our information technology systems and infrastructure; our ability to maintain effective internal control over financial reporting; and the risks, uncertainties and factors set forth under "Risk Factors" in the Company's most recent Annual Report on Form 10-K and its subsequently filed Quarterly Reports on Form 10-Q. Forward-looking statements speak only as of the date they are made. The Company assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable law.
Contact:
Rick Black
Dennard Lascar Investor Relations
ROAD@DennardLascar.com
(713) 529-6600
(1) Adjusted net income, Adjusted EBITDA and Adjusted EBITDA margin are financial measures not presented in accordance with generally accepted accounting principles ("GAAP"). Please see "Reconciliation of Non-GAAP Financial Measures" at the end of this press release. |
- Financial Statements Follow -
Construction Partners, Inc. Consolidated Statements of Comprehensive Income (unaudited in thousands, except share and per share data) | ||||||||
For the Three Months | For the Six Months | |||||||
2026 | 2025 | 2026 | 2025 | |||||
Revenues | $ 769,196 | $ 571,650 | $ 1,578,665 | $ 1,133,230 | ||||
Cost of revenues | 670,343 | 500,300 | 1,358,312 | 985,309 | ||||
Gross profit | 98,853 | 71,350 | 220,353 | 147,921 | ||||
General and administrative expenses | (63,596) | (46,662) | (125,097) | (90,928) | ||||
Acquisition-related expenses | (2,480) | (806) | (14,109) | (20,358) | ||||
Gain on sale of property, plant and equipment, net | 4,606 | 3,407 | 6,645 | 4,462 | ||||
Operating income | 37,383 | 27,289 | 87,792 | 41,097 | ||||
Interest expense, net | (25,590) | (21,592) | (52,960) | (39,722) | ||||
Other income (expense) | 276 | (159) | 23 | 262 | ||||
Income before provision for income taxes and earnings from | 12,069 | 5,538 | 34,855 | 1,637 | ||||
Provision for income taxes | 2,889 | 1,310 | 8,469 | 461 | ||||
Loss from investment in joint venture | — | (13) | (1) | (12) | ||||
Net income | 9,180 | 4,215 | 26,385 | 1,164 | ||||
Other comprehensive income (loss), net of tax | ||||||||
Unrealized gain (loss) on interest rate swap contract, net | 58 | (2,890) | (1,152) | (21) | ||||
Unrealized gain (loss) on restricted investments, net | (158) | 231 | (122) | (102) | ||||
Other comprehensive (loss) | (100) | (2,659) | (1,274) | (123) | ||||
Comprehensive income | $ 9,080 | $ 1,556 | $ 25,111 | $ 1,041 | ||||
Net income per share attributable to common stockholders: | ||||||||
Basic | $ 0.16 | $ 0.08 | $ 0.47 | $ 0.02 | ||||
Diluted | $ 0.16 | $ 0.08 | $ 0.47 | $ 0.02 | ||||
Weighted average number of common shares outstanding: | ||||||||
Basic | 55,917,842 | 55,248,526 | 55,860,888 | 54,698,442 | ||||
Diluted | 56,256,531 | 55,669,646 | 56,150,804 | 55,141,358 | ||||
Construction Partners, Inc. Consolidated Balance Sheets (in thousands, except share and per share data) | |||
March 31, | September 30, | ||
2026 | 2025 | ||
ASSETS | (unaudited) | ||
Current assets: | |||
Cash and cash equivalents | $ 76,860 | $ 156,062 | |
Restricted cash | 120 | 2,953 | |
Contracts receivable including retainage, net | 515,650 | 549,884 | |
Costs and estimated earnings in excess of billings on uncompleted contracts | 64,539 | 45,340 | |
Inventories | 176,802 | 155,133 | |
Prepaid expenses and other current assets | 28,424 | 25,459 | |
Total current assets | 862,395 | 934,831 | |
Property, plant and equipment, net | 1,265,112 | 1,153,070 | |
Operating lease right-of-use assets | 95,724 | 76,355 | |
Goodwill | 1,097,535 | 943,309 | |
Intangible assets, net | 76,391 | 79,230 | |
Investment in joint venture | — | 72 | |
Restricted investments | 16,150 | 23,176 | |
Other assets | 25,450 | 28,813 | |
Total assets | $ 3,438,757 | $ 3,238,856 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 290,346 | $ 284,218 | |
Billings in excess of costs and estimated earnings on uncompleted contracts | 142,185 | 129,300 | |
Current portion of operating lease liabilities | 26,807 | 19,867 | |
Current maturities of long-term debt | 38,500 | 38,500 | |
Accrued expenses and other current liabilities | 66,472 | 110,163 | |
Total current liabilities | 564,310 | 582,048 | |
Long-term liabilities: | |||
Long-term debt, net of current maturities and deferred debt issuance costs | 1,710,699 | 1,573,614 | |
Operating lease liabilities, net of current portion | 69,461 | 57,201 | |
Deferred income taxes, net | 83,543 | 80,079 | |
Other long-term liabilities | 31,359 | 33,951 | |
Total long-term liabilities | 1,895,062 | 1,744,845 | |
Total liabilities | 2,459,372 | 2,326,893 | |
Stockholders' equity: | |||
Preferred stock, par value | — | — | |
Class A common stock, par value | 48 | 47 | |
Class B common stock, par value | 12 | 12 | |
Additional paid-in capital | 609,457 | 541,179 | |
Treasury stock, Class A common stock, par value | (59,770) | (34,589) | |
Treasury stock, Class B common stock, par value | (16,833) | (16,046) | |
Accumulated other comprehensive income, net | 3,095 | 4,369 | |
Retained earnings | 443,376 | 416,991 | |
Total stockholders' equity | 979,385 | 911,963 | |
Total liabilities and stockholders' equity | $ 3,438,757 | $ 3,238,856 | |
Construction Partners, Inc. Consolidated Statements of Cash Flows (in thousands) | |||
For the Six Months Ended | |||
2026 | 2025 | ||
Cash flows from operating activities: | |||
Net income | $ 26,385 | $ 1,164 | |
Adjustments to reconcile net income to net cash, cash equivalents and restricted cash provided by | |||
Depreciation, depletion, accretion and amortization | 91,299 | 68,447 | |
Amortization of deferred debt issuance costs | 1,335 | 2,211 | |
Provision for bad debt | 282 | 172 | |
Gain on sale of property, plant and equipment | (6,645) | (4,462) | |
Realized loss on sales, calls and maturities of restricted investments | (12) | 44 | |
Share-based compensation expense | 22,410 | 18,883 | |
Distribution of earnings from investment in joint venture | 71 | — | |
Loss from investment in joint venture | 1 | 12 | |
Deferred income tax benefit | 3,808 | (1,480) | |
Other non-cash adjustments | (495) | (488) | |
Changes in operating assets and liabilities, net of business acquisitions: | |||
Contracts receivable including retainage | 58,752 | 49,336 | |
Costs and estimated earnings in excess of billings on uncompleted contracts | (16,105) | (15,007) | |
Inventories | (9,780) | (4,387) | |
Prepaid expenses and other current assets | (1,428) | 5,248 | |
Other assets | 2,108 | (824) | |
Accounts payable | (11,082) | (27,606) | |
Billings in excess of costs and estimated earnings on uncompleted contracts | 1,717 | 5,294 | |
Accrued expenses and other current liabilities | (9,124) | 567 | |
Other long-term liabilities | (5,724) | (827) | |
Net cash provided by operating activities, net of business acquisitions | 147,773 | 96,297 | |
Cash flows from investing activities: | |||
Purchases of property, plant and equipment | (81,728) | (68,226) | |
Proceeds from sale of property, plant and equipment | 13,502 | 5,991 | |
Proceeds from sales, calls and maturities of restricted investments | 9,449 | 3,940 | |
Business acquisitions, net of cash acquired | (275,875) | (828,736) | |
Purchase of restricted investments | (2,448) | (6,202) | |
Net cash used in investing activities | (337,100) | (893,233) | |
Cash flows from financing activities: | |||
Proceeds from revolving credit facility | 185,000 | 145,000 | |
Proceeds from issuance of long-term debt, net of debt issuance costs | — | 834,566 | |
Settlement of stock awards | (2,490) | — | |
Repayments of long-term debt | (49,250) | (135,601) | |
Purchase of treasury stock | (25,968) | (20,129) | |
Net cash provided by financing activities | 107,292 | 823,836 | |
Net change in cash, cash equivalents and restricted cash | (82,035) | 26,900 | |
Cash, cash equivalents and restricted cash: | |||
Cash, cash equivalents and restricted cash, beginning of period | 159,015 | 76,684 | |
Cash, cash equivalents and restricted cash, end of period | $ 76,980 | $ 103,584 | |
Supplemental cash flow information: | |||
Cash paid for interest | $ 51,341 | $ 35,788 | |
Cash paid for income taxes | $ 4,030 | $ 1,888 | |
Cash paid for operating lease liabilities | $ 14,705 | $ 7,191 | |
Non-cash items: | |||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | $ 30,910 | $ 20,613 | |
Property, plant and equipment financed with accounts payable | $ 9,694 | $ 6,783 | |
Amounts (receivable) payable to sellers in business combinations, net | $ (2,064) | $ 84,119 | |
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA represents net income before, as applicable from time to time, (i) interest expense, net, (ii) provision (benefit) for income taxes, (iii) depreciation, depletion, accretion and amortization, (iv) share-based compensation expense, (v) loss on the extinguishment of debt, and (vi) nonrecurring expenses related to transformative acquisitions, which management considers to include transactions of a size that would require clearance under federal antitrust laws. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of revenues for each period. Adjusted net income represents net income before (i) nonrecurring expenses related to transformative acquisitions, which management considers to include transactions of a size that would require clearance under federal antitrust laws, and (ii) nonrecurring fees associated with financing arrangements incurred in connection with transformative acquisitions. These metrics are supplemental measures of our operating performance that are neither required by, nor presented in accordance with, GAAP. These measures have limitations as analytical tools and should not be considered in isolation or as an alternative to net income or any other performance measure derived in accordance with GAAP as an indicator of our operating performance. We present Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net income because management uses these measures as key performance indicators, and we believe that securities analysts, investors and others use these measures to evaluate companies in our industry. Our calculation of Adjusted EBITDA, Adjusted EBITDA margin and Adjusted net income may not be comparable to similarly named measures reported by other companies. Potential differences may include differences in capital structures, tax positions and the age and book depreciation of intangible and tangible assets.
The following tables present a reconciliation of net income, the most directly comparable measure calculated in accordance with GAAP, to (i) Adjusted net income and (ii) Adjusted EBITDA (with the resulting calculation of Adjusted EBITDA margin) for the applicable periods.
Construction Partners, Inc. Net Income to Adjusted EBITDA Reconciliation Three Months Ended March 31, 2026 and 2025 (in thousands, except percentages) | |||
For the Three Months | |||
2026 | 2025 | ||
Net income | $ 9,180 | $ 4,215 | |
Interest expense, net | 25,590 | 21,592 | |
Provision for income taxes | 2,889 | 1,310 | |
Depreciation, depletion, accretion and amortization | 46,269 | 37,263 | |
Share-based compensation expense | 7,818 | 4,672 | |
Transformative acquisition expenses | 1,573 | 221 | |
Adjusted EBITDA | $ 93,319 | $ 69,273 | |
Revenues | $ 769,196 | $ 571,650 | |
Adjusted EBITDA margin | 12.13 % | 12.12 % | |
Construction Partners, Inc. Net Income to Adjusted Net Income Reconciliation Three Months Ended March 31, 2026 and 2025 (in thousands) | |||
For the Three Months | |||
2026 | 2025 | ||
Net income | $ 9,180 | $ 4,215 | |
Transformative acquisition expenses | 1,573 | 221 | |
Financing fees related to transformative acquisition | — | — | |
Tax impact due to above reconciling items | (385) | (53) | |
Adjusted net income | $ 10,368 | $ 4,383 | |
Construction Partners, Inc. Net Income to Adjusted EBITDA Reconciliation Fiscal Year 2026 Updated Outlook (unaudited, in thousands, except percentages) | |||
For the Fiscal Year Ending September 30, 2026 | |||
Low | High | ||
Net income | $ 159,000 | $ 162,000 | |
Interest expense, net | 111,000 | 113,000 | |
Provision for income taxes | 51,500 | 52,500 | |
Depreciation, depletion, accretion and amortization | 188,500 | 192,500 | |
Share-based compensation expense | 28,000 | 29,000 | |
Transformative acquisition expenses | 14,000 | 15,000 | |
Adjusted EBITDA | $ 552,000 | $ 564,000 | |
Revenues | $ 3,590,000 | $ 3,650,000 | |
Adjusted EBITDA margin | 15.38 % | 15.45 % | |
Construction Partners, Inc. Net Income to Adjusted Net Income Reconciliation Fiscal Year 2026 Updated Outlook (unaudited, in thousands) | |||
For the Fiscal Year Ending September 30, 2026 | |||
Low | High | ||
Net income | $ 159,000 | $ 162,000 | |
Transformative acquisition expenses | 14,000 | 15,000 | |
Financing fees related to transformative acquisition | 1,200 | 1,200 | |
Tax impact due to above reconciling items | (3,800) | (4,000) | |
Adjusted net income | $ 170,400 | $ 174,200 | |
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SOURCE Construction Partners, Inc.