Analyst Day October 22, 2025 A6A6A6 F5F4F1 F2F8FD 1F75B5 272727 FFC734 BUILDING CONNECTED COMMUNITIES 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 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934. These statements may be identified by the use of words such as "seek" "continue," "estimate," "predict," "potential," "targeting," "could," " ...

Financial Performance - The company reported a revenue of $2.7 billion for FY 2023, with an adjusted EBITDA margin of 15.0%[24] - Adjusted EBITDA for FY 23A was $423 million, with a projected increase to $530 million in FY 24A, representing a 25% growth[52] - Revenue for FY 23A was $2.81 billion, expected to grow to $3.45 billion in FY 24A, indicating a 23% increase[62] - The company achieved an adjusted EBITDA margin of 15.05% in FY 23A, with a target of 15.36% for FY 24A[62] - Net income for the fiscal year ended September 30, 2023, was $49,001,000, projected to increase to $68,935,000 in 2024[127] - Adjusted EBITDA for the fiscal year 2023 was $172,609,000, expected to rise to $220,573,000 in 2024, reflecting a growth of 27.8%[127] - For fiscal year 2025, revenues are projected to range from $2,800,000,000 to $2,820,000,000, with an Adjusted EBITDA forecast between $421,000,000 and $425,000,000[128] - The Adjusted EBITDA Margin for fiscal year 2025 is expected to be between 15.04% and 15.07%[128] - In fiscal year 2026, revenues are projected to be between $3,400,000,000 and $3,500,000,000, with Adjusted EBITDA ranging from $520,000,000 to $540,000,000[129] - The Adjusted EBITDA Margin for fiscal year 2026 is anticipated to be between 15.29% and 15.43%[129] - Interest expense is projected to increase from $17,346,000 in 2023 to $19,071,000 in 2024, and further to between $90,000,000 and $110,000,000 in 2025 and 2026 respectively[127][128][129] - Provision for income taxes is expected to rise from $16,403,000 in 2023 to $23,161,000 in 2024, and further to between $32,600,000 and $50,000,000 in 2025 and 2026 respectively[127][128][129] - Share-based compensation expense is projected to increase from $10,759,000 in 2023 to $15,031,000 in 2024, and further to between $28,850,000 and $29,050,000 in 2025[127][128] Growth Strategy - The company aims for a revenue target of $6.03 billion by FY 2030, representing a CAGR of 15%[47] - The company has experienced a 29% revenue CAGR from FY 2020 to FY 2025, highlighting strong growth potential[36] - The federal infrastructure investment includes $365 billion allocated for highway programs over five years, supporting the company's growth strategy[31] - The company plans to expand its operational footprint with 53 new facilities and 7 new brands since October 2023[28] - The company has identified significant growth opportunities in the Sunbelt region, driven by migration and reshoring trends[29] - The midpoint of FY 26 outlook implies a 16% revenue growth from closed acquisitions and 7% from organic growth[61] - The company is focusing on M&A activity consistent with historical levels to support its growth strategy through 2030[118] - The company has a long acquisitive runway in its core business, supported by favorable economic conditions and infrastructure spending trends[120] Market Demand and Infrastructure Investment - The addressable market for road maintenance has expanded by 8% in lane miles and 16% in vehicle miles traveled since 2001, indicating increased demand for infrastructure services[14] - The company operates in 6 of the 10 states with the highest population growth, which is expected to drive demand for infrastructure services[15] - The company anticipates a robust addressable market driven by ongoing infrastructure investments and population growth, with significant funding allocated across various states[116] - The company is actively investing in growing markets, leveraging state and local government funding initiatives to enhance its infrastructure capabilities[121] - The company is investing in strategic locations and expanding its service offerings to capitalize on growing markets, particularly in Florida and Texas[86][90] Operational Efficiency - The company has a goal to achieve an adjusted EBITDA margin of 17% by FY 2030, with a targeted annual increase of 30-50 basis points[48] - The adjusted EBITDA margin is projected to remain strong, reflecting the company's commitment to maintaining operational efficiency[119] - The company is focusing on vertical integration to secure supply and reduce cost volatility, enhancing its competitive position[37] - The company has maintained a robust backlog with 18 consecutive quarters of growth, supporting future revenue[64] - Cash flow from operations is projected to be approximately $658 million since 2023, representing 75-85% of adjusted EBITDA[71] - The net leverage ratio is expected to gradually decrease towards a target range of 2.5-2.75x following a transformational acquisition[73]

Core Insights - Construction Partners, Inc. (CPI) announced preliminary financial results for fiscal year 2025, highlighting strong operational performance and record year-end results for revenue and profitability [1][2] - The company expects continued growth in fiscal year 2026, driven by favorable economic indicators in the Sunbelt region and strategic initiatives [1][6] Fiscal Year 2025 Preliminary Financial Results - Revenue is projected to be between $2.800 billion and $2.820 billion, a significant increase from $1.824 billion in fiscal 2024 [2] - Net income is expected to range from $101.0 million to $101.8 million, up from $68.9 million in the previous fiscal year [2] - Adjusted EBITDA is anticipated to be between $421.0 million and $425.0 million, compared to $220.6 million in fiscal 2024 [3] Fiscal Year 2026 Outlook - Revenue for fiscal year 2026 is forecasted to be between $3.400 billion and $3.500 billion [6] - Net income is expected to range from $150.0 million to $155.0 million [6] - Adjusted EBITDA is projected to be between $520.0 million and $540.0 million, with an Adjusted EBITDA Margin of 15.3% to 15.4% [6][7] Strategic Growth Initiatives - The company plans to enhance operational performance and expand margins through strategic bidding and vertical integration opportunities [5][7] - CPI aims to leverage transportation funding programs and healthy commercial markets in the Sunbelt for continued growth [7] Project Backlog - The project backlog is expected to be approximately $3.0 billion as of September 30, 2025, an increase from $1.96 billion at the same time last year [3]

Core Insights - Conestoga Capital Advisors reported that equity markets reached new all-time highs in Q3 2025, but the Conestoga Small Cap Composite underperformed the Russell 2000 Growth Index, returning -1.4% compared to the Index's 12.2% gain [1] Company Overview: Construction Partners, Inc. (NASDAQ:ROAD) - Construction Partners, Inc. is a civil infrastructure company focused on roadway construction and maintenance, with a one-month return of -13.96% and a 52-week gain of 35.79% [2] - As of October 17, 2025, the stock closed at $115.01 per share, with a market capitalization of $6.451 billion [2] Financial Performance - Construction Partners, Inc. reported revenue of $779.3 million in fiscal Q3 2025, reflecting a 51% increase compared to fiscal Q3 2024 [4] Market Position and Strategy - The company benefits from federal and state infrastructure spending, which has led to backlog growth and improved revenue visibility [3] - Lower asphalt and fuel costs have supported margin recovery, alongside strong project execution in the Southeastern U.S. [3] - Management's disciplined acquisition strategy has expanded the company's market presence into Texas, Tennessee, and Oklahoma, enhancing long-term growth prospects [3]

Core Insights - Construction Partners, Inc. (CPI) has acquired P&S Paving, Inc., expanding its operations into Daytona Beach and Florida's East Coast, enhancing its service delivery capabilities in a rapidly growing market [1][2] Company Overview - Construction Partners, Inc. is a vertically integrated civil infrastructure company operating in local markets across the Sunbelt, including Alabama, Florida, Georgia, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas [3] - The company focuses on the construction, repair, and maintenance of surface infrastructure, with a significant portion of its business derived from publicly funded projects such as roadways, highways, airport runways, and bridges [3] Acquisition Details - The acquisition of P&S Paving includes two hot-mix asphalt plants and will be integrated into CPI's platform company, C.W. Roberts Contracting, which operates throughout Florida [1][2] - The transaction is expected to provide CPI with immediate access to the high-growth Interstate 95 corridor, where there is strong demand for public and private infrastructure [2]

Group 1 - Construction Partners Inc (NASDAQ:ROAD) is identified as a promising AI stock benefiting from the infrastructure boom linked to the data center revolution [1][2] - The company has achieved mid-teens revenue growth through organic growth and mergers & acquisitions (M&A), with a notable M&A deal in Texas contributing to accelerated revenue growth [2] - Anecdotal evidence suggests significant infrastructure needs, such as a 16-mile temporary road for a new data center in Idaho, highlighting the demand for road construction services [2] Group 2 - Loomis Sayles Small Cap Growth Fund acknowledges the potential of Construction Partners Inc as an investment but suggests that other AI stocks may offer higher returns with limited downside risk [2] - The company operates primarily in the southern and southeastern regions of the United States, focusing on road building and paving services [2]

Core Insights - Construction Partners, Inc. (CPI) has completed the acquisition of eight hot-mix asphalt plants from Vulcan Materials Company, enhancing its operations in the Houston area [1][2][8] - The acquisition aligns with CPI's strategy to expand its geographic footprint in Texas and improve its operational capabilities [2][3] - CPI reported a record project backlog of $2.94 billion, reflecting a 58.1% year-over-year increase, ensuring strong revenue visibility for the upcoming fiscal year [5][8] Company Operations - The acquired asphalt plants will be integrated into Durwood Greene Construction Co., which CPI had previously acquired in August 2025 [2] - The acquisition not only adds new plants and equipment but also skilled workers who align with CPI's values of safety, quality, and customer service [2] - Management is focused on long-term growth through both organic expansion and selective acquisitions, maintaining a disciplined balance sheet [6] Market Position - CPI's stock has experienced a 71.1% increase over the past year, significantly outperforming the Zacks Building Products - Miscellaneous industry's decline of 7.5% [7] - The company is well-positioned for continued growth in 2025, supported by strong public infrastructure funding in the Sunbelt region [4][7] - Approximately 80% to 85% of CPI's expected revenue for the next 12 months is secured through its project backlog, providing strong visibility into fiscal 2026 performance [5]

Group 1: Company Performance - Construction Partners (ROAD) has gained approximately 43.2% year-to-date, significantly outperforming the average return of 8.1% for the Construction sector [4] - The Zacks Consensus Estimate for ROAD's full-year earnings has increased by 10.7% over the past three months, indicating improved analyst sentiment and a stronger earnings outlook [4] - Construction Partners currently holds a Zacks Rank of 2 (Buy), suggesting a favorable position for potential investors [3] Group 2: Industry Context - Construction Partners is part of the Building Products - Miscellaneous industry, which consists of 33 individual stocks and currently ranks 153 in the Zacks Industry Rank [6] - The average return for the Building Products - Miscellaneous industry is 2.5% year-to-date, highlighting that ROAD is performing better than its industry peers [6] - Another notable stock in the Construction sector is Tutor Perini (TPC), which has seen a year-to-date increase of 156.4% and holds a Zacks Rank of 1 (Strong Buy) [5][7]

Core Viewpoint - Construction Partners (ROAD) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [1][2]. - A strong correlation exists between earnings estimate revisions and near-term stock price movements, with institutional investors playing a role in this relationship [4][6]. Company Performance and Outlook - The upgrade for Construction Partners suggests an improvement in the company's underlying business, which could lead to increased stock prices as investors respond positively [5][10]. - For the fiscal year ending September 2025, Construction Partners is expected to earn $2.03 per share, with a 10.7% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of generating significant returns for top-ranked stocks [7][9]. - The upgrade to Zacks Rank 2 places Construction Partners in the top 20% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10].

Group 1: Fund Performance - Loomis Sayles Small Cap Growth Fund returned 9.37% in Q2 2025, underperforming the Russell 2000 Growth Index's 11.97% return due to security selection issues in the information technology and financial sectors [1] - The second quarter began with significant volatility but ended at an all-time high for the S&P 500 [1] Group 2: Company Highlight - Construction Partners, Inc. - Construction Partners, Inc. (NASDAQ:ROAD) is a civil infrastructure company focused on constructing and maintaining roadways, with a one-month return of 6.04% and a 52-week gain of 82.15% [2] - As of September 29, 2025, Construction Partners, Inc. had a market capitalization of $7.18 billion, with shares closing at $127.14 [2] - The company achieved a revenue of $779.3 million in fiscal Q3 2025, reflecting a 51% increase compared to fiscal Q3 2024 [4] Group 3: Growth and M&A Activity - Construction Partners, Inc. has experienced mid-teens revenue growth through a combination of organic growth and mergers and acquisitions (M&A) [3] - The company outperformed during the quarter due to a significant M&A deal in Texas and other transactions in existing markets, which accelerated revenue growth and led to higher earnings revisions [3] Group 4: Hedge Fund Interest - At the end of Q2 2025, 27 hedge fund portfolios held shares of Construction Partners, Inc., an increase from 15 in the previous quarter [4]