struction Partners(ROAD) - 2025 Q4 - Annual Results

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]