GVA Q3 Deep Dive: Margin Expansion, Acquisition Integration, and Guidance Reset

Core Insights - Granite Construction (GVA) reported Q3 CY2025 revenue of $1.43 billion, a 12.4% increase year-on-year, but fell short of Wall Street's expectations of $1.50 billion, resulting in a 4.5% miss [1][6] - The company's adjusted EPS was $2.70, exceeding analyst estimates of $2.50 by 7.9% [1][6] - Full-year revenue guidance was revised down to $4.4 billion at the midpoint, a 1.1% decrease from the previous guidance of $4.45 billion [1][6] Management Commentary - Management highlighted strong execution in both Construction and Materials segments, supported by recent acquisitions and improved project selection [3][5] - CEO Kyle Larkin noted that increased aggregate and asphalt volumes, along with effective pricing strategies, contributed to margin improvement [3][5] - The company is optimistic about organic revenue growth due to a robust backlog of committed projects and strong public market demand, despite acknowledging challenges related to project timing and weather [4][5] Financial Performance - Adjusted EBITDA for the quarter was $215.6 million, beating analyst estimates of $197.5 million, with a margin of 15% [6] - Operating margin improved to 10%, up from 8.2% in the same quarter last year [6] - Market capitalization stands at $4.35 billion [6]