Financial Data and Key Metrics Changes - In 2025, Martin Marietta achieved revenues of $5.7 billion, a 7% increase year-over-year, and gross profit of $1.8 billion, up 13% [16] - The gross margin expanded by 173 basis points to 31%, driven by strong aggregates performance [16] - The aggregates business recorded revenues of $5 billion, an 11% increase, with gross profit rising 16% to $1.7 billion [16] - The gross profit per ton for aggregates improved by 12% year-over-year to $8.45 [10] Business Line Data and Key Metrics Changes - The aggregates business delivered record profitability with revenues increasing 8% to $1.2 billion in Q4, and gross profit rising 11% to $420 million [9] - The specialties business achieved record revenues of $441 million and gross profit of $137 million, reflecting strong organic performance and contributions from Premier Magnesia [17] - Other building materials revenues decreased 8% to $992 million, primarily due to the Minnesota asphalt business and the impact of the California paving divestiture [16] Market Data and Key Metrics Changes - Infrastructure demand remains solid, supported by the Bipartisan Infrastructure Investment and Jobs Act (IIJA), with 71% of highway and bridge funds obligated as of November 30, 2025 [11] - Heavy non-residential demand is driven by growth in data centers and energy projects, with Goldman Sachs estimating hyperscalers may deploy over $500 billion in capital in 2026 [13] - Residential construction faces affordability constraints, with Freddie Mac estimating a need for approximately 4 million additional homes to restore balance [14] Company Strategy and Development Direction - Martin Marietta's strategic focus is on enhancing its core aggregates platform while streamlining its portfolio, as evidenced by the launch of SOAR 2030 [21] - The company aims for low double-digit gross profit growth in aggregates, supported by low single-digit shipment growth and mid-single-digit pricing improvement [19] - The company is reviewing its quarry and terminal networks to align production with demand, which remains approximately 14% below 2022 levels [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the infrastructure investment pipeline and the potential for a new long-term surface transportation bill, which is expected to be passed on time [12][28] - The company anticipates a balanced macro environment in 2026, with expectations of sustained infrastructure investment and accelerating momentum in data centers and energy [11] - Management noted that while private construction remains soft, they are optimistic about the recovery in housing and non-residential construction [15] Other Important Information - Martin Marietta ended 2025 with a consolidated net debt to Adjusted EBITDA ratio of 2.3 times and total liquidity of $1.2 billion, providing capacity for M&A and share repurchases [18] - The company plans capital spending of $575 million in 2026, representing a 29% year-over-year reduction, which will increase free cash flow available for growth initiatives [19] Q&A Session Summary Question: Update on the new highway bill and its importance - Management indicated that the highway bill remains important but noted that states and municipalities have increased their funding capabilities, which may lessen the bill's overarching importance [24][25] Question: Clarification on guidance and potential slow start to the year - Management confirmed that the guidance includes all operations and indicated that January performance was resilient despite challenging weather conditions [33][37] Question: Insights on contract awards and market assumptions - Management provided a positive outlook for infrastructure, expecting mid-single-digit growth, while noting that non-residential construction remains below prior peaks [46][48] Question: Comments on pricing and gross profit per ton - Management expressed confidence in achieving pricing growth and indicated that the gross profit per ton guidance reflects a measured approach due to cost considerations [86][92]

Financial Data and Key Metrics Changes - The company reported total gross revenues of BRL 15 billion, reflecting a 45% year-on-year growth, while net revenues grew 31% year-on-year to BRL 8.4 billion [13] - Net interest income increased by 41% year-on-year, driven by strong performance in payroll loans, credit cards, mortgages, and home equity loans [13] - The efficiency ratio improved from 48.4% to 45.5%, indicating better operational leverage [17] Business Line Data and Key Metrics Changes - The loan portfolio grew by 36% year-on-year, with mortgages increasing by 48% and home equity loans by 35% [9] - The private payroll loans portfolio reached nearly BRL 2 billion, with around 400,000-500,000 clients, showcasing rapid product scaling [6] - Credit card volume grew by 29%, with interest-earning products now representing over 23% of the credit card portfolio, up from 19% last year [6][9] Market Data and Key Metrics Changes - The company processed 32,000 financial transactions per minute, totaling almost 1 billion transactions in December, with a significant increase in daily logins to over 21.5 million [3][4] - The transaction mix is evolving, with credit card transactions outpacing debit card transactions, positively impacting interchange fee income [5] - The company achieved a Pix market share of 8.5%, with ongoing efforts to replicate this success in other products [7] Company Strategy and Development Direction - The company is focused on continuous innovation across its seven verticals, which are interconnected to enhance client value and profitability [8] - The management emphasized the importance of technology and AI in improving efficiency and reducing costs, with plans for hyper-personalization and enhanced customer experience [70] - The company aims to maintain a balanced ratio of secured and unsecured loans while deepening credit penetration [9] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in achieving further growth in 2026, with expectations of continued loan growth and NIM expansion [19][66] - The company anticipates a cost of risk between 5.5% and 6% for 2026, with a focus on maximizing risk-adjusted NIM [50][66] - Management acknowledged the competitive landscape but highlighted their advantages in client base, funding costs, and digital distribution channels [73] Other Important Information - The company maintained a strong NPS of 85 points, indicating high customer satisfaction [4] - The average balance per active client reached BRL 2,100, with total funding growing by 32% year-on-year [11] - The company is preparing for an Investor Day on May 11th, where further insights into future strategies will be shared [20] Q&A Session Summary Question: Concerns about efficiency ratio progress - Management acknowledged the slower progress in efficiency but highlighted significant improvements in ROE and client growth, reaffirming commitment to the 60/30/30 plan [21][22] Question: Future dividend payments strategy - The company plans to maintain a 20% payout ratio for dividends, balancing growth and capital needs [25][27] Question: Fee income growth expectations - Management noted that fee income growth was impacted by accounting changes and competitive pressures but expects initiatives to drive future growth [31][36] Question: Provisioning and asset quality concerns - Management clarified that asset quality metrics are performing as expected, with adjustments made for more conservative risk assessments [46][49] Question: Private payroll loan growth and competition - The company is optimistic about the private payroll loan segment, leveraging its distribution channels and competitive advantages to sustain growth [58][73]

Financial Data and Key Metrics Changes - The company reported Q4 2025 revenue of $440 million, reflecting an 11% quarter-over-quarter growth and a 14% year-over-year growth, meeting the target for sequential growth [6][37] - Q4 net profit was $80 million, representing an 18% net margin, up from 11% in Q1 2025, 13% in Q2 2025, and 14% in Q3 2025, indicating value-based growth driven by technology mix enrichment [6][38] - Full year 2025 revenue reached $1.566 billion, a $130 million or 9% increase compared to 2024 [7][40] Business Line Data and Key Metrics Changes - RF infrastructure revenue increased by 75% year-over-year, driven by hyperscaler adoption of silicon photonics in 800G and 1.6T pluggable transceivers [9] - Silicon germanium and silicon photonics revenues accounted for 27% of corporate revenues, totaling $421 million, up from $241 million in 2024 [10] - Power Management grew 20% year-over-year, representing 16% of corporate revenues in 2025 [23] - Sensors and displays grew 10% year-over-year, also representing 16% of corporate revenue [25] Market Data and Key Metrics Changes - RF mobile represented 23% of corporate revenue in 2025, with a 15% year-over-year decline due to a strategic shift towards higher value optical and RF offerings [20] - The company is experiencing strong demand for silicon photonics, with over 70% of total SiPho capacity reserved or in the process of being reserved through 2028 [28] Company Strategy and Development Direction - The company is increasing its CapEx plan for 2026 to accommodate stronger customer demand, with a total investment of $920 million aimed at expanding capacity [28][46] - The updated financial model targets $2.84 billion in annual revenue by 2028, reflecting a significant increase from 2025 levels [34][51] - The company is focusing on partnerships with leading customers, such as NVIDIA, to enhance technology offerings and manufacturing agility [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the updated financial model by 2028, citing strong customer demand and operational execution as key factors [80][87] - Concerns were raised regarding potential memory shortages impacting the mobile market, but management emphasized proactive planning and flexibility in production [92] Other Important Information - The company achieved a gross profit of $118 million in Q4 2025, a 26% increase from the previous quarter [38] - The effective tax rate for Q4 2025 was exceptionally low at 2% due to a non-recurring tax benefit [39] Q&A Session Summary Question: Clarification on NVIDIA collaboration - The company clarified that its role involves output parameters for photonics and alignment of supply needs, rather than direct shipping to NVIDIA [57] Question: Capacity increase related to NVIDIA demand - Management confirmed that the planned capacity increase is in response to total demand, including from NVIDIA [58] Question: Power business capabilities for high voltage - The company indicated it does not currently have an 800-volt platform on an IC but has higher voltage IC capabilities [63] Question: Shipping through resellers to NVIDIA - It was confirmed that the company ships through module makers or integrators rather than directly to NVIDIA [66] Question: CPO and end-to-end offerings - The company is working on multiple architectures for co-packaged optics but is not directly packaging CPUs [69] Question: Timeline for CapEx rollout - Management expects the majority of the $920 million CapEx to be online by Q3 2026, with full qualification targeted by December [72] Question: Silicon photonics contribution visibility - Management expressed confidence in the demand for silicon photonics and the operational execution needed to meet it [80][87] Question: Concerns about memory shortages - Management acknowledged concerns about memory shortages but emphasized close collaboration with customers to mitigate risks [92]

Financial Data and Key Metrics Changes - The company reported net operating revenues of $21.3 billion for 2025, with consolidated Adjusted EBITDA of $4.57 billion, representing a 14% growth over 2024 [5][13] - The full-year Adjusted EBITDA margin improved by 200 basis points to 21.4% compared to the prior year [5][14] - In Q4 2025, total net operating revenues were $5.5 billion, with consolidated Adjusted EBITDA of $1.183 billion, a 13% increase year-over-year [12][13] Business Line Data and Key Metrics Changes - The USPI segment's Adjusted EBITDA grew 12% in 2025 to $2.026 billion, with same-facility revenues increasing by 7.2% [6][14] - The hospital segment's Adjusted EBITDA increased by 16% to $2.54 billion, with same-store revenues per adjusted admission up 5.3% [7][14] - Same facility revenues grew 7.5%, driven by double-digit growth in total joint replacements in ASCs [7] Market Data and Key Metrics Changes - The company experienced strong same-store revenue growth, exceeding the long-term goal of 3%-6% organic growth [7] - In Q4, exchange volumes accounted for approximately 7.5% of total admissions and over 6% of consolidated revenues [69] Company Strategy and Development Direction - The company plans to continue focusing on organic growth supplemented by M&A, with nearly $350 million invested in 2025 and 35 facilities added to the portfolio [7][8] - The company expects to tackle expense management more structurally, leveraging technology for sustainable cost reductions [27][28] - The company anticipates a gradual tailwind from the phase-out of the Inpatient Only List starting in 2026, with opportunities in high acuity procedures [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong core earnings growth for 2026, despite anticipated headwinds from the expiration of enhanced premium tax credits [11][19] - The company expects full-year 2026 Adjusted EBITDA in the range of $4.485 billion to $4.785 billion, driven by ongoing demand strength and service line expansion [9][18] - Management acknowledged uncertainty regarding enrollment levels and effectuation rates, which could impact future performance [11][19] Other Important Information - The company repurchased approximately 22% of its outstanding shares for around $2.5 billion since the share repurchase program began in Q4 2022 [8][16] - The company generated $2.53 billion of free cash flow for the full year 2025, with $2.8 billion in cash on hand as of December 31, 2025 [15][16] Q&A Session Summary Question: Can you expand on the same-store hospital volume performance in the quarter? - Management noted that while acuity was good, the respiratory season was weaker than expected, impacting volumes [25] Question: What do you mean by tackling expense management more structurally? - Management explained that they are focusing on technology deployment for sustainable expense reductions, moving beyond traditional annual expense management [27][28] Question: Can you provide more details on the hospital admission growth guidance of 1%-2%? - Management indicated that the guidance reflects anticipated impacts from exchange exposure and investments in higher acuity capabilities [32] Question: Is the growth expected to be sustainable in future years? - Management expressed confidence in the sustainability of growth, citing a track record of acuity and revenue per case growth [39][40] Question: What is the payer mix for USPI in Q4? - Management reported a consistent payer mix, with net revenue per case growth of 5.5% and EBITDA margins above 40% [83]

Financial Data and Key Metrics Changes - Fourth quarter overall net sales decreased 12% year-over-year to $1.1 billion, down from $1.2 billion in the prior year [26] - Adjusted EBITDA margins for the fourth quarter were 17%, consistent with expectations despite a weaker outage environment [4] - Gross profit margin decreased to 36.3% from 40.6% in the prior year, primarily due to unfavorable sales mix and a $15.6 million net inventory provision [30] - GAAP net loss for the quarter was $24 million, compared to net income of $117 million in the fourth quarter of 2024 [33] - Adjusted net income for the quarter was $95 million, or $1.61 per share, down from $168 million, or $2.80 per share in the prior year [34] Business Line Data and Key Metrics Changes - Residential product sales decreased 23% to $572 million, impacted by lower shipments of home standby and portable generators due to weak power outage activity [27] - Commercial and industrial (C&I) product sales increased 10% to $400 million, driven by revenue from data center customers [28] - International core total sales increased 5% during the fourth quarter, primarily due to revenue from data center customers [16] Market Data and Key Metrics Changes - The backlog for data center products has grown to approximately $400 million, indicating strong future demand [6] - Home standby shipments decreased 25% year-over-year, reflecting the lowest level of total outage hours in a decade [17] - The average power prices in the U.S. have increased nearly 40% over the last five years, with expectations to double again in the next decade [10] Company Strategy and Development Direction - The company is focusing on expanding its manufacturing capacity for large megawatt generators to meet the growing demand in the data center market [7] - Significant investments have been made in partnerships with hyperscalers, with expectations of substantial order volumes in 2027 and 2028 [5] - The company aims to double its C&I product sales in the coming years, capitalizing on the generational growth opportunity presented by data center investments [25] Management's Comments on Operating Environment and Future Outlook - Management noted that the power outage environment has been soft, impacting home standby and portable generator shipments, but expects a return to more normal levels in 2026 [18] - The company anticipates strong growth in C&I product sales, projecting an increase of over 30% in 2026, primarily driven by data center customers [38] - Management expressed confidence in the progress made in the data center market and expects 2026 to be an inflection point for growth [25] Other Important Information - The company has initiated 2026 net sales guidance projecting mid-teens growth compared to the prior year [37] - Capital expenditures for the full year are projected to be approximately 3.5% of forecasted net sales, focusing on incremental capacity investments [44] - The company has approved a new share repurchase authorization allowing for the repurchase of up to $500 million of shares over the next 24 months [36] Q&A Session Summary Question: Progress with hyperscalers - Management confirmed that while there are no significant orders yet, they are in pilot phases with two hyperscale customers and expect to sign longer-term supply agreements soon [49][52] Question: Competitive environment in the data center market - Management indicated that the market for large megawatt diesel generators has not changed significantly in terms of participants, with limited new entrants due to high investment requirements [58] Question: Growth profile for the data center market - Management estimates the total addressable market for data center backup generators could be as much as $15 billion annually, with a target market share of 10-15% [66] Question: Residential product demand and cost structure - Management highlighted a projected mid-teens growth rate for residential products, with half of the growth expected from price realization and the other half from volume increases as outages normalize [79]

Financial Data and Key Metrics Changes - In Q4 2025, the company reported distributable earnings of $37 million, or $0.26 per diluted share, while for the full year, distributable earnings totaled $139 million, or $0.98 per diluted share [4] - GAAP net income available to common stockholders was $26 million, or $0.18 per diluted share for Q4, and $114 million, or $0.81 per diluted share for the full year [4] - The total CECL allowance stood at $383 million at year-end, equating to 418 basis points of the loan portfolio's total amortized cost, down from 457 basis points a year ago [6] Business Line Data and Key Metrics Changes - The company committed $1.3 billion to new loans in Q4, with $1.1 billion funded at close, and completed approximately $200 million of gross add-on fundings for previously closed loans [6] - Loan repayments and sales totaled $852 million in Q4 and $2.9 billion for the full year, reflecting continued portfolio rotation [7] - The loan portfolio increased by approximately $1.6 billion year-over-year on an amortized cost basis, ending the year at approximately $8.8 billion [8] Market Data and Key Metrics Changes - Over 60% of the loan portfolio is now represented by post-2022 origination, indicating a shift in the company's lending strategy [7] - The portfolio has a weighted average unlevered all-in yield of 7.3%, with 99% first mortgages and 96% floating rate exposure [8] Company Strategy and Development Direction - The company is focused on managing its real estate owned portfolio to improve cash flow and maximize value at exit, particularly through leasing and cost-saving initiatives [2][3] - Management is exploring options to unlock additional value from adjacent land parcels and is evaluating strategies for the REO assets [2][18] - The company is considering various strategies for future growth, including potential investments in mezzanine and construction lending, or leveraging Apollo's access to business lines [27][29] Management's Comments on Operating Environment and Future Outlook - Management received positive feedback from investors regarding efforts to unlock value, but there are questions about future capital strategies [11] - The company is currently evaluating specific internal ideas for future strategies, while also engaging with external proposals [13] - Management indicated that the REO portfolio is not critical to the future direction of the company, allowing for independent decisions on asset monetization [20] Other Important Information - The company ended the year with $151 million of total liquidity and held over $430 million of unencumbered assets [8][9] - Book value per share was $12.14 at year-end, relatively flat compared to the prior quarter [9] Q&A Session Summary Question: Feedback from investors regarding the transaction value and stock trading - Management noted overwhelmingly positive feedback but acknowledged questions about future capital strategies and the disconnect between book value and stock price [11][12] Question: Marketing strategy for REO assets and timing for monetization - Management indicated that stabilization of The Brook is expected later this year, and the decision to monetize will depend on market conditions [17][18] Question: Dividend policy post-portfolio sale - Management envisions paying a Q1 dividend of $0.25 per share, subject to board approval, and will discuss future dividends as they approach Q2 [25][26] Question: Strategy for creating an entity that trades above book value - Management is considering various strategies, including a focus on earnings streams and potential investments that offer higher returns [27][29]

Financial Data and Key Metrics Changes - The company reported total gross revenues of BRL 15 billion, marking a 45% year-on-year growth, while net revenues grew 31% year-on-year to BRL 8.4 billion [12] - Net interest income increased by 41% year-on-year, driven by strong performance in payroll loans, credit cards, mortgages, and home equity loans [12] - The efficiency ratio improved from 48.4% to 45.5%, representing a nearly 300 basis points improvement within the year [16] Business Line Data and Key Metrics Changes - The loan portfolio grew by 36% year-on-year, with quarterly growth accelerating to 10% or 40% on an annualized basis [8] - Private payroll loans reached a portfolio of nearly BRL 2 billion with around 400,000-500,000 clients, showing strong digital distribution capabilities [5] - Credit card volume grew by 29%, with the reshaping strategy driving monetization and profitability [8] Market Data and Key Metrics Changes - The company was the fastest-growing financial institution in Brazil among those with over 20 million clients, with 7 million new clients welcomed in the year [2][3] - The transaction volume through Pix reached BRL 1.5 trillion for the year, leading to a market share of 8.5% [4] - The average balance per active client reached 2.1 thousand reais, with total funding growing 32% year-on-year [10] Company Strategy and Development Direction - The company aims to replicate Pix's success in other products, with home equity already ahead of Pix in market share [6] - The focus remains on continuous innovation and enhancing the client experience through a seamless integration of its seven verticals [7] - The company is committed to maintaining a balanced ratio of secured and unsecured loans while pursuing growth in its credit portfolio [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that 2026 will be another excellent year for the company, highlighting the strength of its platform and operational strategies [18] - The company anticipates a cost of risk between 5.5% and 6% for 2026, with expectations of asset quality pressure in the industry [49] - Management emphasized the importance of technology and innovation in improving efficiency and operational leverage [68] Other Important Information - The company achieved a net income of BRL 1.3 billion, surpassing a 15% ROE in the last quarter [17] - The cost of funding improved to 65.6% of CDI, showcasing the strength of the company's funding strategy [11] - The company plans to maintain a 20% payout ratio for dividends, balancing growth and capital needs [26] Q&A Session Summary Question: Concerns about efficiency ratio progress - Management acknowledged the slow progress in efficiency but highlighted significant improvements in ROE and client growth, reaffirming commitment to the 60/30/30 plan [20][22] Question: Future dividend payments - Management confirmed a 20% payout ratio for dividends will continue as long as it does not impact growth execution [25][26] Question: Fee income growth expectations - Management noted that fee income growth was impacted by a strong increase in net interest income, leading to a compression in the fee income ratio [30][31] Question: Provisioning and asset quality concerns - Management explained that the asset quality metrics are performing as planned, with specific adjustments made to the mortgage portfolio to align with best practices [45][48] Question: Growth expectations for private payroll loans - Management indicated strong growth in private payroll loans, with expectations for continued growth as the product matures and market share increases [56][57]

Financial Data and Key Metrics Changes - Quarterly revenue reached $9.2 billion, setting a new record for full-year revenue of $37.6 billion, up 4% from 2024 [4] - Adjusted diluted EPS was $6.74 for the quarter, with full-year adjusted EPS of $33.46, up 16% from 2024 [4] - Adjusted EBITDA was $364.1 million in Q4, an 8.9% decrease year-over-year, primarily driven by lower net income [19] Business Line Data and Key Metrics Changes - New vehicle revenue declined 6.6% on an 8.3% unit decline, with new vehicle GPU at $27.66, down $300 year-over-year [6] - Used retail performance showed 6.1% revenue growth, driven by 4.7% unit growth, with used GPU at $1,575, down $151 year-over-year [6] - After-sales revenue grew by 10.9%, with gross profit up 9.8% and a gross margin of 57.3% [8] Market Data and Key Metrics Changes - In the UK, same-store gross profit increased by 10% despite challenging market conditions, with adjusted pre-tax income for the UK up 53% for the full year compared to 2024 [9] - North American penetration for Driveway Finance Corporation reached 15% for the quarter, up 650 basis points [18] Company Strategy and Development Direction - The company is focused on maximizing shareholder return through disciplined capital deployment, including share repurchases and strategic acquisitions [11] - Technology investments, including partnerships with Pinewood AI, aim to enhance operational efficiency and customer experience [10] - The company targets $2-$4 billion of acquired revenue annually, balancing share valuation and acquisition prices to accelerate shareholder return [13] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging, with year-over-year earnings pressure driven by margin compression and SG&A de-leverage [15] - The company is well-positioned to deliver compounding earnings growth in 2026 as industry conditions normalize [12] - Management expressed confidence in the resilience of their diversified model and the ability to adapt to changing market conditions [21] Other Important Information - The company repurchased 3.8% of its shares in the quarter and 11.4% of its shares in 2025 at an average price of $314 [20] - Inventory levels remain consistent, with new vehicle day supply at 54 days and used inventory at 40 days [7] Q&A Session Summary Question: Retention levels on the after-sales business - Management indicated retention is slightly up year-over-year, with service contract penetration at 37% [22] Question: Future cash generation and shareholder returns - Management emphasized the focus on share repurchases due to the current stock price being undervalued [24] Question: SG&A as a percentage of gross profit - Management noted that SG&A increased due to weaker sales performance and marketing expenses not materializing as expected [27][28] Question: Demand trends in Q1 - Management reported that trends in Q1 are similar to the last two months of Q4, with some weather impacts noted [31] Question: Used vehicle GPU pressures - Management acknowledged ongoing GPU pressures but highlighted efforts to improve pricing strategies [38][39] Question: After-sales growth drivers - Management attributed after-sales growth to improved customer relationships and the My Driveway portal facilitating better service [43] Question: Luxury vehicle market performance - Management noted a decline in luxury vehicle sales, particularly among brands like BMW and Porsche, but service and parts business remains strong [60]

Financial Data and Key Metrics Changes - In 2025, Martin Marietta reported revenues of $5.7 billion, a 7% increase year-over-year, and gross profit of $1.8 billion, up 13% [15] - The gross margin expanded by 173 basis points to 31%, driven by strong aggregates performance [15] - The aggregates business achieved record revenues of $5 billion, an 11% increase, with gross profit rising 16% to $1.7 billion [15] - The gross profit per ton for aggregates improved by 12% year-over-year to $8.45 [8] Business Line Data and Key Metrics Changes - Aggregates revenues increased 8% to $1.2 billion in Q4, with gross profit rising 11% to $420 million [7] - The specialties business achieved record revenues of $441 million and gross profit of $137 million, reflecting strong organic performance [16] - Other building materials revenues decreased 8% to $992 million, primarily due to the Minnesota asphalt business and the impact of a divestiture [15] Market Data and Key Metrics Changes - Infrastructure demand remains solid, driven by the Bipartisan Infrastructure Investment and Jobs Act (IIJA) [10] - As of November 30, 2025, 71% of IIJA highway and bridge funds have been obligated, but only 48% has been dispersed [10] - Heavy non-residential demand is driven by growth in data centers and energy projects, with Goldman Sachs estimating hyperscalers may deploy over $500 billion in capital in 2026 [11] Company Strategy and Development Direction - The company concluded the SOAR 2025 period with a leverage ratio within the targeted range of 2-2.5 times and strong free cash flow, positioning it well for future investments [7] - Martin Marietta launched SOAR 2030, focusing on continued growth and shareholder value creation [21] - The company is strategically redeploying capital from divestitures into pure aggregates positions to enhance its margin profile and growth potential [7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the infrastructure investment pipeline and the potential for a new long-term surface transportation bill [10] - The company anticipates a balanced macro environment in 2026, with expected consolidated Adjusted EBITDA of approximately $2.49 billion [9] - Management noted that while private construction remains soft, there is optimism for recovery in housing and non-residential construction [14] Other Important Information - The company reported total shareholder returns of 126% from December 31, 2020, to December 31, 2025, significantly outperforming the S&P 500 [6] - Martin Marietta's capital allocation included $3.2 billion in sustaining and growth CapEx and $2.1 billion returned to shareholders through dividends and share repurchases [6] Q&A Session Summary Question: Update on the new highway bill and its importance - Management indicated that both the House and Senate are pursuing a five-year reauthorization of highway public transportation programs, with a focus on highways, bridges, roads, and streets [24][25] - The company believes that even if a continuing resolution is needed, it would maintain funding at record levels, which would not negatively impact the business [100] Question: Clarification on guidance and potential slow start to the year - Management clarified that the consolidated Adjusted EBITDA guidance includes both heritage aggregates and organic aggregates businesses, and they are optimistic about January's performance despite weather challenges [33][36] Question: Insights on in-market assumptions for volume growth - Management expects mid-single-digit growth in infrastructure, driven by strong state DOT budgets and local funding measures, while non-residential construction remains below prior peaks [45][46] Question: Cost expectations and confidence in maintaining price-cost spread - Management noted that inflation is running around 3.5%, and they are taking a measured approach to cost management, with expectations for continued operational efficiencies [58][60] Question: Specialty business profitability and initiatives - Management acknowledged that the Premier acquisition is margin dilutive but expects strong organic growth in the specialties segment to contribute positively moving forward [65][66] Question: Data center backlog and manufacturing trends - Management reported that data centers currently represent a few million tons a year and are growing at a multi-double-digit rate, while manufacturing is showing signs of improvement [72][73]

Financial Data and Key Metrics Changes - Underwriting profit increased significantly from $9 million in 2024 to $67 million in 2025, marking a substantial improvement in financial performance [6] - Net investment income grew by nearly 20%, contributing to the overall financial health of the company [6] - Full-year operating earnings per share improved by 80%, reaching $4.60, while book value per share increased by over $6 to $36.88 [10] - The annual combined ratio improved to 94.8%, reflecting ongoing enhancements in the underlying loss ratio, catastrophe loss ratio, and expense ratio [6][10] Business Line Data and Key Metrics Changes - The core commercial business, which includes small business, middle market, and construction, experienced the strongest growth, with record new business production of $247 million [12][13] - Specialty E&S net written premium grew at a double-digit pace for both the fourth quarter and the full year, despite emerging competitive pressures [14] - The surety business also delivered double-digit net written premium growth for the quarter and full year, indicating strong momentum [15] Market Data and Key Metrics Changes - Rate increases moderated to 4.8% for the quarter, primarily in the property segment, while casualty lines experienced more modest impacts [13] - The underlying loss ratio improved to 55.4% in the fourth quarter, reflecting the quality of the portfolio developed over the last three years [16] - The fourth quarter catastrophe loss ratio was 1.2%, and the full year catastrophe loss ratio of 3.2% outperformed expectations [18] Company Strategy and Development Direction - The company has undergone significant transformation since late 2022, focusing on deepening underwriting expertise and enhancing actuarial insights [5] - Strategic investments in technology are aimed at improving operational efficiency and expanding underwriting capabilities, which are expected to generate significant operational efficiencies [8] - The company is committed to maintaining a conservative posture with reserves to protect its balance sheet and ensure long-term stability [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a more competitive market while maintaining disciplined underwriting practices [27] - The company anticipates continued profitable growth in 2026, supported by a strong capital position and improved profitability metrics [11][24] - Management highlighted the importance of maintaining strong relationships with distribution partners and emphasized the ongoing commitment to long-term value creation for shareholders [11] Other Important Information - The board of directors declared a 25% increase in the quarterly cash dividend from $0.16 per share to $0.20 per share, reflecting confidence in the company's financial performance [11][23] - The company reported a strong return on equity of 13.7%, the best in nearly two decades, indicating robust financial health [7][10] Q&A Session Summary Question: Current pricing expectations in a competitive market - Management acknowledged increased competition but emphasized that pricing remains rational and attractive, with a focus on disciplined risk selection [27] Question: Long-term target for underwriting expense ratio - The company targets a run rate of about 35% for the expense ratio, with expectations for gradual reduction over time as growth continues [30][31] Question: Dynamics affecting profitability in the other liability line - Management noted pressure on profitability in the umbrella line due to large losses but is taking a conservative approach to pricing and reserves [36][37] Question: Impact of social inflation on umbrella line - Management indicated that while they have not seen significant nuclear verdicts, they are guarding against social inflation through careful pricing and reserve management [39]