Oct 29, 2026 earnings call — Long-term targets and Q3 results
Raised low end of 2026 revenue guidance to $5.4 billion and reported Q3 revenue of $1.8 billion.
Revenue $1.8B (est $1.7B) · EPS $3.81 (est $3.27) · Next-quarter revenue outlook $5.4B–$5.5B
Key quotes
"Starting with revenue, we are targeting an organic revenue CAGR of 10% to 12% through 2029."
"We had approximately $1.3 billion in federal CAP at the end of the third quarter and expect to bid on billions of dollars of opportunities over the next several years."
"By the end of 2026, we expect approximately 45% of our eligible aggregate facilities to be automated."
Analyst Q&A 6
Growth by business area
Q (Brent Thielman · Oppenheimer): Analyst asked to break the 10%–12% organic growth target by verticals: highway/public transportation, federal, rail, and mission-critical. He wanted to know which areas will drive the range.
A: Management said highways should grow mid-single digits aided by IIJA funds. Federal work could be around 15% or higher of Construction revenue, helped by collaborative contracting. Rail is small today (<5%) but could reach ~5% in 2027 and near 10% in 2028; mission-critical (including new space CAP of about $100 million) targets about 10% of Construction revenue.
"As we mentioned in prepared remarks, I think that can be around 15% or higher in terms of our Construction segment revenue, and we can replace the work on the southern border and continue to grow within the federal space." — Kyle Larkin (CEO)
Construction margins and M&A
Q (Ethan Roberts · Stephens): Analyst asked what will drive construction gross margin improvement (project mix, bidding, execution) and for color on the M&A pipeline and how materials might contribute to earnings.
A: Management said the main margin levers are winning the right projects and strong execution; they noted construction gross profit margins are already up 80 basis points year-to-date. They said the M&A pipeline is strong, they expect to do more deals while targeting a 2.5x net leverage, may close 2–3 deals, and want materials to be a larger part of the company but have not set a specific percentage target.
"We're up 80 basis points in construction gross profit margins through the first 9 months, which is already ahead of our 50 basis point improvement that we expected this year." — Kyle Larkin (CEO)
Southeast pull-through and share gains
Q (Steven Ramsey · Thompson Research Group): Analyst asked about the Southeast pull-through efforts and how that helps the 200 basis point EBITDA expansion. He also asked how much share gain in 2026 is embedded in the long-term targets.
A: Management said pull-through is making strong headway, noting a large quarry in Kentucky (Slats Lucas) and a new stone yard in Memphis to drive aggregates pull-through. They said their CAP is $7.5 billion today, showing momentum, and that collaborative contracting helps them win share, though they did not give exact share targets by market.
"if you look at our CAP today, it's $7.5 billion, we're up quite nicely, overcoming our highest burn quarter and significantly in what we saw a year ago at this time" — Kyle Larkin (CEO)
Federal collaborative contracts and regions
Q (Kevin Gainey · Thompson, Davis): Analyst asked about the change to collaborative contracting at the federal level, Granite's success so far, and what to expect going forward. He also asked about West and Texas markets and about cost inflation (diesel) and customer reactions.
A: Management said collaborative federal work is new but Granite is well positioned due to prior investments and experience and expects to be selective and announce wins soon. They said Western markets (including California) are healthy and Texas has strong airport and mission-critical opportunities. On costs, they said overall impact has been roughly neutral, materials are more exposed, and unit economics show they are covering and improving on those costs.
"So we do expect to see us be in a position to be selective on some of these contracts and hopefully be able to announce some wins here soon." — Kyle Larkin (CEO)
IIJA timing and pricing outlook
Q (Michael Dudas · Vertical Research Partners): Analyst asked if a delay or CR on IIJA 2.0 would affect bidding and turning pipeline into backlog. He also asked expected pricing for aggregates and asphalt into 2027.
A: Management said they assume continuing CRs and do not see a material impact to their 2029 targets; they still expect mid-single-digit growth in the highway market. For pricing, they expect aggregates to see somewhat higher (mid) price increases next year and asphalt to be low single-digit, with volumes slightly up and some upside from mission-critical projects.
"I think right now, we're just kind of assuming that we're going to see continuing CRs for a period of time." — Kyle Larkin (CEO)
Pipeline, CAP burn, materials margins
Q (Anuj Khandelwal · Goldman Sachs): Analyst asked how active the pipeline is beyond the $7.5 billion CAP, the public/private and federal/state mix, margin quality of new bids, expected CAP burn in next 12 months, and drivers of the materials gross margin decline and outlook for 4Q and 2027.
A: Management said they are bidding more work than a year ago, with the federal market significant and mission-critical bids growing; they typically burn about 40%–50% of year-end CAP and expect around 45%–50% next year. On materials, they focus on unit economics and passing energy costs; as energy costs normalize, they expect cash gross profit margins in Materials to recover by about 3%.
"I think the impact would be or at least the benefit is that when that happens is we'll see gross profit margin or cash gross profit margins in the Materials segments probably go back up around 3%." — Kyle Larkin (CEO)