Construction Partners delivered year-over-year sales growth and higher operating margins in Q2, despite missing Wall Street’s revenue and non-GAAP profit expectations. The company’s robust performance was shaped by strong execution against weather-driven delays, with CEO Fred Julius Smith highlighting the “discipline and delivered robust operational results, driving a record adjusted EBITDA margin of 16.9%.” Management credited its ability to flex operations and leverage three margin levers—market selection, vertical integration, and scale—even as persistent wet weather impacted project timing.
Is now the time to buy ROAD? Find out in our full research report (it’s free).
Construction Partners (ROAD) Q2 CY2025 Highlights:
- Revenue: $779.3 million vs analyst estimates of $789.2 million (50.5% year-on-year growth, 1.3% miss)
- Adjusted EPS: $0.81 vs analyst expectations of $0.82 (1.4% miss)
- Adjusted EBITDA: $131.7 million vs analyst estimates of $127.9 million (16.9% margin, 3% beat)
- The company reconfirmed its revenue guidance for the full year of $2.8 billion at the midpoint
- EBITDA guidance for the full year is $420 million at the midpoint, above analyst estimates of $413.7 million
- Operating Margin: 10.6%, up from 8.8% in the same quarter last year
- Backlog: $2.94 billion at quarter end
- Market Capitalization: $6.51 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Construction Partners’s Q2 Earnings Call
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Patrick Tyler Brown (Raymond James) asked how Construction Partners maintained strong margins despite weather disruptions. CEO Smith cited operational flexibility and the simultaneous impact of the company’s three margin levers.
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Michael J. Feniger (Bank of America) questioned the basis for optimism around public spending in 2026. Smith clarified that contract awards, state budgets, and backlog data underpin management’s outlook for substantial growth.
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Andrew John Wittmann (Robert W. Baird) probed the competitive landscape and market selection. Smith and Executive Chairman Ned Fleming discussed the importance of targeting high-growth metro areas and staying patient at the bid table to secure projects at healthy margins.
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Brian Biros (Thompson Research Group) sought clarity on July volume trends and margin potential under normal weather conditions. Smith confirmed strong July volumes and noted that better weather would have further improved results.
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Adam Robert Thalhimer (Thompson, Davis) inquired about labor market shifts and the company’s ability to attract and retain skilled workers. Smith acknowledged that while post-pandemic labor shortages have eased, long-term workforce retention remains a strategic priority.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team is watching (1) the pace of organic growth and integration of recent acquisitions like Durwood Greene in Houston, (2) sustained strength in backlog conversion into revenue amid public and private sector demand, and (3) the company’s ability to manage input costs and maintain margin expansion. Progress on deleveraging and further capital deployment for strategic acquisitions will also be key signposts.
Construction Partners currently trades at $116.83, up from $93.55 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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