Granite Construction delivered second quarter results that were well received by the market, despite missing Wall Street’s revenue expectations. Management pointed to strong execution in both its Construction and Materials segments, with significant margin expansion attributable to operational improvements, higher aggregate volumes, and disciplined project selection. CEO Kyle Larkin highlighted that the company’s vertically integrated model and focus on public infrastructure funding helped drive robust performance, stating, “We are showing the earnings power of our company in our vertically integrated model.”
Is now the time to buy GVA? Find out in our full research report (it’s free).
Granite Construction (GVA) Q2 CY2025 Highlights:
- Revenue: $1.13 billion vs analyst estimates of $1.16 billion (4% year-on-year growth, 3% miss)
- Adjusted EPS: $1.93 vs analyst estimates of $1.70 (13.9% beat)
- Adjusted EBITDA: $152.4 million vs analyst estimates of $143.2 million (13.5% margin, 6.4% beat)
- The company lifted its revenue guidance for the full year to $4.45 billion at the midpoint from $4.3 billion, a 3.5% increase
- Operating Margin: 9.2%, up from 7.9% in the same quarter last year
- Market Capitalization: $4.87 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 Granite Construction’s Q2 Earnings Call
- Brent Edward Thielman (D.A. Davidson) asked about the pace of Construction segment revenue and project ramp-up. CEO Kyle Larkin explained that revenue growth will accelerate in the back half of the year as projects in the record CAP backlog move forward, with acquisitions layering into results.
- Brent Edward Thielman (D.A. Davidson) inquired about the sustainability of Materials segment margin expansion. Larkin responded that growth is supported by both public demand and ongoing operational improvements, with margins currently tracking ahead of expectations for the year.
- Brian Biros (Thompson Research Group) queried what differentiates the Papich Construction acquisition. Larkin highlighted Papich’s strong public works focus and complementary footprint in Central California, noting expected synergies in materials supply and private sector expertise.
- Brian Biros (Thompson Research Group) requested a comparison of CAP trends between the West and Southeast regions. Larkin said project backlog is expanding across the entire company, supported by strong federal funding and project wins in multiple states.
- Michael Stephan Dudas (Vertical Research Partners) questioned the strategic fit and integration opportunities of the Warren Paving acquisition. Larkin emphasized Warren Paving’s material-centric model and the potential for expanding internal sales, pricing, and federal contracting in the Southeast.
Catalysts in Upcoming Quarters
Looking forward, the StockStory team will monitor (1) the integration progress and revenue contribution from Warren Paving and Papich Construction, (2) the pace of project ramp-up and backlog conversion in the Construction segment, and (3) continued margin expansion from operational improvements and best practice adoption. Ongoing public funding trends and the company’s ability to execute additional strategic acquisitions will also be important indicators of future performance.
Granite Construction currently trades at $111.29, up from $93.40 just before the earnings. At this price, is it a buy or sell? The answer lies in our full research report (it’s free).
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
