Arcosa Reports Record-Breaking Third Quarter 2025 Results, Driven by Strategic Growth and Strong Operational Execution
Arcosa, Inc., a leading provider of infrastructure-related products and solutions for the construction and energy industries, has reported record third-quarter results for 2025, underscoring the success of its strategic portfolio transformation and the operational strength across its core business segments. The company’s results highlight robust revenue growth, margin expansion, and a strengthened balance sheet following the successful integration of the $1.2 billion Stavola acquisition.
Antonio Carrillo, President and Chief Executive Officer of Arcosa, expressed confidence in the company’s strategic trajectory, stating,
Our third quarter performance underscores the success of our portfolio transformation. We achieved record results led by 27% revenue growth, approximately 50% adjusted EBITDA improvement, and a 340-basis-point expansion in adjusted EBITDA margin. Through strong cash conversion this quarter, we also achieved our stated leverage goal two quarters ahead of schedule—just one year after the transformational Stavola acquisition.
Operational Highlights Across Core Segments
Construction Products: Driving Growth and Profitability
Arcosa’s Construction Products segment was the primary growth driver during the quarter, fueled by the significant contribution of Stavola Holding Corporation, acquired in October 2024. Segment revenues surged 46% year-over-year to a record $387.5 million, marking the strongest quarterly performance in the company’s history for this division.
Stavola alone added $102.6 million in revenue and proved highly accretive to margins, demonstrating the acquisition’s value-creating potential. On an organic basis, the division saw 7% revenue growth, driven by improved pricing and higher sales volumes.
Adjusted Segment EBITDA increased 62% to $115.2 million, with margins expanding 300 basis points to 29.7%, while freight-adjusted segment margins climbed to 32.7%. Stavola’s contribution of $44.5 million in adjusted EBITDA was partially offset by temporary inefficiencies at some legacy aggregate sites, primarily due to production downtime and lower cost absorption.
Within the aggregates business, volumes rose 18%, and the freight-adjusted average sales price increased by 9%, translating into 17% growth in adjusted cash gross profit per ton. These results reinforce Arcosa’s competitive edge in the North American aggregates market, where demand for high-quality construction materials continues to accelerate due to infrastructure and industrial development projects.
Depreciation, depletion, and amortization expenses rose 38% to $41.8 million, reflecting the integration of Stavola’s assets into the company’s expanding operations footprint.
Engineered Structures: Record Backlog and Strong End-Market Demand
Arcosa’s Engineered Structures segment delivered another strong quarter, benefiting from continued strength in the U.S. power infrastructure market. Revenues rose 11% to $311.0 million, supported by robust performance in utility structures and higher wind tower production volumes.
Adjusted Segment EBITDA increased 29% to $57.0 million, while margins expanded by 240 basis points to 18.3%, reflecting the benefits of pricing improvements, operational efficiencies, and cost discipline.
Order activity remained strong as utilities across the U.S. focused on expanding and modernizing the national grid. The company reported a record backlog of $461.5 million in utility and related structures, up 11% since the beginning of the year, signaling continued demand growth for high-capacity transmission infrastructure.
Arcosa’s wind tower operations also performed exceptionally well. The company secured $57 million in new wind tower orders during the quarter for delivery in 2026 and accelerated some 2028 deliveries to earlier dates to meet customer demand. The wind tower backlog closed the quarter at $526.3 million, providing healthy visibility into production schedules through 2026.
Additionally, in October, the company received another $60 million in new wind tower orders, extending production visibility through 2027. These wins reinforce Arcosa’s strategic positioning as a critical supplier supporting the clean energy transition and renewable infrastructure build-out across North America.
Transportation Products: Continued Momentum in the Barge Business
Arcosa’s Transportation Products segment also demonstrated solid growth, particularly within the barge business, which continues to capitalize on strong market demand for tank and hopper barges.
Revenues increased 22% year-over-year, driven primarily by higher tank barge deliveries. Excluding the previously divested steel components business (sold in August 2024), Adjusted Segment EBITDA grew 36% to $17.6 million, and margins expanded from 15.8% to 17.7%.
The company reported $148 million in new barge orders during the quarter, representing a book-to-bill ratio of 1.5. This pushed Arcosa’s barge backlog to $325.9 million, up 16% year-to-date, with about 30% of that backlog expected to be recognized in the remainder of 2025. With additional orders received post-quarter, production visibility for both hopper and tank barges now extends well into the second half of 2026.
Corporate and Financial Performance
Corporate expenses, excluding acquisition and divestiture-related costs, totaled $16.0 million, up from $13.4 million in the prior year, primarily due to higher compensation-related expenses. Acquisition-related costs were minimal at $0.1 million, a sharp decline from $11.6 million in the same period last year, reflecting the successful integration of recent acquisitions.
Interest expenses increased to $27.1 million, up $11.3 million year-over-year, mainly due to additional debt used to finance the Stavola acquisition. The effective tax rate rose to 16.2% compared to 13.1% in 2024, primarily driven by higher state taxes and foreign adjustments.
Cash Flow, Liquidity, and Balance Sheet Strength
Arcosa generated $160.6 million in operating cash flow during the third quarter, an increase of $25.6 million compared to the prior period. The improvement was largely attributed to higher earnings and disciplined working capital management, which provided a $22.7 million net source of cash.
Capital expenditures were $39.6 million, reflecting ongoing investments in equipment and capacity expansion. Free Cash Flow rose to $134.0 million, compared to $107.2 million in the prior year.
During the quarter, the company repaid $100 million of term loan borrowings, reducing leverage and reinforcing its commitment to a strong balance sheet. Arcosa’s Net Debt to Adjusted EBITDA ratio improved to 2.4x, down from 2.8x at the end of Q2, achieving the company’s target range of 2.0x to 2.5x.
Total liquidity stood at $920 million, including $220 million in cash and cash equivalents and full availability under its $700 million revolving credit facility, giving Arcosa considerable financial flexibility for future investments and strategic initiatives.
Arcosa updated its full-year guidance, reflecting continued confidence in its growth trajectory:
- Revenue is now expected to range between $2.86 billion and $2.91 billion, compared to prior guidance of $2.85 billion to $2.95 billion.
- Adjusted EBITDA is projected between $575 million and $585 million, up from previous guidance of $555 million to $585 million.
Carrillo emphasized,
Our outlook for the remainder of 2025 remains very positive. Demand trends are favorable, and our U.S.-focused operations are well aligned with long-term infrastructure and energy market drivers. We now anticipate 32% Adjusted EBITDA growth in 2025, reflecting the strong accretion from Stavola and robust organic expansion.
Arcosa’s record-breaking third quarter marks a pivotal milestone in the company’s ongoing evolution into a leading, diversified infrastructure platform. With strong demand in construction materials, utility infrastructure, renewable energy, and transportation, Arcosa’s balanced portfolio positions it to thrive amid national investments in infrastructure modernization and clean energy transition.
Carrillo concluded by reaffirming the company’s strategic priorities:
With leverage now within our long-term target, we remain focused on disciplined capital allocation—investing in high-return opportunities, maintaining a strong balance sheet, and continuing to create long-term value for our shareholders.
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