Granite Announces Q1 2025 Financial Performance
Granite Construction Incorporated, a leading infrastructure contractor and materials producer in the United States, today announced its financial results for the first quarter ended March 31, 2025. The report reveals a mixed performance, with revenue growth in both its Construction and Materials segments being offset by a significant increase in selling, general, and administrative (SG&A) expenses, primarily driven by higher stock-based compensation.
For the first quarter of 2025, Granite reported a net loss attributable to the company of 34million∗∗,or∗∗(0.77) per diluted share. This compares to a net loss of 31million∗∗,or∗∗(0.70) per diluted share, in the same period of the prior year. On an adjusted basis, the company reported net income attributable to Granite Construction Incorporated of $224 thousand, or $0.01 per diluted share, a notable improvement from the adjusted net loss of 9million∗∗,or∗∗(0.21) per diluted share, reported in the first quarter of 2024.
Granite demonstrated top-line growth, with revenue increasing by $28 million, reaching $700 million compared to $672 million in the first quarter of 2024. Both the Construction segment and the Materials segment contributed to this growth, posting year-over-year revenue increases of 3% and 10%, respectively. The Construction segment’s revenue reached $614.6 million, up from $595.2 million, while the Materials segment generated $84.9 million, an increase from $77.1 million in the prior year.
The company also reported an improvement in gross profit, which increased by $30 million to $84 million in the first quarter of 2025, compared to $54 million in the same period last year. The Construction segment saw a significant increase in gross profit to $85.4 million from $56.8 million, resulting in an improved gross profit margin of 13.9% compared to 9.5% in the first quarter of 2024. This improvement was attributed to revenue growth and enhanced project execution within a higher-quality project portfolio. Conversely, the Materials segment reported a gross loss of $1.6 million, an improvement from the $2.5 million gross loss in the prior year. The Materials segment also saw an improvement in cash gross profit, a non-GAAP measure, which increased by 33.1% to $10.5 million.
However, a significant factor impacting the bottom line was the increase in selling, general, and administrative (SG&A) expenses, which rose by $28 million to $116 million, representing 16.6% of revenue, compared to $88 million, or 13.1% of revenue, in the first quarter of 2024. The company attributed this increase primarily to an $18 million year-over-year rise in stock-based compensation expense.
Despite the net loss, Granite reported a substantial improvement in Adjusted EBITDA (1), which totaled $28 million in the first quarter of 2025, compared to $14 million in the same period last year. The company also reported operating cash flow of $4 million, indicating it is on track to meet its target of 9% operating cash flow as a percentage of revenue for the full year.
Looking ahead, Kyle Larkin, Granite President and Chief Executive Officer, expressed optimism about the company’s prospects. “We are off to a great start in 2025,” said Larkin. He highlighted the strong bidding environment, noting, “Bidding opportunities have consistently increased over the past several years. This trend has continued in 2025, as demonstrated by our record CAP of $5.7 billion at the end of the quarter.” CAP (2), or contract awards and pending awards, reached a record $5.7 billion, a sequential increase of $444 million and a year-over-year increase of $241 million. Larkin emphasized the numerous opportunities in both public and private markets to further build CAP throughout 2025. While acknowledging macroeconomic uncertainties, he stated, “we are well positioned to meet our guidance for 2025 as well as our 2027 financial targets.”
Larkin also highlighted a new level of transparency in the company’s reporting. “This quarter marks the first time that we have disclosed product-level detail for aggregates and asphalt in the Materials segment. These disclosures build on the journey that started one year ago with the realignment of our operational leadership to better leverage our teams’ expertise within both the Construction and Materials segments. I am particularly proud of the progress our teams made in raising aggregate margins, and I believe there will be additional growth in the years ahead as we execute on our vertical integration strategy.” The Materials segment saw positive trends in revenue, gross loss, and cash gross profit, driven by the acquisition of Dickerson & Bowen, higher aggregate and asphalt volumes, and increased aggregate sales prices, which were in line with expectations for high single-digit price increases in 2025.
Granite reaffirmed its financial outlook for the full year 2025, with revenue expected to be in the range of $4.2 billion to $4.4 billion, an adjusted EBITDA margin between 11.0% and 12.0%, SG&A expense projected at approximately 9.0% of revenue (including an estimated $45 million in stock-based compensation), a mid-20s effective tax rate for adjusted net income, and capital expenditures between $140 million and $160 million. The company did not provide a reconciliation of forward-looking adjusted EBITDA margin to GAAP net income due to the difficulty in predicting certain components and excluded items.
