Ivan Yi

Ivan Yi inquired about the trajectory of the 2026 full-year guidance, specifically expectations for Q1 aggregates volumes, price, or margins, and any deviations from normal seasonality, and followed up on pricing expectations for the ready-mix and asphalt segments.

Answer

Brian Gray (President and CEO, Knife River) referred to previous guidance that Strata's acquisition increased Q1 seasonal loss by 8%. He noted that TexCrete's full-year benefit might soften this 8% impact for 2026, with benefits predominantly in Q3 and potentially Q4. For ready-mix and asphalt pricing, Brian Gray stated that they are heavily influenced by input costs (cement, liquid asphalt) and product mix. He emphasized that commercial excellence initiatives, dynamic pricing, and new dashboards/tools are being used by sales teams to optimize prices, expecting continued momentum in pricing.

Ivan Yi inquired about the trajectory of the full-year 2026 guidance, specifically Q1 expectations for aggregates volumes, price, or margins, and any deviations from normal seasonality. He also asked for pricing expectations for the ready-mix and asphalt segments.

Answer

Brian Gray, President and CEO, noted that the 8% seasonal loss for Q1 due to Strata, mentioned last year, might be softened by TexCrete's benefit. For ready-mix and asphalt pricing, he stated that it's heavily influenced by input costs (cement, liquid asphalt) and product mix. He emphasized that commercial excellence initiatives and dynamic pricing tools are being used to optimize prices, expecting solid traction going forward.

Ivan Yi of Wolfe Research, LLC asked about the expected revenue and EBITDA cadence for Q3 versus Q4 and current trends in transportation costs and logistics mix.

Answer

CFO Nathan Ring outlined the expected seasonality, with Q3 being the strongest quarter and the second half generating roughly 60% of revenue and over 70% of EBITDA. He noted input costs are rising in the mid-single digits. CEO Brian Gray added that while trucking remains the primary delivery method, the use of rail is increasing, particularly with the addition of Strata's operations.

Ivan Yi questioned why Vulcan's 2026 aggregate volume growth guidance of 2% isn't higher, given its favorable geographic exposure to states like California, Georgia, and Tennessee, and positive contract award data.

Answer

Ronnie Pruitt, Chief Executive Officer, explained that the conservative volume guidance stems from three years of muted demand and the fact that the backlog represents only 40%-45% of total shipments. He emphasized that a significant recovery in single-family residential, dependent on affordability and interest rates, is needed to drive higher volumes, and the company is being conservative until that materializes.

Ivan Yi questioned why Vulcan's 2026 aggregate volume growth guidance of 2% isn't higher than Martin Marietta's, given Vulcan's seemingly more favorable geographic exposure to states like California, Georgia, and Tennessee, and strong contract award data.

Answer

Ronnie Pruitt, SVP and COO, explained that after three years of muted demand, the company is taking a conservative approach. He emphasized that the 2026 guidance assumes single-family housing needs to recover, and until there's more relief on affordability and interest rates, they don't want to get ahead of themselves. He noted that while the backlog is strong, it only represents 40%-45% of shipments, and the balance between public and private demand requires single-family to kick in.

Ivan Yi asked about the deceleration in aggregate price per ton growth in Q3, which was the smallest in years, and why year-over-year growth has slowed from double digits to a 5% guide for 2026.

Answer

Tom Hill, Chairman and CEO, attributed the deceleration to headwinds from acquisitions and lower volumes in the Southeast earlier in the year, noting that three years of negative volume put pressure on price. He believes this is a low point, with accelerating public and private non-res demand supporting stronger pricing conversations and backlog pricing into 2026.

Ivan Yi of Wolfe Research, LLC inquired about the percentage of Vulcan's aggregates that are transported by rail and asked for the company's perspective on the potential impact of the proposed Union Pacific and Norfolk Southern merger.

Answer

Chair & CEO J. Thomas Hill stated that he does not anticipate a significant impact from the proposed merger. He explained that Vulcan is a customer of both railroads but typically ships aggregates to markets within a single railroad's network, meaning they are not long-haul shippers who would be affected by carrier changes.

Ivan Yi asked about the future trajectory of the price-cost spread, specifically when it might reaccelerate if pricing is expected to slow to +5% in 2026 and the spread doesn't narrow this year.

Answer

Chair, President and CEO Ward Nye reiterated a measured view for the current year but expressed confidence that the price-cost spread would continue to build over the SOAR 2030 period. He stated that the company is not concerned about hitting its long-term targets, citing the favorable cost profile and anticipated volume recovery in private construction as key drivers for future reacceleration.

Ivan Yi asked about the trajectory of Martin Marietta's price-cost spread, specifically when it might reaccelerate if pricing is expected to slow to +5% in 2026 and the spread did not narrow this year.

Answer

Chair, President and CEO Ward Nye reiterated a measured view for the current year, expecting the price-cost spread to build over the SOAR 2030 period. He expressed confidence in achieving the long-term price-cost spread targets, citing the company's cost profile, anticipated volume recovery in private construction, and strong current performance.

Ivan Yi questioned whether Martin Marietta's aggregate pricing could return to double-digit levels seen in 2022-2024, and what factors would be necessary to raise the mid-single-digit pricing increase guidance for 2026.

Answer

Chairman and CEO Ward Nye attributed past double-digit pricing to high inflation and a price-sensitive environment, noting that current expectations reflect a more normalized period. He indicated that significant volume increases, particularly in geographies with tight product supply, would be the primary swing factor for potentially higher pricing, aligning with traditional economic principles.

Ivan Yi asked if the company could return to double-digit aggregate pricing, as seen in 2022-2024, and what factors would be necessary to raise the mid-single-digit pricing increase guidance for 2026.

Answer

Ward Nye, Chairman and CEO, explained that previous double-digit pricing was largely driven by high inflation, and the company anticipates a return to more normalized pricing. He identified significant volume growth as the key swing factor for higher pricing, noting that if volumes take off and products become tight in specific geographies, traditional economics would apply.

Ivan Yi asked for a preview of the upcoming Capital Markets Day and whether the company would provide new long-term financial guidance.

Answer

CEO C. Howard Nye confirmed the event will feature a refreshed five-year SOAR strategic plan. He indicated the discussion will cover the company's growth trajectory, geographic focus, M&A strategy, and new commercial tools, and will provide an opportunity to engage with the broader leadership team. He did not explicitly confirm new long-term guidance but hinted at discussing ambitious growth goals.

Ivan Yi inquired about the strategic rationale behind the Semrush acquisition and how it aligns with Adobe's future strategies, particularly regarding brand visibility for marketers.

Answer

CEO Shantanu Narayen and President of Digital Experience Anil Chakravarthy explained that the Semrush acquisition addresses marketers' critical need for brand visibility in the evolving "agentic web," including LLMs and search engines. They highlighted that combining Adobe and Semrush will offer a comprehensive solution for marketers to manage how their brands appear across owned, earned, and new digital channels, providing unified analytics on search and generative engine efficiency.

Ivan Yi from Wolfe Research, LLC, inquired about the impact of recent tax legislation, particularly bonus depreciation, on Wabtec and its customers. He also asked for an update on the regulatory environment following the withdrawal of the CARB locomotive mandate.

Answer

CFO John Olin stated that the restoration of tax benefits like accelerated depreciation is positive, as it improves the IRR for customers purchasing Wabtec equipment. CEO Rafael Santana added that on the regulatory front, the focus remains on advancing rail safety and innovation, highlighting progress on technologies like zero-to-zero and yard automation.

Ivan Yi, on for Scott Group at Wolfe Research, LLC, asked about the operational and customer impact of recent tax legislation, particularly bonus depreciation. He also inquired about the current regulatory outlook following the withdrawal of the CARB locomotive mandate.

Answer

CFO John Olin explained that while the tax bill restores prior benefits, the main advantage is that bonus depreciation improves the ROI for customers purchasing Wabtec equipment. CEO Rafael Santana added that on the regulatory front, the focus remains on working with the FRA to advance safety and innovation, such as zero-to-zero technology, which benefits the entire rail sector.

Ivan Yi, on for Scott Group, asked for a rough estimate of how much of the tariff impact Wabtec can pass through to customers via pricing. He also requested more details on the new Class 1 locomotive order.

Answer

CFO John Olin stated that after minimizing tariff impacts through supply chain actions, the company expects to 'come out of this hole and margins intact' and deliver on its guidance. CEO Rafael Santana declined to comment on the specifics of any single customer order, emphasizing that Wabtec manages a broad basket of opportunities and projects with each customer, and discussions are handled on a specific basis.

Ivan Yi from Wolfe Research asked if the long-term average annual margin improvement would be front- or back-end loaded and inquired about the potential impact of tariffs on cost of goods sold.

Answer

CEO Rafael Santana confirmed the margin improvement is 'clearly more front-end loaded,' as demonstrated by the strong start guided for 2025. Regarding tariffs, he stated that while they are not included in guidance, the company has a successful track record of managing such pressures over the past five years while expanding margins and expects to navigate any future challenges effectively.