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Arcosa, Inc. (ACA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered revenue of $632.0M (+6% YoY; +12% YoY excluding prior divested steel components), Adjusted EBITDA of $109.9M (+19% YoY; +26% YoY ex-divestiture), and Adjusted EBITDA margin of 17.4% (+200 bps), driven by strong Engineered Structures and solid barge performance despite weather headwinds in Construction Products .
  • Versus Wall Street consensus (S&P Global), Arcosa posted broad beats: revenue $632.0M vs $614.5M*, Primary EPS $0.49 vs $0.18*, and EBITDA $106.1M vs $98.6M*; EPS upside was aided by segment margin gains and the timing of wind AMP tax credit monetization (credits from Q1 were sold in April) .
  • Guidance reaffirmed: FY25 consolidated revenue $2.8–$3.0B and Adjusted EBITDA $545–$595M; tariffs included and expected to be immaterial, with CapEx guided at $145–$165M and deleveraging targeted to 2.0–2.5x over the next 12 months .
  • Execution catalysts: Engineered Structures margin expansion to 18.2% on wind volume and Ameron accretion, barge orders ($142M; 1.7x book-to-bill) extending tank backlog into 2026, and strong early-season activity at Stavola as Northeast construction ramps .

What Went Well and What Went Wrong

What Went Well

  • Engineered Structures revenue grew 23% to $284.8M; Adjusted Segment EBITDA nearly doubled (+90%) to $51.7M and margin expanded 650 bps to 18.2%, driven by wind tower volume, Ameron’s accretion, and utility structures efficiencies .
  • Transportation Products showed barge strength: $142M of orders (1.7x book-to-bill), backlog up to $333.6M, with margin up to 18.4% on higher tank barge deliveries and improved operating efficiencies .
  • Management reaffirmed FY25 revenue and EBITDA guidance and highlighted resilient end markets and a path to delever to 2.0–2.5x over the next 12 months: “We remain committed to our goal of reducing leverage to 2.0–2.5 times over the next twelve months.” — CEO Antonio Carrillo .

What Went Wrong

  • Construction Products organic revenues fell 6% and Adjusted Segment EBITDA decreased 5% YoY; margin declined 220 bps to 21.7% due to weather and the seasonally slow Stavola contribution (–$2M EBITDA; –320 bps margin impact) .
  • Operating cash flow turned slightly negative (–$0.7M) and Free Cash Flow was –$29.7M, driven by an $80.7M working capital use, including a $77.6M increase in receivables (timing of deliveries and AMP tax credits sold in April) .
  • Interest expense rose to $28.3M (+$20.0M YoY) on higher debt from the $1.2B Stavola acquisition, pressuring GAAP EPS despite operating progress .

Financial Results

Consolidated Performance (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$640.4 $666.2 $632.0
Adjusted EBITDA ($USD Millions)$114.0 $128.3 $109.9
Adjusted EBITDA Margin %17.8% 19.3% 17.4%
Diluted EPS ($USD)$0.34 $(0.16) $0.48
Adjusted Diluted EPS ($USD)$0.91 $0.46 $0.49

Q1 2025 Actual vs S&P Global Consensus

MetricQ1 2025 ConsensusQ1 2025 Actual
Revenue ($USD Millions)614.5*632.0
Primary EPS ($USD)0.18*0.49
EBITDA ($USD Millions)98.6*106.1*

Values retrieved from S&P Global.
Note: Primary EPS reflects S&P “Primary EPS”; EBITDA reflects S&P “EBITDA” (not “Adjusted EBITDA”).

Segment Breakdown (Q1 2025 vs Q1 2024)

SegmentRevenue Q1 2024 ($M)Revenue Q1 2025 ($M)Adj Segment EBITDA Q1 2024 ($M)Adj Segment EBITDA Q1 2025 ($M)Margin Q1 2024Margin Q1 2025
Construction Products$251.2 $262.8 $60.1 $56.9 23.9% 21.7%
Engineered Structures$231.6 $284.8 $27.2 $51.7 11.7% 18.2%
Transportation Products$115.8 $84.4 $18.6 $15.5 16.1% 18.4%

KPIs and Balance Sheet

KPIQ1 2024Q1 2025
Engineered Structures backlog ($M)$1,366.7 $1,094.1
Barge backlog ($M)$294.4 $333.6
Barge orders ($M) / Book-to-bill—$142 / 1.7x
Net Debt / Adjusted EBITDA (TTM)—2.9x
Liquidity ($M)—$867.8
Operating Cash Flow ($M)$80.5 $(0.7)
Free Cash Flow ($M)$30.3 $(29.7)
Capital Expenditures ($M)$54.4 $34.0
Interest Expense ($M)$8.3 $28.3
Effective Tax Rate (%)17.1% 19.2%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated RevenueFY 2025$2.8–$3.0B $2.8–$3.0B Maintained
Consolidated Adjusted EBITDAFY 2025$545–$595M $545–$595M Maintained
CapExFY 2025$145–$165M (reaffirmed on call) $145–$165M Maintained
Tariffs impact (direct)FY 2025Included; immaterial Included; immaterial Maintained
DividendNext payable—$0.05/share payable Jul 31, 2025 Declared

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Utility structures demand & marginHealthy orders; margin up 380 bps in Q4 to 17.5% ; steady in Q3 Double-digit volume growth; margin accretive; target ~15% utility margin; segment margin 18.2% aided by Ameron and efficiency Strengthening
Wind towers ramp & AMP creditsQ4 sold $45M AMP credits; $2.7M loss recognized Q1 credits monetized in April; no Q1 loss; Belen ramp accretive; ongoing backlog visibility Improving, normalization ahead
Tariffs & steel pricesQ3 steel price volatility; mix impact Steel tariffs on leftover Mexico steel absorbed via plant efficiencies; mills negotiating; expect stabilization Manageable
Aggregates pricingQ3: increased unit profitability, margin expansion Organic pricing +7% (total +10% with Stavola); maintain mid-single-digit FY outlook Positive pricing momentum
Housing vs industrial/infrastructureQ3 hurricanes; resilient trends Housing weak (AZ, TX); infrastructure and industrial (TX, Gulf, FL) strong; NE ramp seasonal Mixed; infra/industrial robust
Barge market dynamicsQ3 book-to-bill 0.9; backlog $244.7M Orders $142M; 1.7x book-to-bill; tank backlog into 2026; dry barge more sensitive to steel and ag tariffs Strengthening, constrained capacity
Leverage trajectoryPro forma 3.4x at Stavola close (Q3); 2.9x at YE 2.9x; deleveraging expected second half; target 2.0–2.5x in 12 months Stable → improving

Management Commentary

  • “Our strong results were driven by double-digit Adjusted EBITDA growth and approximately 275 basis points of organic margin expansion.” — CEO Antonio Carrillo .
  • “Engineered Structures outperformed our expectations due to robust demand and operating improvements in utility structures, higher wind tower volumes, and the accretive impact of Ameron.” — CEO Antonio Carrillo .
  • “We are pleased to maintain leverage at 2.9 times Net Debt to Adjusted EBITDA…committed to…reducing leverage to 2.0–2.5 times over the next twelve months.” — CEO Antonio Carrillo .
  • “On an organic basis, adjusted segment EBITDA margin expanded 100 basis points due to higher pricing and improved unit profitability.” — CFO Gail Peck (Construction Products) .
  • “We did not accrue the loss [on Q1 AMP credit sale]…you could think about ~$2 million as a range for quarterly monetization losses.” — CFO Gail Peck (Engineered Structures) .

Q&A Highlights

  • Engineered Structures contribution: strong volume and margin in wind and utility; Ameron accretive; utility incurred some Mexican steel tariffs but absorbed via efficiencies .
  • Wind towers economics: management sees structurally stronger demand vs prior cycles; viable business even without credits; timing changes in credits could spur near-term orders .
  • Stavola cadence: January very slow; March improved; April orders strong; asphalt seasonality explains Q1 dilutive impact .
  • Barge outlook: tank demand resilient with aging fleet; dry hopper orders more sensitive to steel prices and ag tariff uncertainty; expect steel price easing; backlog extends tank into 2026 .
  • Aggregates pricing and margins: organic price +7% (+10% total with Stavola); maintain mid-single-digit FY price outlook; organic margin expected up in 2025 .

Estimates Context

  • Q1 2025 actuals vs S&P Global consensus: revenue $632.0M vs $614.5M*; Primary EPS $0.49 vs $0.18*; EBITDA $106.1M vs $98.6M* — broad beats driven by Engineered Structures margin expansion, wind volume, Ameron accretion, and timing of AMP credit monetization (no Q1 loss) .
  • Street models may need to raise 2025 segment margins (Engineered Structures near ~18% with utility ~15% target and accretive wind/Ameron) and barge contribution given 1.7x book-to-bill and extended backlog into 2026 .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Engineered Structures is the core earnings engine in 2025; sustained margin accretion from wind ramp and Ameron plus improved utility mix/efficiency support upside to segment profitability .
  • Construction Products should improve sequentially as weather normalizes and the Northeast construction season ramps; pricing remains firm with mid-single-digit outlook .
  • Transportation Products is benefiting from tank barge demand and aging fleet replacement needs; backlog extends into 2026, providing visibility and margin stability .
  • Reaffirmed FY25 guidance and a clear deleveraging plan (to 2.0–2.5x) reduce balance sheet risk and support capital allocation flexibility into H2 2025 .
  • Watch steel price trajectory and ag tariff headlines: near-term noise, but mgmt expects steel pricing stabilization and sees dry barge orders reaccelerating as uncertainty abates .
  • Free cash flow should improve into the second half as working capital normalizes and AMP credits are monetized; CapEx remains disciplined at $145–$165M .
  • Dividend declared ($0.05/share) underscores confidence while maintaining focus on growth and deleveraging .