Executive Summary

Record quarter: revenues $736.9M (+11% YoY) and Adjusted EBITDA $154.2M (+37% YoY), with record Adjusted EBITDA margin of 20.9% (+390 bps YoY) .
Mixed vs consensus: Revenue slightly below Wall Street ($736.9M vs $754.2M*), while EPS beat ($1.27 vs $1.05*); Adjusted EBITDA exceeded consensus ($154.2M vs $151.9M*) .
Guidance tightened for FY2025: revenue $2.85–$2.95B (midpoint unchanged), Adjusted EBITDA $555–$585M (midpoint unchanged); tariffs expected to be immaterial .
Key catalysts: record backlog in Utility Structures ($450.0M) and healthy wind tower visibility ($598.6M backlog), plus $122M barge orders post-quarter, extending hopper backlog into 2026 .
Management emphasized portfolio transformation (Stavola accretion: +14% to consolidated revenue and +250 bps to margin) and deleveraging (Net Debt/Adj. EBITDA 2.8x, targeting 2.0–2.5x within three quarters) .

What Went Well and What Went Wrong

What Went Well

Construction Products delivered record performance: revenues $354.5M (+28% YoY) and Adjusted Segment EBITDA $100.4M (+44% YoY); Freight-Adjusted Segment EBITDA margin 31.0% (+300 bps YoY) .
Engineered Structures achieved record margin 18.7% (+350 bps YoY) on $293.0M revenue (+7% YoY), with record utility structures backlog ($450.0M) and higher wind tower volumes .
CEO on strategic progress: “record quarter… impact of recent strategic actions… expanded disclosures around key growth businesses” . CFO added confidence on pricing and aggregates unit profitability (ASP +8% to $17.83/ton; cash gross profit/ton +15% to $8.24) .

What Went Wrong

Organic Construction Products revenues declined 4% due to wet weather, lower freight revenue, and prior small divestitures; organic Adjusted Segment EBITDA down 6% .
Interest expense rose to $28.5M (+$17.1M YoY) from debt used to finance Stavola, pressuring GAAP EPS .
Wind tower backlog decreased to $598.6M (−23% from start of year) as deliveries progressed; management noted policy clarity helps inquiry activity but conversion timing remains a watch item .

Financial Results

Consolidated Results Across Periods

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Revenues ($M)	$664.7	$666.2	$632.0	$736.9
Diluted EPS (GAAP)	$0.93	$(0.16)	$0.48	$1.22
Adjusted Diluted EPS	$0.91	$0.46	$0.49	$1.27
Adjusted EBITDA ($M)	$112.7	$128.3	$109.9	$154.2
Adjusted EBITDA Margin (%)	17.0%	19.3%	17.4%	20.9%
Cash from Operations ($M)	$38.3	$248.2	$(0.7)	$61.2
Free Cash Flow ($M)	$(6.1)	$199.2	$(29.7)	$39.2

Q2 2025 Results vs Wall Street Consensus (S&P Global)

Metric	Consensus	Actual	Surprise
Revenue ($M)	$754.2*	$736.9	Miss ($17.3M)
Primary EPS ($)	$1.05*	$1.27	Beat (+$0.22)
EBITDA ($M)	$151.9*	$154.2 (Adj.)	Beat (+$2.3M)

Values marked with * retrieved from S&P Global Capital IQ. For EBITDA, company reports Adjusted EBITDA; consensus may reference EBITDA on a non-adjusted basis.

Segment Breakdown

Segment	Q2 2024 Revenue ($M)	Q2 2025 Revenue ($M)	Q2 2024 Adj. Segment EBITDA ($M)	Q2 2025 Adj. Segment EBITDA ($M)
Construction Products	$276.1	$354.5	$69.7	$100.4
Engineered Structures	$274.8	$293.0	$41.7	$54.8
Transportation Products	$113.8	$89.4	$16.7	$13.5

KPIs (Aggregates)

KPI	Q2 2024	Q2 2025
Shipments (tons, M)	8.4	8.9
Freight-Adjusted ASP ($/ton)	$16.45	$17.83
Adjusted Cash Gross Profit/ton ($)	$7.19	$8.24

Backlog Snapshot

Business	Dec 31, 2024 ($M)	Jun 30, 2025 ($M)
Utility & related structures	$414.0	$450.0
Wind towers	$776.8	$598.6
Inland barges	$280.1	$277.0

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Revenue	FY2025	$2.8B–$3.0B	$2.85B–$2.95B	Tightened range; midpoint unchanged
Adjusted EBITDA	FY2025	$545M–$595M	$555M–$585M	Tightened range; midpoint unchanged
Tariffs Impact	FY2025	Expected immaterial	Expected immaterial	Maintained
CapEx	FY2025	Top end reduced; prior not specified	$145M–$155M	Lowered top end by $10M
Net Debt/Adj. EBITDA Target	Next ~3 quarters	2.0–2.5x goal	2.0–2.5x goal; tracking to achieve	Maintained
Dividend	Next payment	$0.05/share declared May 14, 2025	$0.05/share declared Sep 11, 2025	Maintained

Earnings Call Themes & Trends

Topic	Q4 2024 (Two Quarters Ago)	Q1 2025 (Prior Quarter)	Q2 2025 (Current)	Trend
Portfolio transformation	Stavola and Ameron accretive; divested steel components	Reaffirmed 2025 guidance; margin expansion; weather headwinds in legacy	Record quarter; expanded disclosures; Stavola accretive to revenue (+14%) and margin (+250 bps)	Strengthening, accretion visible
Utility structures demand	Healthy order activity; backlog strong	Robust demand; operating improvements; backlog $1,094.1M combined	Record utility backlog $450.0M; larger poles trend; converting idle wind plant to transmission structures	Accelerating; capacity expansion
Wind towers policy clarity	Awaiting policy; backlog extends into 2025–2028	Solid 2025 visibility; awaiting Washington D.C. clarity	“One Big Beautiful Bill” clarity; inquiries up; three plants ~60% utilization; backlog through 2028 at NM facility	Improving clarity; inquiries rising
Construction aggregates	Pricing strong; organic volume mixed	Weather impacted volumes; pricing discipline; freight-adjusted metrics disclosed	Wet weather headwind; ASP +8%; GP/ton +15%; organic volumes expected to improve 2H	Recovering volumes; pricing strong
Barge replacement cycle	Building demand; backlog ~$280M	Book-to-bill 1.7; backlog $333.6M	Bonus depreciation tailwind; $122M orders post-Q2; backlog extends into 2026	Strengthening; visibility improving
Tariffs/macro	Pro-growth agenda; uncertainties noted	Tariffs immaterial in guidance	Tariffs expected immaterial; guidance midpoint unchanged	Stable

Management Commentary

CEO: “This was a record quarter… highlights the impact of recent strategic actions… enhance our growth businesses, reduce our cyclicality, and expand margin.”
CEO on Stavola: “increased consolidated revenues by 14% and consolidated Adjusted EBITDA margin by 250 basis points… 13% increase in gross profit for our aggregates business and 15% improvement in Aggregates Adjusted Cash Gross Profit per Ton.”
CFO on aggregates: “freight adjusted revenues increased 15% and adjusted cash gross profit increased 21%… ASP per ton increased 8% to 17.83 and adjusted cash gross profit per ton increased 15% to $8.24.”
CEO on utility structures: “record second quarter backlog… load growth… significant additions to power generation capacity… needs to be connected to the grid.”
CEO on leverage: “Net Debt to Adjusted EBITDA of 2.8x… on track to reach our target leverage range of 2.0–2.5x within the next three quarters.”

Q&A Highlights

Guidance composition: Management maintained midpoint; expects ~12% organic EBITDA growth with weather normalizing in 2H; outperformance in utility structures offset 1H construction softness .
Aggregates pricing: Year-to-date ASP up ~10%; raised guidance to high-single-digit ASP growth; broad-based pricing strength including New York/New Jersey MSA .
Wind tower capacity and orders: Three plants operating (~60% capacity, NM higher); inquiries up with policy clarity; working to fill 2026 capacity; one idle wind plant converting to transmission structures .
Barge demand and tax: Bonus depreciation tailwind; $122M orders since quarter end; hopper backlog into 2026; tank inquiries into 2027 .
Regional multifamily: Improvement in New Jersey and Texas; Gulf Coast weaker; NAHB mid-single-digit multifamily growth in 2026 cited by management .

Estimates Context

Q2 2025: Revenue missed consensus ($736.9M vs $754.2M*), driven by lower organic volumes from wet weather and reduced freight revenue, while EPS beat ($1.27 vs $1.05*) on margin expansion across Engineered Structures and Construction Products and Stavola accretion .
Q1 2025: Revenue beat ($632.0M vs $614.5M*) and EPS beat ($0.49 vs $0.18*), reflecting wind tower volume ramp and Ameron accretion; construction impacted by seasonality/weather .

Values marked with * retrieved from S&P Global Capital IQ.

Key Takeaways for Investors

Margin-led story: Portfolio shift toward Construction Materials and Utility Structures is expanding margins; record Adjusted EBITDA margin 20.9% supports EPS durability even with weather volatility .
Utility transmission supercycle: Record backlog, larger pole sizes, and conversion of idle plant to transmission structures point to multi-year growth and optionality .
Wind towers poised for order momentum: Policy clarity lifting inquiries; NM facility backlog extends to 2028; watch contract timing to shore up 2026 visibility .
Aggregates resilience: Pricing discipline driving unit profitability; expect 2H organic volume recovery as weather normalizes; Stavola accretive footprint in NY/NJ .
Barge cycle strengthening: Replacement demand and tax incentives underpin orders; backlog extending into 2026; potential capacity expansion if demand accelerates .
Financial discipline: Tightened guidance with unchanged midpoint, deleveraging track to 2.0–2.5x, and lower CapEx ceiling ($145–$155M) improve FCF trajectory .
Trading implications: Near-term upside skewed to margins and backlog-driven visibility; monitor weather normalization (Q3/Q4), wind order conversions, and ongoing pricing strength in aggregates for positive revisions.

Arcosa, Inc. (ACA)·Q2 2025 Earnings Summary