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Great Lakes Dredge & Dock CORP (GLDD)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a material beat versus consensus, with revenue $242.9M and diluted EPS $0.49, driven by high asset utilization and strong execution on capital and coastal protection projects; Adjusted EBITDA was $60.1M with a 24.7% margin .
  • Backlog stood at ~$1.01B (including $44.9M Offshore Energy) with an additional ~$265.3M in low bids/options, providing visibility into 2026; mix skewed 95% to higher-margin capital/coastal protection work .
  • Liquidity enhanced via upsized revolver to $330M (from $300M) post-quarter; $50M share repurchase program authorized in March with 1.2M shares bought for $10.4M through April 30, 2025—signaling confidence in outlook .
  • Management flagged Q2 as the likely low point for revenue/margins due to four dry docks, but still expects full-year 2025 results to exceed 2024, with ~60% of backlog converting to revenue in FY25 .
  • Near-term stock catalysts: continued backlog conversion and LNG awards (Woodside Louisiana LNG notice-to-proceed; ongoing Port Arthur/Rio Grande projects), plus buyback deployment; watch offshore wind (Empire Wind I temporary pause) and Q2 dry dock headwinds for volatility cues .

What Went Well and What Went Wrong

What Went Well

  • Exceptional operational execution with all active dredges working; revenue $242.9M, net income $33.4M, Adjusted EBITDA $60.1M; CEO: “strong project performance and high utilization” .
  • Margin expansion: gross margin rose to 28.6% (from 22.9% YoY) on improved utilization and project mix; EBITDA margin reached 24.7% .
  • Backlog quality and LNG momentum: backlog ~$1.01B with 95% capital/coastal; post-quarter Woodside Louisiana LNG received NTP, adding to visibility alongside Port Arthur and Rio Grande LNG projects; CFO: “our team is killing it on both projects” .

What Went Wrong

  • Offshore wind uncertainty: BOEM issued a temporary pause on Equinor’s Empire Wind I; management highlighted contract termination protections and international diversification for Acadia to mitigate risk .
  • Dry dock headwinds: 2025 is a heavier regulatory dry dock year; Q2 revenue and margins expected to be the lowest of the year; dry docks typically ~60 days and $3–6M each plus lost revenue .
  • G&A higher due to incentive compensation aligned with stronger results, modestly offsetting operating leverage; Q1 operating income up to $49.9M from $31.5M despite higher G&A .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$191.2 $202.8 $242.9
Gross Profit ($USD Millions)$36.2 $48.9 $69.5
Gross Margin (%)19.0% 24.1% 28.6%
Operating Income ($USD Millions)$16.7 $30.0 $49.9
Net Income ($USD Millions)$8.9 $19.7 $33.4
Diluted EPS ($USD)$0.13 $0.29 $0.49
Adjusted EBITDA ($USD Millions)$27.0 $40.2 $60.1
Adjusted EBITDA Margin (%)14.1% 20.0% 24.7%
Segment Revenues ($USD Millions)Q1 2024Q1 2025
Capital$69.9 $91.1
Coastal Protection$63.9 $120.3
Maintenance$64.8 $31.4
Total$198.7 $242.9
KPIs and Backlog ($USD Millions)Q3 2024 (as of Sep 30)Q4 2024 (as of Dec 31)Q1 2025 (as of Mar 31)
Dredging Backlog$1,213.1 $1,194.2 $968.5
Offshore Energy Backlog$44.9 $44.9 $44.9
Total Backlog$1,213.1 (excl. offshore in table) $1,239.1 $1,013.5
Low Bids & Options Pending Award$465.0 $282.1 $265.3
Cash & Equivalents$12.0 $10.2 $11.3
Total Long-term Debt$412.5 $448.2 $413.9
Total Equity$425.4 $448.9 $479.9
Capital Expenditure (Quarter)$38.4 N/A$11.4
Results vs Estimates (S&P Global)Q1 2025 ConsensusQ1 2025 ActualSurprise
Revenue ($USD Millions)$206.7*$242.9 +$36.2; Bold beat
Diluted EPS ($USD)$0.2625*$0.49 +$0.2275; Bold beat

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CapEx ($)FY 2025$140–$160M $140–$160M; unchanged Maintained
Backlog Conversion to RevenueFY 2025~60% ~60% reiterated Maintained
Revenue OutlookFY 2025Revenue higher than 2024 Full-year 2025 to exceed 2024 Maintained
Quarterly OutlookQ2 2025Q1 expected highest Q2 expected lowest revenue and margins Clarified timing
Revolving Credit FacilityAs of May 2, 2025$300M (12/31/2024) Upsized to $330M Raised
Share RepurchaseMar 14, 2025–Mar 14, 2026Authorized up to $50M 1.2M shares repurchased; $10.4M spend through Apr 30 Implemented
Tax rate, OI&E, DividendFY 2025Not providedNot providedN/A

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
LNG projects/backlogPort Arthur and Rio Grande LNG commenced Q3; robust bid market and backlog entering 2025 Woodside Louisiana LNG NTP post-quarter; strong performance on existing LNG projects; one wraps end-2025, Rio Grande into 2026 Strengthening momentum
Offshore wind / AcadiaReservations secured; delivery later 2025; renaming to Offshore Energy; contracts for Empire Wind 1 and Sunrise Wind Empire Wind I temporary pause; termination protections; pursuing international and subsea infrastructure work; Acadia delivery targeted around late 2025/early 2026 Broadened strategy; near-term uncertainty mitigated
Policy/funding (Corps/WRDA)Record appropriations; WRDA process advancing WRDA 2024 signed Jan 4; Corps FY25 under continuing resolution through Sep 30 supporting sustained funding Supportive funding sustained
Dry docks/utilizationExpedited dry dock impacted Q3 margins; 2025 to be heavier dry dock year Four vessels in Q2; Q2 lowest quarter for revenue/margins; utilization otherwise strong Temporary Q2 headwind
Tariffs/macro exposureGeneral risk cautions in releases CFO: tariff impacts immaterial; domestic sourcing limits exposure Minimal impact
Capital allocation/liquiditySecond-lien term loan; rating upgrade; entering 2025 with >$300M liquidity Revolver upsized to $330M; $50M buyback authorized and initiated Increasing flexibility and returns

Management Commentary

  • CEO: “Great Lakes had an great first quarter, with strong project performance and high utilization… backlog stood at approximately $1 billion… 95% of our backlog [is] capital and coastal protection projects” .
  • CFO: “Adjusted EBITDA and adjusted EBITDA margin of $60.1 million and 24.7%, respectively… Q2 should be the lowest on revenue and on margins, and then it will look a lot more normalized in the second half of the year” .
  • CEO on LNG: “Notice to proceed for dredging work on the Woodside Louisiana LNG project… included in our second quarter 2025 backlog… Dredging is expected to commence early 2026” .
  • CFO on liquidity: “Upsizing our revolver by $30 million to $330 million, further enhancing our liquidity, which now stands above $300 million” .
  • CEO on diversification: “We proactively expanded… Acadia to include oil and gas pipeline and power and telecommunications cable protection, as well as international offshore wind” .

Q&A Highlights

  • Empire Wind I pause: Management emphasized termination protections; worst-case cancellation would trigger fees; actively exploring alternative work for Acadia internationally if needed .
  • Bid market and awards: Q2/Q3 expected to see coastal protection projects bid out despite continuing resolution; maintenance market strong; LNG options for Woodside to be added in Q2 backlog .
  • Dry dock impact: Q2 margins and revenue to trough; typical dry dock ~60 days and $3–6M cost plus opportunity cost from pulling vessels off jobs .
  • Tariff exposure: Minimal impact due to U.S. sourcing; most newbuild equipment already procured domestically .
  • Backlog burn and margins: ~60% of backlog to burn in 2025; despite dry docks, revenue and margins expected to be strong vs 2024 .

Estimates Context

  • Q1 2025 results beat Wall Street consensus materially: revenue $242.9M vs $206.7M*, EPS $0.49 vs $0.2625*—driven by mix of capital/coastal protection and strong project execution .
  • Street may need to lift full-year estimates given management’s outlook (FY25 to exceed 2024 and ~60% backlog conversion), while factoring in Q2 dry dock trough .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Strong beat and margin expansion underscore execution and backlog quality; capital/coastal mix supports sustained profitability .
  • Expect Q2 softness from dry docks; setup for second-half normalization—tactically, volatility around Q2 print may offer entry/add opportunities .
  • LNG is a key driver: Woodside NTP and ongoing Port Arthur/Rio Grande projects add multi-quarter revenue visibility at attractive margins .
  • Offshore wind headline risk persists (Empire Wind I pause), but contract protections and international subsea infrastructure markets reduce downside for Acadia utilization .
  • Balance sheet/liquidity improved (revolver upsized; >$300M liquidity), enabling continued fleet modernization and opportunistic buybacks; $10.4M repurchased to date .
  • Policy backdrop supportive (WRDA 2024; sustained Corps funding under CR), underpinning a robust coastal protection and maintenance pipeline into 2026 .
  • Near-term catalysts: conversion of low bids/options, LNG awards, buyback activity pace; monitor Q2 margins and any updates on offshore wind project timelines .