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Great Lakes Dredge & Dock CORP (GLDD)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $193.8 million, diluted EPS $0.14, adjusted EBITDA $28.0 million, and backlog ~$1.013 billion; results were achieved despite four dredges in regulatory drydock and higher drydocking costs .
  • Results beat Wall Street consensus: Revenue $193.8mm vs $177.7mm*, EPS $0.14 vs $0.093*, and EBITDA $28.0mm vs $24.6mm*, reflecting strong project execution and utilization; capital/coastal protection projects drove margins (88% of Q2 revenue) . Values retrieved from S&P Global*.
  • Liquidity strengthened via upsized revolver to $330mm and cash/liquidity of $2.9mm/$272mm; share repurchases reached 1.3mm shares for $11.6mm as of June 30, enhancing per‑share metrics .
  • Management guided Q3 EBITDA to be higher than Q2 and raised full‑year expectations to “highest in company history” for both revenue and net income, supported by a robust backlog and newbuild progress (Amelia Island near delivery; Acadia launched, fully booked for 2026) .
  • Stock reaction catalysts: continued LNG award momentum (Woodside Louisiana LNG added to backlog), WRDA 2024 support, and offshore energy diversification for Acadia; bidding outlook normalizes near $2B with coastal protection focus .

What Went Well and What Went Wrong

What Went Well

  • “Great Lakes delivered a solid second quarter, driven by strong project execution and high equipment utilization.” CEO highlighted revenue $193.8mm, net income $9.7mm, adjusted EBITDA $28.0mm, and ~$1.0B backlog with $215.4mm low bids/options pending .
  • Mix shift supported margins: CFO noted 88% of Q2 revenue came from capital/coastal protection projects, driving gross margin to 18.9% despite drydock costs .
  • Strategic liquidity and capital return: Revolver upsized to $330mm; buybacks totaled 1.3mm shares/$11.6mm YTD by 6/30; management expects Q3 EBITDA > Q2 and record 2025 revenue/net income .

What Went Wrong

  • Drydock headwinds: four dredges in regulatory drydock pressured revenue/margins, with drydock costs and lost revenue noted; Q2 margins were the low point of the year .
  • Backlog composition down from year‑end: total backlog declined to ~$1.013B at 6/30 from ~$1.239B at 12/31 amid strong conversion; coastal protection backlog decreased vs year‑end .
  • Offshore wind uncertainty persists: while Empire Wind I resumed and 2026 utilization for Acadia is secured, management continues to diversify internationally given potential U.S. delays; 2027 work likely outside U.S. .

Financial Results

Consolidated Results (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$202.774 $242.865 $193.755
Diluted EPS ($)$0.29 $0.49 $0.14
Gross Margin (%)24.1% 28.6% 18.9%
Operating Income ($USD Millions)$30.047 $49.945 $17.087
Adjusted EBITDA ($USD Millions)$40.236 $60.108 $27.977
Adjusted EBITDA Margin (%)20.0% 24.7% 14.4%

Q2 2025 vs Prior Year (Q2 2024)

MetricQ2 2024Q2 2025YoY Change
Revenue ($USD Millions)$170.086 $193.755 +$23.669
Gross Profit ($USD Millions)$29.840 $36.566 +$6.726
Gross Margin (%)17.5% 18.9% +140 bps
Operating Income ($USD Millions)$14.585 $17.087 +$2.502
Net Income ($USD Millions)$7.673 $9.695 +$2.022

Segment Revenue Mix (oldest → newest)

Segment ($USD Millions)Q4 2024Q1 2025Q2 2025
Capital$98.756 $91.120 $105.674
Coastal Protection$75.326 $120.302 $65.227
Maintenance$28.140 $31.443 $22.854
Total$202.774 $242.865 $193.755

KPIs and Balance Sheet Snapshot

KPI ($USD Millions unless noted)12/31/20243/31/20256/30/2025
Total Backlog$1,239.144 $1,013.472 $1,012.844
Dredging Backlog$1,194.199 $968.527 $960.413
Offshore Energy Backlog$44.945 $44.945 $52.431
Cash and Cash Equivalents$10.216 $11.336 $2.925
Total Long‑Term Debt$448.216 $413.918 $419.619
Total Equity$448.910 $479.944 $481.869
Liquidityn/a>$300 $272
Net Leverage (TTM, x)n/a2.7x 2.7x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CapEx (incl. capitalized interest)FY 2025$140–$160 $140–$160 Maintained
EBITDAQ3 2025 vs Q2 2025n/aQ3 EBITDA higher than Q2 Newly provided directional
Revenue & Net IncomeFY 2025Revenue higher than 2024 Highest in company history for both Raised
Backlog ConversionFY 2025~60% of backlog to revenue Not updated in Q2 callMaintained (implied)
Drydock ScheduleFY 20257 drydocks; majority Q2–Q3 3 vessels in Q3; ~2 in Q4; 2026 lower than average Updated cadence; 2026 lower
Liquidity (Revolver)Current$300 $330 (upsized) Raised
Cash Flow OutlookFY 2026Cash flow positive starting 2026 Cash flow positive starting 2026 Maintained
Share RepurchaseProgram$50 authorized 1.3mm shares, $11.6 spent by 6/30 Executed (status)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Offshore Energy (Acadia)Contracts for Empire Wind I & Sunrise Wind; expanded target markets (international wind, subsea protection) Acadia launched from drydock; fully utilized in 2026; bidding for 2027+ likely in Europe/Asia Execution progressing; international pivot accelerating
LNG Project MomentumPort Arthur LNG & Rio Grande LNG ongoing; visibility to more LNG Woodside Louisiana LNG NTP added to backlog; options pending; start early 2026 Strengthening
Bid Market & WRDA/FundingRecord 2024 bid market; WRDA 2024 signed; normalized 2025 volume expected 2025 bid market ~$2B; coastal protection focus; WRDA continues to support large projects; backlog provides visibility into 2026 Normalizing; coastal heavy
Drydock & Utilization2025 heavy drydock year; Q2 most impacted Q3: three vessels in dock; Q4: two; Amelia Island to boost utilization Impact moderating into H2
Capital AllocationPlan to delever post newbuild; buyback opportunistic Preference shifts to delevering; buyback program remains opportunistic Discipline maintained
Tariffs/MacroMinimal impact; US sourcing mitigates No material change indicated Stable

Management Commentary

  • CEO: “We ended the quarter with revenue of $193.8 million, net income of $9.7 million, and adjusted EBITDA of $28.0 million… backlog stood at approximately $1.0 billion… Capital and coastal protection projects account for 93% of our dredging backlog, which typically yield higher margins.”
  • CFO: “Adjusted EBITDA and adjusted EBITDA margin of $28.0 million and 14.4% respectively… 88% of our second quarter revenue [from] capital and coastal protection projects… expect to see third quarter EBITDA higher than the second quarter.”
  • CEO: “Acadia… expected to immediately commence operations, first on Equinor’s Empire Wind I… then Orsted’s Sunrise Wind… which will provide full utilization for the vessel for 2026.”
  • CEO: “Our newest hopper dredge, the Amelia Island, expected to be delivered within the next few weeks and plans to immediately go to work.”

Q&A Highlights

  • Award cadence and backlog: Company did not bid on >50% of projects due to limited availability; normalized bid market playing out, with next deepening wave likely in ~18 months .
  • Acadia deployment mix: 2027 most likely in Europe; bidding active across offshore wind and subsea asset protection; lead times internationally ~≤1 year from award to execution .
  • Capital allocation: Focus returns to deleveraging post newbuild; buybacks remain opportunistic if valuation disconnects; revolver upsized partly to support letters of credit tied to LNG and offshore energy projects (~$60mm LCs outstanding) .
  • Drydock cadence/cash flow: Q3 three drydocks; Q4 two; 2026 lower than average; operating cash flow ~“60ish” in Q2; H2 cash flow likely flattish with CapEx finishing Amelia and continuing Acadia .
  • LNG pipeline: Three active projects (incl. Woodside Louisiana LNG) with strong performance; additional U.S. LNG projects advancing; largest Rio Grande extends into 2026 .

Estimates Context

Q2 2025 Actual vs S&P Global Consensus

MetricConsensus*ActualBeat/(Miss)*
Revenue ($USD Millions)$177.700*$193.755 +$16.055*
Diluted EPS ($)$0.0925*$0.14 +$0.0475*
Adjusted EBITDA ($USD Millions)$24.625*$27.977 +$3.352*

Values retrieved from S&P Global*.

Consensus breadth: 4 estimates for EPS and revenue in Q2 2025*.
Drivers of beat: Higher capital/coastal mix, improved utilization/project performance, partially offset by higher drydocking costs .

Key Takeaways for Investors

  • Execution and mix continue to drive beats: Q2 topped consensus across revenue, EPS, and EBITDA, with 88% revenue from higher‑margin capital/coastal protection projects .
  • Near‑term setup is constructive: Management expects Q3 EBITDA > Q2; Amelia Island delivery enhances utilization; drydock headwinds moderate in H2 .
  • Full‑year bar raised: Company now targets record 2025 revenue and net income, supported by robust backlog and LNG additions (Woodside NTP) .
  • Liquidity and risk posture improved: Revolver upsized to $330mm; letters of credit support LNG/offshore energy; buybacks opportunistic but deleveraging prioritized .
  • Offshore energy diversification reduces policy risk: Acadia fully utilized in 2026; bidding for 2027+ in Europe/Asia across wind and subsea protection; Empire Wind I resumed .
  • Policy tailwinds intact: WRDA 2024 authorizations, ongoing Corps funding under CR, and strong coastal protection pipeline underpin bid market and backlog conversion .
  • Watch catalysts: Third‑quarter performance vs guide, LNG award flow, Acadia contract wins for 2027+, and coastal protection bid outcomes to extend 2026 visibility .