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Great Lakes Dredge & Dock CORP (GLDD)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered $195.2M revenue and $0.26 diluted EPS; EPS beat S&P Global consensus ($0.17*) while revenue missed ($201.3M*) as mix shifted and three dredges underwent regulatory dry docks .
  • Adjusted EBITDA was $39.3M with a 20.1% margin, reflecting improved utilization and a higher share of capital/coastal protection work; management expects 2025 to be the highest EBITDA year in company history by a large margin .
  • Backlog stood at $1,007.5M (dredging: $934.5M; offshore energy: $73.0M), with ~$193.5M in low bids/options pending; LNG (Port Arthur, Brownsville/Rio Grande, Woodside Louisiana) and coastal protection underpin visibility into 2026 .
  • Liquidity strengthened via revolver upsized to $430M and second lien payoff (~$6M annual interest savings); Q4 interest expense includes a ~$7.5M non-cash extinguishment, with Q1 run-rate near ~$3M .

What Went Well and What Went Wrong

  • What Went Well

    • Strong profitability: gross margin expanded to 22.4% (from 19.0% YoY) and operating income rose to $28.1M on better utilization and project performance .
    • High-quality backlog/mix: ~84–85% of revenue/backlog tied to capital/coastal protection projects, which carry higher margins; LNG deepening projects progressing; offshore energy backlog grew .
    • Management execution and financing: delivery of hopper dredge Amelia Island; revolver amended to $430M, 2L repaid, lowering weighted average interest to under 6% and extending maturity to 2030 .
    • Quote: “Great Lakes delivered another solid quarter... backlog stood at $934.5 million... providing revenue visibility... well into 2026.” — CEO Lasse Petterson .

  • What Went Wrong

    • Top-line miss vs consensus: revenue of $195.2M vs $201.3M* S&P Global; maintenance/coastal protection revenues were lower YoY .
    • Operational downtime: three dredges were in regulatory dry dock during Q3; Q4 will also see two hopper dredges in dry dock, impacting available capacity .
    • Higher tax expense with stronger results: income tax provision rose to $6.1M vs $3.2M YoY; GAAP interest includes a Q4 non-cash extinguishment charge (~$7.5M) .

Financial Results

MetricQ3 2024Q2 2025Q3 2025Q3 2025 Consensus
Revenue ($USD Millions)$191.2 $193.8 $195.2 $201.3*
Diluted EPS ($USD)$0.13 $0.14 $0.26 $0.17*
Gross Profit Margin %19.0% 18.9% 22.4% —
Operating Income ($USD Millions)$16.7 $17.1 $28.1 —
Adjusted EBITDA ($USD Millions)$27.0 $28.0 $39.3 —
Adjusted EBITDA Margin %—14.4% 20.1% —

Values marked with an asterisk (*) retrieved from S&P Global.

Quarterly trend (2025 YTD):

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$242.9 $193.8 $195.2
Diluted EPS ($USD)$0.49 $0.14 $0.26
Gross Profit Margin %28.6% 18.9% 22.4%
Operating Income ($USD Millions)$49.9 $17.1 $28.1
Adjusted EBITDA ($USD Millions)$60.1 $28.0 $39.3

Segment revenue:

Segment ($USD Millions)Q3 2024Q2 2025Q3 2025
Capital$108.7 $105.7 $126.3
Coastal Protection$43.9 $65.2 $39.8
Maintenance$38.6 $22.9 $23.0
Offshore Energy——$6.1
Total$191.2 $193.8 $195.2

KPIs and balance sheet/backlog:

KPIQ1 2025Q2 2025Q3 2025
Dredging Backlog ($USD Millions)$968.5 $960.4 $934.5
Offshore Energy Backlog ($USD Millions)$44.9 $52.4 $73.0
Total Backlog ($USD Millions)$1,013.5 $1,012.8 $1,007.5
Cash & Equivalents ($USD Millions)$11.3 $2.9 $12.7
Total Long-term Debt ($USD Millions)$413.9 $419.6 $415.3
Liquidity ($USD Millions)—$272.0 $284.1
Capital Expenditures ($USD Millions, quarterly)$11.4 $64.6 $32.8
Low Bids/Options Pending ($USD Millions)$265.3 $215.4 $193.5
Net Leverage Ratio (x)—2.7x 2.5x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CapEx incl. capitalized interest ($USD Millions)FY 2025$140–$160 $140–$150 Lowered/narrowed
Interest Expense ($USD Millions)Q4 2025—~$11 incl. ~$7.5 non-cash extinguishment New disclosure
Interest Expense run-rate ($USD Millions)Q1 2026—~$3 (post-Acadia; cash ≈ GAAP) New disclosure
Offshore Energy RevenueQ4 2025—Increase vs Q3 as Empire 1 armor layer begins Raised
Full-year EBITDA OutlookFY 2025—“Highest EBITDA year... by a large margin” Positive tone
Dry DockingsQ4 2025—Two hopper dredges in dry dock part of quarter Operating cadence

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Offshore Energy / AcadiaQ2: Acadia launched; fully booked 2026; bidding in Europe/Asia; WRDA/CR supportive . Q1: BOEM pause on Empire Wind I; diversified target markets (pipelines, cables) .Empire Wind I resumed; armor rock started with chartered vessel; Sunrise scope added; Acadia fully utilized in 2026; pursuing 2027 utilization .Strengthening and diversified
Government Shutdown / CRQ2: CR through Sep 30, 2025; normalized bid market ~ $2B . Q1: CR enacted March 15, 2025; WRDA 2024 signed .No interruption; payments timely; Corps mostly project-funded, ~3% appropriations-funded workforce .Resilient operations
LNG Deepening ProjectsQ2: NTP on Woodside Louisiana LNG; backlog includes Port Arthur & Brownsville/Rio Grande . Q1: Port Arthur & Brownsville ongoing .Backlog includes Port Arthur, Brownsville, Woodside Louisiana (start early 2026) .Stable; high-margin options expected
Financing / LiquidityQ2: Revolver upsized to $330M; liquidity $272M . Q1: Revolver amended to $330M .Revolver upsized to $430M; 2L repaid; WAC <6%; leverage 2.5x; liquidity ~$284M .Improved balance sheet
Bid Market Normalization & CoastalQ2: Normalized ~ $2B, coastal focus .2025 bid market ~ $1.8B, more coastal protection; next deepening phase in 2027 (NY/NJ, Tampa, New Haven, Baltimore) .Normalized; coastal-heavy

Management Commentary

  • “Our substantial dredging backlog stood at $934.5 million... with an additional $193.5 million in low bids and options pending... Capital and coastal protection projects account for over 84%...” — CEO Lasse Petterson .
  • “We upsized our revolving credit facility to $430 million and extended... 2030... repaid our $100 million second lien... reducing interest expense by almost $6 million per year.” — CFO Scott Kornblau .
  • “With the strong fourth quarter we're on pace to achieve, our expectation is that 2025 will be the highest EBITDA year in company history by a large margin.” — CFO Scott Kornblau .
  • “Empire Wind project has resumed... secured full utilization for the Acadia in 2026... diversifying to offshore energy services beyond wind.” — CEO Lasse Petterson .

Q&A Highlights

  • Interest expense cadence: ~$11M in Q4 including ~$7.5M non-cash extinguishment; Q1 run-rate ~ $3M, with cash interest converging to GAAP post-Acadia delivery; plan to pay down revolver over 2026 .
  • Offshore energy margins: initial project (~$6M revenue in Q3) delivered “really healthy margins,” expected to persist with Acadia online .
  • Coastal protection pipeline: numerous beach renourishment/coastal protection bids in Q4/Q1; diversified client base now ~50% private/~50% federal funding .
  • Government shutdown impact: payments and bidding continue; ~3% Corps workforce dependent on annual appropriations limits furloughs .
  • Q4 setup: very strong despite two hopper dredges in dry dock; environmental window work supports higher margins .

Estimates Context

  • Q3 2025 EPS beat consensus ($0.26 actual vs $0.17*), driven by improved utilization, project performance, and high-margin capital/coastal mix .
  • Q3 2025 revenue missed consensus ($195.2M actual vs $201.3M*), with lower coastal protection/maintenance vs prior year and dry-dock downtime; Q4 offshore energy expected to ramp .
    Values marked with an asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Mix-driven margin expansion and strong execution suggest positive estimate revisions for EBITDA/margins; Q4 set-up appears robust despite scheduled dry docks .
  • Financing actions reduce interest expense (~$6M/year), extend maturities, and support deleveraging in 2026—a tailwind to EPS/FCF .
  • Backlog quality (LNG deepening, coastal resilience) plus ~$193.5M low bids/options pending, provide visibility into 2026; watch for LNG options exercise (high-margin) .
  • Offshore energy ramp (Empire 1 armor rock, South Brooklyn Marine Terminal) continues in Q4; Acadia fully utilized in 2026 with ongoing 2027 commercialization efforts .
  • Government shutdown/CR risks appear contained for GLDD due to Corps funding mechanics; payments/bidding ongoing .
  • Near term trading catalysts: confirmation of strong Q4 margins, incremental offshore energy scope awards, LNG options exercise, and evidence of deleveraging trajectory .
  • Medium-term thesis: modernized fleet, diversified end-markets (offshore energy), improved capital structure, and normalized bid market position GLDD for sustained margin/FCF strength .