Executive Summary

Q1 revenue rose 4% year-over-year to $700 million; adjusted diluted EPS was $0.01 versus consensus of $(0.46), while GAAP diluted EPS was $(0.77). CAP reached a record $5.7 billion, up $444 million sequentially; guidance for FY25 was maintained. [+$700m revenue, $0.01 adj EPS, $(0.77) GAAP EPS, CAP $5.7B, guidance unchanged]
Construction segment margins expanded sharply (gross margin 13.9% vs. 9.5% LY) on improved execution and higher-quality backlog; Materials improved cash gross profit but remained at a modest gross loss due to depreciation and amortization.
SG&A spiked to 16.6% of revenue on $18 million higher stock-based compensation year-over-year ($32.2 million total SBC in Q1), masking underlying operational improvements; adjusted EBITDA doubled year-over-year to $28 million.
Management reiterated confidence in hitting FY25 revenue ($4.2–$4.4B) and adjusted EBITDA margin (11–12%) guidance, citing robust public funding (IIJA), record CAP quality, and a healthy M&A pipeline (target 2–3 deals in 2025).

What Went Well and What Went Wrong

What Went Well

Record CAP of $5.7 billion (+$444 million sequential) positions the company for revenue growth and margin expansion; “we are well positioned to meet our guidance for 2025 as well as our 2027 financial targets.”
Construction segment delivered strong margin expansion (gross profit +$29 million YoY; margin 13.9%) driven by execution and a higher-quality project portfolio.
Materials segment cash gross profit and margin improved (cash GP +$2.6 million YoY; 12.3%), supported by higher aggregates volumes and pricing and acquisitions; management highlighted progress in aggregate margin improvement.

Selected quotes:

“Bidding opportunities have consistently increased…record CAP of $5.7 billion…we are well positioned to meet our guidance for 2025 as well as our 2027 financial targets.” — CEO Kyle Larkin
“Construction segment gross profit improved $29 million to $85 million with a gross profit margin of 14%.” — CFO Staci Woolsey
“I am particularly proud of the progress our teams made in raising aggregate margins.” — CEO Kyle Larkin

What Went Wrong

GAAP net loss widened to $(33.7) million (diluted EPS $(0.77)) due to higher SG&A, including $32.2 million in stock-based compensation and $9.4 million in “other costs, net.”
Revenue missed consensus modestly ($699.5 million actual vs. ~$706.2 million estimate*) amid wet March weather slowing progression and revenue recognition in Western markets.
Reported EBITDA was negative on a GAAP basis despite adjusted EBITDA improvement, underscoring sensitivity to non-GAAP adjustments.

Financial Results

Quarterly Trend (QoQ)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$1,275.5	$977.3	$699.5
GAAP Diluted EPS ($)	$1.57	$0.84	$(0.77)
Adjusted Diluted EPS ($)	$2.05	$1.23	$0.01
Gross Profit ($USD Millions)	$202.9	$150.8	$83.8
Adjusted EBITDA ($USD Millions)	$149.3	$108.5	$28.1
SG&A ($USD Millions)	$91.7	$84.5	$115.9
SG&A (% of Revenue)	7.2%	8.6%	16.6%
CAP ($USD Billions)	$5.6	$5.3	$5.7

Year-over-Year (Q1)

Metric	Q1 2024	Q1 2025
Revenue ($USD Millions)	$672.3	$699.5
GAAP Diluted EPS ($)	$(0.70)	$(0.77)
Adjusted Diluted EPS ($)	$(0.21)	$0.01
Gross Profit ($USD Millions)	$54.3	$83.8
Adjusted EBITDA ($USD Millions)	$14.1	$28.1

Segment Breakdown (Q1)

Metric	Q1 2024	Q1 2025
Construction Revenue ($USD Millions)	$595.2	$614.6
Construction Gross Profit ($USD Millions)	$56.8	$85.4
Construction Gross Margin (%)	9.5%	13.9%
Materials Revenue ($USD Millions)	$77.1	$84.9
Materials Gross Profit (Loss) ($USD Millions)	$(2.5)	$(1.6)
Materials Cash Gross Profit ($USD Millions)	$7.9	$10.5
Materials Cash Gross Margin (%)	10.2%	12.3%

KPIs – Materials Product Lines (Q1)

KPI	Q1 2024	Q1 2025
Aggregates Sales Tons (000s)	3,228	3,768
Aggregates ASP per Ton ($)	$14.99	$15.64
Aggregates Cash Gross Profit ($USD Millions)	$5.0	$12.1
Aggregates Cash GM (%)	10.4%	20.5%
Asphalt Sales Tons (000s)	549	733
Asphalt ASP per Ton ($)	$86.40	$83.23
Asphalt Cash Gross Profit ($USD Millions)	$(1.4)	$0.9
Asphalt Cash GM (%)	(2.9)%	1.4%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$4.2–$4.4B	$4.2–$4.4B	Maintained
Adjusted EBITDA Margin	FY 2025	11.0%–12.0%	11.0%–12.0%	Maintained
SG&A (% of Revenue)	FY 2025	~9.0% incl. ~$45M SBC	~9.0% incl. ~$45M SBC	Maintained
Effective Tax Rate (Adjusted NI)	FY 2025	Mid-20s	Mid-20s	Maintained
Capital Expenditures	FY 2025	$140–$160M	$140–$160M	Maintained
Operating Cash Flow Target	FY 2025	9% of revenue	“On track” for 9% of revenue	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 & Q4 2024)	Current Period (Q1 2025)	Trend
CAP & Backlog Quality	CAP $5.6B; focus on best-value projects and home markets; expect margin expansion into 2025	Record CAP $5.7B; strong bid environment; winning higher-margin work; CAP expected to keep growing	Improving
IIJA/Public Funding	IIJA tailwinds to extend beyond 2026; strong state budgets (e.g., CA)	IIJA continues to fuel opportunities; no delays experienced; benefits to extend well beyond 2026	Supportive
Materials Margin & Pricing	Price increases (agg ~10%, asphalt ~5%); cash GM rising; reorganization benefits	High single-digit agg price increases; cash GM up; aggregate margins improving; product-level disclosures added	Improving
M&A Strategy	Platform built in Southeast; target 1–2 deals/year; larger deals possible with discipline	Target 2–3 deals in 2025; pipeline active; focus on vertically integrated assets	Active
Tariffs/Inflation	Inflation ~3%; derisked portfolio to mitigate cost swings	Tariffs have not significantly impacted results; pre-authorize capex to mitigate equipment/parts increases	Managed
Federal/Defense Work	Federal division strong; Guam, Texas projects; CAP adds expected H1’25	New Guam BESS JV ($97M) into Q1 CAP; Alaska CMGC phase ($54M) awarded in May	Growing
Cash Flow Discipline	FY24 op cash flow 11%; target 9% in FY25; FCF ~50% of EBITDA	Q1 op cash flow $4M; on track for 9% for year; cash + marketable securities $513M	On track

Management Commentary

“We are off to a great start in 2025…record CAP of $5.7 billion…we are well positioned to meet our guidance for 2025 as well as our 2027 financial targets.” — Kyle Larkin, CEO
“Construction segment gross profit improved $29 million to $85 million with a gross profit margin of 14%…largely due to improved execution and performance across our higher-quality project portfolio.” — Staci Woolsey, CFO
“Tariffs…to date, they have not significantly impacted our results or our strategy.” — Kyle Larkin, CEO
“We expect our cash gross profit margins in Materials segment to go up over 3% [300 bps] in 2025.” — Kyle Larkin, CEO

Q&A Highlights

CAP trajectory and mix: Management expects CAP to continue increasing, with strong public market support; mix of bid-build (faster burn) and best value (longer burn) seen as healthy.
Construction margins: Margin expansion attributed to execution and improved CAP; expectation of continued improvement through 2025.
Materials revenue share and growth: Materials revenue ~14% of Construction in Q1; expectation to run ~17–18% over time as vertical integration expands.
Federal business strength: Guam and Texas highlighted; Southeast acquisitions performing well with strong leadership and integration success.
Tariffs and capex: Expect some equipment/parts cost increases; company pre-authorizes capex early to mitigate.
Demand cadence: Jan–Feb strong; wet March slowed projects; April appeared strong.

Estimates Context

How results compared to Wall Street consensus (S&P Global):

Adjusted EPS: Q1 2025 $0.01 vs $(0.455) consensus* — bold beat.
Revenue: Q1 2025 $699.5M vs $706.2M consensus* — slight miss.
Prior quarters for context: Q4 2024 adj EPS $1.23 vs $1.235 consensus* (in line); Q3 2024 adj EPS $2.05 vs $2.465 consensus* (miss on EPS; revenue slightly below)*.

Metric	Q3 2024 (Est vs Actual)	Q4 2024 (Est vs Actual)	Q1 2025 (Est vs Actual)
Primary EPS Consensus Mean ($)	2.465 vs 2.05*	1.235 vs 1.23*	(0.455) vs 0.01*
Revenue Consensus Mean ($USD)	1,286.8M vs 1,275.5M*	949.9M vs 977.3M*	706.2M vs 699.5M*
EBITDA Consensus Mean ($USD)	181.7M vs 145.1M*	119.9M vs 92.7M*	12.1M vs (1.9)M*

Values retrieved from S&P Global.
Note: Granite presents adjusted EPS; comparisons above use adjusted EPS actuals consistent with company-reported non-GAAP. [Q3 & Q4 actuals per press releases; Q1 actual per 8‑K]

Key Takeaways for Investors

Construction margin expansion is the core driver; with record CAP quality and improved execution, expect continued margin improvement into Q2/Q3 — supportive of the 11–12% adjusted EBITDA margin target.
Materials cash margin is inflecting (aggregates ASP +$0.65/ton; cash GM up 210 bps), with management targeting further 300 bps expansion in 2025 — a medium-term lever for consolidated margins.
Reported GAAP loss stems largely from elevated SBC and “other costs”; adjusted results show operational improvement. Watch SG&A normalization and SBC cadence across 2025.
Strong public funding (IIJA) and expanding federal work (Guam, Alaska) underpin backlog visibility; continued CAP growth is a key stock catalyst.
Q1 print: EPS beat, revenue slight miss versus consensus*; trajectory and guidance reaffirmation should support estimate stability, with potential upward revisions if CAP converts to faster burn in Q2–Q3.
Active M&A pipeline (2–3 deals in 2025) focused on vertically integrated materials assets; balance sheet and cash generation provide optionality.
Seasonality and weather remain near-term variables; management indicated April was strong and expects heavier revenue/cash flow in Q2–Q3.

Additional Q1 2025 Press Releases (Context)

JV awarded ~$97M battery energy storage project in Guam (included in Q1 CAP).
Caltrans ~$66M Caldwell Avenue interchange reconstruction (included in Q1 CAP).
Fort Bliss rail yard ~$71M (construction began Feb 2025; prior CAP).
Alaska Parks Highway realignment CMGC Phase 1 ~$54M (awarded May 20).

Non-GAAP Adjustments and Impact

Adjusted net income reconciliation: After-tax adjusting items of $33.9 million (SBC, transaction costs, other costs) turned GAAP net loss of $(33.7) million into adjusted net income of $0.2 million (adjusted diluted EPS $0.01).
Adjusted EBITDA rose to $28.1 million (vs. $14.1 million LY), while GAAP EBITDA was negative due to SBC and “other costs”; management emphasizes adjusted metrics for operating performance.

Why Metrics Moved

Margin expansion in Construction tied to higher-quality backlog and execution; wet March tempered revenue burn but did not derail margins.
Materials cash margin gains driven by pricing (aggregates high-single-digit increases), volumes, and acquisitions; depreciation from investments keeps GAAP gross profit muted.
SG&A uptick primarily due to increased stock-based compensation aligned with performance and share appreciation.

* Values retrieved from S&P Global

GRANITE CONSTRUCTION INC (GVA)·Q1 2025 Earnings Summary