Executive Summary

Solid quarter with margin outperformance and record CAP, offset by a top-line miss vs Street. Q3 revenue rose 12% y/y to $1.43B, but trailed S&P consensus $1.48B; adjusted EPS of $2.70 beat consensus $2.50 on strong Materials margins and operating execution . Revenue/EPS vs estimates from S&P Global: $1.48B*, $2.50*.
Record CAP climbed $273M sequentially to $6.3B, positioning for accelerated revenue in Q4 and into 2026; management called the market “the strongest … in my career” and sees ~8% organic growth into 2026 .
Guidance: FY25 revenue range narrowed to $4.35–$4.45B (from $4.35–$4.55B) on project timing, but adjusted EBITDA margin raised to 11.5%–12.5% (from 11.25%–12.25%); capex trimmed to ~$130M (~3% of revenue) .
Catalysts: margin guidance raise and record CAP are constructive; revenue shortfall vs consensus and narrowed revenue guide may pressure near-term sentiment, but Street likely revises margin estimates higher given outperformance and acquisition synergy traction .

What Went Well and What Went Wrong

What Went Well
- Materials segment delivered exceptional leverage: revenue +39% y/y to $271M, gross profit +111% y/y to $68M; cash gross profit margin expanded to 31.7% (from 22.2%) on higher volumes and pricing, with Warren Paving and Papich contributing ~$46M revenue and $10M gross profit (purchase accounting drag included) .
- Record CAP of $6.3B (+$273M q/q; +$718M y/y), underpinning Q4 and 2026 acceleration; CEO: “This continues to be the strongest market I’ve seen in my career” .
- Profitability outperformance: adjusted EBITDA +44% y/y to $216M; adjusted EPS $2.70 (+32% y/y); CFO raised adjusted EBITDA margin guidance and highlighted YTD operating cash flow of $290M, likely above the 9% of revenue target for the year .
What Went Wrong
- Top-line miss vs S&P consensus: Q3 revenue $1.433B vs $1.484B*, as some anticipated project start-ups shifted later in H2, also prompting narrowed FY revenue guidance .
- Construction revenue growth more modest (+8% y/y) amid timing of conversions; management acknowledged revenue acceleration is more weighted to Q4 and weather remains a Q4 risk .
- SG&A rose to $102M (+$10M y/y) on higher salaries and stock-based compensation (full-year SBC ~$40M), though as percent of revenue (7.1%) improved slightly y/y .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025 (Actual)	Q3 2025 (Consensus)
Revenue ($USD Billions)	$1.276	$1.126	$1.433	$1.484*
Diluted EPS ($)	$1.57	$1.42	$1.98	$2.50*
Adjusted Diluted EPS ($)	$2.05	$1.93	$2.70	—
EBITDA ($USD Millions)	$138.8	$136.8	$197.3	$197.5*
Adjusted EBITDA ($USD Millions)	$149.3	$152.4	$215.6	—
Gross Profit ($USD Millions)	$202.9	$199.1	$260.5	—
Operating Income ($USD Millions)	$104.3	$103.6	$143.7	—
SG&A ($USD Millions)	$91.7	$85.9	$101.6	—

Segment performance

Segment	Q3 2024	Q3 2025
Construction Revenue ($USD Millions)	$1,080.7	$1,162.5
Construction Gross Profit ($USD Millions)	$170.7	$192.3
Construction Gross Margin (%)	15.8%	16.5%
Materials Revenue ($USD Millions)	$194.8	$271.0
Materials Gross Profit ($USD Millions)	$32.3	$68.2
Materials Gross Margin (%)	16.6%	25.2%
Materials Cash Gross Profit ($USD Millions)	$43.2	$86.0
Materials Cash GP Margin (%)	22.2%	31.7%

KPIs and operating drivers

KPI	Q3 2024	Q3 2025
CAP (Committed & Awarded Projects) ($USD Billions)	—	$6.3
Aggregate Sales Tons (000s)	6,366	8,041
Asphalt Sales Tons (000s)	2,801	3,205
Aggregate ASP ($/ton)	$16.36	$20.54
Asphalt ASP ($/ton)	$78.66	$84.00

Note: Consensus figures marked with * are from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$4.35B–$4.55B	$4.35B–$4.45B	Narrowed lower end (lowered high end)
Adjusted EBITDA Margin	FY 2025	11.25%–12.25%	11.50%–12.50%	Raised
SG&A (% of revenue)	FY 2025	~9% (incl. ~$40M SBC)	~9% (incl. ~$40M SBC)	Maintained
Adjusted Effective Tax Rate	FY 2025	Mid-20s	Mid-20s	Maintained
Capital Expenditures	FY 2025	$140M–$160M	~$130M (~3% of revenue)	Lowered

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Market demand & IIJA tailwind	Strong public markets; IIJA spend to extend beyond 2026; CAP building to record $5.7B (Q1) and $6.1B (Q2)	“Strongest market … in my career”; CAP $6.3B; expecting continued growth into 2026	Strengthening
Materials strategy & margins	Realignment, automation, pricing; targeted M&A; cash GP gains; aiming for +300bps cash GP margin in 2025	“Exceptional” quarter; volumes +26% (agg), +14% (asphalt); acquisitions exceeding plan; further room for +3% materials margin expansion to 2027	Positive momentum
M&A & platform buildout	SE platform expansion (Lehman Roberts, Memphis Stone & Gravel, Dickerson & Bowen); Q2 acquisitions: Warren Paving, Papich; uplift to margins	Closed Cinderlite; 100M tons reserves; plan for several deals annually; balance sheet capacity intact	Accretive, continuing
CAP conversion & project timing	Q2: expected H2 acceleration; best value projects support margin but timing variable	Q4 weighted; ~8% organic growth in Q4 and likely into 2026; weather a Q4 risk	Conversion ramping
Cash flow & capex discipline	On track for 9% OCF; Q2 upsized credit facility; capex $140–$160M	YTD OCF $290M; likely above 9% of revenue; capex cut to ~$130M; ~3% of revenue long-term	Better than plan
Tariffs/macro	Monitoring tariffs; limited impact to date (Q1)	No new issues cited in Q3 call [—]	Stable

Management Commentary

CEO on market and CAP: “This continues to be the strongest market I’ve seen in my career… I believe we are positioned to grow our CAP portfolio and increase bid-day margins in the fourth quarter and in 2026.”
CFO on guidance and cash: “We are increasing our adjusted EBITDA margin guidance to a range of 11.5%–12.5%… We generated $290 million of operating cash flow through the first nine months of the year… I expect cash generation will also be strong in the fourth quarter.”
CEO on materials strategy: “From… aggregate plant automation… to bolt-on acquisitions like Cindolite… I believe our materials business will continue to transform over the upcoming quarters and years.”
CFO on segment performance: “Construction segment gross profit… margin of 17%… largely due to improved execution… The southeastern platform, including Warren Paving, performed better than expected, with pricing and volumes leading to a significant increase in asphalt margin.”

Q&A Highlights

CAP drivers and durability: Management sees CAP growing into Q4 driven by broad geographic strength and ongoing IIJA spend (about half disbursed through August), supporting continued bidding success and higher bid-day margins .
Organic growth cadence: Conversion of best value projects and ramping starts support ~8% organic growth in Q4 and into 2026; timing varies by project complexity; weather remains the key Q4 swing factor .
Materials momentum and integration: Warren Paving and Papich are exceeding the deal model; strong aggregate demand tied to private investment (e.g., data centers) in the Southeast; Granite aims to leverage pricing, automation, and distribution yards to expand margins and volumes .
Cash flow and capex: Higher OCF reflects claim settlements and strong collections; capex reduced as some strategic materials investments shift to next year; long-term capex target ~3% of revenue .

Estimates Context

Against S&P Global consensus, Q3 EPS beat while revenue missed: Adjusted EPS $2.70 vs $2.50*; revenue $1.433B vs $1.484B*. EBITDA was above Street: Adjusted EBITDA $215.6M vs EBITDA consensus $197.5*; GAAP EBITDA $197.3M was essentially in line .
Values marked with * are from S&P Global.
Implications: The combination of a revenue miss and margin beat, plus raised margin guidance, likely drives upward revisions to FY margin/EPS trajectories while tempering top-line expectations (revenue range narrowed). Street models may shift to reflect stronger Materials mix/pricing and acquisition synergy flow-through .

Key Takeaways for Investors

Margin-led beat: Despite a revenue shortfall vs consensus, profitability outperformed on Materials volume/price and Construction execution; FY25 adjusted EBITDA margin guidance raised to 11.5%–12.5% .
Backlog strength: Record CAP of $6.3B with broad-based demand supports Q4 acceleration and 2026 growth; management targets ~8% organic growth into 2026 .
Materials is the swing factor: Cash gross profit margin up ~950 bps y/y; acquisitions performing ahead of plan; more bolt-ons and automation/pricing initiatives should sustain mix-led margin expansion .
FY guide balanced: Revenue range narrowed on project timing, but capex lowered and cash generation tracking above target, improving FCF outlook .
Watch Q4 weather and conversion timing: Execution and weather are near-term variables; nevertheless, best value project conversions underpin 2026 visibility .
M&A cadence continues: Recently closed Cinderlite adds ~100M tons reserves in NV; balance sheet capacity and OCF support several deals per year, skewed to materials and vertical integration .
Trading setup: Narrative likely driven by margin guidance raise and backlog quality versus top-line optics; estimate revisions may pivot to higher EBITDA/EPS despite tempered revenue, supportive for medium-term rerating .

Additional details and sources:

Q3 2025 results, guidance, segments, non-GAAP reconciliations: Form 8-K and press release .
Q3 2025 earnings call transcript: strategy, CAP, margins, Q&A .
Prior quarters for trend: Q2 2025 8-K and call (guidance raise, CAP $6.1B) ; Q1 2025 8-K and call (record CAP $5.7B; materials disclosures) .
Q3 press releases (project awards, M&A): Cinderlite acquisition; Tucson Airport GMP4; IDOT I-290 CM/GC (added to CAP) .

S&P Global consensus figures (marked with ): Revenue Consensus Mean (Q3 2025): $1,483,579,670; Primary EPS Consensus Mean (Q3 2025): $2.50333*; EBITDA Consensus Mean (Q3 2025): $197,475,000*. Values retrieved from S&P Global.

GRANITE CONSTRUCTION INC (GVA)·Q3 2025 Earnings Summary