Executive Summary

Q4 2024 delivered solid YoY growth: revenue up 5% to $977M, GAAP diluted EPS $0.84, and adjusted diluted EPS $1.23; FY 2024 marked records across revenue ($4.01B), adjusted net income ($214M), adjusted EBITDA ($402M), and operating cash flow ($456M, 11.4% of revenue) .
Margin expansion continued: Q4 adjusted EBITDA margin was 11.1% (vs. 8.1% in Q4 2023), driven by improved project execution in a higher-quality Construction portfolio; Materials cash gross profit rose despite higher D&A .
2025 guidance introduced: revenue $4.2B–$4.4B, adjusted EBITDA margin 11–12%, SG&A ~9% of revenue (incl. ~$45M SBC), mid-20s tax rate, capex $140–$160M (with ~$50M Materials investments); management targets CAP rebuild in 1H25 to support growth .
Catalysts: expected addition of significant awards to CAP in 1H25, potential asset sale deferred from Q4 to 2025, and an active M&A pipeline (targeting 2–3 deals/year), positioning for further margin gains and vertically integrated growth .

What Went Well and What Went Wrong

What Went Well

Construction segment margin inflected: Q4 Construction gross profit rose $56M YoY to $128M; gross margin increased to 15.6% from 9.1%, reflecting focus on home markets and best value projects .
Materials pricing and operational initiatives: Q4 Materials cash gross profit improved to $37.1M with cash margin at 23.8%, supported by price increases, modernized plants, and automation projects .
Cash generation: FY 2024 operating cash flow reached $456M (11.4% of revenue), aided by process improvements and DSO reduction; year-end cash and marketable securities were ~$586M .

What Went Wrong

CAP declined sequentially: CAP fell to $5.30B from $5.62B in Q3 (down $324M QoQ), reflecting award timing; management expects rebuild in 1H25 amid robust bidding .
Materials GAAP margin compression: Q4 Materials gross margin decreased to 14.5% (from 15.9% YoY) due to increased depreciation, depletion, and amortization tied to M&A and upgrades .
Asset sale slipped: a planned ~$17M gain on sale did not close in Q4 and is now expected in 2025; not included in 2025 guidance, which could otherwise benefit from completion .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$933.7	$1,275.5	$977.3
Diluted EPS ($USD)	$0.55	$1.57	$0.84
Adjusted Diluted EPS ($USD)	$0.85	$2.05	$1.23
Net Income ($USD Millions)	$26.0	$79.0	$41.5
Net Income Margin (%)	2.8%	6.2%	4.2%
EBITDA ($USD Millions)	$61.7	$138.8	$96.1
EBITDA Margin (%)	6.6%	10.9%	9.8%
Adjusted EBITDA ($USD Millions)	$75.8	$149.3	$108.5
Adjusted EBITDA Margin (%)	8.1%	11.7%	11.1%

Segment performance:

Segment Metric	Q4 2023	Q3 2024	Q4 2024
Construction Revenue ($USD Thousands)	$793,727	$1,080,705	$821,353
Construction Gross Profit ($USD Thousands)	$72,034	$170,685	$128,117
Construction Gross Margin (%)	9.1%	15.8%	15.6%
Materials Revenue ($USD Thousands)	$139,971	$194,805	$155,950
Materials Gross Profit ($USD Thousands)	$22,277	$32,264	$22,635
Materials Gross Margin (%)	15.9%	16.6%	14.5%
Materials Cash Gross Profit ($USD Thousands)	$30,529	$43,202	$37,068
Materials Cash Gross Margin (%)	21.8%	22.2%	23.8%

KPIs and balance sheet:

KPI	Q4 2023	Q3 2024	Q4 2024
CAP ($USD Thousands)	$5,545,754	$5,619,795	$5,296,067
Operating Cash Flow ($USD Thousands, FY)	$183,707	$283,549 (YTD)	$456,343 (FY)
OCF as % of Revenue (FY)	5.2% (2023)	N/A	11.4% (2024)
Cash + Marketable Securities ($USD Thousands)	$453,526	$472,433	~$586,000 (Mgmt)
Share Repurchases (Shares, FY)	N/A	N/A	525,000
Low Bids Added (Q4 vs PY)	N/A	N/A	+$450,000,000

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Billions)	FY 2025	N/A	$4.2–$4.4	New
Adjusted EBITDA Margin (%)	FY 2025	N/A	11.0–12.0	New
SG&A (% of Revenue)	FY 2025	N/A	~9.0%; incl. ~$45M SBC	New
Effective Tax Rate (Adjusted)	FY 2025	N/A	Mid-20s	New
Capital Expenditures ($USD Millions)	FY 2025	N/A	$140–$160; incl. ~$50 Materials	New
Operating Cash Flow Margin (%)	FY 2025	N/A	Target ~9%	New

Note: 2025 guidance introduced in Q4 reporting; no prior 2025 guidance to compare. Management also expects CAP rebuild in 1H25 and potential upside from a deferred asset sale not included in guidance .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Public funding/IIJA	Emphasized strong public/private markets; organic growth and federal bill support over years	Strongest market in CEO’s career; CA transportation budget up meaningfully; IIJA still supportive through 2026	Reinforced strength; visibility improving
CAP/backlog quality	CAP $5.6B (record/sequentially up); strong bidding pipeline	CAP $5.3B (lumpy decline); +$450M low bids in Q4 to flow into CAP in Q1–Q2; best portfolio in history	Short-term dip; rebuild expected H1
Materials pricing & automation	Cash gross profit up; pricing and acquisitions drove revenue/margin	Price increases (HSD aggregates, LSD asphalt) planned; automation and plant upgrades continue; cash margin up	Continued optimization; margin accretive
Margin expansion roadmap	Construction margins rising; adjusted margin guidance narrowed higher for 2024	2025 adjusted EBITDA margin 11–12%; ~1%+ improvement from Construction; rest from Materials	Upside path intact
M&A strategy	Announced/acquired Dickerson & Bowen in SE footprint	Target 2–3 deals/year; bolt-ons and platforms; strengthens Western/SE vertical integration	More active pipeline
Cash flow & DSO	YTD OCF up $249M; OCF 7% target exceeded	FY OCF $456M (11% of revenue); 2025 OCF margin target ~9%	Sustained strong conversion
Inflation & contracting	Not highlighted	Inflation expected ~3%; contractual coverage mitigates cost risk	Managed risk posture

Management Commentary

“2024 was a record year for Granite… We expect to continue our organic revenue growth, execute on M&A, expand margins and generate consistent cash flow as we drive toward our 2027 targets.” — CEO Kyle Larkin .
“We are well positioned to achieve our 2025 guidance as we continue to march toward our 2027 financial targets.” — CFO Staci Woolsey .
“With the work that we have in CAP and the opportunities in front of us on the bid schedule, we are in a good position to achieve our organic growth expectations and [realize] improvement in segment gross margin in excess of 1% in 2025.” — CEO Kyle Larkin .
“We ended the year with $586 million in cash and marketable securities and… $334 million in availability under our revolving credit facility.” — CFO Staci Woolsey .
“We have a target of completing 2 or 3 deals a year as we focus on strengthening our western and southeastern footprints.” — CEO Kyle Larkin .

Q&A Highlights

Margin expansion mechanics: At the midpoint, ~150bps of adjusted EBITDA margin improvement in 2025; just over 100bps from Construction, balance from Materials .
Free cash flow framework: 2025 operating cash flow targeted at ~9% of revenue; FCF targeted around ~50% of EBITDA going forward .
CAP trajectory: Q4 added ~$450M of low bids vs. prior year; awards expected to flow into CAP in Q1–Q2 despite seasonal revenue burn rate variability .
Inflation assumptions and risk mitigation: Company bidding assumes ~3% inflation; contracts largely fully designed with supplier/contractor coverage to limit price exposure .
Asset sale timing: Expected Q4 gain on sale (~$17M) slipped to 2025; not included in guidance, offers upside if completed .

Estimates Context

Consensus EPS and revenue estimates from S&P Global were unavailable at time of request due to provider rate limits. As a result, comparisons to Wall Street consensus cannot be provided for Q4 2024 in this recap. If needed, we can refresh once access is restored and update beat/miss assessments.

Key Takeaways for Investors

Mix-driven margin expansion: Construction portfolio discipline and best value focus are driving sustained margin gains; 2025 adjusted EBITDA margin guided to 11–12% with Construction contributing >100bps .
Durable demand backdrop: State budgets (esp. California) and IIJA funding support multi-year public market strength; private markets (water infra, data centers, rail) remain robust .
Materials lever for vertical integration: Pricing actions and automation underpin higher cash margins; targeted Materials capex (~$50M) and M&A (2–3 deals/year) should be accretive .
CAP rebuild as near-term catalyst: Despite Q4 CAP decline, ~$450M of low bids and anticipated awards in H1 2025 position CAP to recover, supporting revenue visibility .
Cash optionality: FY OCF $456M and ~$586M cash/marketable securities provide flexibility for strategic investments, M&A, dividends, and buybacks to offset SBC dilution .
Upside swing factor: Deferred asset sale gain not included in 2025 guidance offers potential EPS/EBITDA upside if completed this year .
Watch execution and seasonality: Materials GAAP margin is pressured by higher D&A; CAP can be lumpy, and Q1/Q4 weather can influence revenue burn—monitor quarterly margin and award flow .

Additional Relevant Press Releases (Q4 period context)

Granite announces $71M rail yard expansion (Kansas) and $88M highway safety enhancement project (South Carolina), reflecting ongoing award momentum entering 2025 .

References:
Press release and 8-K results: .
Q4 2024 earnings call: .
Prior quarters: Q3 2024 press release ; Q2 2024 press release .
Other awards press releases: .

GRANITE CONSTRUCTION INC (GVA)·Q4 2024 Earnings Summary