Construction Partners (ROAD) Q2 2025 earnings summary

Executive summary

• Revenue increased 54% year-over-year to $571.7 million in Q2 FY25, driven by both organic growth and acquisitions, with major deals in Texas, Oklahoma, Alabama, and Tennessee expanding the footprint and contributing significantly to results.

• Net income reached $4.2 million, reversing a net loss of $1.1 million in Q2 FY24, reflecting higher gross profit and gains on asset sales.

• Adjusted EBITDA rose 135% year-over-year to $69.3 million (12.1% margin), with margin improvement due to efficient asset utilization and favorable backlog.

• Backlog reached a record $2.84 billion, up from $1.79 billion a year ago, supporting future revenue visibility and reflecting robust demand in Sunbelt states.

• Raised full-year guidance for revenue, net income, and adjusted EBITDA based on strong Q2 performance and outlook.

Financial highlights

• Q2 revenue was $571.7 million, up 54% from the prior year; 7% organic growth and 47% from acquisitions.

• Net income was $4.2 million ($0.08 per diluted share), compared to a net loss of $1.1 million last year.

• Adjusted EBITDA reached $69.3 million, up 135% year-over-year; adjusted EBITDA margin was 12.1%, up from 7.9%.

• Cash from operations was $55.6 million in Q2 and $96.3 million for the six months ended March 31, 2025.

• Capital expenditures for Q2 were $41.4 million; FY2025 CapEx expected at $130-$140 million.

Outlook and guidance

• FY2025 revenue guidance raised to $2.77-$2.83 billion.

• Organic revenue growth expected at 8%-10% for the year.

• Net income guidance increased to $106-$117 million; adjusted net income to $122.5-$133.5 million.

• Adjusted EBITDA guidance raised to $410-$430 million; margin expected at 14.8%-15.2%.

• The company believes operating cash flow and available borrowings will be sufficient to fund operations, capital expenditures, and share repurchases for at least the next 12 months.