Construction Partners (ROAD) Q3 2024 earnings summary

Executive summary

• Revenue for Q3 FY24 increased 22.7% year-over-year to $517.8 million, driven by acquisitions and strong demand in both public and private markets.

• Net income rose 42.6% to $30.9 million, reflecting higher gross profit and improved margins.

• Adjusted EBITDA grew 30.5% to $73.2 million, with margins rising to 14.1%.

• Project backlog reached a record $1.9 billion as of June 30, 2024, providing strong visibility into fiscal 2025.

• Multiple acquisitions completed in fiscal 2024, expanding presence in Georgia and North Carolina.

Financial highlights

• Gross profit increased 30% to $83.5 million, with a margin of 16.1% for the quarter.

• General and administrative expenses were $38.9 million, or 7.5% of revenue.

• Diluted EPS for Q3 FY24 was $0.59, up from $0.41 in Q3 FY23.

• Cash provided by operating activities year-to-date was $113.2 million, up from $94.5 million last year.

• For the nine months ended June 30, 2024, revenue was $1.29 billion, net income $39.6 million, and Adjusted EBITDA $143.6 million.

Outlook and guidance

• Fiscal 2024 revenue guidance raised to $1.835–$1.86 billion.

• Net income expected in the range of $73.5–$76.5 million; Adjusted EBITDA guidance increased to $219–$228 million, with margins of 11.9%–12.3%.

• Backlog of $1.9 billion supports continued revenue growth, with $0.43 billion to be recognized in the remainder of fiscal 2024.

• Capital expenditures for fiscal 2024 expected to be $90–$95 million.

• Management expects operating cash flow and available borrowings to be sufficient for operations, capital expenditures, and share repurchases for at least the next 12 months.