Granite Construction (GVA) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 20% year-over-year to $1.1 billion, with strong growth in both construction and materials segments and record second quarter revenue.

• Net income for Q2 was $37 million ($0.76 per diluted share) versus a $17 million loss last year; adjusted net income was $77 million ($1.73 per diluted share).

• Adjusted EBITDA margin improved to 12.0%, a 290bps increase year-over-year.

• Announced agreement to acquire Dickerson & Bowen, expanding vertically integrated operations in the Southeast and Mississippi, expected to close in Q3.

• CAP (Committed and Awarded Projects) reached $5.6 billion, up $139 million year-over-year, reflecting strong public sector demand.

Financial highlights

• Q2 gross profit increased $62 million to $165 million year-over-year; adjusted EBITDA was $130 million, up $48 million.

• Construction segment Q2 revenue grew 22% year-over-year to $918 million, with $30 million from acquisitions.

• Materials segment Q2 revenue up 10% to $165 million; gross profit margin rose to 17.8% from 16.0%.

• Materials segment cash gross profit margin increased to 23.9% from 20.3% year-over-year.

• Cash and marketable securities at quarter-end were $377 million; total liquidity exceeded $700 million.

Outlook and guidance

• 2024 revenue guidance narrowed to $3.9–$4.0 billion, expecting to be in the upper half of the range.

• Adjusted EBITDA margin guidance remains at 9.5%–11.5%.

• Operating cash flow expected at 7% of revenue for 2024; capital expenditures projected at $130–$150 million.

• Effective tax rate for adjusted net income expected in the mid-20s percent.

• CAP pipeline remains healthy, with visibility into 2025 and beyond.