Knife River (KNF) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue increased 13% year-over-year to $938.6–$939 million, driven by double-digit volume and gross profit growth in materials and 20% growth in contracting services revenue, despite external headwinds such as energy costs and project delays.

• Adjusted EBITDA was $139.7–$140 million, nearly flat year-over-year, with margin declining to 14.9% due to higher energy costs, project timing shifts, and lower-margin project mix.

• Net income for Q2 2026 was $43.9 million, down 13% from Q2 2025, primarily due to higher interest expense and increased SG&A costs.

• Backlog expanded to $1.2–$1.25 billion, with 85% public-sector exposure, supporting future performance.

• Raised full-year 2026 revenue guidance to $3.4–$3.6 billion, reflecting strong operational momentum and robust demand.

Financial highlights

• Aggregates volume grew 14% year-over-year, with gross profit up 12% and pricing up 8% on a product mix adjusted basis.

• Ready-mix volumes increased 15%, driven by acquisitions, with gross margin up 80 basis points and gross profit up 21%.

• Asphalt volumes rose 24%, with internal volumes up 44%, gross margin up 50 basis points, and gross profit up 24%.

• Contracting services revenue grew 20%, but margins declined due to project mix and competitive dynamics.

• SG&A expenses rose to 8.7% of revenue in Q2 2026, up from 8.3% in Q2 2025, due to higher payroll and lower gains on asset sales.

Outlook and guidance

• 2026 revenue guidance raised to $3.4–$3.6 billion; Adjusted EBITDA guidance reaffirmed at $520–$560 million.

• Aggregates volumes expected to increase high-single digits, pricing mid-single digits; ready-mix volumes to increase mid-teens; asphalt volumes high-single digits.

• Majority of delayed project revenue and earnings expected to shift into late Q4 or 2027, especially in Texas, Alaska, and Hawaii.

• Depreciation, depletion, and amortization expected to increase mid-teens.

• Capital expenditures for 2026 estimated between $170 million and $235 million.