Q3 2025 Construction Partners Inc Earnings Call Transcript
Key Points
- Construction Partners Inc (ROAD) reported a 51% increase in revenue for the third quarter compared to the same period last year, with a mix of 5% organic growth and 46% from recent acquisitions.
- The company achieved a record adjusted EBITDA margin of 16.9%, up 280 basis points from the previous year, despite weather-related challenges.
- The acquisition of Durwood Green Construction in Houston is expected to enhance operational excellence and provide vertical integration opportunities.
- Construction Partners Inc (ROAD) has a strong project backlog of $2.94 billion, covering 80-85% of the next 12 months' revenue.
- The company is benefiting from strong public infrastructure funding and favorable demographic trends in the Sunbelt states, supporting future growth prospects.
- Weather-related delays, particularly in the Southeast, impacted project timelines and fixed asset cost recoveries during the quarter.
- The company's debt to trailing 12 months EBITDA ratio stands at 3.17 times, with a target to reduce it to approximately 2.5 times by late fiscal 2026.
- There is a potential risk of energy price fluctuations impacting margins, although current costs for liquid asphalt and diesel are stable.
- The company faces long-term challenges in attracting and retaining a skilled workforce due to a generational shrinking of the labor pool.
- Despite strong performance, the company acknowledges the need to update and communicate new business targets following transformative acquisitions.
Greetings and welcome to the Construction Partners third quarter earnings conference call. (Operator Instructions) As a reminder of this conference is being recorded. It is now my pleasure to introduce Rick Black, Investor Relations. Please go ahead.
Thank you, operator. And good morning everyone. We appreciate you joining us for the Construction Partners conference call to review third quarter results for fiscal 2025. This call is also being webcast and can be accessed through the audio link on the events and presentations page of the investor relations section of Construction Partners.net.
Information recorded on this call speaks only as of today, August 7, 2025. Please be advised that any time sensitive information may no longer be accurate as of the date of any replay, listening, or transcript or reading.
I would also like to remind you that the statements made in today's discussion that are not historical facts, including statements of expectation, expectations or future
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