Knife River Corp (NYSE:KNF)

Q2 2026 Knife River Corp Earnings Call Transcript

Aug 4, 2026 / 03:00 PM GMT

Release Date Price: $69.51 (-11.83%)

Transcript 10-Q8-K

Key Points

Positve

Knife River Corp (KNF) reported strong operational performance with revenue up 13% year-over-year, driven by record backlog conversion and double-digit volume growth across all product lines.
Aggregate pricing increased by 8% on a product mix adjusted basis, and gross profit improved double-digits for both aggregates and asphalt, showcasing effective price optimization.
The company's self-help initiatives are yielding results, with aggregate crews lowering variable operating costs by 1% despite inflationary pressures and ready-mix crews improving cubic yards per delivery hour by 12%.
Knife River Corp (KNF) raised its full-year revenue guidance to $3.4-$3.6 billion and reaffirmed adjusted EBITDA guidance of $520-$560 million, reflecting confidence in the second-half outlook.
The acquisition strategy is performing well, with Strata expected to outperform original EBITDA projections by over 15% in 2026, and Texcrete contributing to a 15% increase in ready-mix volumes.
Organic investments are creating value, such as the Spokane pre-stress facility securing a substantial contract for a semiconductor facility in Idaho, and the South Dakota rail-served quarry expanding market reach.
The company maintains a strong balance sheet, having amended its term loan to lower interest rates and enhance liquidity, with expectations to end 2026 near its long-term net leverage target of 2.5 times.
Backlog expanded to $1.2 billion, up approximately $50 million sequentially, reinforcing confidence in future performance and providing visibility into second-half activity.

Negative

Higher diesel prices drove a $10 million year-over-year cost increase, with only $4 million recouped through fuel surcharges in Q2, impacting adjusted EBITDA.
Project timing shifts and weather-related delays in Texas, Hawaii, and Alaska impacted adjusted EBITDA by approximately $10 million, with some volumes pushed into 2027.
Market dynamics, including the type and timing of work, reduced contracting services margins by approximately $8 million, as the company performed more lower-margin asphalt paving versus larger general contracting jobs.
The company faces competitive bidding pressures, particularly in Oregon, where limited bid lettings have led contractors to travel to adjacent states, putting downward pressure on margins.
Aggregate gross margins were down slightly due to increased delivery volumes and higher fuel costs, with fuel surcharges being dilutive to margins, and the company now expects margin expansion of only ~100 basis points versus a prior target of 200.
The company inherited lower-margin legacy projects from recent acquisitions in the mountain segment, which will continue to weigh on contracting services margins through the third quarter.
Adjusted EBITDA was flat year-over-year on an as-reported basis, impacted by external headwinds, and the company now guides toward the midpoint of its EBITDA range rather than the upper end.
The West segment underperformed, with revenue down 9% due to weakness in Oregon, Hawaii, and Alaska, and the company expects full-year Oregon performance to be slightly below prior expectations.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

KNF.N - Knife River Corp
Q2 2026 Knife River Corp Earnings Call
Aug 04, 2026 / 03:00PM GMT

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Presentation
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Unidentified_1 [1]
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Hello everyone.

Thank you for joining us and welcome to the Knife River Corporation second quarter results conference call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Dara Dirks, Head of Investor Relations. Dara, please go ahead.

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Unidentified_2 [2]
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Good morning, everyone, and thank you for joining Knife River Corporation's second quarter results conference

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