Construction Partners delivered a strong Q4, with management attributing the company’s outperformance to robust demand across the Sunbelt region and successful integration of recent acquisitions. CEO Jule Smith noted that favorable weather and increased commercial and public sector project activity played key roles, highlighting ongoing migration trends and manufacturing reshoring. He cited the company’s ability to “actively bid and build a wide range of commercial projects to reflect these macro trends,” emphasizing major contracts in fast-growing markets like Texas, Florida, and South Carolina.
Is now the time to buy ROAD? Find out in our full research report (it’s free for active Edge members).
Construction Partners (ROAD) Q4 CY2025 Highlights:
- Revenue: $809.5 million vs analyst estimates of $732.7 million (44.1% year-on-year growth, 10.5% beat)
- Adjusted EPS: $0.47 vs analyst estimates of $0.31 (53.4% beat)
- Adjusted EBITDA: $112.2 million vs analyst estimates of $96.83 million (13.9% margin, 15.9% beat)
- The company lifted its revenue guidance for the full year to $3.52 billion at the midpoint from $3.45 billion, a 2% increase
- EBITDA guidance for the full year is $542 million at the midpoint, above analyst estimates of $531.1 million
- Operating Margin: 6.2%, up from 2.5% in the same quarter last year
- Backlog: $3.09 billion at quarter end, up 16.2% year on year
- Organic Revenue rose 3.6% year on year (miss)
- Market Capitalization: $7.58 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Construction Partners’s Q4 Earnings Call
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Adam Thalhimer (Thompson, Davis & Company) asked about the mix between platform and tuck-in acquisitions in the pipeline. CEO Jule Smith and Executive Chairman Ned Fleming explained that both types are active, with recent platform deals leading to more tuck-in opportunities and organic growth in new states.
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Kathryn Thompson (Thompson Research Group) inquired about bridging the gap between current organic growth rates and the higher full-year target, as well as the impact of weather disruptions. Smith clarified that project delays and competitive market shifts affected Q1, but reiterated confidence in reaching full-year organic growth expectations.
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Andrew Wittmann (Baird) sought clarification on seasonality and the apparent implied second-quarter revenue guidance. CFO Greg Hoffman and Smith said first-half and second-half revenue splits are consistent year-over-year and that weather variability is expected and accounted for in planning.
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Ethan Trollinger (Raymond James) requested details about the margin profile and evolution of the Houston market following recent acquisitions. Smith highlighted strong management, successful integration, and complementary capabilities as factors improving Houston’s performance and attracting further M&A interest in the region.
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Nandita Nayar (Bank of America) questioned the company’s ability to reduce leverage while pursuing further acquisitions. Hoffman emphasized the company’s strong cash flow generation and intention to fund acquisitions largely through operations, supporting both growth and deleveraging targets.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be watching (1) the pace and success of new acquisition integrations, especially in high-growth markets like Houston; (2) signs of continued public infrastructure funding momentum and the outcome of the Surface Transportation program reauthorization; and (3) the company’s ability to maintain or expand margins through disciplined bidding and operational efficiencies. Progress in greenfield facility openings and backlog conversion will also be key markers of execution.
Construction Partners currently trades at $137.11, up from $114.77 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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