Granite Construction Sets 2029 Targets as Revenue Jumps 23% and Backlog Hits Record

Granite Construction on Thursday introduced 2029 financial targets calling for organic revenue growth of 10% to 12% a year, as the infrastructure contractor reported a 23% jump in third-quarter revenue and a record backlog of committed and awarded projects.

Revenue rose to $1.77 billion from $1.43 billion a year earlier, according to the earnings release Granite filed with an 8-K on Thursday. Adjusted EBITDA climbed 32% to $283 million, and adjusted diluted EPS rose to $3.81 from $2.70. Gross profit increased to $336 million from $261 million, while SG&A fell to 5.9% of revenue from 7.1%.

Convertible note charges hit the bottom line

Reported profit told a different story. Net income attributable to Granite fell to $3 million, or 7 cents a diluted share, from $103 million, or $1.98, a year earlier.

The company said the quarter carried $162 million of net non-operating charges tied to settling conversions of its 3.75% convertible notes, which it chose to settle primarily in cash to limit dilution to stockholders. Those charges were excluded from adjusted results. Adjusted net income rose to $173 million from $124 million.

"We delivered excellent third quarter results, reflecting strong execution across our business and continued progress on our strategy," President and CEO Kyle Larkin said in the release.

Construction drives the gains

Construction segment revenue rose 26.8% to $1.47 billion, and the segment's gross profit jumped 42.6% to $274 million, lifting its gross margin to 18.6% from 16.5%. Excluding acquisitions, segment revenue increased about 20%, the company said.

Committed and Awarded Projects, Granite's backlog measure, rose $37 million from the prior quarter to a record $7.5 billion, up $1.1 billion from a year ago. Federal CAP was $1.3 billion, including $569 million of tactical infrastructure projects for U.S. Customs and Border Protection.

The Materials segment grew revenue 7.9% to $292 million on recently acquired businesses, but gross profit fell 9.9% to $61 million. Granite said energy surcharges offsetting elevated diesel costs weighed on margins.

Guidance and long-term goals

Granite narrowed its 2026 revenue forecast to $5.4 billion to $5.5 billion, from $5.3 billion to $5.5 billion, and left the rest of its guidance unchanged, including an adjusted EBITDA margin of 12.25% to 13.25%.

CFO Staci Woolsey said the midpoint of the updated revenue range implies about 15% organic growth, plus a 9% contribution from acquired companies.

The 2029 targets include:

• Organic revenue compound annual growth of 10% to 12%
• Adjusted EBITDA margin of 14% to 16%
• SG&A of about 7.5% of revenue
• Free cash flow of about 10% of revenue
• Continued M&A with a 2.5x net leverage target

Year-to-date operating cash flow rose to $404 million from $290 million. Granite scheduled a conference call for 11 a.m. ET on Thursday.

Sources

1. Granite Construction Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0000861459-26-000040)

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