GLDD Q2 Deep Dive: Project Backlog and Fleet Expansion Drive Growth Amid Industry Shifts

Dredging and coastal protection company Great Lakes Dredge & Dock (NASDAQ:GLDD) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 13.9% year on year to $193.8 million. Its non-GAAP profit of $0.15 per share was 62.2% above analysts’ consensus estimates.

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StockStory’s Take

Great Lakes Dredge & Dock’s second quarter results exceeded Wall Street’s expectations, with management attributing performance to robust equipment utilization and the execution of complex port deepening and coastal restoration projects. CEO Lasse Petterson cited the company’s “extensive fleet” and high project win rate as key factors supporting strong revenue generation. The recently secured backlog, including large coastal protection contracts and the Woodside Louisiana LNG project, also contributed to higher margins and improved visibility for the remainder of the year. Management emphasized that these capital and coastal projects typically yield higher profitability compared to other segments.

Looking ahead, Great Lakes Dredge & Dock’s management is focused on leveraging its substantial project backlog and new vessel capabilities to sustain growth into 2026. Petterson highlighted the upcoming deployment of the new hopper dredge Amelia Island and the anticipated delivery of the subsea rock installation vessel Acadia as central to future revenue streams. Management also pointed to expanding opportunities in offshore energy, with the Acadia positioned to serve both domestic and international markets, including offshore wind, subsea infrastructure protection, and LNG projects. The company expects these strategic initiatives to drive further cash generation and maintain high asset utilization rates.

Key Insights from Management’s Remarks

Management credited the quarter’s standout results to strong asset deployment on high-value coastal and capital projects, enhanced fleet capabilities, and a disciplined bidding approach that prioritized project quality over volume.

• High-value project execution: The company’s revenue mix was dominated by capital and coastal protection projects, which accounted for over 88% of revenue and typically generate higher margins. Petterson noted that project performance and equipment utilization drove margin gains despite a heavier-than-normal dry dock schedule.
• Fleet modernization nearing completion: Delivery of the new hopper dredge Amelia Island is imminent, with immediate deployment on existing backlog projects. This vessel, along with the earlier-delivered Galveston Island, is designed for efficient operation in shallow, narrow U.S. waterways, supporting beach and coastal restoration.
• Strategic backlog positioning: The company’s backlog reached $1.01 billion, up 25% year over year, providing visibility and high asset utilization into 2026. Management noted that 93% of the backlog comprises capital and coastal protection work, reducing exposure to lower-margin segments.
• Initiation of share repurchase program: A $50 million buyback was launched in response to management’s view that the share price undervalued financial performance and long-term outlook. $11.6 million of shares were repurchased by quarter’s end, with future purchases contingent on market conditions.
• Expanded offshore energy focus: The Acadia’s target markets have broadened due to U.S. offshore wind delays. Management is now actively pursuing projects involving subsea infrastructure protection and offshore wind in Europe and Asia, with bidding activity for work beginning in 2027 and beyond.

Drivers of Future Performance

Management expects future performance to be driven by the ramp-up of new vessel deployments, continued backlog execution, and expansion into offshore energy markets, while noting some industry and regulatory uncertainties.

• New vessel revenue contribution: The Amelia Island hopper dredge is scheduled for immediate deployment, while the Acadia is on track for first-quarter 2026 delivery. The Acadia is expected to generate strong revenue from its initial U.S. contract and subsequent international projects, with management targeting both offshore wind and critical subsea asset protection.
• Backlog-driven visibility: The company’s record backlog, predominantly composed of higher-margin capital and coastal protection projects, underpins revenue through 2026. Management expects normalized bid activity in 2025, with the next wave of U.S. port deepening projects anticipated to commence in 2027.
• Offshore wind and energy diversification: While U.S. offshore wind market delays have prompted a shift in strategy, management believes the Acadia’s expanded focus on global subsea infrastructure protection and offshore energy projects will diversify revenue streams and mitigate market-specific risks.

Catalysts in Upcoming Quarters

In upcoming quarters, our team will monitor (1) the operational impact and revenue contribution from new vessel deployments, especially Amelia Island and Acadia, (2) the pace and composition of backlog conversion as more coastal and capital projects are executed, and (3) the outcome of bidding activity for international offshore energy work. Evolving U.S. policy and funding for coastal and port projects will also be important indicators for future performance.

Great Lakes Dredge & Dock currently trades at $11.39, up from $10.61 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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