Granite Reports Third Quarter 2026 Results and Introduces 2029 Targets

• Introducing 2029 financial targets reflecting an expected organic revenue CAGR of 10% to 12%
• Q3 revenue increased 23% year-over-year to $1.8 billion
• Q3 net income of $3 million compared to $103 million for the same period in the prior year
• Q3 adjusted net income (1) of $173 million compared to $124 million, for the same period in the prior year
• Q3 diluted EPS of $0.07 compared to $1.98 for the same period in the prior year and adjusted diluted EPS (1) of $3.81 compared to $2.70 for the same period in the prior year
• Q3 adjusted EBITDA (1) increased 32% year-over-year to $283 million
• Committed and Awarded Projects (“CAP”) (2) increased sequentially $37 million to a new record high of $7.5 billion
• Year-to-date operating cash flow increased $114 million year-over-year to $404 million

WATSONVILLE, Calif.--(BUSINESS WIRE)--Granite (NYSE: GVA) today announced results for the quarter ended September 30, 2026.

Third Quarter 2026 Results

Net income attributable to Granite totaled $3 million, or $0.07 per diluted share, compared to net income attributable to Granite of $103 million, or $1.98 per diluted share, for the same period in the prior year. Current period net income was unfavorably impacted by $162 million of net non-operating charges associated with settling the conversions of our 3.75% convertible notes. As previously disclosed, we elected to settle the conversions of the convertible notes primarily in cash in order to limit dilution to our stockholders. The impact of the conversions and related transactions have been excluded from adjusted net income and adjusted EBITDA. Adjusted net income attributable to Granite totaled $173 million, or $3.81 per diluted share, compared to adjusted net income attributable to Granite of $124 million, or $2.70 per diluted share, for the same period in the prior year.

• Revenue increased $333 million to $1.77 billion compared to $1.43 billion for the same period in the prior year.
• Gross profit increased $75 million to $336 million compared to $261 million for the same period in the prior year.
• Selling, general, and administrative (“SG&A”) expenses increased slightly to $104 million, and our SG&A as a percent of revenue improved from 7.1% in the prior year to 5.9% in the current year.
• Adjusted EBITDA increased $67 million to $283 million compared to $216 million for the same period in the prior year.

“We delivered excellent third quarter results, reflecting strong execution across our business and continued progress on our strategy,” said Kyle Larkin, Granite President and Chief Executive Officer. “Our teams are executing at a high level, and the investments we have made to strengthen and expand our business are creating new opportunities for Granite. We continue to see attractive opportunities in our core transportation markets while expanding our capabilities and presence in federal, mission critical infrastructure, rail and other targeted end markets. Our record CAP and strong market outlook position us well as we enter 2027. We believe Granite has the people, capabilities and market position to capitalize on these opportunities and deliver profitable growth and long-term shareholder value.”

Nine Months Ended September 30, 2026 Results

Net loss attributable to Granite totaled $317 million, or $(7.23) per diluted share, compared to net income attributable to Granite of $141 million, or $2.83 per diluted share, for the same period in the prior year. The net loss was driven by $535 million of net non-operating charges associated with settling the conversions of our 3.75% convertible notes. The impact of the conversions and related transactions have been excluded from adjusted net income and adjusted EBITDA. Adjusted net income attributable to Granite totaled $287 million, or $6.17 per diluted share, compared to $211 million, or $4.67 per diluted share, for the same period in the prior year.

• Revenue increased $876 million to $4.13 billion compared to $3.26 billion for the same period in the prior year.
• Gross profit increased $141 million to $684 million compared to $543 million for the same period in the prior year.
• SG&A expenses increased $50 million to $353 million in the current year from $303 million in the prior year, and our SG&A as a percent of revenue improved from 9.3% in the prior year to 8.5% in the current year.
• Adjusted EBITDA increased $131 million to $527 million compared to $396 million for the same period in the prior year.
• Year-to-date operating cash flow increased to $404 million from $290 million for the same period in the prior year.

Three and Nine Months ended September 30, 2026 (Unaudited - dollars in thousands)

Revenue for the three and nine month periods increased year-over-year, driven by higher CAP entering the quarter and incremental revenue from acquisitions. Excluding the impact of acquisitions, revenue increased approximately 20% for the three and nine month periods, reflecting strong organic growth. Gross profit and gross profit margin for the quarter and nine month periods increased year-over-year as a result of the increase in revenue and strong execution across our project portfolio.

CAP increased $37 million sequentially to $7.5 billion, an increase of $1.1 billion year-over-year. As of September 30, 2026, Federal CAP was $1.3 billion and included $569 million of tactical infrastructure projects for U.S. Customs and Border Protection that should be substantially realized through the second quarter of 2028.

Revenue for the three and nine month periods increased year-over-year, driven by revenue from our recently acquired businesses. Gross profit margin and cash gross profit margin for the three and nine month periods decreased year-over-year primarily due to the margin impact of energy surcharges offsetting elevated diesel costs.

Outlook

Our 2026 fiscal year guidance is unchanged with the exception of our revenue range as noted below:

• Revenue in a range of $5.4 billion to $5.5 billion from a range of $5.3 billion to $5.5 billion
• Adjusted EBITDA margin in a range of 12.25% to 13.25%
• SG&A expense as a percent of revenue in a range of 8.25% to 8.75% of revenue, inclusive of an estimated $48 million of stock-based compensation expense
• Effective tax rate for adjusted net income in the mid-20s
• Capital expenditures in a range of approximately $140 million to $160 million, including approximately $50 million in planned strategic materials investments.

“Our strong performance through the first nine months of 2026 reinforces our confidence in both our full-year outlook and the longer-term financial targets we are announcing today,” said Executive Vice President and Chief Financial Officer, Staci Woolsey. “At the midpoint of our updated 2026 revenue guidance, we expect approximately 15% organic revenue growth, with an additional 9% contribution from acquired companies. This organic growth is consistent with the 10% to 12% CAGR reflected in our 2029 financial targets and demonstrates the progress we are already making toward our long-term objectives. Our strong cash flow generation provides us with the financial flexibility to continue investing in organic growth while pursuing strategic opportunities through disciplined capital allocation.”

Our 2029 financial targets are summarized below:

• Organic revenue CAGR in a range of 10% to 12%
• Adjusted EBITDA margin in a range of 14% to 16%
• SG&A expense as a percent of revenue of approximately 7.5%
• Operating cash flow of approximately 13% of revenue and CAPEX of approximately 3% of revenue resulting in free cash flow of approximately 10% of revenue
• Continued expansion through M&A with a 2.5x net leverage target

We do not provide a reconciliation of forward-looking adjusted EBITDA margin or the most directly comparable forward-looking GAAP measure of net income attributable to Granite because we cannot predict with a reasonable degree of certainty and without unreasonable efforts certain components or excluded items that are inherently uncertain and depend on various factors. For these reasons, we are unable to assess the potential significance of the unavailable information. We also do not provide a reconciliation of target net leverage ratio or the most directly comparable forward-looking GAAP measure because we cannot predict with a reasonable degree of certainty and without unreasonable efforts certain components or excluded items that are inherently uncertain and depend on various factors. For these reasons, we are unable to assess the potential significance of the unavailable information.

Conference Call

Granite will conduct a conference call today, October 29, 2026, at 8:00 a.m. Pacific Time/11:00 a.m. Eastern Time to discuss the results of the quarter ended September 30, 2026. The Company invites investors to listen to a live audio webcast of the investor conference call on its Investor Relations website, https://investor.graniteconstruction.com. The investor conference call will also be available by calling 1-877-328-5503; international callers may dial 1-412-317-5472. An archive of the webcast will be available on Granite's Investor Relations website approximately one hour after the call. A replay will be available after the live call through November 5, 2026, by calling 1-855-669-9658, replay access code 6013263; international callers may dial 1-412-317-0088.

About Granite

Granite is America’s Infrastructure Company™. Incorporated since 1922, Granite (NYSE:GVA) is one of the largest diversified vertically-integrated civil contractors and construction materials producers in the United States. Granite’s Code of Conduct and strong Core Values guide the Company and its employees to uphold the highest ethical standards. Granite is an industry leader in safety and an award-winning firm in quality and sustainability. For more information, visit graniteconstruction.com, and connect with Granite on LinkedIn, X, Facebook and Instagram.

Forward-looking Statements

Any statements contained in this news release that are not based on historical facts, including statements regarding future events, occurrences, opportunities, circumstances, activities, performance, growth, demand, strategic plans, shareholder value, outcomes, outlook, our ability to capitalize on opportunities and deliver profitable growth and create long-term shareholder value, our ability to continue investing in organic growth while pursuing strategic opportunities through disciplined capital allocations, 2026 fiscal year guidance, including revenue, adjusted EBITDA margin, SG&A expense as a percent of revenue, including estimated stock-based compensation expense, effective tax rate, capital expenditures, including estimated planned strategic materials investments, organic revenue growth and contributions from acquisitions in 2026, 2029 financial targets, including organic revenue CAGR, adjusted EBITDA margin, SG&A expense as a percent of revenue, operating cash flow, CAPEX and free cash flow as a percent of revenue and net leverage, CAP and results constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are identified by words such as “future,” “outlook,” “assumes,” “believes,” “expects,” “estimates,” “anticipates,” “intends,” “plans,” “appears,” “may,” “will,” “should,” “could,” “would,” “continue,” "guidance" and the negatives thereof or other comparable terminology or by the context in which they are made. These forward-looking statements are based on management's current beliefs, assumptions and estimates, which may prove to be incorrect, and our expectations may not be realized. In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity. Such risks and uncertainties include, but are not limited to, those described in greater detail in our filings with the Securities and Exchange Commission, particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place undue reliance on them. The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this news release and, except as required by law; we undertake no obligation to revise or update any forward-looking statements for any reason.

Non-GAAP Financial Information

The tables below contain financial information calculated other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Specifically, we believe that non-GAAP financial measures such as EBITDA and EBITDA margin are useful in evaluating operating performance and are regularly used by securities analysts, institutional investors and other interested parties, and that such supplemental measures facilitate comparisons between companies that have different capital and financing structures and/or tax rates.

We are also providing adjusted EBITDA and adjusted EBITDA margin, non-GAAP measures, to indicate the impact of stock-based compensation, (gain) loss on convertible debt transactions, net, gain on remeasurement of previously held equity method investment, and other costs, net, which includes strategic acquisition and integration expenses, and in 2025 legal fees for the defense of a former company officer in his now resolved civil litigation with the Securities and Exchange Commission and reorganization costs.

We provide adjusted income before income taxes, adjusted provision for income taxes, adjusted net income attributable to Granite, adjusted diluted weighted average shares of common stock and adjusted diluted earnings per share attributable to common shareholders, non-GAAP measures, to indicate the impact of the following:

• Acquired intangible asset amortization and acquisition-related depreciation;
• Stock-based compensation;
• (Gain) loss on convertible debt transactions, net;
• Amortization of convertible debt discount;
• Gain on remeasurement of previously held equity method investment; and
• Other costs, net as described above.

We also provide cash gross profit and cash gross profit per ton for the materials segment and product lines to exclude the impact of non-cash costs from gross profit. Non-cash costs include depreciation, depletion and amortization, and, starting in the first quarter of 2026, unrealized gains and losses from the change in fair value of commodity derivative instruments included in cost of revenue. Cash gross profit and cash gross profit per ton are presented to illustrate the operational performance generated by the assets of the materials segment and its product lines.

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