Granite Construction reported a strong opening quarter in 2026, with revenue climbing 30 percent year-over-year to $912 million and adjusted EBITDA rising $30 million to $58 million, according to remarks made during the company's first-quarter earnings call. The company raised its full-year guidance across multiple metrics, reflecting both organic growth and contributions from recent acquisitions.
Chief Executive Kyle Larkin attributed much of the momentum to a robust bidding environment across federal, state, local, and private markets. The company ended the quarter with $7.2 billion in committed and awarded projects, up $200 million from the fourth quarter, despite a roughly $300 million reduction tied to the cancellation of a California public-sector highway project after expanded scope exceeded available funding.
Granite's acquisition of Kenny Seng Construction marked a significant capital deployment move. The Utah-based infrastructure contractor is expected to contribute approximately $150 million in annual revenue with an adjusted EBITDA margin in the high teens. Larkin characterized the acquisition as fitting the company's "disciplined investment framework" and noted opportunities to scale Kenny Seng's materials business and share client relationships across markets.
Federal infrastructure work emerged as a key growth driver. Larkin said Granite's federal business ended the quarter at $1.3 billion in committed and awarded projects, including $640 million tied to Tactical Infrastructure initiatives. The company expects federal work to eventually represent more than 15 percent of construction segment revenue, up from around 10 percent historically. Larkin cited opportunities in Guam, military installations, and southeastern shoreline protection as potential sustained drivers even as border-focused projects wind down over the next two years.
The construction segment generated $766 million in revenue, a 25 percent increase year-over-year. Executive Vice President and Chief Financial Officer Staci Woolsey said $43 million of growth came from acquisitions while $108 million resulted from organic expansion. The materials segment posted $146 million in revenue, with $50 million of the increase attributable to the Warren Paving acquisition.
Private-sector opportunities in rail and data center construction are also gaining traction. Larkin outlined growing demand for intermodal facilities serving Class I railroads and expanding opportunities in mission-critical data center work. Granite has formed a dedicated team for data center pursuits and is already delivering or supplying materials to projects across Washington, Oregon, Nevada, Arizona, Louisiana, and Mississippi. The company believes mission-critical work could eventually represent around 10 percent of overall revenue.
In the materials segment, Larkin reported a "fantastic start to the year" despite seasonal headwinds typical of the first quarter. Demand strengthened across Granite's geographies, supported by newly acquired companies. Through the first four months of 2026, aggregate and asphalt orders are ahead of the prior year and pricing is meeting expectations. Management addressed first-quarter oil price increases, which Larkin attributed to conflict in Iraq, but said the company does not "presently expect" such volatility to significantly impact annual outlook, citing mitigation tools including fixed forward contracts, physical storage, and energy surcharges on material sales.
Woolsey said the company settled $100 million in principal amount of convertible bonds due 2028 and now carries $1.4 billion in debt outstanding with $415 million available under its revolving credit facility. Operating cash flow in the quarter totaled a negative $31 million, a decline from a prior-year inflow of $4 million, though the company maintains its full-year expectation of operating cash flow at approximately 10 percent of revenue.
Updated 2026 guidance reflects the new trajectory. Revenue is now projected at $5.2 billion to $5.4 billion, up from the prior range of $4.9 billion to $5.1 billion, with $200 million attributed to a new Tactical Infrastructure contract and $100 million from Kenny Seng. Adjusted EBITDA margin guidance improved to 12.25 percent to 13.25 percent from 12 percent to 13 percent. Selling, general and administrative expenses as a percentage of revenue are expected to narrow to 8.25 percent to 8.75 percent, down from 8.5 percent to 9 percent, driven largely by revenue growth and ongoing efficiency initiatives. Capital expenditure guidance remained unchanged at $140 million to $160 million.
In closing remarks, Larkin said the first quarter reinforced confidence in the company's ability to achieve 2026 and 2027 financial goals and indicated Granite's acquisition pipeline "continues to evolve," with opportunities for several bolt-on deals this year.
