Construction Partners, Inc.

Construction Partners, Inc. builds and maintains roads and other surface infrastructure across the U.S. Sunbelt. It operates asphalt plants, aggregate facilities and liquid-asphalt terminals that supply its own construction work and outside customers. Its Class A shares trade on Nasdaq as ROAD.

Public projects supply most of its revenue. In the nine months ended June 30, 2026, public customers represented about two-thirds of sales. The business also serves commercial and residential developers. Its fiscal year ends September 30, with warmer third and fourth fiscal quarters typically bringing more construction activity.

Preliminary annual results versus the earlier plan

On November 5, Construction Partners estimated fiscal 2026 revenue of $3.66 billion to $3.68 billion and net income of $141.5 million to $142.5 million. Revenue remained within the August forecast of $3.64 billion to $3.68 billion, but net income was below the earlier target of $165 million to $168 million.

Adjusted EBITDA was estimated at $520 million to $524 million, against the August forecast of $559 million to $569 million. The associated margin estimate fell to 14.21% to 14.24%, from a target of 15.36% to 15.46%. Management attributed the weaker final quarter to unusually wet July weather and rising diesel costs.

The latest estimates still imply about 30% annual revenue growth and 40% net-income growth. Fiscal 2025 revenue was $2.812 billion and net income was $101.8 million.

The earlier quarterly record

Adjusted EBITDA adds back net interest expense, income taxes, depreciation, depletion, accretion and amortization, stock-based compensation and specified acquisition expenses.

Cash generation and borrowing

The latest full financial statements cover June 30, 2026. Operating cash flow was $240.9 million in the first nine months of the fiscal year, up from $179.3 million a year earlier. Purchases of property, plant and equipment were $144.2 million, compared with $104.9 million. Cash spent on acquisitions was $337.4 million.

At June 30, Construction Partners held $94.5 million of cash and had $1.803 billion of debt principal outstanding, compared with $156.1 million and $1.626 billion at September 30, 2025. The June balances preceded several subsequent acquisitions.

During June, the company expanded its revolving credit facility to $700 million and added $300 million of term loans. At quarter-end, it had $599.2 million of revolver availability after borrowings and letters of credit. The revolver and Term Loan A mature in June 2030; the Term Loan B borrowing matures in November 2031.

Acquisitions expand the operating network

Construction Partners completed seven acquisitions in fiscal 2026. After its July purchase of Ellsworth Construction, it added Asphalt Express in Oklahoma in August and Roads, Inc. of NWF in Florida in September. Asphalt Express brought liquid-asphalt supply and transportation capabilities and a site for a future terminal. Roads, Inc. added an operating asphalt plant north of Pensacola.

Three further deals were announced early in fiscal 2027. The company acquired J.H. Strain's asphalt manufacturing and construction assets in Texas, including two plants; Cline Construction in Florida, including a permitted asphalt-plant site; and Piedmont Paving in Georgia, including an operating plant. Piedmont was announced on November 4.

The fiscal 2027 outlook

The November 5 outlook calls for revenue of $4.175 billion to $4.275 billion, net income of about $170.9 million to $180.8 million and adjusted EBITDA of $585 million to $620 million. The adjusted EBITDA margin range is 14% to 14.5%, with expected organic revenue growth of 6% to 8%.

Management expects margin improvement in the second half as lower-margin acquired projects finish and new pricing reflects higher fuel costs. The year-end results call is scheduled for November 19.

Our analysis of the gap against Construction Partners' August plan explains why the profit comparison matters despite strong annual growth.