ROAD Raises Fiscal 2026 Outlook Amid Record Backlog and Strong Profit Growth

Record $3.14 Billion Backlog and Strong Organic Growth Lead to Upgraded Guidance

Construction Partners, Inc. (NASDAQ:ROAD) delivered a robust performance in its fiscal second quarter of 2026, underscored by a record-high $3.14 billion in project backlog and 11% growth from organic revenues. The company’s ability to consistently secure significant project wins throughout the Sunbelt region, coupled with smooth execution across its platforms, not only drove a surge in revenue and profitability but also positioned CPI to raise its fiscal 2026 guidance.

Financial Highlights Point to Expanding Margins and Scalable Growth

The quarter reflected exceptional financial progress, with revenues climbing to $769.20 million—up 34.5% from the same period last year. Gross profit jumped to $98.85 million, a rise of 38.5% year over year. Notably, net income grew to $9.18 million, more than doubling from the prior year's $4.22 million, while adjusted net income soared to $10.37 million (Q2 FY25: $4.38 million). Diluted earnings per share more than doubled to $0.16, and adjusted EBITDA hit $93.32 million, up 34.7% over last year.

Profitability and Margin Improvement Set ROAD Apart

Adjusting for one-time acquisition effects, ROAD’s adjusted EBITDA margin improved slightly to 12.13% in Q2—running ahead of the previous year and setting the stage for even stronger margins in the back half of the fiscal year, when construction activity typically peaks. The company continued to tightly control general and administrative expenses at 8.3% of revenue. Management cited disciplined project execution, effective risk management, and successful pass-through of volatile energy costs as core drivers of the improved bottom line.

Strategic Acquisition Amplifies Growth Platform in Tennessee

ROAD’s purchase of Four Star Paving by subsidiary Pavement Restorations, Inc. in April is expected to enhance vertical integration and market scale in the quickly expanding Nashville metro area. The company highlighted this acquisition as a pivotal move, enhancing its service capabilities and positioning CPI for future wins in regional infrastructure projects.

Upgraded 2026 Outlook: Growth Momentum Poised to Continue

Reflecting on Q2 performance and the expected benefits from new acquisitions, ROAD raised its FY26 guidance across key metrics:

Strong Sunbelt Demand and Execution Propel Confidence

Management emphasized the durability of demand for infrastructure services across the Sunbelt, citing economic growth, increased migration, and state investment in roads as key tailwinds. ROAD’s vertically integrated model and cost pass-through contracts allowed it to offset input price swings—bolstering both margins and competitive positioning. The company’s decentralized approach, supported by operational excellence and local market expertise, continues driving growth as ROAD compounds scale through targeted acquisitions.

Investor Takeaway: Growth Outlook Strengthened by Profit Trends and Backlog Depth

ROAD stands out for its accelerating profitability, operational efficiency, and capacity to both execute and integrate new acquisitions. Heading into the busiest construction months, the balance sheet is supported by a record backlog and management’s raised targets. Investors tracking Sunbelt infrastructure growth may find ROAD’s financial momentum and strategic positioning worth following as the industry’s multi-year upcycle continues.

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