Granite Construction reported higher third-quarter revenue and adjusted earnings, while a large charge tied to settling conversions of its convertible notes sharply reduced reported net income. The company also introduced 2029 financial targets that call for an expected 10% to 12% compound annual growth rate in organic revenue.
Its project pipeline reached a record, and year-to-date operating cash flow improved. Granite said it sees opportunities in transportation as well as federal, mission-critical infrastructure, rail and other targeted markets.
Key details
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Third-quarter revenue rose 23% to $1.77 billion, up from $1.43 billion a year earlier. Gross profit increased to $336 million from $261 million.
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Reported net income fell to $3 million, or 7 cents per diluted share, from $103 million, or $1.98 per share, in the year-earlier quarter. Granite attributed the current quarter’s result to $162 million in net non-operating charges associated with settling conversions of its 3.75% convertible notes.
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Granite said it settled the note conversions primarily in cash to limit dilution to shareholders. It excluded the conversion-related effects from its adjusted results.
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Adjusted net income rose to $173 million, or $3.81 per diluted share, from $124 million, or $2.70 per share. Adjusted EBITDA increased 32% to $283 million from $216 million. These are company-defined, non-GAAP measures.
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Selling, general and administrative costs edged up to $104 million, but declined as a share of revenue, to 5.9% from 7.1%.
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Committed and Awarded Projects reached a record $7.5 billion, up $37 million sequentially. The measure includes expected future revenue from executed contracts and certain joint-venture and construction-management work.
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For the first nine months of 2026, revenue increased to $4.13 billion from $3.26 billion, while gross profit rose to $684 million from $543 million. Adjusted EBITDA grew to $527 million from $396 million.
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Granite reported a nine-month net loss of $317 million, or $7.23 per diluted share, compared with net income of $141 million, or $2.83 per share, a year earlier. The loss reflected $535 million in net charges related to settling the convertible-note conversions. Excluding those effects, adjusted net income was $287 million, or $6.17 per share, versus $211 million, or $4.67 per share.
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Operating cash flow for the first nine months was $404 million, up from $290 million in the same period of 2025.
Plain-English implications
The convertible-note settlement had a substantial effect on Granite’s reported earnings, but the company’s adjusted earnings and operating results were higher year over year. Settling the conversions primarily in cash was intended to limit shareholder dilution. The record project pipeline and newly stated organic-growth target set out the company’s growth ambitions, while the release did not provide further detail on the components of the 2029 targets.