ROAD Filings — Construction Partners, Inc. - FilingSpy
ROAD
Construction Partners, Inc.
Founded in 2001 in Dothan, Alabama, a civil infrastructure contractor that makes hot-mix asphalt, paves roads, develops sites, and mines aggregates across the Sunbelt, with state transportation departments among its biggest customers. Growth has come largely from buying local road builders—including Lone Star Paving, its entry into Texas in late 2024, and then a firm in Oklahoma. The name reflects how it works: construction carried out in partnership with regional companies rather than from one distant headquarters.
Organic revenue growth accelerated to 9% in Q3, the fastest in over a year, while gross margin held near a multi-year high at 16.8%.
accelerated to 9%, the fastest pace in over a year. rose 28% to $999 million and increased 35% to $60 million, as acquisitions and higher-margin continued to drive results, though rose 20% to $30 million on $1.8 billion in . The core business is strengthening, but rising interest costs remain a persistent drag on the bottom line.
Key takeaways
Organic from existing markets rose 8.9% to $69.1 million, accelerating from 5.0% in Q3 FY2025 and 3.6% in Q1 FY2026, driven by strong public and private demand across southeastern markets.
rose 28.2% to $999.4 million, with $151.0 million from acquisitions — primarily Lone Star Paving — and $69.1 million in .
was 16.8%, down 0.1 points from 16.9% a year ago, as cost of revenues rose slightly faster than ; the margin remained near the highest quarterly level in over three years.
Section summaries
Management's Discussion and Analysis
Revenue rose 28% to $999M in Q3 FY2026, driven by acquisitions and 9% organic growth, while net income increased 35% to $60M.
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Total revenues grew 28.2% to $999.4 million, with $151.0 million from acquisitions and $69.1 million from existing-market of 8.9%.
increased 27.8% to $168.4 million, but dipped slightly to 16.8% from 16.9% due to cost of revenues rising slightly faster.
rose 35.2% to $59.6 million, and rose 34.2% to $1.06, as a $36.6 million increase in more than offset a $12.1 million rise in G&A and a $5.1 million increase in .
, net rose 20.0% to $30.3 million, reflecting additional borrowings and fees from amending credit agreements; reached $1.80 billion at quarter-end, with a hypothetical 1% rate increase adding $18.0 million in annual interest cost.
Contract reached $3.4 billion, including $0.7 billion in low-bid jobs not yet under contract, with approximately 73% expected to be completed within twelve months.
What changed
accelerated to 8.9% in Q3, up from 5.0% in Q3 FY2025 and 3.6% in Q1 FY2026, answering the question raised in earlier filings of whether the pace could sustain above 10% in the second half.
of 16.8% held near the Q3 FY2025 peak of 16.9%, showing that the higher-margin and efficient plant utilization continued to offset any margin pressure from Lone Star's Texas project mix — a key watch item from the FY2025 10-K.
rose to $30.3 million as reached $1.80 billion, up from $1.76 billion in Q2 FY2026, with the $300 million now set to mature in June 2027 — a risk flagged repeatedly in prior filings.
of $30.6 million in Q3 brought the nine-month total to $96.6 million, still tracking below the $165–$185 million full-year target, consistent with the seasonal pattern flagged in Q2.
What to watch
Whether can sustain near 9% in Q4 and into FY2027, or whether the Q3 acceleration reflects a peak in demand as the year progresses.
The level of generation in Q4 against the $165–$185 million target, given that only $96.6 million has been generated through nine months and Q4 is typically a seasonally weaker cash flow quarter.
The trajectory of as $1.80 billion in remains on the balance sheet, with the $300 million maturing in June 2027 and a hypothetical 1% rate increase adding $18.0 million in annual interest cost before hedging.
The pace and size of additional acquisitions under the ROAD 2030 strategic plan, given that the company deployed $215 million in Q1 alone and ended Q3 with $94.5 million in cash and $599.2 million in availability.
General and administrative expenses rose 23.8% to $63.1 million, primarily from costs tied to newly acquired businesses.
, net increased 20.0% to $30.3 million, driven by additional borrowings and fees from amending credit agreements.
stood at $3.4 billion, with $2.7 billion in uncompleted work and $0.7 billion in low bid/no contract projects.
Liquidity was supported by $599.2 million in availability, and the company expects $185-$205 million in fiscal 2026 .
Quantitative and Qualitative Disclosures About Market Risk
The company holds $1.80B in variable-rate debt, with a 1% rate shift moving annual interest by $18.0M, and uses a $300M interest rate swap to partially hedge.
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Interest rate risk arises from -based floating-rate borrowings under Term Loan A / and Term Loan B agreements.
At June 30, 2026, variable-rate debt totaled $1.80 billion; a hypothetical 1% rate change would alter annual by $18.0 million.
The company held a single interest rate swap with a $300.0 million , maturing June 30, 2027, and a fair value of $6.2 million.
Derivatives are used only for hedging, not for speculative or trading purposes.
Projected interest payments assume a weighted-average -based floating rate of 5.90% per annum as of June 2026.