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Here are 1-2 brief analogies for Granite Construction (GVA):

• They're like Vulcan Materials, but instead of just selling aggregates and asphalt, they also build the major roads, bridges, and infrastructure projects themselves.
• Think of them as the Bechtel of heavy civil infrastructure construction in the U.S., specializing in building highways, bridges, dams, and other public works.

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• Construction Materials: Production and sale of aggregates (sand, gravel, crushed stone), asphalt concrete, and ready-mix concrete.
• Heavy Civil Construction: Execution of large-scale public and private infrastructure projects, including highways, bridges, airports, dams, and water infrastructure.

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Granite Construction (GVA) primarily sells its services and materials to other entities, not individuals. Due to the competitive bidding nature of heavy civil construction and the diversity of their projects, Granite typically serves a broad range of clients, and no single customer generally accounts for a significant portion of its consolidated revenue.

Its major customers fall into the following categories:

• Government Agencies: This is a predominant customer category for heavy civil infrastructure projects. It includes federal agencies (e.g., U.S. Army Corps of Engineers, various federal departments), state agencies (e.g., State Departments of Transportation, water resource boards), and local government entities (e.g., city public works departments, county transportation commissions, water and sanitation districts, port authorities). These are not public companies with stock symbols.
• Private Sector Clients: Granite provides construction services and materials to various private companies for large-scale infrastructure and site development projects. These clients can include industrial companies, commercial developers, energy companies (e.g., for power plants or renewable energy facilities), mining operations, and real estate developers requiring significant civil infrastructure for their projects. Due to the diverse nature of these projects and clients, no specific public company is consistently identified as a major customer contributing a significant percentage of Granite's overall revenue.

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1. Sensitivity to Economic Fluctuations and Infrastructure Spending Cycles: Granite Construction's business is highly susceptible to macroeconomic factors, including economic cycles, market volatility, inflation, and interest rate changes. A slowdown in both public and private infrastructure investment can directly impact the company's project pipeline, revenue, and overall profitability. For example, a significant reduction in public and private spending could substantially compress the company's EBITDA.
2. Legal, Regulatory, and Accounting Risks: The company has a history of facing legal and regulatory challenges, including a $12 million settlement with the SEC in August 2022 related to accounting malfeasance. Furthermore, a lawsuit was filed in 2020 alleging fraudulent statements regarding the accounting treatment of several large construction projects, with claims of intentionally inflated revenues and profits. The company has also identified material weaknesses in its internal control over financial reporting and disclosure controls. These issues pose a risk to the company's reputation, financial stability, and could lead to further legal actions or penalties.
3. Integration Challenges from Acquisitions: Granite Construction has engaged in strategic acquisitions, such as Warren Paving and Papich Construction, to expand its operational footprint and enhance vertical integration. However, the successful realization of benefits, including enhanced profitability and cash flow, hinges on the seamless operational integration of these acquired entities and the retention of their margins. Failure to effectively integrate could undermine strategic goals and impact financial performance.

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Granite Construction (GVA) operates primarily in two segments: Construction and Materials, focusing on the United States market. The addressable markets for their main products and services in the U.S. are as follows:

Construction Segment

• Transportation Infrastructure: This includes roads, highways, bridges, rail, and airports. The U.S. transportation infrastructure market was valued at approximately USD 380.4 billion in 2024 and is projected to reach USD 550.5 billion by 2032, demonstrating a Compound Annual Growth Rate (CAGR) of 4.9% from 2025 to 2032. Another estimate places the market at USD 233.03 billion in 2025, expected to grow to USD 286.86 billion by 2030, with a CAGR of 4.24% during that period.
• Water Infrastructure: This segment covers projects such as dams, reservoirs, aqueducts, and water treatment facilities. The U.S. water infrastructure and management market was sized at USD 120.2 billion in 2024 and is anticipated to reach USD 179.6 billion by 2032, with a CAGR of 5.3% from 2025 to 2032. Similarly, the U.S. water and wastewater treatment market was valued at USD 121.40 billion in 2024 and is projected to grow to USD 206.64 billion by 2032, at a CAGR of 6.9% during the forecast period.

Materials Segment

• Construction Materials (Aggregates, Asphalt Concrete, etc.): The U.S. construction materials market was valued at USD 145.0 billion in 2024 and is expected to grow at a CAGR of 4.0% from 2025 to 2032, reaching USD 196.1 billion. In 2024, the U.S. market for construction materials held a significant share within North America, with a market size of USD 448.6 billion. Aggregates are a dominant material type within this market.

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Granite Construction (GVA) is anticipated to experience revenue growth over the next two to three years, driven by several key factors:

1. Robust Committed and Awarded Projects (CAP) Backlog: Granite has consistently reported a strong and growing backlog of Committed and Awarded Projects (CAP), which provides a solid foundation for future revenue. For instance, the company achieved a record CAP of $6.3 billion, signaling a healthy pipeline of work. Management expects to continue growing its CAP portfolio and increase bid day margins through 2026. This includes multi-year projects such as segments of the Horizon Lateral Program, a water infrastructure initiative in Southern Nevada.
2. Increased Public Infrastructure Funding: The Infrastructure Investment and Jobs Act (IIJA) and healthy state budgets are significant catalysts for Granite's public sector construction and materials segments. The company is strategically leveraging these funds for projects in roads, bridges, airports, and water infrastructure, with some projects being 60% to 100% publicly funded. This sustained public investment is expected to create attractive opportunities and support organic revenue growth through 2027.
3. Strategic Acquisitions and Vertical Integration: Granite is actively pursuing strategic acquisitions, particularly to enhance its vertically integrated operations within its "home markets" and expand its geographic footprint. Recent acquisitions, such as Dickerson & Bowen, Inc. and Papich Construction, have already contributed to revenue growth and expanded the company's presence. These acquisitions aim to provide reliable access to resources, improve cost efficiencies, and drive margin expansion in the materials segment.
4. Focus on Best Value Procurement and Higher-Margin Projects: The company is strategically shifting towards "Best Value Procurement" and prioritizing higher-quality, higher-margin projects. This disciplined project selection and improved execution across its project portfolio are expected to drive increased gross profit margins in both the construction and materials segments.
5. Growth in Materials Segment with Price Increases: Investments in the materials business, including reserve expansion and plant upgrades, are a priority within Granite's capital allocation strategy. The materials segment has seen growth through acquisitions, increased aggregate production, and is experiencing sales price increases. This segment is becoming a larger and more profitable component of the business, contributing to overall revenue growth and margin improvement.

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Share Repurchases

• On February 1, 2022, the Board of Directors authorized Granite Construction to purchase up to $300.0 million of its common stock.
• As of September 30, 2025, $183.9 million of this authorization remained available.
• In 2024, the company repurchased 524,800 shares of its common stock under the board-approved program and approximately $30.2 million in aggregate principal amount of its 2.75% Convertible Notes.

Share Issuance

• In 2024, Granite Construction issued convertible notes, raising $373.75 million.
• The company engaged in capped call transactions in 2024 to mitigate potential dilution from convertible notes.

Outbound Investments

• On August 5, 2025, Granite Construction completed the acquisitions of Warren Paving for $540.0 million and Papich Construction for $170.0 million.
• Subsequent to the third quarter of 2025, the company acquired Cinderlite for $58.5 million.
• These strategic acquisitions in 2024 and 2025, including Dickerson & Bowen, Inc. and Granite Infrastructure Canada, Ltd. in 2024, aim to expand the company's footprint, strengthen its materials segment, and increase aggregate reserves.

Capital Expenditures

• Capital expenditures are expected to total approximately $130 million for the fiscal year 2025, representing about 3% of anticipated revenue.
• On a long-term basis, the company expects annual capital expenditures to remain at approximately 3% of revenue.