Kirby Corporation (KEX) | The Buildout — AI Infrastructure
The Verdict
Kirby Corporation is the largest domestic tank barge operator, moving bulk liquid products along the Mississippi River System, the Gulf Intracoastal Waterway, and all three U.S. coasts. Through its Distribution and Services segment, it packages, integrates, and services behind-the-meter prime power and backup systems for data centers and industrial users. The AI buildout reaches Kirby through that power-generation work, not through compute or software.
| Market Cap | — |
| Revenue (TTM) | $3.5B |
| Revenue Growth | +6.6% |
| EBITDA Margin (TTM) | 21.6% |
| Net Cash | $39M |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Inland marine supply is structurally tight: industry newbuilds of about 60 barges in 2026 are roughly replacement level, and newbuild economics remain 40% below required returns.
- Spot inland rates have returned to year-ago levels and lead term by 10% or more, with about 40% of the inland term portfolio repricing in Q4.
- Power Generation backlog was raised to $1 billion to $1.5 billion; book-to-bill is well above 1 and most inbound is behind-the-meter power.
- D&S operating margin improved more than 300 basis points sequentially to 10.0% in Q2 2026 on favorable mix.
- Management expects the Power Generation installed base to double in the next 18 months, supported by the Kirby Integrated Power Systems aftermarket initiative.
What We’re Watching
- OEM engine delivery is the binding constraint: OEMs are described as flat out; some OEMs are sold out through 2027, and most are sold out to 2029, with Q2 delays shifting projects into 2H 2026.
- Q4 2026 inland term renewals show whether the spot premium translates into a higher 2027 rate base.
- Coastal term renewals in the 80,000–100,000-barrel ATB market turned down low single digits, the first softness after four years of increases.
- Jones Act waiver policy remains a medium-term coastal risk if extended as a blanket measure.
The thesis is intact and modestly strengthening. The power-generation backlog moved into a higher range, D&S revenue guidance was raised, and D&S margins inflected upward, while marine pricing kept a slow, supply-supported upward path. The open question is whether OEM engine deliveries convert the backlog before the AI-specific revenue contribution becomes clearer.
Earnings Beat
Q2 2026 revenue rose to $922.4 million, with net earnings attributable to Kirby of $89.7 million and EPS of $1.67. D&S operating margin improved more than 300 basis points sequentially to 10.0% on favorable mix; Power Generation revenue rose 8% year-over-year.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $922M | $844M | $856M | +7.8% |
| Gross margin | 23.9% | 25.7% | 26.5% | -260bps |
| EBITDA | $192M | $174M | $198M | −2.8% |
| EPS | $1.67 | $1.50 | $1.67 | −0.1% |
| Power Generation backlog (guided range) | $1.0B–$1.5B | $0.5B–$1.0B | n/a | — |
Our new backlog guidance is a $1 billion to $1.5 billion. And the good news is most of the inbound has been behind-the-meter power.— David W. Grzebinski, CEO, 2026-07-29
Management tone: Management's tone shifted from constructive and detailed in Q1 to slightly more bullish in Q2. It held full-year EPS guidance but added upper-end bias, raised D&S revenue guidance, and openly disclosed Q2 coastal and fuel headwinds.
Management Guidance
Management reaffirmed full-year EPS growth of 5% to 15% and expects results toward the upper end. D&S revenue guidance was raised from flat to slightly up to mid-single-digit growth. Capex of $220 million to $260 million and operating cash flow of $575 million to $675 million were reaffirmed; the CFO said Q3 is expected better than Q4.
Trajectory
Revenue has re-accelerated: $871 million in Q3 2025, $852 million in Q4, $844 million in Q1 2026, then $922 million in Q2, a 9.3% quarter-on-quarter increase. Trailing margins are compressing — gross down 180bps, operating down 130bps, EBITDA down 140bps — even as D&S segment margin improved sequentially, because fuel-cost timing and coastal shipyard work pressured Q2. Demand is not the issue; OEM engine deliveries and marine pricing are the swing factors.
The Model
The model projects FY+1 revenue of $3,532 million and EBITDA of $784 million (22.2% margin), anchored by marine pricing and continued power-generation backlog conversion. FY+2 revenue rises to $3,860 million with EBITDA of $896 million (23.2% margin), reflecting mix shift toward higher-value behind-the-meter work and an emerging aftermarket stream.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $3.4B | $3.5B | $3.9B |
| YoY Growth | — | +5.0% | +9.3% |
| EBITDA | $756M | $784M | $896M |
| EBITDA Margin | 22.5% | 22.2% | 23.2% |
Projections are the median of 5 independent model runs. The model’s revenue sits 2.4% above analyst consensus.
Management reaffirmed full-year EPS growth of 5% to 15% and expects results toward the upper end. D&S revenue guidance was raised from flat to slightly up to mid-single-digit growth. Capex of $220 million to $260 million and operating cash flow of $575 million to $675 million were reaffirmed; the CFO said Q3 is expected better than Q4.
What Could Go Right — and Wrong
- Q4 inland term renewals reprice at a meaningful premium, lifting 2027 marine revenue and margins.
- OEM engine deliveries accelerate in 2H 2026, converting the $1B–$1.5B Power Generation backlog into revenue.
- Behind-the-meter prime power mix shift pushes D&S operating margin above 10% and toward low double digits.
- Kirby Integrated Power Systems begins converting the doubling installed base into service revenue.
- Coastal ATB pricing softness stays contained and coastal margins move north of 20% over the next couple of years.
- OEM engine delivery delays persist into 2027, leaving the backlog as a long-duration promise.
- Inland pricing repeats 2025 softness; spot rates fall back below term and Q4 renewals disappoint.
- Jones Act waiver extends as a blanket measure, pressuring coastal renewals and mariner retention.
- Fuel-cost timing and collections build again, repeating Q2's cash-flow squeeze.
- Coastal 80,000–100,000-barrel ATB softness spreads beyond the niche.
Looking Ahead
The next few quarters turn on Q3 fuel-cost catch-up, 2H OEM engine deliveries, and Q4 inland term renewals. Management also points to the Power Generation installed base doubling over the next 18 months and the next marine maintenance cycle in late 2027 / early 2028 as the medium-term signposts.
- Not specifiedJones Act waiver policy — Potential medium-term coastal risk if waivers persist.
- September 18, 2026Calcasieu Lock work completion — Congestion eases after daily 7 a.m.–7 p.m. closures.
- Q3 2026Fuel-cost recovery quarter — Most Q2 fuel rebill catch-up expected in Q3.
- Q4 2026Inland term renewal season — 40% of term book reprices; spot premium tested.
- 2H 2026OEM engine delivery cadence — Delayed Q2 engine deliveries shift into Q3/Q4.
- Next 18 monthsInstalled base doubling — Power Gen installed base expected to double from Q2 2026.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $3.3B | $3.4B | $3.5B | +3.0% |
| Gross Margin | 25.3% | 26.3% | 25.3% | +100bps |
| EBITDA | $640M | $756M | $3.8B | +18.2% |
| EBITDA Margin | 19.6% | 22.5% | 21.6% | +288bps |
| Net Income | $287M | $355M | $355M | +23.6% |
| Free Cash Flow | $414M | $406M | $2.2B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)25.3%
- EBITDA Margin (TTM)21.6%
- Net Margin (TTM)10.2%
- ROIC11.2%
- FCF Conversion56.3%
- SBC / Revenue0.2%
The Company
Kirby Corporation is the largest domestic tank barge operator, moving bulk liquid products throughout the Mississippi River System, the Gulf Intracoastal Waterway, and all three U.S. coasts. Through its Distribution and Services segment, it also packages, integrates, and services power-generation systems, including behind-the-meter prime power and backup power for data centers. The AI buildout touches Kirby through that power-generation equipment, not through compute or software.
The company operates the San Jac Marine shipyard in Channelview, Texas; oilfield equipment manufacturing and remanufacturing in Houston and Oklahoma City; and a power-generation and nuclear-industry operation in Rocky Mount, North Carolina. The 10-K risk disclosures identify EMD, MTU, Allison, and Daimler distributor/service rights as relationships that could affect customer service capability if lost.
Business Segments
Competitive Landscape
The supplied 10-K extract describes Marine Transportation as operating tank barges and towing vessels transporting bulk liquid products throughout the Mississippi River System, on the Gulf Intracoastal Waterway, and coastwise along all three United States coasts. Its Distribution and Services segment provides equipment, after-market parts and services for power generation systems, engines, transmissions, reduction gears, electric motors, drives, controls, and related equipment used in power generation, marine, on-highway, oilfield services, and other industrial applications.
Supply Chain
Kirby sits between OEM engine makers and data-center/industrial end users in power generation, and between bulk-liquid shippers and refiners in marine. No named neighbor in the supplied material called out Kirby directly.
More on KEX: Earnings recap