Earnings Recap — Q3 FY2026
CY Q3 2026 · Reported August 7, 2026 · Beat 5 of last 7 quarters
The Buildout is a website built on agentic AI tools, currently in beta, and could have factual errors.
Construction Partners is a direct beneficiary of the AI infrastructure buildout, providing site work and paving for data center projects across the Sunbelt. With 70-75% of new data center construction expected in its existing states, the company is well-positioned to capture incremental demand. The Ellsworth acquisition strengthens its presence in Oklahoma, a key data center market, and expands its capabilities to serve this fast-growing end market.
Construction Partners delivered another strong quarter with revenue up 28.2% to $999.4M, driven by 8.9% organic and 19.3% acquisitive growth, despite wet weather in May and energy cost inflation. Adjusted EBITDA rose 24% to $163M with margin of 16.3%. The company completed the Ellsworth Construction acquisition in Oklahoma, expanding its data center capabilities, and raised its full-year guidance. Record backlog of $3.36B provides strong visibility into fiscal 2027. Management highlighted accelerating AI data center activity across its footprint, with 70-75% of new data center construction expected in its existing states.
Management raised fiscal 2026 guidance for the second consecutive quarter, now expecting revenue of $3.64B-$3.68B (over 30% growth), adjusted EBITDA of $559M-$569M, and adjusted EBITDA margin of 15.36%-15.46%. The raise reflects Q3 outperformance and the Ellsworth acquisition. For fiscal 2027, management anticipates strong organic growth plus approximately $140M of acquisitive revenue carrying over, and expects to bring several greenfield facilities online later this year. On federal funding, they believe Congress will ultimately pass a new multiyear surface transportation bill (the BUILD America 250 Act) with higher funding levels, but acknowledge a continuing resolution is increasingly likely; they do not expect disruption to fiscal 2026 or 2027 activity. Management reiterated its ROAD 2030 5-year plan to achieve controlled, profitable growth.
“With an estimated 70% to 75% of new data center construction nationally expected to occur in our existing states, we believe CPI is well positioned to participate in this growth through disciplined bidding, established relationships with general contractors and a focus on projects that meet our commercial margin objectives.”
on AI data center opportunity
“We are raising our fiscal 2026 guidance to reflect over 30% growth on both top line revenue and bottom line margins.”
on Guidance raise
“During the Obama administration, about 4.5 years of it, we lived through a continuing resolution. It's just a fact. You can go Google it, use any of the AI you want. And what we learned is there were no disruptions.”
on Federal funding resilience
Can you size the asphalt pass-through revenue impact, expected total M&A contribution in guidance, and confirm $140M rolls into next year?
Greg Hoffman noted $8-10M of additional revenue from liquid AC pass-through in the quarter, spread across organic and acquisitive. Jule Smith confirmed ~22% acquisitive growth at midpoint (~$780-790M) and ~$140M carrying into FY27.
What's driving the implied Q4 margin step-up beyond seasonal cost leverage? Any help from Ellsworth?
Greg Hoffman said Ellsworth and other acquisitions become fully integrated in Q4, and seasonal absorption of fixed costs drives higher profit and EBITDA. Jule Smith added that energy costs are being passed through and reflected in guidance.
How are you tackling the data center opportunity differently? Is pricing or project length different?
Jule Smith said the model hasn't changed—teams pursue projects in their local markets. Data centers are a growing part of the business, with projects ranging from $2M to $40M, and they allocate resources to highest-margin opportunities.