Construction and construction materials company Granite Construction (NYSE: GVA) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 19.2% year on year to $1.17 billion. The company’s full-year revenue guidance of $5 billion at the midpoint came in 2.4% above analysts’ estimates. Its non-GAAP profit of $1.40 per share was 1.8% above analysts’ consensus estimates.
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Granite Construction (GVA) Q4 CY2025 Highlights:
- Revenue: $1.17 billion vs analyst estimates of $1.16 billion (19.2% year-on-year growth, 0.8% beat)
- Adjusted EPS: $1.40 vs analyst estimates of $1.38 (1.8% beat)
- Operating Margin: 6.4%, in line with the same quarter last year
- Free Cash Flow Margin: 11%, down from 14.8% in the same quarter last year
- Market Capitalization: $5.81 billion
Company Overview
Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE: GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Granite Construction grew its sales at a mediocre 7.2% compounded annual growth rate. This wasn’t a great result compared to the rest of the industrials sector, but there are still things to like about Granite Construction.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Granite Construction’s annualized revenue growth of 12.3% over the last two years is above its five-year trend, suggesting its demand recently accelerated. 
This quarter, Granite Construction reported year-on-year revenue growth of 19.2%, and its $1.17 billion of revenue exceeded Wall Street’s estimates by 0.8%.
Looking ahead, sell-side analysts expect revenue to grow 11.1% over the next 12 months, similar to its two-year rate. Despite the slowdown, this projection is commendable and suggests the market is baking in success for its products and services.
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Operating Margin
Granite Construction was profitable over the last five years but held back by its large cost base. Its average operating margin of 3.5% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.
On the plus side, Granite Construction’s operating margin rose by 6.5 percentage points over the last five years, as its sales growth gave it operating leverage.
In Q4, Granite Construction generated an operating margin profit margin of 6.4%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Granite Construction’s EPS grew at an astounding 53.6% compounded annual growth rate over the last five years, higher than its 7.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into the nuances of Granite Construction’s earnings can give us a better understanding of its performance. As we mentioned earlier, Granite Construction’s operating margin was flat this quarter but expanded by 6.5 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For Granite Construction, its two-year annual EPS growth of 38.9% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.
In Q4, Granite Construction reported adjusted EPS of $1.40, up from $1.23 in the same quarter last year. This print beat analysts’ estimates by 1.8%. Over the next 12 months, Wall Street expects Granite Construction’s full-year EPS of $6.04 to grow 2.6%.
Key Takeaways from Granite Construction’s Q4 Results
It was great to see Granite Construction’s full-year revenue guidance top analysts’ expectations. We were also happy its revenue narrowly outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock remained flat at $133.16 immediately after reporting.
Is Granite Construction an attractive investment opportunity at the current price? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
