Construction Partners (ROAD) has reported a strong performance in its third fiscal quarter of 2026, demonstrating substantial growth in both revenue and adjusted EBITDA. The company's strategic acquisitions and effective operational management have contributed to a record project backlog and an optimistic outlook for the remainder of fiscal year 2026 and into 2027. This positive momentum is underpinned by a robust demand environment in the Sunbelt states and the company's ability to navigate market challenges such as energy cost inflation and weather variations.
During the third quarter of fiscal 2026, Construction Partners achieved a remarkable 28.2% increase in revenue, reaching $999.4 million, compared to $779.3 million in the previous year. This growth was driven by both organic expansion, contributing 8.9%, and strategic acquisitions, accounting for 19.3% of the total revenue increase. Adjusted EBITDA also saw a significant rise of 23.8%, totaling $163.0 million, up from $131.7 million. Although the adjusted EBITDA margin slightly decreased to 16.3% from 16.9% in the prior year, this was attributed to energy cost inflation and adverse weather conditions in May.
The company's project backlog reached an unprecedented $3.36 billion as of June 30, 2026, indicating strong future demand for its services. Adjusted net income for the quarter stood at $60.6 million, or $1.08 per diluted share, marking a 34% increase. These impressive figures led Construction Partners to revise its full-year fiscal 2026 guidance upwards, projecting revenue between $3.64 billion and $3.68 billion, and adjusted EBITDA between $559.0 million and $569.0 million. The adjusted EBITDA margin guidance was set between 15.36% and 15.46%, signifying an anticipated year-over-year improvement of 30 to 40 basis points.
Furthermore, Construction Partners' strategic focus on the burgeoning data center market has yielded substantial opportunities. CEO Jule Smith noted that 70% to 75% of new data center construction nationally is expected to occur within the company's operating states, positioning CPI for significant involvement in this sector. The acquisition of Ellsworth Construction in Oklahoma further enhances this capability, adding $100 million in existing projects and a pipeline of $130 million in new opportunities. Similarly, the Lone Star Paving platform in Texas has a data center project pipeline exceeding $100 million in contract value.
The company has also demonstrated resilience in managing federal funding uncertainties. Despite potential legislative delays for a new multiyear surface transportation bill, management expressed confidence in continued funding, citing a long history of bipartisan support for infrastructure investment. Executive Chairman Ned Fleming highlighted that past periods of continuing resolutions did not disrupt business activities, with states often increasing their own funding to compensate. Approximately 45% of IIJA (Infrastructure Investment and Jobs Act) funding remains available for deployment, ensuring healthy bid activity and contract awards across the company's operational footprint.
In addition to acquisitions and market expansion, Construction Partners is committed to organic growth. The company plans to launch several greenfield facilities later in fiscal 2026 to penetrate underserved high-growth markets. These initiatives, coupled with the company's robust project backlog and effective cost management, including a pass-through pricing model for liquid asphalt, are expected to drive sustained profitable growth. The company's leadership team, guided by the "20-mile march" principle, aims for consistent and disciplined progress toward its ROAD 2030 strategic plan.
Construction Partners continues to demonstrate strong financial health and strategic foresight, reinforcing its position as a leader in the infrastructure construction sector. The company's commitment to employee development, strategic acquisitions, and proactive management of market dynamics ensures its capacity for sustained growth and value creation for shareholders. The consistent progress and positive outlook reflect a well-executed strategy and a resilient business model.
