--- title: "Construction Partners Q3 FY2026 earnings: Revenue rises 28% as backlog reaches a record" type: "News" locale: "en" url: "https://longbridge.com/en/news/295225611.md" description: "Construction Partners (ROAD) reported Q3 FY2026 revenue of $999.4 million, up 28.2% YoY, driven by strong demand and the Ellsworth Construction acquisition. GAAP diluted EPS rose to $1.06. Despite record backlog of $3.36 billion, adjusted EBITDA margin narrowed to 16.3% due to energy costs and wet weather. CPI raised full-year guidance, projecting revenue of $3.64-$3.68 billion and adjusted net income of $177.6-$181.4 million." datetime: "2026-08-07T11:14:41.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295225611.md) - [en](https://longbridge.com/en/news/295225611.md) - [zh-HK](https://longbridge.com/zh-HK/news/295225611.md) --- # Construction Partners Q3 FY2026 earnings: Revenue rises 28% as backlog reaches a record Construction Partners (NASDAQ: ROAD) reported fiscal third-quarter 2026 revenue of $999.4 million, up 28.2% from $779.3 million a year earlier, while GAAP diluted EPS increased to $1.06 from $0.79. Net income grew faster than revenue, but adjusted EBITDA margin narrowed as energy-cost inflation and unusually wet May weather affected operations. Record backlog and the expected contribution from Ellsworth Construction supported a higher fiscal 2026 outlook. ## Core earnings data CPI attributed the quarter’s growth to continued execution and healthy demand for public infrastructure and commercial construction. The release did not quantify how much revenue growth came from existing operations versus acquisitions. GAAP operating income and net income grew faster than revenue. Adjusted EBITDA rose at a slower rate, however, resulting in a lower adjusted EBITDA margin. Metric Q3 FY2026 Q3 FY2025 Year-over-year change Revenue $999.4 million $779.3 million +28.2% Gross profit / margin $168.4 million / 16.8% $131.8 million / 16.9% +27.8%; margin down about 10 bps Operating income / margin $109.4 million / 10.9% $82.9 million / 10.6% +31.9%; margin up about 30 bps Net income $59.6 million $44.0 million +35.2% GAAP diluted EPS $1.06 $0.79 +34.2% Adjusted net income $60.6 million $45.2 million +33.9% Adjusted diluted EPS $1.08 $0.81 +33.3% Adjusted EBITDA / margin $163.0 million / 16.3% $131.7 million / 16.9% +23.8%; margin down 60 bps Adjusted net income, adjusted diluted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP measures. ## Backlog and market demand Project backlog reached a record $3.36 billion on June 30, up approximately 14% from $2.94 billion a year earlier and about 7% from $3.14 billion at the end of March. Management said demand remained healthy across both public infrastructure and commercial construction markets, giving the company additional visibility into future activity. After the quarter ended, CPI acquired Ellsworth Construction to expand its Oklahoma presence, particularly in the Tulsa and Oklahoma City metropolitan areas. Management also highlighted Ellsworth’s data-center construction operations, which complement CPI’s existing portfolio in North Texas. The company expects Ellsworth to contribute to fiscal 2026 results, although it did not quantify that contribution separately. ## Revenue outpaced adjusted EBITDA as weather and energy costs pressured margin Revenue increased 28.2%, but adjusted EBITDA grew 23.8%, causing adjusted EBITDA margin to decline from 16.9% to 16.3%. Management identified energy-cost inflation and extremely wet weather across many markets in May as operating headwinds, but did not disclose the individual financial effect of either factor. Gross margin was nearly unchanged at approximately 16.8%. General and administrative expenses rose to $63.1 million from $51.0 million, but fell as a percentage of revenue to 6.3% from 6.5%, indicating that revenue growth provided some overhead leverage. This helped GAAP operating margin expand even as the adjusted EBITDA margin declined. ## Cash flow and balance sheet Cash-flow figures in the release cover the first nine months of fiscal 2026 rather than the third quarter alone. Operating cash flow increased approximately 34% to $240.9 million from $179.3 million, while capital expenditures rose to $144.2 million from $104.9 million. Subtracting capital expenditures from operating cash flow leaves approximately $96.6 million, compared with $74.4 million in the prior-year period. Cash and cash equivalents declined to $94.5 million on June 30 from $156.1 million at the end of fiscal 2025. Combined current maturities and long-term debt increased to approximately $1.79 billion from $1.61 billion. During the nine-month period, business acquisitions used $337.4 million of cash and total investing outflows reached $445.0 million, helping explain why higher operating cash generation did not result in a larger cash balance. Quarterly net interest expense also increased to $30.3 million from $25.2 million. Operating income growth was sufficient to absorb that increase during the quarter, but the higher debt and interest levels remain important when assessing future profit and cash-flow growth. ## Fiscal 2026 guidance Based on third-quarter performance and the expected contribution from Ellsworth Construction, CPI raised its outlook for the fiscal year ending September 30, 2026. The release did not include the previous numerical ranges, so the size of each increase cannot be calculated. Metric Updated FY2026 guidance Revenue $3.640 billion-$3.680 billion Net income $165.0 million-$168.0 million Adjusted net income $177.6 million-$181.4 million Adjusted EBITDA $559.0 million-$569.0 million Adjusted EBITDA margin 15.36%-15.46% The updated outlook implies that management expects continued growth through the end of the fiscal year while maintaining an adjusted EBITDA margin above 15%. ## Risks investors should monitor - **Weather and energy costs:** Wet conditions can delay project activity, while energy-cost inflation can pressure project profitability and adjusted EBITDA margin. - **Acquisition execution:** The raised outlook includes an expected contribution from Ellsworth, making successful integration and delivery of the anticipated operating benefits relevant to fiscal 2026 performance. - **Debt and interest expense:** Total debt increased from the end of fiscal 2025, and quarterly net interest expense rose about 20% year over year. Further increases could absorb a larger portion of operating profit and cash flow. - **Backlog conversion:** The record backlog improves revenue visibility but does not guarantee timing or profitability. Weather, project cancellations, and inaccurate cost estimates could affect how backlog converts into reported results. - **Public infrastructure funding:** Publicly funded projects make up most of CPI’s business, so reductions or delays in government transportation funding could weaken demand. ## Summary Construction Partners delivered 28.2% revenue growth and higher GAAP earnings in fiscal Q3 2026, supported by healthy construction demand and a record $3.36 billion backlog. Energy inflation and wet weather contributed to a 60-basis-point decline in adjusted EBITDA margin, partly offset by better G&A expense leverage. The main issues to follow are backlog conversion, margin performance, cash use and leverage, and whether Ellsworth delivers the contribution embedded in the raised fiscal 2026 outlook. Find out more ### Related Stocks - [ROAD.US](https://longbridge.com/en/quote/ROAD.US.md) ## Related News & Research - [Construction Partners (ROAD) Q2 Earnings Report Preview: What To Look For](https://longbridge.com/en/news/295047836.md) - [Construction Partners director Michael McKay dies in accident](https://longbridge.com/en/news/295447632.md) - [Construction Partners Q3 revenue beats on strong project demand](https://longbridge.com/en/news/295225106.md) - [Construction Partners Addresses Nasdaq Compliance After Director’s Passing](https://longbridge.com/en/news/295458893.md) - [North American Construction net income falls 9% to C$ 9.4 million in FY26 Q2; revenue rises 25% to C$ 401 million](https://longbridge.com/en/news/295710075.md)