Knife River (KNF) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue rose 7% year-over-year to $353.5 million, driven by higher contracting services, pricing initiatives, and recent acquisitions such as Strata Corporation and Kalama Quarry.

• Net loss widened to $68.7 million from $47.6 million in Q1 2024, reflecting higher SG&A, acquisition-related expenses, and seasonality.

• Adjusted EBITDA was negative $38.0 million, with margin at (10.7)%, impacted by seasonal factors and increased SG&A.

• Full-year 2025 revenue guidance raised to $3.25–$3.45 billion and Adjusted EBITDA to $530–$580 million, both above prior outlooks.

• Backlog at March 31, 2025, was $938.7 million, with 87% public projects, supporting future revenue stability.

Financial highlights

• Gross profit turned negative at $(9.6) million versus $6.5 million last year, with a margin of (2.7)%.

• SG&A expenses rose 21% to $73.1 million, mainly due to acquisition integration and higher labor costs.

• Q1 2025 segment revenue: West $208.3M (+5%), Mountain $66.0M (+10%), Central $67.9M (+11%), Energy Services $13.9M (+9%).

• Aggregate volumes fell 9% year-over-year, but average selling prices rose 6%; ready-mix volumes grew 3% with a 6% price increase.

• Operating cash flow was negative $125.3 million, primarily due to higher working capital needs and net loss.

Outlook and guidance

• Full-year 2025 revenue guidance increased to $3.25–$3.45 billion; Adjusted EBITDA guidance raised to $530–$580 million.

• Aggregate volumes expected to increase high single digits; ready-mix volumes to rise high teens; both maintain mid-single-digit price increase guidance.

• Contracting services margins expected to be in line with 2024, with strong public-sector demand and $820.6 million of backlog to be realized within 12 months.

• SG&A for 2025 expected to be in line with prior guidance plus Strata's addition, with $20 million step-up front-loaded in H1.

• Guidance assumes normal weather, economic, and operating conditions, with no material impact from tariffs or unannounced acquisitions.