Knife River (KNF) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue grew 3% year-over-year to $833.8M, driven by acquisitions and price increases, but net income fell 35% to $50.6M due to lower volumes and higher costs, with weather and Oregon market headwinds compressing margins.

• Record backlog reached $1.3B, nearly 30% higher year-over-year, with 91% supported by public funding and strong DOT budgets.

• Strategic acquisitions, including Strata, Albina Asphalt, and bolt-ons in Minnesota and Oregon, expanded operations and contributed to revenue and seasonality.

• The company reorganized into four segments: West, Mountain, Central, and Energy Services, to better align with strategy and operational focus.

• EDGE operational initiatives and process improvements continued, focusing on margin improvement, pricing discipline, and integration of new assets.

Financial highlights

• Q2 2025 consolidated revenue was $833.8M (up 3% year-over-year); Adjusted EBITDA was $140.8M (down 9%); net income was $50.6M (down 35%).

• Gross margin for Q2 2025 was 18.9% (down from 21.8%); net income margin was 6.1%.

• Six-month 2025 consolidated revenue was $1.19B; net loss for the period was $(18.1)M.

• Diluted EPS for Q2 2025 was $0.89 (down from $1.37 year-over-year).

• Q2 2025 aggregate sales were 8.83M tons (down from 9.41M); average price per ton was $18.80 (up from $16.84).

Outlook and guidance

• Full-year 2025 revenue guidance revised to $3.1B–$3.3B; adjusted EBITDA guidance revised to $475M–$525M, with most of the $55M reduction tied to Oregon and weather headwinds.

• Guidance assumes normal weather and economic conditions, except for included impacts from Texas flooding and Oregon market softness.

• Price increases expected: high-single digits for aggregates, mid-single digits for ready-mix, flat for asphalt; volume growth expected: mid-single digits for aggregates, low-double digits for ready-mix, flat for asphalt.

• Net leverage expected to return to or below 2.5x by year-end.

• 80% of backlog expected to be completed within 12 months; 90% of backlog is public work.