Knife River (KNF) Q3 2025 earnings summary

Executive summary

• Achieved record third quarter revenue of $1.2 billion, up 9% year-over-year, driven by acquisitions, price increases, and operational improvements.

• Adjusted EBITDA reached $272.8 million, up 11% from the prior year, with margin gains supported by process improvements and pricing initiatives.

• Net income for Q3 2025 was $143.2 million, with a net income margin of 11.9%.

• Record backlog of $995 million, 32% higher than last year, with 87% public work and 77% expected to convert to revenue within 12 months.

• Strategic acquisitions and price optimization initiatives contributed to margin improvements and operational resilience.

Financial highlights

• Q3 revenue: $1,203.7 million (up 9% year-over-year); Adjusted EBITDA: $272.8 million (up 11%); margin improved by 50 bps to 22.7%.

• Gross profit: $284.3 million; gross margin improved across aggregates (27.2%), ready-mix (20.2%), and asphalt (20.2%).

• SG&A expenses increased 8%, mainly due to acquisitions, but costs were lower than forecast due to asset sales and lower payroll incentives.

• Interest expense increased 65% to $23.0 million in Q3 2025 due to higher debt balances from acquisitions.

• Cash flow from operations for the nine months ended September 30, 2025, was $82.6 million, down from $149.9 million in the prior year, mainly due to higher working capital needs.

Outlook and guidance

• Full-year 2025 revenue guidance narrowed to $3.1–$3.15 billion; Adjusted EBITDA guidance to $475–$500 million.

• Expect high-single-digit price increases for aggregates, mid-single digits for ready-mix, and low-single-digit decrease for asphalt pricing.

• Ready-mix volumes projected to increase low double digits; asphalt volumes to decrease low single digits.

• Backlog is 32% higher year-over-year, with more paving work secured and additional jobs in the bid schedule.

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