Knife River (KNF) Q4 2024 earnings summary

Executive summary

• Achieved record full-year revenue of $2.90 billion and adjusted EBITDA of $463 million for 2024, with adjusted EBITDA margin reaching 16.0% and strong operational execution.

• Fourth quarter consolidated revenue grew 2% year-over-year to $657.2 million, with adjusted EBITDA up 13% to $81.2 million.

• Backlog increased 13% year-over-year to $746 million, with 85%–86% related to publicly funded projects and most expected to be completed within 12 months.

• Announced definitive agreement to acquire Strata Corporation for $454 million, expected to close in the first half of 2025 and be accretive to adjusted EBITDA margin.

• EDGE strategy and disciplined bidding drove high-single-digit price increases and margin expansion.

Financial highlights

• Full-year revenue rose 2% to $2.90 billion; adjusted EBITDA increased 7% to $463 million; adjusted EBITDA margin expanded to 16.0% from 15.3% year-over-year.

• Aggregates prices increased 7%, ready-mix up 10%, and asphalt up 2% year-over-year.

• Gross margin improved across aggregates (+60 bps), ready-mix (+70 bps), asphalt (+180 bps), and consolidated (+70 bps) year-over-year.

• Contracting services revenue reached $1.4 billion with a record gross margin of 13%.

• SG&A increased 5% due to higher labor and acquisition-related costs.

Outlook and guidance

• 2025 guidance: consolidated revenue of $3.0–$3.2 billion and adjusted EBITDA of $485–$535 million, with margin expected at 16.5% at midpoint; guidance excludes Strata acquisition impact.

• Expect mid-single-digit price increases for aggregates and ready-mix, low-single-digit for asphalt, and low-single-digit volume growth in all major product lines.

• $522 million approved for growth capex, including Strata acquisition; plan to raise $500 million in debt.