Granite Construction Triples Data Center Backlog, Raises 2026 Revenue Guidance

Granite Construction Triples Data Center Backlog, Raises 2026 Revenue Guidance

Granite Construction’s data center backlog more than tripled year over year, pushing the contractor to raise its full-year revenue guidance by $100 million, Construction Dive reports.

Market Impact

The Watsonville, California-based contractor told investors on a second-quarter earnings call Thursday that data center backlog grew from $65 million a year ago to $223 million at the end of June. Granite has set up a dedicated internal division for the sector, handling site preparation and paving for access to large data center builds, and is targeting 10% of total revenue from data center clients.

Overall backlog, which Granite calls committed and awarded projects, rose 23% to $7.4 billion from $6 billion a year earlier. Second-quarter revenue hit $1.46 billion, up 29% year over year. That growth pushed full-year revenue guidance up to a range of $5.3 billion to $5.5 billion, from an original range of $5.2 billion to $5.4 billion. CEO Kyle Larkin said the company’s teams can deliver “whether serving clients in data center site development, intermodal rail infrastructure, federal projects, or our core transportation markets.”

Despite the top-line growth, Granite posted a net loss of $278 million for the quarter, compared to a $72 million profit in the same period last year. The company attributed the loss to a $360 million non-operating charge tied to restructuring its outstanding debt. Looking ahead, Granite is also bracing for tighter public funding: the 2021 Infrastructure Investment and Jobs Act expires September 30, and an interim funding bill targets a 22% cut to public transit along with reductions for Amtrak and Capital Investment Grants. Larkin said the proposed successor, Build America 250, favors formula-based programs and bridge investment over large discretionary megaprojects, which he said “aligns well with Granite’s geographic footprint and capabilities.”

What It Means for Subcontractors

• Site prep, paving and civil subs should watch for new data center work packages from Granite’s dedicated division, which grew backlog from $65 million to $223 million in a year, with a stated goal of 10% of company revenue from the sector.
• Granite’s shift toward “bite-sized” work packages priced at 100% design and capped at contracts under four years means shorter, more clearly scoped bid opportunities rather than sprawling megaprojects, favoring subs who can turn around accurate estimates quickly.
• Rail and federal-project subs should note Granite’s stated focus on intermodal rail infrastructure as a growth area alongside core transportation and data center work.
• Payment terms and contract structures upstream could tighten following Granite’s $360 million debt restructuring charge; subs working with Granite should confirm invoicing schedules and financial terms on new task orders given the swing to a $278 million quarterly net loss.
• Highway-funding-dependent subs should track the September 30 IIJA expiration and the Build America 250 bill, which shifts money toward formula-based and bridge programs rather than large discretionary projects, a mix Granite says favors its footprint.