Granite Posts Record $7.5B Backlog as Revenue Climbs 23%
Granite Construction ended the third quarter with a record $7.5 billion backlog, $1.1 billion above a year ago, and revenue up 23% to $1.77 billion, Construction Dive’s earnings coverage shows.
Market Impact
Road and bridge work still drives the numbers. On the Thursday earnings call, CEO Kyle Larkin said federal transportation dollars keep flowing to active Infrastructure Investment and Jobs Act (IIJA) projects, even though Congress did not pass a permanent surface transportation renewal last month. Granite is operating under a continuing resolution that holds funding at IIJA levels while fiscal year 2027 appropriations and a longer-term reauthorization are worked out. Larkin said a significant portion of the original IIJA money has not been spent and should support state and local programs “over the next several years.”
Net income fell to $3.2 million from $102.9 million a year earlier. The company attributed the drop to a $162 million charge to settle convertible notes.
Granite is also targeting newer segments:
- Federal: About $1.3 billion of backlog, covering airfield and runway paving, roads, site infrastructure, civil work, military campuses and water infrastructure. Larkin expects federal work to be 15% of construction segment revenue this year. He cited new delivery methods in the 2026 National Defense Authorization Act, including progressive design-build and construction manager at risk.
- Mission critical: $331 million of backlog from data centers, battery storage and space sector clients. Granite wants this to reach 10% of construction revenue over the next several years.
- Rail: Less than 5% of the business today, with a push to grow it in 2027.
- M&A: More than $1.4 billion deployed since 2023, with three more deals worth a combined $750 million targeted by year end, mostly in materials.
Granite has shifted from multibillion-dollar megaprojects to smaller packages under best-value contracts, including progressive design-build.
What It Means for Subcontractors
- Data center and storage site work: Larkin described scopes of mass grading, utilities, paving, retaining walls, curb and gutter, water well drilling and power infrastructure, tied to $331 million in backlog. The source does not say which scopes Granite self-performs. Our inference: ask in prequalification before pricing, and lead with trades the company lists as extensions (water well drilling, power infrastructure).
- Federal and military packages: With about $1.3 billion in backlog and work from Guam to Alaska, subs should get in front of Granite during progressive design-build or CMAR preconstruction, when scope and pricing are set, not at bid day. Larkin said Granite expects to bid on “billions of dollars” of federal opportunities in the coming years.
- Southern California rail: The 4,500-acre intermodal facility for a Class 1 railroad is in preconstruction and still permitting, so no construction packages exist yet. The source does not name the client. Earthwork, utility and paving subs near the ports of Los Angeles and Long Beach can build relationships now, but should not count on 2026 revenue.
- Payment terms (our inference): The source says nothing about subcontractor payment. A record backlog that has to be staffed gives subs leverage on schedule and rates. Before signing, negotiate pay terms and retainage on federal and data center subcontracts. Funding at IIJA levels under the continuing resolution points to steady owner cash on active road and bridge jobs.
- Materials suppliers and haulers: Three more acquisitions worth $750 million are targeted by year end, mostly in materials. Aggregate and hauling vendors should expect Granite’s supply chain to consolidate and should confirm contract terms with local Granite plants.
