- Record Revenue and EBITDA Growth: 2025 revenue hit $2.9B (+12%), adjusted EBITDA reached $583M (+30%), with margin expansion to 20.2% (+280 bps).
- Barge Business Divestiture: $450M sale expected by 2026 to reduce complexity; proceeds will fund debt reduction and growth investments.
- 2026 Outlook: Revenue guidance of $2.95B–$3.1B, adjusted EBITDA of $590M–$640M, with Engineered Structures targeting double-digit EBITDA growth.
- Strong Cash Flow and Leverage: $120M Q4 operating cash flow, net debt/EBITDA at 2.3x; 2026 CapEx: $220M–$250M, D&D: $230M–$240M.
- Utility Structures Growth: 20% Q4 revenue growth, new steel pole plant in Illinois, and conversion of wind facility to utility structures expected to offset wind revenue decline.
Segment Performance and Outlook
The Construction Materials segment is expected to experience mid- to high single-digit adjusted EBITDA growth in 2026, driven by low single-digit volume growth and mid single-digit price improvement in aggregates. The Engineered Structures segment is anticipated to have double-digit adjusted EBITDA growth, fueled by strong demand in utility structures and a recovery in wind towers in 2027. Notably, utility structures revenue grew 20% in Q4, driven by solid demand and long lead times.
Guidance and Expectations
For 2026, Arcosa expects revenue to range from $2.95 billion to $3.1 billion and adjusted EBITDA to be between $590 million to $640 million. The company is expected to generate solid unit profitability gains in aggregates, with mid-single-digit price and low-single-digit volume growth. The Engineered Structures segment is expected to see a 25% step-down in wind revenues, but this will be offset by strong growth in utility structures.
Valuation and Capital Allocation
With a P/E Ratio of 25.27 and an EV/EBITDA of 12.67, the market is pricing in a certain level of growth. Arcosa has $700 million in liquidity from its revolver and plans to be a disciplined capital allocator, focusing on growth and generating value for shareholders. The company's net debt to adjusted EBITDA ratio is 2.3x, within its target leverage range. Analysts estimate revenue growth at 5.2% for the next year.
Dividend and Shareholder Returns
The company has a Dividend Yield of 0.19%, indicating a relatively low dividend payout. However, with a Free Cash Flow Yield of 3.33%, Arcosa is generating significant cash flows, which can be used to reduce debt, invest in growth businesses, or return value to shareholders through share buybacks or dividend increases.