Knife River Corporation (KNF) Q3 2026 Earnings Report

The call was broadly positive. Strong revenue and adjusted EBITDA, record aggregates performance, improved pricing and productivity, active Sharper EDGE initiatives, planned growth investments, strong liquidity and demand from infrastructure and private projects outweighed the challenges. However, contracting margin compression, a 14% backlog decline, lower margins in Ready-Mix, asphalt and liquid asphalt, project delays, higher SG&A and net leverage above the target remain meaningful near-term concerns.

Knife River expects full-year aggregates volume growth of high single digits to low double digits, mid-single-digit pricing growth, and at least 150 basis points of gross margin expansion; ready-mix volumes growth of high single to low double digits; asphalt volumes to increase high single to low double digits; second-half contracting margin of 8%-9%; full-year SG&A comparable to 2025; maintenance and improvement capital expenditures between 5%-6% of revenue, with acquisitions and organic growth investments incremental to that range; year-end net leverage finishing modestly above 2.5x; revenue of $3.375 billion-$3.425 billion and adjusted EBITDA of $475 million-$505 million, assuming normal weather and economic conditions for the remainder of the year and excluding the impact of potential acquisitions. Sharper EDGE is expected to ramp over the next three years, with increased benefits each year, including over $125 million of aggregate capital over the next three years and approximately $1 per ton of aggregate gross profit improvement, while the South Dakota aggregates expansion project is expected in the first half of 2027 to add over 1 million tons per year. The Q4 adjusted EBITDA guide is $95 million-$125 million.