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Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-11-06 · 103 added, 148 removed, 184 unchanged (58% of the section changed)

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Within the private sector, we perform various services such as site preparation, mining services and infrastructure services for commercial and industrial sites, railways, residential development, energy development, as well as provide construction management professional services.

We own and lease aggregate reserves and own processing plants that are vertically integrated into our construction operations and we also produce construction materials for sale to third parties.

We own and lease aggregate reserves, and we own processing plants that are vertically integrated into our construction operations.

We also produce construction materials for sale to third parties.

The five primary economic drivers of our business are (i) the overall health of the U.S.

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Current Economic Environment and Outlook

Funding for our public work projects, which account for approximately 85% of our portfolio, is dependent on federal, state, regional and local revenues.

Funding for our public work projects, which account for approximately 85% of our Committed and Awarded Projects (“CAP”), is dependent on federal, state, regional and local revenues.

At the federal level, the $1.2 trillion Infrastructure Investment and Jobs Act (“IIJA”) has increased federal highway, bridge and transit funding to its highest level in more than six decades with $550 billion in incremental funding over five years.

The increased multi-year spending commitment improved the programming visibility for state and local governments and drove an increase in project lettings that started in 2023, and has continued through 2025.

With the IIJA ending in September of 2026, discussions have begun in Congress concerning a replacement bill.

With the IIJA ending in September of 2026, discussions are ongoing in Congress concerning a replacement bill.

At state, regional and local levels, voter-approved state and local transportation measures continue to support infrastructure spending.

While each market is unique, we see a strong funding environment at the state and local levels aided by the IIJA.

In California, our top revenue-generating state, despite overall budgetary concerns, a significant part of the state infrastructure spend is funded through Senate Bill 1 (SB-1), the Road Repair and Accountability Act of 2017, a 10-year, $54.2 billion program, which may only be used for transportation-related purposes, without any sunset provisions.

On October 1, 2025, the U.S.

government shut down due to a failure to agree on funding for the new fiscal year.

We have not experienced any material impacts to our operations, results of operations or financial condition, but continue to monitor the impacts, if any, of this shut down.

Depending on the length of the shut down, our results of operations and/or financial condition could potentially be materially impacted.

In California, our top revenue-generating state, despite overall budgetary concerns, a significant part of the state infrastructure spend is funded through Senate Bill 1 (SB-1), the Road Repair and Accountability Act of 2017, a program without any sunset provisions that may only be used for transportation-related purposes.

Our CAP balance continues to be strong with $7.2 billion at the end of the first quarter of 2026.

Our CAP is supported by a positive public funding environment and strength in the private markets we serve, which we believe will provide further opportunities for continued CAP growth.

Over the last several years, inflation, supply chain and labor constraints have had a significant impact on the global economy including Granite and others in the construction industry in the United States.

Recently, concerns over tariffs have been a major source of uncertainty in the economy.

To date, we have not experienced a material financial impact due to tariffs.

Recently, concerns over tariffs and the conflict in Iran's impact on oil prices have been major sources of uncertainty in the economy.

To date, we have not experienced a material financial impact due to tariffs or the conflict in Iran.

It is impossible to fully mitigate the potential impacts of the foregoing macro-economic factors and they may negatively impact us in the future.

However, where practicable, we have applied proactive measures to mitigate these macro-economic factors, such as fixed forward purchase contracts of oil related inputs, energy surcharges, and adjustment of project schedules for constraints related to construction materials such as concrete.

Our Committed and Awarded Projects (“CAP”) balance continues to be strong with $6.3 billion at the end of the third quarter of 2025.

Our CAP is supported by a positive public funding environment and strength in the private markets we serve, which we believe will provide further opportunities for continued CAP growth.

On October 3, 2025, we completed the acquisition of Cinderlite Trucking Corporation (“Cinderlite”) for $58.5 million in cash, subject to customary closing adjustments.

We purchased all of the outstanding equity interest of Cinderlite, which is a construction materials, landscape supply, and transportation company in Carson City, Nevada.

This acquisition aligns with our strategy of enhancing our vertical integration by strengthening our existing home markets.

The results of Cinderlite will be included in our consolidated results beginning in the fourth quarter of 2025 and are not expected to have a material impact on our results of operations.

Warren Paving

On August 5, 2025, we completed the acquisition of Slats Lucas, LLC and Warren Paving, Inc.

(collectively, “Warren Paving”) for $540.0 million in cash, subject to customary closing adjustments.

Warren Paving is a vertically-integrated asphalt contractor and aggregate producer with operations along the Gulf Coast and Mississippi River.

This acquisition aligns with our strategy to expand our presence into new geographies with future growth opportunities while supporting our existing operations, particularly the Materials segment.

Papich Construction

On August 5, 2025, we completed the acquisition of Papich Construction Company, Inc.

(“Papich Construction”) for $170.0 million in cash, subject to customary closing adjustments.

Papich Construction is a provider of construction services and materials in California’s Central Coast and Central Valley regions.

Kenny Seng Construction Acquisition

On April 23, 2026, we completed the acquisition of KSC Utah Investments, Inc.

("Kenny Seng Construction") and related assets for $164.1 million in cash, subject to customary closing adjustments.

We purchased all of the issued and outstanding common stock of Kenny Seng Construction, which is a provider of construction services and materials in Utah.

This acquisition aligns with our strategy of enhancing our vertical integration by strengthening our existing home markets.

Dickerson & Bowen, Inc.

We acquired Dickerson & Bowen, Inc.

(“D&B”) on August 9, 2024.

D&B is an aggregates, asphalt, and highway construction company serving central and southern Mississippi.

Our consolidated financial statements include the results of Warren Paving, Papich Construction and D&B from their respective acquisition dates forward, which impacts comparability to the applicable prior periods.

See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for further information.

2025 Acquisition Financing

On August 5, 2025, we entered into the Fifth Amended and Restated Credit Agreement (the “Credit Agreement”), which provides for (1) a $600.0 million senior secured revolving credit facility (the “Revolver”), (2) a $600.0 million senior secured term loan (the “Initial Term Loan”) and (3) an additional $75.0 million senior secured term loan ("Delayed Draw Term Loan").

The Warren Paving, Papich Construction and Cinderlite acquisitions were funded with proceeds from the Initial Term Loan and the Delayed Draw Term Loan, a $10.0 million draw on our Revolver and from cash on hand.

The $10.0 million Revolver draw was repaid during the third quarter and the $75.0 million Delayed Draw Term Loan was repaid on October 31, 2025.

The results of Kenny Seng Construction will be included in our consolidated results beginning in the second quarter of 2026.

On April 22, 2026, we drew $170.0 million on our senior secured revolving credit facility (the “Revolver”), which was used, in part, to fund the Kenny Seng Construction acquisition.

Results of Operations

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Therefore, the results of operations of a given quarter are not indicative of the results to be expected for the full year.

The following table presents a financial summary for the three and nine months ended September 30, 2025 and 2024:

Three Months Ended

September 30, Nine Months Ended

September 30,

The following table presents a financial summary for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

(in thousands) 2026 2025

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Other costs, net $ 3,037 $ 9,426

Operating income $ 143,651 $ 104,298 $ 207,465 $ 146,819

Total other (income) expense, net $ (3,874) $ (5,148) $ (7,536) $ 16,791

Operating loss $ (31,133) $ (39,751)

Total other expense, net $ 17,375 $ 332

Amount attributable to non-controlling interests $ (5,310) $ (5,329)

Net income attributable to Granite Construction Incorporated $ 102,929 $ 78,951 $ 140,973 $ 84,863

Net loss attributable to Granite Construction Incorporated $ (41,699) $ (33,656)

Total Revenue by Segment

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands) 2026 2025

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Construction Revenue

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands) 2026 2025

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Total $ 766,054 100.0 % $ 614,618 100.0 %

Construction revenue for the three and nine months ended September 30, 2025 increased by $81.8 million and $120.7 million, or 7.6% and 4.7%, respectively, when compared to 2024.

These increases were primarily driven by $52.7 million of construction revenue from our recently acquired businesses, Warren Paving and Papich Construction, during the three and nine months ended September 30, 2025.

Additionally, D&B construction revenue increased by $4.0 million and $31.1 million for the three and nine months ended September 30, 2025, respectively, when compared to 2024.

Our remaining Construction revenue increased year-over-year driven primarily by higher CAP entering the quarter and year.

Construction revenue for the three months ended March 31, 2026 increased by $151.4 million, or 24.6%, when compared to 2025.

This increase was primarily driven by higher CAP entering the quarter, along with $43.1 million of construction revenue from our recently acquired businesses, Warren Paving and Papich Construction, during the three months ended March 31, 2026.

Materials Revenue

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(dollars in thousands) 2026 2025

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Total $ 146,411 100.0 % $ 84,929 100.0 %

Materials revenue for the three and nine months ended September 30, 2025 increased $76.2 million and $108.1 million, or 39.1% and 24.8%, when compared to 2024.

This increase was primarily driven by higher sales volumes and prices in both aggregates and asphalt.

Additionally, materials revenue from our recently acquired businesses, Warren Paving and Papich Construction, was $45.8 million for both the three and nine months ended September 30, 2025.

Materials revenue for the three months ended March 31, 2026 increased $61.5 million, or 72.4%, when compared to 2025.

This increase was primarily driven by materials revenue from our recently acquired businesses, Warren Paving, Papich Construction and Cinderlite, which was $50.3 million for the three months ended March 31, 2026.

Committed and Awarded Projects

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All CAP is in the Construction segment.

(dollars in thousands) September 30, 2025 June 30, 2025 December 31, 2024 September 30, 2024

(dollars in thousands) March 31, 2026 December 31, 2025

Unearned revenue $ 4,930,788 68.8 % $ 4,123,113 59.2 %

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Total $ 7,169,182 100.0 % $ 6,969,372 100.0 %

(dollars in thousands) September 30, 2025 June 30, 2025 December 31, 2024 September 30, 2024

(dollars in thousands) March 31, 2026 December 31, 2025

Customer type:

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Total $ 7,169,182 100.0 % $ 6,969,372 100.0 %

CAP of $6.3 billion at September 30, 2025 was $273.3 million or 4.5% higher than at June 30, 2025.

Significant additions to CAP during the three months ended September 30, 2025 included $350 million for a drainage improvement project in Illinois, $158 million for a federal project in Guam, $72 million for a port project in Alaska and $39 million for a flood prevention project in California.

CAP of $7.2 billion at March 31, 2026 was $199.8 million or 2.9% higher than at December 31, 2025.

Significant additions to CAP during the three months ended March 31, 2026 included $495 million for a tactical infrastructure project in Texas, $115 million for a reservoir replacement project in California and $114 million for a highway project in California.

All of these projects are in the public sector.

Non-controlling partners’ share of CAP as of September 30, 2025, June 30, 2025, December 31, 2024 and September 30, 2024 was $325.7 million, $300.1 million, $331.1 million and $355.2 million, respectively.

At September 30, 2025, one contract with remaining CAP of $10 million or more per project had total forecasted losses with remaining revenue of $35.1 million, or 0.6%, of total CAP.

These CAP additions were partially offset by the cancellation of a $296 million public sector highway project in California for which the project's expanded scope exceeded available funding.

Non-controlling partners’ share of CAP as of March 31, 2026 and December 31, 2025 was $336.9 million and $361.4 million respectively.

At March 31, 2026, one contract with remaining CAP of $10 million or more per project had total forecasted losses with remaining revenue of $17.3 million, or 0.2%, of total CAP.

Provisions are recognized in the consolidated statements of operations for the full amount of estimated losses on uncompleted contracts whenever evidence indicates that the estimated total cost of a contract exceeds its estimated total revenue.

The following table presents gross profit by reportable segment for the respective periods:

Three Months Ended

September 30, Nine Months Ended

September 30,

Three Months Ended March 31,

(dollars in thousands) 2026 2025

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Percent of total revenue 12.0 % 12.0 %

Construction gross profit for the three and nine months ended September 30, 2025 increased by $21.7 million and $68.6 million, or 12.7% and 18.9%, respectively, when compared to 2024 primarily due to improved project execution across our project portfolio.

For the year to date period in 2025, we also recognized net increases from revisions in estimates due to claim settlements.

For further discussion of projects with revisions in estimates which individually had an impact of $5.0 million or more on gross profit, see Note 4 of “Notes to the Condensed Consolidated Financial Statements.” Additionally, construction gross profit from our recently acquired businesses, Warren Paving and Papich Construction, was $7.2 million for both the three and nine months ended September 30, 2025, which included $1.3 million of purchase accounting-related charges such as step-up depreciation and intangible asset amortization.

See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for further information about acquisitions.

Materials gross profit for the three and nine months ended September 30, 2025 increased by $35.9 million, or 111.4%, and $53.0 million, or 89.7%, respectively, when compared to 2024.

The increased profit was primarily driven by higher volumes and sales prices in both aggregates and asphalt.

The increase was also driven by gross profit from our recently acquired businesses, Warren Paving and Papich Construction, of $9.6 million for both the three and nine months ended September 30, 2025, which included $2.2 million of purchase accounting-related charges such as step-up depreciation and intangible asset amortization.

Construction gross profit for the three months ended March 31, 2026 increased by $16.7 million, or 19.6%, when compared to 2025 primarily due to higher revenue and improved project execution across our project portfolio.

Construction gross profit as a percent of revenue decreased when compared to the first quarter of the prior year as we recognized a net increase from a revision in estimate due to a claim settlement in the prior year which did not recur.

Materials gross profit for the three months ended March 31, 2026 was $7.7 million, compared to a gross loss of $1.6 million for the same period in 2025, reflecting an improvement of $9.3 million.

The increased gross profit was primarily driven by higher volumes and sales prices in both aggregates and asphalt.

The increase was also driven by gross profit from our recently acquired businesses, Warren Paving, Papich Construction and Cinderlite, of $4.9 million for the three months ended March 31, 2026, which included $4.4 million of purchase accounting-related charges such as step-up depreciation and intangible asset amortization.

See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for further information about acquisitions.

Selling, General and Administrative Expenses

The following table presents the components of selling, general and administrative expenses for the respective periods:

Three Months Ended

September 30, Nine Months Ended

September 30,

The following table presents the components of selling, general and administrative (“SG&A”) expenses for the respective periods:

Three Months Ended March 31,

(dollars in thousands) 2026 2025

Salaries and related expenses $ 62,550 $ 55,416

Incentive compensation 19,315 21,495 26,380 24,898

Stock-based compensation 42,559 30,053

Other selling, general and administrative expenses 23,753 26,251 84,899 80,759

Total selling, general and administrative expenses $ 101,645 $ 91,650 $ 303,443 $ 249,695

Other SG&A expenses 35,841 30,442

Total SG&A expenses $ 140,950 $ 115,911

Percent of revenue 15.4 % 16.6 %

Selling, general and administrative (“SG&A”) expenses include the costs for estimating and bidding, including offsetting customer reimbursements for portions of our selling/bid submission expenses (i.e., stipends), business development, materials facility permits, and costs related to our operational offices that are not allocated to direct contract costs and expenses related to our corporate functions.

SG&A expenses include the costs for estimating and bidding, including offsetting customer reimbursements for portions of our selling/bid submission expenses (i.e., stipends), business development, materials facility permits, and costs related to our operational offices that are not allocated to direct contract costs and expenses related to our corporate functions.

Other SG&A expenses include travel and entertainment, outside services, information technology, depreciation, occupancy, training, office supplies, changes in the fair market value of our non-qualified deferred compensation plan liability and other miscellaneous expenses.

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As projects are completed or the volume of work slows down, we temporarily redeploy project employees to bid on new projects, moving their salaries and related costs from cost of revenue to selling expenses.

SG&A expenses for the three months ended September 30, 2025 increased $10.0 million compared to the same period in 2024, primarily due to $14.7 million of higher salaries and related expenses due to increased labor costs and partially offset by a $2.5 million decrease in other selling, general and administrative expenses.

SG&A expenses for the nine months ended September 30, 2025 increased $53.7 million compared to the same period in 2024, primarily due to $30.1 million of higher salaries and related expenses due to increased labor costs, as well as an $18.0 million increase in stock-based compensation due to improved financial performance.

SG&A expenses for the three months ended March 31, 2026 increased $25.0 million compared to the same period in 2025, primarily due to a $12.5 million increase in stock-based compensation, as well as $7.1 million of higher salaries and related expenses due to increased labor costs.

SG&A expenses related to our recently acquired businesses, Warren Paving, Papich Construction and Cinderlite, was $4.9 million.

Other Costs, net

The following table presents other costs, net for the respective periods:

Three Months Ended

September 30, Nine Months Ended

September 30,

Three Months Ended March 31,

(in thousands) 2026 2025

Other costs, net $ 3,037 $ 9,426

Other costs, net mainly consist of acquisition and integration costs and legal costs related to the defense of a former Company officer in his ongoing civil litigation with the Securities and Exchange Commission.

The increases of $7.5

million and $8.9 million for the three and nine months ended September 30, 2025 were primarily due to acquisition and integration costs in the current year.

Other costs, net mainly consists of acquisition and integration costs and, in the prior year, legal costs related to the defense of a former Company officer in his civil litigation with the SEC.

The decrease of $6.4 million for the three months ended March 31, 2026 was primarily driven by a reduction in legal costs following the resolution of our former officer's civil litigation in January 2026.

This was partially offset by increased acquisition and integration costs in the current year.

See Note 1 and Note 3 of the “Notes to the Condensed Consolidated Financial Statements” for information on our recent acquisitions.

Other (Income) Expense, net

The following table presents other (income) expense, net for the respective periods:

Three Months Ended

September 30, Nine Months Ended

September 30,

Other Expense, net

The following table presents other expense, net for the respective periods:

Three Months Ended March 31,

(in thousands) 2026 2025

(Gain) loss on debt extinguishment $ — $ (272) $ — $ 27,552

Interest income (5,849) (6,268)

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Equity in income of affiliates, net (3,473) (1,094)

Other income, net (6,309) (874) (8,834) (1,350)

Total other (income) expense, net $ (3,874) $ (5,148) $ (7,536) $ 16,791

During the three months ended September 30, 2025, total other (income) expense, net remained relatively flat.

During the nine months ended September 30, 2025, total other (income) expense, net improved $24.3 million, primarily due to the $27.6 million loss on debt extinguishment in 2024 that did not reoccur in 2025.

The following table presents the provision for income taxes for the respective periods:

Three Months Ended

September 30, Nine Months Ended

September 30,

Other (income) expense, net 10,365 (63)

Total other expense, net $ 17,375 $ 332

During the three months ended March 31, 2026, total other expense, net increased $17.0 million, primarily due to expenses associated with the repurchase of a portion of our 3.75% Convertible Notes (see Note 14).

We incurred $2.9 million of inducement expense and $6.8 million of related charges, which were included in Other (income) expense, net in the condensed consolidated statements of operations.

There was also an increase of $8.6 million in interest expense primarily related to increased borrowings under our credit agreement (see Note 14).

The following table presents the benefit from income taxes for the respective periods:

Three Months Ended March 31,

(dollars in thousands) 2026 2025

Provision for income taxes $ 38,128 $ 25,469 $ 53,586 $ 36,636

Benefit from income taxes $ (12,119) $ (11,756)

Effective tax rate 25.0 % 29.3 %

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The effect of changes in enacted tax laws, tax rates or tax status is recognized in the interim period in which the change occurs.

On July 4, 2025, Public Law No.

119-21 known as the “One Big Beautiful Bill Act” (“OBBBA”) was signed into law.

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017.

For 2025, we expect to realize a current year benefit associated with accelerated depreciation but do not expect any material impact on our effective tax rate.

See Note 16 of “Notes to the Condensed Consolidated Financial Statements” for more information.

Amount Attributable to Non-controlling Interests

The following table presents the amount attributable to non-controlling interests in consolidated subsidiaries for the respective periods:

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2025 2024 2025 2024

Amount attributable to non-controlling interests $ (6,468) $ (5,026) $ (20,442) $ (8,529)

The amount attributable to non-controlling interests represents the non-controlling owners’ share of the net (income) or loss of our consolidated construction joint ventures.

During the three and nine months ended September 30, 2025 the increase was primarily due to increased profitability on joint venture projects.

Liquidity and Capital Resources

Our primary sources of liquidity are cash and cash equivalents, investments, available borrowing capacity under our Credit Agreement and cash generated from operations.

We may also from time-to-time issue and sell equity, debt or hybrid

securities or engage in other capital markets transactions or sell one or more business units or assets.

We may also from time to time issue and sell equity, debt or hybrid securities or engage in other capital markets transactions or sell one or more business units or assets.

See Note 14 of the “Notes to the Condensed Consolidated Financial Statements” for information on our long-term debt.

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See Note 3 of “Notes to the Condensed Consolidated Financial Statements” for information on our recent acquisitions.

See Note 14 of “Notes to the Condensed Consolidated Financial Statements” for information on the exchange transactions related to our 3.75% Convertible Notes.

We believe our primary sources of liquidity will be sufficient to meet our expected working capital needs, capital expenditures, financial commitments, cash dividend payments and other liquidity requirements associated with our existing operations for the next twelve months.

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However, there can be no assurance that sufficient capital will continue to be available or that it will be available on terms acceptable to us.

As of September 30, 2025, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions and marketable securities consisting of commercial paper, corporate notes and bonds, Municipal notes and bonds and U.S.

As of March 31, 2026, our cash and cash equivalents consisted of deposits and money market funds held with established national financial institutions and marketable securities consisting of commercial paper, corporate notes and bonds, Municipal notes and bonds and U.S.

Government and agency obligations.

On August 5, 2025, we entered into the Credit Agreement, which provides for (1) a $600.0 million Revolver, (2) a $600.0 million Initial Term Loan and (3) an additional $75.0 million Delayed Draw Term Loan.

As of September 30, 2025, the total unused availability under our Revolver was $580.4 million, resulting from $19.6 million in issued and outstanding letters of credit and no amount drawn under the Revolver.

Related to the acquisition of Cinderlite on October 3, 2025, we drew the additional $75.0 million Delayed Draw Term Loan, all of which has been repaid as of the date of this report.

As of the date of this report, the $600.0 million Initial Term Loan is outstanding and no amount was drawn under the Revolver.

As of March 31, 2026, the total unused availability under our Revolver was $584.9 million, resulting from $15.1 million in issued and outstanding letters of credit and no amount drawn under the Revolver.

As of the date of this report, $170.0

million was drawn under the Revolver, resulting in total unused availability under our Revolver of $414.9 million.

See Note 1 and Note 14 of “Notes to the Condensed Consolidated Financial Statements.”

As of September 30, 2025, one of the conditions permitting the holders of the 3.25% Convertible Notes to convert was met.

Our common stock traded above 130% of the $77.88 conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on September 30, 2025 (the last trading day of the calendar quarter).

The holders of the 3.25% Convertible Notes have the right to convert through December 31, 2025, at which point the Company will re-evaluate whether the 3.25% Convertible Notes will continue to be convertible in the subsequent calendar quarter.

As of March 31, 2026, one of the conditions permitting the holders of the 3.25% Convertible Notes to convert was met.

Our common stock traded above 130% of the $77.88 conversion price for at least 20 trading days during the period of 30 consecutive trading days ended on March 31, 2026 (the last trading day of the calendar quarter).

The holders of the 3.25% Convertible Notes have the right to convert through June 30, 2026, at which point we will re-evaluate whether the 3.25% Convertible Notes will continue to be convertible in the subsequent calendar quarter.

In the event the holders of the 3.25% Convertible Notes elect to convert a portion, or all of their 3.25% Convertible Notes, the principal amount is required to be settled in cash.

As a result, the $373.8 million principal amount has been classified as a current liability as of September 30, 2025 in the condensed consolidated balance sheet.

As a result, the $373.8 million principal amount has been classified as a current liability as of March 31, 2026 in the condensed consolidated balance sheet.

Any conversion premium will be satisfied with cash, shares of our common stock or a combination of cash and shares of our common stock, at our election.

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In the unlikely event a holder elects to convert, we would use cash on hand or draw on our Revolver as needed.

As of March 31, 2026, one of the conditions permitting the holders of the 3.75% Convertible Notes to convert was met.

Our common stock traded above 130% of the $46.12 conversion price for at least 20 trading days during the period of 30 consecutive trading days ending on March 31, 2026 (the last trading day of the calendar quarter).

The holders of the 3.75% Convertible Notes have the right to convert through June 30, 2026, at which point we will re-evaluate whether the 3.75% Convertible Notes will continue to be convertible in the subsequent calendar quarter.

Upon conversion, we will pay or deliver, as the case may be, cash, shares of Granite common stock or a combination of cash and shares of Granite common stock, at our election.

In evaluating our liquidity position and needs, we also consider cash and cash equivalents held by our consolidated construction joint ventures (“CCJVs”).

The following table presents our cash, cash equivalents and marketable securities, including amounts from our CCJVs, as of the respective dates:

(in thousands) September 30, 2025 December 31, 2024

(in thousands) March 31, 2026 December 31, 2025

Cash and cash equivalents excluding CCJVs $ 111,720 $ 383,636

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(2) All marketable securities were classified as held-to-maturity and consisted of commercial paper, corporate notes and bonds, Municipal notes and bonds and U.S.

Government and agency obligations as of September 30, 2025 and U.S.

Government and agency obligations as of December 31, 2024.

Granite’s portion of CCJV cash and cash equivalents was $103.0 million and $106.0 million as of September 30, 2025 and December 31, 2024, respectively.

Excluded from the table above is $36.0 million and $28.7 million as of September 30, 2025 and December 31, 2024, respectively, of Granite’s portion of unconsolidated construction joint venture cash and cash equivalents.

Government and agency obligations as of March 31, 2026 and December 31, 2025.

Granite’s portion of CCJV cash and cash equivalents was $96.1 million and $90.6 million as of March 31, 2026 and December 31, 2025, respectively.

Excluded from the table above is $30.9 million and $35.0 million as of March 31, 2026 and December 31, 2025, respectively, of Granite’s portion of unconsolidated construction joint venture cash and cash equivalents.

Capital Expenditures

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The timing and amount of such expenditures can vary based on the progress of planned capital projects, the type and size of construction projects, changes in business outlook and other factors.

During the nine months ended September 30, 2025, we had capital expenditures of $87.7 million, compared to $108.2 million during the nine months ended September 30, 2024.

We currently anticipate 2025 capital expenditures to be approximately $130 million.

Nine Months Ended September 30,

During the three months ended March 31, 2026, we had capital expenditures of $26.1 million, compared to $32.2 million during the three months ended March 31, 2025.

We currently anticipate 2026 capital expenditures to be between approximately $140.0 million and $160.0 million, including approximately $50.0 million in planned strategic materials investments.

Three Months Ended March 31,

(in thousands) 2026 2025

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As a large infrastructure contractor and construction materials producer, our revenue, gross profit and the resulting operating cash flows can differ significantly from period to period due to a variety of factors, including project progression toward completion, outstanding contract change orders and affirmative claims, and the payment terms of our contracts.

Additionally, operating cash flows are impacted by the timing related to funding construction joint ventures and the resolution of uncertainties inherent in the complex nature of the construction work we perform, including claim and back charge settlements.

Additionally, operating cash flows are impacted by the resolution of uncertainties inherent in the complex nature of the construction work we perform, including claim and back charge settlements.

Our working capital assets result from both public and private sector projects.

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While we typically invoice our customers on a monthly basis, our construction contracts frequently provide for retention that is a specified percentage withheld from each payment by our customers until the contract is completed and the work accepted by the customer.

Cash provided by operating activities of $289.6 million for the nine months ended September 30, 2025 represents a $6.1 million increase in cash provided by operating activities when compared to the same period of 2024.

The change was primarily attributable to an increase in net income after adjusting for non-cash items of $77.0 million.

Partially offsetting this was a $45.3 million decrease in cash provided by working capital, which includes receivables, net contract assets, inventories, other assets, accounts payable and accrued expenses and other liabilities.

Additionally, distributions from, net of contributions to, unconsolidated construction joint ventures and affiliates decreased $25.6 million when compared to the same period of 2024.

Cash used in operating activities of $30.9 million for the three months ended March 31, 2026 represents a $34.5 million increase in cash used in operating activities when compared to the same period of 2025.

The change was primarily attributable to a $69.2 million decrease in cash provided by working capital, which includes receivables, net contract assets, inventories, other assets, accounts payable and accrued expenses and other liabilities.

Partially offsetting this was an increase in distributions from, net of contributions to, unconsolidated construction joint ventures and affiliates of $15.3 million when compared to the same period of 2025.

Additionally, net income after adjusting for non-cash items increased $19.3 million.

Investing activities

Cash used in investing activities of $947.8 million for the nine months ended September 30, 2025 represents a $736.7 million increase in cash used in investing activities when compared to the same period of 2024.

The change was primarily due to a $569.6 million increase in cash used for acquisitions net of cash acquired and purchase price adjustments and $192.5 million in purchases of marketable securities net of maturities, partially offset by $24.6 million less of purchases of property and equipment, net of sales.

Cash provided by investing activities of $22.5 million for the three months ended March 31, 2026, compared to cash used in investing activities of $156.3 million for the same period in 2025, represents a $178.8 million increase in cash provided by investing activities.

The change was primarily due to $166.6 million less purchases of marketable securities net of maturities and $11.3 million less purchases of property and equipment, net of sales.

Financing activities

Cash provided by financing activities of $521.7 million for the nine months ended September 30, 2025 represents a $549.5 million increase in cash provided by financing activities when compared to the same period of 2024.

The change was primarily due to increased proceeds from debt issuances, net of debt repayments and related charges of $589.7 million.

This increase was partially offset by increased distributions to non-controlling partners, net of contributions of $38.7 million.

Cash used in financing activities of $255.1 million for the three months ended March 31, 2026 represents a $208.5 million increase in cash used in financing activities when compared to the same period of 2025.

The increase was primarily driven by $288.5 million of repurchases of a portion of our 3.75% Convertible Notes in the current year.

The increase was partially offset by $56.7 million in proceeds from the partial unwind of the capped call transactions and decreased net distributions to non-controlling partners of $26.6 million.

We recognize derivative instruments as either assets or liabilities in the condensed consolidated balance sheets at fair value using Level 2 inputs.

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We are generally required to provide various types of surety bonds that provide an additional measure of security under certain public and private sector contracts.

At September 30, 2025, approximately $3.9 billion of our $6.3 billion CAP was bonded.

At March 31, 2026, approximately $4.6 billion of our $7.2 billion CAP was bonded.

Performance bonds do not have stated expiration dates;

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The terms of this indebtedness are typically renegotiated to reflect the evolving nature of the real estate projects as they progress through acquisition, entitlement, development and leasing.

Modification of these terms may include changes in loan-to-value ratios requiring the real estate venture to repay portions of the debt.

of these terms may include changes in loan-to-value ratios requiring the real estate venture to repay portions of the debt.

Our equity-method investments in our foreign affiliates are subject to local bank debt primarily for equipment purchases.

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The financial covenants under the terms of the Credit Agreement require the maintenance of a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio.

As of September 30, 2025, we were in compliance with the covenants in the Credit Agreement.

As of March 31, 2026, we were in compliance with the covenants in the Credit Agreement.

Share Repurchase Program

As announced on February 3, 2022, on February 1, 2022, the Board of Directors authorized us to purchase up to $300.0 million of our common stock at management’s discretion (the “2022 authorization”).

There were 51,120 and 51,320 shares repurchased under the 2022 authorization in the three and nine months ended September 30, 2025, respectively, and $183.9 million remained available under the 2022 authorization as of September 30, 2025.

There were no shares and 200 shares repurchased under the 2022 authorization in the three months ended March 31, 2026 and 2025, respectively, and $157.6 million remained available under the 2022 authorization as of March 31, 2026.

The specific timing and amount of any future repurchases will vary based on market conditions, securities law limitations and other factors.

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Our website address is www.graniteconstruction.com.

On our website we make available, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and any amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission (“SEC”).

From time to time, we may use our website as a distribution channel for material company information.

The information on our website is not incorporated into, and is not part of, this report.

These reports, and any amendments to them, are also available at the website of the SEC, www.sec.gov.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As of March 31, 2026, there has been no material change in our exposure to market risk from what was previously disclosed in our Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis