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Jun 30
Knife River Q2 2025 Earnings Report
Knife River Corporation reported its second quarter 2025 financial results, with revenue increasing by 3% but net income and EPS decreasing significantly compared to the prior year.
Key Takeaways
Knife River Corporation experienced a mixed second quarter in 2025. While revenue saw a modest increase of 3% to $833.8 million, net income and EPS declined substantially by 35% to $50.6 million and $0.89, respectively. The company achieved a record backlog of $1.3 billion and completed two aggregates-led acquisitions, but unfavorable weather conditions and project timing, particularly in Oregon, impacted performance.
Revenue increased by 3% year-over-year to $833.8 million, primarily due to contributions from recent acquisitions and increased product pricing.
Net income decreased by 35% to $50.6 million, and diluted EPS also fell by 35% to $0.89, largely due to higher costs of revenue and increased selling, general, and administrative expenses.
The company achieved an all-time record backlog of $1.3 billion, nearly 30% higher than the same period last year, with approximately 90% of it being public work.
Unfavorable weather conditions, particularly heavy rain in the Central, Mountain, and Energy Services segments, and reduced demand in Oregon, significantly impacted the start of the construction season and project availability.
Knife River
Knife River
Knife River Revenue by Segment
Revenue by Segment
West Revenue
CapyFin.comMountain Revenue
CapyFin.comCentral Revenue
CapyFin.comEnergy Services Revenue
CapyFin.com Forward Guidance
Knife River revised its full-year 2025 adjusted EBITDA guidance to a range of $475 million to $525 million due to a slower start to the construction season, impacts from July flooding in Texas, and the Oregon economy. The company remains focused on price optimization, cost control, and executing on its record backlog.
Positive Outlook
- Public funding levels for infrastructure remain near all-time records in most markets, supporting future growth.
- The company's record backlog of $1.3 billion is expected to drive volume growth across product lines in the second half of 2025.
- Strategic acquisitions, such as Strata, Kraemer Trucking and Excavating, and High Desert Aggregate and Paving, are expected to create synergies and contribute to updated guidance.
- Continued focus on price optimization, with low-double-digit price increases for aggregates, high-single-digit for ready-mix, and low-single-digit for asphalt achieved in the quarter.
- Ongoing process improvement initiatives through PIT Crews are driving operational efficiencies and best-practice sharing.
Challenges Ahead
- Slower start to the 2025 construction season due to unfavorable wet weather conditions across many states.
- Reduced demand and fewer bid lettings in Oregon due to a challenging funding environment and the absence of a new transportation bill.
- Impacts from July flooding in Texas, which temporarily limited truck and rail access to the Honey Creek Quarry.
- Increased cost of revenue across all product lines, with aggregates experiencing the highest increase due to less production and higher per-unit fixed costs.
- Higher selling, general, and administrative costs, including overhead from recent acquisitions and corporate due diligence expenses.
Revenue & Expenses
Visualization of income flow from segment revenue to net income