Knife River Corporation

What they do

Knife River mines and processes aggregates (crushed stone, sand and gravel), produces asphalt and ready-mix concrete, and provides contracting services including asphalt paving, heavy-civil construction, concrete construction, and site development. It operates through four segments: West, Mountain, Central, and Energy Services, with 208 active aggregate sites, 135 ready-mix plants, 55 asphalt plants, and 9 liquid asphalt terminals. The company serves public and private customers, with public projects making up most of its work.

Revenue drivers

• Aggregates — Core product line with 1.3 billion tons of reserves; approximately 35% used internally to support downstream products and services. Pricing improved 8% on a product mix-adjusted basis in Q2 2026.
• Ready-mix concrete — Produced at 135 plants; volumes expected to increase mid-teens in 2026. Contributed to double-digit volume and gross profit growth in Q2 2026.
• Asphalt — Produced at 55 plants with 9 liquid asphalt terminals; volumes expected to increase high-single digits in 2026. Also supported by Energy Services liquid asphalt supply.
• Contracting services — Includes asphalt paving, heavy-civil, concrete construction, and site development; revenue grew 20% year-over-year in Q2 2026. Backlog of $1.2 billion as of June 30, 2026.

Recent performance

For Q2 2026, revenue rose 13% year-over-year to $938.6 million, while net income fell 13% to $43.9 million and diluted EPS declined to $0.77 from $0.89. Adjusted EBITDA was $139.7 million (14.9% margin) versus $140.8 million (16.9% margin) in the prior year. The company cited headwinds from energy costs, delayed projects, and lower gains on asset sales ($0.65 million vs. $10.3 million). Full-year 2025 revenue was $3.15 billion with net income of $157.1 million.

Strategy

Knife River focuses on vertical integration, using its aggregate reserves to supply downstream products and services, and targets mid-sized, higher-growth markets. Management is executing 'Competitive EDGE' initiatives, including price optimization and operational efficiencies, to improve margins. The company completed the Strata Corporation acquisition in March 2025 for $454.0 million, adding reserves and plants in North Dakota and Minnesota. It continues to evaluate acquisition targets and has organic growth projects underway, including aggregate reserve expansions.

Risks

• Highly competitive industry — Competes with regional, national, and international firms that may have greater resources or specialize in niches, potentially leading to lower prices and margins.
• Public-sector dependency — Most work is public infrastructure; funding delays or changes in federal/state budgets could reduce demand.
• Operational headwinds — Energy costs, weather-related project delays, and phasing issues have recently pressured margins, particularly in the West segment.
• Acquisition integration risk — Growth relies on M&A; integration issues or pipeline shortfalls could hinder expected benefits.

Outlook

Management raised full-year 2026 guidance to revenue of $3.4-3.6 billion and Adjusted EBITDA of $520-560 million. They expect aggregates volumes to increase high-single digits and pricing mid-single digits, ready-mix volumes up mid-teens, and asphalt volumes up high-single digits. The guidance assumes normal weather and excludes future acquisitions.