Suncrete Q3 Earnings Call Highlights

Key Points

• Revenue and margins improved sharply: Third-quarter revenue reached $141 million, up 163% year over year, with approximately 10% organic growth. Supplemental adjusted EBITDA increased 60% sequentially to $23.3 million, and its margin expanded to 16.5%.
• Suncrete lowered its 2026 outlook as high interest rates pressured residential construction, projects were delayed, and some acquisition integrations took longer than expected. It now expects revenue of $408 million to $434 million and supplemental adjusted EBITDA of $63 million to $67 million.
• Commercial and infrastructure demand are helping offset residential weakness: Suncrete cited data-center projects in Oklahoma and Texas as a source of growth extending into 2027. It expects 2026 acquisitions to contribute $200 million to $250 million in 2027 revenue, depending on project timing and market activity.

Suncrete NASDAQ: RMIX reported higher third-quarter revenue and improved margins, but lowered its full-year outlook as elevated interest rates weighed on residential construction and some larger projects faced delays.

Revenue rose to $141 million, up 45% from the second quarter and 163% from a year earlier, Chief Financial Officer Tommy Wentroth said on the company’s earnings call. The results included full-quarter contributions from acquisitions closed to date.

CEO Randall Edgar said Suncrete generated approximately 10% organic growth, with roughly two-thirds attributable to higher volume and one-third to price. Supplemental adjusted EBITDA rose 60% sequentially to $23.3 million, while its margin expanded by 150 basis points to 16.5%.

Despite the quarter’s growth, Edgar said the revised outlook reflected residential weakness, project delays and adjusted timelines for integrating acquisitions in certain markets. He attributed some delays to uncertainty surrounding the midterm election and geopolitical concerns, and said excessive rain in the second quarter had slowed site preparation for some projects.

Revised Outlook and Earnings

Suncrete now expects 2026 revenue of $408 million to $434 million, adjusted EBITDA of $60 million to $64 million and supplemental adjusted EBITDA of $63 million to $67 million.

During the question-and-answer session, Wentroth corrected the loss forecasts initially provided in the earnings release and formal presentation. He said the company expects:

• A net loss of $43.685 million to $39.685 million.
• An adjusted net loss of $16.81 million to $12.81 million.

Wentroth said the revenue and EBITDA outlooks were unchanged by the correction. The company did not provide its previous guidance ranges on the call.

Third-quarter net income was $76,000, compared with a $37.1 million net loss in the second quarter and $4.6 million in net income a year earlier. Adjusted EBITDA rose 66% sequentially to $22.4 million, representing a 15.9% margin.

Acquisition Integration and Margins

Edgar said several acquired businesses were approaching Suncrete’s target margins, but some integrations could take closer to 18 months than 12. He pointed to progress in North Texas, a competitive market where he said performance improved through the quarter.

Asked whether acquired businesses or pressure in legacy operations had affected margins, Edgar said legacy margins remained strong and that the focus was on bringing acquired operations up to those levels. He said the North Texas integration was more challenging than some previous deals but expressed confidence it would reach company standards within 18 months.

Wentroth said acquisitions had brought the materials margin down slightly, while plant and delivery costs improved in the third quarter. He also said selling, general and administrative expenses of approximately $31 million per quarter would be an appropriate baseline, with a slight increase expected as the company prepares for growth.

For 2027, Suncrete expects its 2026 acquisitions to contribute approximately $200 million to $250 million in revenue, depending on project timing and market activity. Treasurer and Head of Business Development Calvin Bocanegra confirmed that estimate excludes contributions from additional deals.

Demand, Pricing and Cash

Edgar said residential construction remained pressured by interest rates, although commercial and infrastructure projects had helped offset the downturn. He described the recently delayed projects as a small number and said they were not material to the company’s total volume picture.

Data centers are a growing source of demand, Edgar said, with projects under construction in Oklahoma expected to support activity into 2027. He also cited more than two years of data center projects already approved or approaching construction in Texas.

Suncrete plans to address anticipated supplier cost increases through its normal 2027 pricing cycle. Edgar said its ability to pass costs on to customers would vary by market, and that the company would negotiate with suppliers in tighter markets.

At Sept. 30, Suncrete reported approximately $206.5 million in total liquidity, including $49 million in cash and cash equivalents and $44.5 million in available revolving loan capacity. Bocanegra said he did not expect the business to burn cash in the fourth quarter outside of mergers and acquisitions.

Edgar said the acquisition pipeline remained active, although the timing of several opportunities had shifted to the first half of 2027. When asked whether a fourth-quarter deal was lined up, he said yes, without providing details.

About Suncrete (NASDAQ:RMIX)

Haymaker Acquisition Corp. 4 is a blank check company. It focuses on effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or other business combination with one or more businesses or entities. Haymaker Acquisition Corp. 4 is based in New York.

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