What Ferrovial (FER) Said on Its Q3 Earnings Call

Key Points

• Ferrovial strengthened its financial position: Net cash rose to €1.66 billion by September, while construction revenue increased 9.1% and the order book reached a record €19 billion. Construction margins also improved across the company’s main operating units.
• Highways delivered strong revenue growth despite mixed traffic trends: The 407 ETR, Dallas-Fort Worth managed lanes and Virginia’s I-66 benefited from higher pricing and revenue per transaction, while I-77 faced weaker EBITDA due to revenue sharing and traffic diversions.
• Major U.S. managed-lanes projects expand Ferrovial’s future commitments: The company advanced Tennessee’s $21 billion I-24 concession and Atlanta’s $8.9 billion I-285 project, with most equity needs expected in 2033–2035 and no planned parent-level equity raise.

Ferrovial NASDAQ: FER reported strong growth in its highways and construction businesses during the first nine months of 2026, while providing additional details on recently awarded managed-lanes projects in Tennessee and Georgia.

CFO Ernesto López Mozo said the company ended September with a net cash position of €1.66 billion, excluding infrastructure project companies, compared with roughly €1.3 billion at the end of 2025. Cash inflows included €604 million in project dividends and €591 million in construction operating cash flow before tax payments and dividends. Ferrovial also received €96 million from divestments, mainly related to Silvertown Tunnel and transmission lines in Chile.

The company’s main cash outflows included a €63 million equity contribution to New Terminal One at JFK Airport and €461 million for cash dividends and treasury-share purchases. Ferrovial announced a second scrip dividend totaling €600 million, payable in cash or shares at shareholders’ election.

Highways Results Led by Pricing and Revenue Per Transaction

The 407 ETR toll road in Ontario posted 18.4% revenue growth for the first nine months despite lower traffic. EBITDA increased 21%, while traffic declined 7.1% in the third quarter. López Mozo said traffic was affected by a more targeted promotional strategy than in 2025, slower regional economic growth, weather, holiday timing and reduced maintenance work on alternative roads.

He said the company did not expect to reduce toll prices at the asset, noting that revenue growth remained substantial and that customers continued to value the service. The 407 ETR distributed C$1.05 billion during the first nine months, with another C$1.05 billion dividend approved for the fourth quarter. Total dividends approved for 2026 were C$2.1 billion, compared with C$1.5 billion in 2025.

Ferrovial’s Dallas-Fort Worth managed-lanes portfolio continued to report double-digit growth in revenue per transaction. During the first nine months:

• NTE revenue rose 14.8%, despite a 2.2% decline in traffic, as capacity-improvement works affected usage.
• LBJ revenue increased 16.3%, while transactions rose 3.9% following completion of the I-635 feeder corridor.
• NTE 35W revenue increased 15.8%, though traffic declined 0.2% amid capacity constraints in portions of the corridor.

Revenue per transaction increased 17.1% at NTE, 12% at LBJ and 15.6% at NTE 35W. The company cited higher heavy-vehicle volumes, improved vehicle classification technology and mandatory-mode events as contributors.

I-66 in Virginia delivered 17.7% revenue growth and an 18.1% increase in adjusted EBITDA in the first nine months, supported by a 7% rise in transactions and a 10% increase in revenue per transaction. I-77, meanwhile, reported a 5.4% revenue increase but a 6.1% adjusted EBITDA decline, largely reflecting a higher revenue-sharing band. Management said construction on the I-81 corridor had diverted heavy traffic toward alternative routes, reducing I-77’s capture rate.

Construction Margin Improves and Backlog Reaches Record

Ferrovial’s construction division generated €5.8 billion in revenue during the first nine months, up 9.1% on a like-for-like basis. The adjusted EBIT margin improved to 4.1% from 3.7% a year earlier, including a 5.1% margin in the third quarter.

Budimex recorded a 6.9% adjusted EBIT margin, while Webber’s margin rose to 3.6% amid 17% like-for-like revenue growth. Ferrovial Construction improved its adjusted EBIT margin to 2.6% from 1.7%, which management attributed to better execution in North America, the U.K. and Spain, lower bidding costs and higher revenue.

The construction order book reached a record €19 billion, up 8.2% on a like-for-like basis from December 2025. The company said the figure excludes approximately €8.7 billion in pre-awarded or pending-financial-close contracts, mainly related to I-24 and Budimex projects.

New Managed-Lanes Awards in Tennessee and Georgia

CEO Ignacio Madridejos discussed the I-24 Southeast Choice Lanes project in Tennessee, for which Ferrovial’s consortium was awarded the concession in August and reached commercial close in September. On a present-value basis, payments to the Tennessee Department of Transportation total $21 billion, with approximately $7.7 billion of nominal payments scheduled during construction from 2027 through 2033. Further payments would occur during operations through 2085.

The concession also includes revenue-sharing mechanisms that apply if the project outperforms defined thresholds. Madridejos said the project’s financing structure would be disclosed at financial close. He noted that TIFIA financing requires a maximum structure of 75% debt and 25% equity at financial close.

Ferrovial was also awarded the I-285 East Express Lanes project in Atlanta, where it holds a 90% stake in the consortium. Phase 1 covers approximately 23 miles and includes two westbound express lanes, extensions at SR 400 and I-85, and a 50-year operating and maintenance period. The project carries an estimated construction cost of about $8.9 billion, with a projected 6.5-year construction period and expected service commencement in 2034.

The proposed Phase 1 concession payment is $23.1 billion, subject to interest-rate movements and final financial structuring before expected financial close in October 2027. An additional $515 million is to be paid at financial close as reimbursement of state costs.

Madridejos said Phases 2 and 3 are not automatically committed and would require separate negotiations and phase agreements. Ferrovial may eventually reduce its 90% ownership stake, though management said no decision has been made regarding the timing of any potential partner sale.

The company said it expects equity needs for I-24 and I-285 to be heavily back-loaded, with the largest commitments occurring in 2033 through 2035. Madridejos said Ferrovial expects to fund the commitments primarily through operating cash generation and, to a lesser extent, additional corporate debt, without an equity raise at the parent-company level.

Airport Update

At New Terminal One at JFK, Ferrovial maintained March 2027 as the Phase A date for delivery, build and operation, subject to contractor execution, systems integration, testing, commissioning and coordination with stakeholders. The terminal had reached 32 airline agreements, including 24 executed agreements and eight letters of intent.

The Port Authority extended the notice-to-proceed deadline for Phase B1 to September 2030 and for Phase B2 to June 2033. Ferrovial said total equity invested in the project reached €1.042 billion after its €63 million second-quarter contribution. The company also said no dividends may be distributed from New Terminal One until June 2033 under the current commitments.

About Ferrovial (NASDAQ:FER)

Ferrovial SE is a global infrastructure company that develops, finances, operates and maintains transportation and other essential infrastructure. Its activities primarily focus on toll roads and mobility infrastructure, airports, energy infrastructure and construction services. The company participates in projects through development, investment, operations and long-term maintenance, often under public-private partnership and concession arrangements.

Ferrovial's transportation portfolio includes managed-lane and toll-road projects, while its airports business has included the development and operation of airport infrastructure.

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