Surface transportation funding under discussion in Congress could outpace the landmark infrastructure package passed just a few years ago, according to the head of Granite Construction.
.webp)
Speaking during the company’s fourth-quarter and full-year 2025 earnings call, President and CEO Kyle Larkin said proposed reauthorization levels for federal highway spending are “significantly higher” than those included in the $1.2 trillion Infrastructure Investment and Jobs Act.
Granite reported strong financial results alongside that outlook. The Watsonville, California-based contractor posted record backlog of $6.97 billion — up 32% year over year — reflecting sustained demand for heavy civil and infrastructure projects nationwide.
With the IIJA set to expire in September, Larkin said lawmakers are focused on ensuring continued investment in transportation infrastructure.
“What we hear really from industry today is that there’s still bipartisan support,” Larkin said on the call. “There’s still a huge focus on coming up with another investment mechanism and I think the really good news is the investment amount is significantly higher.”
Larkin’s comments align with similar optimism voiced by other public contractors, including Dallas-based AECOM, which has also pointed to a potential expansion of highway funding as a driver of the next construction cycle.
According to Larkin, draft legislation for the next surface transportation bill could emerge as soon as March or April. Even before new funding is approved, he noted that only about half of IIJA funds had been spent through November, leaving a substantial pipeline of federally backed projects still to be awarded.
“There’s still a really nice runway of spending to go, so that’ll last, luckily, for a few more years,” Larkin said.
That remaining funding, combined with the prospect of a larger reauthorization package, provides visibility for contractors operating in the infrastructure sector — particularly those with strong state and federal transportation portfolios.
Beyond highways, Granite is also positioning itself for additional federal work tied to border infrastructure. Larkin said the company is among 11 firms competing for roughly $40 billion in southern border projects.
In March, Granite secured the first border wall contract of President Donald Trump’s second term — a $70 million project to build 7 miles of barrier in Hidalgo County, Texas.
Larkin said the administration has accelerated the timeline for awarding additional border contracts, with new announcements expected as early as June or July. However, the bundling of previously smaller work segments into larger contracts has altered the risk profile.
“These contracts are getting larger than what we originally contemplated, so the risk profile is changing a little bit on those to one that’s just giving us reason to be more disciplined in our pursuits and ensuring that we can not only just win the work but be successful in delivering it for ourselves and for our clients,” Larkin said. “So we’ll see.”
Granite has in recent years focused on smaller, more manageable project packages that provide clearer cost and schedule visibility. Executives signaled they will maintain that disciplined approach even as larger federal opportunities emerge.
Granite reported fourth-quarter revenue of $1.17 billion, up 19% year over year, with net income climbing 25% to $52.03 million. For the full year, revenue reached $4.42 billion — a 10% increase from 2024 — while annual profits surged 53% to $193 million.
The company’s growth strategy extends beyond organic backlog expansion. Executives said Granite will continue pursuing acquisitions in 2026, particularly in materials and aggregates, to strengthen its “home-market” model.
Recent acquisitions include Warren Paving and Papich Construction for a combined $710 million, followed by the purchase of Cinderlite Trucking in Nevada. The strategy centers on supplying construction materials from company-owned aggregate plants to nearby infrastructure projects, improving margins and vertical integration.
.jpg)
“While we are selective in our pursuits, we expect to achieve our goal of completing several strategic acquisitions in 2026,” said Chief Financial Officer Staci Woolsey.
With a record backlog, strong earnings momentum and potential increases in federal infrastructure funding on the horizon, Granite appears positioned to capitalize on what could be the next major wave of U.S. transportation investment.
Originally reported by Joe Bousquin, Senior Editor in Construction Dive.
.png)
