Granite Construction is seeing strong revenue momentum in 2026, driven by increased federal infrastructure contracts and expanding data center site development work, company executives said during a recent earnings call.
.jpg)
The Watsonville, California-based contractor reported that federal contracts now account for roughly 15% of its business, while data center-related work is approaching 10% of total activity. These gains helped push the company to raise its full-year revenue guidance.
Granite expects an additional $200 million in revenue from border infrastructure projects in southern Texas, alongside another $100 million contribution from its recent acquisition of Utah-based Kenny Seng Construction. The company also signaled it will continue pursuing strategic acquisitions to support growth.
Despite the cancellation of a roughly $300 million highway project in California, Granite increased its backlog, underscoring sustained demand across markets.
Granite President and CEO Kyle Larkin said the loss was unusual and emphasized the strength of the broader pipeline.
The company’s backlog growth “reflects a bidding environment that remains robust at the federal, state and local and private levels,” Larkin said.
Border-related construction has become a significant contributor to Granite’s portfolio. Of its $7.2 billion backlog at the end of the first quarter, about $640 million is tied to tactical infrastructure projects for U.S. Customs and Border Protection.
The contractor secured the first border wall contract of President Donald Trump’s second term in 2025 and followed that with a $495 million award for infrastructure work near Laredo, Texas, in 2026.
Larkin said the company has intentionally pursued smaller work packages in recent years to manage risk associated with large, multiyear megaprojects. However, the faster pace of the Laredo project has improved visibility into execution risks.
“That project burns over around 14 months and so we expect to be right around 40% complete” by the end of 2026, Larkin said.
He identified three primary risks tied to border work: scheduling challenges, remote jobsite logistics and uncertainty among subcontractors and suppliers.
“You think about a $40 billion program along the border, there’s a lot of subcontractors and suppliers that are participating in that at levels that they probably typically don’t participate in, and so there always is some risk,” Larkin said. “So we’re being very selective about the partners that we have on this project.”
Granite expects to pursue additional border contracts as new opportunities emerge later this year.
Alongside federal work, Granite is capitalizing on the rapid expansion of data centers by focusing on early-stage infrastructure and materials supply.
“We’re successfully delivering and we are supplying materials to projects in Washington, Oregon, Nevada, Arizona, Louisiana and Mississippi,” Larkin said. “We’re really able to tackle it from a civil component, a water component … and/or just materials.”
The contractor’s role often includes site preparation, utility work and road materials — positioning the firm to benefit from the surge in digital infrastructure construction without taking on vertical building risks.
When asked about rising fuel costs tied to geopolitical tensions, including the war in Iran, Larkin said Granite has largely mitigated impacts through pricing strategies.
.jpg)
“The energy surcharge we put in place after Q1 in 2021, and our materials business specifically, that’s really provided us some good protection around just cost increases,” he said.
Granite reported a net loss of $41.7 million for the first quarter of 2026, compared to $33.7 million during the same period in 2025. However, revenue rose 30% year over year to $912.5 million.
The company’s backlog reached $7.2 billion, reflecting a $200 million increase from the previous quarter and a 24% jump year over year. Federal contracts accounted for approximately $1.3 billion of that total.
Looking ahead, Granite raised its full-year 2026 revenue forecast to between $5.2 billion and $5.4 billion, up from its previous estimate of $4.9 billion to $5.1 billion.
Originally reported by Joe Bousquin, Senior Editor in Construction Dive.
.png)
.png)
