Granite Construction is experiencing significant revenue growth in 2026, driven by an expanding portfolio of border infrastructure projects and increasing demand for data center site preparation work, company executives said during its first-quarter earnings call.
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The Watsonville, California-based contractor reported that federal contracts now account for approximately 15% of its business, while data center-related work is approaching 10% of total revenue. These gains contributed to the company raising its full-year revenue guidance.
Granite expects an additional $200 million in revenue from border projects in Southern Texas. Its recent acquisition of Kenny Seng Construction in Utah is also projected to add another $100 million. Company leaders indicated that acquisitions will remain part of its growth strategy moving forward.
Despite the cancellation of an approximately $300 million highway project in California, Granite’s backlog increased to $7.2 billion. President and CEO Kyle Larkin said the loss was unusual and emphasized continued strength across markets.
“The withdrawal of the project was rare and that the firm’s overall backlog increase ‘reflects a bidding environment that remains robust at the federal, state and local and private levels,’” Larkin said.
Border-related work has become a key component of Granite’s backlog. Of the $7.2 billion total, about $640 million is tied to projects for U.S. Customs and Border Protection. The company secured its first border wall contract of President Donald Trump’s second term in 2025 and followed it with a $495 million tactical infrastructure project near Laredo, Texas, in 2026.
Larkin noted that the faster timeline of recent projects has helped reduce risk exposure.
“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 associated with border work: scheduling challenges, remote jobsite logistics and uncertainty among subcontractors and suppliers. Granite has addressed these concerns by deploying regional resources and carefully selecting project partners.
“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.”
The company is also positioning itself to capture additional border contracts expected to be released later this year.
Meanwhile, Granite continues to benefit from the surge in data center construction across the United States. Rather than building facilities themselves, the firm focuses on early-stage site work 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.”
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 sharply to $912.5 million, representing a 30% increase year over year.
The company’s backlog grew by $200 million from the previous quarter and increased $1.4 billion, or 24%, compared to the first quarter of 2025. Federal contracts accounted for $1.3 billion of the total backlog.
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Granite also raised its full-year 2026 revenue guidance to a range of $5.2 billion to $5.4 billion, up from its previous estimate of $4.9 billion to $5.1 billion.
Addressing concerns about rising fuel prices tied to geopolitical tensions, including the war in Iran, Larkin said the company has not experienced major cost impacts.
“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,” Larkin said.
With strong demand across both public and private sectors, Granite appears well-positioned to continue leveraging infrastructure investments and data center growth opportunities throughout 2026.
Originally reported by Joe Bousquin, Senior Editor in Construction Dive.
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