Thank you for your continued patience. Your meeting will begin shortly, and a member of our team will be happy to help you. Thank you for your continued patience. Your meeting will begin shortly, and a member of our team will be happy to help you. Please standby. Your meeting is about to begin. Good morning, ladies and gentlemen, and welcome to the Arcosa, Inc. Fourth Quarter and Full Year 2025 Earnings Conference Call. My name is Chloe, and I will be your conference call coordinator today. As a reminder, today's call is being recorded. Now, I would like to turn the call over to your host, Erin Drabek, Vice President of Investor Relations for Arcosa, Inc. Ms. Drabek, you may begin. Good morning, everyone, and thank you for joining Arcosa, Inc.’s Fourth Quarter and Full Year 2025 Earnings Call.

With me today are Antonio Carrillo, President and CEO, and Gail Peck, CFO. A question-and-answer session will follow their prepared remarks. A copy of the press release issued yesterday and the slide presentation for this morning's call are posted on our Investor Relations website, ir.arcosa.com. A replay of today's call will be available for the next two weeks. Instructions for accessing the replay number are included in the press release. A replay of the webcast will be available for one year on our website under the News and Events tab. Today's comments and presentation slides contain financial measures that have not been prepared in accordance with GAAP. Reconciliations of the non-GAAP financial measures to the closest GAAP measure are included in the appendix of the slide presentation. In addition, today's conference call contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Please refer to the company's SEC filings for more information on these risks and uncertainties, including the press release we filed yesterday and our Form 10-K expected to be filed later today. I will now turn the call over to Antonio.

Thank you, Erin. Good morning, everyone, and thank you for joining us for a discussion of our fourth quarter and full year 2025 results and 2026 outlook. 2025 was an outstanding year for Arcosa, Inc., demonstrated by our exceptional financial performance and significant advancement of our strategic transformation. Our key growth businesses, Construction Materials and Engineered Structures, grew year-over-year, supported by cyclical expansion in both barge and wind towers. For the full year, we achieved record revenues of $2.9 billion, up 12%, record adjusted EBITDA of $583 million, up 30%, and record adjusted EBITDA margin of 20.2%, up 280 basis points. Importantly, we accomplished these results safely, recording the lowest annual safety incident rate in Arcosa, Inc.’s history. Our expanded disclosures further highlight the momentum underpinning our key growth businesses. Within Construction Products, we began separately disclosing revenues and unit statistics for the aggregates business. Representing approximately 60% of our Construction Materials revenues, aggregates achieved 10% growth in cash unit profitability in 2025, led by strong pricing gains and the accretive impact of Stavola. Within Engineered Structures, we separated the revenue and backlog disclosures for utility and related structures and wind towers. This better highlights the underlying strength within utility structures where backlog levels remained at or near record highs throughout the year, supported by robust end market demand. We exited 2025 with great momentum. Fourth quarter adjusted EBITDA increased 13% and margin expanded 90 basis points, with all segments contributing. Our earnings strength and positive cash flow enhanced our balance sheet, and we ended the year comfortably within our long-term leverage target. Overall, I am extremely proud of the dedication and contribution of the entire team. Earlier this week, we announced we entered into a definitive agreement to sell our barge business for $450 million in cash. With a…

Thank you, Antonio, and good morning. Starting with Construction Products, fourth quarter segment revenues decreased 2%. Excluding freight, which is a pass-through in our Construction Materials business, revenues increased 4%. Adjusted segment EBITDA grew 3%, and margin expanded 140 basis points. On a freight-adjusted basis, adjusted segment EBITDA margin was roughly flat. As a reminder, segment performance this quarter is all organic, as Stavola hit its one-year anniversary on October 1, at the start of the quarter. For aggregates, freight-adjusted revenues increased roughly 8%, driven by 5% pricing growth and 2% volume improvement. Two consecutive quarters of volume growth give us optimism on continued volume recovery in 2026. Adjusted cash gross profit increased 6% and adjusted cash gross profit per ton increased 3%. Many of our regions had double-digit growth in unit profitability, particularly our natural aggregates and stabilized sand operations in Texas and our aggregates operation in the East Region. This performance, however, was partially offset by lower unit profitability in our Gulf Region, which was impacted by less favorable product mix, and the West Region, which had lower cost absorption on declining production volumes as we align inventory levels to demand. For the full year, volumes increased 6% due to the inorganic contribution from Stavola, and organic volume improvement in the back half of the year partially compensating for first half weather challenges. Full year freight-adjusted sales price grew 8% and adjusted cash gross profit per ton increased 10%, led by the accretive impact from Stavola. Turning to Specialty Materials and Asphalt, revenues decreased 5% primarily due to lower freight revenue for asphalt. Excluding freight, revenues were roughly flat, while adjusted EBITDA and margin declined slightly. Within Specialty Materials, strong profitability gains in lightweight aggregate were offset by volume-related decline in our specialty plaster business. In our asphalt…

Thank you, Gail. For 2026, we anticipate revenues to be in the range of $2.95 billion to $3.1 billion and adjusted EBITDA to be in the range of $590 million to $640 million, excluding any impact from the barge divestiture. As outlined in the earnings press release, our guidance for barge includes full year revenues of $410 million to $430 million and adjusted EBITDA of $70 million to $75 million. We will update our full year guidance once the divestiture closes. Our 2026 guidance incorporates another record year for our growth businesses, Construction Materials and Engineered Structures, with combined double-digit adjusted EBITDA growth and margin uplift. At the same time, we expect a short-term step-down in wind towers before recovering in 2027. In our outlook comments today, we will focus on the Construction Materials and Engineered Structures segments. Beginning with our first quarter 2026 results, we expect to eliminate segment reporting for Transportation Products and report results for the barge business as discontinued operations. In Construction Products, we anticipate another record year of revenues and adjusted EBITDA. In our guidance range, we anticipate mid- to high single-digit adjusted EBITDA growth. For the aggregates business, we anticipate low single-digit volume growth and mid single-digit price improvement. With our cost expectations generally in line with inflation, we anticipate solid gains in aggregate unit profitability. Our outlook is supported by solid infrastructure demand, which drives roughly 45% of our segment revenues. IIJA funding combined with strong state fiscal health is expected to support volume growth in 2026. Roughly half of the IIJA funding has not been spent, and there is progress on advancing a multiyear surface transportation reauthorization. Our shoring products business has record backlog, a positive indicator of the underlying infrastructure demand. In Texas, our largest natural aggregates and liquid market, public…

Thank you. Press 1 on your keypad. To leave the queue at any time, press 2. Once again, that is 1 to ask a question. We will move first to Ian Zaffino with Oppenheimer. Your line is open.

Hi. Great. Thank you very much. Congratulations on the barge sale. Thank you. Now as far as the proceeds, how are you thinking about redeploying those, what areas and maybe geographies, or any other kind of color you could give us on that, and the multiples you are seeing out there? Do you have to use that for any—I mean, that is why. Thanks.

Let me give you color on that. As Gail mentioned in her script, first, once we close this transaction—and we expect it to be in the second quarter—there might be some debt reduction in the short term. After that, we have a very active pipeline of opportunities for M&A. Right now, we are looking at mostly within our current footprint, but we do have some opportunities that take us to some new MSAs where we are not present. M&A, as mentioned in the past, has no timing because these things sometimes take time and are mostly family-owned businesses. It takes time to get there. We have a really active pipeline in both our current MSAs and a few new ones. That would be our primary focus to try to accelerate our M&A pipeline, mainly bolt-on acquisitions. These are not enormous things. I have mentioned before, bolt-ons are where we really get excited about margin expansion. We also have significant organic CapEx going on. Gail mentioned a few plant movements within our aggregates business, more reserves, finishing the Illinois facility, the galvanizing facility. I just announced that we are transitioning our Tulsa facility from wind towers to transmission over time as we finish our wind tower orders. That facility is very large and has the ability to do both product lines. The big message here is now that we are a simpler company, we will focus our full attention on deploying the capital to generate additional value for our shareholders through both inorganic and organic opportunities.

Okay. We are losing you. What should we expect there? I know we are pretty close to being almost exclusively noncyclical at this point, but any other kind of moves that you intend to do or not do? What should we expect going forward? Thanks.

The cyclical business that we are left with is the wind tower business. As you know, current policy uncertainty creates noise. I mentioned in my remarks that we are very optimistic about the future of the wind industry because, for the first time since we have been building wind towers, we actually need them. The power demand increase is real. I am optimistic about wind. We expect a slower 2026 and a return to higher volumes in 2027. As we enter 2028, that is where we need to start focusing on 2028 and beyond. At the same time, we recognize the policy uncertainty. We have another business that is growing fast, which is utility structures. That is why the transition of our Tulsa facility to more utilities. There is some uncertainty. As we get into 2027, let us see. I am very optimistic about 2028 and beyond for wind. Rightsizing the business to two facilities really reduces our exposure. If the wind industry recovers fast, we will see what we do. For the moment, we will be very focused on growing in utility structures. Long answer to your short question.

That is really helpful. Thank you very much. Good quarter. Thank you.

We will move next to Trey Grooms with Stephens. Your line is open.

Hey, Antonio and Gail. This is Ethan on for Trey. Thanks for the question. Starting off with utility structures, clearly expected to be a pretty large growth driver in 2026. Revenue was up 20% in the fourth quarter. The magnitude of growth here is pretty impressive, and guidance seems to imply pretty solid double-digit EBITDA growth. So just curious if this may help offset what is expected to be lower volume in wind in 2026, and perhaps any more color on the growth or demand expectations for utility structures in 2026? Thanks.

Good morning. I will take the first part of that question. You are correctly identifying a lot of underlying strength within utility structures. As we look to 2026 and think about our guidance for the Engineered Structures segment, we do see a path to that strong utility compensating for the step-down in wind. We gave a rough estimate for where we are right now for wind backlog, which translates to revenues for 2026. You do see roughly a 25% step-down in wind revenues. Given where we are with utility and the strength of the double-digit volume increases and pricing increases that we have had—and as I said in my script, we saw margin expansion for utility in every quarter year over year throughout 2025—we have strong expectations for the business next year, and we see a path to flat to maybe slight growth within the segment for next year.

From the industry perspective, the numbers reflect what we are seeing in the industry. We are seeing very solid demand. We are seeing very long lead times. We are seeing a move towards larger utility poles, and that is why we are moving our wind tower facilities to utility poles. The big picture for us is we are very excited about the industry. Perhaps how should we think about the implications of our new galvanizing facility in Mexico starting this quarter? The facility already has orders and customers assigned to it. We are going to be ramping up with relative certainty around 2027 being a year where the facility starts contributing to the bottom line. The other facility is a longer-term process. We have orders until 2027, so this is a 2028 and beyond impact. The ramp-up in that facility will be a lot smoother because the first facility was idle, so we have to hire and train people and everything. The other facilities are a much easier transition because we already have people. People are the hardest thing to get and the most important resource for any one of our facilities. Moving people that already know how to weld and produce wind towers to transmission structures is a lot easier than hiring new people.

Got it. That is all very helpful. Thanks so much for the color, and I will pass on.

We will move next to Garik Shmois with Loop Capital. Your line is open.

Thanks. Just on the first quarter, I was wondering if you could maybe follow up a little bit more on the observations around weather in the Northeast impacting Stavola. Any additional perspective on Q1 and from a production standpoint, or the impact there—whether we should think about the percentage of EBITDA in the first quarter relative to the full year and how that is looking this year versus historicals?

Good morning, Garik, and thanks for the question. It has been a cold and snowy quarter up in the Northeast, which will likely impact the cadence of our Q1 as a percent of the total. If you look at last year, Q1 EBITDA for the segment within Construction was about 16% or so of the year. It certainly is a smaller contributor to EBITDA for the year. With the weather and the snow here recently, we will see that percentage share drop just a little bit. You will not see the same contribution as a percent of the whole as you saw last year.

Okay. Makes sense. Thank you. And then maybe just on gross profit per ton expectations in aggregates for 2026. I know Q4 had some headwinds due to fixed cost absorption in some of the Western markets. How should we think about gross profit per ton for the segment overall for this year?

As I said in my comments, with mid single-digit price and low single-digit volume, and where we sit here today with expectations that costs are generally in line with inflation, we do see solid unit profitability gains for 2026. The cadence of that is always a little bit uneven with the seasonality. Q1 will likely have a tough comp in unit profitability year over year, but for the full year, we expect solid gains in gross profit per ton.

Understood. Thank you very much.

We will move next to Julio Romero with Sidoti & Company. Your line is open.

Good morning, Antonio and Gail, and congratulations to Jess on his retirement. I wanted to ask about the slope of the accelerating demand in utility structures. You are allocating resources there—Illinois in 2026, Tulsa in 2027. Could you dive a bit deeper into whether the acceleration in demand is being driven by a particular product line or geography? And then from an end use perspective, you said you are seeing demand skew towards larger utility poles. Should we infer that to mean that demand is being driven primarily by new transmission work versus substation?

The slope we have seen over the last couple of years has become more pronounced. As we look at backlog, order intake, and customer reservations that are not yet in backlog, we see the need to accelerate our capacity expansion because our customers need it. In this industry, like in every other one, if we do not do it, someone else is going to do it. We need to be there for our customers. We are a company that has a significant share of our revenues tied to longer-term contracts, and we have had very long-term relationships with our customers, so we have the obligation to respond to their needs, and that is really exciting to us. It is not a regional thing. We see it all over the country. That is why one plant in Illinois and one plant in Tulsa give us further coverage. The overall sentiment is very positive. We did not do this just on hopes of good demand. We had a market study by a third party analyze utility investment over the next five to ten years, and we see this slope continuing to accelerate at least from here to 2030. We have to acknowledge it, plan for it, review it frequently, and make sure that every step we take has the basis to make the right choices and the right capital allocation. We do not do it just based on our gut feeling. We have solid data behind our thinking. On those customer reservations, our customers are mostly utilities. We have a few customers that are EPCs, and for the most part, we do not sell to a hyperscaler. Our customers are the people who supply power to developers and hyperscalers. It might take years. If someone is trying to build a data center right now, it might take two to three years for us to start seeing any noise around it. The move to larger poles that we have seen over the last couple of years has to do with that increase in loads in certain areas. It has to do with permitting, and it has to do with rights of way. It is easier to put a big pole rather than a lot of small poles. It takes less space. You see it also in the conversation on the 765 lines, the very large lines. Bigger lines with higher voltage add resiliency to the grid. The whole country is reconfiguring to people who have higher loads and higher demands, and everyone is trying to adapt to that. We are part of the mix, but it might take us years to see the orders from the time someone develops a data center.

Excellent. Very exciting. I will pass it on. Thank you.

We will move next to Brent Thielman with D.A. Davidson. Your line is open.

Thanks. On Engineered Structures, you have been in a pretty tight range of margin throughout 2025. I want to get a sense of whether those sorts of levels are sustainable into 2026. It sounds like you could have a bit of a different mix within the segment. Does that have a material impact through the year? Maybe just help us understand that piece.

Good morning, Brent. Great question. There are two different stories going on within Engineered Structures for 2026. We feel very comfortable with the visibility we have in wind, but with that revenue step-down, and some lost absorption, we will see a margin impact on the wind side. Does utility fully compensate for that margin impact? There is a chance. We do see utility with good year-over-year progression in margin. The way I would say it right now is wind is going to have an impact for sure. A path to flat margins for the segment looks achievable, but we will have to see how the year progresses.

To add some color, there is a path to compensate for that big of a drop in wind. The quality of our EBITDA in 2026 is going to be a lot better than 2025 because we are changing tax credit EBITDA for utility structures EBITDA. The quality of our EBITDA is going to be better in 2026 and beyond as utility structures grows.

As a follow-up, you have been a patient seller with respect to the barge assets. It has been something that has been discussed for a long time. Congrats on getting something to the finish line here. Could we presume that you built up an M&A pipeline that you really want to act on, and now was just the right time to get this done? I am just trying to think around what finally got this to the finish line.

I have mentioned M&A has its own timing, and we needed to get the barge to a point. I am convinced that the buyer, Winchurch Capital, is going to do very well with this asset because it is at the right spot to sell it. The backlog is there. The trends in the industry are really good. The replacement cycle is coming. They are going to have a really good business to run. I am very excited for our team and for them to buy this business. The timing is right to sell it. Could it have been better six months ago or a year from now? I cannot tell you. Right now, it is as good as we have seen it, and that is why we waited to do it at the right time. There is a long runway for it. At the same time, we have been building our pipeline, and we are excited about some of the opportunities we have going on. I am excited about all these opportunities. At the same time, you have seen us act in the past. The money is not going to burn a hole in our pocket. We are not going to deploy capital to things that we do not think are the best that generate value for our investors. We are not going to pay incredibly high multiples that we cannot afford. We are going to be very disciplined in our capital allocation. The goal is to build a pipeline that we can act on while staying disciplined with our capital allocation. We are going to be a disciplined capital allocator going forward, focused on growth.

One more if I could. With some of the investments you are making on the utility structure side, including the conversion of the wind facility, could you level set us on how much revenue capacity comes on in 2026 or into 2027? Just trying to think about what you are doing internally and what that adds for you in terms of thinking about growth rates for utility structures.

In terms of 2026, as we have said on the conversion for the wind tower facility, that is the second half of the year where that is going to start contributing. From a steel structure perspective, that would be our seventh steel utility pole plant. That gives you a sense of what type of capacity it is adding. We would see that as more of an impact from a full-year perspective in 2027. The other investments we are making, as Antonio said, include a new galvanizing line down in Mexico. That is not a top-line impact; that is a cost saving as we are bringing galvanizing in-house down in Mexico. From a P&L perspective, as we ramp the Clinton facility in the U.S., the benefits from that galvanizing cost savings should offset that ramp impact in 2026. So, half-year benefit from the top-line perspective for the Clinton plant in 2026, and then you get the full-year impact in 2027.

Okay. Thanks, Gail. I appreciate it. Thanks all.

Thank you. This does conclude the Q&A portion of today's event, and this also brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.