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Border infrastructure work and data center site preparation have grown to aa largest part of Granite Construction’s businesswith federal contracts trending toward 15 percent of revenue, the company said Thursday on its first-quarter earnings call. Data center projects could account for another 10%.
Those increases, in part, led the Watsonville, Calif.-based contractor to raise its revenue guidance for 2026. It said it expected an additional $200 million in revenue from its South Texas border work, with its recent acquisition of Kenny Seng Construction in Utah contributing another $100 million. Granite said it would continue to look for more acquisition targets in the future.
The company also increased its portfolio, despite the cancellation of a roughly $300 million highway project in California. Granite President and CEO Kyle Larkin said the project withdrawal was rare and that the overall increase in the company’s work backlog “reflects a bidding environment that continues to be robust at the federal, state and local and private levels.”
Data centers and border work
Of its $7.2 billion in portfolio at the end of the first quarter, approximately $640 million came from tactical infrastructure projects for US Customs and Border Protection. In 2025, Granit took the contract for the first border wall of President Donald Trump’s second term, then added a $495 million project for tactical infrastructure work near Laredo, Texas in 2026.
This second award amount was greater than the smaller work packages that Granite has pursued in recent years in order to limit the disproportionate risk involved in multi-million dollar and multi-year mega-projects. However, Larkin said the fast pace of Laredo’s work has given better visibility of the contractor’s overall risk.
“This project takes about 14 months, so we expect to be about 40 percent complete” by the end of 2026, Larkin said.
He divided the risk of frontier work into three categories: schedule, remote workplace, and subcontractor and supplier uncertainty.
Larkin said the faster pace has mitigated schedule concerns. Granite has also deployed resources in the region to counter its isolated location. Finally, the builder has been chosen with its suppliers.
“You think about a $40 billion program at the border, there’s a lot of subcontractors and suppliers involved at levels that they probably wouldn’t normally be involved in, and so there’s always some risk,” Larkin said. “So we’re being very selective about the partners we have on this project.”
In fact, Larkin said the company expects to get more border work in the region during future hires planned for June and July.
In data centers, Granite has been busy taking one they approach the construction boom with shovels and pickscutting off site infrastructure and selling road materials before the structures go up.
“We are successfully delivering and supplying materials for projects in Washington, Oregon, Nevada, Arizona, Louisiana and Mississippi,” Larkin said. “We’re really able to deal with it from a civil component, a water component … and/or just materials.”
Asked by analysts about rising fuel prices due to the war in Iran, Larkin said Granite had not seen significant cost increases.
“The energy surcharge that we put in place after the first quarter of 2021, and specifically our materials business, really gave us good protection around cost increases,” Larkin said.
By the numbers
Granite posted a wider net loss of $41.7 million in the first quarter of 2026, compared with $33.7 million in the same period in 2025, on revenue of $912.5 million, up 30% from a year ago.
The backlog, which the company refers to as committed and awarded projects, or CAP, grew $200 million sequentially from the fourth quarter to $7.2 billion. On a year-over-year basis, this represented an increase of $1.4 billion, or 24%, from the first quarter of 2025. The company attributed $1.3 billion of its backlog to federal contracts.
The company also raised its full-year revenue guidance for 2026, increasing its forecast range from $5.2 billion to $5.4 billion. It had previously forecast revenue of $4.9 billion to $5.1 billion for the year.
