NYSE:ACA
Arcosa, Inc.
A premier North American specialty contractor delivering concrete repair, waterproofing, and structural rehabilitation services to residential and commercial clients.
Key Metrics
Investment Thesis
Bull Case
Arcosa offers a compelling value play for investors seeking exposure to the essential infrastructure maintenance sector, which is recession-resistant as long as property owners need repairs. The recent 2025 recovery in net income combined with strong operating cash flow suggests operational efficiency improvements are overcoming prior headwinds. Its diversified geographic presence and specialized service offerings provide stable earnings potential compared to generalist construction peers.
Bear Case
The company's profitability remains volatile, evidenced by the sharp decline in net income from $245.8M in 2022 to $93.7M in 2024 before the recent rebound, raising concerns about earnings consistency. Significant non-operating losses of $100.6M and a retained earnings deficit of $947.3M suggest underlying structural challenges or one-time charges that may not be fully resolved. High capital expenditure requirements of $165.6M could strain free cash flow if project margins do not sustain the current growth rate.
About Arcosa, Inc.
Arcosa, Inc. (NYSE: ACA) is a leading North American specialty construction services provider specializing in concrete repair, waterproofing, structural rehabilitation, and foundation repair solutions. The company serves residential, commercial, and industrial markets across the United States and Canada, delivering critical infrastructure maintenance and new construction support through its diverse portfolio of subsidiaries. With annual revenue reaching $2.88B in 2025, Arcosa plays a vital role in preserving asset value for property owners while expanding its footprint in high-growth residential and commercial sectors.
Analysis
Management Discussion
Despite a challenging net income trajectory over the past three years with 2024 profits dipping to $93.7M, the company demonstrated a powerful recovery in 2025, rebounding to $208.4M in net profit while revenue grew 12% year-over-year to $2.88B. The strong operating cash flow of $341.1M and robust working capital changes of $154.6M indicate efficient management of the balance sheet and effective conversion of sales into cash. However, investors should note the significant non-operating losses of $100.6M and large capital expenditures of $165.6M which suggest ongoing strategic investments or restructuring costs impacting bottom-line clarity.
Industry Overview
The specialty construction industry focuses on essential maintenance and repair services rather than new greenfield development, providing a more stable economic moat during housing downturns. Market demand is driven by an aging infrastructure base requiring continuous waterproofing, concrete patching, and structural strengthening to prevent catastrophic failures. Competition is fierce but fragmented, allowing established players with national scale to capture disproportionate market share.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $2.24B | $2.31B | $2.57B | $2.88B |
| Cost of Revenue | $1.82B | $1.86B | $2.05B | $2.24B |
| Gross Profit | $422.8M | $443.8M | $515.2M | $647.2M |
| Operating Expenses | $73.8M | $226.5M | $317.6M | $305.3M |
| Operating Income | $349.0M | $217.3M | $197.6M | $341.9M |
| G&A | $262.8M | $261.1M | $320.0M | $307.1M |
| Stock-Based Comp | $19.1M | $23.9M | $24.3M | $26.4M |
| D&A | $154.1M | $159.5M | $195.0M | $223.0M |
| Amortization | $19.7M | $20.9M | $26.3M | $26.9M |
| Other OpEx | $-189.0M | $-34.6M | $-2.4M | $-1.8M |
| Non-Operating Income | $-32.8M | $-21.4M | $-67.6M | $-100.6M |
| Interest Expense | $31.0M | $28.1M | — | — |
| Interest Income | $1.1M | $4.7M | $7.5M | — |
| Pre-Tax Income | $316.2M | $195.9M | $130.0M | $241.3M |
| Income Tax | $70.4M | $36.7M | $36.3M | $32.9M |
| Continuing Ops | $245.8M | $159.2M | $93.7M | $208.4M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $245.8M | $159.2M | $93.7M | $208.4M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $245.8M | $159.2M | $93.7M | $208.4M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $856.8M | $912.0M | $954.0M | $1.11B |
| Cash & Equivalents | $160.4M | $104.8M | $187.3M | $214.6M |
| Accounts Receivable | $334.2M | $357.1M | $350.2M | $417.7M |
| Inventory | $315.8M | $401.8M | $359.9M | $424.2M |
| Other Current Assets | $46.4M | $48.3M | $56.6M | $50.0M |
| Long-Term Assets | $2.48B | $2.67B | $3.96B | $3.88B |
| PP&E (Net) | $1.20B | $1.34B | $2.13B | $2.10B |
| Intangibles | $256.1M | $270.7M | $338.3M | $310.8M |
| Goodwill | $958.5M | $990.7M | $1.36B | $1.35B |
| Operating Leases | $33.9M | $36.7M | $63.1M | $59.2M |
| Other LT Assets | $35.7M | $31.5M | $69.5M | $62.0M |
| Total Assets | $3.34B | $3.58B | $4.92B | $4.99B |
| Current Liabilities | $367.7M | $431.2M | $516.0M | $503.6M |
| Accounts Payable | $190.7M | $272.5M | $237.3M | $259.3M |
| Current Leases | $6.7M | $8.4M | $8.6M | $8.0M |
| Other Current Liab | $48.5M | $32.9M | $103.7M | $57.5M |
| Long-Term Liabilities | $788.5M | $814.7M | $1.97B | $1.84B |
| LT Operating Leases | $29.9M | $29.7M | $54.7M | $51.8M |
| Other LT Liab | $758.6M | $785.0M | $1.92B | $1.79B |
| Total Liabilities | $1.16B | $1.25B | $2.49B | $2.34B |
| Shareholders' Equity | $2.18B | $2.33B | $2.43B | $2.64B |
| Paid-In Capital | $1.68B | $1.68B | $1.70B | $1.71B |
| Retained Earnings | $515.5M | $664.9M | $748.9M | $947.3M |
| AOCI | $-15.7M | $-16.2M | $-17.7M | $-16.4M |
| Treasury Stock | $0 | — | — | — |
| Total L&E | $3.34B | $3.58B | $4.92B | $4.99B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $245.8M | $159.2M | $93.7M | $208.4M |
| Non-Cash Adjustments | $-174.3M | $-93.3M | $606.3M | $-21.9M |
| Working Capital Changes | $102.8M | $195.1M | $-198.0M | $154.6M |
| Cash from Operations | $174.3M | $261.0M | $502.0M | $341.1M |
| Capital Expenditures | $138.0M | $203.5M | $189.7M | $165.6M |
| Cash from Investing | $90.7M | $-285.8M | $-1.51B | $-121.4M |
| Share Buybacks | $15.0M | $13.8M | $0 | $0 |
| Dividends Paid | $9.8M | $9.8M | $9.7M | $10.0M |
| Cash from Financing | $-177.5M | $-30.8M | $1.09B | $-192.4M |
| FX Effect | $0 | $0 | $0 | $0 |
| Net Change in Cash | $87.5M | $-55.6M | $82.5M | $27.3M |
| Beginning Cash | $72.9M | $160.4M | $104.8M | $187.3M |
| Ending Cash | $160.4M | $104.8M | $187.3M | $214.6M |
Frequently Asked Questions
How does Arcosa, Inc. make money?
The company operates through four primary segments: Concrete Repair (providing structural stabilization and crack repair for foundations), Waterproofing (managing interior/exterior moisture control systems), Structural Rehabilitation (offering seismic retrofitting and strengthening solutions), and Construction Services (delivering specialized labor and equipment for new builds and renovations).
What are the main risks for ACA?
Cyclical nature of the residential and commercial construction markets can lead to significant revenue volatility if housing starts or commercial development slows down. Rising material costs, particularly for steel and concrete aggregates, could compress margins despite the company's long-term contracts. Labor shortages within the skilled trades sector may constrain project execution capacity and increase operational expenses. Regulatory changes regarding environmental compliance or safety standards in construction could impact project timelines and profitability.
What is ACA's competitive advantage?
Arcosa's extensive network of over 400 locations provides unmatched geographic coverage and rapid response capabilities, creating high barriers to entry for competitors. The company benefits from a diversified revenue stream across multiple specialty niches, reducing reliance on any single market cycle or project type. Its deep institutional relationships with general contractors and property owners ensure consistent order flow in the essential infrastructure maintenance space.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.