What Management Said
Read the full Q2 2026 transcript ↗Details on these risks, other legal disclaimers, and reconciliations of any non-GAAP financial measures are defined and described in our earnings release, supplemental presentation, and other filings with the Securities and Exchange Commission. I am proud of how our commercial and operating teams have navigated the first half of the year to deliver adjusted EBITDA growth and aggregates cash gross profit per ton expansion. In the quarter, we generated $654 million of adjusted EBITDA, approximating the prior year despite energy headwinds of almost $40 million. Our teams executed well, earning higher prices for our products in each segment and driving operational efficiencies to help offset inflationary increases in our input costs.
Both of these growth pipelines remain active, including numerous acquisition opportunities likely to be finalized this year. A clear example was our acquisition of an aggregate operation from Brannan Sand & Gravel in early June. This acquisition expanded our reach into southern Colorado and strengthened our distribution network in Dallas-Fort Worth. Our team is already hard at work capturing synergies and driving value from this strategic acquisition.
In terms of the demand environment, what I see ahead of us is similar to what the views that I shared on the last call. We still expect strong public activity in our markets and improving private large project opportunities to drive year-over-year shipments growth in 2026. The amount of work in the pipeline bodes well for public shipments for the next several years, providing good demand visibility, which is important for a healthy pricing environment. Reinvesting in our business, growing our franchise through strategic acquisitions, and returning capital to shareholders through both dividends and share repurchases.
What went well
- Vulcan generated $654 million of adjusted EBITDA, roughly flat year-over-year despite nearly $40 million of energy (diesel) headwinds, reflecting strong cost control.
- Second-quarter aggregates cash gross profit per ton topped $12, up $0.14 year-over-year, extending the compounding unit-profitability strategy.
- Mix-adjusted aggregates average selling prices rose 5% year-over-year with improvement widespread across geographies, as mid-year price increases were pulled forward to June.
- Cost execution was strong: excluding diesel, unit cash cost of sales rose only 3%, and the company dampened a $26 million diesel headwind via Vulcan Way of Operating efficiencies.
- The balance sheet remained strong at 1.7x net-debt/EBITDA with trailing-12-month ROIC up 20 bps to 16.1%; over half a billion dollars was returned to shareholders (including $400 million of buybacks).
- Portfolio actions advanced the pure-play aggregates strategy: divestitures of California concrete and USVI non-core operations funded the Brannan Sand & Gravel acquisition expanding into southern Colorado and Dallas-Fort Worth.
What went wrong
- Shipments rose only 1% year-over-year, with volumes varying widely by geography due to wet weather in Texas and the Southeast.
- Energy (diesel) costs were a significant headwind (~$40 million), and management noted oil prices have been stickier than expected, pressuring near-term margins.
- Cost of sales exceeded pricing by roughly 200 basis points in the quarter, so the price/cost spread has not yet inflected positive (expected to turn later in the year).
- Residential/single-family construction remained weak on affordability, and warehouse demand stayed broadly flat with only a few localized green shoots.
- The NAFTA arbitration against Mexico over the Calica seizure resulted in a finding that Mexico acted arbitrarily and violated NAFTA, but the tribunal awarded only immaterial damages (a disconcerting outcome).
- Gross margins are likely to still be down year-over-year in Q3 before improving in Q4.
Guidance Changes
| Metric | Period | Current guidance |
|---|---|---|
| Full-year adjusted EBITDA | FY2026 | $2.4B-$2.6B (reaffirmed) |
| Full-year capital expenditures | FY2026 | $750M-$800M (maintained) |
| Full-year mix-adjusted price growth | FY2026 | ~4-6%, exiting the year at the upper end |
| Full-year SAG expense | FY2026 | ~$10M-$15M lower than the prior range |
| Aggregate shipments | FY2026 | modest growth (volumes weighted to first half, consistent second-half pace) |
| Second-half gross margin | 2H 2026 | expected up year-over-year (driven by Q4); Q3 possibly still down |
Performance Breakdown
| Metric | YoY | Note |
|---|---|---|
| Adjusted EBITDA | $654M (~flat) | Higher prices and operating efficiencies offset ~$40M of energy headwinds. |
| Aggregates cash gross profit per ton | >$12 (+$0.14) | Price gains and cost discipline compounding unit profitability. |
| Aggregates shipments | +1% | Weather-driven geographic variability (wet weather in Texas and the Southeast). |
| Mix-adjusted average selling price | +5% | Vulcan Way of Selling execution and mid-year increases pulled forward to June. |
| Unit cash cost of sales (ex-diesel) | +3% | Operating efficiencies and spending control despite wet-weather volume impacts. |
| Trailing-12-month ROIC | 16.1% (+20 bps) | Profitability compounding and disciplined capital allocation. |
| Net debt / adjusted EBITDA | 1.7x | Strong cash generation plus divestiture proceeds; commercial paper paid down ~$200M. |
| SAG expense (trailing 12 months) | $558M, 6.9% of revenue (-30 bps) | Continued overhead cost management (first-half SAG down 2%). |
Earnings Call Themes & Trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Price as the primary inflation lever | Vulcan Way of Selling discipline | Mid-year increases pulled forward to June (nearly 2x last year sequentially), delivering 5% mix-adjusted price; management may push additional price in the second half if diesel stays sticky, with more color next call and implications for January 1 increases. | — |
| Cost control (Vulcan Way of Operating) | Efficiency focus | Dampened a $26M diesel headwind via production efficiencies, labor scheduling, stripping optimization and liquid-asphalt storage (added a Northern California facility); back-half costs aided by easier comps (last year's concentrated Q4 repair/insurance costs) and seasonally higher tonnage. | — |
| Public demand / infrastructure funding | IIJA-driven strength | Trailing-12-month highway awards up double digits and public infrastructure awards up 20% in Vulcan markets (Gulf Coast infrastructure +360%, North Georgia highways +189%); a continuing resolution is expected with ~60% of IIJA funds unspent ensuring a smooth transition; the House-passed BUILD America 250 Act's formula-first, aggregate-intensive focus is seen as better for Vulcan than IIJA. | — |
| Private demand (data centers / power / LNG) | Data-center strength | Data centers remain a key driver with power generation (coal-to-gas conversions, solar, Texas growth), power infrastructure and LNG projects emerging as multi-year aggregate-intensive tailwinds; power will ramp slower than data centers given regulatory/planning timelines (4-5 year horizon). | — |
| Residential/light non-res weakness | Affordability drag | Single-family remains weak on affordability, dragging light non-residential (which follows rooftops) and keeping warehouses broadly flat; management sees Vulcan's advantaged footprint well-positioned to capture an eventual recovery. | — |
| M&A / greenfield growth | Active pipeline | Disciplined, aggregates-focused pipeline with several acquisitions likely to close in the second half; Brannan (~1-1.5M tons, split between southern Denver and DFW via a Fort Worth rail facility) a complementary bolt-on; no surprises expected as Vulcan stays the purest-play aggregates company. | — |
| Acquisition integration (Superior, Wake Stone) | Recent deals | Superior Ready Mix executed as planned (aggregates retained, downstream spun to CalPortland); Wake Stone Corporation on schedule after applying Vulcan Way of Selling to lift below-standard pricing over a couple of years. | — |
| Mexico / Calica arbitration | NAFTA arbitration pending | Tribunal unanimously found Mexico's 2022 Calica seizure arbitrary and in violation of NAFTA but awarded only immaterial damages (one arbitrator dissented on the low award); Vulcan still owns the land and port-area land, and Gulf Coast EBITDA has grown 50%+ over four years via its distribution network. | — |
Q&A Summary
Anthony Pettinari (Citi) asked what gives confidence in meeting full-year volume guidance.
Pruitt said demand is tracking as expected with healthy backlogs and robust quoting, positive trends in public infrastructure, highways, data centers and manufacturing, plus emerging LNG/power tailwinds, offset only by weak single-family, and highlighted Vulcan's advantaged footprint for an eventual residential recovery.
Tyler Brown (Raymond James) asked about cost performance and why second-half inflation looks better.
Pruitt cited Vulcan Way of Operating efficiencies dampening a $26M diesel headwind, and Carlisle added easier back-half comps (last year's concentrated Q4 repair/insurance costs won't repeat), seasonally higher tonnage, and full-year SAG now $10-15M below the prior $580-590M range.
Trey Grooms (Stephens) asked about mid-year price increases and additional Mexico color.
Pruitt said mid-years went as expected (nearly 2x last year sequentially, pulled forward to June, contributing to 5% mix-adjusted price) and price remains the biggest lever against sticky fuel; on Mexico he reiterated the disconcerting immaterial-damages award despite a unanimous NAFTA-violation finding, noting Vulcan still owns the land and serves the Gulf Coast.
Philip Ng (Jefferies) asked how July demand and backlogs are shaping up.
Pruitt said backlogs look similar to the start of the year with July shipments continuing as expected despite strange weather, citing strong public awards (Gulf Coast infrastructure +360%, North Georgia highways +189%) and data-center/power/LNG-driven private demand, with single-family the only negative and warehouses broadly flat.
Steven Fisher (UBS) asked when large-project activity becomes visible in shipments.
Pruitt said it will be a consistent, rolling contribution rather than big swings, as customers schedule and place material over time, which suits Vulcan's slow-and-steady, cash-gross-profit-per-ton compounding model.
Keith Hughes (Truist) asked about the second-half mix-adjusted price and volume cadence in the guide.
Carlisle said pricing plays out as expected (lower end of the range in H1, exiting at the upper end), while Pruitt noted volume was weighted to the first half and should continue at a consistent second-half pace, weather permitting.
Kathryn Thompson (Thompson Research) asked for a fuller view of power-related demand.
Pruitt described a mix of renewables/solar, four coal-to-gas conversions (Georgia Power, Alabama Power), Texas growth, and power increasingly bundled into data-center approvals, with rising quoting activity representing another aggregate-intensive multi-year demand source that will ramp slower than data centers.
Angel Castillo (Morgan Stanley) asked whether additional second-half price increases are likely and about the M&A pipeline versus peers' transformative deals.
Pruitt said price remains the strongest lever with more color next call if diesel stays sticky, and that the healthy M&A pipeline (several deals likely to close in H2) will stay disciplined and aggregates-focused with no surprises as Vulcan remains the purest-play aggregates company.
Rohit Seth (B. Riley) asked to elaborate on the BUILD America 250 Act versus IIJA.
Pruitt said the formula-first (matching) approach directs money to states with the miles (Vulcan's footprint) and, together with the bridge program, is more aggregate-intensive than IIJA once green/transit spending with little aggregate content is stripped out, making it a net positive for Vulcan.
Ivan Yi (Wolfe) asked whether mid-year increases are in the guidance and when price/cost inflects positive.
Pruitt said current mid-year success is in the guidance (exiting the year at the upper end of the 4-6% range) but any further pulled-forward increases are not, with price accelerating and cost decelerating through the year; Carlisle expects gross margin still down in Q3 but up in Q4 and slightly up in the back half.
Michael Dudas (Vertical Research) asked about progress on recent acquisitions and whether Colorado is a focus area.
Pruitt said Superior Ready Mix executed as planned (aggregates kept, downstream spun to CalPortland) and Wake Stone is on schedule lifting below-standard pricing, while Brannan is a small bolt-on (~1-1.5M tons split between southern Denver and DFW) that fits the aggregates-led, easy-to-integrate criteria.
Brent Thielman (Oppenheimer) asked how competitors have responded on price amid energy inflation.
Pruitt said no one is immune to diesel so responses and disciplines have been as expected, describing a disciplined market where all participants (and downstream customers) feel the inflation and Vulcan is well-positioned via its selling and operating disciplines.
David MacGregor (Longbow) asked how Vulcan grows shipments in a continuing-resolution environment and whether it changes CapEx.
Pruitt said a continuing resolution simply continues current healthy spending with large IIJA carryover, healthy state budgets and local measures (federal is only a third of public funding), so he expects no disruption to public growth and no change to CapEx plans.
Brian Brophy (Stifel) asked when a new federal infrastructure bill might arrive.
Pruitt declined to predict D.C. timing, noting continuing resolutions can last a year or more but maintain healthy spending, so Vulcan stays focused on the multiple public-funding mechanisms already in place.
Garrett Greenblatt (JPMorgan) asked to size power-generation demand versus data centers.
Pruitt said power generation is a very low percentage today and, given planning and regulatory timelines, should be viewed as a steady four-to-five-year aggregate-consumption tailwind rather than moving as fast as data centers.
More on Vulcan Materials CO
Reported 2026-07-29 · figures from the Vulcan Materials CO Q2 2026 earnings call.
See how Top Bucket AI works for your firm
Request DemoTop Bucket AI Research
Stay ahead of private markets
Research and market intelligence for private-markets professionals.
✓
You're subscribed.
Thanks for signing up.