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YoY shift: Neutral
Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.03pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Risk Factors
+0.09pp
Flat
Net-tone change vs last year's 10-K.
MD&A
-0.15pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
inability+9
adversely+7
claims+3
failure+3
failures+3
Positive rising
profitability+3
opportunities+3
able+2
successfully+1
greater+1
Risk Factors (Item 1A)
13,623 words
Item 1A. Risk Factors.
Arcosa's business, liquidity and financial condition, results of operations, and stock price may be impacted by a number of factors. In addition to the factors discussed elsewhere in this report, the following risks and uncertainties could materially harm its business, liquidity and financial condition, results of operations, or stock price, including causing its actual results to differ materially from those projected in any forward-looking statements. The following list of material risk factors is not all-inclusive or necessarily in order of importance. Additional risks and uncertainties not presently known to Arcosa or that it currently deems immaterial also may materially adversely affect it in future periods.
Summary of Risk Factors
The following is a summary of the principal risks that could adversely affect our business, operations and financial results, and consequently the principal risks associated with an investment in our equity or debt securities. We describe these risks in greater detail below the Summary of Risk Factors.
Risks Related to our Business and Operations.
• the seasonality of our business and its susceptibility to severe and periods of weather;
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
closed+5
divested+4
depletion+3
loss+2
unsatisfied+2
Positive rising
opportunities+2
effective+1
gains+1
improvements+1
efficiencies+1
MD&A (Item 7)
10,045 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity, and certain other factors that may affect our future results. Our MD&A is presented in the following sections:
• Company Overview
• Market Outlook
• Executive Overview
• Results of Operations
• Liquidity and Capital Resources
• Contractual Obligations and Commercial Commitments
• Critical Accounting Policies and Estimates
• Recent Accounting Pronouncements
• Forward-Looking Statements
Our MD&A should be read in conjunction with our Consolidated Financial Statements in Item 8, “ Financial Statements and Supplementary Data ,” of this Annual Report on Form 10-K.
Company Overview
Arcosa, Inc. and its consolidated subsidiaries (“Arcosa,” “Company,” “we,” or “our”), headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading brands serving construction, engineered structures, and transportation markets in North America. Arcosa is a Delaware corporation and was incorporated in 2018.
• delays in construction projects and failure to manage our inventory;
• an inability to sustain our market positions in highly competitive industries;
• an inability to deliver our backlog on time;
• our dependence on key management employees and skilled or professional labor, and an inability to retain their services in the future;
• an inability or failure to maintain safe work sites;
• collective bargaining agreement disputes with labor unions and the risk of strikes or work stoppages;
• equipment failures or other material disruptions at our manufacturing facilities, mining facilities or elsewhere in our supply chain;
• damage to our facilities as a result of natural disasters or similar incidents;
• fluctuations in the price and supply of raw materials, parts, and components used in production, including tariffs on foreign imports;
• reductions in the availability of natural aggregates reserves, specialty materials reserves, and supply stock for recycled aggregates;
• reductions in the availability of energy supplies or an increase in energy costs;
• quarterly fluctuations in our financials due to the limited number of customers for certain products, variable purchase patterns, and timing of completion and delivery of orders;
• material nonpayment or nonperformance by our customers;
• reputational harm or product warranty and liability claims from defects in our products;
• claims arising from third-party misuse, improper installation, or inadequate maintenance or repair of our products;
• expense, unavailability, or inadequacy of insurance coverage;
• an inability to manage our operations or fulfill obligations as a result of our indebtedness and restrictions our indebtedness places on our current and future operations;
• any requirement to reduce the value of our long-lived assets, including intangible assets and/or goodwill;
• changes in accounting policies or inaccurate estimates in the application of accounting policies;
Risks Related to Economic, Geopolitical, and Legal Factors.
• the impact of pandemics, epidemics, or other public health emergencies, as well as governmental shutdowns related thereto;
• instability in the economy or negative conditions in credit markets;
• decreased demand for our products due to our participation in cyclical industries subject to downturns;
• the impact of increased prices and inflation on principal raw material prices, including the cost of steel and liquid asphalt;
• risks related to operations outside of the U.S.;
• increased costs due to fluctuations in foreign currency exchange rates;
• trade policies and practices of competitors that violate U.S. or other foreign laws;
• dependence on government spending, funding, and routine operations from federal, state and local government agencies;
• repercussions from terrorist activities or armed conflict;
• litigateddisputes and other claims that could increase costs and weaken our financial condition;
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Risks Related to Growth Strategy.
• uncertainty of organic growth and increased costs from related operational transitions;
• an inability to successfully identify, consummate, or integrate acquisitions;
• unexpected liabilities from acquisitions and divestitures;
• exposure to new business, regulatory, political, operational, financial, and economic risks from the potential expansion of our business;
Risks Related to Regulatory and Environmental Matters.
• any failure to comply with regulatory compliance obligations in all countries where we do business;
• an inability to comply with health and safety laws and regulations;
• exposure to environmental liabilities and unknown environmental conditions;
• any improper handling, transport, storage, or disposal of hazardous materials;
• risks and physical impacts related to climate change, including business, regulatory, and legal risks;
• costs associated with and varying sentiments regarding our sustainability efforts and practices;
• taxing authorities could contest certain of the tax positions we take;
• the expiration, elimination, modification, or reduction of tax benefits, tax credits, federal-aid programs, or other government funding or subsidies;
Risks Related to Technology and Cybersecurity.
• information system failures, cyber incidents, or security breaches;
• an inability to comply with evolving laws and regulations regarding privacy and cybersecurity;
• operational, legal, and compliance risks regarding our adoption and use of AI technologies;
• an inability to sufficiently protect our intellectual property rights;
Risks Related to Arcosa Common Stock.
• unpredictability in the timing, amount, or payment of dividends on our common stock;
• provisions in our governing documents and Delaware law that could prevent or delay acquisition bids or merger proposals;
• significant fluctuations in our stock price;
• dilution of stockholders’ ownership percentage.
Risks Related to our Business and Operations.
The seasonality of Arcosa's business and its susceptibility to severe and prolonged periods of adverse weather and other conditions could have a material adverse effect on us.
Demand for Arcosa's products in some markets is typically seasonal, with periods of snow or heavy rain negatively affecting construction activity. Sales of Arcosa's products are somewhat higher from spring through autumn when construction activity is greatest. Construction activity declines in these markets during the winter months in particular due to inclement weather, frozen ground, and fewer hours of daylight. Construction activity and Arcosa's ability to deliver products on time or at all to its customers can also be affected in any period by public holidays, vacation periods, and adverse seasonal weather conditions such as extreme temperature, hurricanes, severe storms, torrential rains and floods, low river levels, and similar events, any of which could reduce demand for Arcosa's products, push back existing orders to later dates or lead to cancellations.
Additionally, the seasonal nature of Arcosa's business has led to variation in Arcosa's quarterly results in the past and is expected to continue to do so in the future. This general seasonality of Arcosa's business and any severe or prolongedadverse weather conditions or other similar events could have a material adverse effect on Arcosa's business.
Delays in construction projects and any failure to manage Arcosa’s inventory could have a material adverse effect on us.
Many of Arcosa’s products are used in large-scale projects which generally require a significant amount of planning and preparation and which can be delayed and rescheduled for a number of reasons, including customer labor availability, difficulties in complying with environmental and other government regulations or obtaining permits, financing issues, changes in project priorities, additional time required to acquire rights-of-way or property rights, unanticipated soil conditions, or health-related shutdowns or other work stoppages. These delays may create unplanneddowntime, increasing costs and inefficiencies in Arcosa’s operations, and increased levels of excess inventory.
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Additionally, Arcosa maintains an inventory of certain products that meet standard specifications and are ultimately purchased by a variety of end users. Arcosa forecasts demand for these products to ensure that it keeps sufficient inventory levels of certain products that Arcosa expects to be in high demand and limits its inventory for which Arcosa does not expect much interest. However, Arcosa’s forecasts are not always accurate and unexpected changes in demand for these products, whether because of an unexpecteddelay, a change in preferences or otherwise, can lead to increased levels of excess inventory. Any delays in construction projects and Arcosa’s customers’ orders or any inability to manage Arcosa’s inventory could have a material adverse effect on Arcosa's business.
Arcosa operates in highly competitive industries. Arcosa may not be able to sustain its market positions, which may impact its financial results.
Arcosa faces intense competition in all geographic markets and each industry sector in which it operates. In addition to price, Arcosa faces competition with respect to product performance and technological innovation, substitution, quality, reliability of delivery, customer service, and other factors. If Arcosa is unable to successfully compete or if the cost of successfully competing is significant, the effects of such competition, which is often intense, could reduce Arcosa’s revenues and operating profits, limit Arcosa’s ability to grow, increase pricing pressure on Arcosa’s products, and otherwise affect Arcosa’s financial results.
Arcosa's inability to deliver its backlog on time could affect its revenues, future sales and profitability and its relationships with customers.
At December 31, 2025, Arcosa's backlog was approximately $1.1 billion within our Engineered Structures and $296.9 million within our Transportation Products segments. Arcosa's ability to meet customer delivery schedules for backlog is dependent on a number of factors including, but not limited to, sufficient manufacturing plant capacity, adequate supply channel access to raw materials and other inventory required for production, an adequately trained and capable workforce, engineering expertise, and appropriate planning and scheduling of manufacturing resources. We may also encounter capacity limitations due to changes in demand despite our forecasting efforts. Some of the contracts we enter into with our customers, such as for barges, traffic structures and wind towers, require long manufacturing lead times and contain penalty clauses or liquidateddamages provisions related to late delivery. Failure to deliver in accordance with contract terms and customer expectations could subject us to financial penalties, damage existing customer relationships, increase our costs, reduce our sales and have a material adverse effect on Arcosa's business.
Arcosa depends on its key management employees, and Arcosa may not be able to retain their services in the future.
Arcosa’s success depends on the continued services of its executive team and key management employees, none of whom currently have an employment agreement with Arcosa. Arcosa may not be able to retain the services of its executives and key management in the future. The loss of the services of one or more executives or key members of Arcosa’s management team, or Arcosa’s inability to successfully develop talent for succession planning, could result in increased costs associated with attracting and retaining a replacement and could disrupt Arcosa’s operations and result in a loss of revenues.
The inability to hire and retain skilled or professional labor could adversely impact Arcosa’s operations.
Arcosa depends on professional labor across its businesses and skilled labor in the manufacture, maintenance, and repair of Arcosa’s products. Some of Arcosa’s facilities are located in areas where demand for skilled laborers, such as welders, complex machine operators, and equipment maintenance workers, may exceed supply. Arcosa competes for such personnel with other companies who may periodically offer more favorable terms of employment. If Arcosa is unable to hire and retain these skilled laborers, Arcosa may be limited in its ability to maintain or increase production rates and costs to replace or retain skilled laborers may increase.
Failure to maintain safe work sites could result in losses, which could adversely affect our business and reputation.
Our operational sites include mining, processing and manufacturing facilities, where our employees and others are often in close proximity with mechanized equipment, moving vehicles, chemical substances, and dangerous manufacturing processes or natural conditions. Sites such as these are subject to potentially dangerous workplace risks. Arcosa operates an underground limestone mine in Pennsylvania, which involves unique potential safety risks and hazards inherent to underground mining operations. Safety is a primary focus of our business and is critical to our reputation and performance. Unsafe work conditions, or any perceived failure to protect the health and safety of our employees, can also increase employee turnover, which increases our overall operating costs. If we fail to implement effective safety procedures, our employees and others could be injured, the completion of a project could be delayed, or we could be exposed to investigations and possible litigation, which may be significant. Our failure to
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maintain adequate safety standards through our safety programs could also result in reduced profitability or the loss of customers.
Some of Arcosa’s employees belong to labor unions and strikes or work stoppages could adversely affect Arcosa’s operations.
Arcosa is a party to collective bargaining agreements with various labor unions at some of Arcosa’s operations in the U.S. and Canada and all of Arcosa’s operations in Mexico. Disputes with regard to the terms of these agreements or Arcosa’s potential inability to negotiate acceptable contracts with these unions in the future could result in, among other things, strikes, work stoppages, or other slowdowns by the affected workers and Arcosa could experience a significant disruption of its operations and higher ongoing labor costs. In addition, Arcosa could face higher labor costs in the future as a result of severance or other charges associated with lay-offs, shutdowns, reductions in the size and scope of its operations or difficulties of restarting Arcosa’s operations that have been temporarily shuttered. Negative publicity, work stoppages, or strikes by unions could have a material adverse effect on Arcosa's business.
Equipment failures or other material disruption at one or more of Arcosa’s manufacturing or mining facilities or in Arcosa’s supply chain could have a material adverse effect on us. In some instances, Arcosa relies on a limited number of suppliers for certain raw materials, parts, and components needed in its production.
Arcosa owns and operates manufacturing and mining facilities of various ages and levels of automated control and relies on a number of third parties as part of Arcosa’s supply chain, including for the efficient distribution of products to Arcosa’s customers. Any disruption at one of Arcosa’s facilities or within Arcosa’s supply chain could prevent Arcosa from meeting demand or require Arcosa to incur unplanned capital expenditures. While Arcosa maintains backups for certain critical pieces of equipment to use during the time it may take to repair or replace inoperable equipment, any unplanneddowntime at Arcosa’s facilities may cause delays in meeting customer timelines, result in liquidated and delaydamagesclaims, or cause Arcosa to lose or harm customer relationships.
Arcosa's operations partially depend on Arcosa's ability to obtain timely deliveries of raw materials, parts, and components in acceptable quantities and quality from Arcosa's domestic and foreign suppliers. Certain raw materials, parts, and components for Arcosa's products are currently available from a limited number of suppliers and, as a result, Arcosa may have limited control over pricing, availability, and delivery schedules. If Arcosa is unable to purchase a sufficient quantity of raw materials, parts, and components on a timely basis, Arcosa could face disruptions in its production and incur delays while it attempts to engage alternative suppliers. Fewer suppliers could require Arcosa to source unproven and distant supply alternatives. In addition, meeting certain production demands is dependent on Arcosa's ability to obtain a sufficient amount of steel. An unanticipatedinterruption in Arcosa's supply chain could have an adverse impact on both Arcosa's margins and production schedules. Any such disruption or supply shortage could harm Arcosa's business.
Furthermore, any shortages in trucking, rail, barge, or container shipping capacity, any increase in the cost thereof, or any other disruption to those transportation systems could limit Arcosa’s ability to deliver its products in a timely manner or at all. Any material disruption at one or more of Arcosa’s facilities or those of Arcosa’s customers or suppliers or otherwise within Arcosa’s supply chain could cause a material disruption to Arcosa’s operations, which could have a material adverse effect on Arcosa’s business.
Extensive damage to Arcosa’s facilities, including as a result of natural disasters or similar incidents, could lead to production, delivery or service curtailments or shutdowns, loss of revenue, or higher expenses.
Arcosa operates a substantial amount of equipment at its production facilities, several of which are located in areas that may experience adverse weather, including extreme temperatures, tornados, and hurricanes, or are located on navigable waterways, subject to potential flooding and other excessive or low water conditions on one or more rivers that serve Arcosa facilities. Moreover, manufacturing facilities or other facilities can unexpectedly stop operating because of events unrelated to Arcosa or beyond its control, including equipment or technology failures, fires and other industrial accidents, implementation of non-navigation orders, the discovery of hazardous environmental conditions or other environmental incidents, or natural disasters such as floods, severe weather events, or other catastrophes. An interruption in operations at Arcosa’s facilities could reduce or prevent Arcosa’s production, delivery, service, or repair of Arcosa’s products and increase Arcosa’s costs and expenses. A halt of production at any of Arcosa’s manufacturing facilities could severely affect delivery times to Arcosa’s customers. While Arcosa maintains emergency response and business recovery plans that are intended to allow Arcosa to recover from natural disasters, Arcosa cannot provide assurances that its plans would fully protect Arcosa from the effects of all such disasters. In addition, insurance may not adequately compensate Arcosa for any losses incurred as a result of natural or other disasters, which may adversely affect Arcosa’s financial condition. Any significant delay in deliveries not otherwise contractually mitigated by favorableforce majeure or other provisions could result
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in cancellation of all or a portion of Arcosa’s orders, cause Arcosa to lose future sales, and negatively affect Arcosa’s reputation and Arcosa’s results of operations.
Fluctuations in the price and supply of raw materials and parts and components used in the production of Arcosa’s products could have a material adverse effect on its ability to cost-effectively manufacture and sell its products.
A significant portion of Arcosa’s business depends on the adequate supply of raw materials and numerous specialty and other parts and components at competitive prices. The principal material used in Arcosa’s manufacturing segments is steel. The current U.S. administration has maintained and, in some cases, significantly expanded tariffs on foreign imports of steel and aluminum. While Arcosa has historically mitigated tariff impacts through tariff exclusions or alternative sourcing, these strategies are subject to change, including the expiration of exclusions or the imposition of new tariffs, quotas, or trade restrictions on previously exempt supply sources. Any adverse change in trade policy, such as the imposition of new tariffs, quotas, or other trade remedies, could increase costs and adversely affect our margins and profitability. In addition, the inflationary pressures on principal raw material prices, like steel, may result in increased costs or a delay in orders from Arcosa's customers. Market steel prices have in the past and may in the future exhibit periods of volatility and an increase in steel prices could continue to negatively impact demand for Arcosa's products. Steel prices may experience further volatility as a result of scrap surcharges assessed by steel mills, tariffs, and other market factors. Furthermore, consolidation of steel producers may lead to decreased competition in the industry and result in increased steel prices. Arcosa may use contract-specific purchasing practices, supplier commitments, contractual price escalation provisions, flexing between steel type, and other arrangements with Arcosa’s customers to mitigate the effect of this volatility on Arcosa’s operating profits. To the extent that Arcosa does not have such arrangements in place, a change in steel prices could materially lower Arcosa’s profitability.
The availability of natural aggregates reserves, specialty materials reserves, and supply stock for recycled aggregates could have a material adverse effect on Arcosa's ability to cost-effectively manufacture and sell its products.
A part of the operations in Arcosa’s Construction Products segment includes the mining of natural aggregates and specialty materials reserves. The success and viability of these operations depend on the accuracy of Arcosa’s reserve estimates, the costs of production and the ability to economically distribute the natural aggregates and specialty materials. Estimates for natural aggregate and specialty materials reserves and for the costs of production of such reserves depend upon a variety of factors and assumptions, many of which involve uncertainties beyond Arcosa’s control, such as geological and mining conditions that may not be identifiable. In addition, Arcosa's success in recovering natural aggregates and specialty materials depends on the ability to maintain permits for existing mines and secure and permit new reserve locations in areas that make distribution of materials economically viable. Engaging and maintaining good relations within the communities where we operate is important to securing and retaining permits. Inaccuracies in reserve estimates and production costs, and the inability to secure locations and permits for future operations could negatively affect our results of operations. The success and viability of Arcosa's recycled aggregates operation depends on Arcosa's success in procuring supply stock for processing recycled materials into recycled aggregates. The inability to secure and maintain locations and permits for natural and recycled aggregates operations could negatively affect our results of operations.
Reductions in the availability of energy supplies or an increase in energy costs may increase Arcosa’s operating costs.
Arcosa uses electricity and various gases, including natural gas, at Arcosa’s manufacturing facilities and uses diesel fuel in vehicles to transport Arcosa’s products to customers and to operate its plant equipment. An outbreak or escalation of hostilities between the U.S. and any foreign power or between other foreign powers, such as the war in Ukraine, conflicts in Venezuela and the Middle East or tensions with China, could result in a real or perceived shortage of petroleum and/or natural gas, which could result in an increase in the cost of natural gas or energy in general. Additionally, extreme weather conditions such as extreme temperatures, hurricanes, tornadoes, or floods could result in varying states of disaster and lead to disruptions to the delivery and supply of petroleum and/or natural gas, including rationing thereof, or an increase in natural gas prices, electricity prices, or other general energy costs. Future limitations on the availability (including limitations imposed by increased regulation or restrictions on rail, road, and pipeline transportation of energy supplies) or consumption of electricity, petroleum products or natural gas and/or an increase in energy costs, particularly natural gas and diesel fuel, could have an adverse effect upon our ability to conduct Arcosa’s business cost effectively.
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The limited number of customers for certain of Arcosa’s products, the variable purchase patterns of Arcosa’s customers in all of its segments, and the timing of completion, delivery, and customer acceptance of orders may cause Arcosa’s revenues and income from operations to vary substantially each quarter, potentially resulting in significant fluctuations in its quarterly results.
Some of the markets Arcosa serves have a limited number of customers. For example, Arcosa's wind tower customer base is highly concentrated due to a limited number of companies constructing wind towers. The volumes purchased by customers in each of Arcosa’s business segments vary from year to year, and not all customers make purchases every year. Furthermore, the timing of the completion, delivery, and customer acceptance of orders, including backlog orders, may cause Arcosa's revenues and income from operations to vary substantially each quarter. As a result, the order levels for Arcosa’s products have varied significantly from period to period in the past and may continue to vary significantly in the future. GE Vernova accounted for approximately 12.2% of our consolidated revenues in 2025 up from 10.8% of consolidated revenues in 2024. As a result of these fluctuations, Arcosa believes that comparisons of its sales and operating results between periods may not be meaningful and should not be relied upon as indicators of future performance.
Any material nonpayment or nonperformance by any of our customers could have a material adverse effect on our business and results of operations.
Any material nonpayment or nonperformance by any of our customers could have a material adverse effect on our revenue and cash flows. While our contracts with our customers, including backlog orders, include terms and provisions that protect us in the event of a breach, we may be unable to enforce payment or performance obligations in a timely manner or at all or recover the entire amount we anticipated receiving under such contract. If we were to pursue legal remedies against a customer that failed to purchase the contracted amount of product under a fixed-volume contract or failed to satisfy the take-or-pay commitment under a take-or-pay contract, we may receive significantly less in a judgment or settlement of any claimed breach than we would have received had the customer fully performed under the contract. In the event of any customer's breach, we may also choose to renegotiate any disputed contract on less favorable terms (including with respect to price and volume) in order to preserve the relationship with that customer.
Defects in materials and workmanship could harm our reputation, expose us to product warranty or product liability claims, decrease demand for products, or materially harm existing or prospective customer relationships.
A defect in materials or components from suppliers, our materials, or in the manufacturing of our products could result in product warranty and product liability claims, decrease demand for products, or materially harm existing or prospective customer relationships. Depending on the product, Arcosa warrants its workmanship and certain materials (including surface coatings), parts, and components pursuant to express limited contractual warranties. Arcosa may be subject to significant warranty claims in the future, such as multiple claims based on one defect repeated throughout Arcosa's production process or claims for which the cost of shipping, repairing, or replacing the defective part, component, or material is highly disproportionate to the original price. Responding to such defects may also include costs related to disassembly of our products and transportation of the products from the field to our facilities and returning the products to the customer, a change in our manufacturing processes, recall of previously manufactured products, or personal injuryclaims. Any of these outcomes could result in significant expense and materially harm our existing or prospective customer relationships and reputation.
Some of Arcosa’s products are sold to contractors, distributors, installers, and rental companies who may misuse, abuse, improperly install, or improperly or inadequately maintain or repair such products, thereby potentially exposing Arcosa to claims that could increase Arcosa’s costs and weaken Arcosa’s liquidity and financial condition.
The products Arcosa manufactures are designed to work optimally when properly assembled, operated, installed, repaired, and maintained. For example, Arcosa's shoring products and barges are often subsequently rented or leased by Arcosa's customers to third parties who may misuse or improperly operate these products. If this or similar instances of misuse or improper operation were to occur, Arcosa may be subjected to claims or litigation associated with personal or bodily injuries or death and property damage.
Insurance coverage could be costly, unavailable, or inadequate.
Arcosa maintains primary and excess insurance coverage and is subject to potential liability for certain claims, including business interruption, property damage, personal injury, or death arising from the production, use, exposure to, or the transport of Arcosa’s products. Insurance premiums may increase and/or require that Arcosa increase its self-insured retention, deductibles, or overall limits. A claim for personal injury, auto liability, property loss, business interruption, or a string of such claims or a large damage award could exceed Arcosa’s available
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insurance coverage. The ability of Arcosa to insure against risks described in this Item 1A is limited by the applicable insurance markets, which may be costly, unavailable or inadequate. Arcosa’s inability to secure adequate insurance and/or a claim that exceeds Arcosa’s insurance limits could have a material adverse effect on our financial condition and results of operations.
Arcosa's indebtedness restricts its current and future operations, which could adversely affect its ability to respond to changes in its business and manage its operations.
Arcosa is a party to the Second Amended and Restated Credit Agreement (as amended, the “Credit Agreement”), an Indenture (the “2021 Indenture”) governing its 4.375% senior unsecured notes due 2029 (the “2021 Notes”), and an Indenture (the “2024 Indenture”) governing its 6.875% senior unsecured notes due 2032 (the “2024 Notes” and collectively with the Credit Agreement, the 2021 Indenture, the 2021 Notes and the 2024 Indenture, the “Financing Documents”). The Financing Documents contain a number of covenants potentially restricting the operations and financial condition of Arcosa and certain of its subsidiaries, including, among other things and subject to certain exceptions, restrictions on our ability to incur debt or liens, merge, sell assets, make investments and acquisitions, and make dividends and other restricted payments. The Credit Agreement also requires us to maintain compliance with financial covenants, and a change of control (as defined in the applicable Financing Document) could result in a default or prepayment event under the applicable Financing Document. These covenants and change of control provisions could have an adverse effect on Arcosa's business by limiting its ability to take advantage of financing, merger and acquisition, or other opportunities. The breach of any of these covenants or restrictions could result in a default under the Financing Documents, our inability to access the liquidity provided by the revolving credit facility in the Credit Agreement, the acceleration of the indebtedness under the Financing Documents, and the foreclosure of the liens securing the indebtedness outstanding under the Credit Agreement.
Borrowings under the Credit Agreement incur interest which is variable based on fluctuations in the referenced Secured Overnight Financing Rate ("SOFR"). Increases in the referenced SOFR will increase Arcosa's borrowing costs and negatively impact financial results and cash flows.
For more information on the restrictive covenants in the Financing Documents, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.” Arcosa's ability to comply with these agreements may be affected by events beyond its control, including prevailing economic, financial, and industry conditions.
Arcosa's indebtedness could adversely affect its financial condition and prevent it from fulfilling its obligations
As of December 31, 2025, our total debt (excluding debt issuance costs) was approximately $1.5 billion, and we had unused commitments of $700.0 million under our revolving credit facility that is part of our Credit Agreement. In addition, Arcosa is subject to a variety of performance bonds, payment guarantees and other contingent obligations in the operation of its business.
Subject to the limits contained in the Financing Documents, we may be able to incur substantial additional debt from time to time to finance working capital, capital expenditures, investments or acquisitions, or for other purposes. If we do so, it could have important consequences, including the following:
• making it more difficult for us to satisfy our obligations with respect to our existing indebtedness;
• limiting our ability to obtain additional financing to fund future working capital, capital expenditures, acquisitions or other general corporate requirements;
• requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of other purposes, thereby reducing the amount of cash flows available for working capital, capital expenditures, acquisitions and other general corporate purposes;
• increasing our vulnerability to general adverse economic and industry conditions;
• exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under the Credit Agreement, are at variable rates of interest;
• limiting our flexibility in planning for and reacting to changes in the industry in which we compete;
• placing us at a disadvantage compared to other, less leveraged competitors; and
• increasing our cost of borrowing.
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Arcosa may be required to reduce the value of Arcosa’s long-lived assets, including intangible assets and/or goodwill, which would weaken Arcosa’s financial results.
Arcosa periodically evaluates for potential impairment the carrying values of Arcosa’s long-lived assets, including intangible assets, to be held and used. The carrying value of a long-lived asset to be held and used is considered impaired when the carrying value is not recoverable through undiscounted future cash flows and the fair value of the asset is less than the carrying value. Fair value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risks involved or market quotes as available. Impairmentlosses on long-lived assets held for sale are determined in a similar manner, except that fair values are reduced commensurate with the estimated cost to dispose of the assets. In addition, goodwill is required to be tested for impairment annually or on an interim basis whenever events or circumstances change indicating that the carrying amount of the goodwill might be impaired.
Certain non-cash impairments may result from a change in our strategic goals, business direction, changes in market interest rates, or other factors relating to the overall business environment. Any impairment of the value of goodwill or other intangible assets recorded in connection with previous acquisitions would result in a non-cash charge against earnings, which could have a material adverse effect on our financial condition and results of operations.
Changes in accounting policies or inaccurate estimates or assumptions in the application of accounting policies could adversely affect the reported value of Arcosa's assets or liabilities and financial results.
Arcosa’s financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The significant accounting policies, together with the other notes that follow, are an integral part of the financial statements. Some of these policies require the use of estimates and assumptions that may affect the reported value of Arcosa’s assets or liabilities and financial results and require management to make difficult, subjective, and complex judgments about matters that are inherently uncertain. Accounting standard setters and those who interpret the accounting standards (such as the Financial Accounting Standards Board, the SEC, and Arcosa’s independent registered public accounting firm) may amend or even reverse their previous interpretations or positions on how these standards should be applied. These changes can be difficult to predict and can materially impact how Arcosa records and reports its financial condition and results of operations. In some cases, Arcosa could be required to apply a new or revised standard retrospectively, resulting in the restatement of prior period financial statements. For a further discussion of some of Arcosa’s critical accounting policies and standards and recent accounting changes, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates” and Note 1. “Overview and Summary of Significant Accounting Policies” to Consolidated Financial Statements.
Risks Related to Economic, Geopolitical, and Legal Factors.
Pandemics, epidemics, or other public health emergencies, as well as the governmental shutdowns related thereto or otherwise, may adversely affect Arcosa’s business.
Arcosa’s business may be adversely affected if a pandemic, epidemic, or other public health emergency occurs. The outbreak of a pandemic, epidemic, or any future public health emergency could negatively impact our business, including the health and productivity of our employees, the availability and pricing of supplies and raw materials, our ability to fulfill customer orders, and the availability of our transportation and distribution networks. If any of Arcosa’s facilities become subject to closure from a public health emergency, the business as a whole could be materially affected.
A public health emergency could also disrupt Arcosa's cross-border business transactions and activities. During a pandemic, governments in the U.S. and elsewhere in the world may impose strict measures to help control the spread of a virus, including quarantines, travel restrictions and business curtailments. Such actions may impair or prevent Arcosa from continuing its operations. The extent to which a pandemic, epidemic, or other public health emergency, as well as government shutdowns related thereto or otherwise, could impact our business will depend on numerous evolving factors that we may not be able to accurately predict.
Instability in the economy or negative conditions in credit markets may adversely affect our business by limiting Arcosa's or its customers' and suppliers' access to credit.
Instability in the global economy or negative conditions in the global credit markets that limit or impair our access to credit may adversely affect our business. In general, Arcosa may rely upon banks and capital markets to fund its growth strategy. Any downgrades in our credit ratings may make raising capital more difficult, increase the cost and affect the terms of future borrowings, affect the terms under which we purchase goods and services, and limit our ability to take advantage of potential business opportunities. If Arcosa is unable to secure financing on acceptable
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terms, Arcosa's other sources of funds, including available cash, its revolving credit facility, and cash flow from operations may not be adequate to fund its operations and contractual commitments and refinance existing debt.
We are also exposed to risks associated with the creditworthiness of our customers and suppliers. If volatile conditions in the global credit markets such as rising interest rates and tightening of credit standards limit our customers' access to credit (or increase the cost of obtaining credit), product order volumes may decrease, or customers may default on payments owed to Arcosa. Likewise, if Arcosa's suppliers face challenges obtaining credit, selling their products to customers that require purchasing credit, or otherwise operating their businesses, the supply of materials Arcosa purchases from them to manufacture its products may be interrupted. These events or a more general economic downturn could lead to a reduction in orders for Arcosa’s products, requests for deferred deliveries of backlog orders and make it difficult to collect on accounts receivable, which could result in lower revenue or increased operating costs. In addition, such events could result in Arcosa’s customers’ attempts to unilaterally cancel or terminate firm contracts or orders in whole or in part, resulting in contract or purchase order breaches, which could result in increased commercial litigation costs.
Arcosa and its customers participate in cyclical industries, which are subject to downturns.
A majority of Arcosa's revenue is from customers who are in industries and businesses that are cyclical in nature, which may result in decreased demand for Arcosa's products and negatively affect the collectability of receivables. For example, demand for our construction products is driven in large part by residential and commercial construction spending and by population and economic growth, which typically slow during a downturn. The barge industry in particular has previously experienced sharp cyclical downturns and, at such times, operated with a minimal backlog. In addition, since Arcosa's operations are in a variety of geographic markets, its businesses are subject to differing economic conditions and labor availability in each such geographic market. While the business cycles of Arcosa’s different operations may not typically coincide, an economic downturn could affect disparate cycles contemporaneously.
Cyclical or other fluctuations, including as a result of government or macroeconomic policy, could result in decreased demand for our products, which could, in turn, result in lower sales volumes, lower prices, a slowdown in production at our facilities and/or a decline in or loss of profits. Arcosa may transition away from certain businesses based on such cyclical downturns and economic conditions. In addition, an economic downturn may negatively affect the collectability of accounts receivable. Any of the foregoing market or industry conditions or events could result in reductions in Arcosa’s revenues, or increased operating costs.
The impact of increased prices and inflation on principal raw material prices, including the cost of steel with respect to the order of new barges or wind towers and liquid asphalt with respect to our asphalt paving operations, could negatively impact Arcosa's performance and financial results.
Increased inflation and volatile input costs may be beyond our control, including rising prices for raw materials such as steel, liquid asphalt, fuel, parts and components, freight, packaging, supplies, labor, and energy, which increase our costs to manufacture and distribute our products. We may be unable to pass these rising costs on to our customers. While Arcosa cannot predict the extent to which inflation may increase, increases and volatility in the price of steel and liquid asphalt have impacted and could impact in the future a customer's decision to place or delay orders for new barges, wind towers, or asphalt paving. Other inflationary pressures may generally result in a reduction in construction activity, which could have a material adverse effect on our business. Under varying circumstances, Arcosa may take actions to minimize these inflationary risks, but such efforts may not be effective in mitigating the impact on Arcosa's margins. Arcosa's revenues or operating costs may be negatively affected if we are unable to mitigate the impact of these cost increases through contractual means or otherwise offset the effect of these cost increases.
Risks related to Arcosa’s operations outside of the U.S., particularly Mexico, could decrease Arcosa’s profitability.
Arcosa’s operations outside of the U.S. are subject to risks associated with cross-border business transactions and activities. Political, legal, trade or environmental regulatory developments, economic change or instability, criminal activities, or social unrest could limit or curtail Arcosa’s respective foreign business activities and operations, including the ability to hire and retain employees. Violence in Mexico associated with drug trafficking is continuing. Arcosa has not, to date, been materially affected by any of these risks, but Arcosa cannot predict the likelihood of future effects from such risks or any resulting adverse impact on Arcosa’s business.
Arcosa ships raw materials to Mexico and manufactures products in Mexico that are sold in the U.S. or elsewhere, which are subject to customs and other regulations. Any shutdown or delays at the U.S./Mexico border could affect our ability to transport or import our products manufactured in Mexico in a timely manner or at all. Some foreign countries where Arcosa operates have regulatory authorities that regulate products sold or used in those countries.
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If Arcosa fails to comply with the applicable regulations related to the foreign countries where Arcosa operates, Arcosa may be unable to market and sell its products in those countries or could be subject to administrative fines or penalties.
In addition, with respect to operations in Mexico and other foreign countries, unexpected changes in the political environment, laws, rules, and regulatory requirements; tariffs and other trade barriers, including regulatory initiatives for buying goods produced in America; more stringent or restrictive laws, rules and regulations relating to labor or the environment; adverse tax consequences; price exchange controls and restrictions; regulations affecting cross-border rail and vehicular traffic; or availability of commodities, including gasoline and electricity, could limit operations affecting production throughput and making the manufacture and distribution of Arcosa’s products less timely or more difficult.
Furthermore, any material changes in the tariffs, quotas, trade remedies, regulations or duties on imports imposed by the U.S. government and agencies, or on exports by the government of Mexico or its agencies, could materially adversely affect Arcosa’s ability to export products that Arcosa manufactures in Mexico. In particular, the tariffs put in place by the current U.S. administration have resulted in, and may continue to result in, increased raw material costs that we may not be able to fully pass on to customers. Additionally, the U.S. Department of Commerce has initiated an investigation into imports of wind tower components; while the final scope and magnitude of any potential duties are pending, it is possible an adverse determination could result in significant new tariffs on such imported products. Changes in U.S. trade policy have also resulted in reciprocal and retaliatory tariffs from U.S. trading partners, which could decrease demand for some of our products and reduce revenue. Failure to comply with such import and export regulations could result in significant fines and penalties.
Because Arcosa has operations outside the U.S., Arcosa could be adversely affected by final judgments of non-compliance with the U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”) or import/export rules and regulations and similar anti-corruption, anti-bribery, or import/export laws of other countries. As a result of our policy to comply with the FCPA and similar anti-bribery laws, we may be at a competitive disadvantage to competitors that are not subject to, or do not comply with, such laws.
Arcosa may incur increased costs due to fluctuations in foreign currency exchange rates.
Arcosa is exposed to risks associated with changes in foreign currency exchange rates. Arcosa has substantial manufacturing operations in Mexico. To the extent there are significant changes in the exchange rate between the U.S. dollar and the Mexican peso, Arcosa may incur increased costs or losses and reduced profits. Because our financial statements are denominated in U.S. dollars, fluctuations in currency exchange rates between the U.S. dollar and other currencies have had and will continue to have an impact on our reported earnings. Under varying circumstances, Arcosa may seek to minimize these risks using hedges and similar financial instruments and other activities, although these measures, if and when implemented, may not be effective. Any material and untimely changes in exchange rates could adversely impact our business.
Arcosa may be adversely affected by trade policies and practices, including trade practices of competitors that violate U.S. or other foreign laws, regulations, or practices.
Arcosa faces competition from manufacturers both in the U.S. and around the world, some of which may engage in competition and trade practices involving the importation of competing products into the U.S. in violation of U.S. or other foreign laws, regulations, or practices. Arcosa’s competitors may import competing products that are subsidized by foreign governments and sold in the U.S. at less than fair value. The results of trade negotiations, trade agreements, and tariffs have negatively affected and could continue to negatively affect Arcosa’s supplies, cost of goods sold, and customers. Arcosa produces certain products at its manufacturing facilities in Mexico and relies on cross-border supply chains. Arcosa's business benefits from free trade agreements, such as the United States-Mexico-Canada Agreement ("USMCA"). In July 2026, there will be a first review of the USMCA that could ultimately result in material changes to the agreement's terms. Such potential USMCA developments, including tariffs, changes or amendments to the agreement, governmental orders, policies, and laws and regulations could adversely affect Arcosa's existing production operations in Mexico and have a material adverse effect on Arcosa's business. Additionally, since 2025, the U.S. government has implemented additional tariffs on goods being imported into the U.S. from China, Mexico and Canada. Also, since 2025, changes in U.S. trade policy have resulted in reciprocal tariffs on exports from the U.S. and could again result in reactions from U.S. trading partners, including adopting responsive trade policies, like reciprocal tariffs, making it more difficult or costly for us to export or import our products from or into Mexico and Canada. In February 2026, the U.S. Supreme Court ruled that some of the tariffs imposed under the current U.S. presidential administration are invalid. Following the ruling, a presidential proclamation was issued imposing additional tariffs under U.S. trade laws different from those ruled on by the U.S. Supreme Court, such tariffs can remain in effect for up to 150 days, which may be extended by the U.S. Congress. The current U.S. presidential administration may continue to impose additional tariffs under other U.S. trade laws.
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While we cannot predict what additional changes to trade policy will be made by the current or a future presidential administration or Congress, including whether existing tariff policies will be maintained or modified, what products may be subject to such policies, or whether the entry into new or bilateral or multilateral trade agreements will occur, such changes could increase pricing pressure on Arcosa’s products, reduce Arcosa’s revenues and operating profits, limit Arcosa’s ability to grow, and otherwise adversely affect Arcosa’s financial results.
Arcosa and its customers depend on government spending, funding and routine operations from federal, state and local government agencies, and any disruption in government funding or other functions could harm Arcosa's business.
Periods of partial or full U.S. federal government shutdown, impasse, deadlock, and last-minute accords may continue to permeate many aspects of U.S. governance, including federal government budgeting and spending, government-funded infrastructure projects and building activities, taxation, U.S. deficit spending and debt ceiling limits, and international commerce. Such periods could negatively impact U.S. domestic and global financial markets, thereby reducing customer demand for Arcosa’s products and services and potentially result in reductions in Arcosa’s revenues, increased price competition, or increased operating costs, any of which could adversely affect Arcosa’s business.
Furthermore, certain of Arcosa’s businesses depend on government spending for infrastructure and other similar building activities, including Stavola's business activities in New Jersey. As a result, demand for some of Arcosa’s products is influenced by local, state, U.S. federal, and international government fiscal policies, tax incentives and other subsidies, and other general macroeconomic and political factors. Projects in which Arcosa participates may be funded directly by governments or privately-funded, but are otherwise tied to or impacted by government policies, U.S. presidential executive orders and memorandums, and spending measures. In 2021, the IIJA was signed into law, which provides approximately $350 billion for federal highway programs from 2022 through 2026 by extending many of the programs in the 2015 Fixing America's Surface Transportation Act at higher funding levels, as well as supplemental funding for roads, bridges, and other major projects. We expect Congress to either complete a new multi-year surface transportation reauthorization by the end of 2026 or an extension of the current IIJA funding until such time as they are able to pass a new highway reauthorization.
Government spending is often approved only on a short-term basis and some of the projects in which Arcosa’s products are used require longer-term funding commitments. If government funding is not approved or funding is lowered as a result of a change in priorities under the current U.S. administration, poor economic conditions, lower than expected revenues, or other factors, it could limit infrastructure projects available, increase competition for projects, result in excess inventory, and decrease sales, all of which could adversely affect the profitability of Arcosa’s business.
Additionally, certain regions or states may require or possess the means to finance only a limited number of large infrastructure projects and periods of high demand may be followed by years of little to no activity. There can be no assurances that governments will sustain or increase current infrastructure spending and tax incentive and other subsidy levels, and any reductions thereto or delays therein could affect Arcosa’s business.
Furthermore, Arcosa relies on government personnel to conduct certain routine business processes for the inspection and delivery of certain products that, if disrupted, could have an impact on Arcosa's revenues and business. For example, our barge business depends on services provided by the U.S. Coast Guard and a government shutdown may limit the Coast Guard's ability to conduct such services, which could impair our ability to deliver vessels on schedule, increase logistical and compliance costs, and disrupt customer operations.
Repercussions from terrorist activities or armed conflict could harm Arcosa’s business.
Terrorist activities, anti-terrorist efforts, and other armed conflict involving the U.S. or its interests abroad or other foreign actors, including the war in Ukraine and the conflicts in the Middle East, may adversely affect the U.S. and global economies, potentially negatively affecting the industries in which Arcosa operates. This could result in delays in or cancellations of the purchase of Arcosa’s products or shortages in raw materials, parts, or components, any of which could prevent Arcosa from meeting its financial and other obligations.
Litigateddisputes and other claims could increase Arcosa’s costs and weaken Arcosa’s liquidity and financial condition.
Arcosa is currently, and may from time to time be, involved in various claims or legal proceedings arising out of Arcosa’s operations. The defense of these lawsuits, claims, investigations, and proceedings may divert management's attention from Arcosa's core business and be expensive to defend. Any claims or legal proceedings brought against Arcosa, with or without merit, could harm Arcosa's reputation in the industry and reduce product sales. Adverse judgments and outcomes in some or all of these matters could result in significant losses and costs that could weaken Arcosa’s liquidity and financial condition. Although Arcosa maintains reserves for its probable and
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reasonably estimable liability, Arcosa’s reserves may be inadequate to cover its portion of claims or final judgments after taking into consideration rights in indemnity and recourse under insurance policies or to third parties as a result of which there could be a material adverse effect on Arcosa’s business. See Note 14. "Commitments and Contingencies” to the Consolidated Financial Statements for additional information on the Company’s current litigation.
Risks Related to Growth Strategy.
Organic growth is uncertain and operational transitions could increase costs and lower efficiency.
Arcosa seeks to expand existing business and identify new organic growth opportunities. In seeking these opportunities, we may encounter start-up challenges, new compliance requirements, unforeseen costs, and other risks as we enter new markets, including identifying appropriate opportunities, differentiating ourselves from competitors, managing our ramp-up, recruiting and retaining appropriately experienced and qualified employees, managing customer expectations, and appropriately budgeting and pricing new work. Similarly, Arcosa may from time to time repurpose existing facilities for new or different product lines or business activities. Such transitions can involve significant operational, regulatory and commercial risks, including delays or denials in obtaining required permits, licenses, environmental or zoning approvals, or other governmental authorizations. Further, these transitions may affect customer delivery timelines, product quality, and service levels during changeover periods and ramp-up.
There are inherent risks in our expansion goals and we may be unable to realize the levels of profitability we anticipated. If we are unable to manage the risks of operating in these new markets, our reputation and profitability could be adversely affected.
Arcosa may not be able to successfully identify, consummate or integrate acquisitions.
Arcosa expects to routinely engage in the search for growth opportunities, including assessment of merger and acquisition prospects in new markets and/or products. However, Arcosa may not be able to identify and secure suitable opportunities. Arcosa’s ability to consummate any acquisitions on terms that are favorable to Arcosa may be limited by a number of factors, such as competition for attractive targets and, to the extent necessary, Arcosa’s ability to obtain financing on satisfactory terms, if at all.
In addition, if Arcosa is not able to successfully integrate its transactions, including the Stavola acquisition, to any material degree, such failure of a successful integration could result in unexpectedclaims or otherwise have a material adverse effect on Arcosa’s business. Integration risks include the following: (i) the diversion of management’s time and resources to integration matters from other Arcosa matters; (ii) difficulties in achieving business opportunities and growth prospects of the acquired business; (iii) difficulties in managing the expanded operations; (iv) challenges in retaining key personnel; and (v) the disruption of ongoing business, customer, and employee relationships. The failure to successfully integrate such mergers or acquisitions could prevent Arcosa from achieving the anticipated operating and cost synergies or long-term strategic benefits from such transactions.
Acquisitions and divestitures bring risks of unexpected liabilities that could harm Arcosa's business.
Acquisitions and divestitures may bring known and unknown risks to Arcosa. If we fail to adequately perform due diligence during the acquisition process or if despite adequate diligence an unknown condition or circumstance is discovered after the closing of a transaction, we may be subject to unexpected liabilities in connection with such transaction. Acquisitions and divestitures also bring risks that the counterparties to the transactions may fail to perform their obligations, which could result in costlylitigation, divert management's attention, and disrupt our business operations. Third parties could also seek to hold Arcosa responsible for these liabilities, and there can be no assurance that any indemnity from our counterparties or any insurance we obtain in connection with the transaction will be sufficient to protect Arcosa against the full amount of such potential liabilities.
Furthermore, an element of Arcosa's long-term strategy is to reduce the complexity and cyclicality of the overall business which may result in divestitures. Divestitures pose risks and challenges that could negatively impact Arcosa's business, including retained liabilities related to divested businesses, obligations to indemnify counterparties against contingent liabilities and potential disputes with counterparties.
If we do not realize the expected benefits of these divestitures or our post-completion liabilities and continuing obligations are substantial and exceed our expectations, our financial position, results of operations and cash flows could be negatively impacted. Any divestiture may result in a dilutive impact to our future earnings if we are unable to offset the dilutive impact from the loss of revenue and profits associated with the divestiture, as well as significant write-offs, including those related to goodwill and other intangible assets, which could result in a material adverse effect on Arcosa's business.
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Potential expansion of our business may expose us to new business, regulatory, political, operational, financial, and economic risks associated with such expansion, both inside and outside of the U.S.
Arcosa's growth strategy may result in the acquisition of new lines of business or expansion into geographic markets (whether inside or outside the U.S.) in which we have limited operating experience, including with respect to seeking regulatory approvals, becoming subject to regulatory authorities, and marketing or selling products. For example, the acquisitions of Ameron and Stavola in 2024 expanded Arcosa's Engineered Structures and Construction Products segments and exposed Arcosa to new geographic markets.
Further, our operations in new foreign markets may be adversely affected by a number of factors, including: general economic conditions and monetary and fiscal policy; financial risks, such as longer payment cycles, difficulty in collecting from international customers, the effect of local and regional financial crises, and exposure to foreign currency exchange rate fluctuations and controls; multiple, conflicting, and changing laws and regulations such as export and import restrictions, employment laws, regulatory and local zoning requirements, and other governmental approvals, permits, and licenses; interest rates and taxation laws and policies; increased government regulation; social stability; and political, economic, or diplomatic developments. Certain jurisdictions have, from time to time, experienced instances of civil unrest and hostilities, both internally and with neighboring countries. Rioting, military activity, terrorist attacks, or armed hostilities could cause our operations in such jurisdictions to be adversely affected or suspended. We generally do not have insurance for losses and interruptions caused by terrorist attacks, military conflicts, and wars.
Any of these factors could significantly harm our potential business or international expansion and our operations.
Risks Related to Regulatory and Environmental Matters.
Our business is subject to significant regulatory compliance obligations in the U.S., Mexico, and other countries where we do business, and a failure to comply with any current or future laws or regulations could have a material adverse effect on us.
Arcosa is subject to comprehensive federal, state, local, and foreign laws and regulations and held to industry standards established by private industry organizations. These organizations establish safety criteria, conduct inspections and investigations, and recommend improved safety and operating standards.
Arcosa’s operations are also subject to various governmental regulations in the U.S., Mexico, and other countries where we do business related to the environment, occupational safety and health, labor, and business practices, including OSHA and MSHA.
Although we believe that we are in material compliance with all applicable regulations and operating permits material to our business operations, if it is determined that our products or processes are not in compliance with applicable requirements, rules, regulations, specifications, standards or product testing criteria, it might result in additional operating expenses or otherwise adversely affect our ability to operate, administrative fines or penalties, criminal sanctions, product recalls, reputational harm, or loss of business that could have a material adverse effect on Arcosa’s business.
In addition, amendments to existing statutes and regulations, adoption of new statutes and regulations, modification of existing operating permits, or entering into new lines of business which are under the jurisdiction of governmental agencies that Arcosa has not previously been subject to could require us to alter our methods of operation and/or discontinue the sale of certain of our products, resulting in substantial costs. For example, the U.S. barge industry relies, in part, on the Jones Act because it prohibits foreign vessels from transporting goods between U.S. ports. Changes to or a repeal of such legislation could have a material adverse impact on Arcosa’s barge business and revenues.
Arcosa is subject to health and safety laws and regulations and any failure to comply with any current or future laws or regulations could have a material adverse effect on us.
Manufacturing and construction sites are inherently dangerous workplaces. Arcosa’s manufacturing sites often put Arcosa’s employees and others in close proximity with large pieces of mechanized equipment, moving vehicles, chemical and manufacturing processes, heavy products and other items, and highly regulated materials. Unsafe work sites have the potential to increase employee turnover and raise Arcosa’s operating costs. Arcosa’s safety record can also impact Arcosa’s reputation. Arcosa maintains functional groups whose primary purpose is to ensure Arcosa implements effective work procedures throughout Arcosa’s organization and take other steps to ensure the health and safety of Arcosa’s work force, but there can be no assurances these measures will be successful in preventinginjuries or violations of health and safety laws and regulations. Any failure to maintain safe work sites or violations of applicable health and safety standards and laws, including non-compliance with operating permits, could result in the imposition of substantial fines, suspension of production, alterations of our production processes,
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cessation of operations, or other actions which could harm our business. Such compliance failures could also expose Arcosa to significant financial losses and reputational harm, as well as civil and criminal liabilities, any of which could have a material adverse effect on Arcosa’s business.
Arcosa has potential exposure to environmental liabilities that may increase costs and lower profitability.
Arcosa is subject to comprehensive federal, state, local, and foreign environmental laws and regulations relating to: (i) the release or discharge of regulated materials into the environment at or from Arcosa’s facilities or with respect to Arcosa’s products while in operation; (ii) the management, use, processing, handling, storage, transport and transport arrangement, and disposal of hazardous and non-hazardous waste, substances, and materials; and (iii) other activities relating to the protection of human health and the environment. Such laws and regulations expose Arcosa to liability for its own acts and potentially the acts of others. These laws and regulations also may impose current liability on Arcosa under circumstances where, at the time of the action taken, such action complied with then applicable laws and regulations. In addition, environmental laws and regulations may require significant expenditures to achieve compliance, and non-compliance could result in a shutdown or work stoppage and administrative, civil and/or criminalfines or penalties.
Environmental pre-construction, construction, and operating permits are, or may be, required for Arcosa’s operations under these laws and regulations. These permits are subject to modification, renewal, and/or revocation. Although Arcosa regularly monitors and reviews its operations, procedures, and policies for compliance with Arcosa’s environmental permits and related laws and regulations, the risk of environmental liability is inherent in the operation of Arcosa’s businesses.
Moreover, future events, such as changes in, or modified interpretations of, existing environmental laws and regulations or enforcement policies, or further investigation or evaluation of the potential health hazards associated with the manufacture of Arcosa’s products and related business activities and properties, may give rise to additional compliance and other costs that could have a material adverse effect on Arcosa’s business.
The transportation of commodities by rail, barge, or container also raises potential liability risks in the event of an accident that results in the release of substances that cause or threaten to cause harm to the environment or, natural resources, or result in exposure to harmful substances. If Arcosa is found liable in any such incidents, it could have a material adverse effect on Arcosa’s business.
Responding to claims relating to improper handling, transport, storage, or disposal of hazardous materials could be time consuming and costly.
We use and otherwise handle controlled hazardous materials in our business and generate wastes that are regulated as hazardous wastes under U.S. federal, state, and local environmental laws and under equivalent provisions of law in other jurisdictions in which our manufacturing facilities are located. Our use and management of these substances and materials are subject to stringent, and periodically changing, regulation that can impose costly compliance obligations on us and have the potential to adversely affect our manufacturing activities. We are also subject to potential liability for claimsalleging property damage and personal and bodily injury or death arising from the use of or exposure to our products, especially in connection with products we manufacture that our customers use to transport or store hazardous, flammable, toxic, or explosive materials.
The risk of accidental contamination or injury from these materials cannot be completely eliminated. If an accident involving these substances occurs, we could be held liable for any damages that result, as well as incur clean-up costs and liabilities, which can be substantial. Additionally, an accident involving these materials could damage our facilities, resulting in operational delays and increased costs.
Our manufacturing plants or other facilities may have unknown environmental conditions that could be expensive and time-consuming to correct.
There can be no assurance that we will not encounter environmental conditions at any of our manufacturing plants or other facilities that may require us to incur significant clean-up or correction costs. Upon encountering an environmental condition or receiving a notice of an environmental condition, we may be required to investigate and/or correct or remediate the condition. The presence of an environmental condition requiring corrective action or remediation relating to any of our manufacturing plants or other facilities may require significant expenditures to address.
Business, regulatory, and legal developments regarding climate change, and physical impacts from climate change, could have an adverse effect on our business.
Legislation and rules to regulate emission of GHGs may require Arcosa to meet new standards that may require substantial reductions in carbon emissions. Although there has been a recent push at the federal level in the United States to roll back previous initiatives relating to the regulation of GHG emissions, litigationchallenging this
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rulemaking is expected and the ultimate outcome and long-term effect of this rescission and other roll back initiatives are uncertain at this time. It is possible that efforts to regulate GHGs at the national level in the United States could resume in the future. Further, various states have considered or adopted legislation that seeks to control or reduce GHG emissions from a wide range of sources and there may be future such efforts at the state level or in other countries in which we operate.
There is a potential that climate change legislation and regulation could adversely impact the cost of certain manufacturing inputs, including the increasing cost of energy and electricity. While Arcosa cannot assess the direct impact of these or other potential regulations, new climate change protocols could affect demand for its products and/or affect the price of materials, input factors, energy costs, and manufactured components.
Potential impacts of climate change include physical impacts, such as disruption in production and product distribution due to impacts from major storm events, shifts in regional weather patterns and intensities, and sea level changes. Other adverse consequences of climate change could include an increased frequency of severe weather events, low river levels, drought, flooding, wildfires, and rising sea levels that could affect operations at Arcosa’s manufacturing facilities as well as the price and/or availability of insurance coverage for the Company assets or other unforeseendisruptions of Arcosa’s operations, systems, property, or equipment.
We may communicate certain initiatives and goals regarding GHGs and related matters in our public disclosures. These initiatives and goals may be difficult and expensive to implement or may not advance at a pace sufficient to meet our goals, and we could be criticized for the scope, accuracy, adequacy or completeness of the disclosure. Further, statements about our GHG-related initiatives and goals, and progress towards these goals, may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve and assumptions that are subject to change in the future. If our GHG-related data, processes and reporting are inaccurate or incomplete, or if we fail to achieveprogress with respect to these goals or initiatives on a timely basis or at all, our operations and financial performance could be adversely affected.
California has enacted climate disclosure laws requiring certain U.S. companies doing business in California to report certain GHG emissions and make other climate-related financial risk disclosures. In the past, U.S. federal agencies, like the SEC, have proposed similar climate disclosure requirements. The California rules have been legally challenged and are pending final resolution. To the extent these climate disclosures survive and/or substantially similar ones are adopted in the future, we will be required to incur significant time and money to comply with the disclosure requirements and may be required to modify certain of our operations. These compliance costs could adversely impact our future business.
The impacts of climate change and related regulations on our operations and the Company overall are highly uncertain and difficult to estimate, but such effects could be materially adverse to our business.
Arcosa’s sustainability efforts may be costly or may not align with the public sentiments of our stockholders and others with respect to our sustainability practices and related public disclosures.
Arcosa has been proactive in integrating its sustainability initiatives into its long-term strategy. The subjective nature and wide variety of frameworks and methods used by our stockholders and others to assess Arcosa’s sustainability strategy and progress and heightened governance standards could result in a negative perception by our stockholders or misrepresentation by others of Arcosa’s sustainability goals and progress. Arcosa’s inability to achievesatisfactoryprogress on its sustainability initiatives and improved safety, on a timely basis, or at all, or to align with the sustainability criteria of our stockholders and others could adversely affect Arcosa’s business.
From time to time Arcosa may take tax positions that the Internal Revenue Service (“IRS ”) , the Servicio de Administracion Tributaria (“SAT ” ) in Mexico, or other taxing jurisdictions may contest.
Our subsidiaries have in the past and may in the future take tax positions that the IRS, the SAT, or other taxing jurisdictions may challenge. If the IRS, SAT, or other taxing jurisdictions successfully contests a tax position that Arcosa takes, Arcosa may be required to pay additional taxes or penalties which may not have been previously accrued that may adversely affect its results of operations and financial position.
The expiration, elimination, modification, or reduction of tax benefits or tax credits or the ability to utilize federal-aid programs that allow for purchase price reimbursement or other government funding or subsidies may harm Arcosa's business.
Some of Arcosa’s customers and contractual counterparties (i) rely on their ability to obtain or utilize tax benefits or tax credits such as accelerated depreciation or the production tax credit or investment tax credit for renewable energy or (ii) utilize federal-aid programs that allow for purchase price reimbursement or other government funding or subsidies, any of which benefits, credits, or programs could be modified, discontinued or allowed to expire
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without extension thereby reducing demand for certain of Arcosa’s products or reducing certain tax credits or other tax benefits for which Arcosa or its contractual counterparties may be eligible.
For example, tax legislation enacted in August 2022 provided for certain manufacturing, production, and investment tax credit incentives, including AMP tax credits for companies that domestically manufacture and sell clean energy equipment, like Arcosa Wind Towers. However, tax legislation enacted in July 2025 includes several provisions that roll-back, phase out, repeal, and/or add stricter eligibility requirements for these tax incentives, including provisions that terminate (i) AMP tax credits for wind tower components sold after 2027 and (ii) production tax credits and investment tax credits for wind farm projects that are not placed in service before the end of 2027 (unless such projects begin construction on or before July 4, 2026). Although the pending expiration of these incentives may pull demand forward in the near term, such expiration could in the longer term reduce the demand for Arcosa’s products and/or decrease the amount of AMP tax credits or other tax benefits for which Arcosa or its contractual counterparties may be eligible, thereby creating the potential for a material adverse effect on Arcosa’s business and future financial results.
Risks Related to Technology and Cybersecurity.
Information system failures, cyber incidents or security breaches, whether with Arcosa or a third party, could disrupt our business and result in the compromise of confidential, sensitive, or proprietary information.
Arcosa relies on information technology infrastructure and architecture, including hardware, cloud computing networks, software, people, and processes to manage protected, confidential, and other sensitive information to conduct Arcosa’s business in the ordinary course. Any material failure, interruption of service, compromise of data security, or cybersecurity threat or attack could adversely affect Arcosa’s relations with suppliers, customers, and regulators, and result in negative impacts to Arcosa’s market share, operations, and profitability.
Our business is at risk from and may be impacted by information security incidents, including attempts to gainunauthorized access to our systems or data, ransomware, malware, phishing or social engineering scams, and other physical and electronic security events as well as from similar events impacting third parties with which we do business. Security breaches could result in theft, destruction, loss, misappropriation, or release of protected, confidential, or other sensitive data including personal information of our employees, trade secrets, or other proprietary intellectual property that could adversely impact Arcosa's future results.
While we employ several measures to prevent, detect, and mitigate these threats, there is no guarantee such efforts will be successful in preventing a cyber event or that any third parties with which we do business will be successful in preventing a cyber event. We have invested and continue to invest in risk management, information security, and data protection measures, including technical, administrative, and organizational safeguards, in order to protect our systems and data. The cost and operational consequences of implementing, maintaining, and enhancing further data or system safeguards could increase significantly to keep pace with increasingly frequent, complex, and sophisticated global cyber threats, including those enabled or amplified by AI. Any material breaches of cybersecurity, including the accidentalloss, inadvertent disclosure or unauthorized access or dissemination of proprietary information or sensitive or confidential data, or media reports of perceived security vulnerabilities to our systems, products, and services or those of our third parties could cause us to experience reputational harm, loss of customers and revenue, fines, regulatory actions and scrutiny, sanctions, or other statutory penalties, litigation, liability for failure to safeguard our customers' information, or financial losses that are either not insured against or not fully covered through any insurance maintained by us. Any of the foregoing may have a material adverse effect on our business, operating results, and financial condition.
Arcosa is subject to complex and evolving laws and regulations regarding privacy and cybersecurity.
The laws and regulations governing cybersecurity, data privacy and protection, and the unauthorized access or disclosure of confidential or protected information pose increasingly complex compliance challenges and potentially elevate costs, and any actual or perceived failure to adequately address privacy and cybersecurity concerns or comply with applicable laws and regulations could result in significant penalties, legal liability, judgments and negative publicity; require us to change our business practices; increase the costs and complexity of compliance; and adversely affect our business. If we are not able to adjust to changing laws, regulations and standards relating to privacy or cybersecurity, our business may be materially harmed. As noted above, we are also subject to the possibility of cyber events, which themselves may result in a violation of these privacy and data security laws.
Arcosa’s adoption and use of AI technologies present operational, legal, and compliance risks that could increase our costs and expose us to liability.
Arcosa uses, and expects to expand its use of, AI and machine learning tools across its operations. These tools depend on data quality, model design, human oversight, and third-party software and services. Evolving AI laws,
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regulations, standards, and contractual obligations may restrict certain use cases and increase compliance risk. Although Arcosa maintains internal AI governance, including a charter and a committee, to guide, oversee and support the responsible exploration, adoption, development and integration of AI technologies, these measures cannot eliminate all risks, and failures could adversely affect our business, results of operations, reputation, and financial condition.
Arcosa’s inability to sufficiently protect Arcosa’s intellectual property rights could adversely affect Arcosa’s business.
Arcosa’s patents, copyrights, trademarks, trade secrets, and other intellectual property rights are important to Arcosa’s success. Arcosa relies on patent, copyright, and trademark law, and trade secret protection and confidentiality and/or license agreements with others to protect Arcosa’s intellectual property rights. Arcosa’s trademarks, service marks, copyrights, patents, and trade secrets may be exposed to market confusion, commercial abuse, infringement, or misappropriation and possibly challenged, invalidated, circumvented, narrowed, or declared unenforceable by countries where Arcosa’s products and services are made available, including countries where the laws may not protect Arcosa’s intellectual property rights as fully as in the U.S. Such instances could negatively impact Arcosa’s competitive position and adversely affect Arcosa’s business. Additionally, Arcosa could be required to incur significant expenses to protect its intellectual property rights.
Risks Related to Arcosa Common Stock.
Arcosa cannot guarantee the timing, amount, or payment of dividends on its common stock.
The timing, declaration, amount, and payment of future dividends to Arcosa’s stockholders falls within the discretion of the Board. The Board's decisions regarding the payment of future dividends will depend on many factors, such as Arcosa’s financial condition, earnings, capital requirements, debt service obligations, covenants related to our debt service obligations, industry practice, legal requirements, regulatory constraints, access to the capital markets, and other factors that the Board deems relevant. Arcosa cannot guarantee that it will continue to pay any dividend in the future.
Certain provisions in Arcosa’s restated certificate of incorporation and amended and restated bylaws ("Arcosa’s Governing Documents"), and of Delaware law, may prevent or delay an acquisition of Arcosa, which could decrease the trading price of the common stock.
Arcosa’s Governing Documents and Delaware law contain provisions that are intended to detercoercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the bidder and to encourage prospective acquirers to negotiate with the Board rather than to attempt a hostile takeover.
These provisions include limitations on the ability of our stockholders to call special meetings, the establishment of advance notice procedures for stockholder proposals and nominations for election of directors and allow for the Board to issue blank check preferred stock with voting or conversion rights without stockholder approval. In addition, Arcosa is subject to Section 203 of the Delaware General Corporation Law which makes it more difficult for a person who acquires 15% or more of Arcosa's outstanding voting stock to effect various business combinations with us for a three-year period following the time such stockholder became a 15% stockholder.
Arcosa believes these provisions will protect its stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with the Board and by providing the Board with more time to assess any acquisition proposal. These provisions are not intended to make Arcosa immune from takeovers. However, these provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that the Board determines is not in the best interests of Arcosa and its stockholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.
Arcosa’s stock price may fluctuate significantly.
We cannot predict the prices at which shares of Arcosa common stock may trade. The trading and market price of Arcosa common stock may fluctuate significantly due to a number of factors, some of which may be beyond Arcosa’s control, including: Arcosa’s quarterly or annual earnings, or those of other companies in its industry; actual or anticipated fluctuations in Arcosa’s operating results; changes in earnings estimates by securities analysts or Arcosa’s ability to meet those estimates; Arcosa’s ability to meet its forward-looking guidance; the operating and stock price performance of other comparable companies; overall market fluctuations and domestic and worldwide economic conditions; and other factors described in these “Risk Factors” and elsewhere in this Annual Report on Form 10-K.
Stock markets in general have experienced volatility that has often been unrelated to the operating performance of a particular company. Broad market and industry factors may materially harm the market price of Arcosa’s common stock, regardless of Arcosa’s operating performance. In the past, following periods of volatility in the
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market price of a company’s securities, shareholder derivative lawsuits and/or securities class action litigation has often been instituted against that company. Such litigation, if instituted against us, could result in substantial costs and a diversion of management’s attention and resources.
Stockholders’ percentage of ownership in Arcosa may be diluted in the future.
Stockholders’ percentage ownership in Arcosa may be diluted because of equity issuances for acquisitions, capital market transactions, or otherwise, including, without limitation, equity awards that Arcosa grants to its directors, officers, and employees.
In addition, Arcosa’s restated certificate of incorporation authorizes Arcosa to issue, without the approval of Arcosa’s stockholders, one or more classes or series of preferred stock having such designation, powers, preferences, and relative, participating, optional, and other special rights, including preferences over Arcosa common stock respecting dividends and distributions, as the Board generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the residual value of Arcosa common stock.
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Market Outlook
• Within our Construction Products segment, market demand remains healthy overall when seasonal weather conditions have been normal, supported by increased infrastructure spending and private non-residential activity. The outlook for single-family residential housing continues to be impacted by higher interest rates and home affordability, which has negatively impacted volumes. We have been successful in managing inflationary cost pressures through proactive price increases.
• Within our Engineered Structures segment, our backlog for utility and related structures as of December 31, 2025 was $434.9 million, up 5% from the prior year, and provides strong production visibility for 2026. In utility structures, order and inquiry activity continues to be healthy, as customers remain focused on grid hardening and reliability initiatives, along with increasing demand for electricity stemming from AI-driven projects. Due to increased demand, we are currently in the process of converting an idled wind tower facility to utility structures, which is expected to be operational in the second-half of 2026. We are evaluating our Engineered Structures footprint for additional opportunities to increase capacity to meet elevated demand.
• The Inflation Reduction Act ("IRA,") enacted in August 2022, was a significant catalyst for order activity for our wind towers business, also within the Engineered Structures segment. The IRA included a long-term extension of the Production Tax Credit ("PTC") for new wind farm projects and introduced new Advanced Manufacturing Production ("AMP") tax credits for companies that domestically manufacture and sell clean energy equipment in the U.S. Shortly following the passage of the IRA, we received new wind tower orders of $1.1 billion for delivery in 2023 through 2028, and we opened a new plant in New Mexico that started delivering towers in the second quarter of 2024. As of December 31, 2025, we have delivered roughly half of the orders we received in the wake of the IRA. Uncertainty around potential changes in renewable energy policy under the current U.S. presidential administration tempered additional order activity. The One Big Beautiful Bill Act (“OBBBA”), which was enacted on July 4, 2025, includes several provisions that roll-back, phase out, repeal, and/or add stricter eligibility requirements for, several tax incentives applicable to wind and solar projects. The OBBBA terminates the IRA's AMP tax credits for wind towers sold after 2027. Also, under the OBBBA, wind farm projects that begin construction after July 4, 2026, and are not placed in service before the end of 2027, will not be eligible for the PTC. Notwithstanding these developments, we remain confident that further investment in wind energy is needed to meet the load growth demands in the U.S., and the pending expiration of these incentives may pull demand forward. During the second half of 2025, we received orders of $247 million and shifted some deliveries scheduled for 2028 into 2026, which provide backlog visibility for all three of our active wind tower plants in 2026
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and 2027. As of December 31, 2025, our backlog for wind towers was $627.8 million, down 19% from the prior year, and we expect to recognize 42% during 2026 and 53% during 2027.
• Within our Transportation Products segment, our backlog for inland barges as of December 31, 2025 was $296.9 million, up 6% from the prior year, and provides visibility for both hopper and tank barges well into the second half of 2026. During the fourth quarter, we received orders of $81 million for both hopper and tank barges. Both fleets continue to age as new builds are relatively low, which indicates future pent up replacement demand.
Executive Overview
Recent Developments
On February 24, 2026, the Company entered into a Stock Purchase Agreement to sell its barge business to an affiliate of Wynnchurch Capital, L.P., for a cash purchase price of approximately $450 million, subject to customary purchase price adjustments. The divestiture is expected to close in the second quarter of 2026 and is subject to regulatory approval and other customary closing conditions. Reported within the Transportation Products segment, revenues and operating profit of the barge business were $383.3 million and $60.8 million, respectively, during the year ended December 31, 2025, and $329.8 million and $49.7 million, respectively, during the year ended December 31, 2024. The Company intends to use the after-tax proceeds to further invest in the expansion of its core growth platforms and reduce outstanding debt.
In October 2024, the Company completed the acquisition of the construction materials business of Stavola Holding Corporation and its affiliated entities (“Stavola”) for $1.2 billion in cash. Stavola, which is reported within the Construction Products segment, serves the New York-New Jersey MSA through its network of five hard rock natural aggregates quarries, twelve asphalt plants, and three recycled aggregates sites.
In August 2024, the Company completed the sale of its steel components business. Previously reported in the Transportation Products segment, the steel components business was a leading supplier of railcar coupling devices, railcar axles, and circular forgings. Revenues and operating profit (loss) of the steel components business were $87.8 million and $(19.5) million, respectively, for the year ended December 31, 2024. For the year ended December 31, 2025, the Company recognized a loss of $14.7 million, primarily due to a change in the estimated fair value of the earnout and certain long-term liabilities. As the steel components business was not core to Arcosa's long-term strategy, its divestiture was not considered a strategic shift that would have a major effect on the Company's operations or financial results either from a quantitative or qualitative perspective. As such, it is not reported as a discontinued operation.
In April 2024, the Company completed the acquisition of Ameron Pole Products, LLC ("Ameron"), a leading manufacturer of highly engineered, premium concrete, and steel poles for a broad range of infrastructure applications, including lighting, traffic, electric distribution, and small-cell telecom, for $180.0 million in cash. With operations in Alabama, California, and Oklahoma, Ameron is included in our Engineered Structures segment.
Financial Operations and Highlights
• Revenues for the year ended December 31, 2025 increased by 12.2% to $2.9 billion compared to the year ended December 31, 2024, due to higher revenues in Construction Products and Engineered Structures, partially offset by lower revenues in Transportation Products resulting from the divestiture of the steel components business.
• Operating profit for the year ended December 31, 2025 totaled $341.9 million an increase of $144.3 million, with all segments contributing to the increase.
• Selling, general, and administrative expenses decreased 4.0% as higher costs from the acquired Ameron and Stavola businesses were more than offset by lower costs from steel components and a decline in acquisition and divestiture-related expenses. As a percentage of revenues, selling, general, and administrative expenses were 10.7% for the year ended December 31, 2025, compared to 12.5% in the prior year.
• Interest expense for the year ended December 31, 2025 totaled $108.8 million, an increase of $37.9 million, driven by the additional debt incurred to finance the Stavola acquisition.
• The effective tax rate for the year ended December 31, 2025 was 13.6% compared to 27.9% for the year ended December 31, 2024. See Note 9. "Income Taxes" to the Consolidated Financial Statements.
• Net income for the year ended December 31, 2025 was $208.4 million compared with $93.7 million for the year ended December 31, 2024.
Our Engineered Structures and Transportation Products segments operate in cyclical industries. Additionally, results in our Construction Products segment are affected by weather and seasonal fluctuations with the second and third quarters historically being the quarters with the highest revenues.
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Unsatisfied Performance Obligations (Backlog)
As of December 31, 2025 and 2024 our backlog of firm orders was as follows:
December 31, 2025
December 31, 2024
(in millions)
Engineered Structures:
Utility and related structures
Wind towers
Transportation Products:
Inland barges
In our Engineered Structures segment, 95% of the unsatisfied performance obligations for our utility and related structures are expected to be recognized during 2026, and all of the remaining performance obligations are expected to be recognized during 2027. For our wind towers business, 42% of the unsatisfied performance obligations are expected to be recognized during 2026, 53% are expected to be recognized during 2027, and the remainder are expected to be recognized during 2028.
For inland barges in our Transportation Products segment, all of the unsatisfied performance obligations are expected to be recognized during 2026.
Results of Operations
The following discussion of Arcosa’s results of operations should be read in connection with “Forward-Looking Statements” and Item 1A, “ Risk Factors. ” These items provide additional relevant information regarding the business of Arcosa, its strategy and various industry conditions which have a direct and significant impact on Arcosa’s results of operations, as well as the risks associated with Arcosa’s business.
Overall Summary
Revenues
Year Ended December 31,
Percent Change
2025 versus 2024
2024 versus 2023
($ in millions)
Construction Products
Engineered Structures
Transportation Products
Segment Totals before Eliminations
Eliminations
Consolidated Total
2025 versus 2024
• Revenues increased by 12.2%.
• Revenues from Construction Products increased primarily due to the contribution from the acquired Stavola business, which closed in October 2024.
• Revenues from Engineered Structures increased primarily due to higher volumes in our utility structures and wind towers businesses, partially offset by lower steel pass-through costs. Revenues also increased due to the contribution from the acquired Ameron business, which closed in April 2024.
• Revenues from Transportation Products were impacted by the divestiture of the steel components business, which closed in August 2024. Inland barge revenues increased 16.2% for the year ended December 31, 2025, primarily due to higher tank barge deliveries.
2024 versus 2023
• Revenues increased by 11.4%.
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• Revenues from Construction Products increased primarily due to the contribution from recent acquisitions.
• Revenues from Engineered Structures increased primarily due to higher volumes in our wind towers and utility structures businesses and the contribution from the acquired Ameron business.
• Revenues from Transportation Products decreased due to the sale of the steel components business, which closed in August 2024, partially offset by higher volumes in our barge business.
Operating Costs
Operating costs are comprised of cost of revenues; selling, general, and administrative expenses; impairment charges; and gains or losses on disposition of assets and sale of businesses.
Year Ended December 31,
Percent Change
2025 versus 2024
2024 versus 2023
(in millions)
Construction Products
Engineered Structures
Transportation Products
Segment Totals before Eliminations and Corporate Expenses
Corporate
Eliminations
Consolidated Total
Depreciation, depletion, and amortization (1)
(1) Depreciation, depletion, and amortization are included within operating profit and allocated between cost of revenues and selling, general, and administrative expenses depending on whether the underlying assets contribute to the production of revenue.
2025 versus 2024
• Operating costs increased 7.1%.
• Operating costs for Construction Products increased primarily due to additional costs from the acquired Stavola business.
• Operating costs for Engineered Structures increased primarily due to higher volumes in utility structures and wind towers and additional costs from the acquired Ameron business, partially offset by lower steel input costs for utility structures.
• Operating costs for Transportation Products decreased primarily due to the divestiture of the steel components business, partially offset by higher tank barge volumes.
• Depreciation, depletion, and amortization increased primarily due to the acquisition of Stavola.
• Corporate costs decreased 31.0% primarily due to lower acquisition and divestiture-related expenses, partially offset by higher compensation-related expenses.
2024 versus 2023
• Operating costs increased 13.5%.
• Operating costs for Construction Products increased primarily due to additional costs from recently acquired businesses, including the fair value markup of acquired inventory and long-lived assets, and a $21.8 million gain recognized on the sale of depleted land that was netted against operating costs in 2023.
• Operating costs for Engineered Structures increased primarily due to higher volumes in our wind towers and utility structures businesses and increased costs from the acquired Ameron business.
• Operating costs for Transportation Products were substantially unchanged as higher barge volumes and the $21.6 million loss recognized on the sale of steel components were mostly offset by lower steel components volumes.
• Depreciation, depletion, and amortization increased due to recent acquisitions and organic growth investments.
• Corporate costs increased 47.9% primarily due to higher acquisition and divestiture-related transaction expenses.
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Operating Profit (Loss)
Year Ended December 31,
Percent Change
2025 versus 2024
2024 versus 2023
(in millions)
Construction Products
Engineered Structures
Transportation Products
Segment Totals before Eliminations and Corporate Expenses
Corporate
Consolidated Total
2025 versus 2024
• Operating profit increased 73.0%. Excluding the impact of the divested steel components business, operating profit increased 64.3% for the year ended December 31, 2025.
• Operating profit in Construction Products increased primarily due to the impact of the acquired Stavola business.
• Operating profit in Engineered Structures increased due to higher utility structures and wind tower volumes as well as operating improvements in our utility structures business.
• Operating profit in Transportation Products increased due to higher tank barge volumes, partially offset by the impact of the steel components divestiture.
• Operating profit also increased due to lower acquisition and divestiture-related expenses which decreased by $44.4 million for the year ended December 31, 2025.
2024 versus 2023
• Operating profit decreased 9.1%.
• Excluding the $21.8 million gain recognized on the sale of depleted land in 2023, operating profit in Construction Products increased 14.6% primarily due to the accretive impact of recently acquired businesses and operating improvements in our specialty materials and trench shoring businesses.
• Operating profit in Engineered Structures increased by 32.1% primarily due to higher wind towers and utility structures volumes and the accretive impact of the acquired Ameron business.
• Excluding the $21.6 million loss on the sale of the steel components business, operating profit in Transportation Products increased 13.0 % primarily due to higher volumes and improved margins in barge, partially offset by lower steel components volumes.
For a further discussion of revenues, costs, and the operating results of individual segments, see " Segment Discussion" below.
Income Taxes
The provision for income taxes for the years ended December 31, 2025, 2024, and 2023 was $32.9 million, $36.3 million, and $36.7 million, respectively. The effective tax rate for the years ended December 31, 2025, 2024, and 2023 was 13.6%, 27.9%, and 18.7%, respectively. The change in the effective tax rate for the year ended December 31, 2025 is primarily due to lower state income taxes, higher AMP tax credits, and lower foreign taxes.
Our effective tax rate differs from the federal tax rate of 21.0% due to AMP tax credits, state income taxes, statutory depletion deductions, compensation-related items, and other foreign adjustments. For a reconciliation of the federal tax rate to our effective tax rate, see Note 9. "Income Taxes" to the Consolidated Financial Statements.
See Note 9. "Income Taxes" to the Consolidated Financial Statements for a further discussion of income taxes.
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Segment Discussion
Construction Products
Year Ended December 31,
Percent Change
2025 versus 2024
2024 versus 2023
($ in millions)
Revenues:
Aggregates
Specialty materials and asphalt
Aggregates intrasegment sales
Total Construction Materials
Construction site support
Total revenues
Cost of revenues
Gross profit
Selling, general, and administrative expenses
Other operating income
Operating profit
Depreciation, depletion, and amortization (1)
(1) Depreciation, depletion, and amortization are included within operating profit and allocated between cost of revenues and selling, general, and administrative expenses depending on whether the underlying assets contribute to the production of revenue.
2025 versus 2024
• Revenues increased 18.6% primarily due to the acquisition of Stavola which contributed $219.3 million of inorganic revenues during the first nine months of 2025. Organic revenues in our construction materials businesses declined slightly primarily due to a reduction in revenue from operations divested in the prior year. Higher pricing was mostly offset by lower volumes and a decrease in freight revenue in our legacy construction materials businesses. Revenues in our trench shoring business increased primarily due to higher volumes partially offset by lower steel prices.
• Cost of revenues increased 16.4% primarily due to increased costs from the Stavola acquisition, including higher depreciation, depletion, and amortization expense. Cost of revenues in our legacy businesses decreased slightly primarily due to lower volumes. As a percentage of revenues, cost of revenues decreased to 76.8% in the current period, compared to 78.2% in the prior period.
• Selling, general, and administrative expenses increased 11.9% primarily due to additional costs from Stavola. As a percentage of revenues, selling, general, and administrative costs decreased to 9.9% compared to 10.5% in the previous year.
• Other operating income increased primarily due to lower impairment charges compared to the prior year.
• Operating profit increased 41.7% primarily due to the impact of the Stavola acquisition, which contributed $44.2 million of inorganic operating profit in the first nine months of 2025. On an organic basis, operating profit increased 9% primarily due to higher gross profit and the decrease in impairment charges.
• Depreciation, depletion, and amortization expense increased 22.3% primarily due to the acquisition of Stavola, including the impact of the increase in fair value of long-lived assets acquired.
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2024 versus 2023
• Revenues increased 10.4% primarily due to recent acquisitions. Revenue from Stavola since it was acquired on October 1, 2024 was $78.2 million, representing approximately 75% of the increase. Organic revenues in our aggregates and specialty materials businesses were down slightly as higher pricing was offset by lower volumes, a decrease in freight revenues, and a reduction in revenues from recently divested operations. Revenues from our trench shoring business increased due to higher organic volumes and the acquisition completed in the first quarter of 2023.
• Cost of revenues increased 10.2%, primarily due to increased costs from recently acquired businesses, including higher depreciation, depletion, and amortization expense and $12.2 million for the cost impact of the fair value markup of acquired inventory. Cost of revenues also increased $5.0 million due to a benefit recognized in 2023 related to the reduction in a holdback obligation owed on a previous acquisition. These costs were partially offset by lower costs from recently divested operations. As a percent of revenues, cost of revenues decreased to 78.2% in 2024, compared to 78.3% in 2023.
• Selling, general, and administrative expenses increased 8.6%, due to additional costs from recently acquired businesses and higher compensation-related costs. As a percentage of revenues, selling, general, and administrative costs decreased to 10.5% compared to 10.7% in the previous year.
• Other operating income decreased primarily due to lower asset sale gains compared to 2023.
• Operating profit decreased 3.4%. Excluding the $21.8 million gain recognized on the sale of depleted land in 2023, operating profit increased 14.6%, driven by the accretive impact of recent acquisitions, the recent divestiture of underperforming operations, increased unit profitability in our aggregates business, and operating improvements in our specialty materials and trench shoring businesses. Operating profit for Stavola since it was acquired on October 1, 2024 was $4.5 million, representing approximately 26% of the increase, excluding the gain recognized on the sale of depleted land.
• Depreciation, depletion, and amortization expense increased primarily due to recent acquisitions, including the fair value markup of long-lived assets, and organic growth investments.
Engineered Structures
Year Ended December 31,
Percent Change
2025 versus 2024
2024 versus 2023
($ in millions)
Revenues:
Utility and related structures
Wind towers
Total revenues
Cost of revenues
Gross profit
Selling, general, and administrative expenses
Other operating income
Operating profit
Depreciation and amortization (1)
(1) Depreciation and amortization are included within operating profit and allocated between cost of revenues and selling, general, and administrative expenses depending on whether the underlying assets contribute to the production of revenue.
2025 versus 2024
• Revenues increased 13.6% primarily due to higher volumes from our new wind tower facility in New Mexico. Revenue for our utility and related structures businesses increased due to higher utility structures volumes and the contribution from Ameron, which was acquired in April 2024, partially offset by lower steel prices.
• Cost of revenues increased 9.2% primarily due to higher wind tower volumes. Costs of revenues for utility structures increased due to higher volumes, partially offset by lower steel costs. As a percentage of revenues,
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cost of revenues decreased to 77.8% in the current period, compared to 80.9% in the prior period. This decrease is partially attributed to startup costs incurred in the prior period for the new wind tower facility.
• Selling, general, and administrative expenses increased 8.3% primarily due to additional costs from the acquired Ameron business. Selling, general, and administrative expenses as a percentage of revenues were 8.0% in the current period, compared to 8.4% in the prior period.
• Other operating income decreased primarily due to additional gains recognized in 2024 related to the divestiture of the storage tanks business, which closed in October 2022, including a gain on the settlement of certain contingencies from the sale and a gain on the sale of a non-operating facility that previously supported the divested business.
• Operating profit increased 34.7% primarily due to higher utility structures and wind towers volumes as well as increased efficiencies in our utility and related structures businesses, partially offset by the asset sale gains recognized in the prior period from the divested business.
2024 versus 2023
• Revenues increased 19.9% primarily due to higher volumes in our wind towers and utility structures businesses and the contribution from the acquired Ameron business, partially offset by lower utility structures pricing due to product mix.
• Cost of revenues increased 18.0% primarily due to higher wind tower and utility structures volumes and additional expenses incurred related to the startup of two new facilities during the year, including a concrete utility structures plant and a wind tower plant. Cost of revenues also increased due to higher costs from the acquired Ameron business, including higher depreciation and amortization expense and $1.6 million for the cost impact of the fair value of markup of acquired inventory.
• Selling, general, and administrative expenses increased 34.1% primarily due to additional costs from the acquired Ameron business and higher compensation-related expenses in our utility structure and wind tower businesses.
• Other operating income includes additional gains recognized in 2024 and 2023 on the sale of the storage tanks business related to the settlement of certain contingencies and a gain on the sale of a non-operating facility that previously supported the divested business.
• Operating profit increased 32.1%, primarily due to the gain recognized during 2024, higher utility structures and wind tower volumes, and the impact of the acquired Ameron business, partially offset by lower margins in our utility structures business driven by product mix.
• Depreciation and amortization expense increased primarily due to the acquired Ameron business and organic growth investments.
Unsatisfied Performance Obligations (Backlog)
As of December 31, 2025, the backlog for utility and related structures was $434.9 million compared to $414.0 million as of December 31, 2024. We expect to recognize 95% of the unsatisfied performance obligations for utility and related structures during 2026, and all of the remaining performance obligations are expected to be recognized during 2027.
The backlog for wind towers as of December 31, 2025 was $627.8 million compared to $776.8 million as of December 31, 2024. We expect to recognize 42% of the unsatisfied performance obligations for wind towers during 2026, 53% are expected to be recognized during 2027, and the remainder are expected to be recognized during 2028.
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Transportation Products
Year Ended December 31,
Percent Change
2025 versus 2024
2024 versus 2023
($ in millions)
Revenues:
Inland barges
Steel components
Total revenues
Cost of revenues
Gross profit
Selling, general, and administrative expenses
Other operating expense
Operating profit
Depreciation and amortization (1)
(1) Depreciation and amortization are included within operating profit and allocated between cost of revenues and selling, general, and administrative expenses depending on whether the underlying assets contribute to the production of revenue.
2025 versus 2024
• Revenues decreased 8.2% resulting from the sale of the steel components business in the prior period. Revenues for inland barges increased 16.2%, driven by higher tank barge deliveries, partially offset by lower hopper barge deliveries.
• Cost of revenues decreased by 11.1% driven by the steel components divestiture, partially offset by higher cost of revenues for the barge business due to increased volumes. As a percent of revenues, cost of revenues decreased to 79.6% in the current year, compared to 82.2% in the prior year.
• Selling, general, and administrative expenses decreased 23.1% driven by the steel components divestiture. For inland barges, selling, general, and administrative expenses increased primarily due to higher compensation-related expenses, but decreased as a percent of revenues.
• Other operating expense reflects the loss recognized on the sale of the steel components business. For the current year, the additional loss is primarily due to a change in the estimated fair value of the earnout and certain long-term liabilities.
• Operating profit increased 22.3%, excluding the impact of the steel components divestiture, driven by increased operating profit for the barge business primarily due to increased tank barge volumes.
2024 versus 2023
• Revenues decreased 3.7% resulting from the sale of the steel components business which was completed in August 2024. Barge revenue increased 17.7%, driven by higher deliveries.
• Cost of revenues decreased by 5.2%, driven by lower steel components volumes due to the divestiture, partially offset by higher cost of revenues for the barge business due to higher volumes. As a percent of revenues, cost of revenues decreased to 82.2% in 2024, compared to 83.6% in 2023.
• Selling, general, and administrative expenses decreased 11.4%, primarily due to the divestiture of the steel components business, partially offset by higher compensation-related expenses for the barge business.
• The increase in other operating expense is due to the loss recognized on the sale of the steel components business in 2024.
• Operating profit decreased 34.1%, driven by the $21.6 million loss recognized on the sale of the steel components business during 2024. Excluding the loss, operating profit increased $6.0 million, of 13.1%, driven by increased volume and improved margin in our barge business.
• Depreciation and amortization decreased primarily due to the divestiture of the steel components business.
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Unsatisfied Performance Obligations (Backlog)
As of December 31, 2025, the backlog for inland barges was $296.9 million compared to $280.1 million as of December 31, 2024. We expect to recognize all of the unsatisfied performance obligations for inland barges during 2026.
Corporate
Year Ended December 31,
Percent Change
2025 versus 2024
2024 versus 2023
($ in millions)
Corporate overhead costs
2025 versus 2024
• Corporate overhead costs decreased 31.0% primarily due to a $30.6 million decrease in acquisition and divestiture-related expenses, partially offset by higher compensation-related expenses.
2024 versus 2023
• Corporate overhead costs increased 47.9% primarily due to a $30.5 million increase in acquisition and divestiture-related transaction expenses. Excluding these expenses, corporate overhead costs were roughly flat.
Liquidity and Capital Resources
Arcosa’s primary liquidity requirement consists of funding our business operations, including operating expenses, capital expenditures, working capital investment, quarterly debt payments, and our regular quarterly dividend. Our primary sources of liquidity include cash flow from operations, our existing cash balance, availability under the revolving credit facility, and, as necessary, the issuance of additional long-term debt or equity. We may also consider undertaking disciplined acquisitions, organic investment projects, additional return of capital to stockholders, or funding other general corporate purposes to the extent we have available liquidity.
Cash Flows
The following table summarizes our cash flows from operating, investing, and financing activities for each of the last three years:
Year Ended December 31,
(in millions)
Total cash provided by (required by):
Operating activities
Investing activities
Financing activities
Net increase (decrease) in cash and cash equivalents
2025 versus 2024
Operating Activities. Net cash provided by operating activities for the year ended December 31, 2025 was $341.1 million, compared to $502.0 million for the year ended December 31, 2024.
• The changes in current assets and liabilities resulted in a net use of cash of $154.5 million for the year ended December 31, 2025, compared to a net source of cash of $185.0 million for the year ended December 31, 2024. The current year activity was primarily driven by increases in receivables and inventory and a decrease in advanced billings, partially offset by higher accounts payable.
Investing Activities. Net cash required by investing activities for the year ended December 31, 2025 was $121.4 million, compared to $1,508.9 million for the year ended December 31, 2024.
• Capital expenditures for the year ended December 31, 2025 decreased to $165.6 million, compared to $189.7 million for the year ended December 31, 2024.
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• Proceeds from the sale of property, plant, and equipment totaled $26.6 million for the year ended December 31, 2025, compared to $18.3 million for the year ended December 31, 2024.
• For the year ended December 31, 2025, cash received from acquisitions was $17.6 million due to escrow funds that were returned to the Company related to contractual purchase price adjustments in connection with the Stavola acquisition. Cash paid for acquisitions, net of cash acquired, was $1,424.1 million for the year ended December 31, 2024, primarily related to the Stavola acquisition.
• There were no proceeds from the sale of businesses during the year ended December 31, 2025, compared to $86.6 million for the same period in 2024.
Financing Activities. Net cash required by financing activities for the year ended December 31, 2025 was $192.4 million, compared to net cash provided by financing activities of $1,089.4 million for the year ended December 31, 2024
• During the year ended December 31, 2025, the Company made scheduled quarterly principal payments and prepaid $156.5 million of the outstanding principal balance on the 2025 Refinancing Term Loan.
• Dividends paid during the year ended December 31, 2025 were $10.0 million, compared to $9.7 million for the year ended December 31, 2024.
• During the year ended December 31, 2025, the Company did not repurchase any shares of common stock under its share repurchase program, unchanged from the prior year.
2024 versus 2023
Operating Activities. Net cash provided by operating activities for the year ended December 31, 2024 was $502.0 million, compared to $261.0 million for the year ended December 31, 2023.
• The changes in current assets and liabilities resulted in a net source of cash of $185.0 million for the year ended December 31, 2024, compared to a net use of cash of $71.8 million for the year ended December 31, 2023. The 2024 activity was primarily driven by an increase in advance billings and decreases in receivables and inventories.
Investing Activities. Net cash required by investing activities for the year ended December 31, 2024 was $1,508.9 million, compared to $285.8 million for the year ended December 31, 2023.
• Capital expenditures for the year ended December 31, 2024 decreased to $189.7 million, compared to $203.5 million for the year ended December 31, 2023.
• Proceeds from the sale of property, plant, and equipment and other assets totaled $18.3 million for the year ended December 31, 2024, compared to $36.6 million for the year ended December 31, 2023.
• Cash paid for acquisitions, net of cash acquired, was $1,424.1 million for the year ended December 31, 2024, compared to $120.9 million for the year ended December 31, 2023.
• Proceeds from the sale of businesses was $86.6 million during the year ended December 31, 2024, primarily driven by the sale of the steel components business, compared to $2.0 million during the year ended December 31, 2023.
Financing Activities. Net cash provided by financing activities for the year ended December 31, 2024 was $1,089.4 million, compared to $30.8 million of net cash required by financing activities for the year ended December 31, 2023.
• During the year ended December 31, 2024, the Company received proceeds of $600.0 million from the issuance of the 2024 Notes and $700.0 million from the Term Loan, which were primarily used to fund the Stavola acquisition. Net repayments from borrowings under the revolving credit facility for the year ended December 31, 2024 totaled $160.0 million. The Company borrowed $335.0 million under the revolving credit facility during the year, including $160.0 million in April 2024 to partially fund the Ameron acquisition. These borrowings were paid in full during 2024, resulting in no outstanding loans borrowed under the revolving credit facility as of December 31, 2024.
• Dividends paid during the year ended December 31, 2024 were $9.7 million, unchanged from the prior year.
• During the year ended December 31, 2024, the Company did not repurchase any common stock under its share repurchase program compared to $13.8 million paid during the year ended December 31, 2023.
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Other Investing and Financing Activities
Revolving Credit Facility, Term Loan, and Senior Notes
In August 2023, we entered into the Credit Agreement to increase our revolving credit facility from $500.0 million to $600.0 million, extend the maturity date of our revolving credit facility from January 2, 2025 to August 23, 2028, and refinance and repay in full the remaining balance of the term loan then outstanding under our prior credit facility.
On August 15, 2024, we entered into Amendment No. 1 to the Credit Agreement to, among other things, (i) increase our revolving credit facility from $600.0 million to $700.0 million, (ii) collateralize the amended revolving credit facility with substantially all of our and our subsidiary guarantors' personal property (with certain exceptions), (iii) make the applicable margin for revolving borrowings, letters of credit and the commitment fee rate be based on our consolidated net leverage ratio (permitting up to $150.0 million of unrestricted cash to be netted from the calculation thereof), (iv) modify the margin for SOFR-based revolving borrowings and letters of credit to range from 1.25% to 2.50% per annum, (v) modify the margin for base rate revolving borrowings to range from 0.25% to 1.50%, (vi) modify the commitment fee that accrues on the unused portion of the revolving credit facility to range from 0.20% to 0.45%, and (vii) modify the maximum permitted leverage ratio to include a net debt concept (permitting up to $150.0 million of unrestricted cash to be netted from the calculation thereof), and to provide that such ratio shall be no greater than 5.00 to 1.00 during the fourth quarter of 2024 and the next two fiscal quarters, 4.50 to 1.00 for the next following two fiscal quarters, and 4.00 to 1.00 for each fiscal quarter thereafter (however, this maximum permitted leverage ratio may be increased to 4.50 to 1.00 for up to four fiscal quarters if a material acquisition is entered into). These amendments did not become effective until the closing of the Stavola acquisition on October 1, 2024. The amended revolving credit facility's maturity date of August 23, 2028 remains unchanged.
As of December 31, 2025, we had no outstanding loans borrowed under our revolving credit facility, which left $700.0 million available for borrowing.
The interest rates for revolving loans under the Credit Agreemen t are variable based on the daily simple or term SOFR, plus a 10-basis point credit spread adjustment, or an alternate base rate, in each case plus a margin for borrowing. A commitment fee accrues on the average daily unused portion of the revolving credit facility. The margin for revolving borrowings and commitment fee rate are determined based on the Company's consolidated total net leverage ratio (as measured by a consolidated funded indebtedness, less the aggregate amount of unrestricted cash up to a maximum amount not to exceed $150.0 million, to consolidated EBITDA ratio). As of December 31, 2025, the margin for borrowing based on SOFR was set at 1.75% and the commitment fee rate was set at 0.30%.
The revolving credit facility portion of the Credit Agreement requires the maintenance of certain ratios related to leverage and interest coverage. As of December 31, 2025, we were in compliance with all such financial covenants. Borrowings under the Credit Agreement are guaranteed by certain domestic subsidiaries of the Company. On October 1, 2024, we collateralized our obligations under the Credit Agreement with substantially all of our and our subsidiary guarantors' personal property (with certain exceptions).
On June 17, 2025, we entered into Amendment No. 2 to the Credit Agreement, which established a new class of term loans (the "2025 Refinancing Term Loan") in an aggregate principal amount of $698.3 million. We used the 2025 Refinancing Term Loan's net proceeds, together with cash on hand, to satisfy the outstanding balance under the 2024 Term Loan. The 2025 Refinancing Term Loan requires, among other things, (i) mandatory prepayments from excess cash flow on an annual basis, commencing with the fiscal year ending December 31, 2025, (ii) mandatory prepayments with proceeds of certain asset sales and debt issuances, and (iii) quarterly principal amortization payments in an amount equal to 0.25% of the 2024 Term Loan. The 2025 Refinancing Term Loan has a maturity date of October 1, 2031. The interest rate for the 2025 Refinancing Term Loan is based on SOFR plus 2.00% per year, or an alternate base rate, plus 1.00% per year. If the 2025 Refinancing Term Loan is prepaid in connection with a repricing transaction or we effect any amendment to the Credit Agreement resulting in a repricing transaction, in either case within six months after the initial funding of the 2025 Refinancing Term Loan, there is a 1.0% premium on such prepaid amount or on the amount outstanding at the time such repricing transaction amendment becomes effective. Otherwise, the 2025 Refinancing Term Loan is prepayable at any time without premium or penalty (other than customary SOFR-related breakage costs). The 2025 Refinancing Term Loan is guaranteed by the same subsidiaries of the Company that guarantee our revolving credit facility, and the 2025 Refinancing Term Loan is secured on a pari passu basis with our revolving credit facility. During the year ended December 31, 2025, without premium or penalty, the Company prepaid $156.5 million of the outstanding principal balance on the 2025 Refinancing Term Loan.
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On August 26, 2024, the Company issued $600.0 million aggregate principal amount of 6.875% 2024 Notes that mature in August 2032. Interest on the 2024 Notes is payable semiannually in February and August. In April 2021, the Company issued $400.0 million aggregate principal amount of 4.375% senior unsecured notes (the "2021 Notes", and together with the 2024 Notes, the "Senior Notes") that mature in April 2029. Interest on the 2021 Notes is payable semiannually in April and October. The Senior Notes are senior unsecured obligations of the Company and are guaranteed on a senior unsecured basis by each of the Company’s domestic subsidiaries that is a guarantor under our Credit Agreement. The terms of each indenture governing the Senior Notes, among other things, limit the ability of the Company and each of its subsidiaries to create liens on assets, enter into sale and leaseback transactions, and consolidate, merge or transfer all or substantially all of its assets and the assets of its subsidiaries. The terms of each indenture also limit the ability of the Company’s non-guarantor subsidiaries to incur certain types of debt.
We believe, based on our current business plans, that our existing cash, available liquidity, and cash flow from operations will be sufficient to fund necessary capital expenditures and operating cash requirements for the foreseeable future.
Repurchase Program
In December 2024, the Board authorized a $50.0 million share repurchase program effective January 1, 2025 through December 31, 2026 to replace an expiring program of the same amount. For the year ended December 31, 2025, the Company did not repurchase any shares, leaving the full amount of the $50.0 million authorization available as of December 31, 2025. Under the previous program, the Company did not repurchase any shares during the year ended December 31, 2024, and repurchased 200,000 shares at a cost of $13.8 million during the year ended December 31, 2023. See Note 1. "Overview and Summary of Significant Accounting Policies" to the Consolidated Financial Statements.
Derivative Instruments
In December 2018, the Company entered into a $100.0 million interest rate swap instrument, effective as of January 2, 2019, to reduce the effect of changes in the variable interest rates associated with the first $100.0 million of borrowings under the Company's committed credit facility. In conjunction with the replacement of LIBOR with SOFR as a benchmark for borrowings under our credit facility, on July 1, 2023 the swap instrument transitioned from LIBOR to SOFR. The instrument effectively fixed the SOFR component of borrowings under our credit facility at a monthly rate of 2.71% until such instrument's termination. The interest rate swap instrument expired in October 2023 and no new interest rate swap instrument has been entered into in connection with the 2025 Refinancing Term Loan. See Note 7. "Debt" to the Consolidated Financial Statements.
Stock-Based Compensation
We have a stock-based compensation plan for our directors, officers, and employees. See Note 12. "Stock Based Compensation" to the Consolidated Financial Statements.
Employee Retirement Plans
In 2025, we sponsored an employee savings plan under the 401(k) plan that covered substantially all employees and included a company matching contribution and an annual contribution for certain eligible employees, with the investment of the funds directed by the participants. The Company also contributed to various multiemployer defined benefit pension plans under the terms of collective-bargaining agreements that covered certain union-represented employees at five of our facilities. See Note 10. "Employee Retirement Plans" to the Consolidated Financial Statements.
Contractual Obligations and Commercial Commitments
As of December 31, 2025, we had the following contractual obligations and commercial commitments:
Contractual Obligations and Commercial Commitments
Total
Next 12 Months
Beyond 12 Months
(in millions)
Debt
Operating leases
Finance leases
Obligations for purchase of goods and services
Total
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In the normal course of business, at December 31, 2025, the Company was contingently liable for $198.0 million in surety bonds, which guarantee the Company's own performance and are required by certain states and municipalities and their related agencies. The Company has indemnified the underwriting insurance companies against any exposure under the surety bonds. The Company is not aware of any circumstances that would result in material claimsagainst these bonds. See Note 14. "Commitments and Contingencies" to the Consolidated Financial Statements.
Critical Accounting Policies and Estimates
MD&A discusses our Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.
On an on-going basis, management evaluates its estimates and judgments based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
Our accounting policies are more fully described in Note 1 to the Consolidated Financial Statements. We believe the following critical accounting policies include our more significant judgments and estimates used in the preparation of our Consolidated Financial Statements.
Business Combinations
We account for business combinations under the acquisition method of accounting. As of the date that control in the entity is obtained, the purchase price of the transaction is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values. The purchase price is determined based on the fair value of consideration transferred to and liabilities assumed from the seller as of the date of acquisition. Goodwill is recorded for the excess of the purchase price over the net fair value of the identifiable assets acquired and liabilities assumed. The determination of the acquisition date fair value of the assets acquired and liabilities assumed requires management's judgment and involves the use of significant estimates and assumptions, especially with respect to future expected cash flows and discount rates.
We commonly use an excess earnings method to value acquired mineral reserves and separately identifiable intangible assets, which may include, but are not limited to, customer relationships, permits, and backlog. Significant assumptions used in the valuation of these types of assets may include projected revenues, production costs, capital requirements, customer attrition rates, and discount rates. Changes in the assumptions used could have a significant impact on the estimated acquisition date fair value of the related asset and any future depreciation, depletion, or amortization expense.
The estimated remaining useful lives of acquired tangible and definite-lived intangible assets are based on the length of time that the assets are expected to provide value to the Company and have a significant impact on current and future period earnings.
Management's estimates of fair value are based on assumptions believed to be reasonable, but which are inherently uncertain and, as a result, actual results may differ from estimates. We may adjust the amounts recognized in an acquisition during a measurement period after the acquisition date. Any such adjustments are the result of subsequently obtaining additional information that existed at the acquisition date regarding the assets acquired or the liabilities assumed. Measurement period adjustments are generally recorded as increases or decreases to goodwill, if any, recognized in the transaction. The cumulative impact of measurement period adjustments on depreciation, amortization, and other income statement items are recognized in the period the adjustment is determined.
Acquisition costs are expensed as incurred and are included in selling, general, and administrative expenses in the accompanying Consolidated Statements of Operations. We include results of operations from acquired businesses in our Consolidated Financial Statements from the effective date of the acquisition.
Long-lived Assets
As of December 31, 2025, property, plant, and equipment, net and intangible assets, net represent 42% and 6% of the Company's total assets, respectively. The methods for recognition of depreciation, depletion, and amortization are based on estimates regarding the expected future economic benefit to the Company.
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Property, plant, and equipment are stated at cost and depreciated or depleted over their estimated useful lives, primarily using the straight-line method. Depletion of mineral reserves is calculated based on estimated reserves using the units-of-production method on a quarry-by-quarry basis. See Note 1. "Overview and Summary of Significant Accounting Policies" to the Consolidated Financial Statements for additional information regarding the ranges of estimated useful lives by category of property, plant, and equipment and intangible assets.
We periodically evaluate the carrying value of long-lived assets for potential impairment whenever facts and circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. The carrying value of long-lived assets is considered impaired when the carrying value is not recoverable through undiscounted future cash flows and the fair value of the asset or asset group is less than their carrying value. Fair value is determined primarily using the estimated future cash flows discounted at a rate commensurate with the risks involved or market quotes as available. Significant estimates and judgments that most significantly impact the impairment analysis may include projected revenues, operating profit, and the remaining useful life over which the asset or asset group is expected to generate cash flows. Any potential impairment to the value of such assets could be significant.
Impairmentlosses on long-lived assets held for sale are determined in a similar manner, except that estimated fair values are reduced by the estimated cost to dispose of the assets.
The Company recorded impairments of $1.6 million and $5.8 million during the years ended December 31, 2025 and 2024, respectively, related to plant closures in our Construction Products segment. The Company had no impairment charges during the year ended December 31, 2023.
Goodwill
Goodwill is required to be tested for impairment annually or on an interim basis whenever events or circumstances change indicating that the carrying amount of the goodwill might be impaired. The quantitative goodwill impairment test is assessed at the “reporting unit” level by comparing the reporting unit's estimated fair value with the carrying amount of its net assets. If the carrying value of the reporting unit exceeds its fair value, an impairmentloss is recognized. The goodwill impairment is measured as the excess of the reporting unit's carrying value over its fair value, not to exceed the amount of goodwill allocated to the reporting unit. The estimates and judgments that most significantly affect the fair value calculations consist of level three inputs related to revenue and operating profit growth and discount rates. The Company performs its annual goodwill impairment analysis as of October 1 of each year.
As of December 31, 2025, goodwill totaled $1,348.9 million. Based on the Company's annual goodwill impairment test, performed at the reporting unit level as of October 1, 2025, the Company concluded that no impairment charges were determined to be necessary and that none of the reporting units evaluated were at risk of failing the goodwill impairment test. A reporting unit is considered to be at risk if its estimated fair value does not exceed the carrying value of its net assets by 10% or more. See Note 1. "Overview of Summary of Significant Policies" and Note 6. "Goodwill and Other Intangible Assets" to the Consolidated Financial Statements.
We believe that the assumptions used in our impairment analysis are reasonable; however, given the uncertainties of the economy and its potential impact on our businesses, there can be no assurance that our estimates and assumptions regarding the fair value of our reporting units will prove to be accurate predictions of the future. Additionally, variations in any of these assumptions may result in different calculations in fair value that could result in an impairment charge.
A 100 basis point increase in the discount rate or reduction in the terminal growth rate would not have resulted in an impairment of goodwill for any of our reporting units as of October 1, 2025.
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Income Taxes
The liability method is used to account for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax bases and other tax attributes using currently enacted tax rates. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the provision for income taxes in the period that includes the enactment date. Management is required to estimate the timing of the recognition of deferred tax assets and liabilities, make assumptions about the future deductibility of deferred tax assets, and assess deferred tax liabilities based on enacted law and tax rates for the appropriate tax jurisdictions to determine the amount of such deferred tax assets and liabilities. Changes in the calculated deferred tax assets and liabilities may occur in certain circumstances including statutory income tax rate changes, statutory tax law changes, or changes in the structure or tax status of the Company. The Company assesses whether a valuation allowance should be established against its deferred tax assets based on consideration of all available evidence, both positive and negative, using a more likely than not standard. This assessment considers, among other matters, the nature, frequency, and severity of recent losses; a forecast of future profitability; the duration of statutory carryback and carryforward periods; the Company’s experience with tax attributes expiring unused; and tax planning alternatives.
As of December 31, 2025, the Company's adjusted net deferred tax liability was $223.6 million. At December 31, 2025, the Company had $10.3 million of federal consolidated net operating loss carryforwards, primarily from businesses acquired, and $5.0 million of tax-effected state loss carryforwards remaining. In addition, the Company had $10.5 million of tax-effected foreign net operating loss carryforwards that will begin to expire in the year 2026. We have established a valuation allowance for state and foreign tax operating losses and credits that we have estimated may not be realizable.
For additional information, see Note 9. "Income Taxes" to the Consolidated Financial Statements.
Recent Accounting Pronouncements
See Note 1. "Overview and Summary of Significant Accounting Policies" to the Consolidated Financial Statements for information about recent accounting pronouncements.
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Forward-Looking Statements
This annual report on Form 10-K (or statements otherwise made by the Company or on the Company’s behalf from time to time in other reports, filings with the SEC, news releases, conferences, internet postings, or otherwise) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements contained herein that are not historical facts are forward-looking statements and involve risks and uncertainties. These forward-looking statements include expectations, beliefs, plans, objectives, future financial performances, estimates, projections, goals, and forecasts. Arcosa uses the words “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “intends,” “forecasts,” “may,” “will,” “should,” “plans,” and similar expressions to identify these forward-looking statements. Potential factors, which could cause our actual results of operations to differ materially from those in the forward-looking statements include, among others:
• the impact of pandemics, epidemics, or other public health emergencies on our sales, operations, supply chain, employees, and financial condition;
• market conditions and customer demand for our business products and services;
• the cyclical and seasonal nature of the industries in which we compete;
• variations in weather in areas where our construction products are sold, used, or installed;
• naturally occurring events and other events and disasters causing disruption to our manufacturing, product deliveries, and production capacity, thereby giving rise to an increase in expenses, loss of revenue, and property losses;
• competition and other competitive factors;
• our ability to identify, consummate, or integrate acquisitions of new businesses or products, or divest any business;
• the timing of introduction of new products;
• the timing and delivery of customer orders or a breach of customer contracts;
• the credit worthiness of customers and their access to capital;
• product price changes;
• changes in mix of products sold;
• the costs incurred to align manufacturing capacity with demand and the extent of its utilization;
• the operating leverage and efficiencies that can be achieved by our manufacturing businesses;
• availability and costs of steel, component parts, supplies, and other raw materials;
• changing technologies;
• adoption and use of AI and machine learning technology;
• surcharges and other fees added to fixed pricing agreements for steel, component parts, supplies and other raw materials;
• increased costs due to inflation or tariffs;
• interest rates and capital costs;
• counter-party risks for financial instruments;
• our indebtedness or leverage levels;
• long-term funding of our operations;
• taxes;
• costs and availability of sufficient insurance coverage;
• material nonpayment or nonperformance by any of our key customers;
• the stability of the governments and political and business conditions in certain foreign countries, particularly Mexico;
• public infrastructure expenditures;
• changes in import and export quotas and regulations;
• business conditions in emerging economies;
• costs and results of litigation;
• changes in accounting standards or inaccurate estimates or assumptions in the application of accounting policies;
• legal, regulatory, and environmental issues, including compliance of our products with mandated specifications, standards, or testing criteria and obligations to remove and replace our products following installation or to recall our products and install different products manufactured by us or our competitors;
• actions by the executive and legislative branches of the U.S. government relative to federal government budgeting, taxation policies, government expenditures, U.S. borrowing/debt ceiling limits, and trade policies, including tariffs, and border closures;
• our ability to sufficiently protect our intellectual property rights;
• our ability to mitigate against cybersecurity incidents, including ransomware, malware, phishing emails, and other electronic security threats;
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• if the Company's sustainability efforts are not favorably received by stockholders;
• if the Company does not realize some or all of the benefits expected from certain provisions of the IRA, including due to the modification or termination of the AMP tax credits for wind towers and due to changes in demand for wind towers resulting from modifications in tax incentives;
• costs and challenges in expanding existing business and identifying new organic growth opportunities; and
• the delivery or satisfaction of any backlog or firm orders.
Any forward-looking statement speaks only as of the date on which such statement is made. Arcosa undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made. For a discussion of risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see Item 1A. “ Risk Factors ” included elsewhere herein.
