Arcosa, Inc. (ACA)

Item 2. 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

•Recent Accounting Pronouncements

•Forward-Looking Statements

Our MD&A should be read in conjunction with the Consolidated Financial Statements of Arcosa, Inc. and its consolidated subsidiaries (“Arcosa,” “Company,” “we,” or “our”) and related Notes in Part I, Item 1 of this Quarterly Report on Form 10-Q and the Consolidated Financial Statements and related Notes in Item 8, “Financial Statements and Supplementary Data”, of our Annual Report on Form 10-K for the year ended December 31, 2025 (“2025 Annual Report on Form 10-K”).

Company Overview

Arcosa, headquartered in Dallas, Texas, is a provider of infrastructure-related products and solutions with leading positions in construction materials and engineered structures markets in North America. Arcosa is a Delaware corporation and was incorporated in 2018.

Market Outlook

•Within our Construction Products segment, market demand remains healthy overall when seasonal weather conditions have been normal, supported by 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.

•Within our Engineered Structures segment, our backlog for utility and related structures as of June 30, 2026 was $648.1 million, up 49% year to date, and provides strong production visibility for the remainder of 2026. In utility structures, order and inquiry activity continues to be very 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 have converted an idled wind tower facility to utility structures, which began delivering utility poles in the second quarter. Additionally, we plan to convert one of our existing wind tower facilities to utility structures in 2027.

•For our wind towers business, market demand has historically been impacted by the level of federal tax credits available. The One Big Beautiful Bill Act ("OBBBA"), which was enacted on July 4, 2025, terminates the AMP tax credit for wind towers sold after 2027. Also, under the OBBBA, wind farm projects that began construction after July 4, 2026, and are not placed in service before the end of 2027, will not be eligible for the Production Tax Credit ("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. As of June 30, 2026, our backlog for wind towers was $537.4 million and we expect to recognize 28% during the remainder of 2026.

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Executive Overview

Recent Developments

On June 21, 2026, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") by and among the Company, CRH Americas, Inc., a Delaware corporation ("CRH"), and Neon Merger Sub, Inc., a Delaware Corporation and a wholly owned subsidiary of CRH ("Merger Sub"). Pursuant to the Merger Agreement, and subject to the terms and conditions set forth therein, Merger Sub will merge with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly owned subsidiary of CRH. On the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger ("Effective Time"), each share of Company common stock, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time will be automatically converted into the right to receive $150.00 in cash, without interest and subject to applicable withholding taxes (the “Merger Consideration”).

The consummation of the Merger is subject to the satisfaction or waiver of customary closing conditions, set forth in the Merger Agreement, among other things, including approval by the Company's stockholders and the receipt of required regulatory approvals. If the Merger is consummated, the Company's common stock will be delisted from the New York Stock Exchange and NYSE Texas and deregistered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The transaction is expected to close in the first quarter of 2027. See Note 1. "Overview and Summary of Significant Accounting Policies" to the Consolidated Financial Statements for additional information about the Merger.

On April 1, 2026, the Company completed the sale of its barge business to an affiliate of Wynnchurch Capital, L.P., for $450 million. Net cash proceeds received at closing were approximately $429.9 million, along with a receivable of $10 million related to escrow, after transaction closing costs. In April 2026, the Company used $83.0 million of the cash proceeds to prepay a portion of the outstanding 2025 Refinancing Term Loan. The sale resulted in a pre-tax gain of $359.7 million, which is presented within income from discontinued operations, net of income taxes on the Consolidated Statements of Operations. Previously reported in the Transportation Products segment, the barge business is a leading manufacturer of inland barges, fiberglass barge covers, winches, and marine hardware located along the U.S. inland river systems. The results of operations and cash flows for the three and six months ended June 30, 2026 have been classified as discontinued operations. Results of prior periods have been recast to reflect these changes and present results on a comparable basis. Since there are no remaining operations, the Transportation Products segment is no longer presented as a reportable segment. Unless indicated otherwise, the information in MD&A relates to the Company's continuing operations.

Financial Operations and Highlights

•Revenues for the three and six months ended June 30, 2026 increased by 1.7% and 3.0% to $658.7 million and $1,230.4 million, respectively, from the same periods in 2025.

•Operating profit for the three and six months ended June 30, 2026 increased by $2.3 million and $8.4 million, respectively, to $84.3 million and $131.4 million, respectively, compared to the same periods in 2025.

•Selling, general, and administrative expenses increased by 27.3% and 17.0% for the three and six months ended June 30, 2026, respectively, compared to the same periods in the prior year, driven by higher acquisition and divestiture-related expenses, including those related to the proposed Merger, and compensation-related costs. As a percentage of revenues, selling, general, and administrative expenses were 13.5% and 13.4% for the three and six months ended June 30, 2026, respectively, compared to 10.8% and 11.8% for the same periods in 2025, respectively.

•Interest expense for the three and six months ended June 30, 2026 totaled $23.1 million and $47.1 million, respectively, a decrease of $5.4 million and $9.7 million, respectively, from the same period in 2025.

•The effective tax rate from continuing operations for the three and six months ended June 30, 2026 was 18.3% and 14.6%, respectively, compared to 11.4% and 13.0%, respectively, for the same periods in 2025.

•Net income from continuing operations for the three and six months ended June 30, 2026 was $50.9 million and $74.2 million, respectively, compared to $50.5 million and $62.1 million, respectively, for the same periods in 2025.

Our Engineered Structures segment operates 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 June 30, 2026, December 31, 2025, and June 30, 2025, our unsatisfied performance obligations, or backlog, were as follows:

In our Engineered Structures segment, 71% of the unsatisfied performance obligations for our utility and related structures are expected to be recognized during 2026, 20% are expected to be recognized in 2027, with the remainder expected to be recognized through 2029. For our wind towers business, 28% of the unsatisfied performance obligations for wind towers are expected to be recognized during 2026, 66% are expected to be recognized in 2027, with the remainder expected to be recognized in 2028.

Results of Operations

Overall Summary

Revenues

2026 versus 2025

•Revenues increased by 1.7% and 3.0% during the three and six months ended June 30, 2026, respectively.

•Revenues from Construction Products increased slightly primarily due to higher revenues in our trench shoring business.

•Revenues from Engineered Structures increased due to higher revenues in our utility structures business, partially offset by lower revenues in our wind towers, telecom and lighting businesses.

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Operating Costs

(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.

2026 versus 2025

•Operating costs increased by 1.6% and 2.5% during the three and six months ended June 30, 2026, respectively.

•Operating costs for Construction Products increased primarily due to increased trench shoring volumes and higher costs in specialty materials and asphalt.

•Operating costs for Engineered Structures decreased slightly as higher volume-related costs in utility structures were largely offset by lower volume-related costs in wind towers.

•Depreciation, depletion, and amortization expense increased p

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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.

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:

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

2025 versus 2024

•Revenues increased by 12.2%.

•Revenues from Construction Products increased primarily due to the contribution from the acquired Stavola busine

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