Updated 2026 Revenue Guidance Rises as New Frontier and Quikrete Support Margin Pace

Updated 2026 Revenue Guidance: “Puts and Takes” (New Frontier + Quikrete, margins, and pace)

1) What changed in the 2026 revenue guide (and what was reiterated)

• Management raised full-year 2026 revenue guidance to $7.2B–$7.4B. ¹
• The company reaffirmed full-year adjusted EBITDA from continuing operations guidance of $2.36B–$2.5B (and noted this guidance does not include contributions from the pending LNA transaction). ¹
• In the Q2 discussion, management framed the update as taking the revenue guide up $140M at the midpoint while reiterating the EBITDA range. ²

Interpretation: The update is a revenue-up / EBITDA-neutral (at least at the range level) story—i.e., management is confident it can translate incremental revenue into acceptable profitability despite mix and cost headwinds. ²¹

2) The major “put”: contributions from New Frontier and Quikrete that help earnings despite diesel

A. New Frontier (NFM)

• Management stated that the contributions to EBITDA from New Frontier should largely offset continued elevated diesel costs. ³
• NFM’s contribution is also explicitly tied to the timing/pace of realization of midyear increases in NFM markets: strong realization is expected in August 1 for New Frontier, setting up momentum into January 1 in those markets. ³
• On the reporting optics: because NFM is rolling through over the back half, headline/reported metrics are expected to be lower versus Q2 since the company had only 45 days of New Frontier in Q2. ⁴

B. Quikrete

• For Quikrete, management highlighted strong realization of midyear increases in Quikrete markets with July 1 pacing, and continued momentum into January 1 in those markets. ³
• On valuation/earnings mechanics: management emphasized that the fair market value step-up impacts are largely behind them in the back half—“most of it for Quikrete”—leaving only residual impacts in July (and maybe into August). ⁵

Interpretation: The “puts and takes” behind the guide update are largely about (1) acquisitions supporting volume and realization schedules, (2) offsetting diesel inflation through NFM’s EBITDA contribution, and (3) improved earnings “cleanliness” in the back half as purchase accounting effects fade. ³⁵

3) The major “take”: mix/ASP optics and why reported revenue/margins can look worse even if underlying performance is strong

A. Pricing direction: shipments high-end, but ASP towards the low end (mix + geographic/product)

• Management characterized the outlook as shipments trending toward the high end while pricing is moving toward the lower end of the range. ⁶
• Year-to-date, they reported organic volumes up 4.3% and stated this supports the view that organic volumes should trend toward the high end of the original guide. ³
• On ASP: management said organic ASP is towards the low end; they also noted mix-adjusted pricing was 4% in the quarter, but that mathematically it’s difficult to reach the higher end even with midyears. ³
• They also provided a nuance: headline ASP optics are distorted by acquisition mix; what matters is mix-adjusted pricing trending toward ~4%. ⁴

B. Why reported metrics lag (inventory step-ups, and acquisition mix diluting headline ASP)

• For headline versus underlying economics, management explained that the optics can be misleading because of acquisition mix (e.g., New Frontier ASP around $12/ton and Quikrete ASP below the company average). ⁷
• On the margin bridge issue: reported aggregates gross profit was negatively impacted by a $52M noncash inventory step-up charge, and management indicated that with most fair value inventory charges now behind them, they expect only modest residual impacts on aggregates gross profit for the balance of the year, so reported results align more closely with underlying economics. ⁸

Interpretation: The guide uplift is not “all gain, no noise.” Reported pricing and gross profit can show headwinds due to acquisition mix and purchase accounting effects, but management believes underlying performance is solid and that the back half becomes more representative as step-ups fade. ³⁵⁸

4) Margin and cost mechanics behind the pace: what management expects to sustain (and what’s fading)

A. Cost of goods sold (COGS) and diesel/energy

• Management reported organic COGS up 3% year-to-date after stating they would not change the COGS guide because they are “pulling certain levers” via network optimization, targeting 3% COGS per ton. ⁹
• They also stated they felt confident about the back half because they are lapping COGS-per-ton elevated comps from last year’s second half. ⁹
• They reiterated that when looking at the organic business, the only COGS line items up year-over-year per ton were energy directly or energy-derived (including internal rail freight to terminals); other categories (labor, repairs, contract services, plant overhead) were down year-over-year per ton. ¹⁰

B. “Back-half cleanliness”: fair value step-ups largely done

• Management explicitly said that aggregate gross profit will be much cleaner in the back half, notwithstanding New Frontier impacts, because fair market value step-up is largely behind them for Quikrete and mostly for New Frontier, with residual impacts into July (and maybe into August). ⁵

C. Specialties margins help smooth total results (and are not highly seasonal)

• Management’s specialties segment is described as not highly seasonal, with modeling described as straightforward and an assumption that ~$50M of gross profit can be applied pro rata across Q3 and Q4. ⁹
• They also cited strong Q2 specialties performance: record quarterly revenues of $152M and gross profit of $50M, reflecting both a July 2025 Premier Magnesia acquisition and organic pricing gains. ¹¹

Interpretation: The pace of margins improving in the back half is driven by: (1) purchase accounting effects fading, (2) controllable cost actions keeping COGS aligned with a ~3% plan even under elevated energy, and (3) specialties providing steady gross profit across Q3–Q4. ⁵⁹¹¹

5) The pace of realization: what months matter (Quikrete vs New Frontier vs heritage)

• Quikrete midyear: management expects strong momentum starting July 1, then setting up January 1 in those markets. ³
• New Frontier midyear: management expects strong momentum starting August 1, then setting up January 1 in those markets. ³
• Heritage quoted work / pricing realization: management said rollout of Precise IQ is complete (quoting tool + algorithm in reps’ hands) and it should drive new quoted work coming through at higher ASPs with the algorithm accounting for elevated inflation. ³
• Management also said the company is not betting energy improves: taking a conservative view on the cost approach for the rest of the year. ⁶

Interpretation: The revenue guide update appears to reflect confidence that incremental revenue will be supported by scheduled pricing/midyear resets and operational execution, while margins should largely track due to controllable cost actions and the back-half “cleanliness” effect. ³⁶⁵

6) Summary: puts vs takes behind the updated 2026 revenue guidance

Puts (what supports the uplift and/or cushions margins)

• Revenue guidance increased to $7.2B–$7.4B (midpoint +$140M) while EBITDA range was reiterated. ¹²
• NFM EBITDA contribution largely offsets elevated diesel costs, reducing downside risk from energy inflation. ³
• Organic volumes up 4.3% YTD, implying shipments trending toward the high end of the range. ³
• Back-half gross profit “cleaner” as fair value step-ups largely recede (mostly Quikrete; largely behind them for New Frontier with residual into July/August). ⁵
• Specialties modeling support: not highly seasonal; management indicated ~$50M gross profit pro rata for Q3–Q4. ⁹

Takes (what could pressure reported revenue/ASP and margins despite underlying strength)

• Pricing/mix optics: guidance setup reflects ASP toward the low end and the expectation that reported/headline numbers look lower in the back half versus Q2 due to the shorter Q2 NFM period (only 45 days). ³⁴
• Headline dilution from acquisitions: reported pricing can be held back by acquisition mix because New Frontier and Quikrete ASPs differ from the heritage average. ⁷
• Purchase accounting and noncash inventory step-ups: reported gross profit was impacted by a $52M noncash inventory step-up charge, and management had to bridge to adjusted/underlying metrics. ⁸¹²

Net effect on pace/margins

• The company expects COGS growth to remain controlled (targeting ~3% COGS per ton) via network optimization even with elevated diesel/energy. ⁹
• Margins should be supported by cleaner back-half accounting, controlled cost execution, and steady specialties gross profit, despite reported pricing being “noisy” due to acquisition mix and purchase accounting effects. ⁵⁹¹¹

If you’d like, I can translate this into a simple Q3/Q4 pacing model (revenue and gross profit drivers) strictly based on the qualitative/quantitative guide logic provided here.