Breaking Down Great Lakes Dredge & Dock Corporation (GLDD) Financial Health: Key Insights for Investors

If you are looking at Great Lakes Dredge & Dock Corporation (GLDD), the Q3 2025 results show a clear inflection point, but you defintely need to understand the moving parts. The company delivered a strong quarter, with net income more than doubling year-over-year to $17.7 million on revenue of $195.2 million, driven by high utilization and a focus on higher-margin capital projects. Here's the quick math: their Adjusted EBITDA hit $39.3 million for the quarter, and management is projecting 2025 to be the highest EBITDA year in company history by a large margin. Still, the dredging backlog stood at $934.5 million as of September 30, 2025, a slight drop from the $1.0 billion seen in Q2, which is a number to watch as the bid market normalizes to around $1.8 billion. The opportunity is clear, though, with the new $430 million revolving credit facility strengthening the balance sheet and the new fleet additions like the Amelia Island hopper dredge and the Acadia subsea rock installation vessel positioning them for major LNG and offshore wind work well into 2026.

Revenue Analysis

You need to know where the money is coming from to gauge Great Lakes Dredge & Dock Corporation (GLDD)'s stability, and the story is solid: their trailing twelve-month (TTM) revenue ending Q3 2025 hit a strong $834.60 million. That's a clear signal that their core business is firing on all cylinders, and they expect 2025 to be the highest EBITDA year in company history by a large margin.

The primary revenue stream for Great Lakes Dredge & Dock Corporation is, unsurprisingly, dredging. This isn't just one type of work, though; it breaks down into three main, distinct services. The mix of these services is what drives the higher margins we are seeing. Honestly, the shift in project mix is the most important thing to watch right now.

• Capital Projects: Deepening ports and waterways for larger vessels, like the major Liquefied Natural Gas (LNG) projects.
• Coastal Protection: Beach nourishment and restoration, often federally funded.
• Maintenance Dredging: Keeping existing channels navigable for the U.S. Army Corps of Engineers.

Segment Contribution and Project Mix

The company's focus on higher-margin work is defintely paying off. As of September 30, 2025, the dredging backlog stood at a substantial $934.5 million. Here's the quick math on where that future revenue is concentrated: Capital and coastal protection projects account for over 84% of that backlog. That high-margin concentration provides excellent revenue visibility well into 2026, plus the company has an additional $193.5 million in low bids and options pending award.

The major capital projects, specifically the LNG work like the Port Arthur LNG Phase 1 Project and the Brownsville Ship Channel Project, are key drivers. This is a significant change, moving away from a heavier reliance on lower-margin maintenance work to complex, high-value infrastructure projects.

Year-over-Year Growth and New Streams

We saw impressive growth through the first three quarters of 2025. The TTM revenue of $834.60 million represents a solid 12.53% increase year-over-year. Looking at the quarters, Q1 2025 revenue was $242.9 million, which was up a strong $44.2 million from Q1 2024. Even with four dredges undergoing regulatory drydocking in Q2, that quarter still pulled in $193.8 million, up from $170.1 million in Q2 2024.

The company is also strategically building a new revenue stream in the offshore energy sector. This is a major change. They are investing heavily in new assets, like the Acadia, the first U.S.-flagged, Jones Act-compliant subsea rock installation vessel, which is set to commence operations in Q1 2026. This new segment already has a backlog of $73.0 million as of September 30, 2025, up from $44.9 million at the end of 2024. This diversification is crucial for long-term growth and mitigating risk in the cyclical dredging market. Exploring Great Lakes Dredge & Dock Corporation (GLDD) Investor Profile: Who's Buying and Why?

Here's a snapshot of the quarterly revenue performance:

What this estimate hides is the potential for Q4 to push the full-year revenue even higher, given the strong backlog and high utilization of the newly delivered Amelia Island hopper dredge.

Profitability Metrics

You need to know if Great Lakes Dredge & Dock Corporation (GLDD) is actually keeping more of each dollar, and the Q3 2025 numbers defintely show a strong move in the right direction. The company's focus on higher-margin capital projects is paying off, pushing the Gross Profit Margin to a robust 22.4% for the quarter, which is a significant jump year-over-year. This margin expansion signals solid operational control and better project selection.

Here's the quick math on the third quarter, which ended September 30, 2025. With revenue at $195.2 million, the company's ability to manage project costs is clearly visible, translating directly into a healthier bottom line for shareholders.

Trends in Profitability and Operational Efficiency

The trend over the last year is what really matters. Great Lakes Dredge & Dock Corporation's Q3 2025 Gross Profit Margin of 22.4% is a meaningful increase from the 19.0% achieved in the third quarter of 2024. This margin expansion isn't accidental; it's a function of improved vessel utilization and better project mix. Operating income, which is profit before interest and taxes, also jumped to $28.1 million, up substantially from $16.7 million in the prior-year quarter.

The biggest driver is the shift toward capital and coastal protection projects, which typically yield higher margins than routine maintenance work. Over 84% of the dredging backlog, which stood at $934.5 million as of September 30, 2025, is in these higher-margin categories. This backlog gives strong revenue visibility well into 2026, so the margin strength should continue. This is a capital-intensive business, and high utilization is the key to cost management.

• Q3 2025 Net Income of $17.7 million more than doubled the $8.9 million from Q3 2024.
• Nine-month Net Income for 2025 reached $60.84 million, showing strong year-to-date performance.
• The company's strategic focus on the offshore energy sector, detailed in their Mission Statement, Vision, & Core Values of Great Lakes Dredge & Dock Corporation (GLDD), is also contributing to the margin strength.

Industry Comparison: Outperforming Peers

When you look at the broader construction industry, Great Lakes Dredge & Dock Corporation's profitability metrics are strong. Dredging is a specialty contractor niche, and for this group, the industry benchmark for Gross Profit Margin is typically between 15% and 25%. At 22.4%, GLDD is operating near the high end of this range.

The average Net Profit Margin for the general construction sector in 2025 is around 5-6%, with a healthy target being 8-10%. Great Lakes Dredge & Dock Corporation's Q3 2025 Net Profit Margin of approximately 9.07% puts it right in the healthy, top-tier range for the industry. To be fair, this is a cyclical business, but current performance shows management is executing well on high-value contracts. The U.S. construction industry average P/E ratio is much higher, around 34.6x, so GLDD's lower trailing P/E of 11.10 suggests the market may not yet fully price in this improved margin profile.

Debt vs. Equity Structure

When you look at a capital-intensive business like Great Lakes Dredge & Dock Corporation (GLDD), the debt-to-equity mix is crucial. It tells you how the company is funding its massive fleet and large-scale projects, and honestly, it's a great indicator of management's risk appetite. A construction or dredging company needs to carry debt to finance equipment, but the key is keeping that leverage manageable.

As of September 30, 2025, Great Lakes Dredge & Dock Corporation's total equity stood at $502.1 million. This strong equity base is what backs the debt. Their total long-term debt was $415.3 million, and by calculating the difference between their total debt ($486.6 million) and long-term debt, we see their short-term debt is approximately $71.3 million. This is a sizable debt load, but in this industry, that's just the cost of doing business.

Here's the quick math on their leverage:

• Total Debt to Equity Ratio: 96.91% (or 0.97:1).
• Long-Term Debt to Equity Ratio: 82.71%.

This ratio is a solid sign of financial health. For the 'Heavy Construction Other Than Building Construction Contractors' industry, the median debt-to-equity ratio in 2024 was around 1.88, and a healthy range for construction companies in 2025 is typically between 0.5 and 1.5. Great Lakes Dredge & Dock Corporation's 0.97:1 ratio is well below the industry median and is preferred by lenders and sureties, who generally like to see a ratio under 1.0.

The company recently made a smart move to optimize its debt structure. In October 2025, Great Lakes Dredge & Dock Corporation completed a major refinancing, which demonstrates their ability to access favorable credit markets.

• They upsized their revolving credit facility (a flexible line of credit) by $100 million to a total of $430 million.
• They used this new capacity to immediately repay the $100 million second-lien notes issued in 2024.
• This transaction is expected to save the company an estimated $6 million annually in interest expenses due to the lower interest rate.

This refinancing drastically improved their maturity profile; they now have no debt maturities until 2029, and their weighted average interest rate on total debt is now comfortably under 6%. This balance of debt financing for capital expenditures-like their completed new build program-and a strong equity base shows a thoughtful, long-term approach to funding growth. They are using debt to scale, but they are defintely not overextended. You can read more about their strategic direction here: Mission Statement, Vision, & Core Values of Great Lakes Dredge & Dock Corporation (GLDD).

Actionable Insight: The recent refinancing is a clear de-risking event. With no major debt due for four years and lower interest costs, the company is positioned to direct more cash flow toward operations and potential shareholder returns, rather than servicing expensive debt.

Liquidity and Solvency

You want to know if Great Lakes Dredge & Dock Corporation (GLDD) has the cash flow and balance sheet strength to weather a downturn and fund its growth. The short answer is yes, the company's liquidity position is strong, backed by significant available credit and a positive cash flow trend through the first nine months of 2025. This financial stability is defintely a key strength.

Current and Quick Ratios: A Mixed-Signal Reality

When you look at the standard liquidity measures-the Current Ratio and the Quick Ratio (Acid-Test Ratio)-you see a picture typical of a capital-intensive, project-based business. The Current Ratio, which measures current assets against current liabilities, was 1.22 for the fiscal year ending 2024. That means GLDD had $1.22 in easily convertible assets for every $1.00 in short-term debt, which is solid, though not spectacular.

The Quick Ratio, which strips out inventory (which is often less liquid for a dredging company), was 0.9x for the same period. This is slightly below the ideal 1.0x benchmark, but honestly, for a company like GLDD with high-value, long-term contracts, this isn't a red flag. The true story is in the available capital and cash flow.

Working Capital and Financial Flexibility

The working capital trend for Great Lakes Dredge & Dock Corporation is being managed conservatively, but the company's financial flexibility is excellent. At the end of the third quarter of 2025 (September 30, 2025), the company reported total liquidity near $300 million. This figure is more telling than the ratios alone, as it includes the full capacity of their revolving credit facility.

• Total Liquidity (Q3 2025): $284.1 million.
• Cash and Cash Equivalents (Q3 2025): $12.7 million.
• Revolving Credit Facility: Extended to $430 million with nothing drawn.

Here's the quick math: the company has a massive, untapped line of credit it can use for any immediate working capital needs or unexpected project costs. That's a huge cushion.

Cash Flow Statements Overview: Strong Operating Engine

The cash flow statement shows a healthy core business. Operating Cash Flow (OCF)-the cash generated from the company's normal dredging and marine activities-has been consistently strong throughout 2025, even with the typical quarterly volatility of a project-based firm.

The trend in OCF for the first three quarters of 2025 is: Q1 at about $60.9 million, Q2 at about $56.9 million, and Q3 at about $49.2 million. This positive cash generation is the engine funding the company's strategic fleet modernization.

When you look at Investing Cash Flow, the spending is high, which is expected. Total capital expenditures (CapEx) for Q3 2025 were $32.8 million, largely driven by the new build program, including the delivery of the Amelia Island hopper dredge. This is strategic investment, not maintenance panic.

On the Financing side, Great Lakes Dredge & Dock Corporation has been proactive, repaying $100 million of second-lien notes and extending its revolving credit facility to 2030. This move reduces annual interest expense by nearly $6 million, which is a smart way to strengthen the balance sheet and lower the cost of capital.

This is what the cash flow picture looks like for the first nine months of 2025:

Liquidity Strengths and Near-Term Concerns

The primary liquidity strength is the combination of positive Free Cash Flow, which totaled $52 million for the first nine months of 2025, and the substantial, undrawn credit facility. The company's management is confident, expecting to be 'significantly free cash flow positive starting in 2026'.

The main near-term risk isn't a liquidity crunch, but rather the project-based revenue volatility, which is inherent to the industry. Also, while the backlog is robust at $934.5 million as of September 30, 2025, any major project delay or cost overrun could temporarily pressure working capital. Still, the $430 million revolver is there to smooth out those bumps. You can read more about the company's strategic position in Breaking Down Great Lakes Dredge & Dock Corporation (GLDD) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking at Great Lakes Dredge & Dock Corporation (GLDD) and wondering if the market has it right. My take, based on the latest November 2025 data, is that GLDD appears undervalued compared to its near-term growth projections, but you have to be mindful of its historical volatility.

The stock closed recently at $11.66, and while it's down about 5.36% over the last 12 months, it has shown a positive year-to-date return of 3.28%. That short-term movement suggests recent investor interest, plus the stock is trading well off its 52-week high of $13.05. Honestly, the valuation multiples tell a compelling story of a company poised for a strong 2026.

Here's the quick math on the key valuation metrics:

• Price-to-Earnings (P/E) Ratio: GLDD's trailing P/E is 11.10. This is low, especially when you consider the forward P/E (based on next year's earnings estimates) is 16.90. The jump in the forward P/E signals analysts expect a significant dip in current-year earnings before a strong rebound, but the trailing P/E suggests current profitability is being priced cheaply.
• Price-to-Book (P/B) Ratio: At 1.78, this is a reasonable multiple for a capital-intensive business like dredging. It means the market values the company at less than twice the value of its net assets (equity), which isn't defintely a stretch for a company with valuable, specialized equipment.
• Enterprise Value-to-EBITDA (EV/EBITDA): The TTM (Trailing Twelve Months) EV/EBITDA is sitting at a healthy 7.37 as of November 2025. This metric (Enterprise Value, or total company value, divided by Earnings Before Interest, Taxes, Depreciation, and Amortization) is a great way to compare companies regardless of their debt structure. A value under 10 is often considered attractive in the construction and industrial services sector.

The consensus among Wall Street analysts leans toward a Buy rating. The average one-year price target is around $15.30, which implies a potential upside of over 31% from the current price of $11.66. Some analysts are even more bullish, setting a target as high as $17.00. This strong sentiment is grounded in the company's Q3 2025 results, which showed a net income of $17.7 million and an Adjusted EBITDA of $39.3 million.

A quick note on shareholder returns: GLDD does not currently pay a dividend. The dividend yield is 0.00%, and the payout ratio is 0.00. This isn't a red flag; it's a capital allocation decision. They are choosing to reinvest all earnings back into the business-funding new dredges and fleet modernization-instead of distributing cash. For a growth-oriented, cyclical business, that's a smart move to capture future infrastructure spending. What this estimate hides, of course, is the risk associated with project delays or government funding cycles, which can hit a pure-play like GLDD hard.

For a deeper dive into the company's financial stability, check out the full post: Breaking Down Great Lakes Dredge & Dock Corporation (GLDD) Financial Health: Key Insights for Investors

Risk Factors

You're looking at Great Lakes Dredge & Dock Corporation (GLDD) at a time when its financial footing looks strong, but you need to be a trend-aware realist about the sector-specific headwinds. The direct takeaway is this: while GLDD is projected to hit a record EBITDA year in 2025, its future revenue stability hinges on successful diversification away from its core government-funded dredging into the volatile offshore energy market.

The biggest external risk is the inherent uncertainty in their primary customer base-the U.S. government-and the emerging offshore wind sector. While management confirmed in November 2025 that the ongoing government shutdown had not impacted payments or bidding activity, the risk of future funding interruptions for the U.S. Army Corps of Engineers (Corps) projects is always present. Still, the expected 2025 bid market of approximately $1.8 billion is heavily focused on funded coastal protection and maintenance, which provides a near-term buffer.

• Offshore Wind Delays: Temporary pauses on major projects, like Equinor's Empire Wind 1 in April 2025, introduce revenue timeline uncertainty.
• Regulatory Competition: Expansion into international offshore wind markets with new vessels carries execution and competitive risks.
• Supply Chain Vulnerability: Delays and increased costs from specialized component supply chains remain a persistent operational threat.

Operationally, GLDD faces fleet utilization risks due to necessary maintenance. For the fourth quarter of 2025, for example, two hopper dredges are scheduled for regulatory dry dockings-a planned but costly downtime. This is a necessary expense, but it impacts the ability to utilize assets and generate revenue. To be fair, the Q3 2025 performance was strong, with revenue hitting $195.2 million and Adjusted EBITDA surging to $39.3 million, showing high utilization on other assets.

Here's the quick math on their recent health, which anchors the risk discussion:

The company's strategic mitigation is centered on its fleet modernization and diversification. The new subsea rock installation vessel, the Acadia, is the key to unlocking the offshore energy market, and management has defintely secured contracts that ensure its full utilization starting in 2026. This proactive shift is critical because it reduces reliance on the domestic dredging market's cyclical nature. Plus, they recently amended their revolving credit facility, upsizing it to $430 million and extending the maturity to 2030, which enhances their financial flexibility to weather any project delays or capital expenditure spikes. You can review the strategic priorities that drive these decisions in their Mission Statement, Vision, & Core Values of Great Lakes Dredge & Dock Corporation (GLDD).

Growth Opportunities

You want to know where Great Lakes Dredge & Dock Corporation (GLDD) is going, and the short answer is: offshore and deeper. The company is strategically moving beyond its core U.S. dredging work, which is still strong, to capture high-margin opportunities in the nascent U.S. offshore energy market, a move that will defintely drive revenue growth past 2025.

This shift is already visible in the financials. Analysts project full-year 2025 revenue to reach approximately $836.0 million, with an Earnings Per Share (EPS) consensus of $0.966. The company's confidence is high; management expects 2025 to be the highest EBITDA year in company history by a large margin. Here's the quick math: their dredging backlog stood at a substantial $934.5 million as of Q3 2025, with over 84% of that tied up in higher-margin capital and coastal protection projects. This gives them clear revenue visibility well into 2026.

• Offshore Energy: Diversifying into offshore wind and subsea infrastructure.
• Government Spending: Benefiting from major U.S. Army Corps of Engineers projects.
• Fleet Modernization: New, specialized vessels increase project capability and efficiency.

The biggest growth driver is market expansion into offshore energy. GLDD is leveraging its expertise to secure contracts like the rock installation for the Empire Wind I and Sunrise Wind projects. This is a crucial pivot, reducing reliance on the cyclical, U.S.-centric government funding. Plus, they are also involved in significant Liquefied Natural Gas (LNG) projects, including the largest dredging contract in their history for the Rio Grande LNG facility in Brownsville, Texas.

The company's competitive advantage is simple: they own the best tools for the job. GLDD operates the largest and most diverse fleet in the U.S. dredging industry, comprised of approximately 200 specialized vessels. This fleet, coupled with over 135 years of experience, makes them the go-to provider for complex capital dredging projects that competitors can't touch. They are the only U.S. company with a significant, specialized subsea rock installation vessel, the Acadia, which is slated to commence operations in early 2026 and is already securing contracts for full utilization.

The new build program is a key strategic initiative. The delivery of the Amelia Island hopper dredge in 2025, completing the new build program, solidifies their fleet's technological lead. This investment in new, more efficient vessels is what allows them to bid and execute complex, high-margin work. For a deeper look at the financial stability supporting this growth, you can check out our full analysis: Breaking Down Great Lakes Dredge & Dock Corporation (GLDD) Financial Health: Key Insights for Investors.

Analyst consensus points to an annual revenue growth rate of 4.8% over the next three years, a solid outlook considering the capital-intensive nature of the industry. The table below summarizes the key financial projections for 2025:

What this estimate hides is the potential upside from a fully utilized Acadia in the rapidly expanding offshore wind market, which could push those growth numbers higher. Still, the risk is project delays, especially in the nascent offshore wind sector, but GLDD's diversification strategy is a smart hedge against that.

Next Step: Finance should model a sensitivity analysis on the Acadia's utilization rate to quantify the potential revenue swing for 2026.