Vulcan Materials Company (VMC) Q3 2025 Earnings Call Transcript

Vulcan Materials Company (NYSE: VMC) Q3 2025 Earnings Call dated Oct. 30, 2025

Corporate Participants:

Mark D. Warren — Vice President, Investor Relations

J. Thomas Hill — Chairman and Chief Executive Officer

Ronnie A. Pruitt — Chief Operating Officer

Mary Andrews Carlisle — Senior Vice President and Chief Financial Officer

Analysts:

Trey Grooms — Analyst

Tyler Brown — Analyst

Garik Shmois — Analyst

Andrew — Analyst

Asher Sohnen — Analyst

Kathryn Thompson — Analyst

Jesse Barone — Analyst

Keith Hughes — Analyst

Brent Thielman — Analyst

Steven Fisher — Analyst

Angel Castillo — Analyst

Joe Nolan — Analyst

Adrian Huerta — Analyst

Ivan Yi — Analyst

Michael Dudas — Analyst

Presentation:

Operator

Good morning everyone. Welcome to the Vulcan Materials Company Third Quarter 2025 Earnings Call. My name is Bo, and I will be your conference call coordinator today. [Operator Instructions]

Now, I will turn the call over to your host, Mr. Mark Warren, Vice President of Investor Relations for Vulcan Materials. Please go ahead, sir.

Mark D. Warren — Vice President, Investor Relations

Thank you, operator. Joining me today are Tom Hill, Chairman and CEO; Ronnie Pruitt, Chief Operating Officer; and Mary Andrews Carlisle, Senior Vice President and Chief Financial Officer. Today’s call is accompanied by a press release and a supplemental presentation posted to our website, vulcanmaterials.com.

Please be advised that today’s discussion may include forward-looking statements, which are subject to risks and uncertainties. These risks, along with other legal disclaimers are described in detail in the company’s earnings release and in other filings with the Securities and Exchange Commission. Reconciliations of non-GAAP financial measures are defined and reconciled in our earnings release, supplemental presentation and other SEC filings.

During the Q&A, we ask that you limit your participation to one question. This will allow us to accommodate as many as possible during our time we have available.

And with that, I’ll turn the call over to Tom.

J. Thomas Hill — Chairman and Chief Executive Officer

Thank you, Mark, and thank all of you for joining our call this morning. Mary Andrews and I are happy to have Ronnie joining us today as we discuss the third quarter results and what lies ahead for the remainder of 2025 and moving into 2026.

The third quarter financial results clearly demonstrate the consistent solid execution of our teams across the footprint. Gross margin and unit profitability expanded in each segment and adjusted EBITDA margin expanded 310 basis points. Adjusted EBITDA of $735 million improved 27% compared to the prior year. Thankfully, this year, we were not confronted with the same extreme weather events as the prior year. Aggregate shipments increased 12% in the quarter, resulting in 3% higher shipments on a year-to-date basis. Aggregate’s cash gross profit per ton grew 9% in the quarter through a combination of commercial and operational execution. As anticipated, the prior year acquisitions and a higher percentage of base shipments contributed to 150 basis points of mix headwinds in our aggregate freight-adjusted selling price. Mix adjusted pricing improved 5% in the quarter and 7% on a year-to-date basis.

Our Vulcan Way of Operating efforts continue to benefit our cost performance. Aggregates’ freight-adjusted unit cash cost of sales was 2% lower than the prior year in the third quarter. I’m proud of the way our operators are adopting new tools and disciplines to drive plant efficiencies. And I’m excited about the runway ahead for continued profitability improvements, especially as private demand recovers. Currently, strong momentum continues in public construction activity. The private non-residential end use is improving, while residential demand remains weak. Since there has been little relief in affordability to date, single-family housing starts and permits continue to decelerate across most US markets. With our leading footprint, we are confident we are in the right markets to benefit from an eventual single-family residential recovery. In multifamily residential end use, current data is more varied across geographies. Some states are already showing growth in starts, which should begin to help offset weakness in single-family activity.

Private non-residential construction activity is improving. Overall starts in our markets are positive on a trailing six-month basis. Data center activity remains robust with approximately 60 million square feet under construction and another 140 million square feet proposed and in the planning stages. Nearly 80% of data center projects in the planning stage are within 30 miles of a Vulcan operation. For both data centers and large project opportunities like LNG, which are also gaining momentum, Vulcan is in the right markets and well positioned to supply these projects and help create value for our customers.

The same is true on the public side. Growth in public contract awards in our markets continues to outpace other markets. Trailing 12-month awards are up 17% year-over-year in our footprint. And importantly, there is a long tail to public strength since approximately 60% of the IIJA funds are still yet to be spent. Given shipment trends year-to-date, coupled with the demand I just described, we now anticipate full year shipments to increase approximately 3%, yielding full year adjusted EBITDA of $2.35 billion to $2.45 billion, a 17% increase over the prior year at midpoint.

Now, I’ll turn the call over to Ronnie to discuss our continued execution of our aggregates-led two-pronged growth strategy. Ronnie?

Ronnie A. Pruitt — Chief Operating Officer

Thank you, Tom, and good morning. Over the last 24 months as Chief Operating Officer, I’ve been highly focused on growing the profitability of our existing business, in addition to shaping our portfolio for optimal future growth. In the third quarter, our trailing 12 months aggregate cash gross profit per ton was $11.51, 27% higher than just two years ago. Our commitment to the Vulcan Way of Selling and the Vulcan Way of Operating has supported this growth. Our organic growth, coupled with disciplined M&A and portfolio management positions us well to continue compounding results and creating value for shareholders.

In early October, we completed the disposition of our asphalt and construction services assets. We believe that these downstream positions that we strategically built over time are now more valuable to the acquirers than to us. And we will redeploy the proceeds into attractive growth opportunities in the future.

I’ll now pass the call to Mary Andrews to provide some additional details on our financial results and capital allocation before we share some of our preliminary views about next year.

Mary Andrews Carlisle — Senior Vice President and Chief Financial Officer

Thanks, Ronnie, and good morning. The aggregates unit profitability improvement that Ronnie and our division teams are driving each day is foundational to our cash generation, overall growth and return on invested capital. Over the last 12 months, our free cash flow has increased by 31% to over $1 billion and our conversion is 94%. Complementing our free cash flow with incremental debt of $1 billion, we have grown our franchise through over $2 billion of acquisitions and returned approximately $300 million to shareholders through dividends and share repurchases, all while maintaining our adjusted EBITDA leverage ratio just below our targeted range of 2 to 2.5 times and improving our return on invested capital by 40 basis points. We are poised for additional profitable growth.

We also continue to prioritize reinvesting in our franchise. Year to date, we have deployed $442 million toward maintenance and growth capital expenditures and plan to spend approximately $700 million for the full year. Our trailing 12 months SAG expenses were $566 million and consistent with the prior year’s trailing 12 months as a percentage of revenue at 7.2%. We are pleased with the results our investments in technology and talent are yielding in the business.

I’ll now turn the call back over to Ronnie to provide some preliminary thoughts on 2026 before Tom makes some closing remarks.

Ronnie A. Pruitt — Chief Operating Officer

Thank you, Mary Andrews. Tom shared earlier our views on the current demand environment and we anticipate those trends to continue into next year. Consistent growth in public, improving private non-res and lingering softness in residential. Overall, we expect organic shipments to return to growth in 2026 and improve modestly year-over-year. We also anticipate mid-single-digit pricing improvement. We will maintain our focus on efficiency gains and cost discipline through our Vulcan Way of Operating efforts to continue to deliver expansion and aggregate cash gross profit per ton that exceeds historical averages.

Before I turn the call back over to Tom, I would like to express my gratitude for the opportunity to lead this organization and leverage the strong foundation Tom has built over the last decade. He has cultivated a culture of continuous improvement and created meaningful value for our shareholders. I’m excited about what lies ahead and I’m confident Vulcan Materials will continue to deliver.

Tom, back over to you.

J. Thomas Hill — Chairman and Chief Executive Officer

Thank you, Ronnie. I want to thank all the men and women of Vulcan Materials for living out the Vulcan Way each and every day, doing the right thing, the right way at the right time. Our safety and financial performance are evidence of their commitment to excellence and to continuous improvement. We are ready to finish the year strong and to continue our long track record of durable growth as we move into 2026.

And now, Mary Andrews, Ronnie and I will be happy to take your questions.

Questions and Answers:

Operator

[Operator Instructions] We’ll go first this morning to Trey Grooms with Stephens.

Trey Grooms

Hey, good morning, everyone.

J. Thomas Hill

Hey, Trey.

Trey Grooms

Hey, Tom. First off, I want to say congratulations, Ronnie, on your new role, well deserved. And also to Tom, it’s been a pleasure working with you over the last several years, and we wish you the best on your next chapter.

Ronnie A. Pruitt

Thanks, pal.

Trey Grooms

Sure. And I guess with that, Ronnie, maybe if you could highlight some of your top priorities that you have for the Vulcan Materials team here as you take the reins and transition into your new position.

Ronnie A. Pruitt

Sure. Thanks, Trey, for the question. First and foremost, I’m going to continue to build on the culture that Tom has grown through his leadership at Vulcan. And our culture is based on — safety is our foundation and our people own and drive our results. Our strategic approach will continue to focus on enhancing our core through Vulcan Way of Operating and Vulcan Way of Selling. And strategically, we’ll continue to expand our reach through disciplined aggregate-centric acquisitions, as well as greenfield initiatives that are going to continue to complement our aggregate-leading positions in our network.

Trey Grooms

Okay, excellent. Thank you, Ronnie.

Ronnie A. Pruitt

Thanks, Trey.

Operator

Thank you. We’ll go next now to Tyler Brown with Raymond James.

Tyler Brown

Hey, good morning, guys.

J. Thomas Hill

Thanks, Tyler.

Tyler Brown

Hey. First off, congrats, Ronnie and congrats, Tom. But hey, this quarter’s volumes were obviously great, benefited obviously for some pretty calm weather. We have the Wake Stone comp. But you guys are guiding kind of towards the low end for the full year. Can you just talk about the trends into Q4? What’s kind of driving towards the low end there? And then I appreciate the look on ’26, but when you say modest improvement, can you put a finer point there and maybe talk about some of the puts and takes in the three — call it, the three big end markets?

J. Thomas Hill

Yeah. I think you got to look back a little bit of the third quarter before we go to Q4. Weather definitely cooperated in the third quarter. Volumes were up obviously double-digit. But the big jump in volume was a combination of pent-up demand from the first half of the year, easy comps from last year and then importantly, strong and growing public demand and improving non-residential demand. Now, Q4 weather last year was very good, so tough comps in Q4. We predict 3% volume growth for the full year. With the exception of single-family construction, we see demand in other sectors getting better. I would tell you that October supported the full year guide of 3%.

But Ronnie, why don’t you talk a little bit about ’26?

Ronnie A. Pruitt

Yeah, Tom, thanks. As Tom said, I think single-family will continue to be challenging until we get some of the affordability issues behind us. Our public is quite strong. And as we look into public into 2026, we’ll continue to see improved funding. And I think the more mature DOT execution from the states to get that money put in play. On the private non-res side, our starts have been positive in our markets for the previous six months. And as we look internally, our bidding activity, our bookings and our backlog really support demand growth as we go into next year.

Tyler Brown

Perfect. Thanks, guys.

J. Thomas Hill

Thank you.

Operator

Thank you. We’ll go next now to Garik Shmois at Loop Capital.

Garik Shmois

Oh, hi, thanks and congrats to you both on your new roles moving forward. Wanted to ask just on the pricing, both the growth in the quarter and your confidence in the outlook in ’26, it ticked down sequentially. Is there anything specific driving that? And how should we think about pricing a little more detail into 2026?

J. Thomas Hill

Yeah, good morning. I would call pricing as expected 5%, 150 basis points of mix in there, which we talked about last quarter. Obviously, acquisitions have been a drag on prices, but pricing in those markets continues to improve, I’d call it as planned. But in the quarter, we had 20% more base, driven by really good highway work and data centers. And while base is lower price, it’s also lower cost. So we kept our unit margin momentum. I’m pleased with our — very pleased with our ability to take that price to the bottom line and then some, as you saw costs go down in the quarter. And if you looking-forward, I think growing highway demand and improvements in non-res will support higher prices and unit margins in ’26.

But Ronnie, why don’t you talk a little bit about ’26?

Ronnie A. Pruitt

Yeah, Tom is correct. I mean, improving demand in public and private non-res will definitely support 2026 pricing. And we sent out our letters in September for effective January 1st. So we’re in the middle of having those conversations now. I’ve been encouraged with those conversations and that’s really all around the fixed plants, 40% of our business. On the bid work, our trailing three-month backlog prices are showing acceleration and most of that work will ship in next year. And so, still work to be done, but this coupled with our operating performance should still provide us with continued superior unit margin growth over historical norms.

Operator

Thank you. We’ll go next now to Brian Brophy at Stifel.

Andrew

Hey, this is Andrew [Phonetic] on for Brian. Thank you for taking my question.

J. Thomas Hill

Good morning, Andrew.

Andrew

Hey. I had a question about the unit costs, down 2% in the quarter. How much of that was Vulcan Way of Operating versus lower inflation versus volume benefits? And then additionally, as you’re looking at next year, do you have any preliminary thoughts on how you’re thinking about inflation or the cost piece into 2026 following such a phenomenal year this year? Thanks.

J. Thomas Hill

Yeah. Short answer, we’ve got no relief from inflation. I mean, things — no prices have come down, they’re not going up as fast. But I would really point it to the Vulcan Way of Operating if you look at the whole year. I’m very pleased with our operators’ performance in our 2025 cost. In the quarter and the year, we’re seeing improved operating efficiencies, but still early innings of Vulcan Way of Operating. And remember, in the first half of the year, we had weather issues, we had volume issues that actually hurt costs, but Ronnie and his team were still able to keep the cost down. In Q3, we probably had some tailwinds from efficiencies, volume and more base sales. I think Ronnie and his operators have worked very hard at the Vulcan Way of Operating and he should be pleased with this performance.

Ronnie A. Pruitt

Yeah, thanks, Tom. And I know our operators will appreciate those comments. First and foremost, our safety performance is really good and it’s continuing to improve. And so, when I look at our disciplines and our investment in technology, they’re working, and that’s the Vulcan Way of Operating. There’s still improvement ahead. And so, we’ll continue to focus on those disciplines as we get into ’26. But I’ve got confidence in our people and our processes and our disciplines and our technology, and I think it will be exciting to watch the Vulcan Way of Operating as we continue to go. Selling, and as far as growing our margins, and I think our margin growth will continue to be even more dependable in the future.

Andrew

Great. Thank you.

J. Thomas Hill

Thank you.

Operator

We’ll go next now to Anthony Pettinari at Citi. Hi, this is Asher Sohnen on for Anthony. Thanks for taking my question and congratulations all around. I just — you guys talked about stronger backlogs, but I was wondering if you could maybe walk through some of your key geographies and what you’re seeing there like on an individual or regional basis.

J. Thomas Hill

Yeah. Actually, it’s pretty widespread. I can’t think of any that are down at this point. Probably the healthiest is going to be the Southeast, which is a benefit for us because that’s probably where the higher unit margins are. But we’ve really seen a turn in the non-res side of the business. Data centers have helped that, and really strong growth in public demand. And I think that growth continues to accelerate for the next two or three years. So a good story. Obviously, single-family is still a drag for us and probably will be for a while. Hopefully, that turns next year. But in the meantime, the other sectors are taking up for that.

Asher Sohnen

Great. Thanks. I’ll turn it over.

J. Thomas Hill

Thank you.

Operator

We’ll go next now to Kathryn Thompson with Thompson Research Group.

J. Thomas Hill

Hi, Kathryn.

Kathryn Thompson

Hi. Good morning and thank you for taking my question today. First off, Tom, it’s been a pleasure working with you over the years. Look forward to keeping up with you. And Ronnie, we go back couple of companies, and congratulations on starting in CEO role in January.

J. Thomas Hill

Thank you.

Ronnie A. Pruitt

Thank you.

Kathryn Thompson

So kind of looking forward, did a great job of shaping a portfolio, as was highlighted in the quarter you just reported. How are you thinking about what fits in your portfolio and maybe what may not or who may be a better owner? And can you approach it from thinking about from either a product type, which was we saw this quarter or a geographic focus? So just maybe thinking bigger picture about how you’re thinking about that portfolio shaping going forward. Thanks very much.

Ronnie A. Pruitt

Yeah, Kathryn, this is Ronnie. I’ll take that question. I continue to be really pleased with the downstream business that we have. In the asphalt business, those businesses are really heavily influenced by the public funding and the strength in public funding. And so we’re going to continue to focus on, one, safety as well as our financial performance. And we talk about the concrete and the divestiture that we announced this week. I mean, that’s our strategy. We said early on when we bought Superior that we’re going to evaluate that business and we would decide whether that was a business that we wanted to be in long term. We continue to see challenges on the private side in California, and so we thought the acquirers — it was a business that was going to be more valuable to them.

I’ll remind you that since the acquisition of U.S. Concrete, we now only have a couple of plants left in the Virginia DC area that are integrated with a very successful Vulcan legacy concrete business, but we’ve also retained all those aggregates. So it complements our strategy of being aggregate and we’re going to keep the expertise of both the asphalt and the concrete business. So if those businesses, as we look in the future and M&A presents those to us, we’re not scared of that, but it’s going to continue to be aggregate led. I think that’s our strategy and you’ll see us continue to be focused heavily on those aggregate-led businesses.

Kathryn Thompson

Thank you so much and good luck.

Ronnie A. Pruitt

Thank you.

Operator

Thank you. We’ll go next now to Phil Ng with Jefferies.

Jesse Barone

Hey, good morning, guys. This is Jesse on for Phil. Congrats to Tom and Ronnie. Just real quick on M&A, can you just kind of help us how you’re thinking about the pipeline? You obviously will have quite a bit of dry powder given where your leverage is and post the divestitures. Just any geographies that you’re particularly targeting? Thanks.

Ronnie A. Pruitt

Yeah, this is Ronnie. I would tell you, one, we have a number of greenfields that are still in process. And greenfields for us is a strategy of growth. It takes time. Those will be timed with both market driven as well as the timing of permits. And so we still have that going. When we talk about M&A opportunities, it’s been a quiet year. We continue to have a really good list of targets out there, but the timing of those targets are really driven twofold, one, by the seller and their readiness and then also by the market conditions. And so, I would tell you, M&A this year is not surprising to us. We knew through some of the uncertainties with tariffs and other pauses in the interest rates that an M&A was going to be paused. But I can assure you that we’re still very active. We have a really strong list and those M&A opportunities are going to continue to be aggregate led.

Jesse Barone

Great. Thanks. I’ll turn it over.

Operator

We’ll go next now to Keith Hughes with Truist.

Keith Hughes

Thank you. Congratulations, Tom, on a tremendous run here. And I do have a question for Ronnie. You did talk about ’26 kind of from a high level of continuing this just wonderful run of cash gross profit per ton. Just from a general level, from what you know today in the market, will we see something similar to the last couple of years with the numbers you’ve been putting up and what could potentially take that higher?

Ronnie A. Pruitt

What was the last part of that, Keith?

Keith Hughes

And what would take it higher? What kind of things would you need to see, something that would set even better than what we’ve seen in the last couple of years.

Ronnie A. Pruitt

Look, we’re coming off three years of muted demand in our markets. And so, what we’ve been able to accomplish over the last three years with growing our cash gross profit has been twofold. One, the inflationary stuff helped our pricing early on. And this year, we’ve had some momentum on the cost side of our business. And so, as we said earlier, demand is going to help. Some recovery in demand is going to help our pricing story and we look forward to that. But the Vulcan Way of Operating and the Vulcan Way of Selling, both support that from a cost side, as well as the commercial side. And so, I would tell you, as I said earlier in my comments, I think our cash gross profit will continue above historical norms. And I think both sides of it, the cost and the commercial efforts will play a role into that, but some demand will definitely help the pricing side of our story.

Keith Hughes

Okay, great. Thank you.

Ronnie A. Pruitt

Thank you.

Operator

We’ll go next now to Brent Thielman at D.A. Davidson.

Brent Thielman

Hey, thanks. Congrats to Tom and team as well. I guess there’s a two-part question, I guess, just in terms of thinking about that mid-single-digit price growth in 2026. Part of the question just is that — is that consistent with the annual price increases you’re planning for next year? And then the other thing I was wondering is just around that, how much sort of volume do you bring into 2026 from acquisitions that sort of lack of a better word, underpriced and you’re pushing towards that Vulcan Way of Selling?

Ronnie A. Pruitt

Yeah, I would tell you the 5.5 to mid-single digit is a combination of what we’re seeing both with our backlog as we go into the year — so our bidding work, which accounts for about 60%, as well as the announced letters that we have out with our fixed plants, which is about 40% of our business. And so, those conversations, like I said, are happening now. Those letters were sent out in September. Those fixed plant increases will go into effect in January. When I look overall at how that is going to shape up, I think our backlogs, and I said on a trailing three months, our bookings prices have been accelerating. And so it’s a combination of that bid work and what opportunities we’re seeing, especially around the private non-res side, as well as we still need some help on single-family. And so, I feel good about our pricing going into next year. I think there’s opportunities on both sides, on the public and private side, but that’s where we’re at. I think those conversations are going well.

As far as acquired volumes, I think it’s about 10 million tons of acquired volume coming out of last year, which was both Wake and Superior. And so, as we’ve said before, it’s taken us time. We’re on that campaign. It’s going as expected as far as North Carolina goes. And so, I would anticipate that gap being made up with our normal Vulcan markets and what we’re seeing in Raleigh, that gap will continue to be made up over the next 12 months.

Brent Thielman

Very good. Thank you.

Ronnie A. Pruitt

Thank you.

Operator

We’ll go next now to Steven Fisher with UBS.

Steven Fisher

Thanks. Congrats, Tom and Ronnie. Just, first, a clarification. Have you changed your pricing expectation for the full year of 2025? I’m not sure if I missed that. And then on the volumes, the 1% reduction, is that basically just single-family and within your ’26 outlook are you starting — if it is single-family affecting ’25, do you assume sort of that’s still a drag on the first part of ’26 and then a more accelerating part of the second half? I know it’s still early, but just curious how you’re seeing those dynamics.

J. Thomas Hill

Yeah. So on pricing, I would call fourth quarter probably very similar to third quarter as we continue to enjoy the big base volumes. Like I said, while they are at lower price, they’re also at lower cost and very good margins. So happy to have that work with the data centers and the big highway work. If you look at non-res going forward, I think it continues to grow. Public is very good. I think we probably see headwinds from res for a while, but it’s probably starting to bottom sometime in ’26.

Steven Fisher

Okay. Thank you.

Operator

We’ll go next now to Angel Castillo at Morgan Stanley.

Angel Castillo

Thanks and good morning, everyone. Ronnie, Tom, I echo everyone’s congratulations and well wishes and looking forward to working with you, Ronnie.

Ronnie A. Pruitt

Thank you.

Angel Castillo

Maybe just — you’re welcome. Just regarding your quoting activity and projects pipeline, the acceleration you talked about, I was wondering if you could kind of dive a little deeper into that. Maybe just kind of as a starting point, just putting a finer point on the magnitude of what you saw in October versus perhaps 3Q levels. I know you’ve given kind of last few months, but just if you could kind of split that up. And then maybe if you could expand also just on what’s driving, or what you think is driving kind of the acceleration here in activity. The reason I ask is because I feel like we’ve kind of heard about project backlogs and quoting activity being robust the last couple of years and conversion rates and delays in shipments have kind of disappointed a little bit. So trying to understand, I guess, what gives us confidence that something has changed that will result in kind of the letting of projects moving faster? And within private, if you could expand a bit more, like is that data — are you seeing it happen outside of data centers and semiconductors as well? Or is it primarily just those two?

J. Thomas Hill

Yeah. So look, we talked some in the first part of the year about projects — us pricing projects and then kind of getting postponed or pushed the pause button. We’re not seeing that anymore. In fact, we have seen a lot of those projects actually go at supporting growth in our backlogs. If we put it in our backlogs, we’re pretty sure it’s going to happen. It’s very rare that once we put them in there, the projects don’t go. So I have very good confidence that our backlogs will be shipped and then that growth will support growth as we look at 2026.

I think that if you look forward, I think the non-residential continues to grow. Ronnie, why don’t you talk a little bit about kind of volume drivers in ’26 and the momentum we carry into that?

Ronnie A. Pruitt

Yeah. I mean, when I look at starts on the private non-res side, as Tom has said, in Vulcan-served markets, in September, on a trailing six months, we’re up 7%, trailing three we’re up 8%. So that momentum continues. As I look at the sub-segments of our private non-res, office, data, stores and warehouses, institutional are all up. And our quoting activity and our bidding are on the same trajectory. And so, as we look at it, I mean, there is a lot of data center work out there and that subcategory itself is up 26%. But we’ve also booked two LNG projects. We’ve booked a couple of manufacturing projects, we booked some retail. And so, it’s a combination. Data centers has definitely been a very good tailwind for us, but there’s other sectors within the private non-res that also give us confidence as we look in 2026.

J. Thomas Hill

Yeah, I would tell you that I think that as Ronnie and Mary Andrews, as we all look at ’26, pretty good confidence we’ll see volume growth. The public side, I can’t tell you how strong the public side is, it’s very, very good. We’ve seen the turn we think in non-res. Data centers is bigger than what we thought it was going to be. We think warehouses is now probably turning to growth in most of our markets. So, as we talk a lot about single-family, it’s still a headwind, but I think it continues to probably — it will get better as we march through next year. So I think our confidence level, that’s pretty good.

Angel Castillo

Very helpful. Thank you.

Operator

We’ll go next now to David MacGregor at Longbow Research.

Joe Nolan

Hey, good morning. This is Joe Nolan on for David. Congrats on a nice quarter.

J. Thomas Hill

Thank you.

Joe Nolan

I was just wondering, on public infrastructure, slide 5 shows a nice acceleration in contract awards. I was just hoping you could break it down in some of your key markets and give any detail on how fiscal year ’26 DOT budgets look there?

J. Thomas Hill

Yeah. I would tell you, in our markets is very widespread. The public side, I can’t underscore it, it’s good and getting better. Remember, we’re in year four of IIJA and it took two years to really get that started, which frustrated everyone, including us, as expected. So now we’re seeing the state DOTs mature into substantially increased federal and state funding. All of our — our top-10 DOTs are all up for fiscal year ’26. Trailing 12-month highway starts, as we said, are up 17% in Vulcan states and 5% in other states. So we are aware the DOTs are growing. I think simply put, the DOTs are putting that money to work now and they continue to get better at it. And remember, only 40% of the IIJA funds have been spent. So there’s a long tail to this past ’26.

Ronnie A. Pruitt

Yeah. And I think as Tom said, those funds will carry us well into ’26 and ’27 and beyond. And I would tell you, there’s three rules around reauthorization. One, it never happens on time. Two, it will happen. And three, it’s historically always been larger than the bill before. And so, we’re anticipating that. We think public will continue to remain strong. And if you think about the infrastructure of the country, we still got a lot of work to do. And so, we’re happy with where we’re at on the public side and we think that’s a — it’s going to continue strong in the future.

Joe Nolan

Okay. Very encouraging. Thanks. I’ll pass it on.

Operator

We’ll go next now to Michael Dudas at Vertical Research.

J. Thomas Hill

Mike, we can’t hear you.

Operator

Michael, you might be on mute. We cannot hear you right now. And we’ll circle back around to Michael. We’ll go next now to Adrian Huerta at JP Morgan.

Adrian Huerta

Thank you. Hi Tom, congrats and best wishes. Was a pleasure to work with you all these years.

J. Thomas Hill

My pleasure.

Adrian Huerta

And welcome Ronnie on — I know you for a few years since U.S. Concrete and I’m sure you’re going to deliver very good results as well.

Ronnie A. Pruitt

Thank you.

Adrian Huerta

Quick question on the cost. It’s been quite impressive what you guys have been doing on the cost per tonne side over the last couple of quarters. I think you mentioned that you’re still in the early innings on many of these measures that you’re taking. Can you give us a sense on the actions we’ve been taking and for how many more quarters we can see very good performance on cost as we have seen in the last few quarters?

Ronnie A. Pruitt

Yeah. Thank you for the question. I would tell you, we’re still in the early innings and we’ve talked about Vulcan Way of Operating, the technology investment is complete within our top 127 plants, which represents over 70% of our production as a company. Where we’re at today is really in the final stages of the of the human behavioral side. And so, we have a lot of training going on with our plant operators using the tools, the process intelligence, the scheduling systems with our labor focus. And so, my anticipation is we’ve got a long ways to go, but it’s really exciting to watch. And I would tell you that as I look at what’s transpired this year and what we’re forecasting for next year, these tools, these investments we’ve made and the processes that we go through around our operations and focusing on our critical size production and the yield on that and in the labor side, the labor savings, I think we’ve got a lot of room. And I’m excited about it. And I think, more importantly, our operators are the ones that are driving this. And so, a lot more to come, but I would tell you my anticipation is ’26 is going to be even more momentum than it was in ’25.

J. Thomas Hill

Yeah, I would say that it’s not just a quarter thing. This is years of marching forward with operating efficiency improvements. I think that Ronnie and his team, as I said earlier, should be very proud of their performance this year and they got help from weather and volume in Q3, but they did not in Q1 and Q2. In fact, surprisingly how good the cost was given the conditions. But I think they have years of improvement ahead of them.

Adrian Huerta

Great. Congrats. Thanks, Tom and Ronnie.

J. Thomas Hill

Sure.

Operator

Thank you. We’ll go next now to Ivan Yi at Wolfe Research.

Ivan Yi

Yes, good morning. First, congrats to Tom and Ronnie. I just want to go back to the aggregate pricing again. Price per tonne in 3Q was the smallest in a few years. And I get that there is some negative mix in there. But why is the year-over-year growth decelerated in recent quarters? It had been double-digits and now you’re guiding to 5% in ’26. Just some color there. Thank you.

J. Thomas Hill

Yeah. I think couple of things there. Obviously, we had headwinds from acquisitions. In the first part of the year, we had headwinds from lower volumes in the Southeast driven by weather that helps — that got back to more normal in Q3. But you’re sitting here on three years of negative volume and that does put some pressures on price. I think that’s — so we’re kind of probably at a low point. I believe that the continued acceleration in public and now visibility to the private non-res going up really helps our conversations for pricing and our backlog pricing as we look into ’26. Ronnie called that out that we’ve put out January 1 price increases. We’re having those conversations, are going well. But importantly, before that, over the last few months, we’re seeing acceleration in our backlog pricing, which is a very good foreshadowing for what’s going to happen in 2026.

Ivan Yi

Thank you.

J. Thomas Hill

Thank you.

Operator

We’ll go next now to Michael Dudas at Vertical Research.

Michael Dudas

Yeah, I hope I the mute’s off here. Good morning, Mary Andrews and Ronnie and Tom.

J. Thomas Hill

Good to hear from.

Michael Dudas

Yes, thanks. Congrats to Tom and Ronnie. Also, congrats, Mary Andrews for the great cash generation and the great cash flow numbers you’ve been putting up here. So congrats to all. Maybe just as we get close to wrap up here for Ronnie. As you look into your tenure here for the next several years, maybe even decade or so, as you look out, maybe past 2026, how much different or not will Vulcan look like? And do you see the sense of the industry fundamentals and where we are and given what you’re seeing from competitors and from clients that this type of growth and sustainability and volume, pricing and certainly a profit per tonne growth is sustainable over the next several years?

Ronnie A. Pruitt

Yeah, great question. I mean, I think, if you look out past ’26, ’27, ’28 in the future, Vulcan is going to look very similar. And I would tell you we’re going to continue to be led by our strategy around enhancing our core, which is really investing in — continuing to invest in Vulcan Way of Operating and Vulcan Way of Selling, which is going to really complement our margin growth and it gives us confidence in that margin growth with those tools that we’ve invested in. And then on the strategic side, when we talk about expanding our reach, I mean, we’re going to stay aggregate focused, and both within the markets that we serve and building the franchise that we have and also as we look at geographical expansion, it’s still going to be an aggregate-led company.

And so, I wouldn’t tell you that as you look into the future, you’re going to see anything different than what Vulcan has continued to execute on. Those growth opportunities will be there and we’ll be right in the middle of it, but we’re going to be very disciplined on what we look like and how we — what those businesses are going to be led by is always going to be aggregates.

Michael Dudas

Thank you, Ronnie.

Operator

Thank you. And gentlemen, it appears we have no further questions this morning. Mr. Hill, I’ll turn things back to you, sir, for any closing comments.

J. Thomas Hill

Thank you. And thank you all for your time this morning. As I step back and look at Vulcan’s future, I feel both pride and excitement. Vulcan has fantastic talent and bench strength throughout the organization and particularly in leadership. Ronnie and Mary Andrews and their teams are seasoned, talented industry experts who are armed with a superior set of tools and disciplines embedded in the Vulcan Way of Selling and the Vulcan Way of Operating. Putting that together with our continuous improvement culture, will take Vulcan’s to remarkable heights. I’m very proud to have represented the men and women of Vulcan, and I look forward to supporting Ronnie and Mary Andrews in the future.

Thank you all for your interest in Vulcan and your friendships. Keep you and your family safe and healthy. Thank you. [Operator Closing Remarks]