Southland Holdings Reports $239.5M Revenue in Q1 2025, 16.9% Decrease Year-Over-Year

Southland Holdings, Inc. reported a revenue of $239.5 million for the first quarter of 2025, a decrease of 16.9% from $288.1 million in the same period of 2024. The decline was primarily driven by a $67.2 million drop in the Transportation segment, attributed to projects nearing completion and the company's exit from the Materials & Paving (M&P) business line. In contrast, the Civil segment saw an increase in revenue of $18.6 million, largely due to new projects that commenced after March 31, 2024. The company's gross profit rose to $21.5 million, up 5.2% from $20.4 million a year earlier, reflecting improved performance in the Civil segment.

The company's cost of construction also decreased, totaling $218.0 million for the quarter, down 18.6% from $267.7 million in the prior year. This reduction was mainly due to a $63.5 million decrease in the Transportation segment, which was offset by a $13.8 million increase in the Civil segment. Selling, general, and administrative expenses increased by 14.4% to $16.5 million, driven by higher incentive compensation and real estate tax expenses. Southland reported a net loss of $2.8 million for the quarter, compared to a net income of $525,000 in the same period last year.

In terms of operational metrics, Southland's backlog stood at $2.5 billion as of March 31, 2025, with approximately 40% expected to be recognized as revenue in the next twelve months. The company continues to focus on its Civil and Transportation segments, which are expected to benefit from ongoing infrastructure spending initiatives. The Civil segment accounted for 43% of total revenue, while the Transportation segment contributed 57%. The company also reported a significant increase in gross profit margin in the Civil segment, which reached 22.0% of segment revenue, compared to 21.2% in the previous year.

Strategically, Southland has been navigating changes in its business structure, including the exit from the M&P business line, which contributed to a gross loss of $9.1 million in that segment for the quarter. The company is also managing its debt effectively, with total debt reported at $288.1 million as of March 31, 2025. The weighted average interest rate on total debt was 9.36%. Southland's management expressed confidence in the company's ability to meet liquidity needs over the next twelve months, supported by cash generated from operations and existing cash reserves.

Looking ahead, Southland Holdings anticipates continued demand for its services in both the public and private sectors, driven by federal and state infrastructure spending initiatives. However, the company remains cautious about potential economic uncertainties, including the impact of tariffs and inflation on construction materials and project costs. The management is focused on leveraging its competitive advantages in equipment ownership and self-performance capabilities to capture new opportunities in the market.