Southland Holdings' Q1 2025: Key Contradictions on M&P Profit Impact, Cash Flow, and Transportation Revenue

Profit impact of M&P, cash flow expectations, transportation segment revenue expectations, transportation segment revenue and backlog, and cash flow expectations and legacy backlog are the key contradictions discussed in Southland Holdings, Inc.'s latest 2025Q1 earnings call.



Strong Financial Performance in Q1 2025:
- Southland reported revenue of $239 million and a gross profit of $21.5 million, with a 9% gross profit margin.
- The improvement was driven by a 22% gross profit margin in the Civil segment and strong execution, despite adverse weather conditions.

Backlog and Bookings:
- The total backlog reached approximately $2.5 billion, with $137 million in new awards during the quarter.
- This was supported by strong demand across both public and private clients, particularly in the Civil segment.

Leadership Additions and Strategic Efforts:
- Southland appointed Keith Bassano as CFO and Don Graul as CSO, bringing extensive experience in the sector.
- These additions are part of broader strategic efforts to strengthen the company and improve long-term performance.

Economic Outlook and Infrastructure Demand:
- The company expects sustained infrastructure investment and strong demand, particularly at the federal and state levels.
- Despite recent tariff actions and federal spending cuts, Southland believes its projects are critical and will not be affected.

Legacy Projects and Cash Flow:
- Southland anticipates completing its Materials & Paving legacy projects by the end of 2025, with a focus on improving cash flow.
- The completion of these projects will allow for increased revenue from new core projects delivering strong double-digit margins.