Southland Holdings’ Earnings Call: Mixed Results and Optimistic Outlook

Southland Holdings, Inc. ((SLND)) has held its Q1 earnings call. Read on for the main highlights of the call.

Southland Holdings, Inc. recently held its earnings call, revealing a mixed sentiment among stakeholders. The company showcased strong performance in its Civil segment and maintained a robust backlog, bolstered by new leadership appointments. However, challenges were evident with a decline in overall revenue, increased interest expenses, and losses in the Transportation and Materials & Paving segments.

Strong Start to 2025

Southland reported a revenue of $239 million with a gross profit of $21.5 million, resulting in a gross profit margin of 9%, an improvement from 7% in the previous year. This indicates a positive start to 2025, despite the overall revenue decline.

Civil Segment Success

The Civil segment stood out with a gross profit margin of 22%, up from 21% in the same period in 2024, and revenues of $103 million compared to $84 million in 2024. This success highlights the segment’s resilience and contribution to the company’s profitability.

New Leadership Appointments

The appointment of Keith Bassano as Chief Financial Officer and Don Graul as Chief Strategy Officer has strengthened Southland’s leadership team, positioning the company for strategic growth and improved financial oversight.

Record Backlog

Southland added approximately $137 million in new awards, bringing its total backlog to $2.5 billion. This record backlog underscores the company’s strong market position and future revenue potential.

American Bridge 125th Anniversary

The American Bridge Company celebrated its 125th anniversary, marking a significant milestone and highlighting its historical contributions to iconic infrastructure projects.

Revenue Decline

Despite positive developments, Southland faced a revenue decline, reporting $239 million for the quarter, down $49 million from the same period in 2024. This decrease poses a challenge for the company moving forward.

Increased Interest Expense

Interest expenses rose by $3.2 million from the prior year, totaling $8.9 million, primarily due to higher borrowing costs. This increase impacts the company’s financial performance.

Net Loss for the Quarter

Southland reported a net loss of $4.5 million or a loss of $0.08 per share, compared to a net loss of $400,000 in the same period last year. This reflects the financial challenges the company is currently facing.

Transportation Segment Challenges

The Transportation segment experienced a significant revenue decrease of $67 million from the same period in 2024, with a negative gross profit margin of 1%. This highlights the difficulties within this segment.

Materials & Paving Segment Loss

The Materials & Paving business line contributed a negative $9 million to gross profit, with a noncash charge of $3.5 million impacting results. This segment continues to be a financial drain on the company.

Forward-Looking Guidance

Southland’s forward-looking guidance remains optimistic despite current challenges. The company is poised for growth with opportunities in high-value infrastructure projects, maintaining a strong financial position with positive cash flow and effective debt management. The company plans to complete the wind-down of legacy projects, including the Materials & Paving segment, by the end of 2025. With strategic leadership appointments and robust demand from government clients, Southland is well-positioned for future success.

In conclusion, Southland Holdings, Inc. presented a mixed earnings call, with strong performance in the Civil segment and a robust backlog, countered by revenue declines and segment losses. The company’s strategic leadership changes and forward-looking guidance suggest potential for growth, despite the current financial challenges.