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Net debt ~$1.5B, leverage ~3x EBITDA; 20% rate rise adds ~$30M annual interest expense on floating-rate portion, manageable but compresses margins ~50bps

~30-40% of debt estimated floating-rate; 20% rate increase (~100bps) raises annual interest cost by $25-35M, reducing EPS by roughly $0.35-0.45

Medium intensity; US-China trade tariffs on metals and components disrupt supply chains.

Top chokepoints: (1) Gulf Coast sand/aggregate sourcing disrupted by hurricane risk; (2) Mexico border crossings for construction materials amid tariff/trade tensions

Arcosa is ~95% U.S.-revenue; minimal sovereign currency devaluation exposure with limited Mexico operations (MXN risk) and negligible other international presence

Primarily U.S.-based (TX, SE, Midwest); Mexico secondary market with MXN exposure; currency devaluation risk is low given <5% international revenue share

Medium intensity; commodities: Steel, Aluminum, Copper, Crude Oil (fuel), Rare Earth Elements, Plastics/Resins; geopolitical: US-China trade tariffs on metals and components disrupt supply chains.

No single vendor exceeds 30% of input costs; aggregates and steel inputs sourced from multiple suppliers, limiting single-source lock-in risk materially

Asset-heavy industrial manufacturer/infrastructure products; minimal cloud dependency — operations run on traditional ERP; cloud termination would cause disruption but not existential failure

Back-office and logistics software cloud-dependent; 30-day termination notice would require emergency on-premise migration, causing 2-4 weeks operational disruption estimated

Low API coupling risk; Arcosa is not a software-driven business — ERP and operational systems use standard industrial platforms (SAP-type), easily migrated over 60-90 days

Not applicable — Arcosa's revenue model (selling construction products, engineered structures, aggregates) is standard B2B commerce; Howey Test risk is effectively zero

Medium

Minimal GDPR/CCPA exposure; Arcosa's customers are primarily B2B industrial buyers with limited consumer PII, reducing compliance liability substantially below peer software firms

Moderate risk in regional aggregates markets where Arcosa has acquired local near-monopoly positions; DOJ/FTC scrutiny possible on further bolt-on acquisitions in concentrated geographies

Medium burden; regimes: FAA, DOT, OSHA, EPA, ITAR, FTC; Export controls and defense procurement rules create contract concentration risk.

Predominantly transactional (~85%); some multi-year infrastructure contracts (~15%); limited true recurring subscription revenue — highly project/cycle dependent

B2B product sales: aggregates, construction products, engineered structures; revenue driven by volume x price per unit; no subscription or platform monetization

Cost-plus pricing with market-rate adjustments; pricing power moderate — aggregates tied to regional spot markets; engineered structures have more contractual price lock-in

6/10 — regional aggregate near-monopolies support local pricing power; broader construction products segment faces competitive pricing pressure from national suppliers

22.4% Gross Margin (Moderate (20-40%))

No free-rider problem; all products are physical goods requiring purchase; customer churn tied to construction cycle downturns rather than product substitution or free alternatives

Revenue growth is largely headcount-linear; quarry/plant operations require proportional labor scaling; limited software leverage means doubling revenue requires ~70-80% headcount increase

High marginal cost of growth — capacity expansion requires capital-intensive new quarries, plants, or acquisitions; not a scalable platform business; EBITDA margins improve modestly at scale

Not applicable — Arcosa does not operate a franchise model; business is direct-owned manufacturing and mining operations with standard regulatory compliance requirements

At 10x scale, CAC rises sharply as greenfield aggregate markets saturate; unit economics likely compress 15-20% due to geographic expansion into less-favorable geology and logistics costs

No meaningful network effects; construction products are commodities — value does not increase with additional users; competitive moat comes from geography and permits, not network dynamics

4.8% Return on Assets (Excellent)

Tier 3 (cyclical) — revenues strongly correlated with construction spending; infrastructure/government contracts provide partial buffer (~40% of mix) but private construction exposure creates recession vulnerability

Infrastructure/government contractors and transportation agencies (~40% revenue); relatively stable but subject to federal/state budget cycles and infrastructure bill funding timelines

Private construction contractors and industrial buyers (~60% revenue); high cyclicality, concentrated among large regional contractors — top 10 customers likely represent 20-30% of segment revenue

["11-0000 Management Occupations", "13-0000 Business and Financial Operations Occupations", "15-0000 Computer and Mathematical Occupations", "17-0000 Architecture and Engineering Occupations", "23-0000 Legal Occupations", "33-0000 Protective Service Occupations", "37-0000 Building and Grounds Cleaning and Maintenance Occupations", "41-0000 Sales and Related Occupations", "43-0000 Office and Administrative Support Occupations", "47-0000 Construction and Extraction Occupations", "49-0000 Installation, Maintenance, and Repair Occupations", "51-0000 Production Occupations", "53-0000 Transportation and Material Moving Occupations"]

0.3 (HIL — ~30% of characteristic roles agent-automatable)

5.7% CapEx / Revenue (Moderate-CapEx)

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ACA