Snapshot
Kirby Corp reported $852M of revenue in Q4 2025, up 6.2% year over year, with diluted EPS of $1.68 and an operating margin of 15.2%.
- Revenue
- $852M
- YoY growth
- +6.2%
- Diluted EPS
- $1.68
- Operating margin
- 15.2%
What management said
- •Slide presentation for today's conference call, as well as the earnings release, which was issued earlier today, can be found on our website.
- •Reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures are included in our earnings press release and are also available on our website in the Investor Relations section.
- •2025 was a record year for Kirby, capped off by a solid final quarter.
- •We also continued to return capital to shareholders with over $100 million in share repurchases, and we further strengthened our balance sheet by paying down $130 million in debt.
- •2025's record year of earnings supported another consecutive year of generating more than $400 million in free cash flow.
- •We closed the year with strong operational and financial momentum, combined with improving market conditions, and as we look ahead, we expect steady growth and solid performance in 2026.
- •In Inland Marine, early quarter market softness from muted demand and high barge availability gave way to improving conditions as the quarter progressed.
- •Throughout the quarter, customer demand was stable, supported by limited availability of large capacity vessels.
- •Our teams delivered strong operational execution and maintained a disciplined focus on cost efficiency, and this resulted in an operating margin of approximately 20%.
- •Turning to Distribution and Services, overall demand tracked in line with the prior quarter.
- •We continued to see strong activity in power generation, stable marine repair demand, a slowly recovering off-highway market, and persistent softness in the conventional frac market.
- •In oil and gas, revenues continued to be pressured by a very soft, conventional oil and gas business, yet we continued to maintain profitability in this part of the segment.
What went well
- •2025 was a record year of earnings for Kirby, capped by a solid fourth quarter, supporting another consecutive year of more than $400 million in free cash flow.
- •Kirby returned over $100 million to shareholders through buybacks in the quarter and paid down $130 million in debt, ending the year with the balance sheet in excellent condition.
- •Inland marine improved through the quarter with utilization averaging in the mid to high 80% range and exiting the year close to 90%, delivering operating margins in the low 20% range.
- •Coastal marine maintained mid to high 90% utilization with revenues up 22% year-over-year and operating margins around 20%.
- •Power generation revenue grew 47% year-over-year and 10% sequentially on backlog execution and multiple large project wins, becoming 52% of distribution and services segment revenue.
- •Distribution and services grew operating income 20% for the full year, exceeding the company's own expectations for the segment.
What went wrong
- •Inland term contract renewals were down low single digits and spot prices declined low single digits sequentially due to short-term market softness carried over from the third quarter.
- •Typical seasonal winter weather along the Gulf Coast produced an 82% sequential increase in delay days, hurting fourth quarter operations and efficiency.
- •Oil and gas revenue fell 45% year-over-year and 33% sequentially with operating income down 30% year-over-year on continued conventional FRAC weakness.
- •Distribution and services operating income declined 30% sequentially on year-end softness in marine repair and off-highway and continued conventional frac weakness, and rising medical costs pressured operating margins in both segments.
Guidance changes
| Metric | Period | Previous | Current | Change |
|---|---|---|---|---|
| Full-year EPS growth | FY2026 | Not previously issued | Earnings projected to strengthen year-over-year (range roughly flat to up 12%) | New FY2026 guide |
| Inland barge utilization | FY2026 | Exiting 2025 near 90% | Average low 90% range | Expected improvement |
| Inland operating margins | FY2026 | Low 20% (Q4 actual) | High teens or low twenties full-year average | Steady to modestly improving |
| Inland revenue growth | FY2026 | Not specified | Low to mid single digits year-over-year | New guide |
| Coastal revenue growth | FY2026 | Not specified | Mid single-digit growth, margins in high teens | New guide |
| Distribution and services revenue | FY2026 | Mid single-digit (FY2025) | Flat to slightly higher, margins mid to high single digits | New guide |
| Power generation revenue growth | FY2026 | Not specified | 10%-20% with backlog up 11% sequentially and about 30% year-over-year | New guide |
Performance breakdown
| Metric | YoY change | Reason |
|---|---|---|
| Marine Transportation revenue | +3% ($14.9M) | Pricing and coastal strength; operating margin low 20% range |
| Marine Transportation operating income | +17% ($14M) | Cost management offsetting softer pricing and weather delays |
| Inland revenue | -1% | Lower utilization; up 3% sequentially on improved conditions |
| Coastal revenue | +22% | Steady demand, higher contract prices, limited large-capacity equipment |
| Distribution and services revenue | +10% ($35M) | Power generation growth |
| Distribution and services operating income | +12% ($3M) | Power generation growth, partly offset by year-end softness |
| Power generation revenue | +47% | Backlog execution and strong order flow for backup, prime power, and data centers |
| Oil and gas revenue | -45% | Soft conventional frac on lower rig counts and fracking activity |
| Oil and gas operating income | -30% | Revenue decline, partly offset by aggressive cost management |
Earnings call themes & trends
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Inland pricing | Spot down 4%-5%, term flat (Q3) | Term renewals down low single digits, spot rebounding low to mid single digits in January | Bottoming and firming |
| Inland utilization | Recovered to high 80s (Q3 exit) | Exited year near 90%, 94% by the call | Tightening |
| Power generation / behind-the-meter | Record backlog, mostly standby/backup | 52% of segment revenue, behind-the-meter and higher power nodes growing, gas turbines targeted for 2027+ | Accelerating and shifting to higher value |
| Venezuelan / heavy crude | Potential tailwind discussed | Early signs of refiners taking positions, but volumes not yet material | Emerging tailwind |
| Coastal market | Around 20% margins, tight supply | Up 22% revenue, heavier shipyard year ahead, double-digit price increases moderating | Strong but normalizing pricing |
Q&A summary
Was the Q4 term contract pricing decline a read on 2026 customer demand or near-term pressure?
It reflected near-term pressure from weak late-2025 demand and excess barge availability, not a 2026 outlook; spot has already retraced and is up more in January than it fell in Q4, with utilization at 94% the morning of the call.
Why is the FY2026 EPS guidance range so wide (roughly flat to up 12%)?
Power gen delivery cadence amid OEM supply constraints is the biggest driver of the range, with a lesser factor being how much inland pricing improves through the year; management is cautious given the Q3 demand pullback when the crude slate lightened.
Why are distribution and services margins only guided to mid to high single digits if power gen is doing well?
Backup diesel power for data centers is lower margin because the engine cost is well known industry-wide; higher-margin behind-the-meter natural gas equipment ships more in the second half, and service and parts annuities improve margins in outer years like 2027 and 2028.
What is the storm/winter weather impact on Q1 2026?
Marine impact should be limited with contractual ice clauses, and refineries and chemical plants saw no major freeze interruptions; the cold weather may even be a net positive by tightening utilization, while winter storms help the power gen rental business.
Will the 2025 rate concessions to large customers come back in 2026 and what about gas turbines?
Rate concessions taken for customers in austerity in 2025 will come back in 2026; larger gas turbine packaging is being worked on but represents revenue in 2027 and could become meaningful in 2028 and 2029.
What is the spread between inland spot and contract pricing?
Coastal is essentially fully termed with no spot work; on inland, spot prices are a good 10% above term, a very healthy market, though pricing still needs to be roughly 40% higher to justify new builds and almost nobody is building equipment.