Share-Based Compensation

3 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

The Equity Incentive Plan was initially approved by the Company’s stockholders in 2016, was amended and restated in April 2018, and was further amended in May 2019. In connection with the 2018 amendment and restatement, the Company reserved 2,000,000 shares of Class A common stock for issuance pursuant to awards granted thereunder. In March 2024, the Company’s stockholders approved an increase in such share reserve by an additional 1,000,000 shares. At December 31, 2025, there were 631,230 shares of Class A common stock remaining available for issuance under the Equity Incentive Plan.

The Restricted Stock Plan was approved by the Company’s stockholders and adopted by the Company in March 2024. At that time, the Company reserved 2,000,000 shares of Class B common stock for issuance pursuant to awards granted thereunder. At December 31, 2025, there were 1,843,202 shares of Class B common stock remaining available for issuance under the Restricted Stock Plan.

The following table summarizes the components of share-based compensation expense in the Consolidated Statements of Comprehensive Income (Loss) during the three months ended December 31, 2025 and 2024 (unaudited, in thousands):


	For the Three Months Ended December 31,
	2025		2024
Equity classified awards	$	14,608	$	13,674
Liability classified awards	274		729
Employee stock purchase plan	253		322
Total share-based compensation expense	$	15,135	$	14,725

Restricted Stock - Equity Classified Awards

The Company measures and recognizes stock-based compensation expense, net of forfeitures, over the requisite vesting periods for all stock-based payment awards made, and recognizes forfeitures as they occur. Stock-based compensation is included in general and administrative expenses in the Consolidated Statements of Comprehensive Income (Loss). A summary of the changes in the Company’s restricted stock is as follows (in thousands, except share data):


	For the Three Months Ended December 31,
	2025			2024
	Shares		Weighted Average Grant Date Fair Value Per Share	Shares		Weighted Average Grant Date Fair Value Per Share
Unvested shares, beginning balance	478,611		70.36	509,171		31.59
Shares awarded	190,601		113.60	196,793		80.21
Shares vested	(81,785)		115.01	(16,793)		95.90
Shares forfeited	(337)		78.94	(1,635)		30.78
Unvested shares, ending balance	587,090		78.17	687,536		29.55

Aggregate grant date fair value of shares awarded	$	21,652		$	15,785
Compensation expense recorded upon vesting of awards	$	12,824		$	3,256
Unrecognized compensation expense at fiscal year-end	$	33,421		$	19,146
Weighted average recognition period remaining, in years	3.7			4.0

The restricted shares granted under the Equity Incentive Plan will vest, as applicable, as follows:


Fiscal Year						Number of Shares

2026						105,587
2027						90,920
2028						173,332
2029						180,160
2030						37,091
Total						587,090

Performance Stock Units - Equity Classified Awards

PSUs provide for the issuance of shares of Class A common stock upon vesting, which occurs at the end of the performance period based on achievement of certain Company performance metrics established by the Compensation Committee. The final number of shares of common stock issuable upon vesting of PSUs can range from 0% to 150% of the target number of PSUs initially granted, depending on the level of achievement, as determined by the Compensation Committee. The achievement of performance goals is modified by the total stockholder return ranking of the Company against the Russell 2000 Index over the performance period and can increase or decrease the achieved award by up to 15%. With respect to certain outstanding PSUs, the Compensation Committee may, in its sole discretion, elect to settle all or a portion of vested PSUs in the form of cash, rather than common stock. The Company recognizes expense, net of estimated forfeitures, for PSUs based on the forecasted achievement of Company performance metrics, multiplied by the fair value of the total number of shares of common stock that the Company anticipates will be issued based on such achievement.

During the three months ended December 31, 2025, the Company awarded PSUs representing a target of 55,732 Class A shares to certain members of Company management under the Equity Incentive Plan. These grants are classified as equity awards. The aggregate grant date fair value of these PSU awards was $4.7 million. During the three months ended December 31, 2025 and 2024, the Company recorded compensation expense in connection with PSUs in the amount of $1.9 million and $0.5 million, respectively, which is reflected as general and administrative expenses in the Company’s Consolidated Statements of Comprehensive Income (Loss). At December 31, 2025, the Company forecasted 242,877 shares of Class A common stock underlying PSUs as unvested and approximately $9.4 million of unrecognized compensation expense related to PSU awards, which will be recognized over a remaining weighted-average period of 2.1 years. During the three months ended December 31, 2025, 127,317 shares of Class A common stock were issued upon the vesting of PSUs.

Cash-Settled Restricted Stock Units - Liability Classified Awards

The Company has previously granted cash-settled restricted stock units (“RSUs”) to employees of the Company under the Equity Incentive Plan. The Company elects to account for forfeitures as they occur. Compensation expense associated with prior awards for the three months ended December 31, 2025 and 2024 was $0.3 million and $0.7 million, respectively, which is reflected as general and administrative expenses in the Consolidated Statements of Comprehensive Income (Loss). As of December 31, 2025 and 2024, the liability for cash-settled RSUs was $6.5 million and $2.5 million, respectively, and is included in accrued expenses and other current liabilities and other long-term liabilities. At December 31, 2025, there was approximately $6.1 million of unrecognized compensation expense related to these awards, which will be recognized over a remaining weighted-average period of 2.4 years.

The grant date fair value of cash-settled RSU awards is based on the price of the Company’s Class A common stock and the number of RSUs awarded on the date of grant. The awards are settled in cash and are accounted for as liability-type awards. The expense is recognized over the requisite service period with remeasurement at the end of each reporting period at fair value until settlement. The requisite service period is based on the vesting provisions of the awards, which generally occurs in four equal annual installments beginning on the date of the first fiscal year-end after the grant date.

Employee Stock Purchase Plan

The Construction Partners, Inc. Employee Stock Purchase Plan (the “ESPP”) became effective on May 13, 2021. The ESPP provides eligible employees of the Company an opportunity to purchase shares of the Company’s Class A common stock at a discounted rate using funds withheld through payroll deductions. The maximum number of shares of Class A common stock offered under the ESPP is 1,000,000. The first offering period under the ESPP commenced on July 1, 2023. Since that date, participants have purchased 111,259 shares under the ESPP. Compensation expense associated with the ESPP for each of the three months ended December 31, 2025 and 2024 was $0.3 million, and is included in general and administrative expenses in the Consolidated Statements of Comprehensive Income (Loss).