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.
| Metric | Period | Current guidance |
|---|---|---|
| Full-year EPS growth | FY2026 | Earnings projected to strengthen year-over-year (range roughly flat to up 12%) (New FY2026 guide) |
| Inland barge utilization | FY2026 | Average low 90% range (Expected improvement) |
| Inland operating margins | FY2026 | High teens or low twenties full-year average (Steady to modestly improving) |
| Inland revenue growth | FY2026 | Low to mid single digits year-over-year (New guide) |
| Coastal revenue growth | FY2026 | Mid single-digit growth, margins in high teens (New guide) |
| Distribution and services revenue | FY2026 | Flat to slightly higher, margins mid to high single digits (New guide) |
| Power generation revenue growth | FY2026 | 10%-20% with backlog up 11% sequentially and about 30% year-over-year (New guide) |
| Metric | YoY | Note |
|---|---|---|
| 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 |
| 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 |