Kirby (NYSE:KEX) executives told investors the company finished 2025 with record earnings and what management described as “strong operational and financial momentum,” even as typical fourth-quarter seasonality weighed on certain markets. On the company’s fourth-quarter earnings call, leadership highlighted improving inland marine conditions late in the quarter, continued strength in coastal operations, and outsized growth in its power generation business within Distribution and Services.
Record year, capital returns, and balance sheet actions
Chief Executive Officer David Grzebinski said 2025 was “a record year for Kirby,” supported by another consecutive year of generating more than $400 million in free cash flow. He added that the company continued returning capital to shareholders and reducing leverage, noting more than $100 million in share repurchases during the fourth quarter and $130 million of debt paydown.
Marine Transportation: inland improves late, coastal remains tight
In the fourth quarter, Marine Transportation revenue was $482 million and operating income was $100 million, with operating margins in the low-20% range, Kumar said. He noted seasonal winter weather along the Gulf Coast led to an 82% sequential increase in delay days, pressuring efficiency.
Inland marine market conditions improved as the quarter progressed, management said, after early softness driven by muted demand and high barge availability. Grzebinski said barge utilization averaged in the mid- to high-80% range during the quarter and exited the year close to 90%. Pricing was described as mixed: term renewals were down in the low single digits and spot prices declined in the low single digits sequentially, though the company said spot prices rebounded low- to mid-single digits sequentially by the end of the quarter and into January.
Kumar added that inland represented about 79% of Marine Transportation revenue, with long-term contracts (one year or longer) contributing roughly 70% of inland revenue (59% time charters and 41% contracts of affreightment). He said lower market conditions pushed spot rates down in the low single digits sequentially and in the mid-single-digit range year over year, while renewed term contracts were down in the low-single-digit range due to short-term softness. Despite pricing pressure and weather-related challenges, inland operating margins were in the low-20% range, aided by “aggressive cost management,” according to Kumar.
Coastal marine fundamentals remained solid, executives said, with utilization in the mid- to high-90% range and limited availability of large-capacity vessels supporting demand and pricing. Grzebinski said Kirby delivered an operating margin of approximately 20% in coastal during the quarter, while Kumar reported coastal revenue increased 22% year over year driven by demand, higher contract prices, and equipment availability constraints. Coastal represented 21% of Marine Transportation revenue and was essentially fully contracted under time charters, with no term renewals scheduled in the quarter.
Management cautioned that coastal margins could face near-term headwinds due to planned shipyard work. On the Q&A portion of the call, Kirby said shipyard days are expected to be up at least “10% plus,” with the company characterizing 2026 as a heavier shipyard year. Executives also emphasized that expected mid-single-digit coastal revenue growth is “all price,” given limited volume expansion and the revenue impact of equipment being in shipyards.
Distribution and Services: power generation drives growth amid mixed demand
Distribution and Services revenue in the fourth quarter was $370 million, with operating income of $30 million and an operating margin of 8.1%, Kumar said. Revenue increased 10% year over year and operating income rose 12%, which he attributed to the power generation business. Sequentially, segment revenue fell 4% and operating income declined 30% due to year-end softness in marine repair and off-highway activity and “continued weakness” in conventional frac-related markets.
Power generation was a major focus of the call. Grzebinski said power generation revenue rose 10% sequentially and 47% year over year, driven by execution on existing backlog and supported by strong order flow and “multiple large project wins.” Kumar said power generation represented 52% of segment revenue, with operating margins in the high single digits, and management expects that contribution to continue increasing due to strength in data center and backup power markets.
Within the segment, Kumar said commercial and industrial revenues were nearly flat year over year but fell 11% sequentially due to seasonal softness in marine repair and on-highway activity; the category represented 40% of segment revenue with high single-digit operating margins. Oil and gas revenues declined 45% year over year and 33% sequentially due to softness in legacy conventional frac-related equipment demand, though the company said it “maintain[ed] profitability” through cost control; oil and gas represented 8% of segment revenue and also posted high single-digit operating margins in the quarter.
2026 outlook: steady growth expectations, but timing and inflation add uncertainty
Looking ahead, Grzebinski said the company expects “steady financial performance in 2026” with earnings projected to strengthen year over year. Management flagged macro factors including Venezuelan oil flows and tariff developments as potential sources of “near-term noise,” while also noting they could create upside for demand.
For inland marine, Kirby expects utilization to average in the low 90% range in 2026, with pricing improving steadily as demand improves. Management expects inland revenue to increase in the low- to mid-single digits year over year, with first-quarter weather likely weighing on revenue and margins before improving through the year. Full-year inland margins were projected to average in the high teens to low 20s, reflecting better utilization, firmer pricing, and lower maintenance activity.
For coastal, the company expects utilization to remain in the mid-90% range and anticipates mid-single-digit revenue growth versus 2025, aided by gradual pricing improvement as contracts renew. Coastal operating margins were guided to the high teens for the full year, with pressure expected early in the year due to heavy shipyard activity.
In Distribution and Services, Kirby expects total segment revenues to be flat to slightly higher year over year, with strength in power generation offsetting lower oil and gas activity. Operating margins for the segment were projected to average in the mid- to high-single digits for the full year. Executives repeatedly pointed to OEM supply constraints and long lead times as a key factor shaping the cadence of power generation deliveries and results.
During Q&A, management also discussed cost pressures, including an “increasing trend” in medical costs expected to continue in 2026, as well as wage pressure tied to a tight market for mariners. The company said lower claims losses helped offset medical cost increases in the fourth quarter, but expected general corporate expenses to normalize in 2026.
On cash flow, Kumar said 2025 free cash flow was $406 million, exceeding the high end of guidance in part due to a favorable working capital release in the fourth quarter. For 2026, Kirby expects operating cash flow in a range of $575 million to $675 million, while anticipating a working capital build at least in the first half of the year due to supply constraints supporting growth in power generation. Capital expenditures are expected to be $220 million to $260 million in 2026.
About Kirby (NYSE:KEX)
Kirby Corporation is a leading domestic maritime transporter of bulk liquid products in the United States. Through its Marine Transportation segment, the company operates one of North America’s largest fleets of inland tank barges and towing vessels. Kirby’s fleet moves petrochemicals, black oil, refined petroleum products and agricultural chemicals along coastal and inland waterways, providing critical logistical support to energy, chemical and agricultural producers.
In addition to its marine operations, Kirby’s Distribution and Services segment offers diesel engine and power generation services, along with aftermarket parts sales.
