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Combined Revenue: $456 million in Q2 2026, up $86 million year-over-year, with IMC contributing $91 million.
Adjusted EBITDA: $93 million in Q2 2026.
Gross Profit Margin (Australia): 13.6% in Q2 2026.
Adjusted Margin (Canada): Approximately 7% in Q2 2026.
Adjusted EPS: $0.32 in Q2 2026.
Direct Adjusted G&A: $15 million, or 3.8% of reported revenue.
Depreciation as % of Combined Revenue: 13%, down from 16% last year.
Interest Expense: $18.9 million, up from $14.1 million last year.
Operating Cash Flow Before Working Capital: $78 million in Q2 2026.
Free Cash Flow: $23 million in Q2 2026.
Net Debt: Increased $191 million to $1.1 billion.
Net Debt Leverage (Trailing 12): 2.9 times; 2.6 times based on second half run rate.
Senior Secured Debt Leverage: 1.7 times.
Contractual Backlog: Approximately $3.8 billion as of June 30, 2026.
Combined Revenue Guidance (FY2026): Raised to $1.6 billion to $1.8 billion, with a midpoint of $1.7 billion.
Adjusted EBITDA Guidance (FY2026): $380 million to $420 million.
Free Cash Flow Guidance (FY2026): $110 million to $130 million.
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For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Record Q2 revenue and raised full-year revenue guidance to $1.6-$1.8 billion, reflecting strong first-half performance.
Australia remains a primary growth engine with 31% CAGR in revenue since H1 2024, supported by MacKellar and IMC acquisitions.
Record contractual backlog of approximately $3.8 billion and a $12 billion bid pipeline, providing strong earnings visibility.
Improved operational efficiency with lower repair costs and better internal maintenance, leading to higher gross profit margins in Australia and Canada.
Strategic expansion in Northern Canada, including Nuna fleet expansion expected to drive 20% site-level revenue growth.
Net debt increased by $191 million to $1.1 billion due to the IMC acquisition and growth capital expenditures.
Interest expense rose to $18.9 million from $14.1 million year-over-year, reflecting financing for strategic expansions.
Missed out on a large Australian project bid, though there is potential for future opportunities on the same site.
Sustaining capital expenditure guidance increased to over $200 million for 2026, up from previous estimates, due to oil sands fleet optimization.
EBITDA guidance remained unchanged despite higher revenue, indicating cost pressures or flow-through costs.
Q: Can you provide more color on the fuel services contract won in July and whether additional opportunities similar to that award exist?A: Barry Palmer (President & CEO): This was a significant win for us, as this business previously only serviced our own equipment. We see other opportunities emerging as similar contracts, originally awarded four to five years ago, near their end. We are well-positioned to potentially win one, two, or even three more of these contracts as they come online. Jason Veenstra (CFO) added that this contract is included in the Q2 backlog and is much less capital-intensive, requiring only $5 million in spend for a $135 million backlog.
Q: Can you dig into the equipment optimization strategy in the oil sands? What is happening with the non-core fleet, and what capital investments are needed for the 260 identified assets?A: Barry Palmer (President & CEO): The 260 multi-life assets are the large fleet we see as active for future oil sands work. We are in no rush to sell the remaining assets, as some smaller, underutilized units may be redeployed to new opportunities, including those at Nuna. We are also open to selling units at the right price and have already moved half a dozen units to Australia. For 2026, we expect to spend approximately $50 million on the core fleet to improve mechanical availability above the 70% target, which involves replacing large components that are due for change-outs.
Q: Are you seeing an inflection in demand in the oil sands alongside higher crude prices?A: Barry Palmer (President & CEO): Absolutely. There is a lot of excitement in the oil sands, and we are receiving more offers daily for new scopes. We are pricing work constantly. Having been in the oil sands since the mid-80s, this feels like a full-steam-ahead period after a recent lull. With capital projects underway and haul distances lengthening, more trucks are needed to move the same volume, which is a positive for our business.
Q: The stated bid pipeline in Australia declined meaningfully quarter-over-quarter. What is driving that change?A: Barry Palmer (President & CEO): We missed out on one large project where the owner decided replacing the incumbent was too expensive. However, they have already come back to us about potentially placing a fleet or two on that site, so we still see opportunity there with less capital required. We also missed one project on the West side with IMC, but we are shortlisted for another one right now where we believe we have a very good chance of winning.
Q: Given the lower capital intensity of IMC, what does the free cash flow conversion profile look like going forward?A: Jason Veenstra (CFO): The 30% conversion target remains intact, as IMC represents only about 15% of our business. We expect to achieve this target this year when working capital is neutral. There is no reason we cannot hold this ratio next year, and with our margin initiatives, we hope to potentially increase it. It remains a good placeholder for financial models.
Q: With the increase in unit rate work from IMC, should we expect this type of contract to become more popular in the broader Australian segment?A: Barry Palmer (President & CEO): Unit rate work is already very prevalent in Western Australia, particularly for IMC, as much of their scope involves mine site civil work that is more detailed than simple load and haul. This is typical for that type of work, including mine site remediation, so we expect the contract mix to remain largely the status quo.
Q: Beyond what is captured in the bid pipeline, can you provide commentary on the level of demand swelling in Canada or the United States?A: Barry Palmer (President & CEO): Most of what excites us is captured in the bid pipeline. However, I am extremely excited about the opportunities in front of Nuna. They have picked up some small wins over the last three to six months, which positions them well for larger follow-on projects across Nunavut, Northern Quebec, Ontario, and the Northwest Territories. We just need these bigger projects to come to RFP so we can win and execute them.
Q: The third-party rentals piece was meaningfully higher in Q2. Is this a run rate we should expect going forward?A: Barry Palmer (President & CEO): No. Third-party rentals typically occur when jobs come to us quicker than anticipated, so we use them to start out while we bring our own fleet in. As the project progresses and our own fleet becomes engaged, those costs disappear, which is where we see margin improvement. This increase was primarily driven by Australia.
Q: Sustaining capital was guided to $60-$70 million for 2026, but H1 is already at $84 million. How should we expect this to trend for the balance of the year?A: Jason Veenstra (CFO): We are still just a little north of $200 million for the full year. The increase from the prior guidance reflects our commitment to the oil sands and the strategy to run that operation more efficiently with mechanical availability well north of 70%. Australia is exactly on track with the plans agreed upon in December.
Q: The increased revenue guidance did not come with an increased EBITDA guide. Is this due to flow-through costs, or is there something else to read into?A: Barry Palmer (President & CEO): That is a good way to look at it. The revenue increase reflects a strong first half, while EBITDA performance was consistent with our expectations for the first half. It is a cost conclusion. Regarding higher diesel costs, there is no impact to us on either revenue or EBITDA margin, as it is a flow-through for the vast majority of our operations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.