Q2 2026 Badger Infrastructure Solutions Ltd Earnings Call Transcript
Key Points
- Record second quarter with 23% year-over-year revenue growth to $257 million, driven by broad-based demand across diverse end markets.
- Adjusted EBITDA grew 25% year-over-year to $66.1 million, with margin expansion of 40 basis points to 25.7%.
- Revenue per truck per month (RPT) increased 14% year-over-year to $47,731, reflecting improved utilization and pricing power.
- Fleet expansion continues with 1,822 Hydrovacs, up 8% year-over-year, and Red Deer plant production increased to 80 units in Q2.
- Strong balance sheet with inaugural $300 million bond issue, ample liquidity, and leverage at 1.5 times EBITDA, supporting growth investments.
- New industrial cleaning service line is gaining traction, with customers pulling Badger into broader portfolio work, and margins tracking as planned.
- Plans for a second U.S. manufacturing facility are progressing, expected to enhance capacity, reduce tariff exposure, and mitigate supply chain risk.
- Pricing environment is improving, with management confident in capturing further pricing opportunities in the back half of 2026.
- Data analytics platform is driving operational efficiencies, with significant opportunities to close the gap between top and bottom performing branches.
- Management is working on providing more visibility into recurring revenue streams, which could enhance investor understanding.
- Gross profit margins were reduced by approximately 50 to 70 basis points in Q2 due to ongoing investments in new service lines and operational excellence initiatives.
- Management cautioned that margin improvements may not accelerate in the near term as the company continues to invest in scaling the business.
- Pricing capture was initially slow in Q2, with management acknowledging they were 'not as nimble' in some markets early in the quarter.
- The company does not provide a traditional backlog, and management is still working on how to present recurring revenue visibility, which may leave investors with less clarity.
- Data center exposure remains around 13-14% of revenue, and while not a core focus, it could be subject to volatility if that sector slows.
- The second U.S. manufacturing facility is still in early stages, with capital expenditure guidance not yet provided, creating uncertainty for investors.
- Competition remains intense, with some competitors ramping up, though Badger's scale and footprint provide a competitive advantage.
- The company is investing heavily in hiring and training operators, which has moderated but still impacts margins in the short term.
- Canada market growth, while positive, is still in early innings and may be lumpy, with potential for uneven monthly performance.
- Management did not provide specific guidance on the capacity or output of the new U.S. plant, citing competitive reasons, which may limit investor ability to model future growth.
Ladies and gentlemen, thank you for standing by. Welcome to the Badger Infrastructure Solutions second quarter 2026 results call.
During the presentation, all participants will be in listen-only mode. For those that have dialed into the audio portion of this call to ask a question during the live question-and-answer session, please press star one to raise your hand. Please wait for the operator to say your name and company before asking your question.
For those listening through the webcast, attendees will be in listen-only mode. If you need technical assistance, please submit your request under the Tech tab in the window on the right-hand side of your computer screen.
As a reminder, this event is being recorded today, July 31, 2026, and will be made available on the investor section of Badger's website.
I would now like to turn the call over to Anne Plasterer, Director of Investor Relations.
Thank you. Good morning, everyone, and welcome to our second quarter 2026 earnings
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