Badger Infrastructure Solutions Stock

Ladies and gentlemen, thank you for standing by. Welcome to the Badger Infrastructure Solutions Second Quarter 2026 Results Call. [Operator Instructions] As a reminder, this event is being recorded today, July 31st, 2026, and will be made available on the Investors 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 call. Joining me on the call this morning are Badger's President and CEO, Rob Blackadar; and our CFO, Rob Dawson. Badger's 2026 second quarter earnings release, MD&A and financial statements were released after market close yesterday and are available on the Investors section of Badger's website and on SEDAR+.

We are required to note that some of the statements made today may contain forward-looking information. In fact, all statements made today, which are not statements of historical facts are considered to be forward-looking statements.

We make these forward-looking statements based on certain assumptions that we consider to be reasonable. However, forward-looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them as actual results may differ materially from those expressed or implied.

For more information about material assumptions, risks and uncertainties that may be relevant to such forward-looking statements, please refer to Badger's 2025 MD&A along with the 2025 AIF.

I will now turn the call over to Rob Blackadar.

Thank you, Anne. Good morning, everyone, and thank you for joining our 2026 second quarter earnings call. Before we get into the details, I'd like to take a moment to talk about safety, which is how we start all of our meetings here at Badger. Safety is not only a value here at Badger, it's one of the key reasons customers choose to work with us. Every day, our teams operate in complex environments around critical infrastructure, where planning, communication and safe execution are essential.

Our strong safety culture and our Make Safety Personal annual safety campaign helps protect our people, supports our customers' objectives and reinforces the high standard of service we deliver across North America every single day. I want to personally thank all of our Badger team members and customers for their continued commitment to working safely together.

Now on to the quarter's results. The Badger team delivered another record quarter of double-digit organic growth in revenue and adjusted EBITDA. Building on our positive momentum from Q1, the second quarter top line revenue of $257 million represents 23% growth over the prior year, driven by our extremely diverse end markets.

Some of the projects that began or are currently underway include LNG plants, semiconductor manufacturing plants, new hospital construction, several airport expansions, energy storage facilities, including solar, new automotive manufacturing plants, sports stadiums, chemical processing plants, power generation plants, oil and gas pipeline work, fiber and communication expansions, wastewater treatment plants, data centers, food and beverage manufacturing plants, pharmaceutical plants, transmission and distribution mega projects, nonresidential construction, utility maintenance, several transportation and rail projects and heavy civil infrastructure projects, just to name a few.

Needless to say, we are seeing broad-based end market healthy demand. We successfully met this demand through increased utilization and continued fleet expansion. The Badger team's ability to deliver top-tier customer service is setting the foundation for the remainder of 2026.

Adjusted EBITDA grew 25% year-over-year to $66 billion. We continue to invest in our teams and our branch network, positioning Badger to benefit from our competitive advantages. As fleet utilization rose through the second quarter, we began to realize pricing opportunities across all of our markets in which we operate.

We achieved RPT or revenue per truck per month of $47,731 in Q2, up 14% compared to last year. This reflects our utilization and pricing efforts. Badger ended the quarter with 1,822 hydrovacs, an increase of its average fleet count by 8% compared to last year, while still achieving greater year-over-year RPT performance. Additionally, our expanded fleet enhances our ability to take immediate advantage of our planned growth for the remainder of '26 and into 2027.

Our Red Deer plant delivered 80 hydrovacs this quarter versus 51 units in the same quarter last year. We also retired 36 units and refurbished 12 units in the quarter. With the noted extraordinary demand and opportunities across all of our end markets, our full year fleet strategy remains on track. As we shared last quarter, we are growing our fleet at the high end of the 7% to 10% range for the full year 2026, and we intend to refurbish between 30 to 50 hydrovacs and retire between 130 to 150 units.

We also announced in our release that we are underway with a second manufacturing plant to be located in the United States, and we expect that plant to come online in the back half of 2027 or early into 2028, and Rob will speak a little bit more on that.

Before I pass the call over to Rob Dawson, I'd like to share one last thought. Our enthusiasm is not only tied to the strength of the demand environment, but it is rooted in Badger's ability to capitalize on it as we have proven through our performance over the last several years.

With our industry-leading fleet capacity, vertically integrated manufacturing capabilities, extensive branch network and highly trained workforce, we believe we have competitive advantages that are difficult to replicate and best positions Badger to support our customers on all of their critical project needs.

With that, I'll turn it over to Rob to give our financial update, and then we'll go straight into Q&A after Rob's comments.

Thanks, Rob. Our second quarter results reflected the strength of customer demand, the effectiveness of our operating strategy and the continued commitment of our team to deliver profitable growth.

As Rob noted, we grew revenue and adjusted EBITDA by over 20%, demonstrating the ongoing execution of our road map of building scalability at every level of our operations. Strong performance was also driven by continued fleet investment to capitalize on increased demand across our entire branch network.

Our adjusted EBITDA improved to $66.1 million, an increase of 25% compared to 2025. and adjusted EBITDA margin was 25.7%, up 40 basis points from the same period. Adjusted EBITDA margins have returned to growing as revenue growth, improved efficiency and utilization of our fleet as well as operating leverage offset the near-term impact of our ongoing investments we have been undertaking.

As we discussed in the first quarter, we are well underway on investments to add to Badger's long-term scale, diversity and profitability. The acceleration of hiring and training of operators that we discussed in the fourth quarter of last year and the first quarter of 2026 moderated in the second quarter and was a key factor in our ability to absorb the levels of demand we have been experiencing.

The rollout of operational excellence and the launch of 2 new complementary service lines continues to proceed in line with our expectations. While we make these investments for the longer term, they have reduced our second quarter 2026 gross profit margins by approximately 50 basis points to 70 basis points.

General and administrative expenses were $11.4 million or 4% of revenue compared to $10.8 million or 5% of revenue in the prior year. And finally, adjusted earnings per share was $0.69 per share, up 15% compared to last year.

Turning to the balance sheet, as you know, Badger has, for a long time, maintained a strong balance sheet combined with conservative financial objectives, including relative leverage, available liquidity and debt maturity profiles. This has served us very well, allowing us to fund our growth largely from cash flows, while continuing to return capital to shareholders through dividends and the NCIB.

In line with these objectives, during the quarter, Badger executed our inaugural unsecured bond issue, raising CAD 300 million of 5.75% 5-year senior notes. The proceeds of the offering were used to pay down our credit facility, leaving us with ample long-term committed liquidity. We were very pleased with the strong support from our new Canadian fixed income investors.

With this undrawn capacity on our 5-year credit facility and our compliance leverage at 1.5x EBITDA, the midpoint of our 1x to 2x targeted range, we have lots of flexibility to continue investing in our organic growth, to support investments in new service lines, to fund our plans to develop a second manufacturing facility in the United States and to continue to return capital to shareholders.

Year-to-date, we have purchased and canceled 80,676 common shares under the NCIB at a weighted average price per share of $63.18. We intend to renew the NCIB in August, maintaining our ability to make share purchases in addition to returning capital to our shareholders through dividends.

So with those comments, let's turn it back to the operator for questions.

And our first caller is Yuri Lynk from Canaccord Genuity.

Just want to talk a little bit about RPT. Obviously, strong in the quarter. I've got your LTM RPT at around $44,000. And I think -- and maybe Dawson can help me on this one. I think your Investor Day target converted to the new calculation was just under $43,000. So you're above that. How do we think about the sustainability of RPT on a trailing basis? And is there anything different you're seeing in the market now that might argue for that $43,000 target being higher or lower in the future?

Yuri, great question. A couple of comments on RPT. I would say the addition of our data platform and a number of significantly positive changes we're making in how we approach capacity availability for our customers. One example would be leaving our trucks parked at a customer site versus having them return to our branch, just as one example, is increase the availability of our fleet for revenue-producing activities. And as a result, our utilization has really been one of the drivers of our RPT to be above what we thought was possible even a few years ago at our data center -- at our Investor Day.

So I would say, yes, we're very pleased with where that's gone. We don't believe that there is likely to be a lot of downturn in that number on a last trailing 12 months basis, as you've indicated. In fact, I think there remains some opportunities to improve utilization. And as we'll talk about, there is opportunities for further pricing improvements as well as our utilization on the fleet continues to rise.

But I'll add one other thing to Rob's comments, Yuri, that might be helpful for you. When we did that Investor Day, which was March of 2024, we had announced at that Investor Day that we were launching this thing called Badger Analytics Platform, but it was very early stages, and it was just underway.

The data and the amount of analysis we're starting to get out of the fleet metrics and the ability to move the fleet faster and get more efficient is allowing us to actually just get higher and start to move that trend higher.

And I believe that we're going to continue to see that going forward because the amount of analysis and our customers, we're actually sharing some of that analysis with our customers because the goal for us is to be digging holes. It's not to be driving back and forth and commuting because most of our customers pay port to port.

Our best opportunity to show greater efficiency than any competitor is to actually share that data with the customers, and they really love it. So you're going to see us continue to have a really strong focus on RPT. I wouldn't say at this point, like it needs to have some major rerating from that Investor Day. But I would tell you, it remains a big focus in the company and will remain going forward as well.

How would you -- Rob, how would you characterize the pricing environment? Because we've picked up that you might -- in some markets, you might be a little bit behind on pricing in recent months. So do you feel you -- I mean, you talked about some upside to pricing. Is that what you're referring to? You've got some room to play catch up in some markets?

Yes, absolutely. So the way we're viewing pricing is the pricing environment was -- continued to be under a fair amount of pressure back half of last year and through Q1 of this year. We identified in the month -- as the quarter -- for second quarter as it was going on in April and May that there were some pricing opportunities, and in some instances, Badger was able to capture the pricing. And in a few others, we were not as nimble as we felt we could be.

Since that time, as the quarter went on for the second quarter, we started to pick up more and more momentum on the pricing. And I think on a go-forward basis, you're going to see just tied to the demand, the end markets, everything happening within -- and I mean, you saw the laundry list of projects we're on that is so broad that if you can't get pricing in this environment, we're doing something wrong. And we started to see it as the quarter went on towards the end of the quarter.

And in my opinion, we were probably a little slow at the beginning of the quarter. The opportunity, though, is really on a go-forward basis. So we're pretty enthusiastic about how the -- it's not just the leadership team, Yuri, but the whole company is leaning in on the pricing opportunities to where we're not just covering inflationary pressures and cost, but we're actually going to be exceeding.

And because the market is here, and so now is the time as the industry leader, we should be leading that pricing, and you'll see more and more of that. But we also -- for the way we frame it up because we have not just competitors who listen to these calls, but also customers is Badger has always got to be giving extreme value. If we're going to be the pricing leaders, we have to be giving extreme value and efficiency and safety and reliability.

And so you're going to see more -- us continue to be amping up in all those areas, but pricing is definitely going to be a nice opportunity. I believe -- I feel pretty comfortable we're going to be capturing the back half of the year and then going forward into next year, Yuri.

Our next question comes from Tim James at TD Securities.

My first question, I'm just wondering if you could give us -- you called out the new service lines and that it's progressing as expected. I'm just wondering if you could provide us a little more kind of detail on customer response, how that's fitting into the business, kind of the returns that you're seeing or anticipate from those 2 new service lines.

Tim, it's Rob Dawson here. We've launched principally 1 of the 2 service lines. The other one is going to get going in the second half of this year. That first one being our industrial cleaning. And it's very adjacent to a lot of the work we're already doing. It's got a similar customer list and a similar list of assets.

And so the returns are similar to what we see from hydrovac. It just allows us to get a lot more long-term recurring contracts on a maintenance basis on industrial facilities, whereas in the past, we would be working on a project basis on those facilities during larger turnarounds or debottlenecking work. So this is just circling those plants with a little more assets, a little more service and giving us a stickier presence with those customers.

So far, we're very pleased with the way it's gone. It's all proceeding as we had penciled it out, I guess, as far as our XL business plan, and we're looking forward to having it develop a little more.

And Tim, I'll add an additional a little bit of color about the customers and the adoption you were asking about -- what we're realizing and very, very pleased about this is every time we have launched one of these industrial cleaning branches in the various cities, and we go sit down with customers and we start talking about Badger's capabilities, and again, it's beyond hydrovacing inside these industrial plants.

They're actually coming to us and instead of us kind of pushing to get into more of their manufacturing plants to do our work, they're actually starting to pull us in and asking, can you do more across the large industrial manufacturing owners across their whole portfolio.

And so think of chemical plants and pulp and pulp plants and power plants where they're saying, could you do some of this work across our whole footprint. So we're very, very pleased with the -- how quickly we're being adopted into the markets in which we've already launched.

And regarding the margins, we -- like, again, still very early days, but a few quarters in, the margins are playing out exactly how we had planned. And so obviously, it makes the return profile and the investments we've made, we're pleased with it so.

Okay. That's great. That's helpful. My second question, just returning to the U.S. manufacturing facility or potential U.S. manufacturing facility and forgive me my line cut out for a minute. But is there any way you could kind of give us a bit of a sense for what the capital requirement could be for that facility? And then is it reasonable to assume that CapEx that goes along with it, the kind of return associated with that is effectively from avoiding the tariffs that are currently being incurred?

Yes. So I'll start a little bit about kind of where we are in the process and then Rob, if you want to add any more about kind of the return or tariff comment. So right now, it's still relatively early. So we started talking just slightly about this on, I believe it was during the Q&A for the last quarter about a second manufacturing plant being contemplated by the management team and the Board.

And then since that time, we've been off working alongside of -- as the management team alongside of a small subcommittee of the Board to run the ground, which markets we want to potentially locate and land the manufacturing plant in. Just think in terms generally of where is Badger doing a lot of business, and it's the southern part of the U.S., and it's more -- if you were to decide to be somewhere, let's say, between, let's say, Texas, Oklahoma over to the I-75 North-South corridor in that range, that area.

As far as being able to give a CapEx guidance, we have a pretty broad range of which we've been contemplating internally and then shared with our Board of Directors. But it's too early for us to say, okay, we think it's going to be between x number of millions and x number of millions because it really does depend on the cost of the land, the cost of the development or if we buy an existing facility, which there are some out there. But if we buy an existing facility, what can we actually get it at? And then Rob can talk a little bit about do we -- how we might finance that and maybe tariffs and stuff.

Yes. I mean when you think about the economics of a new facility, I would just ignore tariffs at the outset and say our growth profile, the size of our existing fleet and where we feel it's going to grow to over the next several years, even just the replacement capital for that fleet risk management when you have a single facility, logistics for having it in 2 facilities in 2 markets to serve different areas. There's ample return available to justify a new facility.

And then when you think about the current tariffs we're paying on the trucks that we're producing in Canada and then importing into the United States, that just increases those returns to make it pretty easy to get there.

So the strategic need for the facility, the growth of the business and the returns that our current organic growth strategy is offering us justify the facility in its own right. And then these tariffs recently, I think, are just a little cherry on top of those economics.

And as far as funding it, as I mentioned, we have ample available liquidity on a largely undrawn credit facility. Our balance sheet is just in the midpoint of our leverage target range of 1x to 2x. So we've got plenty of capacity to be able to finance this without any concerns.

Our next caller is Ian Gillies from Stifel.

A follow-up on the U.S. manufacturing facility. When you look out to 2028 and 2029, would the intention be that you run both the Canadian and the U.S. facility concurrently because that's where you see demand going?

Yes. So we've actually been having really good discussions with our manufacturing plant up in Red Deer, which, by the way, is performing extremely well. And we're having the best quality of trucks, I actually believe in Badger's history coming out of the plant right now and our manufacturing team is very, very engaged.

And we've been having discussions both with that plant as well as we're building out and continue to evolve our 3 to 5-year plan because we look at it just constantly, both Rob and I on where is the business going and what are we going to need resource-wise.

We believe at a minimum, we're going to need these 2 plants, both up and running and performing think in terms, Ian, of as -- when I came into the business just around 5 years ago, we were in that 1,200 to 1,300 truck size for hydrovacs. And now we're 1,800 moving toward 1,900 and the business will continue to scale, we believe, over the next 3 to 5 years, if not longer.

So we're going to need both the plants. We're pretty excited about that. And we're building the plants once the U.S. plant is up and running, we'll continue to say, okay, how can we drive the most efficiency between the 2, but it just gives us the capacity to continue to scale the business.

And it also -- there's one other factor that a lot of people think you have the potential for tariff avoidance or just building the trucks. But it also gives us a little bit of a risk mitigation factor by having a second plant that if for whatever reason one of our plants were to go down, you have a little bit of a backup factor. And so it's just good practice to not have all your eggs in one basket.

And so there's just multiple reasons that the second plant makes a lot of sense. But we probably -- and you never say never or anything, but we just don't see a pathway at all anytime soon of just having one single plant or going back to one single plant, so.

The other one to ask bluntly, do you feel like the hydrovac industry in the U.S. is finally capacity constrained? And as we think about that comment, should we be thinking about EBITDA margins, the improvement accelerating year-over-year as we go through the back half of the year? It's kind of what you've spoken to previously, but you just had a good quarter, and I just wouldn't mind getting an updated view there.

Yes. So I would say it's not necessarily constrained because hydrovac in the U.S. is -- continues to be just a really good adoption story. And you -- obviously, Ian, you're talking to a guy who's been in the business around 35 years in construction and construction equipment businesses. But it is -- it reminds me a lot of the early days back in the rental industry is the concept is still being adopted.

But certainly, at least it is our belief that competitive manufacturers are building and pushing on their plants to build as many hydrovacs as they can. And obviously, we have competitors who have taken delivery.

Badger, while we're not at full capacity today, we continue to grow our manufacturing, and you saw how we've moved within our own range from the low to midpoint of the range to now we're at the higher end of the range of what we're giving guidance on for 2026. But there's still some capacity out there.

But I believe the hydrovac industry will continue to just evolve and companies like Badger and other manufacturing companies will continue to build more and more capacity. A lot of people think in terms of the way hydrovac used to be back in the oil and gas days or there's some ability that, okay, there's just going to run out of places for people to use a hydrovac in the oil and gas or the oil field services.

And right now, I mean, just think of the script that I just shared with everyone on the call, the amount of different applications is almost limitless of how you could leverage a hydrovac to make a project safer, more efficient and move without any incidents on it. So for us, we're pretty excited about not just our positioning, but where we're going.

But like with everything, Ian, as there's higher utilization, and certainly, we're seeing -- Rob talked about this in his comments, but good utilization, you'll also see every manufacturer continue to ramp up production.

Another way to think about this, Ian, is we are fortunate that our customer base are some of the largest of the large construction and industrial firms in the world. And their work that they're doing in North America, many of them are public. Many of them, I'm sure some of the analysts on this call follow, they have record -- historical record backlogs, historical record performance and business happening right now.

And a lot of the backlogs that they're sharing with us, and we're not getting them off their calls, they're actually telling our national accounts people that their work will be taking them to the early to midpoint of the 2030s. So today, it's 2026, but -- they have projects that are going to be starting in '28, '29, '30.

And I named some of the projects we're on now, but a lot of those projects, there's more to come behind those and beyond those. So it's a long tail, Ian, and it's a pretty exciting time. But I'll let you if you want to talk a little bit about the margins and what that might look like, Rob? Yes.

No, Ian, I would caution anyone from thinking that margin improvements are going to start to accelerate. And I just want to -- the phase we're in from Q1 of 2025 through to today, our quarterly growth has gone from 8% to 11% to 13%, 15%, 18% and now 23%. We've been accelerating on our top line and the size of our market and the opportunity in front of us.

We've also been investing during that period. And I know there were some concerns from some people about the heavy investment we're making in new operators and training those operators in the fourth quarter and the first quarter of the last couple of quarters, we would not be able to be delivering the level of service we are to customers today and meeting their needs if we hadn't have done that. And so we are continuing to focus on longer-term value and growth, and we're not stepping aside to let, I guess, margins be a focus.

We are continuing to grow profitably, don't get me wrong at all. But we are going to continue to invest in the business and ensure that we can continue to scale up efficiently and effectively the way we have been.

One good example of that is in the United States, we've just recently increased the number of regions we have from 3 regions to 4 regions so that we can have enough people focused on the density of opportunity and not get spread too thin.

That being said, we do think that we will -- and we still remain very confident that we will start to proceed to go back into that 25% to 30% EBITDA margin range. But we still feel that the guidance we gave that on the last call, where we start to see that approaching those numbers in 2027 to be still the case.

Our next caller is Maxim Sytchev.

I wanted to ask you a question, if you don't mind reminding us about your data center exposure and maybe just general comment around how sort of the spending in that space is creating tightness in everything else that you're doing. And obviously, I'm fully on board with the excitement around LNG, petrochemical, et cetera. But I guess any qualitative comments you can provide that would be super helpful.

Yes. So -- and obviously, it is the topic of the day that a lot of various folks ask us about. So we continue to be in that same range we talked about coming out of Q1 and what we realized in Q2. I think in Q1, we were in that 11%, 12%, 13-ish range, and we're like just right around sub-15%, I think 13%, 14% as we went through Q2, like it wasn't materially moving or driving our business like in some kind of an outsized way or we cycled it up in any kind of a dramatic way.

Max, the way we think about data centers is we're here every day to support our customers. And if our customers are calling and they need help and they want to use Badger, we're here -- we work for our customers every day, what do you need and what can we do to provide you an excellent level of service.

If that happens to be on a data center, we're going to work with them on a data center. If it happens to be on an LNG plant or a wastewater treatment plant or a chemical plant, we're going to go work for them.

To give you a perspective, though, Badger had in our kind of the origin story of Badger, and I'm not sure, Max, if we've ever visited with you on this, but the origin story of Badger was we were an oil and gas field services business.

And for the longest time, we were greater than 50% of our revenue was oil and gas. And then today, that represents around just a tick under 5%, 4% to 5% and it wasn't necessarily that we are anti-oil and gas. I even named that in the list of projects that we're in the middle of right now, but we just don't have any one particular area as our main focus.

So we're -- but I want to be very clear, we're not anti-data center, but that's not the focus of our business only. We believe it's going to be around in that 15% range, again, plus or minus, whatever, as data centers continue to be built out.

I'll also give a data point that is very interesting that a lot of people aren't aware of. But when we look at all the available opportunities in every part of every project being bid for '26, '27 and '28, we use a service you've heard us talk about that called [ Dodge and Pech ] reports. So these are like bidding services that all the construction firms use.

And data center bidding and work contributes or consumes about 44% of all the upcoming Dodge projects that are being bid right now. And so us giving you the perspective of we're sitting in that 13%, 14% range right now. Clearly, we're not focusing only on data centers. We're not saying no to it, but it's just not a core tenant. But -- and we're always mindful not to get too heavy. I don't know if you want to add anything on that, Rob or -- yes

I would say these data centers are certainly constraining the capacity and our customers' ability to deliver. But it's also a lot of the projects that are on that list that aren't data centers, and it's in the trillions, non-data center work. They're largely nondiscretionary and are very or highly likely to occur. And if they don't occur this year or next year because the data center gets prioritized, it's very likely that they will happen in 2 or 3 years. So it's -- our enthusiasm for the longer-term opportunities that exist for Badger are continue to be very high.

Yes. Hopefully that helps your queries. Yes [indiscernible].

Yes, absolutely. And then I had a quick operational question, if I may. So as you're getting more data just overall for machines and branches, et cetera, can you maybe talk about qualitatively around the delta between kind of the top and bottom performing branches and how much of an opportunity to potentially closing that gap could represent in terms of utilization? I mean, how should we think about the direction of travel there?

Yes. Great question. So we are leveraging a lot of the data that in the past, prior to the Badger to our Badger Analytics Platform or BAP, that's kind of our data mainframe repository and our Oracle ERP system. Prior to us having full good access to that and it being such a good robust data set, we were doing a lot of this very manually on Excel spreadsheets.

Now we're able to identify real time on a daily basis, where there's opportunities for improvement, and we are engaging actively on those branches that have historically either underperformed or they're going through some kind of a cycle, maybe some customers or projects have moved away, making sure that those branches are rightsized, both with their personnel, the number of personnel, the number of trucks, et cetera. And we're able to do that in a much faster, robust manner than we've ever been able to.

And the cool thing about all of our businesses, our operators are fungible. Our operators, we -- they can go and operate the same Badger truck or a different Badger truck because they're all the exact same controls, the same training, same everything, they can move between branches, between markets, and we actually encourage that as well as the assets are very fungible. They just move across markets. And Rob, if you want to add anything?

That's such a great question. The opportunities that we have don't just reside in utilization either where we're getting such huge returns. Our operational excellence programs, we're able to see on a daily basis, what's the maintenance and reliability by truck, by branch, by market, by region on a monthly, daily, weekly basis, either per engine hour or per dollar of revenue, what's our direct labor utilization, what's our direct labor hours per build hours, all of these different data points we're feeding to our branch managers and our general managers that run our smaller markets on a daily and weekly basis. And the spread between low and high is wide and the opportunity is big on all of those measures.

Our next question comes from [ Kristen ] (sic) [ Krista ] Friesen at CIBC.

I was just wondering more on the competition side on some of these bigger projects and maybe what your national accounts group would address. What are you seeing from competition? Is -- are people starting to get a little bit more aggressive here? Are you seeing more competition on these projects? Any color would be great.

Krista, so we certainly like competition, there's Badger, again, I just celebrated my fifth year, and we are -- the competition is as much as we've ever had. I wouldn't say it's either ramping up or down. It is interesting that it feels like there are certain players kind of on the way up as competitors.

And then there's a few players that a few years ago that were pretty strong competitors that feel like they are struggling because they're not backfilling or refreshing their fleets like at the rate that Badger is. And again, I'm not familiar with the reasons why, and you'd probably have to go ask them.

As far as on projects and national accounts, we just don't have any competitor that has the same footprint that we have. And it's just a huge differentiation and differentiation factor that Badger offers that no one else has at this point. But I'll also share, and we talk about this all the time with the leadership team is we have to remain hungry. We have to understand that competitors will always be out there.

And if we ever take our eye off the ball or we get a little less hungry or to quote someone recently, if you become kind of fat, lazy and happy, that's where companies -- they lose their edge and then they start losing their market position.

But for us, Krista, on let's just use some projects, really large projects that we're on, we're starting to realize that Badger, not only do we bring a leading safety record and safety culture process to these projects on these mega projects that most small or regional because there's no other national service provider that does what Badger does. But these smaller regional, they don't have that level of sophistication.

There are a few regional ones that are decent. They're pretty good regarding their safety programs. But then when a customer says, I need 25, I need 50, I need 75 hydrovacs on this project, no one else can do that. And -- or if they say, okay, we'll provide 25 trucks on this project, that is half their fleet or 3/4 of their fleet or in a few instances, and we watched it happen, where customers will say, you know what, we think we can get it cheaper from one of your competitors. And we think we're providing a competitive price. And so they try the competitor.

And then normally within, I'd say, 7, 10 days, 2 weeks, we're getting a call back saying, we really need you back, and we're willing to pay what -- now we're realizing what Badger is worth. And Krista, we like that positioning.

And again, though, we're not naive enough to think that competitors don't have the ability to get stronger or combine or whatever, but the Badger team is pretty hungry and focused. And I don't know if you have anything else on that.

I've got nothing else to add.

Okay. So hopefully, that gives you more -- a little bit of color there, Krista.

That's great color. And just a second one for me. I know we talked about this on the last call, but any updates on ability to provide like a bit more of a backlog? And maybe just as it relates to some of these larger projects that are longer term, are you able to quantify that in any regard?

Yes. So we don't have a backlog in the traditional sense of a construction firm would have, we -- but we are getting a lot more visibility because the projects are so large and they're starting to realize that if we're going to call and say, hey, Badger, I need 25, 30, 50 trucks, while we can definitely provide that, they're not just sitting around waiting on the phone call. So it takes some logistics, some movement around and some time.

We're getting a lot more notification and a lot more visibility on what the revenue streams are going to do more than we've ever had, Krista. And obviously, we're very pleased about that because it helps Rob and I be able to forecast along with the rest of the leadership team, what our manufacturing needs are going to be, our capacity. It also helps us on our pricing and understanding should we be pushing pricing in these markets or holding pricing or getting more competitive on pricing. And so we have a lot more visibility.

The concept though of an overall backlog, I don't know at this moment if we're ever going to have like a traditional sense like you might get from a general contractor. So anything on that, Rob?

I mean, I think as we also become a utilities -- more of a utilities and infrastructure service business as well, we're working very hard on how we can portray what the types of revenues we are seeing and what the longer-term nature of those are. But we're being quite, I think, pragmatic in making sure that we don't say things that are naturally.

Correct.

Sensible and long-term true. So I understand your maybe impatience on this question, but we're making sure that we get it right.

And Krista, I will give you something though we've been doing a lot of work on, and you're going to hear -- I was hoping to have it here sooner rather than later. I just don't know if it's going to be ready to roll before the end of 2026. It may be a 2027 type discussion with analysts and investors. But this concept of recurring revenues and the reason, as you know, we have these national account contracts. Many of them are 2 years, 3 years to 5 years in nature. They all have pricing escalators, proper payment terms, et cetera.

And we do -- and we have a proven track record, in many cases, north of 10 years with some of these large utilities. And it's the same way that these other large utility contractors, I'm not going to name them on our call, but you know who I'm talking about. they view those as long-term contracts that occur year-after-year, and we're having the same benefit out of that. But we've just never identified it and put it out as a recurring revenue stream and actually identified that officially.

We are internally working on that and more to come on that. I think you're going to get more visibility, which may help you as well, Krista, as you're looking at kind of Badger, not necessarily as a backlog, but more of a, okay, this much of Badger's business is truly recurring or it's under an MSA that goes on for 3 years, I believe that investors and analysts would see a lot of value in that visibility. So hopefully, that helps, Krista, with the -- what your question was.

That's certainly helpful. And definitely sounds like the visibility is improving versus a couple of years ago. So that's great to hear.

Yes, absolutely.

Our next call comes from John Gibson at BMO Capital Markets.

I just had one more on the U.S. manufacturing. Just wondering, Red Deer does or can do up to 350 trucks a year. I guess both are up and running. Would you expect a significantly higher level of new builds going forward? Or maybe just kind of give some guidance on how you expect that facility to ramp and the potential number of trucks, as you put out both in the U.S. and Canada.

Yes, I love that. So John, we're looking at it as we know the capacity, like it's actually very focused, very clear what the capacity is of Red Deer. We also know how we can continue to improve the capacity levels and get -- gain more capacity out of Red Deer.

But as we're looking at the U.S. second campus for manufacturing, we're actually want the variability of it to where, obviously, it could produce at even just a minimum of what the Red Deer campus can do, but having somewhat of tremendous amounts of scalability.

There's multiple ways you can do that when you're building out a manufacturing plant. and you don't have to build it all at once. We don't have to front all the capital and build some mega plant for the next 30 years, but rather as long as -- and we're working with a couple of outside advisory and engineering firms that are guiding us on this.

But as long as you make sure you have the plant for what you need today in the next 3 to 5 years built out, but with the ability to expand, we believe that would allow Badger to have kind of infinite capabilities.

The cool thing about that is, again, and I share this all the time with our internal Badger team, John is Badger will never be as small as it is today. And then next week, we're never going to be as small as it is then. So as we continue to scale and grow the business, we're going to have more and more need for additional capacity.

And we just want to make sure, as Rob and I discussed with our Board of Directors, we are being very measured and thoughtful on this process rather than just knee-jerking trying to put something together quickly, and it's not very well thought out. So clearly, you can tell we've been contemplating it, but you're on the right track.

I just can't give you those numbers. And a little bit of it is for competitive reasons as well because we know we have competitive companies that listen to our calls, and we're not going to tell, okay, here's our exact capacity on a second plant because we don't want someone trying to trump us if that makes sense, John.

No, that's helpful. I think it's fair to assume that builds should go higher over the next few years with the new facility. That's helpful.

Just shifting to Canada, we haven't talked about it much. It seems like we're in early innings of a pretty significant project build-out as well. How are you thinking about the Canadian market? I know it's a bit smaller now, but is demand there now? Or do you see it coming?

Yes. So we are very pleased for the second quarter and actually the last few quarters of just as you're suggesting, there's a lot of projects that are being let and started and underway here in Canada. And we're very, very pleased with what we're seeing there.

A lot of our customers are now starting to report mega billion dollar, in many cases, nation-building projects and them actually winning those projects putting them in their backlog officially. And again, we work for a lot of those customers and they're great customers of ours.

And we're -- so we're like their biggest cheer leaders as they continue to win bigger projects because we believe over time, Badger can support them in all their projects. But we are seeing improvement.

Now at least for Badger, it's still relatively early innings on a turnaround, and I'm sure there will be lumpy months. And from time to time, this month is a little off or this month's outsizing what it's been. But the trend right now is positive. And anything else on -- [ yes ].

I would say Canada is growing, maybe not at the same pace as the United States is definitely well into the double digits. We're very pleased with where it's going, particularly in Ontario, Quebec and then the West Coast.

Yes. West Coast of like BC and all that so.

Thank you. And it appears that we have no more callers. So I will turn it back over to you, Rob Blackadar.

Thank you, operator. And so I'll close with -- on behalf of all of us here at Badger, we want to thank our customers, our employees, our suppliers and our shareholders for your ongoing support that drives Badger's ongoing success. Operator, you may now end the call.

Thank you. This concludes today's event. Thank you for your time and participation today.

Ladies and gentlemen, thank you for standing by. Welcome to the Badger Infrastructure Solutions First Quarter 2026 Results Call. [Operator Instructions] As a reminder, this event is being recorded May 1, 2026, and will be made available on the Investors section of Badger's website.

I would now like to turn the call over to Anne Plasterer, Director of Investor Relations.

Good morning, everyone, and welcome to our first quarter 2026 earnings call. Joining me on the call this morning are Badger's President and CEO, Rob Blackadar; and our CFO, Rob Dawson. Badger's 2026 first quarter earnings release, MD&A and financial statements were released after market close Thursday, and are available on the Investors section of Badger's website and on SEDAR+. We are required to note that some of the statements made today may contain forward-looking information. In fact, all statements made today, which are not statements of historical fact are considered to be forward-looking statements.

We make these forward-looking statements based on certain assumptions that we consider to be reasonable. However, forward-looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them as actual results may differ materially from those expressed or implied. For more information about material assumptions, risks and uncertainties that may be relevant to such forward-looking statements, please refer to Badger's 2025 MD&A along with the 2025 AIF.

I will now turn the call over to Rob Blackadar.

Thank you, Anne. Good morning, everyone, and thank you for joining our 2026 first quarter earnings call. Before we get into the results, I'd like to take a moment to talk about safety, which is how we start all of our meetings here at Badger. With the scale of our fleet and the number of miles our teams travel every day, safe driving remains one of the most important ways we protect our people and the communities in which we work. We reinforce this through our just drive mindset, staying focused behind the wheel by eliminating distractions, adjusting for road conditions and taking the time to pause when conditions aren't right.

These everyday decisions matter. That consistent focus on safe driving is embedded in our safety culture and supports the reliability and professionalisms our customers have come to expect from Badger. The company utilizes industry-leading telematics and AI technologies built into every one of our trucks to further enhance our commitment to safe driving.

Our safety culture and solid safety performance record continues to allow Badger to bid and win projects across all of our end market industries, supporting our increasingly safety-focused broad customer base. I would like to take this opportunity to thank the entire Badger team for their continued dedication, safety focus and amazing customer service. The team's execution is the reason for Badger's continued success.

Now on to the quarter results. The Badger team delivered another strong quarter of double-digit growth in revenue, adjusted EBITDA and adjusted net earnings. Our first quarter revenue was a record performance of just over $203 million. This represents 18% of entirely organic growth over the prior year, driven by the team's strong commercial execution, capturing increased customer demand across Badger's core end markets. We met this demand through increased utilization, pricing and continued expansion in the fleet.

Importantly, we continue to see this trend for the remainder of 2026, building positive momentum leading into the upcoming busy construction season. Notably, this growth is across all of our regions and broadly across all of our end markets. I will provide more detail and context on our broad and diverse end markets later in the call.

Adjusted EBITDA grew 13% year-over-year to a record $38.1 million. We continue to invest in our team and branch network, positioning Badger to benefit from our competitive advantages in our most important strategic markets. We achieved RPT or revenue per truck per month of $39,000 in Q1, up 11% compared to last year. This improvement reflects the strength in fleet utilization and pricing efforts while steadily adding capacity to the hydrovac fleet. Badger ended the quarter with 1,778 hydrovacs, a 7% increase of the average fleet count from last year.

Our Red Deer manufacturing plant delivered 78 hydrovacs this quarter versus 50 units in Q1 of last year, and we also retired 23 units in the quarter. We continue to see extraordinary demand and opportunities over the coming years. Accordingly, we have increased the build rate at our Red Deer plant to capture this demand and expect to grow our fleet at the upper end of the previously disclosed 270 to 310 truck build outlook for the year. Our fleet plan also includes refurbishing between 30 to 50 hydrovacs and retiring between 130 to 150 units. The scale of our existing fleet and our ability to control our own manufacturing plant allows Badger to capture continuous growing demand in 2026 and beyond.

I'll now turn the call over to Rob Dawson to discuss the Q1 financial results in more detail.

Thanks, Rob. Our strong financial results in the first quarter reflect the strength of our business model and the continued discipline focus of our team. As Rob noted, revenue, adjusted EBITDA and adjusted earnings per share grew by double digits, demonstrating the ongoing execution of our road map of building scalability at every level of the operations.

Strong performance was also driven by continued fleet investments to capitalize on increased demand across all of our regions. Our adjusted EBITDA improved to $38.1 million, an increase of 13% compared to 2025, while adjusted EBITDA margin was 18.7% compared to 19.6% in the prior year. As expected and as discussed in our Q4 release, as the rate of our growth has accelerated from the middle of 2025, continuing through to the first quarter of this year, we are making investments to position Badger for sustained long-term growth in both scale and profitability. These investments include adding new branches to capture end market growth and further densifying our presence in key markets, rolling out our Operational Excellence program to drive efficiencies across the company, the hiring and training of our field teams to support our increased truck build rate and recently, as disclosed last quarter, we are in the process of launching additional service lines.

To provide more context, in aggregate, these investments impacted our first quarter adjusted EBITDA margins by about 100 to 120 basis points. Excluding these impacts, our Q1 adjusted EBITDA margin would have been approximately 19.8% versus the 19.6% in the prior year. We are very encouraged to see the underlying business continuing to show a trajectory of expansion. We view these investments as a core catalyst to reaching our 25% to 30% margin targets. Again, and as disclosed previously, while these investments are expected to impact gross margins in the near term, they will position Badger to capture growth opportunities as the year unfolds.

General and administrative expenses were $11.8 million or 6% of revenue, in line with 6% of revenue in the prior year. The consistent expense as a percentage of revenue with the prior year reflects overall stability in our G&A functions. And finally, adjusted earnings per share was $0.22 per share compared to $0.19 last year. We continue to see our growth in revenue and adjusted EBITDA scaling to the bottom line.

Turning to the balance sheet. We continue to maintain a disciplined approach to capital management, preserving financial strength while supporting strategic investments. Our compliance leverage ended the quarter at 1.5x EBITDA at the midpoint of our 1x to 2x targeted range. Looking ahead for the remainder of 2026, our intention is to continue returning capital to our shareholders through both the NCIB and dividends, all while remaining well within our 1.0 to 2.0 total debt to compliance EBITDA range.

With ample balance sheet capacity, we have plenty of flexibility to continue investing in our organic growth strategy to support initial investments in new service lines and also to continue returning capital to our shareholders. During the first quarter, we repurchased and canceled 47,373 common shares under the NCIB at a weighted average price per share of CAD 63.27.

I will now turn the call back over to Rob Blackadar for some final comments. Rob?

Thanks, Rob. So before we open it up for questions, I'd like to share some comments regarding our outlook. Customer activity remains very robust, supported by sustained infrastructure investments across all of North America and the increasing need for safe, precise hydrovac solutions continues to grow. Badger's competitive moat positions us well in this current and future environment. Our industry-leading footprint, purpose-built fleet by our own vertically integrated manufacturing plant and highly trained workforce allows us to serve customers consistently across our broad geographic base.

Scale is the key differentiator. Our ability to continuously deploy equipment and crews efficiently, supporting large national and local customers, delivering safe, reliable service continues to differentiate Badger from all our other competitors in the market. At the same time, we've been very deliberate in strengthening our operating platform to capture and retain customer demand. Investments in our team, fleet capacity, branch network and systems are improving utilization and responsiveness across the organization. Our established pricing discipline and focus on execution allows Badger to balance growth and profitability.

Looking forward, we continue to see long-term infrastructure spending as a meaningful tailwind for the business. Some of these long-term projects that we are currently working on include infrastructure-related projects such as airports, heavy highway projects, wastewater treatment plants, power generation and transmission projects across all of our regions, industrial manufacturing plants, including chip manufacturing, pharmaceutical, metal and steel facilities, LNG facilities and oil refining facilities and data centers and mission-critical facilities. Badger plays an important role in all of these projects by helping customers work safely around critical underground infrastructure, reducing risk and improving their productivity.

While we remain attentive to evolving macro conditions, we are confident in our business model, balance sheet and the ability to execute. We remain focused on disciplined capital allocation, investing for long-term value creation and maintaining our strong safety culture and operational discipline. Finally, I want to remind everyone that we have our Annual and Special Meeting of Shareholders today at noon Eastern, 10 a.m. Mountain Time. For information, please visit our Investor Relations page at ir.badgerinc.com.

So with those comments, let's turn the call back to the operator so we can take questions. Operator?

[Operator Instructions] And with that, we will start with Ian Gillies from Stifel.

Just wanted to start on the margin side. Given the demand profile you're seeing measured against some of the investments you're putting in this year, do you think it's a base case or a stretch goal to get within to that 25% to 30% margin range this year that was previously provided at your Investor Day?

Ian, it's Rob Dawson here. On a trailing 12-month basis, we're still 100 basis points out of that range. I would expect it would be a base case to be in that range by next year. But I think on a trend basis, we would expect to be heading towards that in the second half of this year.

Understood. Maybe as you think about your customers, demand is obviously ramping up quickly. Can you maybe just share some thoughts around how they're treating, I guess, renting hydrovacs versus buying them internally, how that kind of toggle is playing out right now, just given how well things seem to be going and utilization is ramping?

Ian, I'll take that one. This is Rob Blackadar. We continue to see the end market demand and the projects being bid for the next several years to be -- and I shared this during the Q4 release in March that like something we've never seen before. And because of all that demand, there's just not a lot of excess hydrovacs that are in rental fleets and available nor are there a lot of excess trucks just available for customers to purchase. So we really, really enjoy our positioning where we are being the largest hydrovac service provider in the industry.

We do believe customers have a lot of options. Some of our larger customers certainly own their own hydrovacs, and they use Badger in that same concept of when theirs are tied up or in a different area of the country or they need additional units for their projects, they're calling Badger, and we really do enjoy that relationship. But we do not look at a customer who wants to buy their own hydrovacs. If they're going to keep them busier than that 75% utilization, sometimes it makes sense for them to own their own hydrovac, and we actually communicate that to our customers. And then if they're going to use it -- keep it less than 75% utilized, many times it makes sense just to contract with a Badger or another hydrovac services provider. And it's our goal that when a customer makes that decision, we want them to be calling Badger. So hopefully, that gives you some color there, Ian.

Our next caller is Tim James from TD Cowen.

Just wondering the indication of the impact from the investments in expenses that you laid out earlier in the call just to kind of drive and facilitate future growth. You mentioned it was 100 to 120 basis points of impact in the quarter. Is it possible to give us a bit of a sense approximately how much of that related to direct costs versus G&A?

All of that, I would say, Tim, relates to not only just direct costs, but if you think about opening new service lines and opening new branches, there is revenue as well. So it's a revenue, direct and indirect costs that go into our gross margins and the relative impact of all of that. Operational Excellence at this point is still mainly an investment, and so it's a cost, but it's a combination of both of those. But we're not including general and administrative expenses when we're making that statement.

Okay. That's helpful. And then just you called out a number of industries that are driving growth or demand is very strong currently. I'm just wondering if there's any of those that you would point to as being particularly strong, maybe standouts from the rest, if there's 2 or 3? Or is it really if we kind of look across the board, they're all sort of equally responsible for driving the growth?

I apologize, I missed the very front part of what you're saying, Tim, the phone crackled. Can you repeat the front part of what you were saying?

Yes, Rob, I was just wondering if you could -- if -- of those industries that you called out as driving the growth, if there's any kind of 2 or 3 that are particularly notable in driving the strength? Or is it really that broad-based where they're all kind of equally responsible for the growth that you're seeing?

So the way I would frame it up, Tim, to give you the perspective of the dynamics we're seeing because a lot of people as of late have been asking us, I'd say, for the last couple of quarters about the data centers and all the stuff about AI and data centers, et cetera. But actually, it is nonresidential commercial construction, a tremendous amount of utility, both construction and maintenance and utility build-out. That's kind of our core base business, and that's where Badger has been the industry leader for many, many years.

And what has happened or happening is some of the data center build-out that's happening in the marketplace is taking any excess capacity, not just from Badger or the hydrovac business, but you're hearing the same thing in the rental industry. You're hearing the same thing for some of the construction equipment manufacturers, a lot of the service providers, and I'm not going to name them on our call, but anyone who works in any kind of -- in our space in any capacity, the data centers have basically taken all the excess air out of the room. And so that's what has a lot of demand and will have that long tail demand for the next 3 to 5 years. But that's what's driving the overall -- like the core -- our core business is really, really strong.

And then if you layer on the data center on top of that, it's like the cherry on top, it just continues to take any kind of excess capacity and keeps all of these businesses very, very busy and especially us being a service business supporting all those industries, that's where we're seeing all this demand.

Okay. That's great. That's really helpful. One more, if I could just sneak it in actually returning to my previous comment just about the 100 to 120 basis points of impact. When would you expect that to reach sort of a 0 impact? And not to say there is another obviously, opportunities for margin expansion. But this initiative that you've called out now, is it kind of first quarter of '27 when this goes to 0 or even in the second half of the year, should these impacts be kind of reduced to an immaterial weight on margin?

Tim, it's Rob Dawson. I can take that one. If you exclude the impact of our investment in the new business lines because you can imagine we won't get to a solid run rate on those within 4 short quarters. So we always plan -- assuming they're successful, we'll be investing in those continually over the next several years, and there will always be some element of margin dilution, I suspect, as a result of that.

But the others, I think you're right. I think our rate of growth versus just how much we are growing year-on-year, so the acceleration of that growth it was 10%, 11%, 12% in Q2, Q3, Q4 last year, now it's 17%, 18%. That rate of growth is not going to continue to accelerate in our opinion. And so as we head into a steady velocity, a lot of these investments are going to start to level out and the impact of them on our margins will dissipate. So I think that's a pretty good safe advantage that by the end of this year and into next year, we'll start to see very good comps and a return to good growth, that S-curve on our investments will start to hit.

Our next question comes from Yuri Lynk at Canaccord Genuity.

Just wondering on the -- circling back on the 2027 financial targets. I have a 2-part question on RPT. Is $42,750, would that be then the equivalent target as stated under your new reporting structure? And if so, how do you think about RPT over the balance of this year and into next year in the context of record fleet additions?

Yuri, it's Rob Dawson here. I think you're right. It's roughly 90% to 95% of that mixed currency target that we used to go to. So if you just apply that factor to it, you get to roughly what the U.S. dollar amount is. A lot of the increase we've seen in the last year in RPT is actually region mix, higher growth rates in areas that have very high prices, but also are perhaps union or in higher cost markets. So they're not necessarily union or margin accretive, but they are price accretive. So there is an element to that in that RPT, and it's a little bit harder to forecast. But for the remainder of the year, we continue to be very optimistic about our pricing initiatives. And we're targeting to get pricing to at least and perhaps exceed somewhat the impact of inflation. And so we see some RPT growth there.

You are correct, though, with record additions to the fleet, our expectation that yield -- or utilization will continue to grow is probably a bit more muted. So as we've been saying consistently, I think, for the last few quarters, our expectation for RPT growth, notwithstanding what you saw in Q1 here is that it will continue to be moderated as a result of that, but still remain very high. And I would point out that at current rates of RPT with no further growth in it, we're achieving very good returns on capital and after-tax IRRs. So we're very comfortable continuing to invest even with no further growth in RPT, but we do continue to see RPT growing, if that makes sense.

Yes. Well, that's why I was asking the question. I mean, on a trailing basis, you're pretty well at that target. And so it sounds like you wouldn't be surprised if you exceeded that target by a little bit, if I'm hearing you.

Wouldn't be surprised at all. Yes. I'd say inflation has probably exceeded our initial targets as well and RPT has moved with that, if you think about it. And that's probably the main reason why our margin expansion is still right on plan even if our RPT is a little ahead of plan.

Got it. Just switching to data center work. If you want to update us on the proportion of your revenue from that market, that would be appreciated. But apart from that, more interestingly, can you kind of describe the nature of that work? Like some of these projects are so massive that like are you sending trucks to a data center construction site and parking them there for months, i.e., getting above-average utilization on these things? Or are they just bringing you on site when you need to be and it's not any different from some of your other end markets in terms of utilization and volume?

Yuri, it's one of the most interesting dynamics. We've certainly had other large projects historically here at the company. And I'm coming up on my 5-year anniversary. And certainly, earlier on in my 5 years, we would have a large project or 2 or -- and we'd have interesting dynamics. But the way we're covering these now is -- and it's just as you're suggesting, they are beyond just like a large project. It's more of like a mega project, and they're happening in multiple states, multiple contractors. There are a few dominant GCs or general contractors that are doing a fair amount of them, but there are some other one-off contractors doing the work.

But what happens is we will get asked early on in the project to bring out a handful of trucks. And we gladly and happily take support and take care of our customers on those projects. They then watch what we can do and the effectiveness of how efficiently we can move on those projects and start moving dirt around their utilities that they're starting to stub in. And then as they start to get closer to the foundations being built and then the foundations, they start ordering more and more trucks.

And then there becomes a tipping point for Badger. I don't want to give -- I don't mind sharing a little bit, but I'm not going to give you all of our secret sauce because we know competitors listen to the calls here. But at some point, once you get beyond about 10, 12 trucks, you start to park the trucks there. And most of the GCs realize the value of having a hydrovac services company such as Badger that can support all the trucks they need on these projects. We will then have a location very similar to they have laydown yards for rental yards inside of many of the data center projects that are now giving Badger some opportunities to park trucks there, more efficient for the customer, more efficient for Badger and allows us, just as you're suggesting, to continuously keep the utilization high on those trucks.

It also allows us to sit down with the customers and show greater efficiency. As I said to Ian's question earlier, there is really strong demand and will be for the next few years for hydrovacs. And so because of that, we want to show our customers as much efficiency. So by us having them parked on those projects and working directly either with the GCs or some of the key subcontractors out there, we're then able to keep our trucks more efficient, and we will advise a customer if 1 or 2 of our trucks is not being utilized as much because we could repurpose those trucks on a different project.

But the one thing that's very interesting about Badger's positioning, especially in the next few years, there's no one who has the fleet size and scale and scope that we have. And so for a data center project to say, I want to take 20, 30, 50 trucks, and they do use them -- many of them for multiple months. And so far, we've had a few because it's a relatively new phenomena that have gone over a year, and we expect more to go over a year. It's a pretty interesting phenomenon.

You asked kind of -- and we've shared the last couple of quarters because we've got a lot of questions about how much of our business are we really putting into the data centers. And Rob and I were actually looking up historically how we've grown to where we are. We started off and it was in that 5% to 6% range about a year ago. And gradually, as last year went along, it -- we had moved that to that 7% to 8%. And then I think it was last quarter, it was that 8% to 10%. And we're right at that 10%, 11%. And as I shared before, and I'll continue to share it, our goal is not -- we could easily put many, many more trucks on all these data centers, but we don't want to abandon all of our local customers and local markets.

And so for us, we like our positioning being in the upper single digits, low double-digit range, and that's working for us right now. So that's where we are. And we -- as I was suggesting to a previous question, it really is taking up a lot of the excess kind of air in the room regarding utilization and capacity. So it's a very interesting dynamic these days. If you want to add?

I would add one thing. And your question was specifically about how a data center project would work. But that approach that Rob was talking about of going upstream to the -- like the head general contractor and/or just the one down, the large subs and being in front of the project when the project is being planned for, that works for all major projects. So we're seeing that across all of our verticals.

And as Rob said, on an LNG plant, on a new refinery, on a large arena job, you can insert large project here, we're the only company that would be able to provide all of the hydrovac for that project over its life, and we can demonstrate how that can be an efficient cost-saving matter for them to do in a coordinated way rather than down into all the deep subs. But we can also have trucks available in our local markets and do both hand. So that's really our competitive advantage in that regard.

Our next questioner is from Krista Friesen, CIBC.

Maybe just to follow on some of the comments that you just made, some of these projects sound like they're a little bit longer term. Are you able to discuss what sort of visibility you have or kind of give something comparable to a backlog number?

Yes. So Krista, you are speaking my language. We have been in my -- like I said, coming up on 5-year anniversary here shortly, we've been contemplating how we would view backlogs. And if you remember when -- I think I mentioned early on in my tenure, Krista, a lot of our business was being figured out this concept of a day before, a few days before, maybe a week before, and it was very transactional and you just -- it was really hard to forecast revenue.

As we start to work on these larger projects, we now are starting to see the concept of a backlog, but we still have, I would say, at least half our business that is more still not day-to-day, but a few days out to a few weeks out, it's not as last minute as it had been historically. I don't know if we're ever going to get to a true backlog such as some of the larger general contractors are able to report that backlog. The one thing, though, that we are starting to zero in on, and there's more to come on this. I would love to give you the scoop, Krista, but it's not quite fully baked yet. But we're starting to look at all of the business in a lot of the project reporting services such as Dodge and PEC and IIR.

We're starting to look at what percentage excavation makes up of those projects and then what percentage comes hydrovac and then what percentage does Badger have as a market share. And in a weird way, we're backing into revenue forecasting that way. And it's actually starting to work, but it's pretty rudimentary at this stage, but we believe possibly by the end of this year, beginning of next, we actually will be able to start sharing not just the amount of total addressable market because we're seeing some of the GCs and the large utility services contractors talk about their total addressable markets and how they are viewing those.

And we believe Badger is going to be able to give a lot more clarity and that would probably give you -- it may not be a full backlog such as some of the GCs report, Krista, but it will give you a lot more clarity going forward. So anyway, it's a very good news story. We're getting closer and closer, and there's more to come on that. But I think you'll start to see that later in the year or beginning of next.

Yes, that would certainly be great. And maybe just on a separate note, you're guiding to the top end of the build range. Any concerns or worries around the supply chain and being able to source everything you need there?

No, we have not had a problem at all. And even as we have increased the truck build range, not the range, but the guidance that we're giving out that we're moving to the higher end, all of our truck chassis manufacturers and all the suppliers for all the tool in the back, the hydrovac tool in the back have been able to keep up with us. And -- but we do, do a tremendous amount of communication with our suppliers. They have weekly meetings just to make sure they know what we're looking at, what we're thinking and how we are pushing for more and more growth on our manufacturing. And so far, we've had really good support from our manufacturers, and we anticipate that continuing.

And our next question is from Roman at National Bank Capital.

I'm sorry, can you hear me? Yes, I had a quick question in terms of RPT. Obviously, it accelerated to 11% from previous 8%. Is it possible to get a bit more color in relation to pricing versus utilization, just sort of directionally speaking for the metric?

Yes. So what we're seeing is -- if you remember, RPT is an amalgamation of utilization pricing and the truck volume, the number of trucks we have in the fleet and growing into the fleet. We're seeing that the larger driver of the 3 so far has been our utilization. And we saw, as Rob was suggesting in his commentary, solid pricing. And as he suggested, at a minimum, we focus on we're at least keeping up with inflation, and we think there's actually some upside above that. We're not really expanding beyond that at this moment because, again, for competitive reasons. But the main driver of that has been utilization. We think it will continue to be.

And keep in mind, though, as we have increased that truck build guidance for -- and we said that we're going to be going to the higher end of the range, that will also start to see some RPT opportunity on the actual truck volume componentry. And you got to remember, Roman, one last thing to just keep in mind, the RPT and pricing and everything, we're coming -- and we're just reported and coming off of our Q1, which is our most seasonally slow quarter. especially as it relates to pricing.

So we think the team in the field very, very focused on making sure that we're pricing for the projects we're working on correctly and giving a very fair price for a very high level and good level of service and everything we offer to the customers. So -- but yes, as Rob suggested, there is some opportunity in RPT, and we'll see how that continues to play out in the back half of the year.

Okay. That's super helpful. And then just a broad question around free cash flow. I mean, obviously, right now, you're sort of in this build cycle because there's so much opportunity available. But how should we think about this maybe when it comes to like medium-term objectives? And any parameters you could provide that would be super helpful.

I'm sorry, Roman, I missed the very first front of that with a little shakiness in the feed again. Can you repeat the first part of that question?

Yes. See, I'm just referring to how should we be thinking about a free cash flow inflection trajectory as right now, obviously, you're in a build cycle. But I guess when should we expect free cash to come in?

I think just on a look back, we increased our discretionary free cash flow. If you were to split our growth CapEx in units versus retirement CapEx units, we're generating significant discretionary free cash flow and have increased that number by about 150% over the last 5 years. So we do generate a significant amount of discretionary free cash flow. In 2025, our all-in free cash flow is about flat. So we were able to fully fund the organic growth that we delivered last year within the funds generated by the business.

This year, with this increase in the pace of growth and the investments we're making in new service lines, we are leaning back on the balance sheet, and we intend to be that to be the case, certainly for all of 2027. If the market conditions that exist today continue for the next 2 or 3 years, it might be a few years before we get to all-in net free cash flow. But as we've always mentioned, I would always -- with the balance sheet capacity we have and the strength in our balance sheet, we have more than enough capacity to make these investments. And the returns we're getting on these organic investments, particularly at the level of risk you get for an organic investment in a market we already occupy relative to, say, mergers and acquisitions or moving into new geographies or new regions.

We're very focused on ensuring we can capture that growth and think we have the balance sheet and the capacity and capital to continue doing so.

Okay. Super helpful...

All the free cash flow is secondary, we think, to the growth and the opportunities we have right now.

And our last questioner is Trevor Reynolds from Acumen Capital.

Just a couple of quick ones. I think most have been answered. But the tariff, you did kind of highlight what the impact was in the quarter. Is that in line with kind of the guidance that you provided for the year in terms of expectations?

Trevor, it's Rob Dawson here. Yes, the range that we provided on tariffs, what we're experiencing on the ground for tariffs is in that range for sure. I would expect the tariffs currently to be in that $70,000 per truck range at the moment. We think there's opportunities as we get better reporting and accuracy on our U.S. content for things in addition to just the chassis, we could start to get that a little lower. But right now, I think it's fair to say about $70,000 a unit is a fair guess. Our range had us paying quite a bit more than that, but we're in the midpoint of that range, I'd say.

Okay. Great. And then just remind me on the fuel costs, is that pass-through pretty immediate under your new structure? Like is there much of a lag there?

We had already set up during COVID and at the outbreak of the war in Ukraine, a fully reflexive billing process to capture fuel surcharge changes in the moment. So we haven't skipped a beat in any instance that's occurred in the more recent case here. So yes, the answer is yes. There's been flow-through, and it's happened immediately.

Great. And then just last one. Obviously, Canada, not as big a piece of the puzzle as it used to be, but major projects being contemplated? Are you guys at the table in Canada as well? And how do you guys kind of see that playing out over the next few years in Canada?

Yes. Trevor, this is Rob Blackadar. Yes. So we have watched Canada, I'd say, in third and fourth quarter of last year and certainly into Q1 this year. We have been very pleased with the activity we're seeing starting to open up in Canada regarding some of our end markets and what we're covering. All of the projects that are being released, both the government and then some of the military work as well as very, very encouraged by some private investment happening in Canada. We are watching our Canadian business really revitalize for the last, I'd say, 6 to 9 months. And the prospects going forward for the next couple of years, as you're suggesting, look very, very solid.

And if you follow any of the Canadian contractors, very similar, a lot of the projects that they're working on, we actually work for many of them. And so as they're seeing some uptick and uplift, we're obviously the beneficiaries of that as well. And we really enjoy the relationships we have with a lot of those large contractors, and we really enjoy supporting those guys. So anyway, very encouraged by what we're seeing in Canada as well, Trevor.

And that appears to have been the last question. So I will turn it back over to you, Rob Blackadar.

Thank you, operator. So on behalf of all of us here at Badger, we want to thank our customers, employees, suppliers and shareholders for your ongoing support that drives Badger's success. Operator, you may now end the call. Thank you.

Thank you. This concludes today's event. Thank you for your time and participation today.

Ladies and gentlemen, thank you for standing by. Welcome to the Badger Infrastructure Solutions Fourth Quarter 2025 Results Call. [Operator Instructions] As a reminder, this event is being recorded today, March 6, 2026, and will be made available on the Investors section of Badger's website.

I would now like to turn the call over to Anne Plaster, Director of Investor Relations.

Good morning, everyone, and welcome to our fourth quarter 2025 earnings call. Joining me on the call this morning are Badger's President and CEO, Rob Blackadar; and our CFO, Rob Dawson.

Badger's 2025 fourth quarter earnings release, MD&A and financial statements were released after market close yesterday and are available on the Investor Relations section of Badger's website and on SEDAR+. We are required to note that some of the statements today may contain forward-looking information. In fact, all statements made today, which are not statements of historical facts are considered to be forward-looking statements. We make these forward-looking statements based on certain assumptions that we consider to be reasonable. However, forward-looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them as actual results may differ materially from those expressed or implied. For more information about material assumptions, risks and uncertainties that may be relevant to such forward-looking statements, please refer to Badger's 2025 MD&A along with the 2025 AIF.

I will now turn the call over to Rob Blackadar.

Thank you, Anne. Good morning, everyone, and thank you for joining our 2025 fourth quarter and full year earnings call. As we always do here at Badger, we'd like to start off with a brief safety moment. We launched our Make Safety Personal campaign again this year in the first quarter. This will be the third consecutive year we've leveraged this program, and we continue to see our safety results improving across the entire organization. This campaign embodies the team's personal commitment to continuous safety improvement. Badger believes having a safe workplace is critical to our people and to our success, and we remain committed to building on this momentum.

Over the past 5 years, Badger has doubled the size of the company entirely through organic growth. We launched a strong, successful and well-performing commercial strategy anchored by an industry-leading national accounts program. We are beginning to fully leverage our internal manufacturing facility in Red Deer, Alberta, which is producing world-class hydrovacs and has been able to flex up to support our current strong customer demand. Our sales and management leaders across the entire organization continue to deliver one of the most efficient, safest and most reliable hydrovac service offerings in the market today. This has allowed Badger to continue to expand our competitive moat across North America. We look forward to continuing this growth journey for the next 5 years and beyond.

Now on to our 2025 results. Our record top line revenue of over $830 million grew by 12% year-over-year, reflecting the strength in Badger's core end markets and customer demand. We were able to fulfill this demand through increased utilization and continued year-over-year growth in our fleet. We continue to see this trend into 2026. Adjusted EBITDA outpaced revenue growth, up 13% year-over-year. These results highlight Badger's strong operating efficiencies and the optimization of our overhead support functions. Our adjusted EBITDA margin increased to 23.8% compared to 23.6% in 2024. We achieved RPT or revenue per truck per month of $41,672 in 2025, up 5% compared to last year, largely due to improvements in our fleet utilization. Badger ended the year with 1,723 hydrovacs, growing the fleet by 5% overall in 2025. The Red Deer manufacturing plant manufactured 210 hydrovacs. We refurbished 35 hydrovacs, and we retired 130 units during the year at the high end of our revised build and retirement guidance.

As we look ahead into 2026, we see extraordinary demand and opportunities across almost all of our end markets. To capture this demand, we plan to build between 270 and 310 new hydrovac units, a record build rate for Badger manufacturing. Our fleet plan also includes refurbishing between 30 to 50 hydrovacs and retiring between 130 to 150 units. This plan allows us to grow our fleet in 2026 by 7% to 10% net of retirements and spend between $198 million to $230 million in capital. Included in this capital range are investments of $15 million to $25 million with the launch of 2 additional service lines that are intended to complement our existing hydrovac businesses.

While the revenue and adjusted EBITDA contributions from these initiatives are not expected to be material in 2026, we believe these additional service lines will support Badger's long-range strategic growth plans into the future.

I'll now turn the call over to Rob Dawson to discuss our Q4 financial results in more detail.

Thanks, Rob. As you saw in our fourth quarter release, the team delivered a solid performance with record revenue and strong operational performance. Fourth quarter revenue grew 14% compared to 2024, driven by continued fleet investments to capitalize on strong demand across our U.S. operations. Our adjusted EBITDA improved to $44.9 million, an increase of 2% over the prior year, while adjusted EBITDA margin was 21.5%. As we have discussed, with the ramp-up in our growth rate in the second half of 2025, we are making investments to position Badger for sustained long-term growth in both our scale and our profitability. These investments include new additional branches to further capture market growth and densify our position in core markets.

We are also adding certain operational and commercial leadership positions to ensure capacity for continued growth and scale. The initial launch of our Operational Excellence program expected to drive efficiencies across all of our field locations and the accelerated hiring and training of operators to meet our increased truck build rate. Again, these investments will build capacity for longer-term scale and profitability, but have initially impacted near-term margins.

We have continued to invest in systems and processes to ensure that our functional support and general and administration spending grow scalably at a lower rate than our revenue. We are seeing the sustained value of these investments. G&A expenses were $10.9 million or 5% of revenue in the fourth quarter of 2025, 100 basis points lower than the prior year at $11.3 million or 6% of revenue. And finally, our adjusted earnings per share was $11.6 million in the quarter compared to $12.7 million in the prior year.

Turning to the balance sheet. We continue to maintain a disciplined approach to capital management, preserving financial strength while supporting strategic investments. Our compliance leverage ended the year at 1.3x debt to EBITDA in the bottom half of our 1.0 to 2.0 targeted range. Looking ahead to 2026, our intention is to continue returning capital to our shareholders through both the NCIB and through dividends. We do expect to remain within our 1.0 to 2.0x total debt to compliance EBITDA target range throughout 2026.

With this ample balance sheet capacity, we have plenty of flexibility to continue investing in our organic growth strategy to support initial investments in new service lines and to continue to return capital to shareholders. To that end, we were pleased to announce that the Board of Directors has approved a 4% increase to the quarterly cash dividend. This will be effective for the first quarter of 2026 with payments to be made on or about April 15, 2026, to all shareholders of record at the close of business on the last day of the quarter. In total, during 2025, we returned $31 million to our shareholders, $18 million in dividends and $13 million towards the repurchase of 492,800 common shares for an average price of CAD 37.78.

Before concluding, I can provide a brief update on the current tariff environment. Badger's manufactured units remain compliant with the Canada-United States-Mexico Agreement or CUSMA. And in 2025, we did not incur any direct tariffs on our units delivered to the United States. In the fourth quarter, heavy-duty truck tariffs were announced by the U.S. administration and subsequent guidance was released in early 2026. This indicates that a 25% tariff will be payable on non-U.S. content for trucks and components crossing from Canada to the United States. If we assume a 25% tariff on the non-U.S. content of our units, Badger's tariff exposure could be in the range of an additional $18 million to $30 million for 2026. We are considering a number of alternatives and options that can mitigate the impact of these tariffs on Badger's manufacturing costs. As the long-term impacts of this tariff environment continue to evolve, we will be prepared to respond accordingly.

I will now turn things back over to Rob Blackadar for some final comments. Rob?

Thanks, Rob. So before we open it up for questions, I would like to share a few last thoughts regarding our outlook. Looking ahead to 2026, we expect a continuation of the strong growth in our end markets and customer demand we experienced in the second half of 2025. Badger's industry-leading footprint, well-established commercial and pricing strategies and plans for continued investments to expand our branch network in key strategic markets leave the company well positioned to support our customers' growing needs. While we are pleased with our full year 2025 guidance -- I'm sorry, 2025 performance, we believe Badger is set up for even more success in 2026.

Our branch market coverage continues to be the best by far in the industry and growing. We are able to support our customers across 44 states and 6 Canadian provinces. We have the largest fleet of hydrovacs in North America with one of the youngest fleets in the industry. Badger's dedicated national accounts program is an industry-first and industry-leading customer service offering to serve North America's largest contractors, public utilities and infrastructure customers. Our vertical integration in which we manufacture our own trucks provides substantial cost and fleet flexibility advantages. Additionally, our unrivaled fleet and workforce fungibility allows Badger to support customers at every level within local, regional and national markets.

All of these capabilities position Badger to capitalize on various strategic key industries, including power generation, transmission and distribution resiliency improvements, water-related infrastructure projects, reshoring of manufacturing plants back in the United States, various transportation projects and also data center projects, just to name a few. These projects are incremental to the ongoing maintenance and renewal of aged infrastructure in many of our more mature markets.

Overall, we believe the long-term fundamentals of our business remain strong, supported by favorable tailwinds and sustained infrastructure and construction investments across our major markets for the years to come.

So with those comments, let's turn it back to the operator for questions. Operator?

[Operator Instructions] Our first question is from Yuri Lynk from Canaccord Genuity.

Robert, just looking for some additional clarity on the CapEx spend. I mean the $170 million to $200 million, I understand that there's about $20 million in there for the new service lines. Even if I take that out, it kind of implies the cost per truck much higher than what you experienced in 2025. So is there anything else in there? Like what explains the elevated capital spend in there, if it's not the truck builds?

Rob, do you want to grab it and then I'll pick up after you.

Yes. That sounds good, Rob. Yuri, a good question. We spent $125 million on CapEx in 2025. And we've given guidance of pre-tariff of $170 million to $200 million. And so we roughly increased our spending outlook by about $50 million. And as you mentioned, $20 million of that, the midpoint of the range we provided is investing in new service lines. And then the other $30 million is simply an increase in our truck build rate. Recall that while at the plant truck cost is in that $415 to $420 per unit, if you factor in transportation and delivery, licensing and probably most materially FET, the landed cost of a truck into our operations is $450,000 per unit. And that cost is not expected to change appreciably over the next year.

So $30 million for new trucks and $20 million for strategic initiatives and the rest of the spending is largely in line with where we have been. What are those amounts? We do spend a little bit on ancillary equipment every year. Think about the trucks that can support our operations like combo trucks, rock swingers, dump trucks, those sorts of things. We are continuing to invest in IT and process improvements in that $5 million to $10 million range each year. And then we do make modest investments in our manufacturing plant each year as well. So largely in line with our current trends with the 2 big items as the uptick.

Okay. I understand that the tariff situation is fluid. But the build rate guidance is at the high end, kind of pushing up against the -- I think it's 350 units per annum of capacity at Red Deer, the top end is 310. So when do we start thinking about a potential U.S. manufacturing footprint?

Yes. So I'll grab that one, Yuri. We have always had the concept of as the company continues to grow and scale, at some point, we would need a second facility, a second manufacturing facility. And we've had that in our long-range planning for a pretty good while since I've been here at the company. As we started to scale the business, we're starting to realize that we need to be accelerating that decision-making. And so even at our most recent Board meeting, we just recently wrapped up, that discussion of let's start looking into what it would look like, the timing and how we would start to move toward that second facility, we're actually underway with getting some of that information and pulling that together. We do have a lot of additional reasons other than just scaling. It allows us to have redundancy from a risk standpoint.

So instead of having all of our manufacturing only in one facility, obviously, if we have a secondary facility, we would probably do a manufacturing plant in the United States. I don't think that would be a surprise for anyone. And if we were to do that manufacturing plant in the United States, it would probably give us a little bit more efficiency because of the amount of volume we do in the U.S. as well as a secondary benefit would be probably even more relief from a tariff standpoint. And so there's a lot of benefits for us to get going after a second manufacturing strategy. It's something that we're going to be working closely with our Board of Directors on. And at the right time, we're going to -- we'll have some movement on that. And obviously, once that is more solidified, we'll be happy to report that out.

Our next question comes from Ian Gillies from Stifel.

As you think about 2026 and growing the fleet on average by 8.5% this year, do you think there's enough other items, i.e., pricing and utilization that could perhaps get revenue growth above the, call it, long-term average of 12% to 14% this year?

We believe that the markets -- and I shared this at a recent investor conference that Rob and I were at in January, but we believe the markets are so strong, Ian, that there is potential for upside to our plan and to what we're looking at in 2026. I've been in the construction equipment rental space and the exact same end markets that Badger services has been the business I've been in for -- over 32, 33 years. And I've never seen the end markets be as strong as they are right now and the runway ahead of us for the next 3 to 4 years, maybe even longer than that. We don't normally start to prognosticate beyond about the 4-year mark because it just gets so much more opaque and gray out there. But for the next 3 to 4 years, very, very robust end markets and the amount of projects coming at us would really lend us to believe that we should have a pretty solid 2026 and beyond.

Understood. And maybe as you went through your work to think about this capital investment, putting more trucks in the field, new service lines, et cetera. Can you maybe talk about how you think it impacts where you could potentially end up in the future in the EBITDA margin guidance range or business plan range of 25% to 30%. I know that depends on cycles and how good a different year is, but maybe articulating how this helps put you in that range and whereabouts would, I think, be useful.

Yes. I'll start with that, and then I'll let Rob kind of add his thoughts on that. So certainly, as we continue to scale up the business, we believe that -- and the market demand is out there, we believe that on the incremental revenue and the growth revenue, we should start to see more and more profitability, I think in terms of flow-through and operating margin. The -- one of the catalysts that we see as an opportunity is we've kept our overhead and our G&A and everything at very reasonable levels. And for a little bit there, we were actually probably somewhat high a few years ago, and we got a lot more efficient in those areas of the business. And since we've been layering on growth, we haven't had to add a lot. Rob even mentioned that in his commentary. And so we should start to see some incremental dollars start to flow through.

Right now, we're in this a bit of just a very short transitionary phase where we've loaded in some short-term overhead to hire up additional operators. But we believe when all those operators are fully trained, and remember, we're a 90- to 100-day onboarding process that you'll start to see us moving back into our more traditional kind of range that we're aiming for. In addition to all of that, the Operational Excellence program that the business is underway with, and we launched it company-wide in January 2 months ago, very excited about what that's already showing from some pilots at the end of last year and what that's going to start to bear fruit on. So that alongside of the business growth and us keeping our cost under control is what's going to really propel us into the range. And then, Rob, if you want to add anything to that.

I think the final leg of that stool is the data platform that we set up and have matured over the last year. So we have a very timely and robust data set available to us. And in the coming year to 2 years and going forward, we are starting to leverage that data set not only for more timely and better targeted decision-making, but also bringing in the power of some of these large language models to help us to get to broad-based decisions in a more intuitive and quick way. So automation and data performance, I think, is going to be the third leg of driving our margin forward.

That's helpful. And if I could just maybe sneak in one last one. Are you seeing anything in any of your key markets in the U.S. on the supply and demand side, whether it be from competitors or other types of excavation that are negatively impacting margins in any way, shape or form? Or is this purely just we're investing in the business and it's going to turn at a later date?

Yes. So we're not seeing anything material. I mean, certainly, there's inflationary cost and not in any particular market, but just in general across all markets that everyone is burdened by. So obviously, you have your labor, your wages, cost of fuel, even though we did implement a fuel recovery fee post-COVID. And as fuel fluctuates, it becomes less of an issue here at Badger. But I do believe some competitors have some headwinds with that who don't have that floating fuel recovery fee -- fee recovery. The -- but there's nothing in particular that I see either Badger having some disadvantage on our margins or competitors having an advantage or disadvantage as well. I think we're all in the same markets. And right now, with what's in front of us, for Badger, if we were not to invest and continue to scale up, we would run the potential to start not growing and keeping our market share and growing our market share. And we're just determined to be and remain #1 and just have long-term long tail of growth and performance. And so that's my thoughts on that. And Rob, if you want to add anything to that?

I don't have anything to add to that comment, Rob. I mean we are seeing -- I'd say inflation in construction industry is ahead of the CPI number. But as Rob mentioned, we've got already existing things to be very flexible. We don't have to spend a lot of time to get at systems that we already have in place to capture things like price, fuel recovery and those sorts of things. So we've been quite adaptable to the environment that we're in, and we'll continue to be.

Our next question is from Tim James of TD Cowen.

My first question, just looking at the fleet plan for 2026, the manufacturing is going up fairly significantly. And at the same time, the retirements are going up fairly significantly. Is there anything that's going on that causes that mix? I mean the fleet growth, again, in that 7% to 10% range. But I'm just wondering in terms of sort of useful life or the economics of newer units versus older ones. Can you talk about any shifts there just given the increases in both sides of the fleet growth equation?

Yes. There's nothing really material changing as far as is the fleet aging differently? Are we seeing more engine failures or any problems? We're not. In fact, I would suggest that what Rob was talking about on the previous answer in reference to data and leveraging systems and processes and a little bit of AI, but leveraging that with our fleet management tools, we're actually seeing solid efficiency there. What's happening, though, Tim, is we are scaling the business. And if you think about it, when I joined the business in July of '21, we had roughly 1,200-plus hydrovacs. And today, we just announced we ended the year at 1,725 (sic) [ 1,723 ]. And we're continuing to scale and grow. And as you can imagine, as we grow, we are going to continue to grow our build rate and you're also going to have a certain level of retirements that are commensurate with that. We are continuing to age our fleet the exact same. We're not trying to accelerate retirements nor are we trying to delay them. We're running the company in the same manner as we have.

Probably the biggest nuance though, is the refurbishment. If you think about the refurbishments, it's just something we introduced a couple of years ago, and we've seen good benefit to that. And we're going to continue on that process as well. So that's the kind of a clear answer, but we're not changing our fleet management model.

Okay. My second question, I'm just wondering if you could take a minute and sort of review the specific kind of ground level initiatives that are involved in the Operational Excellence program.

Yes, sure. So what we have done, and this is where some of the investments and the -- when we say investments, like we put some overhead into the business, but it's very similar to Operational Excellence programs I've seen at different companies I've worked at in the past. And we go in and we evaluate every aspect of a branch in our location. So if you think about it, Tim, we have 140 locations. And historically, they've been somewhat operated like independent businesses. There were no consistent constant processes and flows across the branches, et cetera.

And what we're starting to realize is there's a lot of efficiency to be had just in how we operate. So for example, just a couple of easy examples, but we have a whole list of these we can go through with you after the call or at any time. But for example, how we dispatch our trucks. Not every branch dispatches the same way and having a common dispatch system. And so we believe there's operational efficiency of 15% to 20% to get even more efficient in how our trucks are routed and the projects they go on and starting to stack and load jobs, which will drive a lot of labor efficiency and utilization. And if you think about the lift on that, that's massive amounts across 1,700-plus trucks.

Second thing, second example that may be helpful is even as basic as how we fuel our trucks. So running Class 8 trucks, we run a tremendous amount of diesel that goes through. But some of our branches will actually do their fueling in the morning. Some of our branches will do their fueling in the evening. Some of the branches have on-site fueling. Some of the branches use truck stops or et cetera. And what we've realized is there is a much more efficient way for us to start fueling all of our trucks across the entire organization. And by doing it in a more efficient, consistent way, we can actually start to leverage our fuel spends and start to control our programs to where all the fueling is happening the same way, and it drives a lot of efficiency because if someone is fueling a truck at the end of the day, sometimes there will be in an overtime situation, and we're paying someone 1.5 to 2x their wage to sit there and fuel a truck. And as you know, our trucks take several couple of hundred gallons of diesel each truck. So it takes time to get the fuel in the truck.

If there's a way for us to avoid having to pay overtime, you start to drive efficiency. That's just one little glimpse along with dispatch, along with the branch flow, along with how we get our drivers out in the morning and what's the most efficient way, that's being standardized across the entire organization. And as Rob and I have shared, we believe once we have about a year -- a full year of that rollout happening across the organization, we're going to start seeing it becoming more material in our margins and move us from the lower end of our range to more toward the middle part of our range of 25% to 30% adjusted EBITDA.

All that, though, takes people, and that's the investment. So it takes people to actually go and roll this out at every single branch. It takes a team to coach and teach our local branches how to do it and then make sure it sticks and it's consistent and then following up. So that's the investment we're making now, but we think it will have great returns longer term. So hopefully, that gives you a little bit of a peek behind the kimono there.

Our next question is from Krista Friesen from CIBC.

Maybe just to dig into that last question a little bit more. Is there anything that we should be thinking about in terms of the cadence of your spending over the next several quarters here? And will it be kind of linear over the quarters? Or how should we think about that?

Yes. So I'll start, and I'll let Rob pick up where I leave off. So as far as from a perspective of branch expansion, we're going to continue to expand in key strategic markets. It's something we've been talking about the last few years, and it's starting to accelerate where if we have a branch that is in a larger metro area, think in terms of top 12 MSAs in the United States. The -- we believe that by having more than just one single location in a very dense but broad geography, we can start to grow our market share. We've realized a few years ago that some of our competitors are just out of reach of where Badger services. And so by us adding a second, third, sometimes even a fourth location, we can start to capture and not lose share, but we can actually grow our share and our profitability in those markets. And so we'll continue with that. We're actually slated to have about half a dozen branch expansions in 2026.

Regarding us ramping up our operator hiring, which we started much heavier and earlier than we normally would in Q4, and it's continued a little bit into Q1, we just see the amount of demand, Krista, that was happening in the marketplace and much earlier. There really wasn't a lot of seasonality. That's why you saw the revenue pop like it did in Q4. But we realized if we don't have the operators and in place trained halfway through toward the end of Q1, we have the risk of missing out on some of the market and the opportunity to grow. And so that's why we front-loaded some of the operator hiring. That's not going to continue in that fashion. So that's something that really was a phenomenon for Q4 and a little bit into Q1 here because we'll have normal operator kind of an employee base rather than this front-loading of a lot of operator hiring.

And then the last part is on the Operational Excellence, which I just laid out. We're going to -- the cost that we put into the business, that is going to -- it's about an 18- to 24-month process. And then that cost will start to just be normalized as part of the business. Operational Excellence will go on somewhat in perpetuity because there's always opportunities to improve your efficiency, but you don't need as much overhead cost as far as the rollout. At that point, it becomes more of a what are some new efficiencies we can start to drive across the whole organization. So you don't need as many people to roll it out. So that will start to sunset after that 12-, 18-month period. So that's kind of our perspective on some of the overhead investments we've made. And Rob, if you want to add anything to that?

Krista, it's Rob here. I think really the only lumpiness in our capital is when we're ordering third-party equipment. And depending on lead times and the delivery dates of those is when we would pay for those items. So for instance, we mentioned hiring some ancillary -- buying some ancillary equipment as well as equipping some of the new service lines that we mentioned in this quarter's release. There will be some lumpiness to that. But overall, everything else is a steady drip on our capital spend. So the vast majority of this is going to be pretty stable.

Okay. Great. And then maybe just to follow on that. Should we assume relative stability in the RPT? I mean, taking into account normal seasonality, just wondering if you think there will be certain quarters of maybe a mismatch between your heightened truck build and then opening these new branches and deploying those trucks.

Yes. I don't really see our RPT moving materially because of our fleet growth. Because what we're finding, Krista, is as we've started to ramp up the fleet builds, the RPT has been able to hold in steady. We've been very fortunate that there's enough demand in the market that our onboarding of new trucks into a market or into a branch, they go to work very, very quickly now and start producing revenue very quickly. So I just don't see that as being some big headwind Rob has shared a few times at investor conferences, et cetera, that utilization, while we've made a lot of improvements across the organization, we continue to see some utilization opportunities, and that's exciting, and that will continue to keep RPT strong. And if you want to add anything to that, Rob?

I think this is overall consolidated, Rob's comments are very true. We don't see significant changes in our RPT over the next while as we're scaling to grow. In each of the individual markets, when you open a new branch, obviously, RPT is going to dilute out a little bit as that branch starts from 0 and gets up to a same-store sales kind of concept to utilization. But over the entire network and fleet, those impacts will be a lot more diluted out and more difficult to see.

We have another question from Frederic Bastien from Raymond James.

I was wondering if you could provide more information on the expansion that you're contemplating into adjacent service lines, please?

Sure. So we -- every year, the company does a strategic -- or strategy session rather, with our Board of Directors and the leadership team, and we go off for 1 day to 1.5 days, and we will evaluate kind of our long-range plan for the company and how we view where the company can grow and expand and look for new opportunities to just drive improvement across the organization for the long term. And as part of that process, we are always evaluating our core business, and we're always evaluating additional businesses and service lines that may be complementary to Badger and our core business. And one of the things that's come up in the last few years and our customers are asking for it is us to start doing more work inside the fence or behind the fence at various industrial type plants. And so one of our strategic initiatives that we're underway with is industrial services, industrial cleaning services. And we did a somewhat of a soft quiet launch later in the back half of 2025 this last year, and we ended the year with 4 locations doing industrial services that are dedicated we found we're very pleased with early results.

But as we said in our -- I think it's in our press release and the script, it's not material at this time. And so because of that, we're not really reporting or promoting the heck out of it, but we felt that we should disclose that some of the CapEx spend that we're spending in that to get that business ramped up. It's extremely complementary to our current business. It also provides us some a little bit of offset to our seasonality because a lot of the industrial work will be happening when some of our hydrovac work starts to slow down in the winter time. So it's pretty exciting that way.

The other service line we're looking to get launched in 2026 here is the concept of trench safety is how we're branding it, but it truly is trench shoring and road plate. And it is to service because a lot of our customers are calling us after we dig the hole, they're calling us and saying, do you guys rent or could you provide trench shoring. So think in terms of a trench box, et cetera. it's a very accretive service line that we can offer. We're not looking to go compete head-to-head against a large trench shoring company or anything like that. We believe it's a value add to our existing customers. And so we're going to be launching a few branches with that, and that's what the CapEx is involved with. But more to come on that as well. They're just very, very early on in the launches of those 2 additional business lines, but we believe our customers, it makes Badger a lot more sticky and by us having those service lines available.

Thank you so much. We certainly appreciate all your questions. I will go ahead and turn it back to Rob.

Thank you, operator. So on behalf of all of us here at Badger, we want to thank our customers, employees, shareholders and suppliers for your ongoing support that drives all of Badger's success. Operator, you may now end the call.

Thank you. This concludes today's event. Thank you for your time and participation today.

Ladies and gentlemen, thank you for standing by. Welcome to the Badger Infrastructure Solutions Limited Third Quarter 2025 Results Call. [Operator Instructions].

As a reminder, this event is being recorded today, November 6, 2025, and will be made available in the Investors section of Badger's website.

I would now like to turn the call over to Anne Plaster, Director of Investor Relations.

Good morning, everyone, and welcome to our third quarter 2025 earnings call. Joining me on the call this morning are Badger's President and CEO, Rob Blackadar; and our CFO, Rob Dawson.

Badger's 2025 third quarter earnings release, MD&A and financial statements were released after market close, Wednesday, and are available on the Investors section of Badger's website and on SEDAR+. We are required to note that some of the statements made today may contain forward-looking information. In fact, all statements made today, which are not statements of historical facts are considered to be forward-looking statements. We make these forward-looking statements based on certain assumptions that we consider to be reasonable. However, forward-looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them as actual results may differ materially from those expressed or implied. For more information about material, assumptions, risks and uncertainties that may be relevant to such forward-looking statements, please refer to Badger's 2024 MD&A along with the 2024 AIF.

I will now turn the call over to Rob Blackadar.

Thank you, Anne. Good morning, everyone, and thank you for joining Badger's 2025 Third Quarter Earnings Call. Before we get into the results, I'd like to take a moment to talk about safety, which is how we start all of our meetings here at Badger. As we move into the colder weather months, it is essential that our teams remain prepared for unexpected situations, including severe winter weather, equipment issues and any emergencies. We encourage all of our team members to review emergency response plans and ensure vehicles are equipped with winter safety kits. Staying informed about local conditions and having accessible, well-maintained safety gear can make a critical difference. We appreciate everyone's continued commitment to safety and the teamwork -- and teamwork as we prepare to enter into the winter season.

Now on to the quarter's results. Building on the positive momentum from Q2, the team delivered another strong quarter of double-digit growth in revenue, gross profit and adjusted EBITDA. Our record Q3 top line revenue of $237.3 million grew by 13% company-wide over the prior year. We continue to see solid demand in our end markets in both local customer and project-based work. I will provide more detail and context on our broad and diverse end markets later in the call.

Our positive results reflect the team's work to increase utilization while continuing to grow the fleet. Ongoing investments in sales and marketing initiatives, including consistent performance to capture pricing opportunities are also reflected in the results.

Adjusted EBITDA grew at a faster pace than revenue, up 15% year-over-year. These results highlight Badger's continued strong operational efficiencies and the optimization of our overhead support functions. Accordingly, adjusted EBITDA margin increased by 40 basis points, to 28.2%. We achieved RPT or revenue per truck per month of $47,921 in Q3, up 8% compared to last year. This improvement reflects our fleet utilization and pricing efforts. Our Red Deer manufacturing plant delivered 57 hydrovacs this quarter versus 48 units in Q3 of last year.

We are updating guidance for our full year fleet plan, mainly due to increased demand from our end markets. As Badger's growth in revenue and business volumes have risen, we have increased our rate of manufacturing to ensure we have the right capacity to meet our customers' needs. Accordingly, we expect 2025 hydrovac production at the upper end of our original 180 to 210 unit range.

We also successfully consolidated a Badger franchise in Denver, one of our core markets and have accelerated the planned refresh of its fleet. As a result, we expect our 2025 retirements to be at the upper end of our original 90 to 130 unit range. We are excited to gain full control of the Denver market and bring Badger's size and scale advantage to accelerate market share.

We retired 36 units in the quarter, bringing us to 98 hydrovac units retired year-to-date. We refurbished 5 units in the third quarter and have completed 23 so far in 2025. The refurbished program has lagged our expectations this year, mainly due to third-party facility capacity. We are reducing the 2025 refurbishment range from the original 50 to 60 units down now to 30 to 40 units for the full year. We plan to develop our own refurbishment facility in the Central U.S. to better control the pace and the cost of this program. This new facility is anticipated to be online and operational in 2026.

The company ended the quarter with 1,703 hydrovacs in our fleet, growing the fleet by 5% since Q3 of last year. Revenue and profitability grew at more than double the rate of fleet growth, exemplifying Badger's operating leverage and capital efficiencies. With the increase in hydrovac production, the consolidation of the Denver franchise as well as targeted growth in strategic market branches, we expect our range of 2025 capital spend to increase from the original $95 million to $115 million range to now between $115 million to $130 million.

I'll now turn the call over to Rob Dawson to discuss our Q3 financial results in more detail.

Thanks, Rob. Our solid financial results this quarter reflect the strength of our business model and the continued disciplined focus of our team. As Rob noted, we have continued to grow our bottom line at a higher rate than revenue, reflecting the ongoing execution of our road map to build scalability.

In addition to the continued advancement of our commercial and pricing strategies, steady improvements in the utilization of our fleet have contributed to our performance this year. The trend in our adjusted EBITDA margins continued to rise in the third quarter, up 40 basis points to 28.2%. In particular, the addition of our fleet module and our universal data platform are showing value in the management of both our fleet and labor force. We have also continued to scale our support functions and G&A spending.

This margin expansion remains on track with Badger's long-term objectives. G&A expenses were $10.6 million or 4% of revenue compared to the $9.8 million or 5% of revenue last year. Finally, adjusted earnings per share was $0.91 per share, up 25% compared to last year. As Rob has already noted, revenues and adjusted EBITDA are growing at a faster rate than our fleet, adding to the bottom line profitability and longer term, continuing to drive higher returns on capital. With year-to-date revenue up 11%, adjusted EBITDA up 16% and adjusted EPS up 29%, we are encouraged by the continued scalability and growth in margins here at Badger.

Turning to the balance sheet. Our compliance leverage ended the quarter at 1.3x debt to EBITDA, down from 1.5x in the same quarter last year. It is notable that we have the financial capacity to continue advancing our organic growth strategy and maintain a stable, strong balance sheet. We renewed our NCIB program in the third quarter, maintaining our ability to make opportunistic share purchases in addition to returning capital to our shareholders through dividends. During the third quarter, we did not purchase any shares under our NCIB.

I will now turn things back over to Rob Blackadar for some final comments. Rob?

Thanks, Rob. So before we open up for questions, I'd like to share a few last comments regarding our market outlook. Badger's end markets have largely recovered following the slower activity we experienced in the back half of 2024 and early '25. As we move through the remainder of 2025 and into '26, we're seeing positive indicators of sustained growth, particularly in key U.S. regions and large metropolitan areas where demand remains robust.

Our strategic focus remains unchanged. We continue to leverage our deep customer relationships, both locally and through our national accounts teams to drive market density and capture operational efficiency in our core geographies. The execution of our commercial strategy continues to help Badger capitalize on large infrastructure projects such as airports, light rail transportation, expansion of petrochemical and LNG facilities as well as data centers.

Supporting all of these trends is the increased demand for power generation and transmission, particularly nuclear, natural gas and solar. These projects are in addition to the continued maintenance and renewal of existing aged infrastructure in many of our more mature markets. Overall, we expect to continue to benefit from these favorable tailwinds driven by significant and sustained growth in infrastructure and construction spending in our major markets.

With one of the most capable fleets in the industry and a broad operational footprint spanning 44 U.S. states, 6 Canadian provinces, we were best positioned to capture long-term growth opportunities. As end market demand continues to strengthen, we remain committed to the disciplined execution of our strategy and to delivering sustainable value for our shareholders.

So with those comments, let's turn it back to the operator for questions. Operator?

[Operator Instructions] And our first caller is Krista Friesen from CIBC.

I was just wondering if you could give us a little bit more color on the amount of work that you're doing around data centers and if you're willing to share kind of what percentage that makes up of your work right now?

Krista, so we -- and we've shared this at some recent investor conferences because we get asked this. Obviously, data centers are kind of the big buzz right now. It's been trending in that 5% to 8% range, direct work on the data centers themselves and then some of the support functions around the data centers, I think in terms of the subcontractors, et cetera, is probably another 3% to 4%. So I would say all in, including the ancillary support around the data centers, I'd say, in that 10% to 11% range, something like that. But directly on the data centers themselves, I'd say 6% to 8% right there.

Okay. And then maybe just on a different topic. Do you have any update on how tariffs are impacting your business? And just given the announcement a little while ago on heavy trucks, if that's impacting your business?

Do you want to cover that, Rob?

Yes, sure thing, Rob. Thanks for the question, Krista. We continue to monitor, obviously, the tariff situation very closely. I think a couple of things just overall with regards to tariffs. 100% of our business results are entirely unaffected by the tariffs, and that's mainly to deliver excavation services to our customers. And so it really only affects the supply of trucks to our business from our manufacturing facility in Red Deer and specifically to our businesses in the United States. We continue to monitor it very carefully. There has been no real clarity on the situation with heavy trucks right now. And so we don't really have a lot to say specifically about what the impact may or may not be. We continue to be fully CUSMA compliant, and we have not paid any tariffs to date on our truck builds.

And I should also point out, I think we talked about this at Q1 that when we think about a worst possible case scenario where we would have, say, a 25% tariff on our entire manufacturing production for the year, it still would increase our CapEx for 200 trucks in the neighborhood of $10 million to $20 million. We'd still continue to be showing the same kind of balance sheet flexibility we have today, and the net impact on our earnings per share would be in that 1% to 3% range. So while we are closely monitoring the situation, we continue to believe that it's an issue that doesn't impact us to the degree of [indiscernible] third-party manufacturers and sellers of equipment across the borders.

And our next caller is [ Joshua Bains ] from TD Cowen.

Yes. Actually, it's Tim James here from TD Cowen. Congratulations on the good results. My first question, I'm just wondering if you could comment on any findings that you've got or that you're seeing in terms of the longevity of the refurbished units that you're doing and putting back out in the field. I believe you expect an additional 5 years typically from those. Anything you're observing that would give you a reason to believe that, that could be actually extended or shortened?

Yes. Great question, Tim. We -- we're very pleased. Obviously, we're pleased enough that we're going to build our own facility to help even fast track even more units. Very pleased with the first 18 months of the program. And the thing that we're displeased with is the ability to get more through our current third-party facilities.

But to frame it up, Tim, and some people on the call may not be aware of the context, we take a thoroughly inspected 9-, 10-, 11-year-old hydrovac that we've owned its entire life. We make sure that it has really strong frame rails, and the underbody components are very, very strong on it. And we replace four large components of the unit, which is the engine; the transmission; the transfer case, which is how you transfer the power from the engine to the hydrovac on the back; and then the blower, which provides the suction on that.

To do that whole exercise, then we do repaint or touch up, put on new tires, new seats and cabs for our operators, so they have a good experience in a truck. We put it back on the road, and that's anywhere from 175,000 roughly to around 185,000. It gives us an additional, we believe, 5 years. So far, Tim, in our first 18 months of doing this, we've had wonderful success. And in fact, a few of our employees have said that the truck is running better than it did when it was new. And again, these are mostly our Gen 4 trucks, the previous generation of trucks.

We are very pleased with their performance so far, very little maintenance or breakdowns on them other than just routine preventative maintenance, PMs. And then the last thing I'll share is, each one of those trucks on those new components -- and those are the most expensive components on the chassis. Those components come with a 3-year warranty unlimited miles. So there really is no downside to the investment we're making.

As far as do we think it can go beyond 5 years and maybe it's 6 or many, many of our chassis are run on the same model chassis we use for dump trucks and flatbeds and various other over-the-road type environments, and trucks have around a 20-year life. We do believe, though, in certain applications, our trucks are run in a little bit higher duty. So we're not sure if it's going to be 5, 6, 7 because it's still early on, and we're through our first batch right now, but we're very encouraged right now. But we're going to stick with the 5-year life at this point.

I don't know if you want to add anything on that.

No, I've got nothing else to add.

So hopefully, that answers your question, Tim.

That's very helpful. I'll just have one more quick one, if I could. And I realize Canada is a relatively small portion of your business in North America. But I'm curious if Canada's budget released this week, if there's anything in there that caught your attention as surprisingly positive or negative in terms of opportunities for Badger in Canada over the coming years.

Tim, it's Rob Dawson here. Thanks for the question. I don't think we would point out any one thing from that Canadian budget, but I would say that we are very encouraged by this government's support for the return of large project, an infrastructure project renewal in Canada that has slowed down so much over the past, say, 5 or 6 years. And we are already starting to see the benefit of some of those, just a change in tone. In particular, our Western Canadian business is back to growing. Our Central Canadian as in Ontario is also starting to show some signs of really solid performance. So overall, quite encouraged by the change in tone and the return to large project resource spending that has made Canada what it is.

And I'm going to add one thing, Tim. We have several of our larger construction customers there in Canada that, in a weird way, they're also kind of our peers, but they're our customers. I don't want to name them because the moment I start naming some customers, you always leave one or two out and make some crabby, so I don't want to do that. But we're very encouraged that several of our publicly traded customers are press releasing these large project wins, and we love supporting those customers and partnering with them. So just as Rob suggested, it seems like Canada is really making an effort to reinvest in some of the infrastructure and a lot of projects that we were seeing regarding -- around power as well as hospitals and some airports and stuff. So very encouraged what we're seeing coming out of Canada.

Thank you. And that seems to be all of our callers. So I will turn it back over to you, Rob.

Thank you, operator. So on behalf of all of us at Badger, we want to say thank you to our customers, our employees, our suppliers and shareholders for your ongoing support that drives Badger's success. Operator, you may now end the call.

Thank you. This concludes today's event. Thank you for participating.