Bird Construction Q2 2026 Earnings Report

Bird Construction EPS Results

• Actual EPS: C$0.70
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Bird Construction Revenue Results

• Actual Revenue: $1.04 billion
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Bird Construction Announcement Details

• Quarter: Q2 2026
• Date: 8/12/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 10:00AM ET

Bird Construction (TSE:BDT) Inc operates as a general contractor in the Canadian construction market. The company focuses primarily on projects in the industrial, commercial and institutional sectors of the general contracting industry. It provides construction services such as new construction for industrial, commercial, and institutional markets; industrial maintenance, repair and operations (MRO) services, heavy civil construction and contract surface mining; as well as vertical infrastructure including, electrical, mechanical, and specialty trades.

Bird Construction Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Revenue surpassed CAD 1 billion in Q2 2026, rising 22.6% year over year, while adjusted EBITDA increased 34.6% to CAD 73.9 million and the margin expanded to 7.1%.
• Positive Sentiment: Contracted backlog grew 30.6% to CAD 6.1 billion and pending backlog rose 57.5% to CAD 6 billion, creating approximately CAD 12 billion of combined backlog, including more than CAD 1.4 billion of recurring revenue expected over the next four years.
• Positive Sentiment: Management expects full-year 2026 revenue growth to potentially exceed 20%, with industrial programs returning to fuller capacity and both Q3 and Q4 expected to be strong contributors.
• Positive Sentiment: Bird reported substantially improved cash generation, including CAD 262 million of trailing-12-month free cash flow, CAD 264.3 million of cash, and CAD 446.5 million of available credit; it also achieved a BBB (low) investment-grade rating and completed a CAD 250 million senior notes offering.
• Neutral Sentiment: Management reiterated its target of an 8% adjusted EBITDA margin in 2027, emphasizing continued improvement rather than implying the target will be reached in 2026; longer-term opportunities include defense, data centers, nuclear, LNG, infrastructure, and the Ring of Fire, though some projects remain subject to permitting and timing uncertainty.

Presentation

[Operator]

Good day, and thank you for standing by. Welcome to the Bird Construction Second Quarter Conference Call and Webcast. We will begin with Teri McKibbon, President and Chief Executive Officer's presentation, which will be followed by a question and answer session. To ask a question during this session, analysts will need to press star one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded, and at this time, all participants are in a listen-only mode.

[Operator]

Before commencing with the conference call, the company reminds those present that certain statements which are made express management's expectations or estimates of future performance and thereby constitute forward-looking information. Forward-looking information is necessarily based on a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic, and competitive uncertainties and contingencies. Management's formal comments and responses to any questions you might ask may include forward-looking information.

[Operator]

Therefore, the company cautions today's participants that such forward-looking information involves known and unknown risks, uncertainties, and other factors that may cause the actual financial results, performance, or achievements of the company to be materially different from the company's estimated future results, performance, or achievements expressed or implied by the forward-looking information. Forward-looking information does not guarantee future performance. The company expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events, or otherwise.

[Operator]

In addition, the presentation today includes references to a number of financial measures which do not have standardized meanings under IFRS and may not be comparable with similar measures presented by other companies and are therefore considered non-GAAP measures.

[Operator]

I would like to turn the call over to Teri McKibbon, President and CEO of Bird Construction.

[Teri McKibbon, President and CEO at Bird Construction]

Good morning, everyone, and thank you for joining Bird Construction's second quarter 2026 conference call. With me today is Wayne Gingrich, Bird's Chief Financial Officer. Bird delivered a strong second quarter, converting a strong bid pipeline into backlog growth, revenue growth, margin improvement, cash generation under our 2027 strategic plan. Revenue exceeded CAD 1 billion for the first time in our history. Adjusted EBITDA margin expanded to 7.1%, and backlog and pending backlog achieved record or near record levels. The significance of the quarter is not only the scale of the growth, but the fact that revenue, EBITDA margin, backlog, and cash flow are all improving together. Our work program is distributed across multiple sectors and regions, supported by Bird's self-performed depth, labor access, technical expertise, and national reach. These attributes are central to how we are differentiated and reinforce Bird's position as a specialty contractor with national scale.

[Teri McKibbon, President and CEO at Bird Construction]

Bird combines specialized execution capability with broad access across industrial buildings and infrastructure. This gives us resilience today and multiple paths to capture the long-term growth opportunities across strategic end markets. A significant share of our work is tied to longer duration investments, recurring revenue streams, and collaborative project delivery models, improving visibility into future performance. Bird recorded revenue of CAD 1 billion in the second quarter, up almost 23% year-over-year. More than 80% of the year-over-year growth was organic, with all businesses contributing to the growth as work programs ramped up as expected during the second quarter. Infrastructure also benefited from contributions from FRPD, which was acquired in October 2025. Revenue growth flowed through to improved earnings, with the second quarter adjusted EBITDA margin expanding to 7.1%.

[Teri McKibbon, President and CEO at Bird Construction]

Margin improvement in the quarter reflected better project mix, continued execution discipline, and the operating leverage from investments we have made in people, systems, and capabilities. The first half of 2026 gives us a solid base for the remainder of the year, with record backlog, top-line growth, and improving margin providing further line of sight towards the 2027 targets. Backlog continues to provide line of sight to future revenue and margin growth. During the second quarter, securements totaled almost CAD 1.8 billion and exceeded work executed by CAD 707 million. Contracted backlog increased to CAD 6.1 billion at quarter end, up 30.6% from a year ago. Pending backlog increased to CAD 6 billion, up 57.5% from a year ago. Combined backlog of approximately CAD 12 billion continues to reflect a high proportion of collaborative contract structures with a favorable margin profile compared with a year ago.

[Teri McKibbon, President and CEO at Bird Construction]

It also includes more than CAD 1.4 billion of MSA and other recurring revenue expected to be earned over the next four years. These programs support workforce continuity and more predictable cash flow alongside the balance of our projects. Backlog quality is as important as backlog size. Our combined backlog includes over 80% in collaborative contract structures, recurring revenue programs, and work in high demand sectors where Bird can apply its technical expertise and self-perform capabilities. This improves line of sight to future revenue while supporting the margin and cash flow profile we are targeting under the 2027 plan. We continue to be selective in the work we pursue with a focus on scope, partners, and contract structures that support margin cash flow and risk objectives. Bird is not simply exposed to attractive markets.

[Teri McKibbon, President and CEO at Bird Construction]

We have intentionally built a platform where work is distributed across end markets, geographies, customers, programs, and funding sources. This reduces resilience on any single end market or region while positioning Bird to participate across Canada's priority investment themes. What stands out is the depth of opportunities ahead. Each of our target markets offers substantial long-term demand that is aligned with our capabilities, creating multiple pathways for future growth beyond the current plan period. Over the past few years, Bird has expanded our labor platform capabilities and delivery capacity needed to support a larger, more diversified work program. This has strengthened Bird's position as a specialty contractor with national scale, carrying self-perform execution and the broader market access of an integrated contractor. Few firms can provide this combination at scale, and our continued securements reflect the value clients place on this operating model.

[Teri McKibbon, President and CEO at Bird Construction]

In industrial, Bird's opportunity set is aligned with investment across oil, gas, and LNG, chemicals, and power, including renewables and nuclear. In buildings, Bird is organized around data centers, defense, Arctic, and remote and social infrastructure. In infrastructure, Bird's target end markets include mining, critical minerals, transportation infrastructure, utilities, transmission, and distribution. Subsequent to quarter end, we announced approximately CAD 1 billion of project awards and agreements across nuclear, civil, marine, and mine infrastructure, industrial facilities, industrial maintenance, and buildings. The diversity of these awards reinforces the distributed load across Bird's end markets and shows how our teams continue to win work in areas where client investment remains active. The load is distributed today, the opportunity is distributed ahead, and Bird is built for both. Turning to execution, our major work programs progressed as expected during the quarter. Large capital investment projects are an important point of Bird's strategy.

[Teri McKibbon, President and CEO at Bird Construction]

Projects highlighted here demonstrate how Bird creates value earlier in the project life cycle through early contractor involvement, and then expands its role as work moves in execution through our self-perform capabilities. This strengthens client relationships, creates opportunities to expand scope, and improves line of sight to future revenue. These projects are also important from a risk management perspective. Early involvement gives Bird insight into future scope, constructability, sequencing, and resource requirements before execution ramps up, which supports better outcomes and more disciplined participation in complex work. We remain confident in our progress against our 2027 strategic plan, including our target of an 8% adjusted EBITDA margin. Second quarter demonstrated progress with revenue increasing 22.6% year-over-year and trailing 12-month adjusted EBITDA margin reaching 6.7%, up from 6.5% in the prior period.

[Teri McKibbon, President and CEO at Bird Construction]

The path toward our 8% adjusted EBITDA margin target is supported by drivers already embedded in the business today. Margins have moved higher over recent quarters as the business benefits from improving buildings performance, infrastructure growth, and increased self-perform participation, operating leverage, and the return of industrial work programs to fuller utilization. These improvements reflect the same priorities we have been executing against. Disciplined project selection, higher quality backlog, greater exposure to higher margin sectors. One Bird collaboration, and continued investment in data-driven operational intelligence. Together, these drivers support further margin expansion and strengthen our visibility into future earnings and cash flow. All three businesses are focused on margin expansion, but I'll highlight buildings.

[Teri McKibbon, President and CEO at Bird Construction]

Margins have improved steadily, supported by our strategic market sectors and continued cross-selling across Bird, which helps increase self-perform content and retain more margin within the business. Buildings is a much different business today and is an important source of One Bird opportunities. Our primary commitment remains execution of the 2027 plan. However, as we begin the 2028 to 2030 strategic planning process, the work we are winning, the partnerships we are forming, and the sectors we are pursuing give us greater visibility to Bird's growth runway beyond 2027.

[Teri McKibbon, President and CEO at Bird Construction]

With that, I'll pass it over to Wayne to discuss the quarter's results in more detail.

[Wayne Gingrich, CFO at Bird Construction]

Thanks, Teri, and good morning, everyone. Revenue was CAD 1,043 million in the quarter, up 22.6% year-over-year. More than 80% of the year-over-year growth was organic, led by continued strength in buildings, with all three businesses contributing to organic growth in the quarter. Infrastructure also benefited from the contribution of FRPD, acquired in October 2025. Revenue growth accelerated faster than originally expected, supported by seasonal activity in buildings and the ramp-up of industrial work programs that had been delayed through much of 2025 and into early 2026. As these programs return to their fuller capacity, we expect them to contribute more meaningfully to second half revenue. Gross profit increased to CAD 109.8 million, and gross profit percentage was 10.5%.

[Wayne Gingrich, CFO at Bird Construction]

The margin reflects disciplined project selection, improving project mix, and increasing self-perform participation across the business, with further support expected as industrial work programs return to full capacity through the second half. Together, these elements reinforce the margin progression embedded in Bird's specialty contractor positioning. Adjusted EBITDA increased 34.6% to CAD 73.9 million, and adjusted EBITDA margin expanded to 7.1%, up 60 basis points from the prior year. We also realized operating leverage in the business, with G&A declining to 5.4% of revenue, compared to 6.4% in the prior year period.

[Wayne Gingrich, CFO at Bird Construction]

Adjusted earnings increased 40% to CAD 38.6 million or CAD 0.70 per share. Net income was CAD 30.3 million or CAD 0.55 per share. As noted in our disclosure, net income includes non-cash warrant-related impacts from a strategic customer arrangement, as well as a non-cash expense related to shares issued to another strategic partner.

[Wayne Gingrich, CFO at Bird Construction]

Finally, cash flows from operating activities were CAD 58.4 million in the quarter, an improvement of CAD 133.8 million compared with the prior year period. Through the first six months of 2026, revenue increased 16.5% to CAD 1.83 billion and adjusted EBITDA increased 24.8% to CAD 111 million, with margin improving to 6.1%. Net income increased 40.5% to CAD 41.7 million. Adjusted earnings increased 29.8% to CAD 52.5 million, and cash flows from operating activities improved by CAD 188.8 million year-over-year to CAD 64.5 million. These results demonstrate continued progress toward Bird's 2027 targets. Cash generation and financial flexibility continue to be important strengths for Bird. Our performance through the first half of 2026 shows how the financial profile of the business is maturing alongside the operating platform.

[Wayne Gingrich, CFO at Bird Construction]

On a trailing 12-month basis, Bird generated CAD 262 million in free cash flow or CAD 4.73 of free cash flow per share. These metrics demonstrate the business's ability to convert earnings into cash and support a larger work program. We ended the quarter with substantial liquidity, including CAD 264.3 million of cash and CAD 446.5 million available under our syndicated credit facility. During the quarter, Bird achieved an important milestone by achieving an investment-grade BBB (low) rating from DBRS and the completion of our inaugural CAD 250 million senior unsecured notes offering. Together with the amended credit facility, these actions do more than diversify our funding sources.

[Wayne Gingrich, CFO at Bird Construction]

They strengthen Bird's financial position with clients, partners, lenders, and surety providers, reflecting how far the business has progressed in recent years. They also provide Bird with direct access to the debt capital market as needed in the future, supporting our ability to pursue and execute our growing work program without compromising balance sheet discipline. Additional capacity was added to support growth while preserving a conservative balance sheet.

[Wayne Gingrich, CFO at Bird Construction]

Adjusted net debt to TTM adjusted EBITDA was 0.96x, and the current ratio was 1.32x. These metrics reflect financial flexibility to execute a record work program, support growth, and pursue selective strategic opportunities while maintaining balance sheet strength. Combined with our investment-grade credit rating, inaugural senior notes offering, and expanded credit facilities, Bird enters the second half of 2026 with broader access to capital, substantial liquidity, and the flexibility to support working capital needs, equipment needs, and selective growth opportunities. Our capital allocation approach remains focused and disciplined, as demonstrated by how we have deployed capital since 2022 across the priorities that support Bird's strategy.

[Wayne Gingrich, CFO at Bird Construction]

We continue to allocate capital to equipment, technology, and productivity initiatives that improve project execution and support margin growth while providing direct returns to shareholders through our dividend and preserving flexibility. Strategic M&A remains selective and aligned with opportunities that expand self-perform capability, deepen technical expertise, or broaden our geographic and service offering. FRPD is a good example of the type of acquisition that strengthens Bird's ability to deliver complex infrastructure work. Overall, our capital allocation approach is consistent with Bird's broader strategy, deploying capital where it strengthens execution, expands capability, supports margin progression, and generates cash flow while preserving financial discipline and creating long-term value for shareholders.

[Wayne Gingrich, CFO at Bird Construction]

With that, I'll turn the call back to Teri.

[Teri McKibbon, President and CEO at Bird Construction]

Thanks, Wayne. Looking ahead, we're focused on converting backlog, executing our current work program, and progressing towards our 2027 targets. CAD 12 billion of combined backlog provides strong revenue visibility supported by a distributed mix of sectors, regions, collaborative delivery models, recurring revenue, and strategic partnerships. We expect revenue growth to continue through the balance of the year with full-year growth that may exceed 20% compared with 2025. We also expect further adjusted EBITDA margin accretion as our industrial program returns to full capacity in the second half, moving us closer to our 8% margin target in 2027.

[Teri McKibbon, President and CEO at Bird Construction]

The second quarter reinforced the key elements of our plan: a distributed work program, broad-based demand, higher quality backlog, improving margins, cash generation, and a balance sheet that supports continued growth. It also reinforces Bird's specialty contractor positioning where scale, self-perform capability, labor access, and technical execution provide further opportunity for margin progression. Together, these factors strengthen our confidence in the 2027 plan and provide a stronger foundation for the next phase of Bird's growth.

[Teri McKibbon, President and CEO at Bird Construction]

With that, I'll turn the call back to the operator to open the line for questions.

[Operator]

We will now begin the question and answer session. As a reminder, analysts who wish to ask a question may press star one one on your telephone. If you wish to remove yourself from the queue, you may press star one one again. Our first question comes from Chris Murray of ATB Cormark Capital Markets.

[Chris Murray, Analyst at ATB Cormark Capital Markets]

Yeah, thanks, folks. Good morning. I guess, Teri, going back to your discussion around the potential to see revenue growth this year. One of the questions I think we've got is just your confidence in the industrial business. You go back a couple of years ago, I think it came as a bit of a surprise when the industrial business, that work kind of went away, if you will, for a bit, and caused some dislocation. I am just wondering your confidence level in the timing of those projects. I know there is a lot of demand right now in a lot of the energy space just for production. So any thoughts around your comfort level with execution over the next couple of quarters would be great.

[Teri McKibbon, President and CEO at Bird Construction]

Yeah. When you think about what our industrial business obviously constructs, we've got some strong demand continuing to evolve on the chemical side. Obviously, we've got a large project underway up at Sherwood Park or Fort Saskatchewan that's scaling up, and we've got a large assignment there. We've got oil loading facilities that we're building. So, when you think about oil specifically, some strength. If you look at our maintenance build business, we have some significant turnarounds that are planned now for Q3 and Q4. That certainly sends a strong level of confidence in the overall business. Then you start looking at some of the other sectors.

[Teri McKibbon, President and CEO at Bird Construction]

We've got renewable work underway, and then ultimately continue to see continued growth on the nuclear side. If you think of our industrial business, certainly lots of strength in the current load that we have, and there's probably other areas that I'm not thinking of right now. Then longer term, we certainly are seeing the confidence returning to future oil production and future LNG production. That takes us certainly into the longer cycle, and then ultimately, lots of confidence in nuclear as well.

[Chris Murray, Analyst at ATB Cormark Capital Markets]

Okay. Then my other question is just looking at where the backlogs already come to, which is pretty impressive. But can you talk a little bit, there's some discussion around the fact that the government in September is going to hold a conference, maybe talk a lot about additional infrastructure. Can you just talk about your outlook on some of these larger programs, be that Northern Defense, or even some of the AI stuff and the data center stuff? Just trying to get a sense of even where the backlog's gone, what's still out there in the pipeline that you think is realistic to be able to book as you go into year later 2026, 2027?

[Chris Murray, Analyst at ATB Cormark Capital Markets]

I guess with a view to how you think 2028 through 2030 could evolve. I know it's still early days, but any view on that would be helpful.

[Teri McKibbon, President and CEO at Bird Construction]

Yeah. I think you've hit on certainly from our lens, it's really exciting. If you think of the three divisions that we have with industrial buildings and infrastructure, and you think about how those businesses fit, we sort of think about it as a 10-cylinder engine, and we have what I refer to as a distributed load across those 10 sectors right now. It's pretty exciting because you wouldn't typically have all cylinders firing at any time, but it certainly feels that way right now. Expect that that's going to continue. We start to look at the larger scale initiatives that are more in the longer term. I think it's going to take a few years, but certainly confidence in oil production, I think LNG, confidence that that'll continue to evolve in those areas.

[Teri McKibbon, President and CEO at Bird Construction]

Nuclear is a pretty exciting area for the future and the types of capabilities that we've developed. That's on the industrial side. You go into on the building side, our defense program. The defense program is just daunting, the number of projects that are going through procurement right now. We've not seen a sector that has this kind of demand, I don't think, in our history. Maybe go back to the oil booms 15, 20 years ago, but that sector has a lot of tailwinds behind it. Then you sort of look at on the data center evolving, Canada is in the early stages of certainly a data center build. The inbounds that we have in our organization today from numerous clients is high. We're obviously very focused on our partnership with Bell, and that program continues to mature.

[Teri McKibbon, President and CEO at Bird Construction]

We've had a great start out in Regina on their 300 MW facility, and that certainly is evolving at a pace that even we didn't expect. Yeah, lots of excitement. Then on the infrastructure side with the dynamics of the transportation side, certainly the marine transportation ports, that whole dynamic has got lots of tailwinds and lots of areas for growth. The timing of our FRPD acquisition was impeccable, considering all the opportunities that are opening up now. But longer term, certainly some strength there. Then obviously the overall infrastructure that's needed, we're utilizing our infrastructure business as we move forward now on site developments for things like data centers, site developments for defense.

[Teri McKibbon, President and CEO at Bird Construction]

It's a big integrated business now and certainly has all the makings of an investment community of what you would refer to as a specialty contractor. We're excited about that.

[Chris Murray, Analyst at ATB Cormark Capital Markets]

Okay, thanks. I'll pass along.

[Operator]

Our next question comes from Krista Friesen with CIBC.

[Krista Friesen, Analyst at CIBC]

Hi. Thanks for taking my question and congrats on the quarter here. Maybe just thinking about the margins. Obviously, good margins in the quarter, seeing good year-over-year improvement, despite the fact you called out just the mix there with Buildings being a little bit greater. Anything that we should be considering or keeping in mind on the mix front as we look out at the back half of the year?

[Wayne Gingrich, CFO at Bird Construction]

Yeah, I can take that one. Buildings has had a very strong start to the year for us, and the sectors that the Buildings team is focused on are moving them into higher margin complex work as well, and that's certainly driving strength in our margins. As we look into the second half, I think what you're going to see is our industrial work program really ramp up. We started to see that here in late Q2, but we'll get a full quarter's benefit of that in Q3 and another one in Q4, and going into early 2027 as well as the work programs we kind of called out in 2025 return to the levels that we expect them to be at.

[Wayne Gingrich, CFO at Bird Construction]

Then as well, Infrastructure is going to contribute meaningfully to the second half as well. We see good strength there, not only on the revenue growth side, but also on the margin strength side too.

[Krista Friesen, Analyst at CIBC]

Okay, that's great. That's really helpful. Then I was also just wondering if you can maybe give us a little bit of an update on your partnership with the Marten Falls First Nation group and the Ring of Fire and the work that you're seeing there, and when you would expect that to start to meaningfully contribute to your earnings. Thank you.

[Teri McKibbon, President and CEO at Bird Construction]

The first phase of that partnership was the work in the community, and that work continues to evolve, and that's the anticipated plan for the balance of 2026. Obviously, lots of motivation to get future work underway to be able to access the large opportunity with the various mines that are in the Ring of Fire. We're certainly anticipating that we'll be well into that potentially in 2027. But early days, there's lots of work to do on design and permitting and things like that all needs to be done in advance of that activity. But the feeling is we have a fair amount of work to build related to the community of Marten Falls and some of the infrastructure that's needed longer term. We're focused on that currently.

[Krista Friesen, Analyst at CIBC]

Thanks. Appreciate the comments there, and I'll jump back in the queue.

[Teri McKibbon, President and CEO at Bird Construction]

Thank you.

[Operator]

Our next question comes from Michael Tupholme with TD Cowen.

[Michael Tupholme, Analyst at TD Cowen]

Thank you. Good morning.

[Teri McKibbon, President and CEO at Bird Construction]

Good morning.

[Michael Tupholme, Analyst at TD Cowen]

Maybe just to pick up on that last question there about Marten Falls. Appreciate what you just said there, Teri, about how the work program kind of looks in 2026 and then maybe building into 2027. But how do we think about the addition to backlog from that opportunity? When do you think we start to see some contributions come in from that?

[Teri McKibbon, President and CEO at Bird Construction]

Yeah, I think early days, but I would think of it as evolving in 2027. There's still some uncertainty around timing and permitting and things like that. It's lots of work going on. But I'd say it's early days on being able to put a pin on exactly when we'd see that evolving. But we're very focused on all the community infrastructure right now, so.

[Michael Tupholme, Analyst at TD Cowen]

Okay. Makes sense. With respect to the data center work in Saskatchewan, it just got going in the quarter, and it's a fairly tight, compressed schedule in terms of executing all of this work. How do we think about the step up from that opportunity in Q3 versus Q2? Then just how we think about that as we look out a little bit here, the contribution from that. Just trying to get a sense for that.

[Wayne Gingrich, CFO at Bird Construction]

Yeah. The work with Bell in Regina certainly was a contributor in Q2, but it was only one mid-quarter and was ramping up through the quarter. Coming into Q3 here, we have a lot of momentum on that site. We have a lot of people mobilized, and we're making great progress. We think that's going to be a strong contributor in both Q3 and Q4 and Q1 and Q2. I think we're about 50% of the labor loading right now, just to give you a sense. I don't think we'll hit our 100% targets until Q4, but yeah, it gives you a sense of the evolution.

[Michael Tupholme, Analyst at TD Cowen]

Okay. That's helpful. Just on the margins, looking at the commentary and the outlook, I wasn't totally sure how to interpret what you're trying to get at here with the margins. I mean, it's clear you still have your 8% target, the strategic plan target for 2027. You talk about expecting further progress in the margins as we move through 2026, which is not surprising. We talk about moving closer to the 2027 strategic plan target of 8%. Are you trying to suggest here that we could see you deliver something in and around that 8% level in 2026? Or is this just a comment that there's going to be progression as you try to build toward that for 2027?

[Wayne Gingrich, CFO at Bird Construction]

Yeah, I think the latter, Mike. There's going to be progression as we build towards the 8% in 2027. We're on a TTM basis. We're 6.7% here right now. We expect that to continue to improve as we go through Q3. The TTM is going to increase, and as we go through Q4, TTM is going to increase again, and expect that trend to continue throughout 2027 as we get to 8% for the year in 2027.

[Michael Tupholme, Analyst at TD Cowen]

Okay. Fair to say that the prior or previously communicated outlook around margins, where you expect to get to and the progression, you are essentially reiterating that there is not really a change here communicated.

[Wayne Gingrich, CFO at Bird Construction]

Yeah. That is exactly right. We are confirming what has already been said out there. We are indicating stronger growth in 2026 than maybe was previously expected, and certainly that is building on the strength of Q2, but also strength in Q3 and in Q4 and I think when you think about how Q3 and Q4 balance, I think both of those quarters are going to be pretty equal and both be very strong. In the second half, we are usually maybe you might see more strength in Q3 because some of the seasonality in Q4, I think you are going to see both be very strong.

[Michael Tupholme, Analyst at TD Cowen]

Okay, that is perfect. Sorry, just to clarify that last point there, equal meaning in absolute dollar terms, not a lot of difference between the two.

[Wayne Gingrich, CFO at Bird Construction]

Yeah. That is right. In terms of the revenue split between Q3 and Q4, I think they will be pretty close to each other in dollar value.

[Michael Tupholme, Analyst at TD Cowen]

Okay, perfect. I will leave it there and turn it over. Thank you.

[Wayne Gingrich, CFO at Bird Construction]

Okay, thanks.

[Operator]

As a reminder, if you would like to ask a question at this time, please press star one one on your touchtone phone. Our next question comes from Ian Gillies with Stifel.

[Ian Gillies, Analyst at Stifel]

Morning, everyone.

[Wayne Gingrich, CFO at Bird Construction]

Morning.

[Teri McKibbon, President and CEO at Bird Construction]

Morning.

[Ian Gillies, Analyst at Stifel]

The term specialty contractors come up a few times on the conference call. If you look at some of the specialty contractors in North America, many of their EBITDA margins are anywhere from 10%-15%. Given how you're talking about Bird in that manner, would it be fair to assume that that would be a good aspirational goal over some undefined period?

[Teri McKibbon, President and CEO at Bird Construction]

Yes.

[Ian Gillies, Analyst at Stifel]

That's helpful. The next one I guess for me is, the stock's obviously done very well, and alongside that valuation and expansion, does that embolden you, or do you feel like you're much better positioned to do larger deals now? Is there stuff out there of that size? It just seems like you're in a much better place, obviously, than you were a couple of years ago.

[Teri McKibbon, President and CEO at Bird Construction]

I think so, Ian. I think, each time you have the strength, the balance sheet that we have, the momentum we have, it puts you in a different position, for sure.

[Ian Gillies, Analyst at Stifel]

Okay. Last one for me. It has become less material over time, but on the dividend, can you just remind us whether the target is set off of your new definition of adjusted EPS or GAAP EPS? Because that obviously is going to affect the outcome and how we may think about dividend growth moving ahead.

[Wayne Gingrich, CFO at Bird Construction]

Yeah, no, it is a good point to clarify. When we rolled out our strategic plan at the Investor Day, I think October 2024, we talked about a 33% payout ratio of GAAP net income being the target. Of course, it is never that clean in any given year. But over the strategic plan period, that is certainly the target payout ratio. But it is on GAAP net income.

[Ian Gillies, Analyst at Stifel]

Okay. Thanks very much. I will turn the call back over.

[Operator]

This concludes the question and answer session. I will hand the call back over to Mr. McKibbon for closing remarks.

[Teri McKibbon, President and CEO at Bird Construction]

Thank you to our teams across Bird for their continued commitment to safety, execution and disciplined delivery. Thank you as well to our clients, partners and shareholders for your continued confidence in Bird.

[Operator]

This concludes today's conference call and webcast. You may disconnect your lines. Thank you for participating and have a pleasant day.

Participants

Executives

• Teri McKibbon, President and CEO
• Wayne Gingrich, CFO

Analysts

• Chris Murray, Analyst at ATB Cormark Capital Markets
• Krista Friesen, Analyst at CIBC
• Michael Tupholme, Analyst at TD Cowen
• Ian Gillies, Analyst at Stifel