Aecon Group TSE: ARE reported a stronger start to fiscal 2026, pointing to record backlog, higher revenue across all operating sectors, and improved profitability metrics versus the prior-year period, while continuing to work through negative impacts from legacy projects.
Record backlog and first-quarter revenue growth
Senior Vice President of Corporate Development and IR Adam Borgatti said Aecon recorded a record backlog of CAD 10.9 billion as of March 31, 2026, supported by “a diversified mix of long-term projects with appropriate risk balance.” Borgatti also noted the quarter included the addition of the Howard Hanson Dam facility project to backlog following an 18-month integrated design phase.
Aecon posted record first-quarter revenue of CAD 1.3 billion, up 18% from the same period a year earlier, with revenue increases across all operating sectors. Borgatti said adjusted EBITDA “improved significantly” to CAD 32 million from CAD 4 million in the prior-year quarter, driven by improved year-over-year margin performance in the Construction segment.
Financial results show improved operating performance, legacy project drag remains
Executive Vice President and CFO Jerome Julier said first-quarter revenue rose by CAD 195 million year over year to CAD 1.3 billion. Adjusted EBITDA improved to CAD 32 million from CAD 4 million a year ago, while operating loss narrowed to CAD 8 million from an operating loss of CAD 41 million in the prior-year period. Julier attributed the improvement primarily to higher gross profit of CAD 59 million.
Adjusted diluted loss per share was CAD 0.21 compared with an adjusted diluted loss per share of CAD 0.55 in the first quarter of last year. Julier added that results were impacted by negative gross profit of CAD 4 million from legacy projects.
Backlog rose to the highest level in the company’s history, surpassing the prior record of CAD 10.8 billion set in the third quarter of 2025. Julier said Aecon booked CAD 1.4 billion in new contract awards in the quarter, compared with CAD 4.1 billion in the prior-year period.
Segment performance: Construction improves; Concessions EBITDA declines
In Construction, Julier said revenue increased 19% year over year to CAD 1.3 billion, with growth across all sectors. He highlighted several operational drivers:
- Nuclear: The largest increase, driven by higher volume of refurbishment, new build, and engineering services work in Ontario and the U.S.
- Utilities: Higher electrical transmission and distribution work in Canada and the U.S., contributions from first-quarter acquisitions, and higher telecom and gas distribution work.
- Civil: Higher civil components of power and rail projects and international work, partially offset by lower foundations work and lower highway, road, and bridge-building activity.
- Industrial: Higher field construction work and industrial manufacturing and wastewater treatment facilities in the U.S., with much of the growth tied to Bodell Construction and Trinity Industrial Services (acquired in Q3 2025), plus increased power generation projects.
- Urban transportation solutions: Higher subway and commuter rail work, partially offset by lower LRT volumes in Ontario and Quebec as projects reached or approached substantial completion in 2025.
Construction adjusted EBITDA was CAD 42 million, compared with a loss of CAD 1 million a year ago, driven by a “volume-driven increase in gross profit in nuclear operations” and improved gross profit margins in civil operations and urban transportation solutions, Julier said.
In Concessions, adjusted EBITDA was CAD 6 million versus CAD 13 million in the prior-year quarter. Julier attributed the decline to lower management and development fees on LRT projects that achieved substantial completion in 2025, partially offset by improved operating results at Skyport in Bermuda. He said the book value of equity of the concessions portfolio was over CAD 250 million at quarter end, and later emphasized management’s focus on value creation over “the daily flow of up and down on EBITDA.”
Liquidity, capital allocation, and acquisitions
Julier said Aecon ended the quarter with CAD 81 million in core cash and cash equivalents, excluding an additional CAD 425 million representing Aecon’s proportionate share of cash held in joint operations. The company also had committed revolving credit facilities of CAD 1 billion, with CAD 294 million drawn and CAD 4 million utilized for letters of credit. Julier noted Aecon has no debt or working capital credit facility maturities until 2029, except equipment loans and leases.
On cash generation, Julier said Aecon produced CAD 212 million in free cash flow in the trailing 12-month period ended March 31, 2026, compared with CAD 2 million in the comparable period last year.
Borgatti also pointed to the company’s CAD 172.5 million common share offering and said Aecon ended the quarter with “strong liquidity” and capacity to invest in growth. In the Q&A, Julier said the equity raise was used “to pay down debt,” strengthening Aecon’s balance sheet and providing capacity to support further growth, while maintaining a disciplined approach to capital allocation and M&A.
Management discussed acquisitions completed during the quarter, largely focused on utility services expansion. CEO Jean-Louis Servranckx said Aecon Utilities acquired K.P.C. Power Electrical and K.P.C. Energy Metering Solutions in Ontario, and acquired ARC American, C.A. Advanced, and Duna Services, plus a 49% interest in KNX Utility Services, strengthening electrical distribution, transmission, substation maintenance, and emergency restoration services across the Midwest and Eastern U.S.
Outlook: revenue growth expectations, nuclear positioning, and defense opportunities
Servranckx said Aecon expects 2026 revenue to exceed 2025 levels, supported by record backlog, recurring revenue programs, and a pipeline tied to power generation, critical resource development, mass transit, water, and defense.
He highlighted a partnership agreement with Defence Construction Canada for the Arctic Over-the-Horizon Radar program stage one project in Ontario under an Integrated Project Delivery model, where Aecon has a 50% interest and leads the JV. Servranckx told analysts the validation period is expected to run “up to the end of 2026,” and he anticipates first construction activity and revenue “around mid 2027.” He also said an Aecon joint venture finalized a $691 million contract with the U.S. Army Corps of Engineers for the Howard Hanson Dam facility project in Washington State, with construction expected to begin shortly.
On nuclear, Servranckx described Aecon as “exceptionally well-positioned” across short-, mid-, and long-term opportunities in Canada and the U.S., citing work at Darlington, Bruce, and Pickering, and involvement in small modular reactor activity. Julier added that from 2023 through the end of 2025, Aecon’s nuclear segment added roughly CAD 800 million of revenue, with about 35% in the U.S., and said the sector is “one of the top one or two” contributors within Aecon’s backlog.
Management also discussed staffing and labor capacity. Servranckx said Aecon focuses on forecasting labor needs and building capacity through training programs such as its Project Management Academy. Julier noted safety culture as a key factor in maintaining labor pools and said Aecon issued roughly 17,000 T4 and W-2 forms in 2025, expecting that figure to increase in 2026.
About Aecon Group TSE: ARE
Aecon Group Inc is a Canada-based company that operates in two segments: Construction and Concessions. The Construction segment includes various aspects of the construction of public and private infrastructure projects, mainly in the transportation sector. Its concessions segment is engaged in the development, financing, construction, and operation of infrastructure projects. Aecon generates the majority of its revenue from the Construction segment.
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