Badger Infrastructure Solutions TSE: BDGI reported record first-quarter 2026 revenue and posted double-digit gains in adjusted EBITDA and adjusted earnings as management pointed to robust customer activity heading into the construction season and continued demand across its end markets.
Record revenue and continued growth investments
President and CEO Rob Blackadar said the company delivered “another strong quarter of double-digit growth in revenue, adjusted EBITDA, and adjusted net earnings,” with first-quarter revenue reaching “just over CAD 203 million,” up 18% year over year on an entirely organic basis. He attributed the increase to “strong commercial execution” that captured demand across Badger’s core end markets, supported by “increased utilization, pricing, and continued expansion in the fleet.”
Adjusted EBITDA rose 13% year over year to a first-quarter record of CAD 38.1 million. CFO Rob Dawson said the results reflected Badger’s business model and “continued disciplined focus,” while also noting the company is making investments to support longer-term scalability. Adjusted EBITDA margin was 18.7% compared with 19.6% a year earlier.
Margins pressured by near-term spending; 25%-30% target discussed
Dawson said the company’s accelerated growth rate has been accompanied by investments that are intended to support “sustained long-term growth in both scale and profitability.” He listed initiatives including adding branches, rolling out an operational excellence program, hiring and training field teams to support a higher truck build rate, and launching additional service lines.
Those investments reduced first-quarter adjusted EBITDA margin by about 100 to 120 basis points, Dawson said. Excluding those impacts, he said adjusted EBITDA margin would have been approximately 19.8% versus 19.6% in the prior year, adding that management is “very encouraged” by the underlying trajectory and views the investments as a catalyst to its long-term margin goals.
On the question of timing for the company’s previously discussed 25% to 30% margin targets, Dawson told Stifel’s Ian Gillies that on a trailing 12-month basis Badger is “still 100 basis points out of that range.” He said he would “expect it would be a base case to be in that range by next year,” and that management would expect to be “heading towards that in the second half of this year.”
Dawson also said the margin drag from certain growth-related investments should dissipate as the growth rate stabilizes, although he noted investment in new service lines could remain dilutive as the company continues to fund them over multiple years if successful.
Fleet growth, manufacturing ramp, and revenue per truck
Badger reported revenue per truck per month (RPT) of CAD 39,000 in the quarter, up 11% year over year. Blackadar said the improvement reflected utilization and pricing, while the company continued adding hydrovac capacity.
Badger ended the quarter with 1,778 hydrovacs, representing a 7% increase versus last year’s average fleet count, according to management. Blackadar said the Red Deer manufacturing plant delivered 78 hydrovacs in the quarter compared with 50 in the prior-year period, while the company retired 23 units.
Citing what he called “extraordinary demand and opportunities over the coming years,” Blackadar said Badger increased the build rate at its Red Deer plant and expects to grow the fleet at the upper end of its previously disclosed 270 to 310 truck build outlook for the year. The fleet plan also includes refurbishing 30 to 50 hydrovacs and retiring 130 to 150 units.
Management fielded several questions about the drivers behind RPT. Blackadar told National Bank’s Roman Pshenychnyi that the “larger driver” has been utilization, with “solid pricing” also contributing. He added that as the company increases truck builds, there may be RPT opportunity tied to fleet volume, while noting first quarter is typically the most seasonally slow quarter, “especially as it relates to pricing.”
Dawson told Canaccord Genuity’s Yuri Lynk that recent RPT increases also reflect regional mix, with higher growth in higher-priced markets that may also have higher costs. He said Badger remains optimistic about pricing initiatives and is targeting pricing that at least keeps pace with inflation, while acknowledging that with record fleet additions, utilization-driven RPT gains may be “a bit more muted.” Dawson added that even at current RPT levels, the company is generating “very good returns on capital and after-tax IRRs.”
Data centers, end-market demand, and project dynamics
Blackadar described demand conditions as “something we’ve never seen before,” and said activity remains robust due to sustained infrastructure investment across North America and the need for “safe, precise hydrovac solutions.” He cited a wide set of projects, including airports, heavy highway, wastewater treatment, power generation and transmission, industrial manufacturing facilities (including chip manufacturing and pharmaceuticals), LNG facilities and oil refineries, and data centers and mission-critical facilities.
In response to questions about which end markets are strongest, Blackadar told TD Cowen’s Tim James that Badger’s “core base business” remains non-residential commercial construction and utility construction, maintenance, and build-out. He said data center construction has been absorbing “any excess capacity” across the broader equipment and service ecosystem, calling it “the cherry on top” that is keeping the market very busy and supporting a “long tail demand for the next three to five years.”
Blackadar also provided updated commentary on Badger’s exposure to data centers. He said data centers represented about 5% to 6% of business roughly a year ago, moved to 7% to 8% as last year progressed, was 8% to 10% last quarter, and is now “right at that 10%-11%.” He added that while the company “could easily put many, many more trucks on all these data centers,” it does not want to “abandon” local customers, and is comfortable operating in the upper single-digit to low double-digit range.
On the nature of the work, Blackadar said Badger is increasingly asked to mobilize early on, then scale up as projects move from utility work into foundations and other phases. He said that “once you get beyond about 10, 12 trucks, you start to park the trucks there,” describing laydown-yard style arrangements that can improve efficiency and help sustain higher utilization. He said some projects have already extended beyond a year and management expects more to do so.
Dawson added that this “go upstream” approach—working directly with general contractors and major subcontractors early in the project lifecycle—applies across large projects beyond data centers, and said Badger’s scale allows it to support major projects while still servicing local markets.
Capital allocation, leverage, buybacks, and other items
Badger reported general and administrative expenses of CAD 11.8 million, or 6% of revenue, in line with the prior year. Adjusted earnings per share was CAD 0.22 compared with CAD 0.19 a year earlier.
On capital management, Dawson said Badger ended the quarter at 1.5x compliance leverage, within its targeted 1x to 2x range. He said the company intends to continue returning capital through its normal course issuer bid (NCIB) and dividends while remaining within its leverage targets. During the first quarter, Badger repurchased and canceled 47,373 common shares under the NCIB at a weighted average price of CAD 63.27.
Asked about free cash flow, Dawson said Badger has generated significant discretionary free cash flow and increased that measure by about 150% over the last five years, though he noted that in 2025, “all-in free cash flow” was about flat as the company fully funded organic growth with internal cash generation. With faster growth and investments in new service lines, he said Badger is “leaning back on the balance sheet” and intends that to be the case “certainly for all of 2027,” adding that if current market conditions persist, it “might be a few years” before the company returns to all-in net free cash flow.
On manufacturing and supply chain, Blackadar told CIBC’s Krista Friesen that the company has not had issues sourcing chassis and other components, citing frequent communication with suppliers. In Canada, Blackadar said the company has been “very pleased with the activity” over the last six to nine months and described prospects over the next two years as “very, very solid.”
Dawson also addressed tariffs and fuel. He said tariff costs were within the range previously provided and estimated current tariffs at about “$70,000 per truck” while noting opportunities to reduce that figure as the company improves reporting on U.S. content. On fuel, Dawson said Badger has a “fully reflexive billing process” to capture fuel surcharge changes immediately and said the company “hasn’t skipped a beat” in passing through recent changes.
Looking ahead, Blackadar said management remains attentive to macro conditions but is confident in Badger’s competitive positioning, operating platform investments, and pricing discipline as it balances growth and profitability.
About Badger Infrastructure Solutions TSE: BDGI
Badger Infrastructure Solutions Ltd is North America's provider of non-destructive excavating services. Its key technology is the Badger Hydrovac, which is used primarily for safe excavation around critical infrastructure and in congested underground conditions. The Badger Hydrovac uses a pressurized water stream to liquefy the soil cover, which is then removed with a powerful vacuum system and deposited into a storage tank. The company manufactures and designs its truck-mounted hydrovac units, giving an opportunity to incorporate feedback from its hydrovac operators into its existing and future design and manufacturing processes.
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