What WSP Global (WSP) Said on Its Q3 Earnings Call

Key Points

• Q3 results strengthened: Net revenue rose 22% to CAD 4.23 billion, adjusted EBITDA increased to CAD 865 million, and the margin expanded to 20.5%. Backlog reached a record CAD 20.3 billion, up 23.5% year over year.
• U.S. project work is converting more slowly: Funding reviews and authorization delays are slowing the move from project awards to revenue. WSP expects low-single-digit organic net revenue growth in the Americas in 2026.
• Outlook remains positive overall: WSP narrowed its 2026 net revenue and adjusted EBITDA guidance ranges, upgraded its EMEIA growth outlook, and said it is on track to reach its 2027 margin target in 2026.

WSP Global TSE: WSP reported higher third-quarter revenue and earnings, record backlog and expanding margins, while cautioning that U.S. infrastructure projects are taking longer to move from awards to active work.

Net revenue rose 22% from a year earlier to CAD 4.23 billion, including organic growth of 5.1%. Revenue increased 16.6% to CAD 5.3 billion. Growth across all reportable segments helped offset slower project conversion in parts of the Americas, management said.

Adjusted EBITDA rose to CAD 865 million from CAD 700 million, and adjusted EBITDA margin increased to 20.5% from 20.2%. Net earnings attributable to shareholders climbed to CAD 334 million, or CAD 2.48 per share, from CAD 285 million, or CAD 2.18 per share.

President and CEO Alexandre L'Heureux said backlog reached a record CAD 20.3 billion, up 23.5% over 12 months and equivalent to 11.6 months of revenue. Organic backlog growth was at or above 5% for a second consecutive quarter.

U.S. Projects Face Slower Conversion

L'Heureux said WSP's assessment of U.S. demand has not changed, but the company now expects a more measured pace of conversion from awarded projects into revenue. Federal funding reviews and delays in authorizations have affected parts of the public-sector transportation and environmental businesses, he said.

“Our view of the U.S. opportunity has not changed. Our view of the timing has,” L'Heureux said. He added that the pace of improvement will depend on funding authorizations, task-order releases, project mobilization and utilization.

Organic backlog growth in the Americas improved sequentially to 4.9% in the third quarter from 2.1% in the second quarter and negative 1.4% in the first. L'Heureux said the company's U.S. backlog was CAD 11 billion and that recovery in project conversion would likely be gradual rather than linear.

For 2026, WSP now expects low-single-digit organic net revenue growth in the Americas. CFO Alain Michaud said fourth-quarter emergency response services revenue is expected to be below the historical average because of a muted U.S. hurricane season.

Power Demand and Regional Growth

WSP's power and energy businesses continued to expand. L'Heureux said POWER Engineers and TRC were growing at a double-digit pace year to date, and the integration of TRC was progressing as planned. The companies have more than 100 joint pursuits, he said.

WSP was recently selected as a delivery partner for American Electric Power's Western Regulated Transmission portfolio. L'Heureux said the assignment is under a framework agreement, so very little has been added to reported backlog, although he expects significant work over the next five years.

He said the power opportunity extends beyond data centers, citing electricity demand, aging infrastructure and the need for new generation and transmission capacity.

Canada posted 10.2% organic growth in the quarter, with strength in transportation and infrastructure as well as energy, mining, defense and data centers. L'Heureux cautioned that the timing of certain project milestones contributed to the quarterly result and should not be extrapolated.

Organic growth reached 10.5% in EMEIA, where backlog grew almost 12% organically over 12 months. The U.K. recorded its fifth consecutive quarter of double-digit organic growth, supported by transportation, power and energy, and data centers. WSP upgraded its full-year organic growth expectation for EMEIA to mid- to high-single digits.

APAC recorded a second consecutive quarter of organic growth, but margins declined year over year. L'Heureux attributed the decline mainly to regional mix and foreign exchange hedging effects, alongside continued weakness in New Zealand, where reduced public spending has weighed on activity.

2026 Outlook and Cash Flow

WSP narrowed its full-year net revenue outlook to CAD 16.3 billion to CAD 16.65 billion and its adjusted EBITDA outlook to CAD 3.11 billion to CAD 3.15 billion. It reiterated the rest of its 2026 outlook. For the fourth quarter, it forecast net revenue of CAD 4.1 billion to CAD 4.45 billion and adjusted EBITDA of CAD 810 million to CAD 850 million.

Michaud said the company is comfortable that it will reach its 2027 adjusted EBITDA margin target of 19% in 2026. WSP did not provide 2027 guidance and plans to issue a formal outlook with its year-end results.

Third-quarter free cash flow rose to CAD 333 million from CAD 315 million a year earlier. The leverage ratio was 2.2 times at quarter-end, slightly above the company's target range following the TRC acquisition. Michaud said WSP remains on track to return to that range by year-end, supported by earnings growth and cash generation.

About WSP Global (TSE:WSP)

WSP Global Inc provides engineering and design services to clients in the Transportation & Infrastructure, Property and Buildings, Environment, Power and Energy, Resources, and Industry sectors. It also offers strategic advisory services. The firm operates through four reportable segments namely, Canada, Americas ( US and Latin America), EMEIA (Europe, Middle East, India and Africa), and APAC (Asia Pacific, comprising Australia, New Zealand and Asia).

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