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Highlights
- Revenue Growth: Q3 revenue rose 7% year-over-year to $209.4 million, with U.S. revenue up 10% and Canada down by 12%.
- Profit and Margins: Gross profit margin improved slightly to 32.5%, while adjusted EBITDA increased 11% to $58.3 million, boosting the adjusted EBITDA margin to 27.8%.
- Dividends and Share Buybacks: Badger declared a quarterly cash dividend of CAD$0.18 and repurchased 44,400 shares under its NCIB program at an average price of CAD $36.95.
- Business Outlook: The company expects demand to continue across U.S. markets, despite some project deferrals, with growth anticipated to pick up in late 2025. Canadian operations are expected to benefit from deferred project starts in 2025.
Badger Infrastructure Solutions Ltd. (TSX:BDGI) has announced its third-quarter results, showing consistent revenue and margin growth, despite mixed performance across regions. Presented in U.S. dollars, the company’s Q3 2024 earnings reveal significant gains in key metrics compared to the previous year.
Q3 Financial Performance
Badger achieved a 7% increase in revenue, reaching $209.4 million, primarily driven by a 10% rise in U.S. revenue to $185.4 million, which constitutes 89% of the total revenue. Canadian revenue, however, declined by 12%, totaling $24.0 million. Despite this regional disparity, the company’s gross profit margin improved to 32.5%, with adjusted EBITDA increasing 11% to $58.3 million, reflecting a solid adjusted EBITDA margin of 27.8%.
Revenue per truck per month (RPT) for Q3 came in at $46,851, a slight decrease from $49,079 in the previous year. The adjusted earnings per share (EPS) rose by 6% year-over-year, reaching $0.73 per share. Additionally, the company’s board approved a quarterly cash dividend of CAD$0.18, payable on October 15, 2024, to shareholders of record as of September 30, 2024.
Strategic Initiatives and Business Outlook
In alignment with its growth strategy, Badger has announced plans to expand its fleet, although at the lower end of its projected 7%–10% growth range. This decision is largely due to reduced utilization rates in Canada. The fleet increase will be managed by focusing on the lower end of the new build range and the high end of the retirement range.
Looking ahead, Badger remains optimistic about demand in infrastructure, utilities, and non-residential construction across U.S. markets, although certain projects have been delayed, tempering near-term growth. The company anticipates an improvement in activity by late 2025, with support from ongoing infrastructure spending and deferred project start-ups. The Canadian market is expected to recover as delayed projects launch in 2025.
As part of its ongoing capital allocation strategy, Badger has enhanced its Normal Course Issuer Bid (NCIB) program. Effective November 4, 2024, the Toronto Stock Exchange approved an increase in Badger’s NCIB. The company repurchased 44,400 shares during Q3 at an average price of CAD $36.95 per share, reinforcing its commitment to shareholder returns.
