Toronto, Ontario--(Newsfile Corp. - August 4, 2026) - Dexterra Group Inc. (TSX: DXT)
Highlights
Dexterra delivered a strong quarter generating consolidated revenue of $269.2 million in Q2 2026, compared to $249.3 million for the same period in 2025, with the revenue increase driven by strong workforce accommodation occupancy, organic growth and the addition of Right Choice Camps and Catering Ltd. ("Right Choice"), partially offset by a decrease in ABS revenue due to lower margin workforce accommodation installation and demobilization activity related to the timing of projects.
Adjusted EBITDA for the quarter was $32.8 million (2025 - $30.0 million), an increase of 9.3% compared to Q2 2025 reflecting growth in Support Services revenue, the favourable shift in business mix toward higher-margin workforce accommodation rental revenue within ABS, and the contributions from our investment in Pleasant Valley Corporation ("PVC") of $1.4 million.
Free Cash Flow ("FCF") for Q2 2026 was $21.8 million (deficit of $3.7 million in Q2 2025), reflecting a significant reduction in working capital to optimal levels. The net debt to Adjusted EBITDA ratio is 1.5x.
Net earnings were $10.3 million in Q2 2026, compared to $11.8 million in Q2 2025. Adjusted net earnings were $13.4 million and Adjusted earnings per share ("Adjusted EPS") was $0.20 in Q2 2026, compared to $14.4 million and $0.23, respectively, in Q2 2025. The recent strategic acquisitions are performing as expected and the Corporation is making strategic investments in people and technology to scale the U.S. business. Recent new business wins are expected to come on stream over the coming quarters, supporting the Corporation's growth objectives.
Delivered a Return on Equity of 15.4% (Q2 2025 - 14.9%) on a trailing twelve-month basis.
Dexterra declared a dividend for Q3 2026 of $0.10 per share for shareholders of record at September 30, 2026, to be paid on October 15, 2026.
This news release contains certain measures and ratios, such as Adjusted EBITDA, Adjusted EBITDA as a % of revenue, Adjusted net earnings, Adjusted EPS, FCF, and Return on Equity that do not have any standardized meaning as prescribed by GAAP and, therefore, are considered non-GAAP measures. The method of calculating these measures may differ from other entities and accordingly, may not be comparable to measures used by other entities. See "Non-GAAP measures" and "Reconciliation of Non-GAAP measures" of the Corporation's MD&A for the three and six months ended June 30, 2026 and 2025 details which is incorporated by reference herein.
Second Quarter Financial Summary
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||
| Revenue | $ | 269,209 | $ | 249,340 | $ | 544,675 | $ | 489,071 | ||||
| Adjusted EBITDA(1) | 32,830 | 30,031 | 66,128 | 55,205 | ||||||||
| Adjusted EBITDA as a % of revenue(1) | 12.2% | 12.0% | 12.1% | 11.3% | ||||||||
| Net earnings | 10,310 | 11,818 | 23,913 | 20,439 | ||||||||
| Adjusted Net earnings(1) | 13,417 | 14,398 | 25,530 | 25,366 | ||||||||
| Net earnings per share, basic | 0.16 | 0.19 | 0.38 | 0.33 | ||||||||
| Net earnings per share, diluted | 0.16 | 0.19 | 0.37 | 0.33 | ||||||||
| Adjusted earnings per share(1) | 0.20 | 0.23 | 0.39 | 0.41 | ||||||||
| Total assets | 740,020 | 561,372 | 740,020 | 561,372 | ||||||||
| Total loans and borrowings ("Net Debt") | 205,819 | 93,353 | 205,819 | 93,353 | ||||||||
| Free Cash Flow(1) | 21,753 | (3,734 | ) | 22,739 | (2,300 | ) | ||||||
(1) Please refer to the "Non-GAAP measures" section for the definition of Adjusted EBITDA, Adjusted EBITDA as a percentage of revenue, Adjusted net earnings, Adjusted earnings per share, Free Cash Flow, and to the "Reconciliation of non-GAAP measures" section for the related calculations.
Second Quarter Operational Analysis
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's) | 2026 | 2025 | 2026 | 2025 | ||||||||
| Revenue: | ||||||||||||
| Support Services | $ | 226,497 | $ | 205,353 | $ | 460,517 | $ | 404,128 | ||||
| Asset Based Services | 42,712 | 43,987 | 84,158 | 84,943 | ||||||||
| Total Revenue | $ | 269,209 | $ | 249,340 | $ | 544,675 | $ | 489,071 | ||||
| Adjusted EBITDA: | ||||||||||||
| Support Services | $ | 22,981 | $ | 20,484 | $ | 47,355 | $ | 39,362 | ||||
| Asset Based Services | 17,202 | 16,520 | 33,032 | 29,978 | ||||||||
| Corporate expenses | (7,353 | ) | (6,973 | ) | (14,259 | ) | (14,135 | ) | ||||
| Total Adjusted EBITDA | $ | 32,830 | $ | 30,031 | $ | 66,128 | $ | 55,205 | ||||
| Adjusted EBITDA as a % of Revenue: | ||||||||||||
| Support Services | 10.1 % | 10.0 % | 10.3 % | 9.7 % | ||||||||
| Asset Based Services | 40.3 % | 37.6 % | 39.2 % | 35.3 % | ||||||||
Support Services
Revenue for the three months ended June 30, 2026 was $226.5 million, an increase of 10.3% over Q2 2025, primarily driven by strong workforce accommodation occupancy, organic growth in both workforce accommodations and facilities management, as well as the addition of Right Choice acquired in Q3 2025, partially offset by lower than normal wildfire support activity. Excluding the contribution from Right Choice, revenue growth was 5%.
Adjusted EBITDA for the three months ended June 30, 2026 was $23.0 million, an increase of 12% over Q2 2025, and is attributable to the same factors mentioned above as well as Adjusted EBITDA contribution from PVC of $1.4 million (40% interest acquired in Q3 2025). Adjusted EBITDA margin for the three months ended June 30, 2026 was 10.1% compared to 10.0% in Q2 2025. Adjusted EBITDA margin excluding the equity accounted investment in PVC was 9.5%, reflecting investment in sales resources and operational support as the Corporation continues to build out and scale its U.S. platform. Adjusted EBITDA margins are expected to continue to exceed 9% over the long term.
For the six months ended June 30, 2026, Support Services revenues were $460.5 million, an increase of 14.0% over the same period in 2025, primarily driven by strong workforce accommodation occupancy including the impact of Right Choice, and organic growth related to new contracts. Our U.S. business has grown to $49 million revenue for the six months ended June 30, 2026 compared to $42.9 million for the same period in 2025, and this excludes the PVC equity investment which is making good progress on winning new contracts which will be onboarded over the next few quarters. Adjusted EBITDA for the six months ended June 30, 2026 was $47.4 million, an increase of 20.3% over the same period in 2025, and is attributable to the factors mentioned above as well as Adjusted EBITDA from PVC of $2.9 million. Adjusted EBITDA margin for the six months ended June 30, 2026 was 10.3% compared to 9.7% for the same period in 2025. Adjusted EBITDA margin excluding PVC was consistent with the prior year period at 9.7%.
Asset Based Services
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's) | 2026 | 2025 | 2026 | 2025 | ||||||||
| Revenue: | ||||||||||||
| Rental and other | $ | 33,308 | $ | 29,383 | $ | 66,629 | $ | 59,275 | ||||
| Workforce accommodation installation and demobilization | 9,404 | 14,604 | 17,529 | 25,668 | ||||||||
| Total Asset Based Services revenue | $ | 42,712 | $ | 43,987 | $ | 84,158 | $ | 84,943 | ||||
Revenue for the three months ended June 30, 2026 of $42.7 million included a 13% increase in rental and other revenue compared to Q2 2025, driven by higher equipment utilization, and the contribution from Right Choice, offset by lower wildfire support rental activity. Excluding the contribution from Right Choice, revenue growth was 2%. Workforce accommodation installation and demobilization revenue which varies based on timing of projects, decreased by $5.2 million compared to Q2 2025 as a result of less activity.
Adjusted EBITDA for the three months ended June 30, 2026 was $17.2 million, an increase of 4.1% over Q2 2025. Adjusted EBITDA margin for Q2 2026 was 40.3% compared to 37.6% in Q2 2025. Adjusted EBITDA and margins were higher in Q2 2026 reflecting a higher proportion of workforce accommodation rental revenue which generates higher margins compared to installation and demobilization activity. Adjusted EBITDA margins for ABS are expected to remain between 30% and 40% over the long term, depending on the mix of business.
For the six months ended June 30, 2026, ABS revenues were $84.2 million, a decrease of 0.9% over the same period in 2025, primarily driven by the factors mentioned above. Adjusted EBITDA for the six months ended June 30, 2026 was $33.0 million, an increase of 10.2% over the same period in 2025, attributable to the addition of Right Choice and change in business mix compared to the prior year period. Adjusted EBITDA margin for the six months ended June 30, 2026 was 39.2% compared to 35.3% for the same period in 2025.
Liquidity and Capital Resources
Net debt was $205.8 million at June 30, 2026 compared to $199.7 million at December 31, 2025. The increase in Net Debt from Q4 2025 was nominal and we expect debt levels to decrease over the remainder of the year absent any acquisitions. Net debt has decreased approximately $20 million since Q1 2026. Adjusted EBITDA conversion to FCF is expected to exceed 50% for the year.
Net Debt at June 30, 2026 was 1.5x Adjusted EBITDA, demonstrating our commitment to maintaining a strong balance sheet and financial flexibility.
Additional Information
A copy of Dexterra's Condensed Consolidated Interim Financial Statements ("Financial Statements") for the three and six months ended June 30, 2026 and 2025 and related Management's Discussion and Analysis ("MD&A") have been filed with the Canadian Securities Regulatory authorities and are available on SEDAR at sedarplus.ca and Dexterra's website at dexterra.com. The Financial Statements have been prepared in accordance with International Financial Reporting Standards and the reporting currency is in Canadian dollars.
Conference Call
Dexterra will host a conference call and webcast to begin promptly at 8:30 a.m. Eastern Time on August 5, 2026 to discuss the second quarter results.
To access the conference call by telephone the conference call dial in number is 1-800-715-9871.
A live webcast of the conference call will be accessible on Dexterra's website at https://ir.dexterra.com/events-presentations by selecting the Q2 2026 Results webcast link.
An archived recording of the conference call will be available approximately one hour after the completion of the call until September 4, 2026 by dialing 1-800-770-2030, passcode 9194621.
About Dexterra
Dexterra employs more than 9,000 people, delivering a range of support services for the creation, management, and operation of infrastructure across Canada and the U.S.
Powered by people, Dexterra brings best-in-class regional expertise to every challenge and delivers innovative solutions, giving clients confidence in their day-to-day operations. Activities include a comprehensive range of integrated facilities management services, industry-leading workforce accommodation solutions, and other support services for diverse clients in the public and private sectors.
For further information contact:
Denise Achonu, CFO
Head office: Airway Centre, 5925 Airport Rd., Suite 1000
Mississauga, Ontario L4V 1W1
Telephone: (905) 270-1964
You can also visit our website at dexterra.com.
Reconciliation of non-GAAP measures
The following provides a reconciliation of non-GAAP measures to the nearest measure under GAAP for items presented throughout the news release:
Adjusted EBITDA
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's) | 2026 | 2025 | 2026 | 2025 | ||||||||
| Net earnings | $ | 10,310 | $ | 11,818 | $ | 23,913 | $ | 20,439 | ||||
| Add: | ||||||||||||
| Share based compensation | 2,667 | 2,187 | 5,222 | 4,165 | ||||||||
| Depreciation & amortization | 11,555 | 9,692 | 24,724 | 19,270 | ||||||||
| Equity investment depreciation, amortization and income taxes | 1,403 | 147 | 2,763 | 297 | ||||||||
| Finance costs | 3,979 | 1,973 | 8,050 | 4,032 | ||||||||
| Loss (gain) on disposal of property, plant and equipment | 69 | (97 | ) | 293 | (68 | ) | ||||||
| Income tax expense | 2,847 | 4,311 | 7,411 | 7,070 | ||||||||
| Insurance recovery, net(1) | - | - | (6,248 | ) | - | |||||||
| Adjusted EBITDA | $ | 32,830 | $ | 30,031 | $ | 66,128 | $ | 55,205 | ||||
(1) Impact of one-time insurance claim includes insurance recovery amounts for the six months ended June 30, 2026 discussed above related to the fire.
Adjusted net earnings and Adjusted EPS
| Adjusted net earnings | Adjusted EPS | |||||||||||
| Three months ended June 30, | Three months ended June 30, | |||||||||||
| (000's except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||
| Net earnings/EPS | $ | 10,310 | $ | 11,818 | $ | 0.16 | $ | 0.19 | ||||
| Amortization of intangible assets related to acquisitions | 1,532 | 1,265 | 0.02 | 0.02 | ||||||||
| Share based compensation | 2,667 | 2,187 | 0.04 | 0.03 | ||||||||
| Income tax on adjustments | (1,092 | ) | (872 | ) | (0.02 | ) | (0.01 | ) | ||||
| Adjusted net earnings/Adjusted EPS | $ | 13,417 | $ | 14,398 | $ | 0.20 | $ | 0.23 | ||||
| Adjusted net earnings | Adjusted EPS | |||||||||||
| Six months ended June 30, | Six months ended June 30, | |||||||||||
| (000's except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||
| Net earnings/EPS | $ | 23,913 | $ | 20,439 | $ | 0.38 | $ | 0.33 | ||||
| Amortization of intangible assets related to acquisitions | 3,018 | 2,427 | 0.05 | 0.04 | ||||||||
| Share based compensation | 5,222 | 4,165 | 0.08 | 0.07 | ||||||||
| Net insurance claim(1) | (6,248 | ) | - | (0.10 | ) | - | ||||||
| Income tax on adjustments | (375 | ) | (1,665 | ) | (0.02 | ) | (0.03 | ) | ||||
| Adjusted net earnings/Adjusted EPS | $ | 25,530 | $ | 25,366 | $ | 0.39 | $ | 0.41 | ||||
(1) Impact of one-time net insurance claim includes insurance recovery income for the six months ended June 30, 2026 related to the fire.
Free Cash Flow
| Three months ended June 30, | Six months ended June 30, | |||||||||||
| (000's) | 2026 | 2025 | 2026 | 2025 | ||||||||
| Net cash flows from operating activities | $ | 29,238 | $ | 3,257 | $ | 26,126 | $ | 9,124 | ||||
| Sustaining capital expenditures, net of proceeds from the sale of property, plant and equipment, intangible assets, and insurance proceeds received | 1,875 | (894 | ) | (3,724 | ) | (1,335 | ) | |||||
| Finance costs paid | (3,709 | ) | (3,681 | ) | (7,251 | ) | (5,584 | ) | ||||
| Lease payments | (3,523 | ) | (2,416 | ) | (7,141 | ) | (4,505 | ) | ||||
| Income tax payments related to prior periods(1) | 893 | - | 11,849 | - | ||||||||
| Net insurance claim(2) | (3,021 | ) | - | 2,880 | - | |||||||
| Free Cash Flow | $ | 21,753 | $ | (3,734 | ) | $ | 22,739 | $ | (2,300 | ) | ||
(1) Following the utilization of most of the Corporation's tax loss carryforwards in 2024, a portion of the Corporation's 2025 tax liability was deferred and paid in 2026, which, when combined with 2026 tax installment payments, results in two years of cash tax payments occurring in 2026.
(2) Includes the net impact of one-time insurance claim related to the fire.
Return on Equity
| Trailing twelve months ended June 30, | ||||||
| (000's) | 2026 | 2025 | ||||
| Net earnings from continuing operations | $ | 44,276 | $ | 41,383 | ||
| Average total shareholders' equity(1) | 288,322 | 278,498 | ||||
| Return on Equity | 15.4 % | 14.9 % | ||||
(1) Average total shareholders' equity is calculated as the average of beginning total shareholders' equity and ending total shareholders' equity over the period from June 30, 2025 to June 30, 2026.
Forward-Looking Information
Certain statements contained in this news release may constitute forward-looking information under applicable securities law. Forward-looking information may relate to Dexterra's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "continue"; "forecast"; "may"; "will"; "project"; "could"; "should"; "expect"; "plan"; "anticipate"; "believe"; "outlook"; "target"; "intend"; "estimate"; "predict"; "might"; "potential"; "continue"; "foresee"; "ensure" or other similar expressions concerning matters that are not historical facts. In particular, statements regarding Dexterra's future operating results and economic performance, including return on equity and Adjusted EBITDA margins; capital allocation priorities, acquisition strategy; its capital light model, market and inflationary environment expectations, including energy price fluctuations, asset utilization, workforce accommodation occupancy levels, its leverage, FCF, wildfire activity expectations, expected benefits from the Right Choice and PVC acquisitions, investments in technology, U.S. tariff impacts, and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions, including expected growth, market recovery, supply chain mitigation efforts, results of operations, performance and business prospects and opportunities regarding Dexterra. While management considers these assumptions to be reasonable based on information currently available to Dexterra, they may prove to be incorrect. Forward-looking information is also subject to certain known and unknown risks, uncertainties and other factors that could cause Dexterra's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information, including, but not limited to: the ability to retain clients, renew existing contracts and obtain new business; an outbreak of contagious disease that could disrupt its business; the highly competitive nature of the industries in which Dexterra operates; outsourcing of services trends; reliance on suppliers and subcontractors; cost inflation; including energy pricing, U.S. tariff impacts; U.S. government shutdown, volatility of industry conditions could impact demand for its services; a reduction in the availability of credit could reduce demand for Dexterra's products and services; Dexterra's significant shareholder may substantially influence its direction and operations and its interests may not align with other shareholders; its significant shareholder's approximate 50% ownership interest may impact the liquidity of the common shares; cash flow may not be sufficient to fund its ongoing activities at all times; loss of key personnel; the failure to receive or renew permits or security clearances; significant legal proceedings or regulatory proceedings/changes; environmental damage and liability is an operating risk in the industries in which Dexterra operates; climate changes could increase Dexterra's operating costs and reduce demand for its services; liabilities for failure to comply with public procurement laws and regulations; any deterioration in safety performance could result in a decline in the demand for its products and services; failure to realize anticipated benefits of acquisitions and dispositions; inability to develop and maintain relationships with Indigenous communities; the seasonality of Dexterra's business; inability to restore or replace critical capacity in a timely manner; reputational, competitive and financial risk related to cyber-attacks and breaches; failure to effectively identify and manage disruptive technology; economic downturns can reduce demand for Dexterra's services; its insurance program may not fully cover losses. Additional risks and uncertainties are described in Note 23 to the Financial Statements contained in its most recent Annual Report filed with securities regulatory authorities in Canada and available on SEDAR at sedarplus.ca. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Dexterra is under no obligation and does not undertake to update or alter this information at any time, except as may be required by applicable securities law.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/307997
Source: Dexterra Group Inc.
