ADF Group (DRX) investor relations material

Executive summary

• Fiscal 2027 began with Q1 revenues of CAD 99.3 million, up 78.8% year-over-year, driven by new contracts and the Groupe LAR acquisition.

• Net income reached CAD 12 million (CAD 0.42 per share), up from CAD 8.7 million (CAD 0.30 per share) in the prior year.

• Gross margin improved to 24.2% from 22.0% year-over-year.

• Order backlog hit a record CAD 645.8 million, with 72% Canadian content and significant contribution from Groupe LAR.

Financial highlights

• Gross margin rose to CAD 24.0 million, nearly double the prior year, with margin percentage increasing from 22% to 24.2%.

• Adjusted EBITDA for the quarter was CAD 18.5 million (18.6% of revenues), up from CAD 10.4 million (18.7%).

• Cash and cash equivalents stood at CAD 62.1 million at quarter-end, down only CAD 0.6 million from January 31, 2026.

• Working capital was CAD 111.9 million as of April 30, 2026.

• Selling and administrative expenses increased by CAD 4.2 million to CAD 7.6 million, mainly due to share-based compensation and Groupe LAR integration.

Outlook and guidance

• Management expects continued growth, supported by a robust order backlog and new contracts in the hydroelectric sector.

• Expectation of similar gross margins in Q2, with further benefits from Groupe LAR synergies in the second half of the year.

• LAR plant expansion to double capacity, with meaningful revenue impact expected starting Q2 of next fiscal year.

• Full-year CapEx projected at approximately CAD 35 million.

• Ongoing discussions for additional government financing, with confirmation expected by end of Q2.