ADF Group (DRX) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 2025 was CAD 55.5 million, down from CAD 107.4 million year-over-year due to U.S. tariff uncertainty.

• Net income for the quarter was CAD 8.7 million, or $0.30 per share, compared to CAD 15.3 million, or $0.47 per share, a year ago.

• Order backlog reached CAD 330.4 million as of April 30, 2025, up from CAD 293.1 million at January 31, 2025.

• Cash and cash equivalents were CAD 75.3 million at quarter-end, up CAD 15.3 million from the previous quarter.

Financial highlights

• Gross margin was CAD 12.2 million, with margin percentage falling from 29.2% to 22% year-over-year.

• Adjusted EBITDA was CAD 10.4 million (18.7% of revenues), down from CAD 23.1 million (21.5% of revenues) in Q1 2024.

• Working capital stood at CAD 108.6 million as of April 30, 2025, with a ratio of 2.45:1.

• Dividend of $0.02 per share was paid on May 15, 2025, to shareholders of record as at April 24, 2025.

• Selling and administrative expenses were CAD 3.4 million, a decrease of CAD 6.3 million, mainly due to DSU and PSU market value adjustments.

Outlook and guidance

• Revenues are expected to return to last year's levels (CAD 80–85 million per quarter) in the second half of fiscal 2026, assuming current tariff rules remain.

• Management expects increased revenue and profitability in the second half of fiscal 2026, supported by a strong order backlog.

• Anticipation of new contracts in the coming months, with strong momentum from Canadian clients.

• Uncertainty related to U.S. tariffs remains a key factor influencing near-term performance.