Growth International (AFN) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was CAD 282 million, down 2% year-over-year, with adjusted EBITDA of CAD 25 million, a 19% decrease, as ongoing uncertainty in North American and global agriculture impacted customer purchasing and large capital decisions.

• Adjusted EBITDA margin declined to 8.9%, down 197–200 basis points year-over-year, mainly due to lower commercial volumes, partially offset by cost reductions.

• Farm segment revenue rose 7% year-over-year to CAD 102 million, while commercial segment revenue declined 6% to CAD 180 million due to soft North American markets and geopolitical issues in India.

• Restructuring and cost-saving initiatives are underway, targeting over CAD 30 million in annualized savings by Q4 2026, with SG&A expenses down CAD 9.7 million year-over-year.

• Net debt leverage ratio increased to 5.2x at March 31, 2026, up from 4.7x at December 31, 2025, due to seasonal working capital build.

Financial highlights

• Consolidated Q1 revenue was CAD 282 million, down 2% year-over-year.

• Adjusted EBITDA was CAD 25 million, down 19% year-over-year; adjusted EBITDA margin fell to 8.9%, down 197 basis points.

• Farm segment revenue: CAD 102 million (+7% YOY); commercial segment revenue: CAD 180 million (–6% YOY).

• Farm adjusted EBITDA was CAD 18.9 million (flat year-over-year); commercial adjusted EBITDA was CAD 13.6 million, down from CAD 24.5 million.

• Q1 2026 loss before income taxes was CAD (43.6) million.

Outlook and guidance

• Order book at March 31, 2026, was CAD 589 million, down 19% year-over-year, mainly due to completion of large international commercial projects.

• Sequential improvement in Q2 commercial margins is expected, but full recovery depends on volume rebound.

• Free cash flow is expected to be positive for the full year, supported by receivable monetization and cost savings.

• Focus remains on debt reduction, with a long-term leverage target of 2.5x and ROIC goal of 15%.

• Annualized cost savings from restructuring now expected to reach at least CAD 30 million by Q4 2026.