Badger Infrastructure Solutions (BDGI) Q2 2024 earnings summary

Executive summary

• Achieved 9% revenue growth to $186.8 million in Q2 2024, led by 14% growth in U.S. operations, while Canadian revenue declined 19% due to delayed projects and lower market activity.

• Adjusted EBITDA increased 14% year-over-year to $44.6M, with margin improving to 23.9% from 22.8% last year.

• Gross profit margin remained stable at 29.2% compared to 29.1% last year.

• Net fleet grew by 114 trucks year-over-year, ending the quarter with 1,584 hydrovacs, an 8% increase.

• Board approved a quarterly dividend of CAD $0.18 per share for Q3 2024.

Financial highlights

• U.S. revenue up 14% year-over-year to $165.6M, with strong growth in Eastern and Southern regions; California and Upper Midwest saw slower growth.

• Canadian revenue down 19% to $21.2M, expected to remain soft until delayed projects commence later in 2024 or early 2025.

• Adjusted earnings per share rose 18% to $0.45.

• G&A expenses decreased to $10 million (5.3% of revenue) from $10.9 million (6.4% of revenue) last year.

• Revenue per truck per month (RPT) was $43,161, slightly down due to Canadian softness; U.S. RPT was flat.

Outlook and guidance

• Canadian revenues expected to remain in line with first half trends until delayed projects start.

• Truck build guidance moderated to the lower end of 7%-10% growth for the year.

• Confident in achieving 12%-14% revenue growth in 2025 through improved utilization and pricing, even with slower truck builds.

• Emergency response work not forecasted into guidance; any such activity is considered upside.

• 2024 capital spend forecast: $90M-$130M for new builds, refurbishments, and ancillary equipment.