Wajax (WJX) Q1 2025 earnings summary

Executive summary

• Revenue rose 15.1% year-over-year to $555.0 million, driven by strong equipment sales in construction, forestry, and mining, including two large mining shovel deliveries and aided by a new competitive financing program.

• Adjusted EBITDA increased 6.2% to $43.2 million, with adjusted net earnings per share up to $0.69, reflecting adjustments for non-cash derivative losses.

• Cost savings initiatives reduced selling and administrative expenses as a percentage of revenue to 14.1% from 16.7% year-over-year, excluding unrealized losses on total return swaps.

• All regions posted revenue growth, with the West, East, and Central regions up 20%, 11%, and 10% year-over-year, respectively.

• Backlog decreased 0.6% sequentially and 4.4% year-over-year to $561.3 million; inventory fell $15.2 million from Q4 2024 and $91.5 million year-over-year.

Financial highlights

• Gross profit margin declined 290 basis points year-over-year to 19.1%, but improved 200 basis points sequentially from Q4 2024.

• Cash flow from operating activities improved to $75.9 million in Q1 2025 from $55.0 million in Q1 2024, with inventory reduction as a key driver.

• Leverage ratio improved to 2.0x from 2.17x in Q4 2024, but remains above the 1.5x–2.0x target range.

• Adjusted EBIT rose 9.3% to $28.0 million; adjusted EBITDA margin was 7.8%.

• Working capital efficiency improved to 25.5%, up 50 basis points from Q4 2024.

Outlook and guidance

• Management expects continued strong demand in mining and energy, supported by robust backlog, but faces headwinds from soft market conditions and tariff uncertainties.

• No change to the expected delivery cadence for mining shovels; three more are planned for the remainder of 2025.

• Typical seasonality is expected for the rest of the year, with Q2 anticipated to be strong for construction.

• Focus remains on six strategic priorities, including cost/process improvement, inventory management, and margin improvement.