Wajax (WJX) Q1 2026 earnings summary

Executive summary

• Q1 2026 saw improved margins, strong operating cash flow, and reduced leverage despite a 9.5% year-over-year revenue decline to $502.1 million, mainly due to lower equipment volumes and customer caution in certain sectors.

• Margin gains were driven by higher industrial parts and ERS sales, offset by lower equipment and product support margins.

• Net earnings rose 35.9% year-over-year to $17.8 million, with basic EPS up to $0.82 from $0.60.

• Management focused on cost control, inventory optimization, and margin improvement to enhance profitability and cash flow.

Financial highlights

• Revenue declined 9.5% year-over-year to $502.1 million, mainly due to lower equipment volumes and fewer large mining shovel deliveries.

• Gross profit margin improved to 20.6%, up 150 basis points from Q1 2025, driven by higher margins in industrial parts/ERS and favorable sales mix.

• Adjusted EBITDA margin increased to 8.1% from 7.8% in Q1 2025; adjusted EPS was $0.67, down 2.4% year-over-year.

• Cash flow from operating activities increased to $67.4 million from $31.4 million in Q1 2025.

• Leverage ratio improved to 1.51x from 1.62x at year-end 2025.

Outlook and guidance

• Solid demand expected in mining and energy sectors, with one large mining shovel scheduled for delivery in the next four quarters.

• Market conditions in other sectors remain mixed, with ongoing macroeconomic softness and trade/tariff uncertainty.

• Focus remains on margin improvement, cost control, and prudent capital allocation to manage near-term variability.