North American Construction Group lifts 2026 revenue guidance after Q2

North American (TSX: NOA ) reported second-quarter financial results on Thursday.

The transcript from the company's second-quarter earnings call has been provided below.

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Access the full call at Summary North American Construction Group Ltd reported $93 million in EBITDA for Q2 2026, with revenue up $86 million year-over-year, largely due to the acquisition of IMC which contributed $91 million.

The company has raised its full-year revenue guidance to $1.6-$1.8 billion, citing strong first-half performance and a robust $3.8 billion contractual backlog.

Australia remains a key growth area with a 31% CAGR in revenue from H1 2024 to H1 2026, supported by acquisitions like McKellar and IMC, and a strong bid pipeline of $3.9 billion.

In Canada, the company is expanding its presence in mining and infrastructure with new equipment arriving in Nunavut expected to drive 20% site-level revenue growth.

The oil sands operations have identified 260 heavy equipment assets for optimization, aiming for a medium-term mechanical availability target of 70% to improve margins.

Free cash flow generation was $23 million in Q2, with net debt rising to $1.1 billion due to strategic acquisitions and growth capital expenditures.

The company plans to announce a new CEO soon, reflecting ongoing leadership stability and strategic direction.

Full Transcript Jenny, Investor Relations Good morning, ladies and gentlemen.

Welcome to the North American Construction Group Ltd conference call regarding the second quarter ended June 30, 2026.

At this time, all participants are in a listen-only mode.

Following management's prepared remarks, there will be an opportunity for analysts, shareholders, and bondholders to ask questions.

The media may monitor this call in listen-only mode.

They are free to quote any member of management, but they are asked not to quote remarks from any other participant without that participant's permission.

The Company wishes to confirm that today's comments contain forward-looking information and that actual results could differ materially from a conclusion, forecast, or projection contained in that forward-looking information.

Certain material factors or assumptions were applied in drawing conclusions or in making forecasts or projections that are reflected in the forward-looking information.

Additional information about those material factors is contained in the Company's most recent Management's Discussion and Analysis, which is available on SEDAR and EDGAR as well as on the Company's website at nacg.ca.

I will now turn the conference call over to Jason Venstra, CFO.

Jason Venstra, CFO Thanks, Jenny, and good morning, everyone.

I'll start today's call with brief commentary on the financials, then pass the call to Barry for his operational and forward-looking comments, and we'll conclude as per usual with Q&A.

Starting on slide 4, we delivered $93 million of EBITDA in the first quarter, translating into year-over-year improvements in both adjusted earnings and margin performance.

Combined revenue was up $86 million from last year with IMC contributing $91 million of revenue in the quarter.

Excluding IMC, Australia was up organically 15% in the quarter on commission, growth assets and strong execution.

Offsetting these increases was the year-over-year impact of the divestiture of the ultra-class haul trucks in Canada.

The $456 million of total combined revenue finished off a strong first half foundation of over $875 million, supporting our 2026 combined revenue midpoint of $1.7 billion.

Moving to slide 5, Australia posted a 13.6% gross profit margin and Canada delivered a combined adjusted margin of approximately 7% despite difficult seasonal conditions early in the quarter.

In both regions, these results reflected disciplined project execution, improved internal maintenance capability, lower repair costs, and the implementation of continued fleet efficiency initiatives, and importantly are trending in the right direction heading into the second half of 2026.

Moving to slide 6, Q2 EBITDA and EBIT were both up meaningfully from the prior-year quarter on the acquisition of IMC and a more typical quarter from the Fargo joint ventures.

Direct adjusted G&A was $15 million, or 3.8% of reported revenue, well below our 5% targeted threshold, demonstrating operating leverage on stronger revenue.

Depreciation as a percent of combined revenue dropped to 13% from 16% last year as IMC's lower capital intensity resulted in the combined number being lower than our expected range midpoint of 15%.

All told, adjusted EPS of 32 cents was generated by solid operational performance.

Interest expense increased to $18.9 million from $14.1 million last year, reflecting the financing of our strategic expansions in Australia.

Our average cost of debt for the quarter remained consistent at 6.4%.