ADF Group (DRX) Q2 2027 earnings summary

Executive summary

• Revenue for Q2 2026 reached CAD 95 million, up 79.3% year-over-year; six-month revenue was CAD 194.3 million, a 79% increase from the prior year.

• Net income for Q2 was CAD 3 million (CAD 0.10/share), and year-to-date net income was CAD 15 million (CAD 0.52/share), both significantly higher than last year.

• Results were negatively impacted by non-cash costs from share units (DSUs, PSUs, RSUs) and foreign exchange losses, reducing net income by $6.2 million for the quarter and $7.1 million for the half-year.

• Record order backlog at CAD 693.7 million, with 64% Canadian-based projects.

Financial highlights

• Gross margin for Q2 was 18.7%, down from 20.7% last year; year-to-date gross margin was 21.5%, nearly flat year-over-year.

• Adjusted EBITDA for Q2 was CAD 8.4 million (vs. CAD 3.7 million last year); year-to-date adjusted EBITDA was CAD 26.9 million (vs. CAD 14.1 million last year).

• Cash and cash equivalents at quarter-end were CAD 91.4 million, up CAD 28.7 million since January 31, 2026.

• Operating cash flow for the six months was CAD 47.1 million.

• Working capital at July 31, 2026: CAD 109.5 million.

Outlook and guidance

• Year-to-date gross margin of 21.5% is expected to be a good indicator for coming quarters, with potential improvement as legacy backlog is completed.

• Most of the record order backlog is expected to be executed by the end of fiscal 2028, excluding certain long-term contracts.

• No direct impact expected from recent U.S. tariffs or Canadian counter-tariffs, but ongoing trade policy uncertainty remains.

• Full-year CapEx expected to exceed CAD 40 million.