ADF Group (DRX) Q4 2026 earnings summary

Executive summary

• Fiscal 2026 closed with exceptional results despite U.S. tariff challenges and market uncertainties, with revenue at CAD 258.7 million, down from CAD 339.6 million year-over-year.

• Groupe LAR acquisition finalized in September 2025 strengthened position, contributed to backlog growth, and diversified operations.

• Order backlog reached CAD 561.1 million, with 57% from Canadian contracts, excluding new contracts of CAD 157.3 million announced post-year-end.

• Net income was CAD 26.3 million (CAD 0.93 per share), down from CAD 66.8 million (CAD 1.84 per share) year-over-year.

• Adjusted EBITDA was CAD 43.5 million (16.8% of revenues), compared to CAD 91.3 million (26.9%) last year.

Financial highlights

• Revenues for fiscal 2026 were CAD 258.7 million, down from CAD 339.6 million year-over-year.

• Gross margin declined to 23.1% from 31.6% in fiscal 2025, mainly due to U.S. tariffs and higher steel prices.

• Cash flows from operations totaled CAD 49.4 million; CapEx was CAD 11.1 million.

• Working capital at year-end: CAD 104.8 million.

• Cash and equivalents: CAD 62.7 million, up CAD 2.7 million year-over-year, despite share buybacks and the Groupe LAR acquisition.

Outlook and guidance

• Revenue growth anticipated for fiscal 2027, but margin stagnation expected in early quarters due to tariffs and delayed operational impact from plant expansion.

• Full-year gross margin expected to be similar to fiscal 2026, with possible improvement in the second half.

• Major new four-year contract will have limited impact on FY 2027 revenues; most fabrication starts next year.

• Most contracts in backlog are expected to be executed by the end of fiscal 2028.

• The diversified and record order backlog positions the company well to navigate new tariff realities.