Q3 2025 Dexterra Group Inc Earnings Call

November 5, 2025

Only mode and the conference is being recorded.

Operator: The conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star one on your telephone keypad. Should you need assistance in the conference call, you may signal an operator by pressing star zero. I would now like to turn the conference over to Denise Achonu, Chief Financial Officer. Please go ahead.

After the presentation, there will be an opportunity to ask questions.

To join the question queue. You may press star then 1 on your telephone keypad,

Should you need assistance in the conference call you may signal an operator by pressing star then zero?

I would now like to turn the conference over to Denise eyonu Chief Financial Officer. Please go ahead.

Denise Achonu: Thank you, Steve. Good morning, thank you to everyone for joining the call. My name is Denise Achonu, Chief Financial Officer of Dexterra Group Inc. With me on the call today are Mark Becker, our CEO, and our Board Chair, Bill McFarland, who will provide some brief introductory comments. After a brief presentation, we will take questions, with the call ending by 9:15 AM Eastern Time. We will be commenting on our Q3 2025 results with the assumption that you have read the Q3 earnings press release, MD&A, and financial statements. The slide presentation, which supports today's comments, is posted on our website. We encourage participants to access the slides and follow along with our presentation. Before we begin, I would like to make some comments about forward-looking information.

Thank you, Steve. Good morning, and thank you to everyone for joining the call.

My name is Denisa chani Chief Financial Officer of dextera Group Inc.

With me on the call today, our Mark Becker, our CEO and our board, chair. Bill McFarland who will provide some brief introductory comments.

After a brief presentation, we will take questions with the call Ending by 9:15 Eastern Time.

We will be commenting on our Q3, 2025 results with the assumption that you have read the Q3 earnings press release.

Mdna, and financial statements.

The slide presentation which supports today's comment is posted on our website and we encourage participants to access the slides, and follow along with our presentation.

Denise Achonu: In yesterday's news release and on slide two of the presentation that we have posted to our website, you will find cautionary notes in that regard. I will not cover the content of the cautionary notes in any detail. However, we do claim their protection for any forward-looking information that we might disclose on this conference call today. I will now turn it over to Bill McFarland for his introductory comments.

Before we begin, I would like to make some comments about forward-looking information and yesterday's news, release and on slide 2 of the presentation that we have posted to our website.

You will find cautionary notes in that regard.

I will not cover the content of the cautionary notes in any detail. However, we do claim their protection for any forward-looking information that we might disclose on this conference call today.

I will now turn it over to Bill McFarland for his introductory comments.

Bill McFarland: Good morning, thank you, Denise. Q3 was another strong quarter for Dexterra as management continues to make progress on delivering on the 2025 priorities, including strong operational execution and delivery of results, importantly, the successful closure of two strategic acquisitions. These two key investments position Dexterra to continue to grow both its business segments in line with our strategy, which includes accelerating growth in the U.S. IFM business and supporting our leading remote workforce accommodation business by making high return investments when accretive opportunities arise. As we consistently communicated, we are also committed to delivering a return on equity of 15% to shareholders while continuing to build and scale the business over the long term. This includes paying shareholders a dividend and delivering capital appreciation over time. We believe both of the investments will help us meet those goals.

Good morning and thank you Denise. Q3 was another strong quarter for dextera his management continues to make progress on, delivering on the 2025 priorities, including strong, operational execution, and delivery of results. And importantly, the successful closure of 2, strategic acquisitions.

These 2.

Key Investments position, dextera to continue to grow voltage, business segments in line, with our strategy, which includes accelerating growth in the US ifm business and supporting our leading remote Workforce, accommodation, business by making high return Investments, when a creative opportunities arise.

As we consistently communicated, we are also committed to delivering a return on Equity of 15% to shareholders while continuing to build, and scale the business over the long term.

This includes paying shareholders a dividend and delivering capital appreciation over time.

We believe both of the investments will help us meet those goals.

Bill McFarland: With that overview, I would now like to pass it over to Mark Becker for comments on the Q3 2025 results.

Overview. I would now like to pass it over to Mark Becker for comments on the Q3 2025 results.

Mark Becker: Great. Thank you very much, Bill, good morning, everyone. I guess starting off on slide five, as Bill talked about, we closed on our two strategic acquisition investments in Q3, and we've been focused on effective onboarding and realizing the benefits from both businesses. Our partnership with Pleasant Valley Corporation is progressing very well, with collective efforts focused on our joint strategic objectives, including the growth of our US platform. The investment in PVC enhances our facilities management capabilities, expands our operational scale and market access within the US, where PVC has a very strong track record of growth and profitability and a robust pipeline of opportunities. The PVC technology-enabled distributed delivery model is complementary to our largely self-performed facilities management model. Over time, we expect to leverage these combined capabilities across North America.

Great. Thank you very much, Bill and, uh, good, good morning everyone, and I guess starting off on on slide 5.

Um, is Bill talked about, we closed on our 2, strategic acquisition investments in in 23.

Uh, and we've been focused on effective onboarding and realizing the benefits from from both businesses.

Our partnership with Pleasant Valley, Corporation is progressing very well.

With Collective efforts focused on our joint, strategic objectives.

Including the growth of our us platform.

The investment in PVC enhances, our facilities, management capabilities, expands our operational scale.

And Market access within the US where PVC has a very strong track record of growth and profitability.

And a robust pipeline of opportunities.

The PVC technology enabled distributed. Delivery model is complimentary to our largely self-performed Facilities, Management model. And over time we expect to leverage these combined capabilities across North America

Mark Becker: We are deeply engaged with the leadership team at PVC. Their commitment to operational excellence and client service provides a strong foundation for the future. We remain confident in the long-term growth trajectory of the business, and we're actively supporting initiatives that will accelerate US growth, including investments in sales capability and technology. With David Lambert now fully embedded as President of Dexterra USA, we are well positioned and executing with focus and discipline to scale our FM/IFM presence in the US. The Right Choice acquisition, closed at the end of August, and onboarding is progressing very well in line with our expectations and is providing an immediate lift in revenue and adjusted EBITDA. The optimization of Right Choice's camps, with a total of 2,000 beds in the Montney and Duvernay in Alberta and BC, with Dexterra facilities in the region, is also well underway.

We are deeply engaged with the leadership team at PVC and their commitment to operational excellence and client service provides a strong foundation for the future.

We remain confident in the long-term growth trajectory of the business. And we're actively supporting initiatives that will accelerate us growth.

Including investments in sales capability and Technology.

And with David Lambert. Now fully embedded as president of dexterity USA. We are well positioned and executing with focus and discipline to scale our FM ifm presence in the US.

The right choice, acquisition, uh, closed at the end of August, and onboarding is progressing very well. In line with our expectations and is providing an immediate lift in revenue and adjusted ibida.

In Alberta and BC with dextera facilities in the region, is also well underway.

Mark Becker: The Right Choice fleet of high-quality, underutilized equipment provides additional capacity available for redeployment across the Dexterra network in support of our new growth opportunities. We expect to complete the integration of the Right Choice business in Q1 of 2026 and to be in a position to deploy an available equipment fleet over the medium term on new growth opportunities, including potential nation-building projects across mining, energy, and other infrastructure as Canada reacts to new global dynamics. Turning now to our Q3 results, I'm very pleased to report that we delivered another quarter of strong financial and operating results with robust market activity levels and strong margins across the business, resulting in CAD 35 million in adjusted EBITDA for Q3.

The right choice Fleet of high-quality underutilized equipment provides additional capacity. Available free redeployment across the dextera network in support of our new growth opportunities.

We expect to complete the integration of the right choice business in q1 of 2026 and to be in a position to deploy an available equipment Fleet over the me medium term on new growth opportunities.

Including potential nation, building projects, across mining energy, and other infrastructure as Canada reacts to new Global Dynamics.

Turning now to our QC results, I'm very pleased to report that we delivered another quarter of strong financial and operating results with robust Market activity levels and strong margins, across the business resulting in 35 million in adjusted ibida for Q3.

Mark Becker: Our operating performance in Q3 was driven primarily by continued strong camp occupancy levels and also the contributions from our recent acquisitions in PVC and Right Choice Camps & Catering, which added almost CAD 2 million in EBITDA. Our stronger operating performance allowed us to continue to achieve our target return on equity of 15%. In the quarter, we also returned approximately CAD 7 million to shareholders through a combination of our recently increased dividend and share buybacks. Market response has been quite positive, with our share price continuing to improve over 30% year-to-date and over 10% since we announced the two investments in early August. Finally, our efforts to proactively manage costs and our supply chain initiatives have allowed us to remain resilient to the implications of cross-border trades challenges, as well as providing margin enhancements in a challenging business environment. With that, I'll turn things over to Denise Achonu.

Our operating performance in Q3 was driven primarily by continued, strong cap occupancy levels and also the contributions from our recent acquisitions in PVC and right choice, which added almost 2 million in ibida.

Our strong operating performance allowed us to continue to achieve our Target return on Equity of 15%.

In the quarter, we also returned approximately 7 million to shareholders to a combination of our recently, increased dividend and share BuyBacks.

Market response has been quite positive, with our share price continuing to improve over 30% a year to date and over 10%. Since we announced the 2 investments in early August,

Mark Becker: Finally, our efforts to proactively manage costs and our supply chain initiatives have allowed us to remain resilient to the implications of cross-border trades challenges, as well as providing margin enhancements in a challenging business environment. With that, I'll turn things over to Denise Achonu.

Finally, our efforts to proactively manage costs and our supply chain initiatives has allowed us to remain resilient to the implications of cross border. Trade challenges, as well as providing margin enhancements in a challenging business environment.

With that, I'll turn things over to Denise.

Thank you, Mark.

Denise Achonu: Thank you, Mark. Speaking in more detail on the business segments, starting with support services on Slide 6. For Q3, revenues from support services were CAD 234 million, an increase of 7% from Q3 2024 and 14% over Q2 2025. Adjusted EBITDA for the quarter was CAD 25 million, compared to CAD 20 million in Q3 2024 and CAD 21 million in Q2 2025. The increase in revenue and profitability over last quarter is attributable to strong camp occupancy across our network, organic growth, normal seasonal forestry activity, and contributions from both PVC and Right Choice. Adjusted EBITDA margin in Q3 2025 was 10.5%, an increase compared to 9.2% in Q3 2024 and 10% in Q2 2025. The Q3 adjusted EBITDA margin, excluding PVC, which has no related revenue as it is equity accounted for, was 10%.

Speaking in more detail on the business segments, starting with Support Services on slide 6.

For Q3 revenues from Support Services, where 234 million, an increase of 7% from Q3 2024 and 14% over Q2 2025.

Adjusted ibida for the quarter was 25 million compared to 20 million in Q3 2024 and 21 million in Q2 to 2025.

The increase in revenue and profitability over last quarter is attributable to strong Camp occupancy, across our Network, organic growth, normal seasonal, forestry activity and contributions from both PDC and right choice.

Adjusted ibida margin in Q3 2025 was 10.5% and increased compared to 9.2% in Q3 2024 and 10% in Q2 2025.

The Q3 adjusted iida margin, excluding PDC which has no related Revenue, as it is equity, accounted for was 10%.

Denise Achonu: The increase was a result of the factors previously mentioned, our focus on cost control, and continued supply chain efficiency efforts. We expect adjusted EBITDA margins for support services to continue to exceed 9% for the remainder of 2025 and over the long term. Our pipeline of new sales opportunities remains robust in all areas of support services, including integrated facilities management opportunities on both sides of the border. The recent US federal government shutdown is expected to have a limited impact on our US operations, as our government contracts are generally classified as essential services. Moving on to asset-based services on Slide 7. Revenue from this business segment was lower in Q3 at CAD 48 million compared to Q3 2024, primarily driven by lower access matting activity due to delays on certain oil and gas project starts by clients.

The increase was a result of the factors. Previously, mentioned, our focus on cost control and continued supply chain efficiency efforts,

We expect adjusted evida margins for support services to continue to exceed 9% for the remainder of 2025 and over the long term.

Our pipeline of new sales opportunities remains robust, in all areas of Support Services included integrated facility management opportunities on both sides of the Border.

The recent US federal government shutdown, is expected to have a limited impact on our us operations as our government. Contracts are generally classified as essential services.

Moving on to asset Based Services on slide 7.

8 million compared to Q3 2024. Primarily driven by lower access matting activity due to delays on certain oil and gas projects start project starts by clients.

Denise Achonu: We expect this activity to ramp up in Q4, returning to more normalized levels in the medium term. Revenue in Q3 increased 8% compared to Q2 due to higher equipment utilization of workforce accommodation structures and the one-month contribution from Right Choice. Q3 2025 adjusted EBITDA was CAD 16 million, compared to CAD 18 million in Q3 2024 and CAD 17 million in Q2 2025. Adjusted EBITDA margin for Q3 2025 was lower at 34% compared to 35% in Q3 2024 and 38% in Q2 2025 as a result of the same factors previously mentioned, partially offset by the contribution from Right Choice. We have recently secured some medium-term camp rental contracts, which are expected to contribute positively to an outlook of higher margins over the medium term.

We expect this activity to ramp up in Q4 returning to more normalized levels in the medium-term.

Revenue in Q3 increased 8% compared to Q2 due to higher equipment. Utilization of Workforce, accommodation structures.

And the 1-month contribution from right choice.

232025. Adjusted epid was 16 million 16 million compared to 18 million in Q3 2024 and 17 million in Q2 20225.

Adjusted ibida margins for Q3 2025 with lower at 34% compared to 35% in Q3 2024.

And 38% in Q2 202025 as a result of the same factors previously mentioned.

Partially offset by the contribution from right choice.

We have recently secured some medium-term shampoo rentals contracts which are expected to contribute positively to an Outlook of higher margins, over the medium term.

Denise Achonu: Adjusted EBITDA margins in this business segment are expected to fluctuate between 30% and 40%, depending on the mix of business. Similar and connected to support services, our growth pipeline and asset-based services business remains robust across primarily resource and infrastructure projects. Reinforced by the recent federal budget announcement, there is significant potential opportunities around Canadian nation-building investments. I'll now speak about our recent acquisitions, financial position and capital markets on Slide 9. The results of the two acquisitions have been included in our Q3 results from their respective closing dates. The 40% interest in PVC has been reported as an equity investment and contributed CAD 0.9 million and CAD 0.7 million to adjusted EBITDA and net earnings, respectively, to our support services segment in Q3.

Adjusted Epic on margins. In this business segments are expected to fluctuate, between 30% and 40%, depending on the mix of business.

Similar and connected support services, our growth Pipeline and asset based service to business remains robust across primarily resource and infrastructure projects.

Reinforced by the recent federal budget announcement, there is significant potential opportunities.

Around Canadian nation, building Investments.

On now speak about our recent acquisitions financial position and capital markets on slide 9.

The results of the 2 acquisition have been included in our Q3 results from their respective closing dates.

The 40% interest in PVC has been reported as an equity investment and contributed.

0.9 million and 0.7 million to adjusted infida and net earnings respectively to our support service. SE segment in Q3

Denise Achonu: Right Choice has been consolidated with our results since 1 September and is contributing to both the support services and asset-based segments of the business, with a combined uplift in Q3 of CAD 5 million and CAD 0.9 million to revenue and adjusted EBITDA, respectively. Turning now to our financial position. Net debt at 30 September 2025 was CAD 206 million, compared to CAD 93 million at Q2 2025, and it was CAD 68 million at 31 December 2024. The increase was due to the investment in PVC and the acquisition of Right Choice, which added approximately CAD 150 million to debt. We expect to pay down debt by over CAD 20 million by the end of the year and expect our debt-to-EBITDA ratio to be under 1.7 times of annualized pro forma adjusted EBITDA by year-end, which is well within our comfort zone.

Right. Choice has been Consolidated with our results since September 1st and is contributing to both the support services and asset based segments of the business with a combined uplift in Q3 of 5 million and 0.9 million to revenue and adjusted epidural respectively.

Turning now to our financial position, net debt at September 30th 2025 was 206 million.

Compared to 93 million at Q2, 2025.

And it was 68 million.

At December, 31st 2024.

The increase was due to the investment in PDC and the acquisition of right choice, which added approximately 150 million to death.

We expect to pay down debt by over 2, 20 million by the end of the year. And expect our debt, IFA ratio to be under 1.7 times of annualized, performance adjustment by year end.

Which is well within our comfort zone.

We're committed to maintaining a strong balance sheet over the long term.

Denise Achonu: We are committed to maintaining a strong balance sheet over the long term. Through the recent interest rate decreases, we have seen our effective interest rate drop by over 200 basis points to 6% in Q3 compared to the same period in the prior year. We have also taken out US debt for the PVC acquisition, so our equity investment is effectively hedged from a foreign exchange movement point of view and intend to enter into an interest rate collar to manage interest rates on a go-forward basis. Free cash flow for Q3 2025 was CAD 38 million compared to CAD 12 million for Q3 2024, driven by strong operational results and positive improvements in working capital. As previously communicated, we generate the majority of our free cash flow in the Q3 and Q4.

Through the recent interest rate decreases. We have seen our effective interest rate dropped by over 200 basis points, to 6% in Q3 compared to the same period in the prior year.

We have also taken out US debt for the PVC acquisition, so our Equity investment is effectively hedged.

For exchange movement point of view and intent to enter into an interest rate caller to manage interest rates on a go forward basis.

Free cash flow for Q3 2025 with 38 million compared to 12 million for Q3 2024.

Driven by strong operational results and positive improvements in working capital.

As previously communicated this.

We generate the majority of our free cash flow in the third and fourth quarters.

Denise Achonu: Adjusted EBITDA conversion to free cash flow is expected to continue to exceed 50% for the 2025 fiscal year. On a normalized basis, annual cash taxes are currently running at approximately CAD 15 million, and the majority of our 2025 tax liability will not be payable until early 2026, which results in two years of tax payments in 2026. We remain focused on optimizing working capital primarily through actively working with our clients for prompt payment of receivables. Year to date, we have repurchased approximately 1.5 million common shares for total consideration of CAD 12 million under the terms of the NCIB. We plan to remain opportunistic with share buybacks as we still believe our shares are undervalued. Dexterra also declared a dividend for Q4 2025 of CAD 0.10 per share for shareholders of record at 31 December 2025 to be paid on 15 January 2026.

Adjusted ibida conversion to free. Cash, flow is expected to continue to exceed 50% for the 2025 physical year.

On a normal life, space is annual cash. Taxes are currently running at approximately 15 million and the majority of our 2025 tax liability will not be payable until early 2026.

Which results in 2 years of tax payments in 2026.

We remain focused on optimizing working capital primarily through actively working with our clients for prompt payment of receivables.

Year to date. We have repurchased approximately 1.5 million common shares for total consideration of 12 million.

Under the terms of the ncip.

We plan to remain opportunistic with share BuyBacks as we still believe our Shares are undervalued.

Shoulders of record at December 31st, 2025.

To be paid on January 15th, 2026.

I will now turn it back to mark for closing.

Denise Achonu: I will now turn it back to Mark for closing comments.

Mark Becker: Great. Thanks very much, Denise. You know, summing things up, with our outlook and priorities going forward on slide 11. First priority is continuing to build on our positive momentum on delivering predictable and consistent results, steady organic growth, and realizing the full benefit from our acquisition investments. Secondly, our partnership with PVC is off to a very strong start, and we are working together towards our shared strategic goals, including IFM's centric growth and building out the Dexterra US-based platform. Integration of Right Choice into our existing operations and deployment of camp equipment towards new growth opportunities is also a priority. From an outlook perspective, we continue to closely monitor trade implications and economic conditions in light of ongoing market uncertainties.

Great. Thanks very much Denise. And, uh, you know, so many things up.

Um, with our Outlook and priorities going forward on slide 11.

Uh, first priority is continuing to build on our positive momentum on delivering predictable and consistent results steady organic growth.

And realizing the full benefit from our acquisition Investments.

Secondly, our, our partnership with PVC is off to a very strong start and we are working together towards our shared. Strategic goals, including ifm eccentric growth, and building out the dextera us-based platform.

integration of right choice in our existing operations and deployment of Camp equipment towards new growth opportunities is also a priority

from an Outlook perspective. We continue to closely monitor trade implications and economic conditions in light of ongoing Market uncertainties.

Mark Becker: Dexterra is naturally insulated from the direct impacts of trade tariffs as our labor and a large majority of our supply commodities are domestically sourced. We are, however, continuing to proactively make adjustments to our supply channels, including optimizing and expanding our volume discounts and vendor rebates, and are hedging our foreign exchange and interest rates, as Denise discussed. We continue to monitor economic and industry indicators and are staying closely connected to our clients. At this time, we're not seeing indications of changes to industry activity levels or client plans for the balance of 2025 and 2026. We have a healthy pipeline of new sales opportunities in all areas of our business, particularly with our recent acquisitions.

Dexter is naturally insulated from the direct impacts of trade tariffs as our labor and a large majority of our supply Commodities are domestically sourced.

We offer whatever continuing to proactively make adjustments. To our supply channels, including optimizing and expanding our volume discounts, and vendor rebates. And our hedging our foreign exchange and interest rates as Denise, discussed

We continue to monitor economic and Endust industry indicators and are staying closely connected to our clients.

At this time, we're not seeing indications of changes to Industry activity levels or client plans for the balance of 2025 and 2026.

We have a healthy pipeline of new sales opportunities and all areas of our business, particularly, with our recent acquisitions.

Mark Becker: As Denise mentioned, the potential around nation-building project investments is significant across all our businesses, including Dexterra having a well-established platform of defense and government facilities management capabilities, including IFM, that's well suited to the potential for defense expansion and investments. Our capital allocation priorities moving forward are really unchanged over the medium term. Number one is maintaining the newly increased dividend. Secondly, supporting, sustaining, and selective high return capital investments. Three, accretive in the acquisitions while maintaining our strong balance sheet. Four, remaining opportunistic on share buybacks under the NCIB. We are excited and confident on our path forward with our expanded business platform. Our overarching strategic focus remains the delivery of consistent and predictable results, profitable growth, and a return on equity for shareholders of 15%. This concludes our prepared remarks.

as Denise mentioned, uh, the potential around nation, building project Investments uh, is significant across all our businesses

Including dextera having a well-established platform of defense and government facilities, management capabilities, including ifm. That's well suited to the potential for Des defense expansion and Investments.

Our Capital allocation priorities moving forward are really unchanged over the medium term number 1 is maintaining uh, the newly

increased dividend.

Secondly, supporting sustaining and selective High return, Capital Investments.

3 creative in the Acquisitions will maintaining our strong balance sheet, and 4, remaining opportunistic, on share BuyBacks under the ncip.

We are excited and confident on our path forward with our expanded business platform. Our overarching strategic forecast Remains the delivery of consistent and predictable, results profitable growth growth, and a return on equity for shareholders of 15%.

This includes our prepared remarks, I'll turn the call back.

Mark Becker: I'll turn the call back to Steve for the Q&A portion of the call.

To Steve for the Q&A. Portion of the call.

Thank you.

Operator: Thank you. We will now begin the question and answer session. In the interest of fairness, you are asked to limit yourselves to 2 questions. Rejoin the queue if you have additional questions. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. The first question comes from Frederic Bastien with Raymond James. Please go ahead.

We will now begin the question and answer session.

In the interest of fairness, you are asked to limit yourself to 2 questions, then rejoin the queue. If you have additional questions,

To join the question queue. You may press star then 1 on your telephone keypad,

you will hear the tone acknowledging your request.

If you are using a speaker phone, please pick up your handset before pressing any keys.

To enjoy a question, please. Press star then to

We will pause for a moment as callers join the queue.

The first question comes from Frederick Bastion with Raymond James, please go ahead.

Good morning everybody and uh great results.

Frederic Bastien: Good morning, everybody, and great results.

Great, thank you very much Fred.

Mark Becker: Great. Thanks very much, Fred.

um,

Frederic Bastien: I know it's early days, but do you have plans in motion to relocate some of Right Choice's underutilized assets to areas where you're seeing strong demand or maybe are short on assets?

I know it's early days, but um, do you have plans in motion to relocate some of bright sources under your lies assets to areas where you're seeing, uh, strong demand or maybe our short on assets?

Mark Becker: Yeah. I mean, that's definitely, you know, not only kind of the Right Choice plan, but is kind of how we manage our, you know, workforce accommodations business, kind of Canada-wide, coast to coast to coast, as you know. You know, I think proactively relocating, we tend to kind of land the contracts and then relocate the equipment to support the contracts. It's typically how we do that. You know, we expect that kind of protocol to continue. There's really not a lot of utility, I guess I could say it that way, in relocating equipment in advance. It's really, you know, as you land the contracts, as you land the new projects, you know, relocated on the basis of the new work.

Yeah, I mean that that's definitely, you know, not only kind of the right choice, but but just kind of how we manage our, you know, Workforce accommodations business.

kind of Canada wide coast to coast to coast as, you know,

And um, you know, I think proactively relocating, we tend to kind of land the contracts and then relocate, the equipment to support the contracts. It's typically how we do that. And um, you know, we expect that kind of protocol to to continue. It was really not a lot of um,

Utility, I guess I could say it that way and relocating equipment in advance, it's really, you know, as you land the contracts as you land to do a projects. Um you know, relocated on on the basis of uh basis of the new work.

Okay, that's helpful.

Frederic Bastien: Okay. That's helpful. My second question, you know, the results are very strong despite the delayed project starts on the ABS side. Are you able to quantify the impact that this had on results?

Um my second question, um, you know the results are very strong despite the uh the the delayed project starts on the ABS side. Are you able to quantify the impact that uh this had on um, on results?

Mark Becker: Yeah, I mean, the way I would quantify it, you know, we have been running access matting, you know, at 90% utilization. Q3 got closer to 80%. We're already seeing things pick up here in Q4. I think, you know, just from an outlook perspective, I think Q4 will look more of a normal profile in terms of what our overall outlook for the year would have been. You know, kind of back to more normal utilizations, you know, including things like, you know, the seasonality profile that we see between quarters and in Q4. Of course, we've got the addition of PVC as well as Right Choice on top of there. You know, I think a return to a more normal Q4 is kind of what we're seeing.

Yeah, I mean, uh, the way I would quantify, you know, we have been running access matting, you know, a 90% utilization, uh, Q3 a lot closer to 80%. Um,

We're already seeing things pick up here in in Q4.

Um, so I think, you know, just from an Outlook perspective.

I think 24 will look.

more of a normal profile uh, in terms of what our overall look for the year would have been and, uh,

You know, kind of back to back to more normal utilizations. Um, you know, including things like, uh,

you know, the seasonality profile that we see between the corners and then Q4,

and of course we've got the addition of PVC as well as uh, as well as right choice on top of there. So, you know, I think a return to a more normal Q4 is kind of what we're seeing.

Thank you.

Operator: Thank you. The next question comes from Zachary Evershed with National Bank Capital Markets. Please go ahead.

The next question comes from Zachary evershed, it's National Bank, Capital markets. Please go ahead.

You are in the quarter guys. Good morning.

Zachary Evershed: You're on the quarter, guys. Good morning.

Good morning, Zach.

Mark Becker: Good morning, Zach.

Zachary Evershed: In the remote business, obviously, early days for nation building, we just got the budget yesterday. Can you give us some more granular details on sequential growth trends in the various verticals, infrastructure resource, and, you know, no benefit to relocating the assets prior to winning contracts? Can you give us an update on how those bids are going to fill the underutilized beds from Right Choice?

Uh, so in the remote business obviously, uh, early days for nation building, we just got the budget yesterday. But can you give us some more granular? Granular details on sequential growth Trends in the various verticals infrastructure resource and, uh, you know, no benefit to relocating the assets prior to winning contracts. But can you give us an update on how those bids are going to fill the underutilized beds from right choice?

Mark Becker: Yeah, happy to do that, Zach. You know, I'd just say generally a lot of opportunity. You know, I'd have to say, you know, some of the early opportunities that we're seeing are notionally things that we have seen already, like they're existing projects, and I think everyone in the business kind of understands that. It does kind of run the gamut of the business segments. We're seeing everything from energy-based and oil and gas-based, you know, opportunities, pipeline opportunities, mining opportunities, as well as infrastructure opportunities. If anything, I could say, you know, things are picked up, I guess, in terms of pace of activity around contracting, is what I would say.

Yeah, happy to do that back. You know, I just said generally a lot of opportunity and uh you know, I'd have to say, you know, a lot of some of the early um opportunities that we're seeing are notionally things that we have seen already like the existing projects and I I think everyone uh is in the business kind of understands that but it does kind of run the gamut of uh of the business segments. So we're seeing everything from energy.

Based.

Uh, in the oil and gas based, uh, you know, opportunities, pipeline opportunities. Uh, mining opportunities, um, as well as infrastructure opportunities.

If anything I could say, um, you know, things are things are, are picked up. I guess, in terms of pace, uh, of

Activity around Contracting is what I would say. Um, and uh,

Mark Becker: Well, the only thing I would say might be a little bit different, Zach, would be, you know, we're really seeing a rejuvenation of defense-related infrastructure projects, things that we've seen before, but maybe expanded and certainly brought back to the forefront. That is very active for us on the pipeline as well. I really just characterize it back as we're seeing it all around and kind of across the board in our verticals. We're pretty excited about, you know, the opportunities, and it's really gonna be a matter of when these projects really come to fruition and land and our opportunity and timing around that.

Well, the only thing I would say, might be a little bit different Zach would be, you know, we're really seeing a Rejuvenation of Defense related infrastructure, projects, uh, things that we've seen before, but maybe expanded and, and certainly brought back to the Forefront. So that is very active for us on the pipeline, as well. So I, I really just characterize it back as we're seeing it all all around and, and a kind of across the board in our verticals. We're pretty excited about

Um you know the opportunities and uh it's really going to be a matter of when these projects really come to fruition and land.

And our opportunity and timing around that.

Great color, thanks.

Zachary Evershed: Great color. Thanks. Question two. Your outlook for support services specifically mentions, over 9% for the rest of 2025, and prior statements were to exceed 9% over the long term. Would you say that the prior guidance still stands, or are you just clarifying the level for Q4?

Question 2. Uh your outlook for Support Services specifically mentioned uh over 9% for the rest of 2025 and prior statements were to exceed 9% over the long term. Would you say that the prior guidance still stands or you just clarifying the level for Q4?

Denise Achonu: Morning, Zach. I would say, you know, our prior guidance stands. You know, over 9% is really, you know, what we're expecting. What I would say, though, is that can fluctuate based on occupancy. In Q3, we had strong occupancy, and that took us over, you know, to that 10% range. Again, based on, you know, where occupancy ends, we could end up with a higher end of that range. Our guidance remains unchanged related to the support services margin.

Morning Zach, I would say, you know, our prior guy and fans, you know over 9% um is really, you know what we're expecting. What I would say though is that can fluctuate based on occupancy. So in Q3 we had strong occupancy and that takes us over, you know, to that 10% range. And so again, based on, you know, where occupancy ends, we could end up with a higher end of that range, but our guidance remains unchanged related to the support services margins.

Thank you.

Operator: Thank you. If you have a question, please press star, then one. The next question comes from Konark Gupta with Scotiabank. Please go ahead.

If you have a question, please press star then 1.

Some can Bobby with Courtyard, please go ahead.

hi, this is

[Analyst] (Scotiabank): Hi, this is Carol on behalf of Jonathan Goldman. Thanks for taking my questions. I wanted to ask you, how should we think about the sustainability of the support services margin? Just following up on the previous long-term target, you were able to execute on 10.5 this quarter. Could you elaborate on that?

Carol on behalf of Jonathan Goldman, thanks for taking my questions.

Um, I wanted to ask you, how should we think about the sustainability of the support services margin? Um, just following up on the Prius. Long-term Target you were able to um, execute on 1 0. 5,

Denise Achonu: Sure. Thanks, Carol. You know, it really is driven by a couple things. You know, within that support services group, we've got, our IFM margins, which are typically kind of in the 8% to 10% range. We've got work on our remote services, which is typically in the 10% to 12% range. You know, let's say custodial above 6% plus. Those are our target margins that we aim for. That all blends out to, again, that kind of above 9%, which is our current outlook. Again, it can vary based on mix of business and occupancy. In Q3, we had really strong occupancy across our camp business. You know, as a result, we hit that 10%.

Sure, thanks Carol. Um, you know, it really is driven by a couple things, you know, within that Support Services Group, we've got um, our ISM margins, which are typically kind of in the 8 to 10% range. We've got work on our remote Services which is typically in the 10 to 12% range.

Um,

you know, let's say custodial above, you know, 6% Plus

and those are our Target margins that we we aim for and that all Blends out to again that kind of above 9%, which is our current Outlook

Again, it varies you can vary based on mix of business and occupancy.

Denise Achonu: Again, I would say we're very comfortable saying above 9%, but again, it's driven by business mix and occupancy.

And so in Q3 we had really strong occupancy across our campus, um, and, and you know, as a result we hit that 10%. So again, I would say we're very comfortable saying above 9%, but again, it's, it's driven by business, mix and occupancy.

[Analyst] (Scotiabank): Okay, thank you. Could you also elaborate on some of the drivers of the year-to-year decline in ABS margins? It looks like the Right Choice margins were actually similar to your legacy business, but at the time of the acquisition, it seemed like they were significantly higher.

Okay, thank you. And could you also elaborate on some of the drivers of the Year? Decline in ABS margins. It looks like the right choice. Margins were actually similar to your legacy business but at the time of the acquisition, it seems like they were significantly higher.

Denise Achonu: Yeah. For the Right Choice business, we are expecting margins to be very much similar to our current profile. Obviously, it's contributing both to our support services and asset-based segments. What we're seeing are margins kind of within what our normal targets would be. ABS between 30% and 40%, and then support services in that remote space, 10% to 12%. In terms of where they've landed for the quarter, very much in line with our expectations as it relates to the Right Choice.

The the very much similar to our current profile, um, obviously it's contributing both to our support services and asset based, uh, segments. And what we're seeing are margins, kind of within what I, our normal targets would be so ABS between 30% and 40%, uh, and then Support Services in that remote space, 10 to 12%.

Um, in terms of

um, where they've landed for the quarter, very much in line with our expectations, as it relates to the right choice.

But I think, uh,

On abs.

Terrell.

Mark Becker: I think, on ABS, Carol, as well, you know, and I think we're pretty clear in our feedback in Q3, I mean, it's really around matting utilization, as I talked about and on Fred's question. You know, we do see, you know, that 30% to 40% range of margin within ABS. When, you know, utilization is high on matting, which is high margin work, it tends to be towards the top end when it goes back towards 80, which is still a pretty good utilization, but, it can back it off a bit. I think that's where you're seeing the fluctuation around ABS. You know, I would say, you know, we're still seeing lots of opportunity around ABS. We've seen the activity pick up in Q4, as I mentioned.

As well.

we're pretty clear on our our feedback in Q3 I mean, it's really around matting, matting utilization as I talked about and on Fred's question and um,

You know, we do see, you know, that 30 to 40% range.

Of margin within abs. And when, you know, utilization is high on matting which is high margin work. Uh, tends to be towards the top end when it goes back towards 80, which is still a pretty good utilization, but

It can back it off a bit. So I think that's where you're seeing the the fluctuation around abs.

Mark Becker: you know, we still see things in that 30% to 40% range, but on high activity, it tends to be towards the higher end of the range.

Um, you know, I would say, you know, we're still seeing lots of opportunity or NBS. We've seen the activity, pick up in Q4, as I mentioned. Um, and uh, you know, we still see these things in in uh, in that 30 to 40% range. But on high activity, it tends to be towards the higher end of the range.

Operator: Thank you. The next question comes from Trevor Reynolds with Acumen Capital. Please go ahead.

Thank you. The next question comes from Trevor and all with Acumen Capital. Please go ahead.

Trevor Reynolds: Good morning, guys. Just you guys mentioned some new medium-term contracts, I think for the asset-based services side of things. I was wondering if you guys can kind of provide an update on what your utilization level is on your camp assets right now.

Morning guys. Um just uh, you guys mentioned some new medium-term contracts. Uh, I think for the um, asset Based Services side of things, I was wondering if you guys can kind of brighten up an update on what you're utilization. Level is on on your Camp assets right now.

Mark Becker: Yeah. A good question, Trevor. I would say it this way on kind of the non Right Choice equipment, we're still in that over 90% range. I think as we communicated, the Right Choice asset utilization was a little more in that 50% range at acquisition time. The optimization, though, around our open camps, for example, in the Montney between the Right Choice camps and our camps is well underway now, where we are consolidating opportunities between camps that are in the same region and same clients in a lot of situations, freeing up those assets then to redeploy.

Yeah good, good question Trevor. And uh, you know, I would say say it this way on uh, you know, kind of the non right choice, uh equipment, we're still in that over 90% range.

um,

you know, I think if we communicated, um, you know, the right choice, uh, asset utilization was a little more in that 50% range, uh, at acquisition time.

Um, the optimization though around.

Mark Becker: What you'll see from us going forward, because we're really optimizing everything, you're gonna see things blend together, where, you know, for example, we are closing some Horizon North or some Dexterra camps, keeping some Right Choice open and redeploying different equipment. It's gonna be more of a blend. You know, you'll see us report those utilizations, but you'll see that ramp up over the medium term as we deploy, you know, our inventory to new opportunities. Obviously, it's gonna be in the top half of the 50% to 90% range, as we redeploy that equipment on new opportunities.

Open counts, for example, in uh, in the Monte juvene, between the right choice camps and our camps as as well underway. Now, where we are consolidating opportunities, uh, between camps that are in the same region and and the same clients in in a lot of situations, um, freeing up those assets then to, to redeploy. And what you'll see from us going forward, uh, because we're

Um, you know, you'll see us report those utilizations, but you'll see that ramp up over the medium term as we deploy. Um, you know, our our inventory um uh to to new opportunities. But obviously it's going to be in the top half of the 52, 90% range. Uh as we as we deploy that equipment on new opportunities,

Trevor Reynolds: Okay, great. Just maybe on the PVC side of things, maybe just how that integration's going and what the timeframe to kind of rolling out that PVC Connect across the company and scaling that up? Maybe any update you can provide on that?

Okay, great. Um and then just maybe on the the PVC side of things, maybe just tell that uh that integration going and and what the time frame to kind of rolling out that uh PVC connect across the company and scaling that up, maybe any update. You can provide on that

Mark Becker: Yeah, for sure. You know, the integration and the onboarding is going really, really well. You know, it's a joint venture at this point in time, and we're working very closely together, as I mentioned, with PVC. You know, I would say, you know, and this dates back into CMI as well as PVC. It's all about building that US platform for us and, you know, opening up, you know, the robust opportunity pipelines, which we've seen. As you mentioned, kind of back drafting, you know, the distributed model with our self-perform model, both in Canada and the US and across North America.

Yeah, for sure. So uh, you know, they they the integration and the onboarding

Is is going really, really well. And you know, it's a joint venture um, at this point in time and we're working very closely together as I mentioned with with PVC. Um, you know, I I would say, you know, in this dates back into CMI uh, as well as PVC. Uh, it's all about a building that us platform for us and, you know, opening up, uh, you know, the robust opportunity pipelines which which we've which we've seen

Mark Becker: I think, you know, one of the early focus areas with PVC, and no different than we did with CMI starting last year, is really getting that those opportunity pipeline going for new opportunities. We're seeing lots of opportunities. We wanna land some new work, wanna generate a bit of growth momentum with that business. Definitely we are investing, as we talked about in PVC Connect, which is the distributed technology model. That work is well underway as well. Between this year and into next year, we'll be investing in PVC Connect. To your point, looking at how we can then backdraft that into Canadian opportunities and Dexterra opportunities.

And as you mentioned, kind of backdrop and, you know, the distributed model, with our self-perform model, both in Canada, and the US and across North America. I think, uh, you know, 1 of the early, uh, Focus, uh, areas, uh, with PVC, um, and no different than we did with PV CMI starting last year, is really getting that that, uh, those opportunity pipeline going for for New Opportunities. We're seeing lots of opportunities. We want to land some uh, land some new work want to generate a bit of growth momentum, uh, with that business. And then definitely, we are investing as we talked about in, uh, PVC connect which is the distributed technology model, and that work is well underway as well. Um, so between this year and into next year we'll be investing um, in uh, in PVC connect and then to your point looking at how we can then Backdraft that into uh, Canadian opportunities and fixed error opportunities.

Mark Becker: The only other thing I would say, Trevor, you know, really investing in our US sales team is an important piece. Obviously, we've got David Lambert on board now. We've got another senior executive leader that's working directly with PVC, but also bringing on a new sales leader. We've got sales individuals. We're really bringing that team together under that whole US umbrella because it's gonna be really important to make sure we get full value from these acquisitions, that we have a strong sales team, strong business development that can bring kind of the joint Dexterra, PVC capabilities to bear and really, as I said, bring on new work and really get us some growth momentum going.

Um, the only other thing I would say Trevor, um, you know, we're really investing in our Us sales team is, is an important piece. And obviously, we've got um, uh G, uh, David Lambert on board now, uh, we've got another senior executive leader. That's working directly with PVC but also wring out a new sales leader. We've got sales individuals, we're really bringing that team together under that whole us umbrella.

Because it's going to be really important to make sure we get full value from these Acquisitions. That we have a strong sales, team strong business development that that can bring kind of the joint dextera PVC capabilities to bear. And really, as I said, bring on new work and and really get us some some growth momentum going.

Operator: Thank you. The next question comes from Sean Jack with Raymond James Ltd. Please go ahead.

Thank you. The next question comes from Sean Jack with a and James limited. Please go ahead.

Hey morning guys. Um

Sean Jack: Hey, morning, guys. Just wondering, outside of the IFM, wondering what the effect of the, you know, this building, nation building sentiment is doing to pricing right now?

Just wandering outside of the ifm um, wondering what the effect of the, you know, the building nation building sentiment is doing to pricing right now.

Mark Becker: Yeah, good question. Like, we certainly, Sean, haven't seen a ton of inflation at this point. You know, as we talked about, we're pretty insulated, and we've done a lot of things around supply chain. I guess around nation building specifically, I mean, we all know, you know, the more frothy the opportunity set is, it tends to drive pricing up, and we'll keep our eyes on that. Again, we got to see these projects really come to bear. There's a lot of contracting activity, a lot of discussions going on around projects, as I mentioned. A lot of projects getting pulled ahead.

Yeah, good, uh, good good, good question. Like we certainly

Sean. Haven't seen.

A ton of, uh, a ton of, uh, inflation at, at this point. Um, and uh, you know, as we talked about, we're pretty insulated, and we've done a lot of things around supply chain, but I guess around nation, building specifically,

I mean, we all know, you know, the more

Yeah, the more frothy the opportunity set is uh it tends to drive pricing up and uh we'll keep our eyes on that. Um,

Again we got to see these projects really come to Bears. A lot of a lot of Contracting activity. Uh a lot of discussions going on our own projects, as I mentioned, a lot of projects getting pulled ahead.

Mark Becker: I think, Sean, it remains to be seen, you know, what impact on pricing around things like, you know, turnkey camps and camp rates that that'll drive. You know, margins as well, more broadly. I think it's just gonna be around the pace of nation building projects, how quickly they come on, where they are and what sector they're in. Generally speaking, if we do see or as we see, I guess, nation building projects come on, you can expect that it would tend to have an uplift, an uplift towards pricing is what I would say.

Um, I think Sean it remains to be seen. Um you know, what impact on pricing around things like uh you know, Transit camps and and and Camp rates uh that that will drive. Um and and and uh you know, margins as well more broadly. Uh, I think it's just going to be around the pace of nation building projects how quickly they come on uh where they are and what sector they're in. Um, but uh, generally speaking if we do see or as we see, I guess nation, building projects, come on. You can expect that uh it would tend to have an uplift uh a uplift towards uh towards pricing is what I would say.

Sean Jack: All right. Perfect. That's helpful. Just wanted to circle back. There's been some comments on the opportunities coming up, specifically from resource and from mining. Just wondering how Dexterra is positioning itself to win Canadian defense contracts that are coming up soon. There's been a lot of talk about that around the budget as well. Just any thoughts on that would be great.

Typically from resource and from mining, just wondering how Dexter's position itself to win. Uh, Canadian Defence contracts that uh

Up soon been a lot of talk about that around the budget as well so just any thoughts on, that would be great.

Sorry, sorry. Can you repeat that? Sean, I didn't quite catch you.

Mark Becker: Sorry, can you repeat that, Sean? I didn't quite catch that.

Sean Jack: Yeah, just wondering how Dexterra is positioning itself to win, you know, a lot of this work that's coming up from the Canadian defense sector that are expected to be coming up soon. Is there a specific plan to kind of position itself there or any color would be great?

Oh, uh, so yeah, just wondering how Dexter's positioning itself to win. Um, you know, a lot of this work that's coming up with a from the Canadian Defence sector that are expected to be coming up soon. Uh, is there a specific plan to kind of position itself there or any color would be great?

Yep, for sure. Uh,

Mark Becker: For sure. I mean, we've got history, definitely in Canada around both defense. I mean, we're at a number of Canadian Armed Forces bases across Canada in the FM/IFM space. We've been a player in that for long beyond that I've been involved with the company, as well as, you know, federal government infrastructure, around the FM/IFM space. We're kind of a well-established player, and I would say a known player. As I mentioned earlier, you know, some of these projects we're hearing about, we've heard about before. There's things that, around, you know, runway expansions on remote bases, base expansions in remote locations. You know, we've heard about them before. We're connected. We're familiar with the supply chain protocols around, you know, defense and government in Canada.

I mean we've got history definitely in Canada around both defense. I mean, we're at a number of Canadian Forces bases across Canada in the FM ifm space. So we've been a player in that for long beyond that. I've been involved with the company, uh, as well as uh, you know, federal government.

Uh, infrastructure, uh, around the FM, ISM space. So we're we're kind of a

Well, established player, and I would say a known player and, uh, as I mentioned earlier, you know, somebody's projects were hearing about uh, we've heard about before. Uh, there's things that uh, around you know. Runway expansions are remote uh bases base expansions remote locations. Um, you know, we've heard about them before we've connected. Uh, we're familiar with the supply chain, protocols around, you know, defense and government in Canada. So

Mark Becker: I'd say, Sean, we're really well plugged into that. Also, you know, indigenous relationships matter and, you know, a lot of these locations we're pretty well connected with existing business and potential new business. I feel like our exposure and our visibility around this, and our candidacy around this is pretty positive is what I would say.

I'd say, Sean were really well plugged in to that and also, um, you know, indigenous relationships matter. And, uh, you know, it's a lot of these locations were, were were pretty well connected with existing business and potential new business. So, um, I feel like our exposure and our visibility around this, uh,

Candidacy around. This is

Is is pretty positive, is what I would say.

All right. That's perfect. Thanks guys.

Sean Jack: All right. That's perfect. Thanks, guys.

Thank you.

Operator: Thank you. As there are no further questions, this concludes the question and answer session and today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day. Thank you.

Hi. This is concludes the question and answer session and today's conference call.

You may disconnect your lines. Thank you for participating and have a pleasant day. Thank you.

Q3 2025 Dexterra Group Inc Earnings Call

Request DemoDemo

Dexterra Group

Earnings