Q2 2026 Dexterra Group Inc Earnings Call

August 5, 2026

Speaker #1: Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Dextera Group Inc. second quarter 2026 earnings call.

Operator: Thank you for standing by. My name is Jordan, and I will be your conference operator today. At this time, I would like to welcome everyone to the Dexterra Group Inc.'s Second Quarter 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, followed by one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Denise Achonu, Chief Financial Officer. Please go ahead.

Speaker #1: Our lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.

Speaker #1: And if you'd like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Denise Achanou.

Speaker #1: Chief Financial Officer, please go ahead.

Speaker #2: Thank you, Jordan. Good morning, and thank you to everyone for joining the call. My name is Denise Achanou, Chief Financial Officer at Dextera Group Inc. With me on the call today are Mark Becker, our CEO, and our board chair, Bill McFarland.

Denise Achonu: Thank you, Jordan. Good morning, and 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 on the call, with the call ending by 9:15 AM Eastern Time. We will be commenting on our Q2 2026 results with the assumption that you have read the Q2 2026 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.

Speaker #2: Who will provide some brief introductory comments. After a brief presentation, we will take questions on the call with the call ending by 9:15 Eastern Time.

Speaker #2: We will be commenting on our Q2 2026 results, with the assumption that you have read the Q2 2026 earnings press release, MD&A, and financial statements.

Speaker #2: The slide presentation which supports today's comments is posted on our website. And we encourage participants to access the slides and follow along with our presentation.

Speaker #2: Before we begin, I would like to make some comments about forward-looking information. In 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.

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.

Speaker #2: 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.

Speaker #2: I will now turn it over to Bill McFarland for his introductory comments.

Speaker #3: Good morning, and thank you for joining our call today. Dextera had another strong quarter in Q2, reflecting continued progress in meeting our business plan goals as outlined at our recent AGM.

Bill McFarland: Good morning, thank you for joining our call today. Dexterra had another strong quarter in Q2, reflecting continued progress in meeting our business plan goals as outlined at our recent AGM, by delivering profitable growth and strong free cash flow while maintaining a strong balance sheet, which provides flexibility as we pursue new opportunities. We have a very resilient business model with limited direct impacts from tariffs and other geopolitical events, a key differentiator from many other businesses. This has allowed us to continue to make strong progress in achieving our business plan goals and is supported by disciplined execution by our management team.

Speaker #3: By delivering profitable growth and strong key free cash flow, while maintaining a strong balance sheet, which provides flexibility as we pursue new opportunities. We have a very resilient business model, with limited direct impacts from tariffs and other geopolitical events.

Speaker #3: A key differentiator from many other businesses. And this has allowed us to continue to make strong goals and has supported by disciplined execution by our management team.

Speaker #3: The board is optimistic about the company's outlook. Including a growing pipeline of opportunities across North America and is encouraged to see the market recognizing our strong financial performance and future prospects, which when taken together have delivered excellent shareholder returns and a positive backdrop for all stakeholders.

Bill McFarland: The board is optimistic about the company's outlook, including a growing pipeline of opportunities across North America, and is encouraged to see the market recognizing our strong financial performance and future prospects, which when taken together, have delivered excellent shareholder returns and a positive backdrop for all stakeholders. We are also very pleased with the performance and progress made by the management team as they build a strong company for the future. I'll now pass it over to Mark for his business overview.

Speaker #3: We are also very pleased with performance and progress made by the management team as they build a strong company for the future. I'll now pass it over to Mark for his business overview.

Speaker #4: Thanks very much, Bill, and good morning to everyone. Starting off on slide 5, as Bill talked about, we continue the positive momentum from Q1 with another quarter of strong operational and financial performance.

Mark Becker: Thanks very much, Bill, good morning to everyone. Starting off on slide five, as Bill talked about, we continued the positive momentum from Q1 with another quarter of strong operational and financial performance. We generated revenue of CAD 269 million, an increase of 8%, while adjusted EBITDA increased by 9% to CAD 33 million over Q2 of last year. This demonstrates we're adding scale to the business while improving our bottom-line profitability, including strong free cash flow generation, which allows us to reinvest in the business, pay dividends, and create long-term value for shareholders. Our performance in the quarter was driven primarily by strong workforce accommodations occupancy, organic growth from new contract wins coming on stream, as well as positive impact from the RightChoice acquisition. These results were delivered despite lower than normal activity in wildfire support.

Speaker #4: We generated revenue of $269 million and increase of 8%, while adjusted EBITDA increased by 9% to $33 million over Q2 of last year. This demonstrates we're adding scale to the business while improving our bottom-line profitability including strong free cash flow generation, which allows us to reinvest in the business, pay dividends, and create long-term value for performance in the quarter was driven primarily by strong workforce accommodations occupancy, organic growth from new contract wins coming on stream, as well as positive impact from the right choice acquisition.

Speaker #4: These results were delivered despite lower-than-normal activity in wildfire support. Adjusted margins are strong at 12% in the quarter, reflecting a greater contribution from our high-margin workforce accommodation rental revenue stream.

Mark Becker: Adjusted margins were strong at 12% in the quarter, reflecting a greater contribution from our high-margin workforce accommodation rental revenue stream. Operational efficiency gains while maintaining strong customer retention, loyalty, and satisfaction ratings. Three, managing inflation pressures through supply chain initiatives, contract inflation terms, and price adjustments. We also generated CAD 22 million in free cash flow in the quarter and exited the quarter with a net debt at 1.5x adjusted EBITDA. This financial flexibility will allow us to continue investing in the business and pursue high return investments and acquisitions where they make sense and are accretive to shareholders. One of our key near-term priorities is to realize the full value of our acquisitions, and I'm pleased to report that we're making good progress.

Speaker #4: Operational efficiency gains while maintaining strong customer retention, loyalty, and satisfactory ratings. And three, managing inflation pressures through supply chain initiatives, contract inflation terms, and price adjustments.

Speaker #4: We also generated $22 million in free cash flow in the quarter and exited the quarter with a net debt at $1.5 times adjusted EBITDA.

Speaker #4: This financial flexibility will allow us to continue investing in the business and pursue high-return investments and acquisitions where they make sense and are creative to shareholders.

Speaker #4: One of our key near-term priorities is to realize the full value of our acquisitions, and I'm pleased to report that we're making good progress.

Speaker #4: The right choice acquisition has enhanced our competitive position in the Monte Duvernay region and contributed to our available workforce accommodations, equipment capacity, of approximately 2,000 beds, which is important to support new growth, including Canadian nation building and other opportunities.

Mark Becker: The RightChoice acquisition has enhanced our competitive position in the Montney region and contributed to our available workforce accommodations equipment capacity of approximately 2,000 beds, which is important to support new growth, including Canadian nation building and other opportunities. Our fleet is over 85% utilized today, which is a market-leading rate, and we expect our utilization to increase as we secure new growth contracts, also with a focus on building some excess capacity as needed for new business. Our partnership with PVC is also progressing very well. We are focused on growing our joint business by leveraging the combined platform and expanding relationships with both new and existing customers, and we have been very impressed by the PVC team's talent and engagement. PVC has secured a number of new logo facility management contract wins in the quarter, supporting our ambitious growth objectives in the US.

Speaker #4: Our fleet is over 85% utilized today, which is a market-leading rate. And we expect to utilize our we expect our utilization to increase as we secure new growth contracts also with a focus on building some excess capacity as needed for new business.

Speaker #4: Our partnership with PVC is also progressing very well. We are focused on growing our joint business by leveraging the combined platform and expanding relationships with both new and existing customers.

Speaker #4: And we have been very impressed by the PVC team's talent and engagement. PVC has secured a number of new logo facility management contract wins in the quarter.

Speaker #4: Supporting our ambitious growth objectives in the US. These new contracts will come on stream over the coming quarters and demonstrate the power of our combined brands.

Mark Becker: These new contracts will come on stream over the coming quarters and demonstrates the power of our combined brands. Our trailing 12-month return on equity as of the end of Q2 was 15.4%, achieving our target of 15% and demonstrating our continued commitment to delivering strong shareholder value. With that overview, I'll turn things over to Denise to provide more detail on our segmented results and financial position.

Speaker #4: Our trailing 12-month return on equity as of the end of Q2 was 15.4%, achieving our target of 15% and demonstrating our continued commitment to delivering strong shareholder value.

Speaker #4: With that overview, I'll turn things over to Denise to provide more detail on our segmented results and financial position.

Speaker #2: Thank you, Mark. I'll begin with a detailed look at our business segment, starting with support services on slide 7. Revenue and support services for the second quarter was $226 million.

Denise Achonu: Thank you, Mark. I'll begin with a detailed look at our business segment, starting with Support Services on slide seven. Revenue and Support Services for Q2 was CAD 226 million, up 10% compared to Q2 2025. This increase was driven by strong workforce accommodation occupancy, including the contribution from the RightChoice acquisition, which was completed in Q3 2025, partially offset by lower than normal wildfire support activity in the quarter. Wildfire support activity is part of both Support Services and Asset-Based Services. Subsequent to Q2, our wildfire support for the affected communities is trending towards more normalized levels. Excluding the contribution from the RightChoice acquisition, Support Services revenue increased by 5% year over year, which is in line with our expectations, including positive growth momentum in the US.

Speaker #2: Up 10% compared to Q2 2025. This increase was driven by strong workforce accommodation occupancy, including the contribution from the right choice acquisition, which was completed in Q3 2025.

Speaker #2: Partially offset by lower-than-normal wildfire support activity in the quarter. Wildfire support activity is part of both Support Services and Asset-Based Services. Subsequent to Q2, our wildfire support for the affected communities is trending towards more normalized levels.

Speaker #2: Excluding the contribution from the right choice acquisition, support services revenue increased by 5% year over year. Which is in line with our expectations, including positive growth momentum in the US.

Speaker #2: Adjusted EBITDA in support services was $23 million. An increase of 12% compared to the same period last year. While adjusted EBITDA margins were 10%, consistent with the prior year period.

Denise Achonu: Adjusted EBITDA and support services was CAD 23 million, an increase of 12% compared to the same period last year, while adjusted EBITDA margins were 10%, consistent with the prior year period. PVC contributed CAD 1.4 million to adjusted EBITDA in the quarter. Excluding PVC, adjusted EBITDA margins were 9.5%, reflecting continued investments in sales and business development resources in our US facilities management platform to support growth. These costs are being closely managed to align with our projected growth profile. As a reminder, PVC is accounted for using the equity method, as we currently own 40% of the business with an option to acquire the remaining 60% in 2027. As a result, PVC's revenue is not included in Dexterra's reported revenue.

Speaker #2: PVC contributed $1.4 million to adjusted EBITDA in the quarter. Excluding PVC, adjusted EBITDA margins were 9.5%, reflecting continued investments in sales and business development resources in our U.S. facilities management platform to support growth.

Speaker #2: These costs are being closely managed to align with our projected growth profile. As a reminder, PVC is accounted for using the equity method. As we currently own 40% of the business, with an option to acquire the remaining 60% in 2027.

Speaker #2: As a result, PVC's revenue is not included in Dexterra's reported revenue. We continue to expect PVC to be cash flow neutral in the near term as it invests in modernizing its proprietary software, PVC Connect.

Denise Achonu: We continue to expect PVC to be cash flow neutral in the near term as it invests in modernizing its proprietary software, PVC Connect, and expands its team to support the long-term growth of its distributed model across North America. Looking ahead, we remain focused on delivering profitable organic growth, which is focused on North American facilities management service, driving operational efficiencies, and managing inflationary pressures, including higher energy costs through a disciplined contract management and supply chain initiatives. We continue to expect support services adjusted EBITDA margins to exceed 9% over the long term, particularly as we expand our facilities management services business through both self-perform and distributed models, a key competitive advantage for Dexterra. Moving on to asset-based services on slide eight. Revenue was CAD 43 million in Q2.

Speaker #2: And expands its team to support the long-term growth of its distributed model across North America. Looking ahead, we remain focused on delivering profitable organic growth with a focus on North American facilities management service.

Speaker #2: Driving operational efficiencies and managing inflationary pressures, including higher energy costs, through disciplined contract management and supply chain initiatives. We continue to expect support services adjusted EBITDA margins to exceed 9% over the long term.

Speaker #2: Particularly as we expand our facilities management services business. Through both self-perform and distributed models. A key competitive advantage for Dexterra. Moving on to asset-based services on slide 8.

Speaker #2: Revenue was $43 million in the second quarter. Higher margin rental revenue increased by 13%, supported by higher equipment utilization, and the contribution from right choice.

Denise Achonu: Higher margin rental revenue increased by 13%, supported by higher equipment utilization and the contribution from RightChoice, partially offset by lower wildfire activity. Excluding RightChoice, revenue increased 2% compared to the prior year. Installation and demobilization revenue was lower by CAD 5 million year over year, reflecting less activity in the quarter. This revenue stream is lower margin and varies based on project timing. However, it is a critical enabler to our market leading competitive position as a turnkey provider of workforce accommodations, securing key market opportunities and incenting long-term client relationships. Beginning in Q1 2026, we expanded our disclosure on the composition of asset-based services revenue to provide investors with greater visibility into the key drivers of this business. Supplemental 2025 quarterly comparative information by revenue component is available on our website on the investor's page under Documents and Filings.

Speaker #2: Partially offset by lower wildfire activity. Excluding Right Choice, revenue increased 2% compared to the prior year. Installation and demobilization revenue was lower by $5 million year over year, reflecting less activity in the quarter.

Speaker #2: This revenue stream is lower margin and varies based on project timing. However, it is a critical enabler to our market-leading competitive position as a turnkey provider of workforce accommodations.

Speaker #2: Securing key market opportunities and incenting long-term client relationships. Beginning in Q1 2026, we expanded our disclosure on the composition of asset-based services revenue. To provide investors with greater visibility into the key drivers of this business.

Speaker #2: Supplemental 2025 quarterly comparative information by revenue component is available on our website. On the investors page, under documents and filings. Adjusted EBITDA was $17 million, up 2025.

Denise Achonu: Adjusted EBITDA was CAD 17 million, up 4% compared to Q2 2025. Adjusted EBITDA margin improved to 40% compared to 38% in the prior year period, primarily reflecting a higher mix of workforce accommodation rental activity, which carries stronger margins than installation and demobilization activity. Looking ahead, current market indicators continue to support higher workforce accommodation rental activity through H2 2026. While access matting utilization is expected to remain similar to 2025 levels. For 2026, we continue to expect a greater proportion of revenue to come from higher margin rental activity versus installation and demobilization activity. Adjusted EBITDA margins should continue to be at the upper end of our 30% to 40% target range. Moving to slide nine.

Speaker #2: Adjusted EBITDA margin improved to 40% compared to 38% in the prior year period. Primarily reflecting a higher mix of workforce accommodation rental activity, which carries stronger margins than installation and demobilization activity.

Speaker #2: Looking ahead, current market indicators continue to support higher workforce accommodation rental activity, through the second half of 2026. While access matting utilization is expected to remain similar to 2025 levels.

Speaker #2: For 2026, we continue to expect a greater proportion of revenue to come from higher margin rental activity. Versus installation and demobilization activity. And adjusted EBITDA margins should continue to be at the high upper end of our 30% to 40% target range.

Speaker #2: Moving to slide 9. Free cash flow was $22 million in the second quarter, supported by strong profitability and collections from certain U.S. government accounts impacted by the shutdown.

Denise Achonu: Free cash flow was CAD 22 million in Q2, supported by strong profitability and collections from certain US government accounts impacted by the shutdown and the collection of certain accounts receivable balances related to operations funded by the Canadian government. We expect the majority of our free cash flow conversion to occur in H2 2026, similar to prior years. On a full year basis, we continue to expect adjusted EBITDA conversion to free cash flow to exceed 50%. In Q2, corporate expenses represented 2.7% of revenue, compared to 2.8% in Q2 2025. Revenue growth more than offset the increase in corporate costs, which included investments in our technology platform related to labor management and artificial intelligence applications, which over time are expected to drive further operational efficiencies.

Speaker #2: And the collection of certain accounts receivable balances related to operations funded by the Canadian government. We expect the majority of our free cash flow conversion to occur in the back half of 2026.

Speaker #2: Similar to the prior year, on a full-year basis we continue to expect adjusted EBITDA conversion to free cash flow to exceed 50%. In the second quarter, corporate expenses represented 2.7% of revenue compared to 2.8% in Q2 2025.

Speaker #2: Revenue growth more than offset the increase in corporate costs, which include included investments in our technology platform, related to labor management and artificial intelligence applications.

Speaker #2: Which over time are expressed as to drive further operational efficiencies. Looking ahead, in 2026, we continue to expect corporate costs to approximate $2.5% of revenue.

Denise Achonu: Looking ahead, in 2026, we continue to expect corporate costs to approximate 2.5% of revenue, inclusive of planned investments in technology and our US business platform as the business continues to scale. Capital expenditures were CAD 3.6 million, including CAD 2 million incurred as a result of the fire in Q1, which we expect to recover through insurance. We continue to expect sustaining capital expenditures to approximate 1% to 1.5% of revenue on an annualized basis. We remain committed to a capital-light approach, including assessing potential high return projects using the lens of increased shareholder value. Net debt declined to CAD 206 million at quarter end, compared to CAD 225 million at 31 March 2026, reflecting strong free cash flow generated in the quarter. Net debt to adjusted EBITDA was 1.5 times, which remains well within our comfort level, and our balance sheet provides flexibility as we pursue our capital allocation priorities.

Speaker #2: Inclusive of planned investments in technology and our US business platform. As the business continues to scale. Capital expenditures were $3.6 million, including $2 million incurred as a result of the fire in Q1.

Speaker #2: Which we expect to recover through insurance. We continue to expect sustaining capital expenditures to approximate 1% to 1.5% of revenue on an annualized basis.

Speaker #2: We remain committed to a capitalized approach, including assessing potential high return projects using the lens of increased shareholder value. Net debt declined to $206 million at quarter end, compared to $225 million at March 31, 2026.

Speaker #2: Reflecting strong free cash flow generated in the quarter. Net debt to adjusted EBITDA was $1.5 times, which remains well within our comfort level. And our balance sheet provides flexibility as we pursue our capital allocation priorities.

Speaker #2: As we continue to focus on operational efficiency and free cash flow conversion, we expect net debt to decline over the balance of 2026. Absent absent significant investments or acquisition activity.

Denise Achonu: As we continue to focus on operational efficiency and free cash flow conversion, we expect net debt to decline over the balance of 2026, absent significant investments or acquisition activity. Our CAD 425 million term loan matures in 2029 and has significant available capacity to support growth. We also remain committed to delivering strong returns to shareholders. In May, the board approved the renewal of Dexterra's Normal Course Issuer Bid through 24 May 2027, allowing for the repurchase of up to 3 million shares and providing flexibility for opportunistic share repurchases. In Q2, we had limited share buybacks. We declared a dividend yesterday of CAD 0.10 per share, payable in October 2026. I will now pass it back to Mark for concluding remarks.

Speaker #2: Our $425 million term loan matures in 2029 and has significant available capacity to support growth. We also remain committed to delivering strong returns to shareholders.

Speaker #2: In May, the board approved the renewal of Dexterra's normal course issuer bid through May 24, 2027, allowing for the repurchase of up to $3 million shares.

Speaker #2: And providing flexibility for opportunistic share repurchases. In Q2, we had limited share buybacks. We declared a dividend yesterday of $0.10 per share, payable in October 2026.

Speaker #2: I will now pass it back to Mark for concluding remarks.

Speaker #1: Great. Thanks very much, Denise. And before we open things up for questions, I'll provide a few comments on our outlook and priorities, which is highlighted on slide 10.

Mark Becker: Great. Thanks very much, Denise. Before we open things up for questions, I'll provide a few comments on our outlook and priorities, which is highlighted on slide ten. As we look to the remainder of 2026, our focus continues on strong execution of our business plan and delivering profitable, predictable results, pursuing profitable organic growth opportunities, and realizing the full value of our acquisitions. Our sales pipeline remains strong across both Canada and the US in support of our growth objectives. We expect strong organic growth across the Dexterra FM North American portfolio, including government services and integrated facilities management. In our US facilities management business, we continue to focus on scaling our FM platform and expanding our facilities management opportunities through our investment in PVC and our expanded US organization and sales force.

Speaker #1: As we look to the remainder of 2026, our focus continues on strong execution of our business plan and delivering profitable predictable results, pursuing profitable organic growth opportunities, and realizing the full value of our acquisitions.

Speaker #1: Our sales pipeline remains strong across both Canada and the United States, in support of our growth objectives. We expect strong organic growth across the Dexterra FM North American portfolio, including government services and integrated facilities management.

Speaker #1: In our US facilities management business, we continue to focus on scaling our FM platform and expanding our facilities management opportunities through our investment in PVC and our expanded US organization and sales force.

Speaker #1: As mentioned previously, we're seeing positive new sales and contract wins with PVC under the distributed FM model, supporting our growth expectations set out at the time of the PVC acquisition investment.

Mark Becker: As mentioned previously, we're seeing positive new sales and contract wins with PVC under the distributed FM model, supporting our growth expectations set out at the time of the PVC acquisition investment. The development of large-scale data centers is providing significant opportunity for workforce accommodations, particularly in the US. Dexterra is partnering with an established US-based turnkey provider of workforce housing and support services to jointly pursue opportunities for data center development and other projects. Our objective is to grow our exposure to the data center space under our capital-light model, we will continue to provide further updates as these opportunities unfold. In Canada, our established FM/IFM platform, together with our market leadership position in workforce accommodations, positions us very well to pursue opportunities related to nation-building projects. We are tracking a number of opportunities identified under the nation-building umbrella, including a mix of near-term and longer-dated projects.

Speaker #1: The development of large scale data centers is providing significant opportunity for workforce accommodations particularly in the US. Dexterra is partnering with an established US based turnkey provider of workforce housing and support services to jointly pursue opportunities for data center development and other projects.

Speaker #1: Our objective is to grow our exposure to the data center space under our capital light model and we will continue to provide further updates as these opportunities unfold.

Speaker #1: In Canada, our established FM and IFM platform, together with our market leadership position and workforce accommodations, positions us very well to pursue opportunities related to nation-building projects.

Speaker #1: We are tracking a number of opportunities identified under the nation building umbrella, including a mix of near term and longer dated projects. With Dexterra's market leading coast to coast to coast presence across the energy mining infrastructure government and defense segments, as well as our over 80 indigenous partnerships across Canada, we are well positioned to take advantage of these opportunities, which we expect will provide a meaningful upside opportunity for both FM and work and the workforce accommodations business.

Mark Becker: With Dexterra's market-leading coast-to-coast presence across the energy, mining, infrastructure, government, and defense segments, as well as our over 80 Indigenous partnerships across Canada, we are well-positioned to take advantage of these opportunities, which we expect will provide a meaningful upside opportunity for both FM and the workforce accommodations business. Given the strong pipeline of opportunities in the workforce accommodations business, including nation-building, we expect to deploy our 2,000 beds available capacity in the medium term. Accordingly, we are and we will continue to actively look at high-return accretive opportunities to augment our asset fleet while staying true to our capital-light business model. For example, our asset refurbishment expertise and facility at our Grande Prairie operations provides us with a competitively unique capability to acquire and deploy quality market assets in a very cost-effective manner. We also continue to closely monitor the macroeconomic environment and inflationary trends.

Speaker #1: Given the strong pipeline of opportunities in the workforce accommodations business, including nation building, we expect to deploy our 2000 beds capacity available capacity in the medium term.

Speaker #1: Accordingly, we are, and we will continue to, actively look at high-return, creative opportunities to augment our asset fleet while staying true to our capital-light business model.

Speaker #1: For example, our asset refurbishment expertise and facility at our Grand Prairie operations provides us with a competitively unique capability to acquire and deploy quality market assets in a very cost effective manner.

Speaker #1: We also continue to closely monitor the macroeconomic environment and inflationary trends. Our business remains well insulated from the direct impact of tariffs, as we employ our workforce locally and source the majority of our materials and supplies domestically in both Canada and the U.S.

Mark Becker: Our business remains well-insulated from the direct impact of tariffs as we employ our workforce locally and source the majority of our materials and supplies domestically in both Canada and the US. While ongoing geopolitical tensions and the conflict in the Middle East may create broad inflationary pressures, we have a number of levers to manage these impacts. These include contractual inflation pass-through mechanisms, disciplined pricing and contract management, supply chain initiatives, and our ongoing operational efficiency projects, all of which have been very effective in supporting our margins. Based on what we see today, we don't expect inflation to have a material impact on our business, although we continue to monitor the situation closely. Finally, we remain committed to our disciplined approach to capital allocation. Our current priorities continue to be supporting the dividend. Number two, making sustaining and high-return capital investments.

Speaker #1: While ongoing geopolitical tensions and the conflict in the Middle East may create broad inflationary pressures, we have a number of levers to manage these impacts.

Speaker #1: These include contractual inflation pass through mechanisms, discipline pricing, and contract management, supply chain initiatives, and our ongoing operational efficiency projects. All of which have been very effective in supporting our margins.

Speaker #1: Based on what we see today, we don't expect inflation of a material impact on our business, although we continue to monitor the situation closely.

Speaker #1: Finally, we remain committed to our discipline approach to capital allocation. Our current priorities continue to be supporting the dividend. Number two, making sustaining and high return capital investments.

Mark Becker: Three, maintaining a strong balance sheet, paying down the debt. Four, accretive acquisitions. We're also making strategic investments in technology, both client-facing and enterprise technology that support innovation, operational efficiency, and differentiation across our platform. In closing, we are very confident in our strategy and our ability to grow and win in the developing marketplace and are well-positioned to continue delivering profitable growth and long-term shareholder value. This concludes our prepared remarks. I'll turn things back over to Jordan to chair our Q&A portion of the call.

Speaker #1: Three, maintaining a strong balance sheet, paying down the debt, and four, a creative acquisitions. We're also making strategic investments in technology, both client facing and enterprise technology, that support innovation, operational efficiency, and differentiation across our platform.

Speaker #1: In closing, we are very confident in our strategy and our ability to grow and win in the developing marketplace, and we are well positioned to continue delivering profitable growth and long-term shareholder value.

Speaker #1: This concludes our prepared remarks. I'll turn things back over to Jordan to chair our Q&A portion of the call.

Speaker #2: As a reminder, if you'd like to ask a question during today's call, simply press star followed by the number one on your telephone keypad.

Operator: As a reminder, if you'd like to ask a question during today's call, simply press star followed by the number one on your telephone keypad. Your first question comes from the line of Kyle McFee from ATB Cormark. Your line is live.

Speaker #2: Your first question comes from the line of Kyle McPhee from ATB Cormac Cormac. Your line is live.

Speaker #1: Hi everyone. So your comments point to the workforce accommodation opportunities linked to US data centers. And it was described as a near term opportunity in your filings to suggesting maybe it's already de-risked and we'll see the benefit soon.

Kyle McPhee: Your comments point to the workforce accommodation opportunities linked to US data centers, and it was described as a near-term opportunity in your filings, suggesting maybe it's already de-risked and we'll see the benefits soon. Can you tell us anything more about timing and size of this demand linked to US data centers and whether or not anything's actually been contracted at this point?

Speaker #1: Can you tell us anything more about timing and size of this demand linked to US data centers and whether or not anything's actually been contracted at this point?

Speaker #3: Good morning, Kyle. Yeah, we were already contracted and active on one project in the US—actually, two projects in the US. Lots of activity around those projects.

Mark Becker: Morning, Kyle. We were already contracted and active on one project in the US. Actually, two projects in the US. Lots of activity around those projects, and these are large-scale projects. That continues to develop. I think what we see is a fairly aggressive approach to projects, but they are large, complex projects and will kind of develop over time. Probably the best thing I could say, Kyle, is it's continuing to develop for us, and I think we'll kind of keep you posted. Again, these are large projects that will take time, but we do expect to continue to develop our contracting on that front.

Speaker #3: And these are large scale projects. And that continues to develop. I think what we see is fairly aggressive approach to projects, but they are large, complex projects.

Speaker #3: And we'll kind of develop over time. Probably the best thing I could say, Kyle, is it's continuing to develop for us and I think we'll kind of keep you posted.

Speaker #3: But again, these are large projects that will take time, but we do expect to continue to develop our contracting on that front.

Speaker #1: Got it. Okay. And then, is this mainly services you'll be providing to third-party-owned workforce camps, or is this rental contracts linked to your own fleet, or both?

Kyle McPhee: Got it. Okay. Is this mainly services you'll be providing to third-party-owned workforce camps, or is this rental contracts linked to your own fleet or both?

Mark Becker: I would say broadly, our initial contract was some of our workforce accommodations that we have active down in one of the projects. More broadly, on these opportunities that we are pursuing, it is client-owned or third-party-owned assets. Along with our business partner down there, we are doing workforce accommodation set up, turnkey provision of the accommodations, maintenance of the assets, and then as well, the full servicing of the assets as part of the contract. Got it. Okay.

Speaker #3: A little bit of both, but I would say broadly, our initial contract was some of our workforce accommodations that we have active down in one of the projects.

Speaker #3: But more broadly, on these opportunities that we're pursuing, it is client owned or third party owned assets, but along with our business partner down there, we are doing workforce accommodation setup, turnkey provision of the accommodations, maintenance of the assets, and then as well the full servicing of the assets as part of the contracts.

Speaker #1: Got it. Okay. And then.

Speaker #2: Your next question comes from the line of Frederick Bastian from Raymond James. Your line is live.

Operator: Your next question comes from the line of Frederic Bastien from Raymond James. Your line is live.

Speaker #1: Thank you.

Frederic Bastien: Thank you.

Speaker #3: Morning, Fred.

Mark Becker: Morning, Fred.

Speaker #1: How are you? I think Kyle got cut off, but I'll just build on that question, that comment around the U.S. partnership. Is it fair to assume, though, that the bulk of your contribution to this partnership would be coming from the support services side?

Frederic Bastien: How are you? I think Kyle got cut off, but I'll just build on that comment around the US partnership. Is it fair to assume, though, that the bulk of your contribution to this partnership would be coming from the support services side?

Speaker #3: Yes. Yes. That'll be the most significant part of it.

Mark Becker: Yes. That'll be the most significant part of it.

Speaker #1: Okay, cool. Question on the wildfire season. Obviously, started quieter than normal in Q2, but it sure seems to have picked up since. Does that change your outlook for that part of the business into the back half?

Frederic Bastien: Okay, cool. Question on the wildfire season. Obviously, started quieter than normal in Q2, but it sure seems to have picked up since. Does that change your outlook for that part of the business into the back half?

Speaker #3: Yeah, I think our outlook would be a more normal level of what we would—if there’s such a thing as a normal year—but if you averaged out the last 10 years, I would say kind of a more normal year for wildfires.

Mark Becker: I think our outlook would be a more normal level. If there's such a thing as a normal year, but if you averaged out the last 10 years, I would say a more normal year for wildfires. One thing I can say is wildfires aren't all created equally. The fires in northern Ontario, we're actually supporting and supporting the communities there. It's been raining like crazy in Alberta, but there's activity in BC. It just depends where they are and the nature of the fires in terms of what we can support. Generally, I would say, smaller impact is what we're seeing this year, but an average amount.

Speaker #3: One thing I can say is wildfires aren't all created equally. So the fires in northern Ontario, we're actually supporting and supporting the communities there.

Speaker #3: It's been raining like crazy in Alberta, but there's activity in BC. So it just kind of depends where they are and the nature of the fires in terms of what we can support.

Speaker #3: But generally, I would say kind of smaller impact is what we're seeing this year. But kind of an average amount.

Speaker #1: Thanks. Thanks, guys. That's all I have. Solid execution. I'll pass it over.

Frederic Bastien: Thanks. Thanks, guys. That's all I have. Solid execution. I'll pass it over.

Speaker #2: Returning back to Kyle McPhee for a second question. Your line is live.

Operator: Returning back to Kyle McPhee for a second question. Your line is live.

Speaker #1: Hello again. So it was nice to see the 5% organic growth from your support services segment in Q2. That would be a net of some of the year over year drag from wildfire services that didn't repeat.

Kyle McPhee: Hello again. It was nice to see the 5% organic growth from your support services segment in Q2. That would be net of some of the year-over-year drag from wildfire services that didn't repeat. Can you quantify that year-over-year drag from wildfire services so we can get a better idea of the true organic growth from the rest of the segment?

Speaker #1: Can you quantify that year over year drag from wildfire services so we can get a better idea of the true organic growth from the rest of the segment?

Speaker #4: Yeah, sure. Hi Kyle, this is Denise. Typically in a normal year, wildfire activity is contributed around, let's say, 20, 25 million equally split between Q2 and Q3.

Denise Achonu: Yeah, sure. Hi, Kyle, this is Denise. Typically, in a normal year, wildfire activity has contributed around, let's say, CAD 20 million, CAD 25 million, equally split between Q2 and Q3. In Q2, we did see, I would say, less than half of what we've seen in the past. Does that help?

Speaker #4: So, in Q2, we did see, I would say, less than half of what we've seen in the past. Does that help?

Speaker #2: Your next question comes from the line of Mark Neville from Canaccord Genuity. Your line is live.

Operator: Your next question comes from the line of Mark Neville from Canaccord Genuity. Your line is live.

Mark Neville: Hey, good morning. Maybe just to follow up on the data center conversation. It seems like it's quite a large opportunity. I'm just curious how you sort of plan to manage the growth, the markets that you might target, and any comments around staffing and such. Thanks.

Speaker #5: Hey, good morning. Maybe just to follow up on the data center conversation. I mean, it seems like it's quite a large opportunity. I'm just curious how you sort of plan to sort of manage the growth, the markets that you might target, and sort of any comments around staffing and such.

Speaker #5: Thanks.

Speaker #3: Yeah, good question, Mark, and good morning. They are shaping up. They are larger projects, as I said. They're large, complex projects. We've actually got folks from workforce accommodations business.

Mark Becker: Yeah. Good question, Mark, and good morning. They are shaping up. They are larger projects, as I said. They're large, complex projects. We've actually got folks from our workforce accommodations business. We've got a leader down there that's virtually working full-time on this. A few more people that we've seconded into the opportunity, and we're also hiring on folks in the US. I think we're well-positioned to support the work that we're gaining and we're bidding into on those projects. It's all part of being part of the ecosystem down there on the various regions and various projects that are ongoing. We're certainly well-positioned for it, and I think we're well-positioned also to provide resources as I mentioned, on a capital-light basis.

Speaker #3: We've got a leader down there that's virtually working full time on this, a few more people that we've seconded into the opportunity, and we're also hiring on folks in the U.S.

Speaker #3: So I think we're well positioned to support the work that we're gaining and we're bidding into on those projects. And it's kind of all part of being part of the ecosystem down there on the various regions and various projects that are ongoing.

Speaker #3: But we're certainly well positioned for it. And I think we're also well positioned to provide resources, as I mentioned, on a capital-light basis.

Speaker #5: Got it. And this may be just a second question. It sort of, I mean, at least to me, it sort of sounds like or feels like you're talking up M&A a bit more or the opportunity or the potential to do M&A or sort of high margin or a creative opportunities.

Operator 1: Got it. This may be just a second question. At least to me, it sort of sounds like, or feels like you're talking up M&A a bit more or the opportunity or the potential to do M&A, or sort of high margin or accretive opportunities. Can you just maybe expand on that sort of topic and whether we're reading into it properly? Thanks.

Speaker #5: Can you just maybe expand on that sort of topic and whether I'm sort of whether we're reading into it properly? Thanks.

Speaker #3: Yeah. As we've talked about, I think so far this year, we're really focused on making sure we kind of deliver full value from the recent acquisitions, which is the right choice acquisition and the PDC investment.

Mark Becker: Yeah. As we've talked about, I think so far this year, we're really focused on making sure we deliver full value from the recent acquisitions, which is the RightChoice acquisition and the PVC investment. I would say when we talk about high return kind of investments, they would be smaller capital investments, not necessarily M&A, but other capital investments, like some of the things I talked about in my remarks, that they'll support the business. That's been typical for us, but not specifically focused towards M&A at this point. Never say never. Those would be our priority focuses that we're focused on this year.

Speaker #3: So I would say when we talk about high return, kind of investments, they would be smaller capital investments, not necessarily M&A, but other capital investments like some of the things I talked about in my remarks.

Speaker #3: That they'll kind of support the business. And that's been typical for us, but not specifically focused towards M&A. At this point, never say never.

Speaker #3: But those would be kind of our priority focuses that we're focused on this year.

Operator: Your next question comes from the line of Zachary Evershed from National Bank Capital Markets. Your line is now live.

Speaker #2: Your next question comes from the line of Zachary Evershed from National Bank Capital Markets. Your line is now live.

Zachary Evershed: Good morning, everybody. Congrats on the quarter.

Speaker #6: Good morning, everybody. Congrats on the quarter.

Speaker #3: Yeah, thanks, Zach. Appreciate that.

Mark Becker: Yeah. Thanks, Zach. Appreciate that.

Speaker #6: Maybe building on the last question there, what kind of hurdle rate would you guys be looking for when you're investing in new or refurbished beds?

Zachary Evershed: Maybe building on the last question there, what kind of hurdle rate would you guys be looking for when you are investing in new or refurbished beds?

Speaker #3: Like high quick return is what I would say. I mean, our yeah, like kind of two to four years max and probably closer to two, realistically.

Mark Becker: Like high, quick return is what I would say. I mean, our Yeah, two to four years max, and probably closer to two, realistically. We are on a refurbishment basis. It can be done pretty cost-effectively, as I mentioned. With a lot of the projects that we are seeing in our pipeline, there is real opportunity to put those to good use. I think our focus is really going to be about well-matching any of those incremental investments to the pipeline and the opportunities that we see in front of us, not get too far ahead of our skis in terms of how we do that. Make sure any investments are indeed that high return investment that we are really going to recapture that from the contracts that we are going to deploy that equipment on.

Speaker #3: And we're on a refurbishment basis. It can be done pretty cost effectively, as I mentioned. And with a lot of the projects that we're seeing in our pipeline, there's real opportunity to put those to put those to good use.

Speaker #3: I think our focus is really going to be about, well, matching any of those incremental investments to the pipeline and the opportunities that we see in front of us—not getting too far ahead of our skis.

Speaker #3: In terms of how we do that and make sure any investments are indeed that high return investment that we're really going to recapture that from the contracts that we're going to deploy those that equipment on.

Speaker #6: Gotcha. Thanks. And then sticking on maybe the nation building theme, can you compare and contrast your indigenous relationships versus other peers who you see as main contenders and whether that's been a major factor in the pipeline?

Zachary Evershed: Got you. Thanks. Sticking on maybe the nation-building theme, can you compare and contrast your indigenous relationships versus other peers who you see as main contenders, and whether that has been a major factor in the pipeline?

Speaker #3: Yeah, it is a big factor. And I think if you look at our last five years, in the remote business, we've gone from kind of a Western focused business to West to East to the Arctic, coast to coast to coast, as I like to say.

Mark Becker: Yeah. It is a big factor, and I think if you look at our last five years in the remote business, we have gone from a Western-focused business to west to east to the Arctic, coast to coast to coast, as I like to say, including energy, mining, infrastructure. We have got quite a breadth, and we have got quite a breadth of indigenous relationships, over 80 relationships, as I talked about. I think if you look across the competitive environment, you are not going to see anyone that really has that kind of scope and scale in terms of both geographic coverage as well as community relationships. Without exception, nation-building, more broadly, broad opportunities in Canada. In the remote space, indigenous relationships are really, really important. We are very happy to have that position.

Speaker #3: And including energy, mining, infrastructure, so we've kind of got quite a breadth and we've got quite a breadth of indigenous relationships over 80 relationships as I talked about.

Speaker #3: I think if you look across the competitive environment, you're not going to see anyone that really has that kind of scope and scale. In terms of both geographic coverage as well as community relationships and without exception, nation building more broadly, broad opportunities in Canada in the remote space, indigenous relationships are really, really important.

Speaker #3: So we're very happy to have that position. We're very happy to be able to work with communities on that basis, because it's a key part of how we're going to earn and land this work that's in front of us.

Mark Becker: We're very happy to be able to work with communities on that basis because it's a key part of how we're going to earn and land this work in front of us.

Speaker #2: Your next question comes from the line of Trevor Reynolds from Acumen Capital. Your line is live.

Operator: Your next question comes from the line of Trevor Reynolds from Acumen Capital. Your line is live.

Speaker #7: Good morning, guys. I was just wondering if you could touch on the magnitude of the new contracts that you highlighted in the US?

Trevor Reynolds: Morning, guys. I was wondering if you could touch on the magnitude of the new contracts that you highlighted in the US.

Speaker #3: Yeah, good morning, Trevor. And generally, I would say right around that $30 million per annum. With some upside growth potential on scope expansion. So they're new logos to the distributed model, which is positive.

Mark Becker: Yeah. Good morning, Trevor. Generally, I would say right around that CAD 30 million per annum with some upside growth potential on scope expansion. There are new logos to the distributed model, which is positive and indicative of our work with PVC. I think also supports what we're seeing in the US in terms of a larger, more fragmented market where there is larger opportunities and ability for larger growth rates.

Speaker #3: And indicative of our work with PVC and I think also supports what we're seeing in the US in terms of a larger more fragmented market where there is larger opportunities and ability for larger growth rates.

Trevor Reynolds: Great. You mentioned that you expect the 2,000 beds of current capacity to be deployed near term here, maybe just which sort of projects those are going to. Maybe just on your ability to procure more assets, it seems like the market's getting very tight. How do you think you're going to be able to do that?

Speaker #7: Great. And then you mentioned that you expect the 2000 beds of current capacity to be deployed near term here, maybe just which sort of projects those are going to and then maybe just on your ability to procure more assets, it seems like the market's getting very tight.

Speaker #7: How do you think you're going to be able to do that?

Speaker #3: Yeah, I'd probably say we just got to watch characterization of near term. I would say probably midterm is probably a good way to say that.

Mark Becker: Yeah. I'd probably say, always got to watch characterization of near term. I would say probably midterm is probably a good way to say that. For us, Zach was asking about our coverage in Canada, it's not just about specific nation-building projects. There's a much broader pipeline of opportunities that even some very near-term things that'll come into play. I think we're kind of seeing nation-building projects that are identified as the nation-building projects, perhaps. They're all under discussion, they're all under contracting activity, but maybe coming to fruition and hitting the P&L the back half of 2025. There's other opportunities that are near term and other opportunities that are long term.

Speaker #3: And for us, and Zach was asking about our coverage in Canada, it's not just about specific nation building projects. There's a much broader pipeline of opportunities that even some very near term things that'll come into play.

Speaker #3: I think we're I think we're kind of seeing nation building projects that are identified as the nation building projects perhaps they're all under discussion.

Speaker #3: They're all under contracting activity. But maybe coming to fruition and kind of hitting the P&L kind of the back half of next year. But there's other opportunities that are near term and other opportunities that are long term.

Speaker #3: And I guess one thing we're sure seeing is I think the overall opportunity set is probably a 2027 plus. And 2027 to 2035, if you look at all the nation building projects and the proposed schedule, to answer your question around equipment, I mentioned in my remarks, I mean, we do have we do maintain our equipment very well.

Mark Becker: I guess one thing we're sure seeing is, I think the overall opportunity set is probably a 2027 plus, 2027 to 2035, if you look at all the nation-building projects and the proposed schedule. To answer your question around equipment, I mentioned in my remarks, we do maintain our equipment very well. I've always talked about that with our business. We have a facility that can maintain equipment, and we would use that to build incremental assets by purchasing market assets. There is assets out there. Obviously, we want to achieve our level of quality, and with limited investment, you can actually bring those to good market shape to be able to bring those to the contracts that we're seeing. We've talked about the data centers being more client or third party capitalized under the capital A model.

Speaker #3: I've always talked about that with our business. We have a facility that can maintain equipment. And we would use that to build incremental assets by purchasing market assets.

Speaker #3: There is assets out there. Obviously, we want to kind of achieve our level of quality with limited investment. You can actually bring those to kind of good market good market shape to be able to bring those to the contracts that we're seeing.

Speaker #3: We've talked about the data centers being more client or third-party capitalized and for the capital. Model, that's another opportunity both in Canada and the US, I would say.

Mark Becker: That's another opportunity both in Canada and the US, I would say. Obviously, ultimately, new equipment, but that can be a very expensive way to go and a very slow way to go, where we would see the refurbishment model to be something that can be brought to bear fairly quickly and very cost-effectively.

Speaker #3: And obviously, ultimately, new equipment, but that can be a very expensive way to go, and a very slow way to go, where we would see kind of the refurbishment model to be something that can be brought to bear fairly quickly and very cost-effectively.

Operator: Your next question comes from the line of Jonathan Goldman from Scotiabank. Your line is live.

Speaker #2: Your next question comes from the line of Jonathan Goldman from Scotiabank. Your line is live.

Jonathan Goldman: Hey, good morning, team, and thanks for taking my questions. Just some housekeeping ones for me. What was the organic growth in the asset-based business?

Speaker #8: Hey, good morning, team. And thanks for taking my questions. Just some housekeeping ones for me. What was the organic growth in the asset-based business?

Denise Achonu: It was 2%.

Speaker #5: It was 2%.

Speaker #8: On a consolidated basis for the entire segment?

Jonathan Goldman: On a consolidated basis for the entire segment?

Speaker #5: So yeah, with the so the retail again, there's two components to the asset-based business. There's the rental. And so the organic growth is on that rental piece because the installation and demobilization that does not have anything related to right choice in it.

Denise Achonu: RTIP, again, there's two components to the asset-based business. There's rental. The organic growth is on that rental piece because the installation and demobilization, that does not have anything related to RightChoice in it, right? Again, because we mentioned that is project-based, it can be very variable.

Speaker #5: Right? And again, as we mentioned, that is project-based, so it variable.

Speaker #8: Yeah, I understand. Is it possible to quantify the consolidated organic growth, though, for the segment?

Jonathan Goldman: Yeah, I understand. Is it possible to quantify the consolidated organic growth, though, for the segment?

Speaker #5: Well, I mean, you can see from a revenue basis, it was flat, right? For Q2 2025 compared to Q2 2026.

Denise Achonu: Well, you can see from a revenue basis, it was flat, right? For Q2 2025 compared to Q2 2026.

Speaker #8: Okay, maybe we can take that offline. Back to the wildfires, are you able to quantify how much of a drag on margins the lower activity was in each segment?

Jonathan Goldman: Maybe we can take that offline. Back to the wildfires, are you able to quantify how much of a drag on margins the lower activity was in each segment?

Speaker #3: Sorry, say that again, Jonathan. I didn't hear your question.

Mark Becker: Sorry, say that again, Jonathan. I didn't hear your question.

Speaker #8: Yeah, the lower wildfire activity. I was under the assumption it's margin accretive, so it looks like margins are pretty good this quarter. Are you able to quantify how much of a drag it was on the margins in each segment?

Jonathan Goldman: Yeah, the lower wildfire activity. I was under the assumption it's margin accretive, it looks like margins are pretty good this quarter. Are you able to quantify how much of a drag it was on the margins in each segment?

Mark Becker: One thing I'd say probably, you'd find the kind of support that we provide, it's workforce accommodations, it's other types of support that we provide, kind of fits sort of in the center of the margin profile, I would say, between what we have on support services segment as well as the ABS segment. I think it fits really well. I wouldn't say it would necessarily be a drag in terms of the percent margin that we would've seen there.

Speaker #3: One thing I'd say probably you'd find the kind of support that we provide. I mean, it's workforce accommodations. It's other types of support that we provide.

Speaker #3: It kind of fits sort of in the center of the margin. Profile, I would say, between what we have on support services segment as well as the ABS segment.

Speaker #3: So I think it fits really well. So I would say it would necessarily be a drag in terms of the percent margins that we would have seen there.

Speaker #8: Okay, that's helpful. And then your comments around the data centers, maybe I misheard, but you're already on two projects. So would that already be reflected in your numbers?

Jonathan Goldman: Okay, that's helpful. Your comments around the data centers. Maybe I misheard, but you're already on two projects. Would that already be reflected in your numbers? If we think a little more out, how material could this opportunity be for you guys?

Speaker #8: And then, if we think a little more broadly, how material could this opportunity be for you guys?

Mark Becker: I think it's just getting going. We do have assets on the first project that we mobilized actually last year, was about 500 beds in the US, and that's been part of our numbers. Some of the newer projects that we're seeing are really just getting going, but they are getting contracted as well. Honestly, Jonathan, really, I think the best way to leave this with the market is, we do see these as significant opportunities, we're bidding on a lot of work related to these and we'll kind of keep the market well-informed as we land work there. We do see the opportunity as potentially significant.

Speaker #3: Yeah, I think it's just getting going. I mean, we do have assets on the first project that we mobilized actually last year, which is about 500 beds in the US.

Speaker #3: And that's been part of our numbers. Some of the newer projects that we're seeing are really just getting going. But they are getting contracted as well.

Speaker #3: And honestly, Jonathan, really I think the best way to leave this with the market is we do see these as significant opportunities, but we're bidding on a lot of work related to these.

Speaker #3: And we'll kind of keep the market well informed as we kind of land work there. But we do see the opportunity as potentially significant.

Operator: Your next question comes from the line of Kyle McPhee. Your line is live.

Speaker #2: Your next question comes from the line of Kyle McPhee. Your line is live.

Kyle McPhee: Hello again. Just to finish the discussion on my last question because the operator's having fun cutting me off here. The organic growth for your support services segment was 5%, adjusted for wildfire is probably more like 8%, high single digit. How would you characterize that organic growth, in terms of how it landed for facilities management versus remote services? Were kind of both growing in around that rate, or was one much better than the other?

Speaker #6: Hello again. Just to finish the discussion on my last question, because the operators have a fun time cutting me off here. So, the organic growth for your support services segment was 5%; adjusted for wildfire, it's probably more like 8%, high single-digit.

Speaker #6: How would you characterize that organic growth in terms of how it landed for facilities management versus remote services? Were both growing at around that rate, or was one much better than the other?

Speaker #3: Yeah, I think very, very similar. I think we're doing well on both fronts is what I would say. The things around PVC, I mean, that's a really good number.

Mark Becker: Yeah, I think very similar. I think we're doing well on both fronts is what I would say. The things around PVC, that's a really good number. Knowing what we announced in terms of the overall PVC revenue, that's a really positive amount of growth on that front. I would say blended across both business segments, both remote, as well as facility management, we are seeing positive organic growth rates.

Speaker #3: Knowing what we announced in terms of the overall PVC revenue, that's a really positive amount of growth on that front. But I would say blended across the both business segments, both remote, as well as facility management, we are seeing we are seeing positive organic growth rates.

Speaker #6: Got it. Okay. And then, yeah, go ahead.

Kyle McPhee: Got it. Okay.

Denise Achonu: And-

Kyle McPhee: then-

Denise Achonu: Just-

Kyle McPhee: Yeah, go ahead.

Denise Achonu: Sorry. Clarity. PVC isn't right now in our revenue numbers.

Speaker #5: Sorry. Clarity, PVC isn't right now in our revenue numbers. But.

Speaker #6: Yeah, understood.

Kyle McPhee: Yep. Understood.

Denise Achonu: As Mark stated, equally facilities management and our workforce accommodations business.

Speaker #5: As marketing is equally facilities management and our workforce accommodations. Business.

Speaker #6: Yeah, understood. Okay. And then on the PVC contract, when can you tell us what type of client business that they're winning? That helps us get a feel on margin and how many of these 30 million-ish year type contracts they won.

Kyle McPhee: Yep, understood. Okay. On the PVC contract win, can you tell us what type of client business that they're winning? That helps us get a feel on margin and how many of these CAD 30 million a year type contracts they won.

Speaker #3: Yeah. And kind of in the center of, I guess, the target that we—some of the segments that we look at, like things like commercial, light industrial is what I would kind of characterize it as, which has been the center of the target for PVC and continues to be part of our pipeline.

Mark Becker: Yeah, kind of in the center of, I guess, the target that some of the segments that we look at, things like commercial light industrial is what I would kind of characterize it as. Which has been the center of the target for PVC and it continues to be part of our pipeline. We're always targeting, as we've always articulated on a segment level that, FM, IFM work is in that 8% to 10% margin range, these things are in that range, in terms of the delivered margin.

Speaker #3: I would say we're always targeting, as we've always articulated on a segment level, that FM/IFM work is in that 8% to 10% margin range.

Speaker #3: And these things are in that range. In terms of the delivered margin.

Speaker #6: Okay, thank you. That is it from.

Kyle McPhee: Okay, thank you. That is it from me.

Speaker #2: Your next question comes from a line of Mark Neville from Cancourt, Genuity. Your line is live.

Operator: Your next question comes from the line of Mark Neville from Canaccord Genuity. Your line is live.

Mark Neville: Hey. Thanks for letting me back in. Maybe just two points of clarification or two follow-ups. Just on Kyle's last question, how many new contracts were there in the quarter?

Speaker #3: Yeah, yeah. Thanks for letting me back in. Maybe just two points of clarification or two follow-ups. Just on Kyle's last question, how many new contracts were there in the quarter?

Speaker #3: Well, the ones were specifically talking about is actually three. Three. Okay. Yeah. And is that. But.

Mark Becker: Well, the ones we're specifically talking about is actually three.

Mark Neville: Three. Okay.

Mark Becker: Yeah.

Mark Neville: Is that-

Mark Becker: But-

Mark Neville: Go ahead.

Speaker #6: Sorry, go ahead.

Speaker #3: Yeah. Well, I would say Mark is referencing PVC because it's noteworthy. There are four contracts we win all the time. You look at 400 clients, kind of North America-wide, we're always winning work.

Mark Becker: Why I would say, Mark, is we're referencing PVC because it's noteworthy.

Mark Becker: There's contracts we win all the time.

Mark Neville: Yep

Mark Becker: 400 clients kind of North America-wide. We're always winning work. I certainly wouldn't look at that as we won three contracts across the entire business, even in just FM in the quarter. There's certainly a lot more than that.

Speaker #3: So I certainly wouldn't look at that as kind of we won three contracts across the entire business, even in just FM. In the quarter, there's certainly a lot more than that.

Speaker #4: Yeah, yeah. No, for sure. Understood. And the 30 million, that was combined or that was per contract?

Mark Neville: Yeah. No, for sure. Understood. The CAD 30 million, that was combined, or that was per contract?

Mark Becker: That'd be combined on a per and an annum basis.

Speaker #3: That'd be combined on a per and atom basis.

Speaker #4: Okay. And maybe just a final question on the data centers. Would you be pursuing these opportunities in Canada as well, and would you anticipate those being sort of also client- or third-party-owned assets?

Mark Neville: Okay. Maybe just a final question on the data centers. Would you be pursuing these opportunities in Canada as well, and would you anticipate those being sort of also client or third party owned assets, or would that be different? Would your expectation that's a different sort of model in Canada? Thanks.

Speaker #4: Or would that be different? Would your expectation that's a different sort of model in Canada? Thanks.

Speaker #3: Yeah. Yes, yes. And we are. And I think it could be either is what I would say. I think some of it gets down to scale.

Mark Becker: Yes. We are. I think it could be either, is what I would say. I think some of it gets down to scale, Mark. Some of these things in the US are very large projects, it kind of gets down to how big the project is, how long the project is. It may make more sense for either the client or third party to be capitalizing the assets versus us taking on that kind of capital commitment. I think it can kind of vary. I would say, though, We'll see how things develop with this, which is why you hear me be pretty cagey, because we want to see how things develop. It certainly is very active down in the US and very large projects, as I've mentioned.

Speaker #3: Mark, some of these things in the US are large, very large projects. And it kind of gets down to how big the project is, how long the project is.

Speaker #3: It may make more sense for either the client or third party to be kind of capitalizing the assets. Versus us, taking on the kind of capital commitment.

Speaker #3: So I think it can kind of vary. I would say, though, that we'll see how things develop with this, which is why you're hearing me be pretty cagey, because we want to see how things develop.

Speaker #3: It certainly is very active down in the US and very large projects, as I've mentioned. I would say in Canada, we see less number of very large projects and smaller projects as well, which, to be honest, we like all of those, even small projects where we've mobilized our equipment.

Mark Becker: I would say in Canada, we see less number of very large projects and smaller projects as well, which, to be honest, we like all of those, even small projects where we mobilize our equipment, it can make a lot of sense for us.

Speaker #3: You can make a lot of sense for us.

Speaker #4: Got it. Thanks again.

Mark Neville: Got it. Thanks again.

Speaker #2: Your next question comes from the line of Trevor Reynolds from Acumen Capital. Your line is live.

Operator: Your next question comes from the line of Trevor Reynolds from Acumen Capital. Your line is live.

Speaker #7: Hey, guys. Just one follow-up. Just in terms of what you're seeing in the rates as you're bidding on these new contracts for asset-based services. There used to be discussion that rates need to triple to entice new construction.

Trevor Reynolds: Hey, guys. Just one follow-up. In terms of what you're seeing in the rates as you're bidding on these new contracts for asset-based services. There used to be discussion that rates need to triple to entice new construction. Is that still the case, kind of what you're seeing? Just maybe what you're seeing on the rates front as you're bidding on new contracts?

Speaker #7: Is that still the case? Kind of what you're seeing, or just maybe what you're seeing on the rates front as you're bidding on new contracts?

Mark Becker: Well, I would say in general, it sort of depends, but we are seeing pricing in certain areas kind of going up around turnkey workforce accommodations and that size of thing. Obviously, providing new build equipment, not only the timeframe and, to be honest, the cost of them in Canada from what we see, would be a very expensive way to go and would require. To be honest, Trevor, we have clients right now that are asking for new equipment, meaning, because of the nature of their project, for example, one of them is a mining project that is going to be mobilizing assets that are going to be there for a very long time. They want new equipment. They're willing to pay that bill for it. We're happy to offer that.

Speaker #3: I would say, in general, it sort of depends, but we are seeing pricing in certain areas kind of going up around turnkey workforce accommodations and that sort of thing.

Speaker #3: I mean, obviously providing new-build equipment, not only the time frame and, to be honest, the cost of them in Canada from what we see, would be a very expensive way to go and would require—and, to be honest, Trevor, we have clients right now that are asking for new equipment, meaning because of the nature of their project. For example, one of them is a mining project that is going to be mobilizing—kind of assets that are going to be there for a very long time.

Speaker #3: They want new equipment. They're willing to pay that bill for it. So we're happy to offer that. I would say, though, just because of the cost and time frame that's probably kind of tranche three out of the options around providing turnkey solutions to clients.

Mark Becker: I would say, though, just because of the cost and timeframe, that's probably tranche 3 out of the options around providing turnkey solutions to clients. It is something we do, and it is something that's going to be the highest tranche of cost to the client, just depending what their objectives are.

Speaker #3: But it is something we do do. And it is something that's going to be kind of the highest tranche of cost to the client just depending what their objectives are.

Speaker #7: Okay, great. Thanks.

Trevor Reynolds: Okay, great. Thanks.

Speaker #2: Your next question comes from the line of Jonathan Goldman from Scotiabank. Your line is now live.

Operator: Your next question comes from the line of Jonathan Goldman from Scotiabank. Your line is now live.

Speaker #7: Thanks for taking my follow-up. Denise, how should we think about the level of cash taxes for the balance of the year?

Jonathan Goldman: Thanks for taking my follow-up. Denise, how should we think about the level of cash taxes for the balance of the year?

Speaker #5: It should be approximately—I think this is something we've talked about in the past—it's in at around $15 million, $12 to $15 million, in terms of cash taxes.

Denise Achonu: It should be approximately, I think this is something we've talked about in the past. It's in and around CAD 15 million, CAD 12 million to 15 million in terms of cash taxes.

Speaker #7: Is that for the balance of the second half, or for the year total?

Jonathan Goldman: That's for the balance of the H2 or for the year total?

Denise Achonu: It's for the year. Again, that's for the installments that we'll be looking for 2026. You'll recall at the beginning of the year, we would've made our about CAD 12 million cash tax payment for 2025. Combined would be in and around, I don't know, CAD 27.7 million.

Speaker #5: It's for the year. And again, so that's for the installments that we'll be making for 2026. You'll recall at the beginning of the year, we would have made our about 12 million cash tax payment for 2025.

Speaker #5: So combined would be in and around, I don't know, 27, 27 million.

Speaker #7: Okay, perfect. Thanks.

Jonathan Goldman: Okay, perfect. Thanks.

Operator: That concludes our question and answer session. Thank you for joining today's call. You may now disconnect.

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