Earnings call transcript: Secure Energy sees Q1 2026 EBITDA growth amid strategic shifts

Secure Energy reported Q1 2026 adjusted EBITDA of CAD 137 million, up 13% year over year, on revenue of CAD 383 million and a 36% EBITDA margin, with funds flow from operations of CAD 101 million. Management raised growth capital to CAD 100 million from CAD 75 million and said 2026 adjusted EBITDA is trending toward the high end of guidance, while also lifting the dividend 5% to CAD 0.105 per share and buying back nearly 1 million shares. The bigger strategic development is the announced transaction with GFL, which the board unanimously supports and which the company says offers a meaningful premium plus future upside, subject to Competition Bureau review.

Analysis

The key read-through is that this is not a simple “higher oil = better SES” story; the company is increasingly monetizing bottleneck infrastructure with pricing power that is becoming less cyclical than the market likely assumes. That means the more important winner is the asset base itself, not the commodity beta: produced-water, landfill, and rail-enabled logistics each create local monopoly characteristics, which should sustain margin even if WTI rolls over. The GFL deal adds a second layer of optionality by converting SES from a standalone quality compounder into a strategic asset inside a larger platform, compressing the discount between private-market infrastructure value and public-market trading multiples.

The second-order effect is on competitors: smaller waste and metals processors should see more pressure, because SES is reinvesting into the highest-return nodes while deepening network density. The incremental railcar capacity is particularly relevant — it lowers unit logistics costs and should widen the spread versus regional scrap competitors who cannot arbitrage U.S. end markets as efficiently. If that execution continues, SES can keep compounding EBITDA faster than revenue, which is exactly the pattern that usually precedes multiple re-rating or M&A interest.

The main risk is timing, not thesis. Regulatory friction around the deal could keep the stock pinned despite strong operating trends, and a sharp reversal in commodity prices would hit sentiment first even if volumes prove resilient later. The contrarian point: consensus is likely underestimating how much of SES’s earnings base is now anchored by non-discretionary environmental spend, which tends to hold up for quarters after macro weakening; that makes near-term downside in the operating business smaller than headline WTI sensitivity suggests. The place to be skeptical is not the industrial logic, but whether the market will pay up for it before the merger closes.

Key Decisions for Investors

• Long SES.TO vs. short a Canadian small-cap energy proxy for 1-3 months: thesis is that SES’s EBITDA mix is shifting toward non-cyclical infrastructure and should outperform pure commodity beta if WTI retraces; stop if the GFL process stalls materially or if WTI collapses below the budget anchor for a sustained period.
• Accumulate SES.TO on merger-related weakness over the next 2-6 weeks: risk/reward improves if the stock trades down on regulatory noise, because standalone fundamentals and capital returns remain supportive while deal optionality provides a valuation floor.
• Pairs trade: long SES.TO / short GFL for a 3-6 month horizon if the spread tightens too slowly; SES has the cleaner near-term operating momentum, while GFL carries integration and execution risk that the market may not fully price yet.
• If options liquidity permits, buy medium-dated SES.TO calls into any pre-vote dip: this captures upside from both a deal-close headline and further multiple expansion if investors begin to price the business as a scarce infrastructure asset rather than an energy-adjacent name.
• Watch for a post-Q2 inflection in volume commentary before adding aggressively: if management confirms the expected second-half pickup, it becomes a stronger catalyst for another estimate revision and likely supports a higher takeout or trading multiple.