Badger Infrastructure Solutions (TSE:BDGI) outlined record full-year revenue, continued fleet expansion, and a stepped-up capital plan for 2026 during its fourth-quarter 2025 earnings call held March 6, 2026. Management also discussed near-term margin pressure tied to growth investments, a higher dividend, and potential exposure to newly announced U.S. truck-related tariffs.
Full-year results: record revenue and modest margin improvement
President and CEO Rob Blackadar said Badger delivered record top-line revenue of over $830 million in 2025, representing 12% year-over-year growth. He attributed the increase to strength in the company’s core end markets and customer demand, supported by higher utilization and fleet growth.
Badger’s revenue per truck per month (RPT) was $41,672 in 2025, up 5% compared to the prior year, which management said was largely driven by improvements in fleet utilization.
Q4 performance: strong revenue, investments weigh on margins and EPS
CFO Rob Dawson said fourth-quarter revenue increased 14% compared to 2024, driven by continued fleet investments to capitalize on demand in U.S. operations. Adjusted EBITDA was $44.9 million, up 2% year-over-year, while the adjusted EBITDA margin was 21.5%.
Management emphasized that the company is investing to support sustained growth, including new branches, added operational and commercial leadership capacity, the rollout of an Operational Excellence program, and accelerated hiring and training of operators to support a higher truck build rate. Dawson said these actions are intended to support longer-term scale and profitability but have initially impacted near-term margins.
Dawson also pointed to progress on overhead scalability. Fourth-quarter G&A expense was $10.9 million, or 5% of revenue, compared to $11.3 million, or 6% of revenue, in the prior year quarter. He said adjusted earnings in the quarter were $11.6 million, down from $12.7 million a year earlier.
Fleet growth and 2026 capital plan: record manufacturing guidance
Badger ended 2025 with 1,723 hydrovacs, growing the fleet by 5% overall during the year. The Red Deer, Alberta manufacturing plant produced 210 hydrovacs; the company refurbished 35 and retired 130 units in 2025.
Looking to 2026, Blackadar said the company sees “extraordinary demand and opportunities” across nearly all end markets. To meet that demand, management guided to:
- Build 270 to 310 new hydrovac units (a record build rate for Badger manufacturing)
- Refurbish 30 to 50 hydrovacs
- Retire 130 to 150 units
- Net fleet growth of 7% to 10% after retirements
- Capital spending of $198 million to $230 million
In the Q&A, Dawson elaborated on capital spending, noting 2025 CapEx was $125 million and the company’s pre-tariff guidance implies an increase, which he said was driven mainly by higher truck build volume and strategic initiatives. He also said the “landed cost” of a truck into operations—after transportation, delivery, licensing, and federal excise tax—was about $450,000 per unit and was not expected to change materially over the next year. In addition to new trucks and new initiatives, Dawson said Badger’s plan includes ancillary equipment purchases, ongoing IT and process investments, and modest annual investments in the manufacturing plant.
New service lines: industrial services and trench safety offerings
Management said a portion of 2026 capital is earmarked for two new service lines intended to complement the hydrovac business. Blackadar said contributions are not expected to be material in 2026, but the company views them as supportive of longer-range growth.
In response to an analyst question, Blackadar said Badger has begun offering industrial services/industrial cleaning, with a “soft, quiet launch” in the back half of 2025. The company ended the year with four locations dedicated to industrial services, and management said early results have been encouraging. He also said industrial work could help offset seasonality, as some industrial activity may occur when hydrovac work slows in winter.
The second service line planned for launch in 2026 is branded “trench safety,” including trench shoring and road plate. Blackadar described it as a customer-driven add-on following excavation work, intended to be a value-added offering rather than a broad competitive push against large trench shoring companies.
Margins, operations, and tariffs: efficiency programs and potential added costs
Executives reiterated a longer-term adjusted EBITDA margin framework of 25% to 30% and described several drivers intended to support expansion over time, including scale benefits, overhead discipline, the Operational Excellence rollout, and increased use of the company’s data platform. Blackadar said the company is in a “short transitionary phase” with incremental overhead tied to accelerated operator hiring and training, and he cited a 90-to-100-day onboarding process. He said the company expects margin improvement as training catches up and as Operational Excellence becomes more broadly embedded.
When asked about the Operational Excellence program, Blackadar said the initiative involves evaluating branch-level processes across Badger’s network, which he described as having historically operated with significant variability. He highlighted dispatch and fueling practices as examples where standardization could improve routing efficiency, utilization, and labor efficiency, and reduce overtime-related costs.
Badger also addressed the evolving U.S. tariff environment. Dawson said Badger’s manufactured units remain compliant with CUSMA and that the company did not incur direct tariffs in 2025 on units delivered to the U.S. However, he noted that heavy-duty truck tariffs were announced in the fourth quarter with guidance released in early 2026 indicating a 25% tariff payable on non-U.S. content for trucks and components crossing from Canada into the U.S. Assuming that tariff applies, Dawson said Badger’s exposure could be $18 million to $30 million in additional cost in 2026, and management is evaluating mitigation options.
In a separate discussion, Blackadar said the company has long contemplated a second manufacturing facility as part of long-range planning. He told analysts the company has begun gathering information on timing and considerations for a second facility, which he suggested would “probably” be in the United States and could provide redundancy, efficiency, and potential tariff relief.
On capital returns and leverage, Dawson said Badger ended the year at 1.3x debt-to-EBITDA (within its stated 1.0x to 2.0x target range) and intends to continue returning capital through its NCIB and dividends while remaining within that range in 2026. The company’s board approved a 4% increase to the quarterly cash dividend effective for the first quarter of 2026, with payment expected on or about April 15, 2026. Dawson also said the company returned $31 million to shareholders in 2025, including $18 million in dividends and $13 million toward repurchasing 492,800 shares at an average price of CAD 37.78.
About Badger Infrastructure Solutions (TSE:BDGI)
Badger Infrastructure Solutions Ltd is North America’s provider of non-destructive excavating services. Its key technology is the Badger Hydrovac, which is used primarily for safe excavation around critical infrastructure and in congested underground conditions. The Badger Hydrovac uses a pressurized water stream to liquefy the soil cover, which is then removed with a powerful vacuum system and deposited into a storage tank. The company manufactures and designs its truck-mounted hydrovac units, giving an opportunity to incorporate feedback from its hydrovac operators into its existing and future design and manufacturing processes.
