Q2 FY2026
Filed Aug 12, 2026North American Construction Group Ltd. Announces Results for the Second Quarter Ended June 30, 2026 Raises Full Year 2026 Combined Revenue Guidance on Record Q2 Top-Line Performance
Record combined revenue and higher adjusted EBITDA supported a raise to combined revenue guidance, while adjusted EBITDA margin declined, net income fell, and net debt increased from December 31, 2025.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $401.0M | – | up $80.3 million or 25% year-over-year |
| Total combined revenuenon-GAAP | $456.1M | – | up $85.5 million or 23% year-over-year |
| Cost of salesGAAP | 298,097 | – | – |
| DepreciationGAAP | 59,456 | – | – |
| Gross profitGAAP | $43.41M | Both gross profit measures exceeded 2026 Q1 results. | – |
| Gross profit marginother | 10.8 % | – | – |
| Combined gross profitnon-GAAP | $49.87M | Both gross profit measures exceeded 2026 Q1 results. | up from $33.4 million in the prior year |
| Combined gross profit marginnon-GAAP | 10.9 % | – | – |
| General and administrative expenses (excluding stock-based compensation)non-GAAP | 20,086 | – | – |
| Stock-based compensation expense (benefit)GAAP | 230 | – | – |
| Operating incomeGAAP | 20,537 | – | – |
| Interest expense, netGAAP | 18,880 | – | – |
| Equity earnings in affiliates and joint venturesGAAP | $2.09M | – | improved significantly year-over-year |
| Net incomeGAAP | $9.38M | – | down $0.9 million or 9% year-over-year |
| Adjusted net earningsnon-GAAP | $8.53M | – | up $7.7 million year-over-year |
| Adjusted EBITnon-GAAP | $32.20M | – | – |
| Adjusted EBITDAnon-GAAP | $93.47M | – | up $13.4 million or 17% year-over-year |
| Adjusted EBITDA marginnon-GAAP | 20.5 % | – | – |
| Free cash flownon-GAAP | $23.03M | – | improving $23.4 million year-over-year |
| Basic net income per shareGAAP | $ 0.35 | – | consistent with 2025 Q2 |
| Diluted net income per shareGAAP | $ 0.34 | – | – |
| Adjusted EPSnon-GAAP | $ 0.32 | – | up significantly from $0.02 in 2025 Q2 |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Heavy Equipment - AustraliaReflecting $84.5 million of reported revenue from IMC following its April 7, 2026, acquisition and organic growth of approximately $24.9 million from the legacy Australian business. | $277.5M | – | increased 65% |
| Heavy Equipment - CanadaPrimarily due to the 2025 Q4 divestiture of ultra-class haul trucks, lower Syncrude activity, and spring break-up impacts, partially offset by ramp-up of the Kearl project. | $121.8M | – | decreased 17% |
| Revenue from joint ventures and affiliatesReflecting lower MNALP volumes, partially offset by the first contribution from the IMC PKKPE joint venture. | $49.7M | – | declined 1% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
2026 outlook
- Revenue$1.6 - $1.8B
- NoteAdjusted EBITDA: $380 - $420M
- NoteFree cash flow: $110 - $130M
- NoteContractual backlog: $3.8 billion
Capital returns
- On August 11, 2026, the NACG Board of Directors declared a regular quarterly dividend of twelve Canadian cents ($0.12) per common share.
- The Dividend is payable to common shareholders of record at the close of business on August 28, 2026.
- The Dividend will be paid on October 2, 2026.
What drove it
- IMC contributed $84.5 million of reported revenue and $13.1 million of adjusted EBITDA following its April 7, 2026, acquisition.
- Legacy Australian operations delivered organic growth driven by strong project execution, prior-period growth asset investments, and favourable foreign exchange translation rates.
- Combined gross profit was driven by IMC's $10.5 million contribution, a $7.6 million improvement from core segments, and Fargo's return to profitability.
- Equity earnings improved primarily because the Fargo-Moorhead flood diversion project returned to profitability after a margin forecast adjustment weighed on the prior-year period.
- Canadian margin performance benefited from fleet optimization, including the 2025 Q4 divestiture of ultra-class haul trucks.
Concerns
- Adjusted EBITDA margin was 20.5 %, compared to 21.6 % in 2025 Q2, principally reflecting IMC's margin profile.
- Net income declined to $9.4 million from the prior year's $10.3 million as higher general and administrative costs, including $4.8 million of acquisition and integration activities, and increased interest expense more than offset gross-profit gains.
- Heavy Equipment - Canada revenue decreased 17% amid reduced operating capacity from the fleet divestiture, lower Syncrude activity, spring break-up seasonal impacts, and adverse weather conditions.
- Net debt increased to $ 1,087,415 at June 30, 2026 from $ 878,461 at December 31, 2025.
What to watch
- Execution of work in hand and seasonal momentum in the second half of 2026.
- Mechanical availability and reliability of the right-sized heavy equipment fleet in the oil sands region.
- Australian workforce mix and discretionary operating-cost reduction following major growth in Queensland.
- Continued IMC integration and commissioning of expanded fleet in Western Australia.
- Completion of the Fargo-Moorhead flood diversion project.
- Conversion of earnings into free cash flow against $110 - $130M full-year guidance.
Balance sheet and cash flow
- Cash: $ 167,676 at June 30, 2026, compared with $ 100,128 at December 31, 2025.
- Net debt: $ 1,087,415 at June 30, 2026, compared with $ 878,461 at December 31, 2025.
- Senior-secured debt: $ 630,427 at June 30, 2026, compared with $ 510,136 at December 31, 2025.
- Senior unsecured notes: 550,000 at June 30, 2026, compared with 350,000 at December 31, 2025.
- Cash provided by operating activities: $ 90,926, compared with $ 64,674.
- Cash used in investing activities: (134,792), compared with (71,823).
- Free cash flow was supported by $93.5 million in adjusted EBITDA, offset by $62.5 million in sustaining capital, and $18.2 million in cash interest.
Analysis
NACG reported record Q2 top-line performance, with total combined revenue of $ 456,082 versus $ 370,628 in the prior-year quarter and reported revenue of $ 400,963 versus $ 320,634. The company raised its 2026 combined revenue guidance to $1.6 - $1.8B from a previous outlook of $1.5 - $1.7B, citing stronger-than-expected first-half revenue. The updated midpoint is stated as $1.7 billion, up from $1.6 billion, while adjusted EBITDA and free cash flow guidance remained $380 - $420M and $110 - $130M, respectively.
Australia was the principal growth engine. Heavy Equipment - Australia revenue increased 65% to $277.5 million, including $84.5 million of reported revenue from IMC and approximately $24.9 million of organic growth in the legacy Australian business. Management attributed legacy growth to project execution, prior-period growth asset investments, and favourable foreign exchange translation rates. IMC's economic benefit from January 1, 2026 was reflected in combined revenue, gross profit, adjusted net earnings, adjusted EBIT, and adjusted EBITDA.
Profitability improved on an adjusted basis but showed mix and cost pressure. Adjusted EBITDA increased to $ 93,467 from $ 80,113, including a $13.1 million IMC contribution, but adjusted EBITDA margin declined to 20.5 % from 21.6 % principally because of IMC's margin profile. Reported gross profit increased to $ 43,410 from $ 35,830, while gross profit margin declined to 10.8 % from 11.2 %. Combined gross profit increased to $ 49,870 from $ 33,396 and combined gross profit margin improved to 10.9 % from 9.0 %, supported by IMC, core-segment improvement, and Fargo's return to profitability.
GAAP earnings did not follow the adjusted earnings improvement. Net income declined to $ 9,376 from $ 10,250, while operating income fell to 20,537 from 22,789. The release attributes the net-income decline to higher general and administrative costs, including $4.8 million of acquisition and integration activities, and increased interest expense. Adjusted net earnings rose to $ 8,531 from $ 806, and adjusted EPS rose to $ 0.32 from $ 0.02, driven by stronger gross profit, improved equity earnings, and reduced interest accretion, partly offset by higher interest expense on growth-related debt.
Cash flow improved, with free cash flow of $ 23,029 compared with $ (376), supported by adjusted EBITDA and offset by sustaining capital and cash interest. The balance sheet reflects the scale-up associated with growth and IMC: cash was $ 167,676, while net debt was $ 1,087,415 compared with $ 878,461 at December 31, 2025. Canada remains a constraint on the consolidated mix, as Heavy Equipment - Canada revenue decreased 17% to $121.8 million because of fleet divestiture effects, lower Syncrude activity, spring break-up, and weather, partly offset by the Kearl ramp-up.
Management, verbatim
Record revenue of more than $450 million demonstrates both the growing scale of the business and the demand across our markets. With work in hand, seasonal momentum and recent scope expansions, we remain confident in the $400 million midpoint of our 2026 adjusted EBITDA guidance.
Barry Palmer, President and Chief Executive Officer
Our priorities for the second half are clear: execute the work in hand, improve fleet availability and utilization, convert earnings into free cash flow and allocate that capital toward the strongest risk-adjusted returns.
Barry Palmer, President and Chief Executive Officer
Not in the filing
stated, not guessed- Prior-quarter figures for key Q2 metrics
- Gross margin guidance
- Operating expenses guidance
- Tax rate guidance
- Share repurchases
- Dividend amount paid during Q2 2026
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.