Bullish indicating open at $55-$60, IPO prices at $37
AtkinsRéalis Group Inc (ATRL) reported strong second-quarter results on August 7, 2025, with total revenue increasing 15% year-over-year to $2.71 billion, driven by exceptional performance in its nuclear segment and solid organic growth across most business units.
Quarterly Performance Highlights
The engineering and construction firm delivered impressive financial results, with AtkinsRéalis Services revenue growing 15% (9% on organic basis) compared to Q2 2024. Segment Adjusted EBIT increased 18% to $246 million, while the company’s backlog reached a record high of $20.94 billion as of June 30, 2025, up 32% from the previous year.
As shown in the following quarterly highlights slide, the company completed several strategic initiatives during the quarter, including the sale of its remaining interest in Highway 407 ETR for approximately $2.6 billion and the acquisition of a majority stake in David Evans:
"We had a strong second quarter with solid organic revenue growth and a record-high backlog," noted the company in its presentation conclusion. "There is continued strong demand for Engineering Services and Nuclear."
The company’s backlog has shown consistent growth over the past year, increasing from $15.62 billion in June 2024 to $20.77 billion by June 2025, representing a 33% increase. This growth provides significant revenue visibility for future periods.
As illustrated in the following backlog chart, Q2 bookings included several major projects such as an execution contract for the first of four planned SMR units in Darlington and design services for the Hong Kong-Shenzhen Western Rail Link:
Segment Performance Analysis
The standout performer for the quarter was the Nuclear segment, which saw revenue surge 59% year-over-year to $567 million, with organic revenue growth of 56%. The segment’s backlog more than tripled, increasing 223% to $5.65 billion. Segment Adjusted EBITDA rose to $69 million, with the EBITDA to Net Revenue ratio improving from 21.8% to 25.4%.
The following chart highlights the exceptional performance of the Nuclear segment:
The Nuclear segment’s strong performance was supported by several key wins, including a $450 million execution contract from Ontario Power Generation (HM:PGV) for the first of four planned SMR units at the Darlington project. The company also expanded its strategic partnership with France’s EDF (EPA:EDF) through a nuclear collaboration agreement.
Regional performance was mixed across the Engineering Services segments. The UK and Ireland (UKI) segment saw revenue increase 11% to $534 million, with organic growth of 5%. The US and Latin America (USLA) segment posted an 18% revenue increase to $397 million, though organic revenue contracted 3%. Canada experienced a slight revenue decline of 2% to $366 million, while the Asia-Middle East-Africa (AMEA) segment saw revenue decrease 8% to $188 million.
Strategic Financial Initiatives
AtkinsRéalis significantly strengthened its balance sheet during the quarter through several strategic initiatives. The company completed the sale of its remaining interest in Highway 407 ETR for approximately $2.6 billion in the first half of June 2025, allowing it to reduce debt and return capital to shareholders.
As of June 30, 2025, the company reported cash and cash equivalents of $953 million and total recourse debt of $695 million, with $1.6 billion available on its revolving credit facility. The Net Limited Recourse & Recourse Debt to Adjusted EBITDA Ratio improved dramatically from 1.1x in June 2024 to (0.3)x in June 2025.
The following capital allocation status update illustrates the company’s strengthened financial position:
The company has been actively returning capital to shareholders, buying back approximately 9 million shares for $791 million year-to-date while paying $7 million in dividends. These actions align with the company’s capital allocation framework, which focuses on maintaining a strong balance sheet, investing in the business, and returning capital to shareholders.
Revised Outlook and Guidance
Despite the strong quarterly performance, AtkinsRéalis revised its 2025 outlook for Engineering Services Regions, lowering organic revenue growth expectations to mid-single digits from the previous 7-9% range. However, the company raised its Nuclear segment revenue outlook to $2.0-2.1 billion from the previous $1.9-2.0 billion.
The revised guidance reflects the company’s assessment of market conditions and project timelines, as shown in the following outlook slide:
Looking further ahead, AtkinsRéalis maintained its 2025-2027 financial targets, including an organic revenue growth CAGR of over 8% for Engineering Services Regions and Nuclear annual revenue of $2.2-2.5 billion by 2027. The company also targets a segment adjusted EBITDA to net revenue ratio of 17-18% for Engineering Services by 2027.
The CANDU® nuclear technology continues to be a significant growth driver for the company, with a robust pipeline of life extension projects and potential new builds in Ontario, Alberta, and other regions. The company’s nuclear backlog has grown from $3.2 billion in 2024 to $5.6 billion as of June 30, 2025.
As illustrated in this strategic roadmap for nuclear revenue:
AtkinsRéalis appears well-positioned to capitalize on growing global demand for nuclear power as countries seek to reduce carbon emissions while ensuring energy security. The company’s strong backlog, improved financial position, and strategic focus on high-growth segments suggest positive momentum heading into the second half of 2025, despite the tempered outlook for Engineering Services growth.
Full presentation:
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.