Bird Construction Q1 2025 slides: EBITDA soars 41% as margins expand

Introduction & Market Context

Bird Construction Inc . (TSX:BDT) released its Q1 2025 earnings presentation on May 14, 2025, showcasing significant margin expansion despite more moderate revenue growth. The company, which trades near $25.98 per share, reported continued momentum in its diversified construction and maintenance services business across Canada.

The results come amid Bird’s strategic focus on economically resilient sectors and lower-risk project delivery models, with over 90% of projects utilizing collaborative frameworks. The company’s stock has performed well, trading near its 52-week high of $32.67, supported by a healthy dividend yield of approximately 3.4%.

Quarterly Performance Highlights

Bird Construction reported revenue of $718 million for Q1 2025, representing a 4.0% increase compared to $688 million in the same period last year. While revenue growth was modest, the company delivered substantial improvement in profitability metrics.

Adjusted EBITDA surged 40.9% year-over-year to $34 million, with the adjusted EBITDA margin expanding to 4.8% from 3.5% in Q1 2024. Adjusted earnings increased by 14.5% to $13 million, resulting in adjusted earnings per share of $0.23 compared to $0.21 in the prior year.

As shown in the comprehensive financial summary below, net income declined 6.0% to $9.4 million ($0.17 per share), suggesting the presence of one-time charges or adjustments that impacted GAAP results.

Margin Expansion & Operational Excellence

Bird’s margin expansion has been a consistent trend over recent quarters, with trailing twelve-month adjusted EBITDA reaching $223 million at a 6.5% margin, compared to $147 million at a 5.0% margin for the twelve months ending Q1 2024.

The company attributed this improvement to broad-based margin enhancements across all business units and its strategic focus on lower-risk delivery models. The presentation highlighted that over 90% of projects are in lower-risk collaborative frameworks, contributing to more predictable performance.

The following chart illustrates Bird’s sustained EBITDA momentum over recent quarters:

Bird’s operational excellence is particularly evident in its execution of large capital investment projects. The company highlighted several major initiatives, including its role as a key construction subcontractor on the $5.1 billion Woodfibre LNG Project, which aims to be the world’s first net-zero LNG export facility. Other significant projects include work at Bruce and Darlington Nuclear Facilities, BHP Jansen Phase I, Dow’s Fort Saskatchewan Path2Zero Project, and the East Harbour Transit Hub Project.

Backlog Growth & Project Pipeline

Bird reported a record backlog of $4,328 million as of Q1 2025, representing a 16.4% increase from $3,458 million in Q1 2024. The company achieved approximately $1.3 billion in new contract securements during the quarter, resulting in an impressive 180% book-to-bill ratio.

The backlog growth reflects Bird’s success in securing projects across diverse sectors, with a compound annual growth rate of 18% in recent years. The company’s combined backlog (including pending backlog) demonstrates a sustained upward trajectory:

Bird’s strategic focus targets economically resilient sectors supported by long-term growth drivers. The company has identified significant market opportunities across infrastructure, buildings, and industrial sectors, with particular emphasis on areas like rail ($20B market), data centers ($15B), nuclear ($9B), and industrial maintenance ($10B).

Capital Allocation & Shareholder Returns

Bird Construction has maintained a disciplined approach to capital allocation, balancing investments in growth, acquisitions, and shareholder returns. Between 2022 and 2024, the company allocated 39% of capital to internal investments, 27% to acquisitions, and 34% to dividends.

The company has demonstrated strong cash flow generation capabilities, with trailing twelve-month free cash flow increasing to $63 million from $51 million a year earlier. This financial strength is supported by a healthy balance sheet with a current ratio of 1.27 and an adjusted net debt to TTM adjusted EBITDA ratio of just 0.71x.

The following chart illustrates Bird’s improving cash flow generation:

Bird currently pays a monthly dividend of $0.07 per share, representing a yield of approximately 3.4%. The company has targeted a long-term dividend payout ratio of 33% of net income over its 2025-2027 Strategic Plan period, signaling its commitment to returning capital to shareholders while maintaining financial flexibility for growth initiatives.

Forward-Looking Statements

Looking ahead, Bird Construction provided a positive outlook for 2025, though with some near-term moderation in growth. The company expects the majority of 2025 revenue growth to occur in the second half of the year, with lower growth continuing into Q2 2025.

For the full year, Bird anticipates organic revenue growth in line with its strategic targets and continued margin accretion. Earnings and adjusted EBITDA growth are expected to outpace revenue growth for the year, reflecting ongoing operational improvements and a focus on higher-margin work.

Bird’s 2025-2027 Strategic Plan targets annual revenue growth of 10% (±2%), an adjusted EBITDA margin of 8.0% for the full year 2027, and a dividend payout ratio of 33% of net income. These targets reflect management’s confidence in the company’s ability to continue its trajectory of profitable growth while maintaining financial discipline.

With a record combined backlog, significant expected conversions of pending backlog to backlog in Q2, and a solid foundation for growth supported by a healthy balance sheet and strong operating cash flow generation, Bird Construction appears well-positioned to deliver on its strategic objectives despite near-term growth moderation.

Full presentation:

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