Earnings call transcript: Badger Infrastructure Q2 2025 sees revenue rise 11%

Badger Infrastructure Solutions Ltd. reported a notable performance in the second quarter of 2025, with revenue increasing by 11% year-over-year to $208.2 million. The company’s stock experienced a decline, dropping 4.14% to $52.09 following the earnings release. According to InvestingPro data, the stock has shown remarkable strength with a 52.79% year-to-date return, despite the recent pullback. The company appears undervalued based on InvestingPro’s Fair Value analysis, suggesting potential upside opportunity for investors.

Key Takeaways

• Revenue for Q2 2025 rose by 11% year-over-year.
• Adjusted earnings per share increased by 33% to $0.60.
• The stock price fell by 4.14% in response to the earnings call.
• Strong growth in data center and infrastructure project backlogs.

Company Performance

Badger Infrastructure Solutions showcased a strong performance in Q2 2025, driven by increased demand across various end markets, including data centers and infrastructure projects. The company reported a 6% growth in its hydrovac fleet compared to the same period last year, underlining its strategic focus on expanding its operational capabilities.

Financial Highlights

• Revenue: $208.2 million, up 11% year-over-year.
• Gross Profit Margin: 30.5%, an increase from 29.2% in the previous year.
• Adjusted EBITDA: Grew 18% year-over-year.
• Adjusted Earnings Per Share: $0.60, up 33% from the prior year.

Outlook & Guidance

Badger Infrastructure is targeting long-term revenue growth of 12-14% and aims to maintain its current growth trajectory. The company anticipates continued strong project activity in data centers and infrastructure, with a robust project backlog expected to support growth over the next two to three years. Trading at a P/E ratio of 26.14 and a PEG ratio of 1.24, detailed valuation metrics and comprehensive analysis are available in the Pro Research Report on InvestingPro, part of their coverage of over 1,400 US equities.

Executive Commentary

Rob Lacquadar, CEO, highlighted the company’s strategic positioning, stating, "Our goal is to be the supplier of choice in the critical infrastructure industry." CFO Rob Dawson added, "We will continue to step up in our margin and execute... Our adjusted EBITDA and earnings per share should continue to rise at rates that exceed our revenue growth."

Risks and Challenges

• Market Volatility: The recent stock price decline highlights potential investor concerns about market conditions.
• Supply Chain Disruptions: Ongoing global supply chain issues could impact manufacturing and delivery schedules.
• Competitive Pressure: Increasing competition in the non-destructive excavation sector may affect market share.

Q&A

During the earnings call, analysts focused on Badger’s fleet management strategy and opportunities in the data center market. The company also addressed questions about its NCIB (share buyback) program and pricing strategies across different markets.

Overall, Badger Infrastructure Solutions Ltd. delivered a strong quarter, with significant growth in key financial metrics. However, the stock’s decline suggests that investors may have had higher expectations or are cautious about future market conditions.

Full transcript - Badger Infrastructure Solutions Ltd (BDGI) Q2 2025:

Conference Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Badger Infrastructure Solutions Limited Second Quarter twenty twenty five Results Call. During the presentation, all participants will be in listen only mode. For those that have dialed into the audio portion of this call to ask a question during the live question and answer session, please press star one to raise your hand. Please wait for me to say your name and company before asking your question.

For those listening through the webcast, attendees will be in listen only mode. If you need technical assistance, please submit your request under the tech tab in the window on the right hand side of your computer screen. As a reminder, this event is being recorded today, 07/31/2025, and will be made available on the Investors section of Badger’s website. I would now like to turn the call over to Ann Plascherer, Director of Investor Relations.

Ann Plascherer, Director of Investor Relations, Badger Infrastructure Solutions: Good morning, everyone, and welcome to our second quarter twenty twenty five earnings call. Joining me on the call this morning are Badger’s President and CEO, Rob Lacquadar and our CFO, Rob Dawson. Badger’s twenty twenty five second quarter earnings release, MD and A and financial statements were released after market close yesterday and are available on the Investors section of Badger’s website and on SEDAR plus We are required to note that some of the statements made today may contain forward looking information. In fact, all statements made today, which are not statements of historical fact, are considered to be forward looking statements. We make these forward looking statements based on certain assumptions that we consider to be reasonable.

However, forward looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them as actual results may differ materially from those expressed or implied. For more information about material assumptions, risks and uncertainties that may be relevant to such forward looking statements, please refer to Badger’s 2024 MD and A along with the 2024 AIF. I will now turn the call over to Rob Lacketer.

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: Thank you, Anne. Good morning, everyone, and thank you for joining our twenty twenty five second quarter earnings call. Before we get into the results, I’d like to take a moment to talk about safety, which is how we start all of our meetings here at Badger. As we enter into the peak of the summer construction season, many of our team members and customers’ projects are experiencing extreme heat and humidity. At Badger, we manage these exposures with regular hydration, cooling off breaks, and job sharing rotations to ensure the safety and productivity of our team members.

I want to personally thank all of our team members and our customers for looking out for each other during these summer months. Now on to the second quarter results. Building on the positive momentum from Q1, the team delivered another strong quarter with double digit growth in revenue, gross profit and adjusted EBITDA. Our record Q2 top line revenue of $208,200,000 grew by 11% company wide over the prior year. We are now seeing the pickup in our end markets that we had discussed in q three and 2024.

Importantly, we have worked hard to put Badger in a position to capitalize on the pipeline of upcoming customer projects across all of our end markets. I will provide more detail and context on our diverse set of end markets later on in the call. Our positive results reflects reflect our efforts to increase utilization while continuing to grow our fleet. Our ongoing investments in sales and marketing initiatives, including consistent efforts to capture pricing opportunities, is also reflected in the results. Adjusted EBITDA grew at a faster pace than revenue, up 18 year over year.

These results highlight Badger’s strong operating efficiencies and the optimization of our overhead support functions. Accordingly, our adjusted EBITDA margin increased by a 140 basis points to 25.3%. We achieved RPT or revenue per truck per month of 41,867 in Q2, up 2.5% compared to last year. This improvement reflects our fleet utilization and pricing efforts. Our Red Deer manufacturing plant delivered 51 Hydrax this quarter versus 59 in 2024.

We retired 30 units in the quarter and 62 units year to date. We refurbished nine units in the quarter and eighteen year to date. Our full year 2025 fleet strategy remains on track to manufacture between one hundred and eighty and two hundred and ten hydrovacs, retire between 9,130 units, and refurbish between 50 to 60 trucks. I’d like to note that refurbs will likely be on the lower end of this range. Combined with the current fleet utilization, our targeted fleet growth of 4% to 7% ensures that we have the capacity needed to meet customer demand throughout 2025.

We ended the quarter with 1,682 hydrox in our fleet, growing our fleet by 6% since q two of last year. Also of note, we announced our intention to renew our NCIB with a TSX subject to customary approvals. I’ll now turn the call over to Rob Dawson to discuss our Q2 financial results in more detail.

Rob Dawson, CFO, Badger Infrastructure Solutions: Thanks, Rob. We’re pleased to report strong financial performance for the quarter that reflects the strengths of our business model and the focused execution of our teams. As Rob noted, we have continued to grow our bottom line at a higher rate than revenue, demonstrating our continued execution of our road map of building scalability at every level of our operations. Our gross profit margins increased to 30.5% compared with twenty nine point two percent last year. In addition to the continued advancement of our commercial and pricing strategies, steady improvements in the utilization of our fleet have also added to this profitability.

The trend in our adjusted EBITDA margins also continued to rise, up 140 basis points from 23.9% in the 2024. In particular, the addition of our fleet module and our universal data platform are beginning to show value in the management of our fleet and our labor. We are also maintaining discipline in our support functions and G and A spending. This margin expansion remains on track with Badger’s long term objectives. General and administrative expenses were $10,800,000 or 5% of revenue, in line with the $10,000,000 or 5% of revenue in the prior year.

And finally, adjusted earnings per share was $0.6 per share, up 33% compared to the prior year. Turning to the balance sheet. We have maintained a disciplined approach to capital management, preserving financial strength while supporting strategic investments and spending for organic growth. In that regard, our compliance leverage ended the quarter at 1.4x debt to EBITDA, down one point from the same period last year despite purchasing about $20,000,000 of Badger shares through our NCIB program over the past year. With our strong balance sheet, we have the financial flexibility to continue advancing our organic growth while also delivering shareholder returns through dividends and our NCIB program.

During the second quarter, we purchased and canceled 191,800 common shares at a weighted average price per share of $36.94 As Rob mentioned, we intend to renew this NCIB when our existing lending lapses in August. I will now turn things back over to Rob Lacadar for some final comments. Rob?

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: Thanks, Rob. So before we open it up for questions, I’d like to share a few last comments regarding our market outlook. You will recall in 2024, we experienced a deceleration in growth in some of our end markets. We shared our expectation of improving conditions anticipated in the back half of twenty twenty five. We are now seeing several projects getting underway, including data centers, large infrastructure improvements such as airports, airport construction, light rail transportation, and the continued expansion of large petrochemical and LNG facilities.

Supporting all of these trends is the increased demand for more power generation and transmission, including nuclear and natural gas fired. These projects are in addition to the continued maintenance and renewal of existing aged infrastructure in many of our more mature markets. Our focus continues to be making sure Badger is well positioned to support all of our customers’ local and national needs wherever they may be. The entire Badger’s team’s goal be the supplier choice, critical infrastructure industry. With our industry leading fleet, a broad branch network across 44 US states and six Canadian provinces, we believe Badger is well positioned to capitalize on these long term end market tailwinds.

We remain focused on executing our business strategies and delivering sustainable value for our shareholders. So with those comments, operator, I’ll I’ll turn the, call back over to you to field field some questions.

Conference Operator: Thank you, Rob. For those of you dialed into the audio portion of this call, to ask a question during the live question and answer session, please press star one to raise your hand. Please wait for me to say your name and company before asking your question. And so our first caller is Yuri Lynk from Canaccord Genuity. Go ahead, Yuri.

Yuri Lynk, Analyst, Canaccord Genuity: Good morning, Rob and Rob.

Ian Gillies, Analyst, Stifel: Good morning, Yuri.

Yuri Lynk, Analyst, Canaccord Genuity: Rob, just on your outlook and the projects that you’re seeing starting up here or, I guess, in progress, Can you talk about how that plays into your your full year build rate and retirement rate guidance? It it looks like on the retirements that you’ll have to kind of accelerate what you’ve done in the in the first half of the year to kinda get get at the the low end of the of that range, which seems kinda strange given, you know, the the demand pickup that you’re seeing. So I guess just net net, do you do you envision being at the lower end of that retirement guidance?

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: No. I I I actually feel like we’ll be in at the midpoint to the higher end of the retirement. We will continue on our build rate on the new trucks, But I don’t I don’t think we’re, we’re seeing any problems on the retirement end of it. And as you can tell, there’s good demand in the business. It’s not our desire at all to accelerate any retirements, but rather just have them kinda normal course when the when the truck’s at its end of useful life and it’s not a candidate for refurb, that’s when we flag it for retirement.

Some of our trucks, if you remember, Yuri, during COVID period, few years back, 2020, a little bit in ’21, business was slower than we didn’t put as many hours on it. So we’ve actually been able to get a little bit longer life out of those trucks. But now that’s kind of at the end of the course of those kind of extended trucks there. But it’s not our desire to accelerate any retirements, especially in a high demand, type environment we’re in right now. The only kind of, hiccup, and I and I mentioned it during my comments, but, really is on our refurbs, and it’s it’s strictly tied to we’re using some third parties to do our refurbs, and they’re doing a very good job.

Very happy with the refurbs that are coming out. They’re just not able to keep up with, our level of demand on that so far. And that that’s why we’re we’re kinda sharing that. We’ll probably be on the lower end of those refurbs. I don’t know if you wanna add anything, Rob.

Rob Dawson, CFO, Badger Infrastructure Solutions: No, Yuri. I think in addition to Rob’s comments, would add, you know, on a total fleet management basis, you know, we’ll we’re still targeting into that, you know, the basic of our plan. You know, our revenue and results are are generally in line with what we expected, you know, at the beginning of the year. And so our fleet our fleet plan hasn’t changed, you know, in in total very much at all. In fact, if anything and the and the first half results really show this utilization targets.

You would recall last year, our utilization, we had indicated, had fallen off somewhat and that there was some latent capacity in our existing fleet at the start of the year. We’re using our new data tool and our fleet management system to very good effect, and we’re really getting good good improvement in utilization of the existing fleet. So we feel we can absorb, you know, even even the higher growth rates without having to flex up on the truck build.

Yuri Lynk, Analyst, Canaccord Genuity: Okay. Thanks for that. Second and last question. On data centers, lots of talk about it. Can you quantify at all what that segment means for for Badger in terms of, you know, how big of a business is that for you today?

And what do you see coming down the pipe in in terms of data center activity? And on those jobs, you know, the the nature of your work, in terms of, you know, duration, are they relatively short duration projects? Or, I guess, some of the bigger ones, are you are you on there for a few weeks, months? Like, just just some color would be would be helpful.

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: Sure. So the the unique nature of the data center projects is probably one of the reasons why we pointed out, and I know that seems to be a topic on a lot of the industrials calls or data center projects. For us in particular, though, and and I mentioned this these these words in particular because it’s what we do, but they really are viewed as a critical infrastructure type project. Meaning, any of the utilities going into and out of the data centers. And and a lot of people always hear a buzz about the power requirements for data centers, Yuri.

But there’s something that is equally as important, and that’s actually water and the water cooling that has to get brought in to these facilities. And we just feel that that our technology being nondestructive excavation and badger trucks in particular, we’re just uniquely positioned for that. Right now, data centers are actually tracking around the same range, maybe even slightly higher than what we’re doing in oil and gas across the company. I’m not gonna give the exact percentage, but it’s pretty strong. The backlog of data center work, is pretty strong as well.

And, just like, every one of the investors and analysts that are listening to the call, you know, we track a lot of the data center owners’ calls as well and what they’re forecasting for their CapEx, etcetera. And it looks to continue to be strong for the next, I’d say, two to three years. And so we’re pretty enthusiastic in leaning into it. We just feel like this is a very unique, time for us to be able to capture, something that is in its initial phases of its, build out comp company wide and also nationwide. The other aspect of it, though, and to kinda give you the perspective, Yuri, of how Badger fits into a data center project, once a single utility gets brought into the data center project, where Badger starts.

And so it could be water, it could be power, electricity, it could be, any kind of a fiber line or anything that gets brought into a data center site. That’s when all of a sudden the site becomes very sensitive to not having mechanical excavation continue because you just don’t wanna do any damage and delay that project. There’s a lot of commitments that are made with these multibillion dollar projects, a lot of money at risk here, but they wanna get them online and functioning ASAP. And that’s the one thing that happens when you use a hydrovac. They’re very like, extremely low likelihood of any damage to infrastructure.

And, that’s why we think we’re uniquely positioned, Badger and and the whole industry is. And so we’re we’re pretty excited about it. But, obviously, that’s not our only focus. We do a lot in nonres construction. There’s a lot of other very sensitive type projects if you think in terms of, other grid hardening, think in terms of LNG plants, all of those are very sensitive infrastructure projects as well.

But data centers in particular seem to be the the topic of the day. But, yeah, that that’s our perspective on that, Yuri.

Yuri Lynk, Analyst, Canaccord Genuity: Okay. Very helpful, guys. I’ll turn it over, and congrats on another good quarter.

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: Thank

Conference Operator: you. Your next question comes from Ian Gillies at Stifel. Go ahead, Ian.

Ian Gillies, Analyst, Stifel: Good morning, everyone. Good morning, Ian. In the second quarter, you saw a very strong lift in year over year revenue growth. When I think about the back half of the year, is there is there potential to get back into that revenue growth range that was prescribed at the Investor Day, which was 12% to 14%? Or is that still a little further away, do you think?

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: We we put that out as our long range target, and we feel that way about it, even now. And, so, yes, we had improvement on our revenue growth rate q one, over q one, and happy to have posted an 11%, gain. But, it’s still early days as a lot of these projects and everything are ramping up, And, it’s Badger’s take is to just make sure we’re in a position to earn and win and execute on those projects, Ian. We’re not, at this point, ready to say we are, you know, gonna be either well well within or higher than that long range plan. But certainly, we we’ve made progress this quarter, and we’re marching toward it here in the month of July and and starting into q three here.

But I wouldn’t start taking up a bunch of numbers at this point from my perspective. And Rob, if you want to add anything.

Rob Dawson, CFO, Badger Infrastructure Solutions: Yes. Would just reiterate what Rob just said that the growth rate that we are experiencing in Q2, which is a great step up. And on a trailing twelve month basis, you know, the deceleration in our growth rate bottomed out in about February and is is now back to, you know, in that low double digits that you saw this quarter. You know, we we think the the current rate of growth is probably what we’re seeing for now.

Ian Gillies, Analyst, Stifel: Yeah. That that that’s helpful. As it pertains, to some of the margin progression, you did a good job highlighting some of the technology initiatives in Yuri’s question. But but is there anything operational or or perhaps even analog you could point to, whether it be adding scale in key regions, putting new basis in key regions, or things of that nature that are worth highlighting as, the ways you’ve been improving the margin?

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: Yeah. So, we we look at it at it, on, the margin improvement a couple of ways. Number one, as we’re growing the business and continue to grow the business and improve the top line, it’s what can we do to drive the efficiency. And Rob, is the biggest driver and cheerleader Rob Dawson, biggest driver and cheerleader of this in the company is, what are you doing on your flow through? And what are we working on our flow through at all of our regional?

We have regional meetings every quarter, and we bring in all the the team leaders. And and Rob and I are on the road a bunch, out in the business. And what are we doing on our flow through? And it it really is, making sure that all the hard work that everyone’s doing to grow the top line makes it through to the bottom, and that really is keeping the cost under control, and not letting the cost, scale at the same rate that the revenue is going up. A lot of that is both in branch local costs or operating cost at the branch level.

But even in our corporate functions and, you know, Ian, you’ve watched some of our journey, but while the business has scaled a lot in the last three years, we have not scaled up that overhead functions in the g and a. And and both Rob and myself are very guarded on that. We’re trying to use and leverage technology rather than just throwing bodies at it. And I think that really has helped us to achieve some of

Rob Dawson, CFO, Badger Infrastructure Solutions: the margin growth and anything you wanna add on that, Rob. I just think the availability of this data tool now gives us real time ability to measure measure in a very specific way, labor rates, labor utilization, you know, M and R rates. And once you can measure things, you can set targets and then set expectations. And then the competition amongst all the different regions and branch managers starts to take hold, and the culture starts to drive on this as well. So it’s nothing too fancy.

It’s just very simple, but doing those simple things better and better every hour.

Ian Gillies, Analyst, Stifel: Understood. And last one for me. I was hoping, to address the NCIB. It obviously hasn’t been active, so far this quarter. It slowed down a little bit in q two.

With the move in the share price, should we view that as, that you won’t be active with where the share price is? Or is there other items that are going on there that might have precluded you from using it?

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: Cover that. You

Rob Dawson, CFO, Badger Infrastructure Solutions: know, with the the share price rising as as much and as fast as it did, you know, we did we did pause our NCIB program, and we’ve been discussing with our board on the conditions under which we would we would start buying shares again. You know, we think at the moment, I think you shouldn’t expect there to be a lot of large purchasing at the moment, but we do, you know, we do plan to put it back in place, the NCIB program, and see it as almost an evergreen program. And we’ll always be ready to buy shares with the, you know, ample capacity we have on our balance sheet if we see good Right. As presented. Right.

And and

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: to clarify, Ian, when Rob said we paused it, he means, like, we just paused the purchasing. But, certainly, it’s in place. You have to remember, and Rob and I were chatting about this at an investor conference, let’s say, six or eight weeks ago. But when that was put in place last August, we were at a fifty two week low. And now the company has been trading in that fifty two week high range.

And so but we very much have a desire to keep it in place. We’ll renew it, or apply to renew it here shortly. And when that gets completed, as we expect it will, we’ll, do a press release on that. And if it if the shares get in a position where we’re ready to start buying, we will certainly we have ample capacity to do that, as Rob suggested. So hopefully, that clarifies that, Ian.

Ian Gillies, Analyst, Stifel: No. That’s very helpful. Thanks very much. I’ll turn

Rob Dawson, CFO, Badger Infrastructure Solutions: it back over. Thanks, bud.

Conference Operator: Our next caller is Krista Friesen from CIBC. Go ahead, Krista.

Krista Friesen, Analyst, CIBC: Hi. Thanks for taking my question. Maybe if we can just talk a little bit more on the data tool. So has that been fully rolled out at this point? And maybe do you expect to see additional operating leverage from this tool throughout the remainder of the year?

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: Yes. The we are have branded it the Badger Analytics pat platform or BAP, but it basically is our analytics platform that can identify where there’s opportunities in the business for improvement, whether that be, as Rob suggested a bit ago, a labor opportunity. Because remember, we’re a very labor and asset intensive business. But if we can have better labor management, better labor efficiency, the platform is starting to identify where we have areas of opportunity. And and so far, it’s it’s working wonderfully.

Very pleased with it. And company wide, it is rolled out. But I’ll also share on the asset side, we have integrated that and been integrating it pretty diligently with our new fleetio system. And so Rob mentioned this a bit ago, but our maintenance and repair or M and R, we’re starting to see opportunities with that, Christa. And that is where we can start to leverage our spend, start to work on some purchasing programs with certain vendors, and consolidate certain vendors.

And that’s helping drive efficiency. And we’re getting that through that badger analytics platform, which is integrated with the Flideo system. So it’s it’s kind of a a flywheel that was slow to get started, but as the flywheel’s been moving, now it’s underway, and we should continue to get some momentum out of that. And we’re pretty enthusiastic about it. So anything you wanna add, Rob, on the data?

Rob Dawson, CFO, Badger Infrastructure Solutions: I think your overall question is would we expect to see continued margin improvement directly from that data data tool? I think that data tool is just one of the one of the, the ways by which, you know, we’re going to be able to measure and drive certain initiatives. But we do have a very good road map of initiatives that we continue to see opportunities for in to improve margin over the next few years just as we’ve guided to. So the answer is yes. We will continue to step up in our margin and execute and execute as we will.

Our adjusted EBITDA and earnings per share should continue to rise at rates that exceed our revenue growth.

Krista Friesen, Analyst, CIBC: Okay. Great. And then maybe if you can just talk about more broadly the pricing that you’re seeing in the market right now and if there’s any any kind of geographic pockets of of weakness or strength there.

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: Yeah. So, Christa, we’re we’re seeing kinda continued pricing opportunities certainly, in markets that’s where there’s solid demand and especially in the summer season, you we’re we’re seeing and we’re working toward capturing those pricing opportunities, You know, obviously, for competitive reasons, and we have competitors who listen to the call as well as investors and analysts. We’re we’re not gonna name out, okay, this one market has really strong pricing, and this one area has weaker pricing. But our our desire, our strategy, and from the moment we really started putting our our energy and efforts toward our pricing process and programs, and we built our pricing, tool called the CPQ, configure price quote tool, for Badger. Really focused it on being a dynamic pricing tool rather than a fixed static type pricing tool.

The pricing is actually done at the local and regional levels. It is not done out of the corporate office, but we have a lot of training, a lot of development on those on those systems and strategies, and we talk through we do sales training and negotiation training for our sales reps, etcetera. If you if you have you know, from your perspective, Chris, if we’re trying to figure out, okay, where might the pricing opportunities be, you can just start to look at where some of the highest demand areas are, where the largest construction projects, construction demand, maybe even some of the data center projects, etcetera, you’ll start to see pricing opportunities. And then there are pockets a a only a few, but there are pockets where there’s not as much demand, and that’s where you might see some, pricing softness. But even, where we have, pricing that’s not as strong as other more you know, the higher demand markets, it’s still pretty solid pricing.

Like, we’re not seeing it, go negative. I’m not aware of it really going negative in any market right now, so pretty encouraging. So

Krista Friesen, Analyst, CIBC: Thanks. I’ll, I’ll jump back in the queue.

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: Thanks, Krista.

Conference Operator: And our next question is from Sean Jack at Raymond James. Go ahead, Sean.

Rob Dawson, CFO, Badger Infrastructure Solutions: Hey. Morning, guys. Morning, guys. So happy to hear that many of these large projects are now getting moving. Wondering how that affects the sales mix on a national accounts versus small jobs basis in the short term.

And also just wondering, should we expect any, like, higher margin accretion from stronger utilization from that?

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: I’ll I’ll cover the first part. Rob can talk a little bit about the margin and the margin accretion. The the mix is actually it’s probably the most balanced since we launched the national accounts program right now. So we have good demand in many of our national account customers. Some of them are tied to some of the projects I named earlier.

But a lot of those national accounts are actually doing just standard infrastructure type projects. Think in terms of bridges, think in terms of some of the grid hardening I I talked about earlier. But just general nonres construction, nonresidential construction, there there’s just solid demand. But right now, as the company continues forward and we’re growing, we’re seeing probably the most balanced level between national accounts and local accounts since we launched the national accounts program. That’s encouraging for us.

We are not looking to have national accounts be the only part of the business, but we also don’t want local accounts to dominate as well. A good mix has us a lot more diversified than if we were heavy on one side or the other. Because think in terms of the national accounts, they are more concentrated spend into less number of customers. But, obviously, with a more concentrated spend, you know, it it, has probably a little bit more aggressive pricing. And, so that that’s where how we kinda view it is we like a good balance between local and national.

And right now, we’re we’re achieving that. So if you wanna talk a little bit about the margins.

Rob Dawson, CFO, Badger Infrastructure Solutions: On the margin side, it it’s very project specific. But I would say given what Rob just said about the the relative balance between local work, say, and national accounts work, you know, I don’t think that mix being well, I’ll restate that. The fact that that mix is relatively stable means that, you know, good margins from this project work because we get really high utilization. But it isn’t it isn’t driving in in, you know, any of the improvements. It’s more our management of labor and the operating leverage we have in the business overall that’s driving the margin improve.

Okay. Perfect. That’s great color, guys. That’s all for me. Thanks.

And

Conference Operator: that’s all the callers we have in the queue at this moment. I’ll turn it back over to you.

Rob Lacquadar, President and CEO, Badger Infrastructure Solutions: Thank you, operator. So on behalf of all of us here at Badger, we wanna thank our customers and our employees, suppliers, and shareholders for your ongoing support that drives Badger’s success. Operator, you may now end the call.

Conference Operator: Thank you. This concludes today’s event. Thank you for your time and participation today.

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