Aecon Group (TSE:ARE) reported record third-quarter revenue and backlog for 2026, citing broad-based growth across its construction businesses, a large nuclear contract award and continued expansion in recurring utility-services revenue.
For the three months ended Sept. 30, Aecon posted revenue of C$1.9 billion, up 26% from a year earlier. Adjusted EBITDA rose 40% to C$130 million, while operating profit increased to C$83 million from C$61 million in the prior-year period. Adjusted diluted earnings per share were C$0.86, compared with C$0.49 a year earlier.
“Aecon delivered record quarterly revenue of C$1.9 billion,” Senior Vice President of Corporate Development and Investor Relations Adam Borgatti said, adding that 71% of quarterly revenue growth was organic.
Record Backlog Led by Nuclear Award
Aecon ended the quarter with backlog of C$14.6 billion, a 39% increase from the prior quarter and the highest backlog reported in the company’s history. The figure compared with C$10.8 billion a year earlier. Aecon booked C$6 billion in new contract awards during the quarter and C$10.1 billion over the trailing 12 months.
The backlog increase included Aecon’s C$1.75 billion share of contracts and joint ventures associated with the execution phase of the Pickering Nuclear Generating Station refurbishment. Aecon said the award, which had an aggregate value of C$3 billion, was the largest nuclear award in its history.
About two-thirds of backlog extends beyond the next 12 months, with roughly 40%, or C$6 billion, extending beyond 24 months, President and CEO Jean-Louis Servranckx said. He also pointed to a pipeline of projects in development or collaborative delivery phases that have not yet been reflected in reported backlog.
Those opportunities include future refurbishment work at Pickering units 6, 7 and 8; potential additional units at the Darlington small modular reactor project; the Cascade Advanced Energy Facility SMR; the Mactaquac Life Extension Project; Roberts Bank Terminal 2; Arctic Over-the-Horizon Radar Stage 1; and further work under the GO Expansion Program.
Construction Growth Across All Sectors
Construction revenue totaled C$1.9 billion in the third quarter, up C$410 million, or 27%, from the previous year. The company said growth was broad-based across all of its operating sectors.
- Utilities revenue increased C$184 million, supported by electrical, gas and telecommunications activity, including contributions from acquisitions completed in the first quarter.
- Nuclear revenue rose C$130 million, reflecting higher volumes of refurbishment, decommissioning and engineering-services work in Ontario and the United States.
- Civil revenue increased C$45 million, led by power, rail and foundation work, partly offset by lower highway, road and bridge activity.
- Industrial revenue rose C$42 million, largely due to U.S. field-construction work and businesses acquired in the third quarter of 2025.
- Urban transportation solutions revenue increased C$9 million as subway and commuter-rail activity offset lower light-rail project volumes.
Construction adjusted EBITDA increased to C$132 million from C$88 million a year earlier, and segment margin rose to 6.8% from 5.8%. Chief Financial Officer Jerome Julier attributed the improvement primarily to stronger gross-profit margins in civil and nuclear operations.
Third-quarter results included C$9 million of negative gross profit from legacy projects. Julier said the final legacy project reached substantial completion in June and began operations in July, while Aecon and its joint-operation partners continue to pursue a commercial resolution.
Management emphasized that the company’s contract mix has shifted toward lower-risk work. At Sept. 30, 64% of backlog consisted of variable-price work, including cost-plus and unit-price contracts. Of the remaining fixed-price backlog, close to half had been awarded after collaborative and integrated development phases.
Overall, about 81% of Aecon’s backlog was tied to collaborative or non-fixed-price contract structures. Servranckx said the mix should support more predictable results as backlog converts to revenue.
Utilities and Concessions Strategy
Recurring revenue over the trailing 12 months exceeded C$1.1 billion, including C$987 million from utility services, up 42% from C$695 million a year earlier. Aecon said its master service agreement programs have a weighted average term of about three years and a renewal rate near 100%.
Servranckx described Aecon Utilities as an important growth platform with capabilities in power, transit electrification, battery storage, data-center electrical infrastructure, airports and nuclear development. He said the company expects utility-services recurring revenue to remain an important contributor beyond reported backlog.
The company also launched Maple Fibre, a majority-controlled strategic alliance with a Tier-1 telecommunications operator to finance, design, build and own next-generation network infrastructure. Aecon Utilities has begun construction work for the partnership in Ontario.
Concessions adjusted EBITDA was C$12 million, down from C$15 million a year earlier, primarily because of deferred intercompany construction profit on network assets under development.
Cash Flow, Fabrication Expansion and Outlook
Aecon reported trailing-12-month free cash flow of C$645 million, compared with negative C$41 million in the comparable prior-year period. The company attributed the improvement to working-capital management and contract structure.
At quarter-end, Aecon had C$529 million of core cash and cash equivalents, in addition to C$537 million representing its proportionate share of cash held in joint operations. Net debt was C$338 million, and net debt to trailing-12-month adjusted EBITDA stood at 1x.
The company also plans to acquire additional nuclear fabrication capacity in Ontario, with closing expected in the fourth quarter. Julier said the investment is expected to be around C$50 million and would increase Aecon’s fabrication footprint, alongside existing facilities in Canada and the United States.
Aecon reaffirmed its expectation for double-digit revenue growth in 2026 and said it anticipates further revenue growth in 2027. Management said the outlook is supported by backlog, recurring programs, recent acquisitions and opportunities in nuclear and conventional power, resource development, transit, water, defense and digital infrastructure.
“Our focus is on stabilizing and gradually improving margins,” Servranckx said, pointing to the company’s lower-risk contract mix, operational execution and the wind-down of legacy project exposure.
About Aecon Group (TSE:ARE)
Aecon Group Inc (TSX: ARE) is a North American construction and infrastructure development company with global experience. Aecon delivers integrated solutions to private and public-sector clients through its Construction segment in the Civil, Urban Transportation, Nuclear, Utility and Industrial sectors, and provides project development, financing, investment, management, and operations and maintenance services through its Concessions segment.
