ADF Group Inc.

Revenue for Q2 ended July 31, 2026 was $95 million, up $42 million year over year; year-to-date revenue was $194.3 million versus $108.5 million last year. Gross margin was 18.7% in the quarter, down from 20.7% a year ago, while year-to-date gross margin was 21.5% versus 21.3%. Adjusted EBITDA was $8.4 million versus $3.7 million last year in Q2, and year to date it was $26.9 million versus $14.1 million. Net income was $3 million, or $0.10 per share, compared with $0.9 million, or $0.03 per share, last year; year-to-date net income was $15 million, or $0.52 per share, versus $9.6 million, or $0.34 per share. Cash and cash equivalents were $91.4 million and working capital was $109.5 million; operating cash flow year to date was $47.1 million. Management said full-year CapEx is now expected to be just over $40 million, including just over USD 10 million for Great Falls, and backlog reached a record $693.7 million, including Groupe LAR’s $243.3 million.

The lead executive emphasized resilience and said the quarter should be viewed through the lens of strong fundamentals rather than one-time accounting noise. He pointed to record backlog, better geographic diversification, and a strong balance sheet as the foundation for continued growth. He also said the company is investing to expand capacity at Groupe LAR and Great Falls and that these projects are on time and on budget.

He highlighted that Q2 results were affected by noncash share-unit mark-to-market costs tied to the stock price move and by FX losses, which reduced earnings by $4.3 million and $1.8 million in the quarter, respectively. He also said the $25 million cash inflow from the Groupe LAR claim settlement boosted the quarter-end cash balance to $91.4 million, with operating cash flow at $47.1 million year to date. On margins, he said the year-to-date 21.5% gross margin is a useful benchmark, though legacy Groupe LAR backlog and tariff-related input costs, including steel, are still weighing on near-term profitability.

Analysts focused on backlog mix, normalized gross margin, CapEx execution, and SG&A trends. Management said Canadian content was 64% of backlog, down from 72% at Q1 because of late-June U.S. project additions, and reiterated that a roughly 50/50 mix would be better while still being comfortable with the current level. On margins, management said Q2 was not a clean read because of moving pieces, but year-to-date margins likely approximate what to expect, with potential improvement in Q3 and Q4 as legacy backlog is completed; on CapEx, it said Groupe LAR is on time and on budget and Great Falls expansion has begun.