WSP Global (WSP) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered strong revenue and earnings growth, with net revenue organic growth of 3.7% (5.5% normalized for fewer US billable days) and robust project backlog.

• Integration of POWER Engineers contributed 11% organic growth and significant revenue synergies, with acquisition and integration costs impacting EBIT.

• Backlog reached a record $16.6 billion (CAD 16.6 billion), up 16.6% year-over-year and representing 11.3 months of revenues.

• Free cash flow improved by $241.1 million year-over-year, driven by working capital optimization and factoring arrangements.

• The company reaffirmed its 2025 financial outlook, citing robust margin improvement and strong organic growth profile.

Financial highlights

• Revenues grew 22% year-over-year to $4.39 billion; net revenues up 20% to $3.35 billion.

• Adjusted EBITDA increased 19.7% to $533.9 million, with a margin of 16%.

• Adjusted net earnings reached $229.1 million ($1.76 per share), up 18.2% year-over-year.

• Free cash inflow was $115.9 million for Q1, compared to an outflow of $125 million last year.

• Net debt to adjusted EBITDA ratio stood at 1.8x, or 1.7x including full-year EBITDA from acquisitions.

Outlook and guidance

• 2025 financial outlook reaffirmed, with expectations for margin improvement and compelling organic growth.

• Management expects North America to continue leading growth in 2025, with improving prospects in APAC and EMEA as backlog grows.

• Rightsizing and optimization costs in APAC and EMEA are included in the outlook, with no additional unplanned costs anticipated.

• Maintains a healthy pipeline of projects and expects continued positive market fundamentals.

• Backlog growth and project wins support confidence in future performance.