WSP Global (TSE:WSP) showcased robust financial performance during its fourth-quarter earnings call for the fiscal year 2025, reporting significant organic growth, margin expansion, and a record generation of free cash flow. The company’s leadership addressed investor inquiries regarding the impact of artificial intelligence (AI) on its business model, emphasizing a proactive approach to integrating technology rather than viewing it as a substitute for professional engineering services.
2025 Performance Highlights
President and CEO Alexandre L’Heureux characterized 2025 as a year of “strong execution,” aligned with the company’s strategic plan, “Pioneering Change for Empowered Growth.” He noted that the company successfully completed several strategic acquisitions, including TRC and Ricardo, which have enhanced its capabilities in key sectors. Fourth-quarter organic net revenue growth reached 5.9%, excluding the effects of reduced emergency response services in the United States and adjustments to significant projects in Canada.
Michaud, the company’s Chief Financial Officer, reported an adjusted EBITDA of CAD 694 million for Q4, reflecting a year-over-year increase of approximately 9%. The adjusted EBITDA margin improved slightly to 18.9% from 18.7% in the same quarter of 2024. For the entire fiscal year, adjusted EBITDA totaled CAD 2.5 billion, marking a 17% increase from the previous year and an adjusted EBITDA margin of 18.3%, representing an improvement of around 40 basis points.
A significant achievement highlighted during the call was the record free cash flow of CAD 1.7 billion for 2025, which accounted for 180% of net earnings attributable to shareholders. The company also achieved a record low in days sales outstanding (DSO), finishing the year at 63 days.
Strategic Acquisitions and Portfolio Actions
WSP has invested approximately CAD 7 billion over the past 15 months to enhance its presence in the power and energy sector through the acquisitions of TRC and Power Engineers. L’Heureux described TRC as a leading U.S. power and energy firm with about 8,000 professionals, emphasizing that this acquisition broadens WSP’s service offerings across advisory, digital, and program management capabilities.
Michaud noted that the company’s net debt to adjusted EBITDA ratio was 0.9x at the end of 2025, reflecting cash raised through a common share issuance to partially fund the TRC acquisition. Following the acquisition’s completion, he mentioned that the pro forma net debt to adjusted EBITDA ratio stood at approximately 2.3x.
Additionally, WSP disposed of certain non-core businesses, including an underground storage operation in the U.S. and a rail business in Germany, which represented about 1% of 2025 net revenue.
Outlook for 2026
Looking ahead, Michaud provided a positive outlook for 2026, anticipating net revenue between USD 16 billion and 17 billion, indicating total net revenue growth exceeding 18% at the midpoint. He projected adjusted EBITDA between CAD 3.0 billion and 3.18 billion, with organic net revenue growth expected to be between 4% and 7%.
The company forecasts regional growth, with mid- to high-single-digit organic growth anticipated in Canada and the Americas, mid-single-digit growth in EMEA, and stable net revenue in the Asia-Pacific region. For the first quarter of 2026, WSP estimates net revenue between CAD 3.575 billion and 3.775 billion, with adjusted EBITDA projected at CAD 590 million to 630 million.
Michaud also highlighted that the company is targeting “far beyond” 100% free cash flow conversion, with expectations of ending 2026 with leverage around 1.6x to 1.7x. He noted improvements in working capital driven by the implementation of an Enterprise Resource Planning (ERP) system, which now encompasses about 80% of WSP’s EBITDA.
Acknowledging AI’s Role in Future Operations
Addressing concerns regarding AI, L’Heureux emphasized that WSP views AI as a tool to enhance productivity rather than replace the critical human elements of engineering and accountability. He stated that more than 60% of WSP’s projects operate on a fixed-price basis, indicating a shift in client expectations towards solutions and outcomes rather than just cost reductions.
The partnership with Microsoft, initiated approximately a year ago, aims to deploy AI tools for frontline staff and support Microsoft’s data center objectives. Chief Technology Officer Chadi Habib reported progress with two AI solutions now in production and targeting a general availability release in March.
In response to questions about AI’s influence on mergers and acquisitions, L’Heureux remarked that digital capabilities are increasingly scrutinized during due diligence processes, pointing to TRC’s substantial digital offerings as a valuable asset.
WSP Global Inc. continues to provide a range of engineering and design services across various sectors, including Transportation & Infrastructure, Property and Buildings, Environment, Power and Energy, Resources, and Industry. The company operates through multiple regional segments, including Canada, the Americas, EMEIA, and APAC.
