Wsp Global ((TSE:WSP)) has held its Q4 earnings call. Read on for the main highlights of the call.
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WSP Global’s latest earnings call struck an upbeat tone, with management highlighting broad-based strength in revenue, profit and cash generation alongside record backlog and accelerating momentum in Power & Energy and digital solutions. While leverage has temporarily risen and some regions and acquisitions weigh on margins, executives stressed that fundamentals and growth prospects remain solidly positive.
Strong Revenue Growth
WSP reported a powerful top-line performance, with full-year revenue rising 13% to $18.0 billion and net revenue climbing 15% to $14.0 billion versus 2024. Management underscored that these results landed at the high end of guidance, reinforcing confidence in demand across core markets and the benefits of recent acquisitions.
Robust Profitability Expansion
Profitability moved ahead even faster than sales, as adjusted EBITDA increased 17% to $2.5 billion for the year and reached $694 million in Q4, up about 9% year over year. The adjusted EBITDA margin improved roughly 40 basis points to 18.3%, showing that operational discipline and mix improvements are offsetting integration and inflation pressures.
Record Free Cash Flow and Conversion
Cash generation was a standout, with record free cash flow of $1.7 billion in 2025, equal to about 180% of net earnings. Operating cash inflow reached $2.25 billion, up $865 million from 2024, giving WSP significant financial flexibility for debt reduction, investment and future shareholder returns.
Working Capital and Leverage Discipline
Management highlighted structural gains in working capital, as days sales outstanding fell to a record low 63 days, nine days better than a year ago. This efficiency supported strong cash flow and left net debt to EBITDA at roughly 0.9x before the TRC acquisition closed, underscoring conservative balance sheet management prior to recent deal activity.
Record Backlog and Strengthening Pipeline
Demand visibility improved, with backlog hitting a record $17 billion, up 10% over 12 months, and sub-backlog around $8 billion, 85% of it tied to master service agreements. Proposal activity is growing sharply, including about 15% pipeline growth in the U.S. and more than 50% globally, signaling strong future workload across key end markets.
Strategic M&A in Power & Energy
The company has invested about CAD 7 billion over 15 months in strategic deals such as TRC, POWER Engineers and Ricardo to build scale in Power & Energy. POWER Engineers in particular delivered mid-teens organic growth in 2025, validating WSP’s thesis that grid modernization and energy transition work are powerful long-term growth drivers.
Positive 2026 Financial Outlook
Management issued ambitious 2026 guidance, calling for net revenue of $16–17 billion, implying more than 18% total growth including acquisitions. Adjusted EBITDA is expected at $3.0–3.18 billion, roughly 21% growth versus 2024, with organic net revenue up 4–7%, indicating confidence in both underlying demand and integration progress.
Digital and AI Adoption Progress
WSP is leaning into digital transformation, with its ERP platform now covering about 80% of EBITDA and enabling better data and efficiency. The company also highlighted AI partnerships, including work with Microsoft, and said two proprietary AI-enabled solutions are already live with clients, with broader general availability planned.
Higher Pro-Forma Leverage from Deals
One trade-off of the acquisition strategy is higher leverage, as pro-forma net debt to adjusted EBITDA now stands near 2.3x following TRC and other deals. This sits above the company’s historical range, but management framed it as a deliberate, manageable step, supported by strong cash flow and a clear plan to delever over the next two years.
Short-Term Margin Drag from Acquisitions
Newly acquired businesses come in with lower margins, creating a near-term headwind even as they add scale and capabilities. Ricardo alone is expected to trim 2026 margins by about 15–20 basis points, and TRC operates slightly below WSP’s average, so margin expansion will be more gradual despite higher EBITDA.
APAC Region Still in Recovery Mode
The Asia-Pacific region lagged other geographies, with management noting only sequential improvements through 2025 rather than robust year-on-year growth. Guidance assumes APAC will be broadly stable versus 2025 in 2026, suggesting a slower, more gradual recovery compared with the Americas, Canada and EMEIA.
Q4 One-Offs Cloud Organic Growth
Quarterly comparables were affected by several one-time factors, including a much lower volume of emergency response work in the U.S. compared with the prior year. Revisions to significant Canadian projects in 2024 also distorted year-on-year figures, meaning the reported 5.9% Q4 organic growth needs to be interpreted against this lumpier backdrop.
Impact of Disposals and Discontinued Operations
WSP has been pruning its portfolio, and non-core disposals and discontinued operations reduced 2025 net revenue by about $150 million, roughly 1% of the total. Management cautioned that these actions will affect comparability and annualization, but they are meant to sharpen focus on higher-growth, higher-margin areas.
ERP Rollout and Integration Work Ahead
About 20% of EBITDA is still not on the new ERP system, including important regions such as Australia and New Zealand, Sweden, Central Europe and the newly acquired Ricardo. Bringing these units onto the platform in 2026 will require ongoing effort but is expected to unlock further efficiency, standardization and data-driven decision-making.
Guidance and Outlook
Looking ahead, WSP’s 2026 guidance points to net revenue of $16–17 billion and adjusted EBITDA of $3.0–3.18 billion, with around 40 basis points of margin expansion and 4–7% organic growth. Management expects strong free cash flow conversion well above 100% and plans to reduce net debt to EBITDA from about 2.3x to roughly 1.6–1.7x by the end of 2026, supported by record backlog and a growing pipeline.
WSP Global’s earnings call painted the picture of a company executing strongly on growth, cash generation and strategic repositioning despite higher leverage and a slower APAC recovery. For investors, the combination of record backlog, robust guidance and a clear path to deleveraging suggests the firm is well placed to capitalize on long-term infrastructure, energy transition and digital trends.