WSP Global Inc. (TSE:WSP) announced strong performance in its fourth-quarter and full-year fiscal 2025 earnings call, highlighting significant organic growth, margin expansion, and record free cash flow. The company’s leadership, including President and Chief Executive Officer Alexandre L’Heureux, emphasized the successful execution of their three-year strategic plan, “Pioneering Change for Empowered Growth,” and the completion of key acquisitions, notably TRC and Power Engineers.
In the fourth quarter, organic net revenue growth reached 5.9%, adjusting for lower emergency response services in the U.S. and revisions to major Canadian projects. Michaud, the Chief Financial Officer, reported an adjusted EBITDA of CAD 694 million, reflecting a 9% increase year-over-year, with an adjusted EBITDA margin of 18.9%. For the entire fiscal year, adjusted EBITDA totaled CAD 2.5 billion, a substantial rise of 17%, with a margin improvement of 40 basis points compared to 2024.
A pivotal focus was the company’s cash flow performance, which reached a record CAD 1.7 billion for 2025. This free cash flow represented 180% of net earnings attributable to shareholders, while days sales outstanding (DSO) ended the year at a record low of 63 days.
Strategic Acquisitions Enhance Market Position
Over the past 15 months, WSP has invested approximately CAD 7 billion in the power and energy sector through its acquisitions of TRC and Power Engineers. L’Heureux characterized TRC as a “premier U.S. power and energy brand,” significantly enhancing WSP’s offerings across advisory, digital, and program management capabilities.
At the close of 2025, WSP’s net debt to adjusted EBITDA stood at 0.9x, bolstered by cash raised through common share issuance for TRC’s acquisition. Following the acquisition, the pro forma net debt to adjusted EBITDA was approximately 2.3x. The company also took steps to streamline its portfolio, divesting certain non-core businesses, including an underground storage operation in the U.S. and a rail business in Germany, which collectively accounted for about 1% of 2025 net revenue.
Looking ahead to 2026, Michaud provided guidance anticipating net revenue between USD 16 billion and USD 17 billion, marking an expected growth of over 18% at the midpoint. Adjusted EBITDA is projected to fall between USD 3.0 billion and USD 3.18 billion, with organic net revenue growth estimated at 4% to 7%.
Adapting to AI and Technological Advancements
During the earnings call, L’Heureux addressed concerns regarding the impact of artificial intelligence (AI) on professional services. He emphasized that WSP’s work is intricately linked to physical environments and regulatory compliance, asserting that AI serves as a tool to enhance productivity rather than replace human expertise. Over 60% of WSP’s projects are fixed-price, indicating a client demand for quality outcomes rather than solely lower costs.
The company is actively pursuing a partnership with Microsoft, focusing on deploying AI tools for staff and co-developing products to enhance service delivery. Chief Technology Officer Chadi Habib mentioned that two solutions are currently in production with four clients, with a general release planned for March.
In the question and answer segment, L’Heureux noted that digital capabilities are now a critical factor in evaluating mergers and acquisitions, citing TRC’s digital offerings as a significant opportunity for expansion within WSP’s global network.
These developments position WSP Global not only as a leader in engineering and design services but also as a proactive player in integrating advanced technologies into its operations. As the company looks towards 2026, the focus remains on leveraging its strategic acquisitions and technological advancements to drive growth and profitability.
