WSP Global (TSE:WSP) announced a robust performance during its fourth-quarter earnings call for fiscal year 2025, showcasing significant organic growth, margin enhancement, and record cash generation. The company’s executives addressed investor inquiries regarding the implications of artificial intelligence (AI) on its operations, emphasizing the technology’s role as a productivity enhancer rather than a replacement for professional services.
President and CEO Alexandre L’Heureux highlighted the conclusion of a year marked by “strong execution,” referencing the company’s strategic plan, titled Pioneering Change for Empowered Growth, and the successful completion of acquisitions such as Ricardo and TRC. In the fourth quarter, WSP reported an organic net revenue growth of 5.9%, adjusting for fluctuations in emergency response services in the U.S. and project revisions in Canada.
Adjusted EBITDA for the fourth quarter reached CAD 694 million, reflecting a 9% year-over-year increase, while the adjusted EBITDA margin improved slightly to 18.9%. For the full fiscal year, adjusted EBITDA amounted to CAD 2.5 billion, marking a 17% increase from the previous year. Management noted that restructuring costs negatively impacted margins by approximately 40 basis points, indicating an underlying margin expansion of around 80 basis points.
A central theme of the earnings call was cash flow. WSP generated a record CAD 1.7 billion in free cash flow for 2025, which represented an impressive 180% of net earnings attributable to shareholders. The company achieved a record low in days sales outstanding (DSO), ending the year at 63 days.
Strategic Acquisitions and Portfolio Management
L’Heureux detailed WSP’s strategic investments in the power and energy sectors, amounting to approximately CAD 7 billion over the past 15 months through the acquisitions of TRC and Power Engineers. He characterized TRC as a leading U.S. power and energy brand with around 8,000 professionals, enhancing WSP’s offerings across various capabilities, including advisory and program management.
Michaud, the Chief Financial Officer, reported a net debt to adjusted EBITDA ratio of 0.9x at the end of 2025, a figure influenced by capital raised through a common share issuance to partially finance the TRC acquisition. Following the acquisition’s closure, the pro forma net debt to adjusted EBITDA ratio stood at approximately 2.3x.
WSP also undertook portfolio optimization, divesting non-core businesses such as an underground storage operation in the U.S. and a rail business in Germany, which collectively represented about 1% of 2025 net revenue.
Outlook for 2026: Growth and Margin Enhancements
Looking ahead to 2026, Michaud provided guidance indicating net revenue expectations between $16 billion and $17 billion, reflecting an anticipated total net revenue growth of over 18% at the midpoint. Adjusted EBITDA is projected to range from $3.0 billion to $3.18 billion, with organic net revenue growth expected between 4% and 7%.
Michaud acknowledged that the net revenue outlook accounts for approximately $150 million in impacts from recent disposals and the annualization of operations discontinued in 2025. Regionally, he indicated that WSP anticipates mid- to high-single-digit organic growth 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, net revenue is forecasted between CAD 3.575 billion and CAD 3.775 billion, with adjusted EBITDA projected between CAD 590 million and CAD 630 million. Michaud noted that fewer billable days in Q1 might reduce organic growth by approximately 1.5%, although offsets are expected in the second and fourth quarters.
The company aims for a free cash flow conversion exceeding 100% and anticipates ending 2026 with leverage around 1.6x to 1.7x, bolstered by improvements in working capital driven by its enterprise resource planning (ERP) system. Michaud also mentioned that Power Engineers would be integrated into the ERP platform starting January 1, 2026, with about 80% of WSP’s EBITDA already on the new platform.
AI Strategy: Enhancing Productivity
Addressing concerns about AI potentially displacing professional services firms, L’Heureux positioned WSP’s adoption of AI as a means to augment productivity rather than replace human expertise. He emphasized the importance of engineering judgment and regulatory compliance in their operations. Over 60% of WSP’s projects operate on a fixed price basis, with clients increasingly seeking comprehensive solutions rather than lower costs.
WSP’s Chief Technology Officer, Chadi Habib, provided insights into the company’s partnership with Microsoft, initiated about a year ago. The partnership focuses on deploying AI tools for frontline staff, supporting Microsoft’s data center objectives, and co-creating products. Two solutions are currently in production with four clients, with a general release planned for March 2026.
Habib also discussed an ecosystem approach to partnerships, highlighting collaborations with startups like UrbanLogiq and Fathom, as well as strategic alliances with Google in transportation and Schneider in property and buildings. He underscored the importance of safeguarding WSP’s intellectual property and domain expertise.
During the Q&A session, L’Heureux elaborated on how AI is influencing mergers and acquisitions, noting that digital capabilities are now a crucial factor during due diligence. He cited TRC’s digital offerings, valued at around $150 million, as an example of the opportunities to enhance capabilities across WSP’s global network.
WSP Global provides engineering and design services across sectors such as Transportation & Infrastructure, Property and Buildings, Environment, Power and Energy, Resources, and Industry. The firm operates through four reportable segments: Canada, Americas (U.S. and Latin America), EMEIA (Europe, Middle East, India, and Africa), and APAC (Asia Pacific).
