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Operator: Thank you for standing by. Welcome to the Badger Infrastructure Solutions Second Quarter 2026 Results Call. During the presentation, all participants will be in listen-only mode. For those who have dialed into the audio portion of this call, to ask a question during the live question-and-answer session, please press *1 to raise your hand. Please wait for the operator to say your name and company before asking your question. For those listening through the webcast, attendees will be in listen-only mode. If you need technical assistance, please submit your request under the tech tab in the window on the right-hand side of your computer screen. As a reminder, this event is being recorded today, July 31, 2026, and will be made available on the investor section of Badger's website. I would now like to turn the call over to Anne Plasterer, Director of Investor Relations.
Anne Plasterer: Thank you. Good morning, everyone, and welcome to our second quarter 2026 earnings call. Joining me on the call this morning are Badger's President and CEO, Robert G. Blackadar, and our CFO, Robert Dawson. Badger's 2026 second quarter earnings release, MD&A, and financial statements were released after market close yesterday, and are available on the Investors section of Badger's website and on SEDAR+. We are required to note that some of the statements made today may contain forward-looking information. In fact, all statements made today that are not statements of historical fact are considered to be forward-looking statements. We make these forward-looking statements based on certain assumptions that we consider to be reasonable. However, forward-looking statements are always subject to certain risks and uncertainties, and undue reliance should not be placed on them as actual results may differ materially from those expressed or implied. For more information about material assumptions, risks and uncertainties that may be relevant to such forward-looking statements, please refer to Badger's 2025 MD&A along with the 2025 AIF. I will now turn the call over to Robert G. Blackadar.
Robert G. Blackadar: Thank you, Anne. Good morning, everyone, and thank you for joining our second quarter 2026 earnings call. Before we get into the details, I would like to take a moment to talk about safety, which is how we start all of our meetings here at Badger. Safety is not only a value here at Badger, it is one of the key reasons customers choose to work with us. Every day, our teams operate in complex environments around critical infrastructure where planning, communication, and safe execution are essential. Our strong safety culture and our Make Safety Personal annual safety campaign helps protect our people, supports our customers' objectives, and reinforces the high standard of service we deliver across North America every single day. I want to personally thank all of our Badger team members and customers for their continued commitment to working safely together. Now on to the quarter's results. The Badger team delivered another record quarter of double-digit organic growth in revenue and adjusted EBITDA. Building on our positive momentum from Q1. The second quarter top line revenue of $257 million represents 23% growth over the prior year. Driven by our extremely diverse end markets. Some of the projects that began or are currently underway include LNG plants, semiconductor manufacturing plants, new hospital construction, several airport expansions, energy storage facilities, including solar, new automotive manufacturing plants, sports stadiums, chemical processing plants, power generation plants, oil and gas pipeline work, fiber and communication expansions, wastewater treatment plants, data centers, food and beverage manufacturing plants, pharmaceutical plants, transmission and distribution mega projects, nonresidential construction, utility maintenance, several transportation and rail projects, and heavy civil infrastructure projects, just to name a few. Needless to say, we are seeing broad-based end-market healthy demand. We successfully met this demand through increased utilization and continued fleet expansion. The Badger team's ability to deliver top-tier customer service is setting the foundation for the remainder of 2026. Adjusted EBITDA grew 25% year over year to $66 million. We continue to invest in our teams and our branch network, positioning Badger to benefit from our competitive advantages. As fleet utilization rose through the second quarter, we began to realize pricing opportunities across all of our markets in which we operate. We achieved RPT, or revenue per truck per month, of $47.7 thousand in Q2, up 14% compared to last year. This reflects our utilization and pricing efforts. Badger ended the quarter with 1.82 thousand hydrovacs, an increase of its average fleet count by 8% compared to last year, while still achieving greater year-over-year RPT performance. Additionally, our expanded fleet enhances our ability to take immediate advantage of our planned growth for the remainder of 2026 and into 2027. Our Red Deer plant delivered 80 hydrovacs this quarter, versus 51 units in the same quarter last year. We also retired 36 units and refurbished 12 units in the quarter. With a noted extraordinary demand, and opportunities across all of our end markets, our full-year fleet strategy remains on track. As we shared last quarter, we are growing our fleet at the high end of the 7% to 10% range for the full year 2026. And we intend to refurbish between 30 to 50 hydrovacs and retire between 130 to 150 units. We also announced in our release that we are underway with a second manufacturing plant to be located in the United States, and we expect that plant to come online in the back half of 2027 or early into 2028, and Robert will speak a little bit more on that. Before I pass the call over to Robert Dawson, I would like to share one last thought. Our enthusiasm is not only tied to the strength of the demand environment, but it is rooted in Badger's ability to capitalize on it as we have proven through our performance over the last several years. With our industry-leading fleet capacity, vertically integrated manufacturing capabilities, extensive branch network, and highly trained workforce, we believe we have competitive advantages that are difficult to replicate and best position Badger to support our customers on all of their critical project needs. With that, I will turn it over to Robert to give our financial update, and then we will go straight into Q&A after Robert's comments.
Robert Dawson: Thanks, Robert. Our second quarter results reflected the strength of customer demand, the effectiveness of our operating strategy, and the continued commitment of our team to deliver profitable growth. As Rob noted, we grew revenue and adjusted EBITDA by over 20%. Demonstrating the ongoing execution of our roadmap of building scalability at every level of our operations. Strong performance was also driven by continued fleet investments to capitalize on increased demand across our entire branch network. Our adjusted EBITDA improved to $66.1 million, an increase of 25% compared to 2025. And adjusted EBITDA margin was 25.7%, up 40 basis points from the same period. Adjusted EBITDA margins have returned to growing, as revenue growth, improved efficiency and utilization of our fleet, as well as operating leverage, offset the near-term impact of our ongoing investments we have been undertaking. As we discussed in the first quarter, we are well underway on investments to add to Badger's long-term scale, diversity, and profitability. The acceleration of hiring and training of operators that we discussed in the fourth quarter of last year and the first quarter of 2026 moderated in the second quarter and was a key factor in our ability to absorb the levels of demand we have been experiencing. The rollout of operational excellence and the launch of two new complementary service lines continues to proceed in line with our expectations. While we make these investments for the longer term, they have reduced our second quarter 2026 gross profit margins by approximately 50 to 70 basis points. General and administrative expenses were $11.4 million, or 4% of revenue, compared to $10.8 million, or 5% of revenue, in the prior year. And finally, adjusted earnings per share was $0.69 per share, up 15% compared to last year. Turning to the balance sheet. As you know, Badger has, for a long time, maintained a strong balance sheet combined with conservative financial objectives, including relative leverage, available liquidity, and debt maturity profiles. This has served us very well, allowing us to fund our growth largely from cash flows, while continuing to return capital to shareholders through dividends and the NCIB. In line with these objectives, during the quarter, Badger executed our inaugural unsecured bond issue, raising C$300 million of 5.375% five-year senior notes. The proceeds of the offering were used to pay down our credit facility, leaving us with ample long-term committed liquidity. We were very pleased with the strong support from our new Canadian fixed income. With this undrawn capacity on our five-year credit facility, and our compliance leverage at 1.5x EBITDA, the midpoint of our 1x to 2x targeted range, we have lots of flexibility to continue investing in our organic growth to support investments in new service lines, to fund our plans to develop a second manufacturing facility in the United States, and to continue to return capital to shareholders. Year to date, we have purchased and canceled 80.7 thousand common shares under the NCIB at a weighted average price per share of $63.18. We intend to renew the NCIB in August, maintaining our ability to make share purchases in addition to returning capital to our shareholders through dividends. So with those comments, let's turn it back to the operator for questions.
Operator: And our first caller is Yuri Lynk from Canaccord Genuity. Go ahead, Yuri.
Yuri Lynk: Morning, gentlemen.
Robert Dawson: Good morning, Yuri.
Robert G. Blackadar: Good morning.
Yuri Lynk: Just wanna talk a little bit about RPT. Obviously, strong in the quarter. I have got your LTM RPT at around $44 thousand. And I think, and maybe Dawson can help me on this one. I think your Investor Day target converted to the new calculation was just under $43 thousand. So you are above that. How do we think about the sustainability of RPT on a trailing basis, and is there anything different you are seeing in the market now that might argue for that $43 thousand target being higher or lower in the future?
Robert Dawson: Yuri, great question. A couple of comments on RPT. I would say the addition of our data platform and a number of significantly positive changes we are making in how we approach capacity availability for our customers. One example would be leaving our trucks parked at a customer site versus having them return to our branch, just as one example. Has increased the availability of our fleet for revenue-producing activities. And as a result, our utilization has really been one of the drivers of our RPT to be above what we thought was possible. Even a few years ago at our data center at our Investor Day. So I would say, you know, yes, we are very pleased with where that has gone. We do not believe that there is likely to be a lot of downturn in that number on a last trailing 12 months basis, as you have indicated. In fact, I think there remain some opportunities to improve utilization. And as we will talk about, there are opportunities for further pricing improvements as well as our utilization on the fleet continues to rise.
Robert G. Blackadar: Yeah, but I will add one other thing to Robert's comments, Yuri, that might be helpful for you. When we did that Investor Day, it was March 2024, we had announced at that Investor Day that we were launching this thing called Badger Analytics Platform, but it was very early stages. And it was just underway. The data and the amount of analysis we are starting to get out of the fleet metrics and the ability to move the fleet faster and get more efficient is allowing us to actually just get higher and start to move that trend higher. And I believe that we are going to continue to see that going forward because the amount of analysis and our customers, we are actually sharing some of that analysis with our customers because the goal for us is to be digging holes. It is not to be driving back and forth and commuting. Because most of our customers pay port to port. Our best opportunity to show greater efficiency than any competitor is to actually share that data with the customers, and they really love it. So you are going to see us continue to have a really strong focus on RPT. I would not say at this point it needs to have some major rerating from that Investor Day. But I would tell you it remains a big focus in the company and will remain, going forward as well.
Yuri Lynk: How would you, Robert, how would you characterize the pricing environment? Because we have picked up that you might, in some markets, you might be a little bit behind on pricing in recent months. So do you feel your, I mean, you talked about some upside pricing. Is that what you are referring to? You have got some room to play catch up in some markets?
Robert G. Blackadar: Yeah. Absolutely. So the way we are viewing pricing is the pricing environment continued to be under a fair amount of pressure back half of last year and through Q1 of this year. We identified in the months as the quarter for second quarter was going on, in April and May, that there were some pricing opportunities. And in some instances, Badger was able to capture the pricing. And in a few others, we were not as nimble as we felt we could be. Since that time, as the quarter went on for the second quarter, we started to pick up more and more momentum on the pricing. And I think on a go-forward basis, you are gonna see just tied to the demand, the end markets, everything happening within and, I mean, you saw the laundry list of projects we are on, that it is so broad. That if you cannot get pricing in this environment, we are doing something wrong. And we started to see it as the quarter went on toward the end of the quarter. And in my opinion, we were probably a little slow at the beginning of the quarter. The opportunity, though, is really on a go-forward basis. So we are pretty enthusiastic about how it is not just the leadership team, Yuri, but the whole company is leaning in on the pricing opportunities. To where we are not just covering inflationary pressures and cost. We are actually going to be exceeding. And because the market is here and so now is the time, as the industry leader, we should be leading that pricing. And you will see more and more of that. But we also, for the way we frame it up, we have not just competitors who listen to these calls, but also customers, is Badger has always gotta be giving extreme value if we are gonna be the pricing leaders. We have to be giving extreme value and efficiency and safety and reliability. And so you are gonna see more, us continue to be amping up in all those areas. But pricing is definitely gonna be a nice opportunity. I believe I feel pretty comfortable we are going to be capturing the back half of the year and then going forward into next year, Yuri.
Yuri Lynk: Thanks for the color, guys. I will turn it over there.
Robert Dawson: Thanks, bud.
Operator: Thank you. Our next question comes from Tim James at TD Securities. Go ahead, Tim.
Tim James: Thanks very much. Good morning. My first question, I am sorry if you could give us, you called out the new service lines and that it is progressing. I am just wondering if you can provide us a little more kind of detail on customer response, how that is fitting into the business, kind of the returns that you are seeing or anticipate from those two new service lines?
Robert Dawson: Tim, it is Robert Dawson here. We have launched principally one of the two service lines. The other one is going to get going in the second half of this year, that first one being our industrial cleaning. And it is very adjacent to a lot of the work we are already doing. It has got a similar customer list. And a similar list of assets. And so the returns are similar to what we see from hydrovac. It just allows us to get a lot more long-term recurring contracts on a maintenance basis. On industrial facilities, whereas in the past, we would be working on a project basis on those facilities during larger turnarounds or debottlenecking work. So this is just circling those plants with a little more assets, a little more service. And giving us a stickier presence with those customers. So far, we are very pleased with the way it has gone. It is all proceeding as we had penciled it out, I guess, as far as our Excel business plan. And we are looking forward to having it develop a little more.
Robert G. Blackadar: And, Tim, I will add a little bit of color about the customers and the adoption you were asking about. What we are realizing and very, very pleased about this is every time we have launched one of these industrial cleaning branches in the various cities, and we go sit down with customers and we start talking about Badger's capabilities. And, again, it is beyond hydrovacking inside these industrial plants. They are actually coming to us. And instead of us kind of pushing to get into more of their manufacturing plants to do our work, they are actually starting to pull us in and asking can you do more across the large industrial manufacturing owners across their whole portfolio. And so think of chemical plants and pulp and paper plants and power plants where they are saying, could you do some of this work across our whole footprint. So we are very, very pleased with how quickly we are being adopted and the markets in which we have already launched and regarding the margins, we like, again, still very early days, but a few quarters in, the margins are playing out exactly how we had planned. And so obviously, it makes the return profile and the investments we have made, we are pleased with it.
Tim James: Okay. That is great. That is helpful. Thank you. My second question, just returning to the U.S. manufacturing facility or potentially U.S. manufacturing facility. And forgive me, my line cut out for a minute. But is there any way you could kind of give us a bit of a sense for what the capital requirement could be for that facility. And then is it reasonable to assume that CapEx that goes along with it, kind of return associated with that is effectively from avoiding the tariffs that are currently being incurred?
Robert G. Blackadar: Yeah. So I will start a little bit about kind of where we are in the process, and then Robert, if he wants to add any more about the kind of return or tariff comment. So right now, it is still relatively early. So we started talking just slightly about this on, I believe it was during the Q&A for the last quarter, about a second manufacturing plant being contemplated by the management team and the board. And then, since that time, we have been at work alongside of the management team, alongside of a small subcommittee of the board, to run to ground which markets we want to potentially locate and land the manufacturing plant in. Just think in terms generally of where is Badger doing a lot of business, and it is the southern part of the U.S., and it is more if you were to decide to be somewhere, let's say, between Texas, Oklahoma over to the I-75 north-south corridor, in that range, that area. As far as being able to give a CapEx guidance, we have a pretty broad range of which we have been contemplating internally and then shared with our board of directors. But it is too early for us to say, okay, we think it is gonna be between X number of millions and X number of millions. Because it really does depend on the cost of the land, the cost of the development, or if we buy an existing facility, which there are some out there. But if we buy an existing facility, what can we actually get it at? And then Robert can talk a little bit about do we, you know, how we might finance that and maybe tariffs and stuff.
Robert Dawson: I mean, when you think about the economics of a new facility, I would just ignore tariffs at the outset and say, our growth profile, the size of our existing fleet and where we feel it is going to grow to over the next several years, even just the replacement capital for that fleet. Risk management when you have a single facility. Logistics for having it in, you know, two facilities in two markets to serve different areas. There is ample return available to justify a new facility. And then when you think about the current tariffs we are paying on the trucks that we are producing in Canada and then importing into the United States. That just increases those returns to make it, you know, pretty easy to get there. So, the strategic need for the facility, the growth of the business, and the returns that our current organic growth strategy is offering us justify the facility in its own right. And then these tariffs recently, I think, are just a little cherry on top of those economics. Yep. And as far as funding it, you know, as I mentioned, we have ample available liquidity on a largely undrawn credit facility. Our balance sheet is just in the midpoint of our leverage target range of 1x to 2x. So we have got plenty of capacity to be able to finance this without any concerns.
Tim James: Okay. That is super. Thank you very much.
Operator: Our next caller is Ian Gillies from Stifel. Go ahead, Ian.
Ian Gillies: Morning, everyone.
Robert G. Blackadar: Morning, Ian.
Ian Gillies: A follow-up on the U.S. manufacturing facility. When you look out to 2028 and 2029, would the intention be that you run both the Canadian and the U.S. facility concurrently because that is where you see demand going?
Robert G. Blackadar: Yeah. So we have actually been having really good discussions with our manufacturing plant up in Red Deer. Which, by the way, is performing extremely well. And we are having the best quality of trucks I actually believe in Badger's history coming out of the plant right now, and our manufacturing team is very, very engaged. And we have been having discussions both with that plant as well as we are building out and continue to evolve our three- to five-year plan because we look at it just constantly, both Robert and I, on where is the business going and what are we gonna need resource-wise. We believe, at a minimum, we are gonna need these two plants both up and running and performing. Think in terms, Ian, of as when I came into the business just around five years ago, we were in that 1.2 thousand to 1.3 thousand truck size for hydrovacs, and now we are 1.8 thousand moving toward 1.9 thousand and the business will continue to scale, we believe, over the next three to five years, if not longer. So we are gonna need both the plants. We are pretty excited about that. And we are building the plants once the U.S. plant is up and running. We will continue to say, okay. How can we drive the most efficient efficiency between the two? But it just gives us the capacity to continue to scale the business. And it also, there is one other factor that a lot of people think you have the potential for tariff avoidance, or just building the trucks. But it also gives us a little bit of a risk mitigation factor by having a second plant that if for whatever reason one of our plants were to go down, you have a little bit of a backup factor. And so it is just good practice to not have all your eggs in one basket. And so, there is just multiple reasons that this second plant makes a lot of sense. But we probably, and you never say never or anything, but we just do not see a pathway at all anytime soon of just having one single plant or going back to one single plant.
Ian Gillies: So good. The other one, to ask bluntly, do you feel like the hydrovac industry in the U.S. is finally capacity constrained? And as we think about that comment, should we be thinking about EBITDA margins improvement accelerating year over year as we go through the back half of the year? It is kind of what you had spoken to previously, but you just had a good quarter. And I just would not mind getting an updated view there.
Robert G. Blackadar: Yeah. So, I would say it is not necessarily constrained because hydrovac in the U.S. continues to be just a really good adoption story. And you are, you know, obviously, and you are talking to a guy who has been in the business around 35 years in construction and construction equipment businesses, but it reminds me a lot of the early days back in the rental industry, is the concept is still being adopted. But certainly, at least it is our belief that competitive manufacturers are building and pushing on their plants to build as many hydrovacs as they can. And, obviously, we have competitors who are taking delivery. Badger, while we are not at full capacity today, we continue to grow our manufacturing, and you saw how we have moved within our own range from the low to midpoint of the range to now we are at the higher end of the range of what we are giving guidance on for 2026. But there is still some capacity out there. But I believe the hydrovac industry will continue to just evolve, and companies like Badger and other manufacturing companies will continue to build more and more capacity. A lot of people think in terms of the way hydrovac used to be back in the oil and gas days or, you know, there is some ability that, okay, there is gonna run out of places for people to use a hydrovac in the oil and gas or the oilfield services. And right now, I mean, just think of the script that I just shared with everyone on the call. The amount of different applications is almost limitless of how you could leverage a hydrovac to make a project safer, more efficient, and move without any incidents on it. So, for us, we are pretty excited about not just our positioning, but where we are going.
Robert Dawson: But like with everything, Ian, as there are higher utilizations, and certainly, we are seeing, Robert talked about this in his comments, but good utilization. You will also see every manufacturer continue to ramp up production. Another way to think about this, Ian, is we are fortunate that our customer base are some of the largest of the large construction and industrial firms in the world, and their work that they are doing in North America, many of them are public. Many of them, I am sure some of the analysts on this call follow. They have a record historical record backlogs. Historical record performance, and business happening right now. And a lot of the backlogs that they are sharing with us, we are not getting them off their calls, they are actually telling our national accounts people that their work will be taking them to the early to midpoint of the 2030s. So today, it is 2026. But they have projects that are gonna be starting in 2028, 2029, 2030. And I named some of the projects we are on now, but a lot of those projects, there is more to come behind those and beyond those. So it is a long tail, Ian. And it is a pretty exciting time. But I will let you, if you wanna talk a little bit about the margins and what that might look like, Robert. Yeah. No, Ian. I would caution anyone from thinking that margin improvements are going to start to accelerate. And I just want to, the phase we are in from Q1 of 2025 through to today, our quarterly growth has gone from 8% to 11%, to 13%, 15%, 18%, and now 23%. We have been accelerating on our top line and the size of our market and the opportunity in front of us. We have also been investing during that period. And, you know, I know there were some concerns from some people about the heavy investment we are making in new operators and training those operators in the fourth quarter and the first quarter of the last couple of quarters. We would not be able to be delivering the level of service we are customers today and meeting their needs if we had not done that. And so we are continuing to focus on longer-term value and growth and we are not stepping aside to let, I guess, margins be a focus. We are continuing to grow profitably. Do not get me wrong at all. But we are gonna continue to invest in the business and ensure that we can continue to scale up efficiently and effectively the way we have been. One good example of that is in the United States, we have just recently increased the number of regions we have from three regions to four regions. So that we can have enough people focused on the density of opportunity and not get spread too thin. That being said, we do think that we will, and we still remain very confident that we will start to proceed to go back into that 25% to 30% EBITDA margin range. But we still feel that the guidance we gave on the last call, where we would start to see that approaching those numbers in 2027, to be still the case.
Ian Gillies: Understood. Incredibly helpful. I will turn the call back over.
Robert G. Blackadar: Thank you.
Robert Dawson: Thanks, Ian.
Operator: Thank you. Our next caller is Maxim Sytchev. Go ahead, Maxim.
Maxim Sytchev: Hi. Good morning, gentlemen. I wanted to ask you a question. If you do not mind, reminding us about your data center exposure, maybe just general comment around how sort of the spending in that space is creating tightness in everything else that you are doing. And, obviously, you know, I am fully on board with, you know, the excitement around LNG, petrochemical, etcetera. I guess any qualitative comments you can provide, that would be super helpful. Thank you.
Robert G. Blackadar: Yeah. So and obviously, it is the topic of the day that a lot of various folks ask us about. So we continue to be in that same range. We talked about coming out of Q1 and what we realized in Q2. I think Q1, we were in that 11%, 12%, 13%-ish range and we are just right around sub-15%. I think 13% to 14% as we went through Q2. Like, it was not materially moving or driving our business. Like, in some kind of an outsized way or ratcheted up in any kind of a dramatic way. Max, the way we think about data centers is we are here every day to support our customers. And if our customers are calling and they need help, and they wanna use Badger, we are here. We work for our customers every day. What do you need, and what can we do to provide you an excellent level of service? If that happens to be on a data center, we are gonna work with them on a data center. If it happens to be on an LNG plant or a wastewater treatment plant, a chemical plant, we are gonna go work for them. To give you a perspective, though, Badger had in our kind of the origin story of Badger, and I am not sure, Max, if we have ever visited with you on this, but the origin story of Badger was we were an oil and gas field services business. For the longest time, we were greater than 50% of our revenue was oil and gas. And then today, that represents, at around just a tick under 5%, 4% to 5%. And it was not necessarily that we are anti oil and gas. I even named that in the list of projects that we are in the middle of right now. But we just do not have any one particular area as our main focus. So we are, but I wanna be very clear. We are not anti data center, but that is not the focus of our business only. We believe it is gonna be around in that 15% range. Again, plus or minus, you know, whatever, as data centers continue to be built out. I will also give a data point that is very interesting that a lot of people are not aware of, but when we look at all the available opportunities in every part of every project being bid for 2026, 2027, and 2028, we use a service you have heard us talk about, but called Dodge and PEC Reports. So these are, like, bidding services that all the construction firms use. And data center bidding and work contributes or consumes about 44% of all the upcoming Dodge projects that are being bid right now. And so us giving you the perspective of if we are sitting in that 13% to 14% range right now, clearly, you know, we are not focusing only on data centers. We are not saying no to it. But it is just not a core tenet. But and we are always mindful not to get too, I do not know if you wanna add anything on that, Robert.
Robert Dawson: Or I would say, you know, that these data centers are certainly constraining the capacity and our customers' ability to deliver. But it is also a lot of the projects that are on that list that are not data centers, and it is in the trillions of non-data center work. They are largely nondiscretionary and are very highly likely to occur. And if they do not occur this year or next year because a data center gets prioritized, very likely that they will happen in two or three years. So our enthusiasm for the longer-term opportunities that exist for Badger continues to be very high.
Robert G. Blackadar: Yep. Yeah.
Maxim Sytchev: No. That helps. Thank you. Yeah. It was over there. Yeah. Yeah. Absolutely. And then I had a quick operational question, if I may. So as you are getting more data, just overall from machines and branches, etcetera, can you maybe talk about qualitatively around the delta between kind of the top and bottom performing branches and much of an opportunity to potentially closing that gap could represent in terms of utilization? I mean, how should we about the direction of travel there? Thanks.
Robert G. Blackadar: Yeah. Great question. So we are leveraging a lot of the data that in the past prior to the Badger Analytics Platform, or BAP, that is kind of our data mainframe repository in our Oracle ERP system. Prior to us having a full good access to that and it being such a good robust dataset, we were doing a lot of this very manually on Excel spreadsheets. Now we are able to identify real time on a daily basis where there are opportunities for improvement, and we are engaging actively on those branches that have historically either underperformed or they are going through some kind of a cycle. Maybe some customers or projects have moved away, making sure that those branches are right-sized both with their personnel, the number of personnel, the number of trucks, etcetera. And we are able to do that in a much faster, robust manner than we have ever been able to. And the cool thing about all of our businesses, our operators are fungible. Our operators, they can go and operate the same Badger truck or a different Badger truck because they are all the exact same controls, the same training, same everything. They can move between branches, between markets, and we actually encourage that. As well as the assets are very fungible. They just move across markets. And, Robert, if you wanna add anything?
Robert Dawson: You know, Maxim, it is such a great question. The opportunities that we have do not just reside in utilization either. Where we are getting such huge returns, our operational excellence programs, we are able to see on a daily basis what is the maintenance and reliability by truck, by branch, by market, by region? On a monthly, daily, weekly basis, either per engine hour or per dollar of revenue. What is our direct labor utilization, what is our direct labor hours per billed hours, all of these different data points. We are feeding to our branch managers and our general managers that run our smaller markets on a daily and weekly basis. And the spread between low and high is wide, and the opportunity is big on all of those measures.
Maxim Sytchev: Yes. Thank you so much.
Robert G. Blackadar: Thanks, Max.
Operator: Our next question comes from Krista Friesen at CIBC. Go ahead, Krista.
Krista Friesen: Good morning. Thanks for taking my question. I was just wondering more on the competition side on some of these bigger projects and maybe what your national accounts group would address. What are you seeing from competition? Are people starting to get a little bit more aggressive here? Are you seeing more competition on these projects? Any color would be great.
Robert G. Blackadar: Yeah. Yeah. Hey, Krista. Good morning. So we certainly, like competition, there is Badger. Again, I just celebrated my fifth year. And the competition is as much as we have ever had. I would not say it is either ramping up or down. It is interesting that it feels like there are certain players kind of on the way up as competitors, and then there are a few players that a few years ago were pretty strong competitors that feel like they are struggling because they are not backfilling or refreshing their fleets at the rate that Badger is. And, again, I am not familiar with the reasons why, and you probably have to go ask them. As far as on projects and national accounts, we just do not have any competitor that has the same footprint that we have. And it is just a huge differentiation factor that Badger offers that no one else has at this point. But I will also share, and we talk about this all the time with the leadership team, is we have to remain hungry. We have to understand that competitors will always be out there. And if we ever take our eye off the ball or we get a little less hungry or, to quote someone recently, if you become kind of fat, lazy, and happy, that is where companies lose their edge and then they start losing their market position. But for us, Krista, on, let's just use some projects, really large projects that we are on. We are starting to realize that Badger not only, do we bring a leading safety record and safety culture process to these projects, on these mega projects, that most small or regional, because there is no other national service provider that does what Badger does. But these smaller regional guys, they do not have that level of sophistication. There are a few regional ones that are decent. They are pretty good regarding their safety programs. But then when a customer says, I need 25. I need 50. I need 75 hydrovacs on this project. No one else can do that. And, or if they say, okay. We will provide 25 trucks on this project. That is half their fleet or three-quarters of their fleet. Or in a few instances, and we watch it happen, where customers will say, you know what? We think we can get it cheaper from one of your competitors. And we think we are providing a competitive price. And so they try the competitor, and then normally within I would say, seven, 10 days, two weeks, we are getting a callback saying, we really need you back, and we are willing to pay, what now we are realizing what Badger is worth. And, Krista, we like that positioning. And, again, though, we are not naive enough to think that competitors do not have the ability to get stronger or combine or whatever, but the Badger team's pretty hungry and focused. And I do not know if you have anything else on that.
Robert Dawson: I have got nothing else.
Robert G. Blackadar: Okay. So, that gives you a little bit more color there, Krista.
Krista Friesen: Yeah. That is great color. And just a second one for me. I know we talked about this on the last call. But any updates on ability to provide a bit more of a backlog? And maybe just as it relates to some of these larger projects that are longer term, are you able to quantify that in any regard?
Robert G. Blackadar: Yeah. So we do not have a backlog in the traditional sense a construction firm would have. But we are getting a lot more visibility because the projects are so large and they are starting to realize that if we are gonna call and say, hey, Badger. I need 25, 30, 50 trucks. While we can definitely provide that, they are not just sitting around waiting on the phone call. So it takes some logistics, some movement around, and some time. We are getting a lot more notification, a lot more visibility on what the revenue streams are gonna do more than we have ever had, Krista. And, obviously, we are very pleased about that because it helps Robert and I be able to forecast along with the rest of the leadership team what our manufacturing needs are gonna be, our capacity. It also helps us on our pricing and understanding should we be pushing pricing in these markets. Or holding pricing or getting more competitive on pricing. And so we have a lot more visibility. The concept though of an overall backlog, I do not know at this moment if we are ever gonna have like a traditional sense that, like, you might get from a general contractor. So anything on that one?
Robert Dawson: I mean, I think as we also become more of a utilities and infrastructure service business as well. You know, we are working very hard on how we can portray what the revenues we are seeing and what the longer-term nature of those are, but we are being quite, I think, pragmatic in making sure that we do not say things that are not actually defensible and long-term truth. So, yeah. You know, I understand your maybe impatience on this question, but we are making sure that we get it right.
Robert G. Blackadar: Krista, I will give you something that we have been doing a lot of work on, and you are gonna hear. I was hoping to have it here sooner rather than later. I just do not know if it is gonna be ready to roll before the end of 2026. It may be a 2027-type discussion with analysts and investors. But this concept of recurring revenues. And the reason, as you know, we have these national account contracts. Many of them are two years, three years, to five years in nature. They all have pricing escalators, proper payment terms, etcetera. And we do and we have a proven track record in many cases north of 10 years with some of these large utilities. And it is the same way that these other large utility, I am not gonna name them on our call, but you know who I am talking about. They view those as long-term contracts that occur year after year, and we are having the same benefit out of that. But we have just never identified it and put it out as a recurring revenue stream and actually identified it that officially. We are internally working on that and more to come on that. I think you are gonna get more visibility, which may help you as well, Krista, as you are looking at kind of Badger, not necessarily as a backlog, but more of a, okay. This much of Badger's business is truly recurring or it is under an MSA that goes on for three years. I believe that investors and analysts would see a lot of value in that visibility. So hopefully that helps, Krista, with what your question was.
Robert Dawson: Thanks. Yeah.
Krista Friesen: That is certainly helpful and definitely sounds like the visibility is improving versus a couple years ago, so that is great to hear.
Robert G. Blackadar: Yes. Absolutely.
Robert Dawson: Thank you, Krista.
Operator: Our next call comes from John Gibson at BMO Capital Markets. Go ahead, John.
John Gibson: Good morning. Thanks for taking my question. I just had one more on the U.S. manufacturing. Just wondering, you know, Red Deer can do up to 350 trucks a year. I guess if both are up and running, would you expect a significantly higher level of new builds going forward or, you know, maybe just kinda give some guidance on how you expect that facility to ramp and the potential number of trucks you can put out both in U.S. and Canada.
Robert G. Blackadar: Yeah. I love that. So, John, we are looking at it as we know the capacity, like, it is actually, you know, very focused, very clear what the capacity is of Red Deer. We also know how we can continue to improve the capacity levels and gain more capacity out of Red Deer. But as we are looking at the U.S. second campus for manufacturing, we actually want the variability of it to where obviously, it could produce at even just a minimum of what the Red Deer campus can do. But having somewhat of tremendous amounts of scalability, there are multiple ways you can do that when you are building out a manufacturing plant. And you do not have to build it all at once. We do not have to front all the capital and build some mega plant for the next 30 years, but rather, as long as, and we are working with a couple of outside advisory and engineering firms that are guiding us on this. But as long as you make sure you have the plant for what you need today in the next three to five years built out, but with the ability to expand, we believe that would allow Badger to have kinda infinite capabilities. The cool thing about that is again, and I share this all the time with our internal Badger team, John, is Badger will never be as small as it is today. And then next week, we are never gonna be as small as it is then. So as we continue to scale and grow the business, we are going to have more and more need for additional capacity. We just wanna make sure, as Robert and I discussed with our board of directors, we are being very measured and thoughtful on this process. Rather than just knee-jerking, trying to put something together quickly and it is not very well thought out. So clearly, you can tell we have been contemplating it, but you are on the right track. I just cannot give you those numbers and a little bit of it is for competitive reasons as well because we know we have competitive companies that listen to our calls, and, you know, we are not gonna tell, okay, here's our exact capacity on a second plant because we do not want someone trying to trump us, if that makes sense, John.
John Gibson: No. That is helpful. I think it is fair to assume that builds should go higher over the next few years with the new facility. But that is helpful. Just shifting to Canada, you know, we have not talked about it much. You know, it seems like we are going to, you know, early innings of a pretty significant project buildout as well. How are you thinking about the Canadian market? I know it is a bit smaller now, but is demand there now, or do you see it coming?
Robert G. Blackadar: Yeah. So we are very pleased for the second quarter and actually the last few quarters of just as you are suggesting, there are a lot of projects that are being let and started and underway here in Canada. And we are very, very pleased with what we are seeing there. A lot of our customers are now starting to report mega-billion-dollar, in many cases, nation-building projects. And them actually winning those projects, putting them in their backlog officially. And, you know, again, we work for a lot of those customers and they are great customers of ours. And so we are, like, their biggest cheerleaders as they continue to win bigger projects. Because we believe over time, Badger can support them in all their projects, but we are seeing improvement. Now at least for Badger, it is still relatively early innings on a turnaround, and I am sure there will be lumpy months and from time to time, you know, this month's a little off or this month's, you know, outsizing what it has been, but the trend right now is positive.
Robert Dawson: Anything else on? Yeah. John, I would say Canada is growing, you know, maybe not at the same pace as the United States. It is definitely well into the double digits. Yeah. We are very pleased with where it is going. Yeah. Particularly in Ontario, Quebec, and the West Coast. Yeah. West Coast of, like, B.C. and all that.
John Gibson: Thanks a lot, guys. Very helpful. I will turn it back to you.
Operator: Thank you. And it appears that we have no more callers, so I will turn it back over to you, Robert G. Blackadar.
Robert G. Blackadar: Thank you, operator. And so I will close with, on behalf of all of us here at Badger, I want to thank our customers, our employees, our suppliers, and our shareholders for your ongoing support that drives Badger's ongoing success. Operator, you may now end the call.
Operator: Thank you. This concludes today's event. Thank you for your time and participation today.