Bird Construction Inc. ($BDT)

Good day, and thank you for standing by. Welcome to the Bird Construction Fourth Quarter and Full Year 2025 Results Conference Call and Webcast. We will begin with Teri McKibbon, President and Chief Executive Officer's presentation, which will be followed by a question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] Before commencing with the conference call, the company reminds those present that certain statements which are made express management's expectations or estimates of future performance and thereby constitute forward-looking information. Forward-looking information is necessarily based on a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Management's formal comments and responses to any questions you might ask may include forward-looking information. Therefore, the company cautions today's participants that such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of the company to be materially different from the company's estimated future results, performance or achievements expressed or implied by the forward-looking information. Forward-looking information does not guarantee future performance. The company expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise. In addition, the presentation today includes references to a number of financial measures, which do not have standardized meanings under IFRS and may not be comparable with similar measures presented by other companies and are therefore considered non-GAAP measures. I would now like to turn the call over to Teri McKibbon, President and CEO of Bird Construction.

Good morning, everyone. Thank you for joining our fourth quarter 2025 conference call. With me today is Wayne Gingrich, Bird's Chief Financial Officer. Before we begin today's call, I want to recognize the many teams across Bird who took part in Women in Construction Week and International Women's Day. These moments are reminders of the meaningful contributions women make across our organization and our responsibility to create space for every voice to be heard. This year's International Women's Day theme, Give to Gain reflects our belief that when we support each other through mentorship, opportunity and visibility, we strengthen our business. Our commitment to equity and inclusion continues to shape how we collaborate, innovate and deliver for our clients. 2025, Bird strengthened the underlying fundamentals of the business, exiting the year with record backlog, improved margin quality and increased visibility into a multiyear growth runway. While revenue timing shifted in certain markets, demand did not. Demand across our key strategic sectors remained strong, resulting in more than $11 billion in combined backlog with accretive embedded margins. This reflects growth of 45% over 2024 and provides multiyear visibility underpinning our confidence in our revenue and margin trajectory. As we enter 2026, we believe Bird is better positioned than at any point in our history to benefit from long-cycle infrastructure investments across our core markets. Full year revenue was $3.4 billion, comparable to 2024. Growth in infrastructure was supported by the ramp-up of the East Harbour Transit Hub, a full year of Jacob Brothers and the addition of FRPD. Growth was offset by timing shifts in project starts across several end markets, which we have discussed in prior quarters. Importantly, momentum in our infrastructure business remains a core driver of our strategy, and we expect that momentum to continue. Margins progressed year-over-year despite lower proportional revenue in our industrial construction and industrial maintenance businesses. Adjusted earnings and adjusted earnings per share remained strong, though slightly lower year-over-year. Our operating model continues to perform and structural margin levers remain firmly in place. During the year, we secured $4.7 billion worth of work, underscoring the strength of our client relationships and the robustness of the bidding environment. Our backlog is diversified, risk balanced and heavily weighted towards collaborative delivery models. With stronger embedded margins than a year ago, our backlog provides a level of visibility and confidence into future revenues and margins. Depth of our backlog continued to build across priority sectors. Defense backlog increased to over $1.5 billion. We entered a development phase agreement for the Peel Memorial Hospital, secured successive awards on large capital projects, mobilized new work at the Pickering nuclear facility and significantly expanded our industrial maintenance portfolio. Importantly, the factors that muted near-term growth -- near-term revenue in 2025 did not reduce demand. That demand is firmly embedded in our backlog, pending backlog and recurring revenue programs that extend well beyond 2026. Looking ahead, approximately 54% of our backlog is expected to be recognized over the next 12 months. This is further supported by a record $1.5 billion of recurring revenue contracts with industrial maintenance and other recurring revenue expected to contribute over $500 million per year, along with the continued conversion of pending backlog. Bird's record combined backlog with stronger embedded margins than a year ago demonstrates the underlying momentum of the business and supports our confidence in Bird's long-term trajectory. We do not see the opportunity set slowing down. And as major projects advance, we expect the volume of opportunities to continue to increase, allowing us to be selective in pursuing the projects best suited to our capabilities. Turning to margins. Quarterly margins were down modestly year-over-year, reflecting the project delays and deferrals in industrial construction and industrial maintenance. On a full year basis, our adjusted EBITDA margin was 6.5%, an improvement of 20 basis points over 2024. Given that from 2024 -- 2022 to 2024, Bird expanded adjusted EBITDA margins by 200 basis points, we remain confident in achieving the remaining 150 basis points within 2 years to go in terms of our current strategic plan time horizon. The next few slides outline the deliberate and incremental drivers already at work across the business to support the continued progress of our strategy. Large capital investment projects remain a core pillar of Bird's long-term strategy. These programs are inherently multiyear, providing scale duration and opportunities for margin expansion driven by complexity and higher self-perform content. 2025, Bird moved into the execution phase of the East Harbour Transit Hub, expanded scope on Dow's Path2Zero project, secured additional awards at BHP's Jansen Potash project, mobilized new work at the Pickering Nuclear Facility, progressed operations at Woodfibre LNG and entered the development phase of Peel Memorial Hospital. Successive awards demonstrate Bird's ability to engage early, execute effectively and expand participation over the project lifestyle. This track record continues to strengthen our reputation and positions the company well for sustained demand across Canada's evolving nation-building energy and infrastructure investment programs. There is significant depth across Bird's end markets with near-term tailwinds supporting demand across energy, defense, health care, data centers, transportation and trade infrastructure. We are increasingly being pulled into new opportunities early and across more geographies as clients prioritize safety, delivery certainty, self-perform depth and proven execution. Demand remains resilient across nuclear, LNG, petrochemicals and potash. We were pleased to hear how Dow recommitted to the Path2Zero project where Bird's work remains weighted to the second half of 2026 and '27. Our industrial maintenance portfolio remains a key differentiator, providing a strong base of recurring revenue. New MRO awards and MSAs secured in 2025 increased pending backlog to over $1.5 billion. The largest of these awards resulted directly from the NorCan acquisition, demonstrating the value of cross-selling and the effectiveness of integrating acquisitions into the Bird operating model. The nuclear sector remains active, representing approximately 10% of our revenue today, and we expect that exposure to grow. Additionally, we've received -- recently achieved new credentials that enable broader participation in the sector. This is timely as we prepare for new build activity to ramp up in the coming years. Our backlog remains robust across health care, defense, education and long-term care. Peel Memorial Hospital is a significant milestone award and a strong validation of our health care expertise and collaborative approach. As referenced, our defense portfolio continues to accelerate. We're actively tracking over 200 defense-related projects, including substantial investment in the Arctic infrastructure where Bird has a deep experience and a proven track record. Many of these projects are part of the Department of Defense's plan, $100 billion in construction over 10 years, which includes $40 billion in the north over 20 years. We continue to see strong sustained activity in the data center market. As the sector evolves, delivery partners are being selected based on schedule certainty and the ability to self-perform critical path scope. Bird is well differentiated here with integrated civil, electrical, mechanical and project delivery capabilities. Bird offers end-to-end capabilities in this fast-growing sector from land selection and power coordination and sourcing through site development, full electrical, mechanical and structural delivery. Critical path in data center construction is electrical scope and Bird's position as the country's largest electrical employer enables us to support clients coast-to-coast with scale and schedule certainty. We are currently tracking more than $20 billion in data center opportunities and see momentum continuing to build through 2026. In infrastructure, the acquisition of FRPD has meaningfully expanded our self-perform capabilities in marine construction, dredging and land foundations. FRPD's strong reputation and 115-year track record spanning coast to coast to coast brings deep expertise and a differentiated platform for delivery. This has unlocked new cross-selling opportunities with Jacob Brothers, our industrial group and across the broader organization. Timing of this acquisition couldn't have been better given the breadth of opportunities developing across all geographic regions in Canada. The momentum is building rapidly, and we expect FRPD to be a significant catalyst for growth. Taken together, strong sector demand, long-duration nation building investments, Bird's execution capabilities, record backlog position the company well for sustained disciplined growth and value creation through 2026 and beyond. In 2025, infrastructure continued to expand, creating a more balanced revenue mix between industrial buildings and infrastructure. Infrastructure growth was supported by a full year contribution from Jacob Brothers, and initial contribution from FRPD and strong execution across transit hydroelectric utilities and mining programs, including continued momentum from recent acquisitions and our Commercial Systems and Utilities group. Infrastructure with its high proportion of self-perform work will continue to support margin progression as it increases its share of our revenue mix. As our record backlog converts, we expect to benefit from operating leverage across our platform, supported by scale and disciplined cost management. At the same time, we continue to make smart investments to further improve execution and efficiency. In 2025, Bird reached a major milestone with the rollout of our ERP platform, establishing a scalable digital foundation and unified project delivery system. Building on that, we are advancing predictive analytics, digital tools to enhance planning, productivity and safety. Early progress is improving visibility into potential project risks and enabling more proactive data-informed decision-making across the project life cycle. Together, these capabilities support earlier risk identification, more effective resource allocation and more consistent execution across complex projects, reinforcing margin resilience as the business continues to scale. Across the business, multiple deliberate levers are already at work, mix improvement as infrastructure scales, higher self-perform and equipment-related revenue, operating leverage and disciplined project selection within collaborative lower-risk delivery models. These are not new initiatives. They reflect execution already underway, tangible progress supporting our path to the 2027 adjusted EBITDA margin target of 8% and further revenue growth. We are confident in this trajectory that a backlog and demand environment provide the runway to execute. With that, I'll now turn it over to Wayne to walk through our financial performance in more detail.

Thank you, Teri. Bird's fourth quarter and full year 2025 results demonstrate continued execution of our strategy and the resilience of our operating model. Despite uncertainty impacting near-term revenue timing, we delivered solid margins, adjusted earnings and cash flow. As anticipated, construction revenue in the fourth quarter was $877 million, lower year-over-year, reflecting the timing related to project delays that we highlighted earlier in 2025. Gross profit margin in the quarter was 11.1%, a full percent higher than in 2024. Margins benefited from a higher proportion of infrastructure work, which typically carries greater self-performed content and from disciplined project execution. These positives were partially offset by delays in project starts where we continue to carry personnel and equipment costs in anticipation of future mobilization. Adjusted EBITDA in the fourth quarter was $66.2 million compared to $71.9 million last year, with an adjusted EBITDA margin of 7.5% compared to 7.7%. Given the softer industrial work program and mix impacts in the quarter, this remains a solid margin outcome. Turning to earnings. Net loss in the quarter was $14 million or $0.25 per share compared to net income of $32.5 million or $0.59 per share in the fourth quarter of 2024. This decline reflects the $62.2 million impairment on accounts receivable and contract assets related to creditworthiness concerns for a single customer that was previously disclosed. The sole project for this customer is substantially complete and no further costs are expected. This impact was partially offset by the $7.6 million bargain purchase gain on the acquisition of FRPD. Adjusted earnings in the quarter was $31.8 million or $0.57 per share compared to $37.3 million or $0.67 per share last year. Adjusted earnings excludes both the bargain purchase gain and the credit impairment, which are nonrecurring items. Operating cash flow in the fourth quarter was $192.6 million, up $55 million year-over-year. This reflects resilient underlying cash generation that would have been materially higher absent the onetime customer credit impairment. For the full year, revenue totaled $3.4 billion, essentially flat compared to 2024. Growth from the full year contribution of Jacob Brothers, the addition of FRPD and organic growth in infrastructure, including mining work programs in the East Harbour Transit Hub was offset by lower industrial and buildings revenue. This reflected less favorable weather early in the year, maintenance work deferred into 2026 and client decisions that slowed certain work programs and delayed the start of new projects. Revenue of all the company's businesses in 2025 was impacted by delays in the start of contracted projects resulting from economic uncertainty. Despite flat revenue, profitability continued to improve. Full year gross profit increased to $356.9 million, representing gross margin of 10.5%, up from 9.7% in 2024. Margin improvement was driven primarily by higher relative growth in infrastructure and the continued shift toward higher-margin collaborative work. These results reflect disciplined project selection, strong execution, expanding self-perform capabilities and effective cross-selling across the organization. Adjusted EBITDA for the full year was $222.1 million, up from $212.8 million in 2024 with an adjusted EBITDA margin of 6.5%. This places Bird within 150 basis points of our 2027 margin target, even in a year where higher-margin self-perform industrial work was temporarily deferred into 2026. Net income for the year was $47.4 million or $0.86 per share, with the year-over-year decline primarily attributable to the fourth quarter impairment. Adjusted earnings for the year was $107.7 million or $1.94 per share compared to $111.3 million or $2.04 per share in 2024. Cash flow generation remained a core strength in 2025. Full year operating cash flow was $113.1 million, which is a strong result despite the onetime customer credit issue and demonstrates the underlying strength of Bird's cash-generating business model. Free cash flow totaled $71.8 million or $1.30 per share. Our balance sheet remains strong, providing both resilience and flexibility. Adjusted return on equity was 25%. Adjusted net debt to adjusted EBITDA was 0.82x, and the current ratio was 1.26. With $167 million of cash and cash equivalents and an additional $399 million available under the company's syndicated credit facility, Bird has ample liquidity to support working capital, project-driven capital expenditures and accretive acquisitions to further expand our service offerings and self-perform capabilities. Overall, while revenue in 2025 was impacted by uncertainty, Bird delivered strong margins, solid earnings and robust cash flow, supported by a record backlog with higher embedded margins. Bird remains committed to a balanced and disciplined approach to capital allocation, supporting both profitable growth and consistent shareholder returns. Our priorities are clear and unchanged. We continue to invest in our business through capital expenditures and equipment and technology to support execution. We remain active and disciplined in M&A, pursuing tuck-in acquisitions that enhance our capabilities, expand our footprint in key markets and are accretive to margins and cash flow. We also continue to return capital to shareholders through a monthly dividend with a long-term payout ratio target of 33% of net income, recognizing that the ratio may fluctuate year-to-year. Bird operates with low capital intensity and our strong balance sheet and consistent cash generation provide flexibility to execute our record backlog while pursuing opportunistic growth. We remain focused on opportunities that deliver outsized value through our cross-selling and our One Bird operating model. Taken together, this disciplined approach continues to support long-term value creation through clear priorities, smart investment and a conservative financial profile. With that, I'll turn the call back to Teri.

Thank you, Wayne. With 2025 behind us, we enter 2026 with momentum and greater multiyear visibility. Our programs are expected to materialize as anticipated with revenue growth accelerating in the second quarter. Recent industrial maintenance awards that added more than $1 billion in pending backlog further support multiyear visibility. Our teams continue to win new work at a pace that drives future revenue growth as the book-to-bill ratio has been consistently greater than 1, reaching 1.4x in 2025. Bidding environment remains highly active across defense, nuclear, data centers, health care, trade and transportation. With risk balance record backlog of more than $11 billion with average margins higher than a year ago, Bird has strong visibility through 2027 and clear momentum towards its strategic plan growth and profitability targets, supported by a strong balance sheet, disciplined capital allocation and ample liquidity, Bird is well positioned to execute its record backlog, invest in growth and continue delivering shareholder value. I'll now turn the call back to the operator to open the line for questions.

[Operator Instructions] Our first question comes from Chris Murray with ATB Cormark Capital Markets.

Maybe just starting with the outlook in 2026. Certainly, 2025, as you noted, had some challenges in it. And so I guess what I'm trying to understand is how should we be thinking about year-over-year revenue growth? You did mention kind of starting to ramp back up Q2. The backlog is pretty sizable to have to work through. So just trying to get an idea of how we think of this. I know at one point, you were sort of thinking about a 10% year-over-year growth, but it just feels like next year, just coming off the lower base, we're going to be a lot higher than that. But just how this kind of pattern you think happens? And any commentary about where you thought you were going to be for '27 based on what the original strategic plan would be helpful.

Yes. I think for '26 -- the way the year is shaping up, I think, is consistent with how we tried to frame it in Q3 and again, here at year-end. So I think Q1 is still going to be a little bit muted, like we're going to have some of the project deferrals that we talked about last year that's still going to impact Q1, particularly in the industrial program. I think we're going to see Q2 ramp up pretty significantly towards the end of Q2. And then in the second half of 2026, I think we're going to see very robust growth. So I think '26 overall is certainly going to be double-digit growth and could be depending on how certain of our market sectors play out, could be stronger into the low teens even. We have record backlog, 54% of it is going to be put in place in 2026, but we also win and execute work throughout the year, and we expect that to continue. Looking ahead to 2027, we've got more visibility into the 2 years out than we've ever had with our $11 billion combined backlog. And what gives us confidence in the margins is that the margins embedded in our combined backlog are higher today than they were a year ago or at any point to be honest in the last 10 years. So that's why we're confident that we can continue to see margins still improve through '26 and '27. And then from a volume perspective on '27, the range we came out with in our strategic plan back when we did the Investor Day in October '24 was $4.6 million to $5.1 million, and I think the midpoint, $4.85 million. So we still expect to be in that range of revenue for '27 -- the pipeline that we have, and Teri can go into this more in a bit here, too, but the pipeline of projects that we're pursuing right now line up very well to support this growth on top of the record backlog.

Okay. That's helpful. And then just maybe a housekeeping question on the impairment. You did note it was one client, project is complete, but it was tied to a specific asset. So just in terms of recoveries, does this mean that you either have a claim on the asset or there's some other mechanism that will be in place for recoveries? And any idea of timing on recoveries and whether or not this is fully impaired or there's an expectation that you'll only come out whole at the end?

Well, we took a full impairment in Q4 for the $62.2 million made up of accounts receivable and contract assets. So we're not carrying a recovery on the books at this time. We are going to pursue recovery, but we decided to take a pretty conservative view of it. It's certainly -- nothing is going to be imminent on any potential future recovery, and we're just going to follow the normal course there. But just with how the facts are playing out in this particular instance, it's not something that we can really go into a ton of detail on at this point in time. But I guess the key point here is just know that we're going to pursue a recovery, but it would take time before you ever see anything from that, we think.

Our next question comes from Frederic Bastien with Raymond James.

Around this time last year, you were preparing for some turnaround activity that ended up getting pushed out. What indications are you receiving from oil sands clients today that they indicate things will go back to normal this year?

Yes, we're certainly feeling highly confident in the programs. The programs will be in all cases, with all our major clients will be fall turnarounds. So that has moved around a bit in prior years. There's been spring turnarounds. But in our case this year, they're all fall. And that's the sort of the end of the window for their flexibility in terms of when they do these turnarounds. There's regulatory compliance they have to meet. So -- but we expect them to be of considerable scale, and we have some new opportunities that we're potentially positioned for, and we'll see how they materialize as well. So we're expecting a very strong back half of '26 with the large fall turnaround program.

Okay. Great. And Teri, you sound pretty pumped about FRPD. Can you speak to some of the cross-selling opportunities that you expect to deliver from that acquisition? I know you kind of hinted at some, but any specifics that you can point to?

Yes. So it's -- I don't think in my entire career, I've ever been involved in an acquisition with our team that was more timely than this one. This one is just -- you couldn't script it any better the way it's playing out. So we've got the Western ports all getting increased spending levels to increase throughput. And that's a lot of the ports on the West Coast -- and very visible. We're on 1 of the 3 teams that are qualified for the Roberts Bank terminal, which is a large opportunity. As you know, in the West Coast, there's large scopes of work being done with, for example, the Massey Tunnel, which is a tunnel under the Fraser we're well positioned to support those kinds of projects. You've got Northern Arctic basis, things that are developing, lots of discussion around Churchill. And these are all places that FRB has worked in the past. And you've got the LNG side with both the second phase of LNG Canada, you got Prince Rupert LNG. These are all -- there's not a lot of marine capacity in Canada, a lot of international capacity. It's very expensive to use that. So we're just really well positioned for that business, and they've been running at breakneck speed in the last few months with the opportunities as they are coming in. So we're really feeling good about that. And I think as Canada looks at its east-west trade corridors, any of that work involves significant enhancements of ports, and we're well positioned to support that as we go forward. And we're also starting to see mining opportunities where mining companies are talking to us about going in and coming in and dredging tailing ponds to reactivate mining in those reserves that at the time they were shut down, they were not cost effective, but they are in today's market. So we're seeing those opportunities evolve. And it's kind of unique. It's not something you see or have historically seen, but those are also certainly happening. So yes, it's a very busy time for FRPD. And obviously, we're starting now in July on our new dredging contract as well and the dredging contract we have with Fraser [indiscernible].

Our next question comes from Ian Gillies with Stifel.

Teri, I think you specifically mentioned the defense backlog in the commentary. But I was wondering if you could maybe talk a little bit about where the nuclear backlog is today, whether it be in absolute or percentage terms and where you might hope to see that in 12 months or 24 months' time, just so we can get a better understanding of how impactful you think that space may be to your business?

A good portion of the nuclear backlog is flowing through our MSA framework. So you've got all that remediation work that we do for CNL and other clients. And you have the nuclear lab up in Chalk River that is advancing construction, which is certainly a large-scale opportunity. I'm not in a position where we can disclose those values of that type of work because it's something that's with our clients is confidential. And we still have a large program underway with Bruce. We've got a large program underway with OPG with there, we're building 5 facilities for OPG right now at the Pickering nuclear facility. We've got some more work that's evolving in some of the other nuclear facilities in the country. Decommissioning is still at a very high pace, some new opportunities that we're in procurement on for that. So I'd say like it's certainly a robust area. I can speak to it more in terms of overall percentage of revenue because of the MSA aspect of it. So we'll run probably around 10% of our revenue even with our anticipated growth in 2026 in nuclear-related activity. And then I think longer term, you have the new builds, which are going to be significant scale, both at Bruce and Wesleyville. So the scale of those will take considerable capacity from the market that have nuclear credentials, nuclear capabilities. We're building essentially a weapons-grade uranium testing facility that is the same nuclear grade concrete and things like that as you'd have on an SMR or a large-scale nuclear program. So the resume we're developing is quite strong. And now we have the required certifications and licenses to essentially do an end-to-end in nuclear. We just have to build out our resume a bit stronger, and we have the contracts in place to do that when we're working on a reactor phase.

That's very helpful. And then maybe switching gears to the margin side. You look at Q4, which was very strong and you think about adding scale to that through '26 and '27 and getting leverage on G&A, is the 8% EBITDA margin target, is there a potential you think you could exceed that or even beat that based on what you see right now?

Yes, it's tough to get ahead of that right now and get over our skis a bit on that. I think it's an achievable target. I think as we see the momentum build in Q2 into Q3, we'll have a little more clarity as to how that's evolving. And the world we live in today has got certainly some volatility. But we're pretty confident on the backlog and the kinds of projects we have. These are going ahead. We've tried to position ourselves with blue-chip clients. And the exciting part of our business, to be honest with you, is when you have such a large scale of new work that's evolving both in defense and in data centers. The scale of these opportunities in those 2 areas, which has not really been in historical times, a very strong position or percentage or a very small percentage of our historical revenue. So you start to see those things layer in. Yes, it's pretty exciting, especially when you have your core markets that we've been working on are very strong. So it puts us in a really nice position for the next 5 years and beyond.

[Operator Instructions] Our next question comes from Krista Friesen with CIBC.

Maybe just to follow up on the last question on the nuclear portion. Are there markets that you would be evaluating for M&A to help boost your resume within nuclear or your product offering? Or is that not something you really see much of in the market right now?

I think it's -- you don't see much of it in the market in Canada, and we're focused, as you know, in Canada. So you don't see much of it. You'd have to almost be moving towards a manufacturing kind of framework, and it's not really what our core business is. So no, I think it's -- we have a very strong resume in large-scale projects with things like LNG, where you're building these massive foundations and large concrete type mobilizing workforces. So we have a really strong runway, and we're continuing to develop our nuclear resumes so that our clients are confident to award those programs, a small acquisition in that space, it'd have to be small because there's nobody that's got any real scale and it wouldn't really do much for us. And like I said, we're focused on the resume development. We're also doing some large scale. We have a large-scale hydroelectric project underway with OPG, and that's going well, and those all enhance the scale question about our capability to handle large-scale projects.

Okay. Great. And then maybe just on the data center opportunity, you've identified a TAM of $15 billion here in Canada. Are you seeing much work right now? And maybe specifically, what are you seeing in Alberta in terms of projects actually starting to move forward on the data center front?

So we've historically had experience here in smaller data centers in the province like small, predominantly on the electrical side. Currently, and I can't talk about who the clients, it's a very secret of industry, but currently, we just -- it feels like we're just at the tipping point here on large scale. There's some large-scale ones that are in procurement right now that have -- and the scale of these things is just -- is really significant, and it will take out a lot of capacity, to be honest. The secret weapon for us is a large electrical army that we have and a number of those resources here in Alberta. But Alberta has got something like 40 individual companies that are in discussions with the government to develop data centers. So there's potentially 40 projects. They all won't get built. They all need power and the government's sort of mantra here has been we've got the gas, bring your own power, and we'll work closely with you to develop these. And if that continues, I think you'll see Alberta as a major hub in North America for data centers and the scale of these that are evolving are massive. And some of them are further along in procurement than others. And we typically aren't -- in the early stage of a project. So when a client is going out to get an approval from a municipality to do something, we may or may not be involved at that point. Some companies will go ahead and do that on their own and then engage us after. And in other cases, we're working really early on and working with potential clients to identify opportunities, land opportunities and power opportunities and working with them collaboratively on the power applications and that. So we're -- we have a pretty good sense of where everyone is and where they're all evolving. And the major markets for us would be Alberta and Ontario. And -- but we've got data centers underway right now in Manitoba. There's emerging opportunities in Saskatchewan. We've got emerging opportunities in Atlantic Canada. So it feels like we're just getting towards the tipping point after a few years of a lot of planning, and it's the -- if you can well imagine the impact these have had in the U.S. on companies like us has been tremendous, tremendous impact in terms of performance and scale. And -- but it feels like we're 3 or 4 years behind the U.S. development. So -- but these companies have a track record and they know what they're doing and they know the critical path is certain aspects of those projects like electrical is critical.

I appreciate the color on that. It sounds like a very big opportunity. If I could just sneak in one more. I appreciate early days since we've seen so much volatility in the price of oil. But are you hearing anything about potential delays in the maintenance work, just given where the price of oil is and maybe customers looking to push out as much as they can right now?

It would be our opinion, despite the press yesterday on this, it would be our opinion that there isn't any ability to defer any of these large turnarounds another year. It wouldn't be -- it wouldn't meet the regulatory obligations. It wouldn't be a good decision given that we have already extended some of them a year. That's just our opinion. We have reached out based on that article that came out yesterday and have confirmed that there is no anticipation of a delay of these turnarounds. There's a lot of planning that goes into these. And I guess, anybody's guess when things settle down, whether the things are settled down by the fall. But that's the timing of those -- they're not spring turnarounds as they sometimes were historically. They're all fall turnarounds this time around.

[Operator Instructions] Our next question comes from Maxim Sico with NBCN.

I just wanted to circle back, if I may, to the data center space. I mean I presume, obviously, right now, your electrical capacity is sort of fully utilized and assuming some of these big opportunities do come to fruition in terms of -- I mean, are you thinking about any pinch points in relation to accessing labor? Or Teri, I guess, how do you envision those things evolving, let's call it, over the next 24 months?

Yes. One of the benefits we have, Max, is we have an accordion-like capability that is massive at scale when we ramp up and ramp down for the turnaround side. So we have teams and people, that's all they do. So as we enter into the planning stages of some of these projects, it's a really nice feature that we have, and it's a nice -- and we carry a regular base of -- so what we will be doing as these things materialize is diverting attention to these away from some of the other traditional markets that we have, but we have the ability to ramp up considerably to handle. And we have a proven track record of building these for clients. Just the scale of these and the speed of these is really increasing.

Okay. Is there some sort of fungible capacity to -- I mean, I realize that you were not doing like a ton of resi work, but is there some spare left in that bucket or not -- or you're just sort of talking about overall...

Yes, I'd say that if you start to develop significant backlog in the data center space, you start to steer away from other opportunities that you have in other markets that we service. As you know, we have a very large commercial electrical capability, and we have a very large industrial electrical capability. And both of those have accordion like features. We have bases all over Canada. So we can draw from those bases. And the thing with the data centers is largely about speed. So those types of projects can carry the travel costs and the premiums that are associated with attracting that type of capability. I was told by one of my close friends in the U.S. that runs a very large construction company that if we had this army of electricians available in the U.S., we would have opportunities that would just be daunting to simply enter into because there's so much demand. So we're dealing with clients that are very aware of the complexity of to deliver these projects with speed. You've got to have the resources. And it's typically the first thing they look at is where is the electrical capacity. And that's how they get evaluated. So it feels like we're -- and we've had a lot of inbound requests from different companies. And it feels like we're heading into a nice phase of strong demand. And we've got a track record of delivering these things end to end. So we'll do the site developments. We'll do electrical, mechanical, do the structures, we'll do underground utilities. We'll do all of that with our own companies, and that's what clients are kind of looking for.

Yes. And so can you remind us in terms of the margin generation there? Is there any differential versus kind of the core construction activities on the electrical side of things?

I think it's the turnkey capabilities, if you look at companies in the U.S. that trade publicly that just do site development, the speed of that site development will give you a higher margin opportunity for companies that are more electrical that trade publicly in the U.S., and you can see the margin profile that they're generating. So it's definitely higher across the space because of the speed and because of the quality and because of the expectations and the confidence level of these clients to get these things done on time.

Okay. That's super helpful. And then you had a slide kind of highlighting some of the digital tools deployment that you're doing across the company. I realize it's probably very early days, but Teri or Wayne, if you want to opine on these developments and how that could be perceived, whether in terms of margin uplift or just critical path staying closer to that? Any comments would be helpful.

Well, it's certainly -- I think, again, sometimes you're lucky with your timing. It's for us to put a new advanced ERP in place that has the latest technology and the latest capabilities, and it can be enhanced and expanded upon in many new areas. Predictive analytics is something that we've been working on now for 18 months, and now we're able to evaluate projects. It's a very powerful tool in the sense that I've been in construction my whole career, and you do develop an eye for productivity or an eye for progress on a project. But despite all that, despite you've been in the business for a long time and you're a seasoned project superintendent project manager, when you can give those individuals leading indicators of issues that you wouldn't normally be able to detect, and it's not just -- if you're dealing with an individual project manager and you're thinking about his particular career, he will only know what he knows through his particular career if you're dealing with thousands of projects, thousands of leading indicators and you have all that in your database, which we have, we're able to generate predictive flags at a very early level, sometimes 10% or 15%, which you normally would be catching up to until you're sort of midway through a project, maybe 50%. So -- as you know, we work a lot with clients. So we're able to share that predictive ability with the client to -- if you're working collaboratively with clients and the types of contracts we have today, clients are -- they want to be fully aware of anything that's giving them any concern around schedule and anything they can do to enable whether it's moving utility or the utility relocation gets delayed, what is the impact on the project. So with this kind of power that we have now in our new system, and all our leaders in the field with these tools is very powerful. And it's -- and then you add to that the digital twin where you've got a model now that's eventually it will be controlling all of the projects in terms of progress and design and constructability and work-based planning and safety and all these aspects, it's really going to make a difference in so many areas that project predictability will be considerably higher. And particularly, I'm excited about what it's going to do for safety because if we can ensure with the monitoring that we'll have capabilities to do that every individual worker is, first and foremost, in a position where they're qualified to be in, but also working efficiently with the right tools and the tools in the right place and that's going to make a huge difference as the company moves forward.

This concludes the question-and-answer session. I will hand the call back over to Mr. McKibbon for closing remarks.

So in closing, our foundation is stronger, visibility is greater and the opportunity is significant and multiyear. We remain focused on safety, our people and disciplined project execution, and we are increasingly confident in the trajectory of the business and energized by what lays ahead. Thank you all for joining us this morning.

This concludes today's conference call and webcast. You may disconnect your lines. Thank you for participating, and have a pleasant day.