Dexterra Group (TSE:DXT) used its fourth-quarter conference call to highlight what executives described as a record 2025, driven by strong operating execution, margin expansion, and contributions from two strategic acquisitions completed during the year.
Board chair Bill McFarland said 2025 produced CAD 123 million in EBITDA and net earnings of more than CAD 40 million. He also pointed to a 14% dividend increase to CAD 0.40 per share during the year and noted the company’s share price had appreciated by more than 60% over the prior 14 months, which he said reflected investor confidence in the company’s strategy and free cash flow generation.
Record revenue and Q4 margin expansion
Becker said the company delivered 15% return on equity in 2025 and returned CAD 34 million of free cash flow to shareholders through dividends and share buybacks.
Acquisitions: Pleasant Valley and Right Choice integration
Management emphasized two strategic moves: an investment in Pleasant Valley Corporation (PVC), which expands Dexterra’s U.S. facilities management platform, and the acquisition of Right Choice Camps & Catering, which expands the company’s workforce accommodations footprint.
Becker said PVC’s distributed delivery model is complementary to Dexterra’s largely self-performed facilities management model, and he described the partnership as progressing well as the companies pursue facilities management and integrated facilities management (IFM) opportunities. CFO Denise Achonu noted PVC is accounted for under the equity method, so its revenue is not included in Dexterra’s reported results.
On Right Choice, Becker said the business will be fully integrated into Dexterra’s platform within Q1. He described onboarding of employees and clients as “seamless,” and said “open camp optimization” in the Montney/Duvernay region is underway. Management also highlighted the acquired access equipment fleet as a source of medium-term capacity for growth opportunities and potential nation-building and infrastructure projects.
In the fourth quarter, Becker said PVC contributed CAD 2 million to adjusted EBITDA and Right Choice contributed CAD 6 million to adjusted EBITDA. Achonu provided a segment view, noting Right Choice’s contributions differ by segment classification.
Segment performance: support services and asset-based services
Support services revenue in Q4 was CAD 231 million, up 12% year-over-year, driven by strong camp occupancy and the impact of the Right Choice acquisition, Achonu said. Segment adjusted EBITDA rose 31% to CAD 24 million, and adjusted EBITDA margin increased to 10% from 9% a year earlier. Achonu said the improvement came despite tariffs, inflation, and economic concerns, citing supply chain management, contract management, and operational efficiencies.
Achonu said PVC contributed CAD 2 million to support services adjusted EBITDA in Q4, while Right Choice contributed CAD 4 million during what she described as Right Choice’s typically strongest quarter. Excluding PVC, support services adjusted EBITDA margin was 9.6%. For the full year 2025, support services revenue and adjusted EBITDA increased 7% and 18%, respectively, versus 2024. Achonu said on a “same footprint” basis, EBITDA increased 9%, or CAD 7 million, in 2025.
Looking ahead, Achonu said the 2026 sales pipeline remains strong across support services, including facilities management opportunities in both Canada and the U.S., and she expects long-term adjusted EBITDA margins in the segment to continue to exceed 9%. She added Dexterra expects its PVC investment to be cash-flow neutral in the near term as it invests in the business and technology.
Asset-based services (ABS) revenue declined 2% year-over-year in Q4 due to lower project revenue tied to camp installation timing and lower access matting rentals, partially offset by CAD 6 million in revenue from Right Choice. ABS adjusted EBITDA increased 9% to CAD 15 million and adjusted EBITDA margin rose to 37% from 34%. Achonu attributed the margin improvement to a shift toward higher-margin equipment utilization and contribution from Right Choice.
For 2025, ABS revenue was CAD 173 million compared with CAD 192 million in 2024, while adjusted EBITDA rose 9% to CAD 61 million. Full-year ABS adjusted EBITDA margin was 35% compared to 29% in 2024. Starting in Q1, Achonu said the company will no longer report Right Choice separately, as it will be fully integrated into the workforce accommodation platform. She reiterated the expectation for ABS adjusted EBITDA margins to remain in the 30%–40% range depending on mix.
Cash flow, balance sheet, and capital allocation
Achonu said Dexterra generated $60 million of free cash flow in 2025, with adjusted EBITDA conversion to free cash flow of 49%. She said conversion was reduced by delayed receipt of a customer receivable funded by the Canadian federal government; $11 million was collected after year-end. On that basis, she said the conversion would have been 58% if collected by year-end.
Dexterra’s tax losses are now almost fully utilized, Achonu added, meaning the company expects to make income tax payments and installments for 2025 and 2026 in 2026. Management expects adjusted EBITDA conversion to free cash flow in 2026 of greater than 50%, with higher conversion in Q3 and Q4 due to seasonality in support services.
Net earnings per share were CAD 0.12 in Q4 2025 versus CAD 0.11 a year earlier. Achonu said net earnings were impacted in Q4 and the full year by higher share-based compensation expense tied to the share price’s performance. She quantified the year-over-year after-tax increase in share-based compensation expense at CAD 2.1 million in Q4 and CAD 4.2 million for the full year. She also said CAD 6.7 million in share-based compensation payments were made in Q1 2026 for units that vested in early 2026, and that the company entered into a total return swap in early 2026 to hedge changes in share-based compensation expense against share price movements.
Net debt at year-end was CAD 200 million, or 1.6x adjusted EBITDA, with the PVC and Right Choice acquisitions adding about CAD 115 million of debt in 2025. Achonu said the company entered into a collar swap on $16 million of U.S. dollar debt to hedge interest rate fluctuations. The company’s CAD 425 million term loan matures in 2029 and has “significant unused capacity” for future M&A.
In 2025, Dexterra repurchased 1.5 million shares at a weighted average of CAD 7.80 for total consideration of CAD 12 million, and paid CAD 23 million in dividends. Achonu said the company paid dividends of CAD 0.375 in 2025 and declared a CAD 0.10 per share dividend for Q1 2026 (record date March 31, 2026; payable April 15, 2026). Becker added the company expects to use a portion of 2026 free cash flow to pay down debt.
2026 priorities and demand signals
Becker said the company’s priorities include maintaining the dividend, funding sustaining and high-return investments, pursuing accretive acquisitions in the medium term, and paying down debt—while emphasizing a near-term focus on realizing the full value of the PVC and Right Choice transactions.
Management also discussed potential upside from “nation-building and defense-related government investments,” while stressing that Dexterra’s current growth trajectory is not dependent on that activity. Becker said Dexterra is “largely insulated” from direct tariff impacts because labor and most supply inputs are domestically sourced, but he acknowledged broader trade actions and CUSMA renegotiation could pose risks to client demand, supply chains, or inflation.
During Q&A, Becker addressed ABS revenue variability, describing the segment as “lumpy” due to the timing of camp mobilizations and access matting utilization. He reiterated expectations for low-single-digit revenue growth in ABS over time and the 30%–40% adjusted EBITDA margin range. On buybacks versus debt reduction, he said the company remains opportunistic with its NCIB but is prioritizing integration and upcoming PVC-related considerations, with free cash flow currently being directed toward debt reduction.
On workforce accommodations capacity, Becker said Dexterra has about 22,000 beds under management across Canada, with about 12,000 as owned assets, and said utilization is in the “high 80s” after adding Right Choice’s beds—implying a little over 1,000 beds available. He also said the company can procure equipment in the market as needed, and that it would look to market equipment before considering new builds, which he said remain expensive in Canada.
Asked about the size and end-market mix of the camps business, Becker said the combined workforce accommodations business (including ABS and support services components) is about CAD 600 million, with roughly 40% tied to energy/oil and gas, 30% mining, and 30% infrastructure. He said Dexterra has deliberately diversified away from a heavier oil and gas concentration in recent years.
On PVC, management referenced historical figures disclosed with the acquisition: about US$170 million in revenue, with margins around 8%, and noted Dexterra holds a 40% ownership stake. Management also discussed continued investments in sales resources and technology. Achonu said certain technology investments, including workforce and human capital management systems, will be expensed rather than capitalized, and she reiterated a 2026 sustaining capital expectation of roughly 1%–1.5% of revenue.
About Dexterra Group (TSE:DXT)
Dexterra Group is a publicly listed corporation delivering a range of support services for the creation, management, and operation of infrastructure across Canada. Powered by people, we bring best-in-class regional expertise to every challenge and deliver innovative solutions, giving clients confidence in their day-to-day operations. Our activities include a comprehensive range of facilities management services, industry-leading workforce accommodation solutions, innovative modular building capabilities and other support services for diverse clients in the public and private sectors.
