Good day, and thank you for standing by. Welcome to the Bird Construction first quarter 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. To ask a question during the session, analysts will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded, and at this time, all participants are in a listen-only mode. 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 like to turn the call over to Teri McKibbon, President and CEO of Bird Construction.
Good morning, everyone, and thank you for joining Bird's first quarter 2026 conference call. With me today is Wayne Gingrich, Bird's Chief Financial Officer. Before we begin, I'd like to acknowledge our teams across the country who recognized Safety Week last week and the National Day of Mourning on April 28th. At Bird, safety is fundamental to how we operate. It's about ensuring our people return home safely every day, and it's inseparable from strong execution and operational discipline. Our focus on safety underpins consistent performance and supports long-term strength of the business. Thank you to our teams for the continued commitment to working safely and to delivering excellence.
Our business is aligned with some of the most significant long-cycle investment programs in Canada's history, getting underway across the country, including defense, nuclear and renewable energy, oil, gas, LNG, healthcare and educational infrastructure, land and marine infrastructure, mining and community development, and data centers. Distinct vertical platforms designed with purpose-built teams strategically developed with the overall benefit to not be overweight in any particular sector subject to economic volatility. In summary, it's an exciting time to be at Bird. We are built for this. Bird continues to carry significant backlog, pending backlog. Our teams are winning work across our target sectors. That visibility supports disciplined planning and execution while advancing progress toward our 2027 strategic plan objectives. We're starting to see a meaningful shift in how capital is approaching infrastructure investment in Canada.
Recent federal actions, including the Sovereign Wealth Fund, investment in skilled trades, the Major Projects Office, One Project-One Review agreements, and reinforced NATO defense spending are moving policy into execution. Together, these measures support projects advancing into construction. We expect this to improve line of sight on project progression nationally. Bird delivered a solid start in 2026 with strong revenue growth, stable margins, and improved year-over-year adjusted earnings. As we discussed at year-end, we expect revenue growth and margin accretion to accelerate in the second quarter and second half of the year. This is still on track. First quarter results reflect solid execution, a diverse and growing backlog, and clear cadence for margin accretion as our record work program converts.
Construction revenue returned to year-over-year growth of 9.2%, while adjusted EBITDA increased 8.9% with an adjusted EBITDA margin of 4.7%. Adjusted earnings and adjusted EPS also increased year-over-year. The quarter reflected strong organic growth in buildings and year-over-year growth in infrastructure, supported by both organic activity and contributions from FRPD. Industrial revenue tracked as expected with a modest year-over-year decline ahead of an expected ramp-up in the second quarter and second half. Backlog growth during the quarter reinforced performance trends as securements and conversions increased visibility and supported a favorable margin profile. Subsequent to quarter end, we announced two transformational partnerships, which I will discuss further in the following slides. We remain focused on disciplined project selection and continued progress towards a more balanced mix across industrial buildings and infrastructure.
Our combined backlog continues to be a key strength. Robust demand drove CAD 1.1 billion of backlog securements and conversions during the quarter, resulting in record contracted backlog of CAD 5.4 billion, up 23.8% year-over-year. Pending backlog totaled CAD 5.6 billion, this includes approximately CAD 1.5 billion of MSA and other recurring revenue expected to be earned over the next five years through our industrial maintenance and environmental remediation businesses. A high proportion of our backlog is delivered under collaborative contract structures that align incentives and help mitigate cost escalation while supporting consistent margins. Overall, backlog remains well-balanced and reflects higher embedded margins than a year ago, supporting revenue and margin progression through 2026 and 2027.
Margin progression continues to be driven by our fundamentals, revenue mix, increased exposure to more complex and higher margin sectors, strong execution, and increased self-performed content, and an operating leverage of volume scale. In the quarter, revenue mix reflected a higher proportion of buildings revenue, which typically includes less self-performed work. Our full year expectations are unchanged, and we remain confident in achieving our 2027 strategic plan objective of an 8% adjusted EBITDA margin. Turning to execution, our focus remains on safe delivery and predictable performance on our major projects progressed as planned during the quarter. Large capital investment projects remain a core element of our strategy, providing long duration revenue visibility and opportunities to expand scope over time. Our approach is to establish early involvement, demonstrate a strong commitment to safe execution, and deepen our role as programs advance.
Projects highlighted on this slide illustrate that model in practice and across several end markets. Through this model, S-LCLPs support margin progression, multiple-multi-year growth, and strategic capital deployment, remain an important contributor to progress against our 2027 strategic plan objectives and beyond. We recently announced a majority Indigenous-owned strategic partnership with Marten Falls First Nation through the formation of Piinahzii LP, focused on the collaborative delivery of community infrastructure that supports both near-term priorities and longer-term development objectives. Initial opportunities include improvements to the local airport, a solar facility with battery storage, and a training center. Marten Falls traditional territory includes large areas within the Ring of Fire region in Northern Ontario. The region has a significant nation-building priority with Canada's critical mineral strategy and hosts deposits of chromite, nickel, copper, cobalt, and platinum group metals critical to electric vehicle batteries and clean energy supply chains.
Despite this potential, development has historically been constrained by the absence of permanent all-season infrastructure, particularly the access roads to remote First Nation communities and prospective industrial sites. Governments are now advancing infrastructure initiatives to address these constraints and improve access as part of a broader effort to unlock long-term economic development. A number of agreements have advanced over the past year that support momentum on access and enabling infrastructure. Our partnership provides a structured framework to work with the community on infrastructure and readiness initiatives with strong emphasis on capacity building and local participation. Over the coming three to six months, we expect progress on planning design of access roads within the Marten Falls First Nation, with construction anticipated to commence in 2027. Beyond access roads, the region will require additional enabling infrastructure, including transmission, telecommunications, and digital networks to support future development.
This early engagement positions Bird with potential by visibility into a significant multi-year infrastructure program, supporting demand beyond 2027 and backed by our partnership with the Marten Falls First Nation. This morning, we announced a significant long-term strategic partnership with Bell AI Fabric, Bell Canada's national AI infrastructure platform. This partnership reflects the strength of our integrated self-perform model and our ability to deliver mission-critical infrastructure at scale, underpinned by an increasingly differentiated electrical, mechanical, civil, and system capability as a leading specialty contractor. Under the agreement, Bird and Bell have established a structured basis from which to collaborate on future AI data center projects. This provides us with a meaningful pipeline opportunity in one of the fastest-growing segments of the construction market, while also giving us greater confidence in future demand.
That long-term view will enable us to continue investing confidently in our people, supply chain relationships, operational capacity required to support a transformational multi-year build-up program. To date, Bell has indicated line of sight to monetizing approximately 800 MW of power over time. The structure of the partnership is also designed to align incentives over the long term. As part of the agreement, we will grant Bell warrants to acquire common shares which vest in connection with delivery milestones. This creates strong alignment between both organizations as we work together to build world-class digital infrastructure nationwide. The data center environment remains a significant addressable market. Over the past five years, Bird has built a mission-critical team and is well-positioned to pursue large-scale opportunities across Canada, as reflected in this morning's strategic partnership announcement with Bell.
Overall, this partnership reinforces our position as the partner of choice for Canada's largest and most complex infrastructure projects. The first project under the long-term strategic partnership with Bell AI Fabric is a 300 MW data center announced in March in the rural municipality of Sherwood, Saskatchewan. This facility represents Bell's largest ever investment in Saskatchewan and will be Canada's largest purpose-built AI data center. The first phase is expected to come online in the first half of 2027. Bird has been selected as the lead construction manager for the Sherwood facility, building on our deep roots in Saskatchewan. Since our founding in Moose Jaw in 1920, we have contributed to projects that generations of residents rely on every day. From hospitals and schools to industrial military facilities, energy assets and potash operations.
That long-standing presence matters because projects of this scale and importance require more than technical capability. They require trusted relationships, regional knowledge, and a proven ability to deliver in partnerships with communities and stakeholders. A core part of our commitment is our approach to Indigenous engagement, not just at Sherwood, but at other critical projects like the Piinahzii Limited Partnership in the Ring of Fire. We believe that meaningful partnerships are built through action, accountability, and measurable outcomes. That includes creating opportunities for Indigenous employment, procurement, training, and long-term community participation. We are proud to have maintained partnership accreditation in Indigenous relations since 2013, and in 2024, we achieved the PAIR Silver certification, a recognition that reflects years of sustained effort and continuous improvement.
As we move forward with the Sherwood project alongside Bell and our other project partners, we will focus on local and Indigenous involvement throughout the life of the project. The Sherwood project and our other partnerships are not simply about delivering infrastructure. They are about creating durable economic benefits and strengthening communities. In addition to these recent announcements, we continue to see significant depth across Bird's markets. Clients are increasingly prioritizing safety performance, delivery certainty, self-perform capability, and proven execution. As I referenced, the opportunity set remains broad across defense, nuclear, and renewable energy, oil, gas, and LNG, healthcare and educational infrastructure, land and marine infrastructure, mining and community development, and data centers. We are now seeing acceleration in spending in real time, we expect project flow to continue as policy commitments increasingly move to execution.
Many programs are anchored in long-term national priorities tied to energy security, supply chain resilience, and geopolitical considerations supporting multi-year construction programs with high barriers to entry due to complexity and certification requirements. Looking ahead, we remain confident in our progress towards the objectives outlined in our 2027 strategic plan. The fundamentals underpinning the plan have been in place for several years and have continued to strengthen since we formally laid out the strategy in 2024. Performance over the 2022-2024 strategic plan period reflects our risk-balanced business model and proven ability to deliver growth alongside margin improvement. We expanded margins by 200 basis points over 2023 and 2024, and our current plan requires a further 150 basis points of improvement across 2026 and 2027.
With line of sight from our backlog and strong execution, we remain confident in our ability to achieve the 8% margin target in full year 2027. The next phase is driven by execution-led fundamentals embedded in our backlog and supported by long-term demand across our strategic sectors. With that, I'll now turn it over to Wayne to walk through our financial performance in more detail.
Thanks, Teri. Good morning, everyone. Our teams delivered a solid quarter and set the foundation for the rest of the year. Construction revenue was CAD 783.4 million, up 9.2% year-over-year. As Teri mentioned, buildings delivered strong organic growth. Infrastructure grew both from organic activity and the contribution from FRPD, and industrial was modestly lower as expected. Gross profit was CAD 72.3 million, representing a gross profit margin percentage of 9.2% compared to 9.4% in the prior quarter. Margins were consistent with expectations reflecting mix, while execution discipline continues to support our margin trajectory. This included a higher proportion of buildings revenue, which generally carries a lower proportion of self-performed work.
Adjusted EBITDA was CAD 37.1 million, up from CAD 34.1 million last year, while adjusted EBITDA margin was 4.7% compared to 4.8%. The increase in dollars was largely attributable to higher growth profit. Net income was CAD 11.4 million or CAD 0.21 per share, and adjusted earnings was CAD 13.9 million or CAD 0.25 per share. On cash flow, we generated CAD 6.1 million, up significantly from 2025. Cash flow generation remains a core strength of the business. In the first quarter, cash flow reflected the quality of earnings. Bird's business model remains cash generative, supported by backlog quality, margin strength, and execution discipline.
We ended the quarter with CAD 195 million of cash and cash equivalents, along with CAD 341.5 million available under a syndicated credit facility, giving us resilience and flexibility. Our current ratio of 1.24 further underscores balance sheet strength. Free cash flow generation remains strong, with trailing 12-month free cash flow conversion of approximately 259% of net income and CAD 2.31 of free cash flow per share, reflecting strong operating performance. Returns and leverage remain well within our targeted ranges. 12-month adjusted ROE was 25%, and net debt to adjusted EBITDA for the quarter was 1.01x, reinforcing our capital discipline.
Overall, our balance sheet continues to support execution of our record backlog while providing flexibility to manage working capital requirements, invest in growth, and advance our 2027 strategic plan objectives. Turning to our capital allocation priorities, we maintain our balanced approach. As we've outlined previously, we reinvest in the business, including investments in equipment and technology that enhance productivity, execution, and self-perform capabilities. These investments directly support margin progression and long-term returns. At the same time, we remain focused on strategic M&A that expands our service offerings and self-perform footprint. As shown here, acquisitions have been a meaningful component of capital deployment over the past several years, and we continue to evaluate opportunities selectively with a clear focus on fit, returns, and integration. Maintaining a strong balance sheet remains a core priority.
As discussed earlier, our liquidity, leverage, and capital efficiency metrics position us well to support ongoing execution while preserving financial flexibility. Finally, returns to shareholders remain an important part of our framework. Based on our 2027 targets, we expect our dividends to continue to grow in line with earnings. Overall, this balanced approach to capital deployment supports execution of our strategy, enhances self-perform and service capabilities, and positions Bird to continue creating shareholder value over the long term. With that, I'll turn the call back to Teri.
Thanks, Wayne. Our outlook for 2026 is consistent with the expectations we communicated at year-end. We expect revenue growth and margin accretion to accelerate in the second quarter and through the second half, with all businesses contributing to full-year double-digit revenue growth. Our teams are securing new work at a pace that supports continued growth.
Combined backlog of approximately CAD 11 billion reflects a higher proportion of collaborative contract structures, more favorable margin profile than a year ago, and a diversified mix of end markets. This backlog profile, together with operating leverage as volume scale, provides meaningful visibility into margin accretion through the balance of 2026 and into 2027. Additionally, we've added confidence in our long-duration demand underpinned by the Ring of Fire partnership and associated opportunity set and the Bell AI Fabric partnership announced today. This backlog profile, together with operating leverage as volume scale, provides meaningful visibility and a margin accretion through the balance of 2026 and into 2027. As new capital enters the market, execution is increasingly the key differentiator.
Bird, with its labor depth systems track record of executing complex projects at scale, is well-positioned for future backlog growth, reinforcing our confidence in the outlook. With sustained demand and long-term structural drivers, we remain committed to our 2027 strategic plan targets. With that, I'll turn the call back to the operator to open the line for questions.
We will now begin the question-and-answer session. As a reminder, analysts who wish to ask a question may press star one one on their telephone. If you wish to remove yourself from the queue, you may press star one one again. Our first question comes from Chris Murray with ATB Cormark.
Yeah. Thanks, guys. Good morning. I guess starting with the outlook, I'm just trying to maybe get a sense of the magnitude of the opportunity here. Certainly a couple of very interesting announcements, and then there was another announcement this morning from the federal government around energy infrastructure, which probably ends up adding to what we've got going on. I think on the last call you talked about the fact that, you know, you thought that it was reasonable to hit the kind of the, even the bottom end of your original revenue guidance, for 2027 and that kind of CAD 4.6 billion-CAD 5.1 billion number.
As we start to think about the opportunity set, what's in backlog now, what you've been booking, can you maybe walk us through what that cadence looks like into 2027, if there's a reasonable chance that we're gonna move beyond that bottom end? I guess at, you know, I know you alluded to the fact double-digit kinda growth in 2026 into the second half, can you maybe give us a view of how you think, you know, we get to the end of 2026, jump off into 2027 towards those goals? That would probably be a little bit more helpful for us.
Yeah. That, I can take that one now, Chris. In October 2024 when we announced our strategic plan goals, you know, we announced a range of, I think CAD 4.6 billion-CAD 5.1 billion in revenue, with the midpoint kind of being CAD 4.8 billion. Of course, our 8% EBITDA target and our 33% payout ratio of net income for dividends. We remain committed to those numbers. You know, with the CAD 11 billion of combined backlog, CAD 5.4 billion of booked backlog, you know, we've got great visibility going into the second half here. We really do see that momentum picking up.
We think, you know, we're gonna gain momentum with the recent announcements here with Ring of Fire and with Bell AI Fabric. Yeah, that's gonna contribute probably less so to 2026, but certainly going into 2027, we're gonna be carrying a healthy book of business. Included in our CAD 11 billion of backlog is actually not very much from these two opportunities. These are kind of second quarter developments. We're carrying probably less than CAD 100 million in the CAD 11 billion for these, so that's not even reflected in those results. I think, going in, we feel pretty confident in our 2027 targets.
Okay. I guess, you know, just thinking about the magnitude of the growth, you know, Teri, I know you've talked about this before, you know, it almost looks like you're starting to, you know, I'll be cautious about outstripping your capacity to manage this growth. I know you've added a lot of capability with some of the acquisitions you've done, some of the teams you've added. How do you think about managing this magnitude of growth that we have coming down the pipe right now, not having something go wrong along the way?
We put a, you know, tremendous amount of time and investment into assembling, you know, a world-class team. I just find myself lucky coming to work every day and working with these really talented individuals. What we've been focused on strategically is really setting up these verticals with individual specialized teams. There's not much overlap, you know, if at all, until you get into almost C-suite of these individual units that we've got set up. As I said earlier, you know, on the data center side, we've had a team assembled for over five years, and we've invested a lot. You know, we've been building small, you know, data centers across the country, but generally, you know, quite small.
Obviously had, have gained a tremendous amount of experience, you know, doing that. Now as we look at a project like this that we've announced, we're well organized, well set up for it. I think you referenced the acquisitions. I think it comes from a, you know, a very strategic mix of things. I think, you know, back in 2020, the acquisition of Stuart Olson brought us this massive electrical army. Those are all variables. We continue to add our business unit here in Toronto. Dagmar has been on, I think they're onto number six right now, doing site development for data centers. Yeah, I think the group we've assembled can scale.
I think the opportunities that are in front of us, we're looking at them with a lot of discipline to ensure that we have the capacity to perform and not let one of our clients down.
Okay. I'll leave it there. Thanks, folks.
Thanks.
Our next question comes from Krista Friesen with CIBC.
Hi. Thanks for taking my question.
Yes, ma'am.
Maybe actually just following up on the data centers. Obviously, a lot of work to be done out there. Like, a lot of announcements. I'm just wondering on Alberta specifically. We've heard a lot of announcements for data centers, but it seems like it's taking some time for them to move through the permitting process. Just wondering if you can shed some light on what you're seeing in Alberta specifically.
Yeah. The difference in Alberta compared to other provinces, like we're really focused currently on the sovereign data center developers. Those entities, you know, before we get to any kind of announcement, have a power agreement in place. Alberta is different in the sense that they've basically said, "Bring your own power, and we'll support, you know, the permitting and support that process." The power part of it is considerable. It has to be assembled, and the work that has to be done. If someone arrived in Alberta today and thought they would do a data center, they would have had to have been in the queue for a gas-fired power plant five years ago to be able to get a power plant. You're probably seeing a bit of that.
I think the government is really trying hard to free up the, you know, the permitting side. You know, it has to still go through the various levels of government, and you've seen some things in the press with, you know, different governments, municipal governments and whatnot going through the, that framework. Yeah, we are really focused on the sovereign developers because in those cases, you know, they've got preferred power agreements.
Okay. That makes a lot of sense. Just switching gears here. Would you be able to provide us with an update on where things sit with the turnarounds for some of your oil and gas clients?
Everything we've heard, you know, Krista, at least, you know, this is always a little bit, there's some variability, but everything we're hearing, like our turnarounds were always planned for the fall. You know, so that's still intact. The feedback we've had is those remain on schedule. We're putting a lot of work on the front end of those. You know, we anticipate having a pretty busy fall with those assignments in different parts of Canada, you know, which is, which is exciting for us to grow that platform.
Okay, great. Thank you. I'll jump back in the queue.
Our next question comes from Frederic Bastien with Raymond James.
Good morning.
Good morning.
The two partnerships. Congrats on the partnerships you recently signed. On the Bell announcement specifically, can you give us a sense of what is contemplated for the project's first phase?
Relative to what, Fred?
In terms of scope of work, I know the timeline is fairly quick.
Yeah.
online in the first half of 2027.
Yeah. We have.
You know, just wondering how quickly you mobilize.
Yeah. We have a, we're the preferred, you know, basically construction partner that we've contracted. That's why we're announcing it this morning. We've been working on this for, you know, almost two months, you know, through all the procurement and we'll be mobilizing fairly quickly. I'm guessing, maybe Monday, we're mobilizing fairly quickly. The site development is already contracted, that's underway. We'll be following that. Obviously, the site's got to be fully developed, we're getting organized for various aspects of the job and exploring, you know, various concepts to accelerate the project and including modularization in some of our facilities.
Yeah, it's, you know, it's early days, but we'll probably have a little more color as we get into our Q2 discussions of what we've got underway and yeah, just executed the contract overnight.
Okay. Just curious, was a data center build-out or partnership of this magnitude even contemplated when you set out your initial goals for 2027?
In the strategic plan, you're talking about?
Uh-
Like in our strat plan? Is that what you're talking about?
I mean, yeah, your strat plan. Obviously, you had.
Yeah.
You know.
Yeah.
You obviously budget.
It was very small.
You have visibility.
Yeah.
Yeah, just curious where that ranked?
It was small. It was in the plan, but it was small because, you know, as you know, we developed this plan, you know, through the first nine months of 2024, and it was still, you know, It was kind of early days on AI and early days on the acceleration of these facilities in the U.S. It was a smaller subset at the time of the areas where we had interest. We were, you know, we were working with our team and traveling the globe to learn everything we could learn who was doing what, where, and the plan, you know, through 2027 was a smaller revenue target.
Okay, cool. Last question on this one, I promise. Can you provide a bit more color on the issuance of warrants linked to this partnership? I understand it's common in the U.S., but perhaps more of a novel concept here.
Yeah. So we're gonna be issuing 2.625 million warrants. You know, we, we like this a lot because it really drives alignment through the strategic partnership. In terms of vesting schedule, the first 750,000 warrants will vest, you know, as the first project here in Saskatchewan comes online. Then future tranches of warrants will vest with, you know, other future projects that they come about and are awarded to Bird. That will occur over a five-year period, and the warrants have a seven-year total life to be exercised.
Okay, great. That's good color. Appreciate all the details. Thank you.
Thanks, Fred. Thanks.
Our next question comes from Ian Gillies with Stifel.
Morning, everyone.
Hi, Ian.
Teri, are you able to confirm that the contract structures for this data center partnership will largely follow the IPD structures you'd like to use in other parts of your business?
This is a fairly common contract structure. A CCDC 5B is something we use, you know, quite extensively, but it fits the same, you know, same types of profiles as we see in our business, and we are very comfortable operating under that type of a framework.
Okay. Maybe switching gears to the West Coast. There's obviously a lot going on there. Can you maybe just provide some updated commentary on maybe how you see LNG development progressing over the next, call it, 12 months- 18 months, and perhaps any other large industrial developments you see happening along the West Coast?
Yes, certainly. We remain confident in the second phase. There certainly is all the right leading indicators. There certainly hasn't been any, you know, press on any reason they wouldn't be moving forward. We're heavily engaged with the entity, but we can't obviously comment on that. We, you know, obviously we're continuing with Woodfibre. That's gone very well. We've got other opportunities in the pipeline. The expansion of the second phase of Roberts Bank is in procurement. Roberts Bank phase II in the Lower Mainland.
That's obviously exciting, and as you move to more of the industrial side, you know, certainly sounding like we're getting close now on a carbon capture, an emission cap framework, you know, with the news yesterday and some more news anticipated tomorrow. That'll really be a catalyst for new oil production, which we haven't seen since 2014. Anxious to see that because obviously we're so well positioned in Canada's oil sector with our teams that are focused in those areas. You know, Dow Chemical's ramping up in Alberta, which we were hoping for, and it's probably ramping up faster than we thought, so that's a good sign. Generally industrial is picking up nicely as the year evolves and in the West.
Okay, last one for me is, when you acquired Jacob Bros, they obviously had some airport expertise in Vancouver. At Pearson, it feels like the LIFT program's finally starting getting ready to take off. With that in mind, can you talk at all about how you're thinking about pursuing some of these airport upgrades in Canada, which seems to be another important driver?
Construction demand over the next, call it, three to five years?
Yeah. Yeah, I'd say that, you know, we've had a pretty active role in YVR in Vancouver. YVR seems to be moving back now into development again, which is exciting. A lot of our decisions on what we pursue in Canada really have a lot to do with the model that the client wants to contract under. You'll often see us, you know, and we're very, very lucky. The first time in my career we've been in a scenario where you can make choices as to something you don't like, versus trying to possibly get through a commercial model that you don't really like, but you try to price your way through it.
You know, we can make choices today in terms of where we go and where we don't go. You know, we're very focused on a collaborative model, but some of the, some of the clients or the potential opportunities out there, you know, are not quite there. We'll leave it at that.
Understood. I'll turn the call back over.
Our next question comes from Michael Tupholme with TD Cowen.
Thank you. Good morning. The first question is just another question regarding this morning's Bell AI Fabric announcement. For the 300 MW Sherwood facility, are you able to talk in a little bit more detail just about the scope of your role or mandate on the project as it relates to being the lead construction partner? I guess sort of as a, as in addition to that, you know, you mentioned there's very little in the backlog for this and, I guess also the Marten Falls opportunity. When does this get booked into backlog, this first data center and the work associated with that? How do we think about potential value? I guess how much of this is self-performed versus, you know, work that maybe need subcontractor?
To me, I'll tackle parts of that, and Wayne will comment on the mechanics. This partnership, you know, is certainly a partnership that's evolving. We've been contracted because we have the capabilities in a multitude of areas to self-perform the project. We obviously are aligned with Bell to balance that, you know, with local contractors and local, you know, indigenous contractors and indigenous trades. It's early days. We just signed overnight. This will continue to evolve, Mike, and we'll have more clarity on exactly what we're doing. We have the full capability to self-perform the project, but that will evolve over time as we balance the needs of the local community with our approach.
That's just something we have a very good track record of doing. Maybe on the reporting, Wayne.
Yeah. In terms of timing. Q1, we don't have anything reflected in our CAD 11 billion combined backlog. In Q2, we certainly will have it reflected in our combined backlog, and I would expect that it would go into booked backlog in full. There may be components that flow through pending first, but in total it will be reflected in there.
That's helpful. Thanks. Just a clarification or follow-up to that, Wayne, when you book, whatever you book in Q2, is that gonna be a sort of a 1x booking for this entire project, or is this simply a portion of the, of the three this particular data center that gets booked in Q2 and more pieces come after that?
We're still working through some of the mechanics of that with Bell, so I'd say more to come here.
Okay. Just one more on this, on this particular opportunity and the partnership. Do you have line of sight to future opportunities beyond this first facility in Sherwood? Like, do you have a sense for what that looks like?
Bell has provided their line of sight publicly. I think that would be all we would say to that.
Okay. Fair enough. Just shifting gears, question regarding defense opportunities in Canada. Can you talk specifically about how you're positioned for the forward operating locations and/or northern operational support hubs that the Canadian federal government has talked about, building in the North?
It's certainly an exciting series of opportunities. There are, you know, sort of four major main bases that the government has planned, which is public. There's one in Inuvik, there's one in Yellowknife, there's one in Iqaluit, and it's more of an upgrade expansion of Goose Bay. Those are the secure bases that will host, you know, the either Gripen or F-35 fighters. They'll be based in those bases. We're currently building the F-35 facility in Cold Lake. That's the basis. What happens with those is there's also in parallel to the base development, which I think they have budgeted CAD 20 billion for all four total, part of a CAD 40 billion investment in the Arctic.
The other CAD 20 billion is all the community development around these secure facilities because, you know, you obviously have a high security area that you build, and then you have the town where everyone would live and reside in. There's a combination of both, and I think that makes up the balance of the, or some portion of the balance of the CAD 40 million. Then you're seeing, which is really exciting for us, you're seeing some ports getting lots of traction. Certainly seems like, you know, there's a big focus on developing Churchill, and then also developing a new Arctic port in Grays Bay, which is one of the only deep water accessible locations in the Arctic. Lots of, lots of activity starting to happen around that.
That's really somewhat independent, although that would be a main supply channel to the bases. We're working in Nunavut right now and in Inuvik and also in Tuktoyaktuk. We're building a school and building a community center, and we've consistently been in those areas. We built a hospital in today's dollars in Yellowknife, about five years ago, finished that, called Stanton. We've done a 80-room hotel in Aklavik four years or five years ago. We're, you know, we're regularly in and out of Goose Bay with our Inuit partnership, and that's referred to as Timmiak. That's an Inuit partnership that we have on in the Northeast. We're pretty well-positioned for these as these evolve.
We have a team that's assembled specifically, you know, for this group, with some really exciting new members that have joined us, including a recently retired major general from the Canadian Army. Big focus area for us, what's happening here.
That's very helpful. Really good color. Obviously, it does sound like you're really well-positioned. If you were to be successful in some of these opportunities, whether it be bases or ports or both, like timing-wise, could we see something come through this year in terms of awards on some of these, or are they a little bit further out?
Yeah, no, it's the procurement timing is I think the first one comes in July, August, and then they flow behind those kind of every six months, I think is the way they've set them up. We have a team assembled. We're not tackling these on our own. We have a team assembled, which is, I would say it's a Tier 1 team, including our engineering partner.
All right. That's all very helpful. I will leave it there. Thank you.
As a reminder, if you would like to ask a question at this time, please press star one one on your touchtone phone. Our next question comes from Yuri Lynk with Canaccord Genuity.
Hey, good morning.
Hey, Yuri.
I'm just trying to make sure I understand the Bell opportunity. I mean, and especially in proportion to the warrants that were issued. I mean, it's a big number, right? You know, this might go into backlog in Q2, but your guidance is, you know, is unchanged. Bell's talking about spending over CAD 1 billion in 2026 on the project.
I'm just trying to square the outlook with the warrants and the potential, like how large this could be, and if you feel it's all reflected in your existing guidance or if it's looking conservative or just how to kinda think about it in the context of, you know, over CAD 135 million worth of stock to Bell for this deal.
Yeah. I mean, it's not the warrants aren't tied to one project. 750,000 of the warrants are tied to the one project. You know, the rest of the warrants are tied to future data centers that would be awarded and completed by Bird over the next five years. That would be a pretty significant pipeline of opportunities for our business. Obviously gives us great visibility to our work program and to work for a Tier 1 client.
Yeah. just, you know, how do I think about the CAD 1 billion of CapEx they're spending in 2026 on this project?
Yeah. I think, Yuri, we can't really comment on what Bell has announced, in terms of their CapEx. We really can't comment on that, to be honest.
Okay. Is your role purely as a subcontractor or GC?
No. No. We're the general contractor for the project, and the various entities that end up in engagements. Some of them are, you know, one of them was already contracted before for our agreement, so that one is, you know, getting underway, and Bell announced that a week or two ago. That's direct to Bell, but the balance of construction will be part of our umbrella.
Okay. you hope to self-perform 10%, 20%, how do we think about the sub-
It'll depend on the capacity. It'll depend on. We have the capability to subcontract 9%, but it's a variable. You know, variable question right now, because it'll evolve as like I said, we only signed this overnight. That'll evolve with the balance that we agree to between Bell and ourselves as to, you know, in terms of, you know, what works with the local businesses, and we wanna maintain that balance. It's difficult to predict right now. You're just in the newness of this, so we'll have more color, you know, as the year evolves, so.
Okay.
It's exciting, and it's a tremendous opportunity, and especially the longer term partnership and the alignment we have with Bell AI Fabric, you know, is transformational really for our company. It's just difficult to put a specific guidance to this at this point. We'll have more, you know, clarity as we get moving now.
Okay. Okay, and just a last clarification, like, as a general contractor, so you're not, say, the construction manager on the project, which would, I think, be a bit of a lower margin?
We're a bit of both. Yeah. We're a construction manager that has as a partnership with Bell, you know, to develop this site, and we will have oversight of construction activities. We'll work with the, like I said, the local community and the local trades and that's still in the development stages.
Okay. Okay, guys, sounds like there's still lots to come. Definitely exciting. Just trying to make sure I understand the opportunity. Thanks for the color.
Thank you.
This concludes the question and answer session. I will hand the call back over to Mr. McKibbon for closing remarks.
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