Black Diamond Group (TSE:BDI) reported first-quarter 2026 results that management described as “continued stability across the platform,” supported by higher consolidated revenue and Adjusted EBITDA, as well as contributions from the Royal Camp Services acquisition completed in November 2025.
Quarterly results and rental fundamentals
Chief Executive Officer Trevor Haynes said consolidated revenue rose 27% year-over-year to CAD 130 million, while Adjusted EBITDA increased 21% to CAD 32 million. He highlighted growth in recurring rental revenue, noting consolidated rental revenue increased 16% to CAD 43.8 million, driven by “disciplined capital allocation for organic fleet growth,” steady utilization, and “moderate rate improvement.”
On capital deployment, Haynes said total capital expenditures were CAD 16.8 million, consistent with the comparative quarter, and capital commitments totaled CAD 26.5 million, “largely allocated toward contract-backed asset additions.” He added that the company intends to continue scaling its fleet “in line with end market demand,” while retaining flexibility for other capital allocation priorities, including acquisitions, debt reduction, and potential shareholder returns.
Segment performance: Workforce Solutions, Modular Space Solutions, and LodgeLink
Chief Financial Officer Toby LaBrie said first-quarter earnings per share declined by CAD 0.06 versus the comparative period, attributing the change to factors including depreciation and amortization tied to Royal Camp (a CAD 0.075 impact on EPS), shares issued in connection with prior transactions, higher stock-based compensation linked to share price, and moderated activity in legacy Workforce Solutions operations after a large U.S. contract prepayment in the fourth quarter of 2025.
At the segment level, LaBrie said Workforce Solutions (WFS) revenue increased 54% to CAD 81.5 million, with Adjusted EBITDA up 48% to CAD 18.9 million, driven primarily by services growth and Royal Camp contributions. WFS utilization was 56.5%, which management characterized as leaving meaningful available capacity.
Modular Space Solutions (MSS) generated rental revenue of CAD 26.8 million, up 5%, with Adjusted EBITDA of CAD 19.4 million, consistent year-over-year. Utilization was 77.7%, which LaBrie said remained within the optimal range. Average monthly rates rose 3% on a constant-currency basis. He also highlighted growth in value-added products and services (VAPS), with VAPS revenue up 35% and VAPS reaching 10.8% of rental revenue.
LodgeLink posted total trade value of CAD 32.7 million, up 52%, and net revenue of CAD 3.7 million, up 37%. Total travel segments increased 15% to 154,979.
Balance sheet, free cash flow, and facility expansion
LaBrie said net debt ended the quarter at CAD 330.7 million, with net debt-to-trailing twelve-month Adjusted EBITDA leverage of 2.1x, which he noted was at the low end of the company’s target range. Liquidity at quarter-end was CAD 93.3 million before the company’s asset-based lending facility expansion.
Haynes said Black Diamond expanded its asset-based lending facility to CAD 550 million from CAD 425 million, with an uncommitted accordion of CAD 75 million, which he said enhances flexibility to scale the business. LaBrie added the average interest rate paid on debt during the quarter was 4.21%, down 62 basis points year-over-year.
LaBrie reported free cash flow of CAD 17.8 million in the quarter, up 5% from the comparative period. He also said the company’s ERP implementation remains on schedule, with total investment to date of approximately CAD 9.3 million and roughly CAD 2.6 million remaining, and the current phase for MSS and corporate scheduled to go live in the current quarter.
Demand outlook: Canada “nation-building,” data centers, and the military
Management emphasized a constructive outlook, while cautioning that timing of large project starts can be difficult to predict. Haynes said the company expects “similar steady near-term performance” through the first half of the year, with potential acceleration later in 2026. LaBrie said meaningful improvements are expected in the second half of 2026 tied to seasonal education and construction activity, and he reiterated management’s view that large Canadian infrastructure and resource projects could provide durable multiyear demand once underway.
On WFS demand, Haynes told analysts that he has not seen a project-bidding pipeline like the current environment in decades, referencing mining, energy infrastructure, and Canadian military initiatives. He said Black Diamond has about 6,000 beds of “ready-to-deploy assets,” and that the company’s quoted demand “does exceed the available capacity,” though the mix and timing of projects remains uncertain.
Chief Operating Officer of Workforce Solutions Mike Ridley said the broader pipeline remains “very, very active” across mining (including Eastern Canada), construction, government spending, disaster relief, homelessness, and oil and gas activity in the Duvernay and Montney, in addition to activity in the U.S. and Australia. Haynes added that smaller projects are mobilizing now, supporting current operating levels even as larger projects ramp.
Asked about sector-wide bidding, Haynes said Black Diamond has “well in excess of CAD 1 billion of high quality outstanding bids,” while noting the complexity created by duplication across bid processes.
Management also positioned the “nation-building” theme as a tailwind for MSS, with Haynes citing demand for temporary project offices, laboratories, training buildings, and other site infrastructure. MSS COO Ted Redmond said the company has participated in the U.S. data center trend for the past 10 years and described the scale of spending as having increased dramatically. Redmond added that Black Diamond is already on “a significant number of data centers” and expects that to continue, while noting he did not have an exact percentage of U.S. revenue tied to data centers and that it is “much less than 50%” of construction activity.
Haynes also said the company has been building relationships and qualifications for Canadian defense procurement and created an Ottawa-based entity, Black Diamond Defense Services, to support this effort. He characterized the opportunity as spanning MSS, WFS, and LodgeLink, with Ridley noting a project that could deploy as early as the third quarter, and Haynes suggesting an infrastructure build could span “five, six, seven” years.
Royal Camp integration and LodgeLink 3.0 update
On the Royal Camp acquisition, Haynes said the integration has been “probably the quickest and most seamless” among the company’s past deals, citing strong alignment and early commercial coordination across an integrated asset pool. He and Ridley referenced replacing external caterers with Royal in operated facilities as a source of margin benefit, while noting systems integration work remains, including ERP-related activities. Royal Camp President Jon Warren said IT integration is complete and described positive feedback on catering operations and cross-marketing opportunities between the platforms.
Regarding seasonality, management said breakup-related slowdowns appear shorter than in prior cycles. Warren said drilling activity can quiet down for much of April, but “what we lost in drilling, we gained in turnaround,” and he said rigs were starting to return in May. Haynes added that a meaningful portion of Royal’s revenue comes from long-term operating camps, including mining-related work, which Warren described as “constant.”
For LodgeLink, Haynes provided an update on the company’s “generation 3.0” product, saying the platform is moving from pilot to advanced pilot, with expectations for beta testing “this summer” and into the fall, and general availability “later this year.” He said the company anticipates a maturing revenue model that could add new users and revenue types, while noting customer sign-ups have been strong even ahead of the 3.0 rollout and retention among large long-term customers remains “high 90s to 100%.”
On LodgeLink margins following the Spencer Group acquisition, Haynes said traditional travel management revenue streams carry lower margins than LodgeLink’s accommodation business, and he expects blended margins to improve gradually as LodgeLink grows faster and becomes a larger portion of the mix. LaBrie echoed that view, saying sequential improvements should follow as the revenue mix shifts toward the accommodation side.
About Black Diamond Group (TSE:BDI)
Black Diamond Group Ltd rents and sells space rental solutions and modular workforce accommodations to business customers in Canada, the United States and Australia. The company also provides specialized field rentals to the oil and gas industries of Canada and the United States. Besides, Black Diamond Group provides turnkey lodging services, as well as a host of related services that include transportation, installation, dismantling, repairs, maintenance, and ancillary field equipment rentals. From its locations, the company serves multiple sectors including oil and gas, mining, power, construction, engineering, military, government, and education.
