WSP Global Inc.

Thank you. Good day, everyone.

Thank you for joining our call. Today, we will be discussing our Q2 2025 performance, followed by a Q&A session.

Alexandre L'Heureux, our President and CEO; and Alain Michaud, our CFO, are joining us this morning. Please note that this call is also accessible via webcast on our website.

During the call, we will make forward-looking statements. Actual results could differ from those expressed or implied.

We undertake no obligation to update or revise any of these statements. Relevant factors that could cause actual results to differ materially from those forward-looking statements are listed in the MD&A for the quarter ended June 28, 2025, which can be found on SEDAR+ and on our website.

In addition, during the call, we may refer to specific non-IFRS measures. These measures are also defined in the MD&A for the year ending December 31, 2024.

Our MD&A includes reconciliations of non-IFRS measures to the most directly comparable IFRS measures. Management believes that these non-IFRS measures provide useful information to investors regarding the corporation's financial condition and results of operation as they provide additional critical metrics of its performance.

These non-IFRS measures are not recognized under IFRS, do not have any standardized meaning prescribed under IFRS and may differ from similarly named measures reported by other issuers and accordingly, may not be comparable. These measures should not be considered as a substitute for the related financial information prepared by IFRS.

With that, I will now turn the call over to Alexandre.

Thank you, Quentin, and thank you all for joining us today. Let me start by saying that I am very pleased with our performance in Q2 2025.

We had robust profitability, increased cash flow generation and a historically low DSO for second quarter. We are also enhancing our 2025 financial outlook.

Let's dive into a few highlights. First, on net revenues.

In Canada and the U.K., we delivered high single-digit organic growth and considering our backlog, the pipeline of opportunities and the recent economic stimulus announcement, we feel positive on the outlook. In the U.S., POWER Engineers delivered a solid 16% organic growth and significant revenue synergies opportunity, and the integration is progressing as planned.

When considering the organic growth of POWER, we delivered high single-digit organic growth in the U.S. this quarter and our backlog is solid.

In the Nordics, we have seen an uptick in the activity level and our backlog is growing. And in Australia and New Zealand, our rightsizing activities are largely completed.

Our backlog and pipeline of opportunities are expanding, and we expect a progressive return to growth in the second half of the year. All in all, we delivered solid growth while keeping our business fit for purpose, which continues or a testament of the strength of our diversified platform.

Second, on profitability, adjusted EBITDA grew by 22% in the quarter. Our adjusted EBITDA margin increased by 80 basis points as we continue to own in our productivity and project performance.

I'm particularly pleased with the fact that we delivered margin expansion across each of our reportable segments despite absorbing optimization and rightsizing costs, which impacted our overall margin by approximately 50 basis points in the quarter. Excluding these costs, our focus on operational excellence delivered 130 basis point improvement in the quarter.

Third, following a strong cash generation performance in Q1, Q2 performance was even stronger. In fact, free cash flow increased by almost $400 million versus Q2 2024 and over $600 million versus last year for the first 6 months period.

Our DSO stands at 69 days, making a historically low level for a second quarter. Our leverage ratio now stands in the middle of our target range and further deleveraging is expected in the second half of the year, which puts us in a favorable position to seize opportunities.

On the M&A front, we continue to pursue opportunities and strategically deploy capital. In Q2, we announced the acquisition of Lexica, U.K.-based consulting firm specializing in healthcare and life sciences.

This acquisition adds expert to our planning, property and advisory business in the region, forming a new healthcare and life sciences advisory team. WSP also announced the acquisition of Ricardo.

Headquartered in the U.K., this consultancy firm delivers strategic advisory and engineering solution that intersect the global transport, energy and environment agenda. Ricardo operates across Europe, Australia, North America, Asia and the Middle East.

On July 15, the shareholders of Ricardo approved the scheme at the shareholders' meeting held in connection with WSP's acquisition. The acquisition received overwhelming support with over 90% of shares voted in favor of the scheme.

This step marks an important milestone towards welcoming the team to WSP. Closing the acquisition remains subject to obtaining the required regulatory approval and the sanction of the scheme by the U.K.

Court, all of which is expected to occur in Q4 2025. Now allow me to elaborate on the dynamics across our four core market sectors.

The Transportation & Infrastructure sector continued to perform well in Q2. In particular, our leading tunnel teams continue to win new business, including the Virginia Department of Transportation mandate to provide project management services for two tunnels as part of the Hampton Roads Bridge-Tunnel Expansion project.

Water continues to benefit from investment across most of our geographies. Of note, WSP secured a role in the substantial expansion of Ontario's Courtright water -- wastewater treatment plant.

Rail and transit also maintained robust momentum. For example, in Finland, we secured new business for several strategic projects in Nordic countries, including a segment of Rail Baltica in Estonia and the renewable of the Copenhagen Metro signaling system.

In APAC, WSP picked up strategic wins as the market continued to show signs of recovery. The new terminal of Perth International Airport is one of the many new projects we signed recently.

Let's now shift to our Property & Building sector. We posted strong performance in Canada, the U.S.

and the U.K., which account for approximately 2/3 of our business and our backlog and pipeline remain healthy, which provide a positive outlook for the rest of the year. Four standout area are data centers, industry and advanced manufacturing, healthcare and defense, all generating significant opportunities that point to future growth.

For example, we continue to see strong data center investment in AI and digital infrastructure with approximately 300 new mandates in the quarter and robust activity across all of our geographies. These mandates encompass site acquisition due diligence, campus master planning for new AI Giga factory, greenfield data center design projects, brownfield data center upgrades and the growing power and water infrastructure demand.

Let's move on to Power & Energy. The sector continued to demonstrate strong momentum throughout the quarter.

Our thermal generation business is driving considerable growth. The transmission distribution market in the U.S.

has remained active and most of our clients are maintaining or increasing their spend projections for 2026 and beyond. Now a brief update on the ongoing integration of POWER Engineers.

We successfully achieved several milestones and preparation to move POWER on our ERP system are in full swing. The success of this integration is evidenced by strong financial performance.

The business is growing at a double-digit pace. We have a growing backlog and with over 250 active pursuit in the pipeline today, we are accelerating our joint market presence with a new and existing -- with new and existing clients.

On Earth & Environment sector thrive in a fluid environment. This last quarter, we secured a number of very important new wins in high demand area like power, energy, defense, technology, water and mining to name just a few.

WSP was awarded a major PFAS project for the U.S. Air Force in the American Midwest.

This win shows our strong position in the combined defense and water markets. Moreover, our leading biodiversity and marine expertise remains a key differentiator for WSP and in Canada, WSP secured a new mandate for Hydro-Quebec's major Gull Island hydro projects, which includes environmental studies, biodiversity assessments and geotechnical scopes.

Finally, a few updates on digital. As a reminder, at our Investor Day earlier this year, we shared three priorities for our digital strategy.

One, growing organic digital revenues at least twice as fast as our core business; two, pioneer solutions that grew recurring digital revenue and three, be a catalyst for change in our industry, working with our clients and the world innovative technology companies. We saw strong momentum around all these three focus areas for the first half of the year.

We have met our internal organic growth ambitions globally and are confident for the rest of the year. Our pipeline is strong and growing across all our target offerings.

For example, we have received multiple awards from clients who have requested our engineers -- engineering and science expertise to organize their critical asset data, artificial intelligence application. Another example, we were awarded a multiyear contract in New Zealand to continuously monitor areas of landslide risk using specialized sensors and real-time alerting systems.

Real-time monitoring of geo-hazard and extreme weather risk is one of several areas where we see strong growth signals for recurring digital revenues, which is in line with our second objective. We have a lot of momentum with our digital ecosystem partners as well.

In addition to the Microsoft alliance announced in February, WSP announced a strategic partnership with Urban Logic in late May and recently won projects where domain expertise and artificial intelligence solutions will predict wild fire risk in Alberta. We are in active discussion with several other potential technology partners.

We are very pleased with our progress with the Microsoft strategic alliance. Externally, this has resulted in several strategic wins and has led to numerous client conversations regarding how WSP and Microsoft can collaboratively address their most significant challenges.

Internally, WSP has pragmatically deployed AI tools globally with strong initial impact and feedback. Several internal AI work stream are in progress with some already contributing to internal productivity improvements.

In summary, we are starting strong in our digital ambitions for the strategic cycles. And now before I turn it over to Alain, I am pleased to reaffirm our #1 position in Engineering's News record 2025 list of the top 225 international design firms, a standing WSP has proudly held since 2021, with leading position in transportation, building, power, water, hazardous waste and sewer waste.

Now over to you, Alain.

Thanks, Alex, and hello, everyone. I'm pleased to report on our solid quarterly results.

For the second quarter, revenue and net revenue increased by 15% and 16%, respectively, displaying robust year-over-year growth. The increase was mainly attributable to acquisition growth of 10.4% and organic net revenue growth of 3.5%.

POWER Engineers continue to demonstrate strong growth with an organic growth rate of 16% compared to Q2 2024. Canada, the U.S., including POWER and the U.K.

each delivered high single-digit organic growth in the quarter. Backlog reached $16.3 billion, up 10.9% in the 12-month period, representing 11 months of revenue.

Our book-to-burn ratio is above 1, similar to what we have delivered every quarter for the last 4 years. Overall, each of our key markets remained strong and of interest, we are seeing positive development and backlog increases in the Nordics, Australia and New Zealand.

Moving on to profitability. Adjusted EBITDA in the quarter grew to $633 million compared to $520 million in the second quarter of 2024, an increase of 22%.

Adjusted EBITDA margin for the quarter stood at 18.2% compared to 17.4% in Q2 2024, an increase of 80 basis points, mainly due to the continued focus on productivity. Excluding optimization and restructuring costs, our margin increased 130 basis points in the quarter and each of our reportable segment delivered solid margin performance in the quarter.

Adjusted net earnings for the quarter reached $307 million or $2.35 per share, up 30% and 24%, respectively, compared to the second quarter of 2024. The increase is mainly attributable to higher adjusted EBITDA.

As for our cash position, I'm particularly pleased with our very strong cash flow generation this quarter. Net debt to adjusted EBITDA ratio stood at 1.5x, which is within management's target range of 1 to 2x, which provides flexibility to deploy capital.

As we now conclude the first half of the year in a good position, we decided to update our 2025 financial outlook with adjusted EBITDA now expected to reach the higher end of the range. This is due to continued strong performance in Canada, the Americas and EMEA, thanks to the fact that our business in APAC is now largely rightsized and fit for purpose.

Our net revenue outlook remains unchanged between $13.5 billion and $14 billion, with organic growth on a constant currency basis between 5% and 8%. From a segment standpoint, net revenue in the APAC reportable segments are expected to conclude the year with low to mid-single- digit organic contraction.

The remaining 2025 targets are -- and other assumptions are reiterated. As a reminder, the '25 financial outlook excludes the expected contribution of acquisition not completed as of August 6, such as Ricardo Plc.

Lastly, I'm pleased to share that in addition to delivering strong financial performance in the quarter, we continued the deployment of our new ERP. We are now live in 15 countries with the Middle East, India and Africa added in June 2025.

These recent implementations went well, and we have seen strong billing stats volume in the first month of operation. We now have approximately 50,000 active users under the new system.

On that, back to you, Alex.

Thank you, Alain. Let me just reaffirm how proud I am of our results this quarter and in the first half of the year.

Our North American and U.K. businesses are benefiting from strong growth momentum and delivering leading margins.

Our rightsizing initiatives in APAC are largely completed, and the business is now fit for purpose with a growing backlog. Our ERP rollout continues to progress as planned with productivity gains starting to materialize.

We announced key acquisitions to further strengthen our platform, and we have a strong balance sheet and the M&A pipeline is healthy. Overall, we are well positioned for the future and are feeling good about the second half of the year.

We believe our diversified business and the long-term trends driving our industry will continue to support compounded sustainable performance. With that, we can open the lines to questions.

Congrats on the progress here. Really a standout performance in cash flow.

It seems like you're moving on from the ERP costs and you have the benefit of Section 174 R&D expensing. I suppose that leaves M&A and cash drag and really just execution.

So maybe you can just give us a sense of how to think about any cash drag from M&A ahead? And to what extent your execution focus can kind of keep cash flow at this healthy level?

Well, you look at our leverage and our ratio to EBITDA at the moment, we're already back to the middle of the range that we've provided in our outlook. So I think we are deleveraging very, very fast.

So obviously, I just mentioned, Steven, that the pipeline of opportunities is healthy. And I continue to believe that this is part of our DNA to continue to have a strategy that combines strong organic growth, strong margin improvement, but also inorganic growth.

So without providing any future guidance as to what may or may not happen in the second half of next year, we do -- we are extremely pleased now with our cash flow generation. And I think you are right in saying that now 80% -- more than 80% of our EBITDA has been converted on the ERP, so we have significantly derisked this program.

And now I think the benefits are materializing.

Yes. And if I could just add a few points.

Strong performance this quarter and Q1 too was strong on free cash flow. If you look at the last 12 months, it's roughly $1.5 billion of free cash flow we generated.

Our conversion rate is now standing at about 1.9x net earnings. So this is significantly above the typical conversion rate of 100%.

So we continue to push hard on working capital management. So I don't foresee any change in the cadence for the rest of year Q3, but most importantly, Q4 usually strong free cash flow quarter.

In terms of drag, the only one to keep in mind is the Ricardo acquisition that will generate some payment most likely in Q4, but that's a positive. That's the way I would put it.

That's very helpful. And then just in terms of organic growth, I mean, it seems like you might be more on track for the lower end of organic growth range for the year.

But I guess to what extent is there still a path to the upper end of the range? And related to that, are there any extra workdays in the second half to be aware of since that was a headwind in Q1?

Yes. So feeling good overall.

I think that that's the statement about the second half of the year. We have our largest region, Canada, U.S., U.K., you heard in our opening commentary, delivering high single-digit growth, which on balance, you could probably say that this is a bit higher than what we guided.

So there's some positive on that level. The regions that were creating a bit of a drag on our numbers, I think they're in a much better position now with a progressive return to growth.

So obviously, that's where we stand. The various things to keep in mind is, yes, the billable days, we had called out in Q1, especially in the U.S.

We will see the reversal of that in Q4, at least for the most part. And then we need to keep in mind we have significant disaster recovery response revenue in Q4 last year in the U.S.

So hurricane season, storm season is starting. So we shall see.

But for the time being, we remain confident for the rest of the year. We'll see how Q3 unfolds, and we'll reassess our guidance as we report on Q3 results.

Just wanted to dig into some of the comments you made in the prepared remarks around some of the regions. I think the two most dynamic have been the U.K.

and the U.S. with some of the elections, new policies, et cetera.

Maybe if you can just dig in and just walk us through some of the dynamics you're seeing on the ground? It does sound like your results were positively driven by those markets.

But just curious on the puts and takes in those two markets and just the outlook ahead for those regions.

I mean it's more than just the U.K. and the U.S.

I mean if you look in the last 12 to 18 months, we had election in New Zealand. We had election in the U.K.

We had election in Australia. We had election in Canada last quarter.

We had election in the U.S. So we had a Liberation Day and despite all this turmoil, because I mean, when there's an election, there's a change of priorities, WSP continued to perform very well in those markets.

Obviously, there's been a slowdown in Australia and New Zealand. In my personal opinion, I would call this near-term slowdown.

I think New Zealand and Australia, we're seeing now the proposal activity level coming back. And as Alain said, we are going to see progressive return to growth in those -- in that region.

So we're overall feeling very good. As it relates to U.K.

and the U.S., there has been obviously a shift in some of the priorities from past governments. But the good news is that even with the Big Beautiful Bill and U.K.

statement from government, infrastructure spending remains a top priority for those countries.

Great. And then one of the thematics that's obviously been picking up in the recent quarters and year is and we're really noticing that this quarter is matter on data centers.

It sounds like that was one of the drivers around just your POWER acquisition, your involvement in that space. Maybe you could just dig into the demand environment today, how that compares to when you got into sort of the POWER acquisition?

And maybe just dig into the opportunity ahead today relative to what you have thought when you actually made that acquisition?

Yes. Well, on the back of last year, obviously, we saw a very, very strong demand on that segment.

I would say in the first half, there was a bit of a cooling off, but I can tell you that over the last months and what we are foreseeing our pipeline in the next 6 months and the remainder of the year, we are starting to see, again, very, very strong demand for that segment. So I think it bodes well in the short term, the medium term, but also in the long term.

So I think the POWER acquisition was, I've said it before, I'll say it again, was not a good to have or good to do, for us, it was a must-do deal. And I'm extremely pleased that we completed this acquisition.

It's very, very strategic for our platform.

I was wondering if we could just dig in a little bit on the 50 bps hit from restructuring. Was that largely APAC?

Or was that a little bit more broad?

Largely APAC.

And it's in line, Krista, with what we discussed in Q1, right. We had said that we had done a fair share of bringing our business more to a fit-for-purpose level in Q1, and we had announced that we would still do a bit of work in Q2, which is what happened.

So it's in line. And it's -- as Alex said, it's -- the biggest chunk is in APAC.

And then again, for the sake of repeating ourselves, we absorbed those costs. And despite that, we've increased -- we have now visibility on the higher end of our range from a bottom line point of view.

Right. And then maybe if you can just comment on, are you seeing any changes in the conversations with your customers south of the border just as a result of all the various legislative changes we've seen over the last couple of months here?

I think that the market is very -- is still very, very dynamic. Of course, there's some question asked.

I think the intent of the new administration is to expedite and facilitate investment. There's been some shift in priorities for instance, away from renewable, maybe more in fossil fuel and a few other matters.

But I think the real intent is really to facilitate and expedite investments. So in some ways, we have not seen much disruption at this point.

We're quite pleased with the way the market and our clients have behaved and operated in the current environment.

Congrats for the solid quarter. Just on the acquisition of Ricardo, could you provide more details about the opportunities to bring margins to double ESP levels down the road, but also what we could -- we should expect from a net revenue, EBITDA as you're looking to divest some businesses once that deal is closed?

Yes. We haven't closed the transaction, Benoit.

So we're not going to comment just yet on the impact that this will have on the numbers going forward. But I can tell you that we're highly confident that we are going to bring up the Ricardo margins to our level.

We've done it on numerous occasions in the past. If you look at the POWER Engineers, obviously, we're not disclosing margins level by acquisition, but I can tell you that right at this point, 6 months into the year and 6 months after closing or I should say, 8 to 9 months, after closing, we have seen a huge shift up in the margin level of POWER Engineers.

So I'm highly confident that we are going to achieve that, and I think we are going to achieve that very quickly.

And Benoit, more to come on all of this. But in terms of status, we have the AGM, where the transaction was voted in favor 99-plus percent.

So that's good news. And from a regulatory review standpoint, things are progressing well.

So we expect a closing in Q4. And we don't control and know exactly how it's going to turn out.

But if I would have to bet based on past experience, this should be closed in the earlier part of Q4 rather than the later part of the quarter.

That's great. And for POWER Engineers, obviously, we see a lot of -- you see a lot of revenue synergies with this acquisition.

You announced Stuart McLaren, Head of Nuclear. So I'm just wondering about the potential synergies we might see and what kind of area of expertise it could add to POWER Engineers right now?

Well, POWER Engineers is one, if not the leading firm in transmission, which is a very high value proposition for our clients. We continue to develop our expertise and continue to grow our expertise and distribution on the electric side.

Power gen is something that POWER Engineers has been very busy growing this year. We see tremendous growth on power generation.

And in terms of source of energy, I think we are doing great work right now, like I said, on the electric side. But we are also doing -- and it's not something we talk a lot about typically, but we do a lot of work on the nuclear side here in Canada, more in the U.K.

and obviously, in the U.S. with all of the SMR that are currently being designed.

So all in all, I'm feeling very bullish around this acquisition and very bullish around this sector.

I wanted to go back to these comments you made around the data center and the 300-plus new assignments that you were able to secure from -- that were related to that. Presumably, you had a lot of that growth coming from POWER Engineers.

And I think that business has been growing 15-plus percent organically year-to-date. Could you sort of piece out or parse out the growth that you experienced between sort of end markets is data center, the bulk of the growth -- the bulk of what led the growth?

Or were there other end markets that you would point out?

You mean with POWER Engineers, Frederic? Or you mean...

Yes. Yes, specifically for POWER Engineers.

It's clearly more than that. I mean we work with most, if not all, of the major utilities in the U.S.

So at the moment, I mean, I would say we work with the existing blue-chip client list that the POWER Engineers had. But what's great now is that we are able to bring POWER Engineers on our public sector clients, we are able to bring them on our property & building sector clients.

So I think that's what -- why we're seeing this acquisition to be so dynamic for us at this point.

Okay. And then I keep remaining quite impressed with the performance in Canada.

The region continues to lead the way with organic growth, 9%, and you had the highest margins at almost 24%. So clearly, this company is standing out -- sorry, the region is standing out.

And I remember, Alex, you made some comments about the potential for all the other regions to effectively catch up to where Canada is right now. How strongly do you feel about this?

And any idea of sort of what type of time frame you'd be looking at to bring the other regions up to Canada standard?

Well, for the others to catch up Canada, they will have to slow down a little bit. They're too good.

But you are right in commending our home country. I'm extremely pleased with our performance.

Standing out performance for many quarters now. And I expect continued performance for Canada.

And the goal as we discussed and unveiled our plan in February, our 3-year plan, Frederic, we are -- now have our eyes set on more than 20% on aggregate for the company. And so I can tell you that the U.S.

business is providing stellar numbers as well, and they're continuing to improve the margin profile. You will recall where we were in the U.K.

back in, for instance, '15, '16 and where we are today. Stellar performance of our U.K.

business. I could pinpoint to Australia.

I understand that we are not disclosing margin profile by country, but I can tell you that we have increased our margin profile in Australia by a couple of hundred basis points. Same thing with New Zealand, that is well above 20%.

So to your point around bringing up everybody, I think what's great is when you experience success in many parts of the world, you want to leverage best practices across the group, and that's what we've been doing, and it's been really paying off for us. Extremely pleased with this 80 basis point increase in the quarter.

And again, we're not afraid and you know us, we're not afraid to rightsize businesses when we see fit. So without that, it would have been 130 basis points in the quarter.

So it's quite extraordinary. So I feel that all the countries right now are headed in the same direction, which is up.

Just following up maybe on that question about margins a little bit. The 80 basis points that you saw today, I mean, it sounds like there's a lot of things that are going right.

But I was wondering in the commentary, you said that it was mainly driven by productivity. But is there anything else to be thinking about in terms of any other benefits you're seeing?

Or is it just basically having better absorption and utilization supporting that margin growth at this point?

No, it's not just a utilization game. I think we are seeing actually our operating margins going up, gross margin, and we are seeing our -- and this is a function not of just utilization but also pricing.

So we're feeling quite good about that. And also, Alain and the team are working very hard to continue to optimize our platform and leverage best practices.

So we have seen -- I would tell you, we have seen improvement in our margin profile pretty much across the value chain, and I expect that to continue. And as we build our brand, I've talked about that many times over, now clients are recognizing the expertise that we bring to the table, the technical excellence that we are bringing to the table.

It allows us to be more selective in the projects that we undertake, but it also allowed us to charge for the great work that our engineers are doing. So overall, I feel that we are seeing improvement across the patch at the moment.

Okay. That's helpful.

Maybe turning back to APAC and maybe trying to frame this appropriately. So hearing -- like with what I'm hearing, it feels like -- I think you said that you're starting to see the region kind of fit for purpose, but you also mentioned you're starting to see signs of recovery.

And I think you called out particularly Australia and New Zealand. But I'm just wondering, is this -- is APAC going to be pretty much just Australia and New Zealand on a go-forward basis?

And how do we think about -- given you had the weak front end and the updated guidance, It almost implies that you're kind of at a more stable position today on a go-forward basis. So just any thoughts around -- because APAC has got a lot of moving parts to it.

Just any thoughts about how you see the APAC business evolving from this point forward.

Well, we're big fans of our Asia Pacific business. Through peaks and valleys, we've always been committed to Australia and New Zealand and will continue to be highly committed to New Zealand and Australia.

At the moment, Canada is more than twice the size of our Australian business. So if we see opportunities to continue to grow our Aussie business, we will.

But at the end of the day, when you look at the government data that the government data that was published, for instance, in New Zealand, we saw in 2024, a reduction by the new government of 20% in investment in 2024 alone and another further 4%, 5% in 2025. Not because New Zealand doesn't have a good balance sheet.

Actually, they have one of the best balance sheets. But because the new government wanted to reprioritize the infrastructure spending in other areas of the country.

So as I said before and I said earlier on in my address, for us, this is just a near-term bump, and we expect those countries to go back to growth in the near term, progressive growth in the near term. And when you talk about Asia and Asia Pacific as a whole, you are right in saying that right now, our focus area has been New Zealand and Australia because Asia right now represents such a small part of our business going forward.

And I would argue that there too, most of the work has been done. So we're feeling good going forward essentially.

Most of them have been asked already. But Alex, maybe can you share your thoughts on the bill P5 in Canada, how that may impact your business?

And is the timing of that, I guess, more medium to longer term? Or just how do you think about any opportunities from that flowing through?

I think overall, I mean, there's very few -- a number of important bills that will come into effect. And we're feeling actually very good around the state of the country and the direction that the new government is going to take.

So overall, I'm feeling very good about it.

And then I guess maybe one on the DSO. I mean, pretty impressive performance an all-time low.

Can we think about that level as being sustainable? Obviously, there is the historical seasonality in the business.

But can you maybe talk about some of the drivers that lead you to put in that performance?

I'll let Alain answer that question.

Yes. Yes, so we're standing at a very good level for Q2 at 69 days.

Our guidance for the full year is between 67 and 73. So we have to remember what have driven our DSO to be a bit higher in the past few years.

There was two elements that impacted us was, one is the initial rollout of our system, which in my opinion, this is now behind us, things are working much better. And the second headwind we had was at Section 174 overall on free cash flow, which has now been reversed through the One Big Beautiful Bill Act in the U.S.

So we expect tailwind on free cash flow for Section 174 this year. And as it relates to DSO, I would say we're back to be leading again on that front, in which we've been leading for many, many, many years.

So part of the DNA, right, focused on productivity, but cash as well is a big area of focus for us. And I expect to continue to see good performance in the coming quarters, especially that we're entering Q3, but most importantly, Q4 and big collection quarter.

So I am cautiously optimistic, I would put it that way, for continued good trajectory on the DSO level for the rest of the year.

As you think about the aspirational EBITDA margin target of 22% and when you're putting that together, I guess, how much impact did you anticipate in that from the AI tools and productivity gains that are going into place? And I know this is a bit of a challenging question.

At what point do you think you'll be able to start more closely identifying the impact it's having on margins and productivity?

You are right in saying it's a tricky one. Look, I can tell you that we are very, very active in that space.

and we are working very closely with Microsoft and the strategic alliance that we formed together is extremely helpful in that regard. I can tell you, for instance -- I'll give you an example.

In our bidding group, and I'm careful about saying that, but we believe that very soon, we will be able to reduce some of our human output by close to 80%. So that's not de minimis because we have bidding groups across each and every segment and across each and every country.

So that's an example of where we feel we can make a tremendous improvement and reduce human intervention. But it's not just about AI.

It's about what we have been able to achieve over the last decade. If you take our revenue per employee over the course of the last decade, you will see constant growth over the years of super employees.

And that's a testament of what we have been able to achieve. In other words, doing more with less.

And you will see that our revenue at the moment is growing much faster than our headcount, if you track that very carefully. And that's why today, unlike perhaps 5, 6, 7 years ago, I am not talking as much about head count than we used to because to me, it's becoming more irrelevant than it was 5, 6 years ago.

So I hope I'm answering that question. But certainly, I mean, in terms of human intervention and all of our corporate function, but also in operation, we are seeing tremendous opportunities at the moment.

No. That's very helpful.

And maybe on a separate note, backlog growth year-to-date, obviously, is expected to pick up. Can you maybe talk a bit about the impacts, environmental has on that backlog growth?

Because if I recall correctly, the churn is usually a little quicker. And I believe backlog typically grows in that business in 4Q.

Yes. Well, the backlog has continued to grow, that's good.

It is a very dynamic sector for us in Canada. It also has been very dynamic in the U.S.

In the short term, I think this year, there are reasons I can explain with definitive statements, the field work has been a little bit more quiet than perhaps what we have seen in the last 2, 3 years, especially in the U.S. But I don't believe it's related to anything that has been discussed in the press or the changes that the administration are looking to make.

But in terms of activity level, in terms of market dynamics, we're feeling very good about it. Remember also that there was a strike in the province of Quebec by engineers.

So that too impacted a little bit of our Canadian business this summer. But I think these are moment in time as opposed to structural issues in the marketplace.

Well, thank you very much. Again, we're extremely pleased with the quarter, the strong performance of our large hubs, our margin improvement and especially our cash flow generation.

M&A pipeline is great, and we look forward to updating you over the course of the next few quarters. Thank you very much, and have a great day.