Bird Construction Inc

TSX:BDT

Q2-2025 Earnings Call

[Operator]

Good day, and thank you for standing by. Welcome to the Bird Construction Second Quarter Results Conference Call and Webcast.

We will begin with Teri McKibbon, President and Chief Executive Officer's presentation, which will be followed by a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

Before commencing with the conference call, the company reminds those present that certain statements which are made express management's expectations or estimates of future performance and thereby constitute forward-looking information. Forward-looking information is necessarily based on a number of estimates and assumptions that, while considered reasonable by management, are inherently subject to significant business, economic and competitive uncertainties and contingencies.

Management's formal comments and responses to any questions you might ask may include forward-looking information. Therefore, the company cautions today's participants that such forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of the company to be materially different from the company's estimated future results, performance or achievements expressed or implied by the forward-looking information. Forward-looking information does not guarantee future performance. The company expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, events or otherwise.

In addition, the presentation today includes references to a number of financial measures, which do not have standardized meanings under IFRS and may not be comparable with similar measures presented by other companies and are, therefore, considered non-GAAP measures.

I would like to turn the call over to Teri McKibbon, President and CEO of Bird Construction.

[Terrance McKibbon, executive]

Thank you, operator. Good morning, everyone. Thank you for joining our second quarter 2025 conference call.

With me today is Wayne Gingrich, Bird's Chief Financial Officer. Before we dive into our results for the quarter, I'd like to take a moment to share a milestone that we feel reflects the strength of our people and culture here at Bird. We're proud to be recognized as a certified best employer in Canada as a distinction awarded to organizations scoring in the top quartile for employee engagement through the Best Employers in Canada program powered by Mercer. With a 95% employee survey response rate, our employees have made their voices for, and we are thankful for their feedback. We're proud of our dedicated teams for fostering meaningful employee experiences.

Turning to our second quarter highlights. Bird continued to deliver margin improvement with gross profit percentage increasing to 10.6% from 8.6% a year ago and adjusted EBITDA margin increasing to 6.5% compared to 5.3% last year. Margin accretion reflects the company's strategic focus on higher-margin sectors, disciplined project selection and strong operational execution. While revenue was slightly lower year-over-year as a result of client-driven project deferrals and delays amid a backdrop of economic uncertainty, underlying demand in our key sectors remain strong. Bird secured nearly $1.2 billion in new awards in the quarter, growing our record backlog to over $4.6 billion, over 36% higher than a year ago.

Bird's backlog remains diversified, risk balanced and heavily weighted to collaborative delivery models, providing a pathway to growth and continued margin accretion once some of the market uncertainty is behind us. With a solid balance sheet, Bird remains well positioned to invest in future work programs and pursue attractive M&A opportunities in a healthy market environment. Bird continues to progress through its 2027 strategic target of 8% EBITDA margin, margin improvements of 120 basis points in the quarter and 150 basis points on a trailing 12-month basis compared to last year are a direct result of our focus on margin-accretive sectors, disciplined project selection, increasing self-perform capabilities and contributions from Jacob Bros acquired in August of 2024.

While the company has made great progress over the past year, it's important to remember that margin accretion like revenue in the construction industry is rarely linear and recent client decisions to delay certain projects and a slower to develop industrial maintenance program may moderate the pace of margin improvements until there's greater clarity in the market for our clients. That being said, with only 120-basis-point gap between our current trailing 12-month margin and our 2027 target of 8%, we remain committed to achieving this target with 2.5 years remaining in our plan.

Demand in Bird's key sectors remain strong and the bidding environment is robust. In the second quarter, Bird added $1.2 billion in securements to its backlog of contracted work, bringing year-to-date securements to just shy of $2.5 billion. For context, that's almost $1 billion more in securements in the current year compared to the same time last year. At the end of the second quarter, Bird's backlog of contracted work was $4.6 billion and our pending backlog of awarded but not yet contracted work was $3.8 billion. Pending backlog continues to include over $800 million of master service agreement and other recurring revenue to be earned over the next 5 years.

Bird's combined backlog continues to reflect a high proportion of collaborative contract types and favorable embedded margins compared to a year ago. The bidding pipeline remains strong, and we believe Bird is well positioned to support nation-building initiatives and the development of export markets, increased defense spending, demand for health care and long-term care, the need for additional power generation capability through LNG, nuclear wind and hydro refurbishments in particular. We continue to see strong demand in our key strategic sectors. This was reflected in our second quarter project awards, including projects awards in defense, energy, long-term care, mining sectors, all sectors that remain central to Canada's evolving economic priorities.

A significant development this year is the passing of Bill C-5, the One Canadian Economy Act, which seeks to streamline approvals for nationally significant infrastructure projects while protecting the environment and respecting indigenous rights through meaningful consultation. This legislation is expected to unlock billions in investment across sectors that align closely with Bird's core strengths, including transportation, energy and civil infrastructure. With our proven track record delivering large complex projects and our strong partnerships with indigenous communities, exemplified by PAIR silver status, we are well positioned to capitalize on this shift and expand our pipeline of major infrastructure opportunities.

Looking ahead, we see compelling opportunities emerging from several key trends. Global investment in nuclear energy is accelerating and Bird has a strong footing to support the resurgence of Bird's infrastructure and industrial capabilities. Our recently awarded contracts to design and construct facilities supporting Ontario Power Generation's nuclear operations and refurbishment activities demonstrates our active participation in this growth market, and we are well positioned to play a meaningful role in Canada's nuclear resurgence and the broader energy transition. Canada's renewed focus on economic independence, including increased defense spending and a more streamlined regulatory environment is creating a favorable landscape for infrastructure and resource development.

In the second quarter, Bird was awarded a new project with Defense Construction Canada, building on our expertise in delivering secure, specialized infrastructure. Bird remains focused on key sectors that are aligned with national priorities. As these trends continue to unfold, we expect them to have a positive impact on our backlog, margin expansion and long-term value creation for our shareholders.

Large capital investment projects or LCIPs continue to be a key pillar of Bird's strategy, offering long-term visibility and scalable growth. These complex multiphase initiatives often begin with targeted scopes, allowing us to demonstrate value early and expand our role over time. In the second quarter, Bird continued to be awarded additional scopes across several LCIPs, including on sites where project delays have been announced due to current economic uncertainty. The award of new scopes reinforces our confidence that projects will proceed through to completion and Bird will be there to support them along their journey. While time lines have shifted, the strategic importance of these projects remains unchanged, and they continue to represent meaningful opportunities for margin accretion and sustained shareholder value.

I'll now turn the call over to Wayne to cover our second quarter financial performance in more detail.

[Wayne Gingrich, executive]

Thank you, Teri.

Construction revenue for the second quarter of $850.8 million represented a 2.6% decrease compared to the same period in 2024. Organic growth in infrastructure resulting from increased work programs for mining clients as well as the commencement of the East Harbour Transit Hub project was complemented by additional contributions from Jacob Bros acquired in August of last year. The infrastructure revenue growth was more than offset by modest revenue declines in buildings and industrial driven by client decisions to slow down certain work programs and delayed commencement of new projects as a result of economic uncertainty across North America and globally. On a year-to-date basis, revenues of $1.57 billion for the first half of 2025 compared to $1.56 billion in the first half of 2024.

The company's gross profit margin improved in the quarter compared to 2024, increasing to 10.6% from 8.6%. The increase in gross profit continues to reflect the improved margin profile on newer work resulting from disciplined project selection and cost control, growing self-perform capabilities and cross-selling opportunities across the company. On a year-to-date basis, gross profit margin of 10% compared to 8.3% last year.

Adjusted EBITDA in the second quarter was $54.9 million, a 17.9% increase over the $46.6 million reported a year ago. Adjusted EBITDA margins continue to increase on a year-over-year basis, reaching 6.5% for the quarter compared to 5.3% last year. On a year-to-date basis, adjusted EBITDA was $89 million or 26% higher than 2024 and adjusted EBITDA margin was 5.7% compared to 4.5% in the prior year.

Turning to earnings. Net income and earnings per share were $20.3 million and $0.37, respectively, compared to $21.4 million and $0.40 in 2024. This marginal decline includes the impact of noncash amortization of acquisition intangibles related to the Jacob Bros, which was acquired in August of 2024. Adjusted earnings and adjusted earnings per share were $27.6 million and $0.50 compared to $22.7 million and $0.42 in 2024. The weighted average shares outstanding for the second quarter of 2025 was approximately 1.5 million shares higher than 2024 due to the acquisition of Jacob Bros.

Bird continues to generate strong operating and free cash flow, which in combination with the company's healthy balance sheet supports our strategic growth initiatives and our balanced capital allocation. On a trailing 12-month basis, Bird's operating cash flow over free cash flow generation improved significantly compared to a year ago despite higher seasonal investment in noncash working capital in the current year. Free cash flow conversion of net income was 55.9% and free cash flow per share was $0.99. The company's current ratio was 1.28x. Our adjusted net debt to trailing 12-month adjusted EBITDA ratio was 1.15x, and our long-term debt-to-equity ratio was 30% at the end of the second quarter.

Bird's liquidity position remains strong with $142.6 million of cash and cash equivalents and an additional $231.7 million available under the company's syndicated credit facility to support ongoing investments in growth-related working capital, project-driven capital expenditures and accretive acquisitions to further diversify service offerings and self-perform capabilities.

Bird remains committed to a balanced capital allocation approach, supporting the growth of the company's current and future work programs through capital expenditures in equipment and technology, returning capital to shareholders through our monthly dividends and actively pursuing attractive opportunities in today's healthy M&A market. The company maintains low capital intensity, continues to target a long-term dividend payout ratio of GAAP net income of 33% and remains disciplined and opportunistic in our approach to pursue acquisitions that will enhance our capabilities and drive further shareholder value.

With that, I'll turn the call back to Teri.

[Terrance McKibbon, executive]

Thank you, Wayne.

We remain focused on resilient high-demand sectors such as infrastructure, health care, defense and energy, including LNG, nuclear, wind and hydro. These sectors with long-term drivers align with national priorities and will support our growth and margin expansion strategy through 2027. While the second quarter was marked by elevated economic uncertainty, this primarily influenced the timing of project execution rather than the strength of demand. Although some clients opted to delay project starts due to the economic uncertainty, these projects are secured and our scopes of work remain intact.

We anticipate positive revenue growth in the second half of 2025 compared to 2024, though the pace may be more measured until macroeconomic conditions stabilize. Bird has a healthy balance sheet, strong operating cash flow to support our strategic growth initiatives, including the flexibility to pursue attractive M&A opportunities, which will further diversify our service offerings and self-perform capabilities.

With that, I'll turn the call back to the operator for questions.

[Operator]

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

[Chris Murray, analyst]

I guess let's start with the revenue and expectations for the second half. So -- and correct me if I'm wrong. I mean, if I think about the fact that Q2 should have had a pretty big impact from Jacobs, probably underlying Bird organic growth was probably low-double digit type decline. You've talked about some modest increases organically. There'll be less of an impact from Jacobs as we go into the second half. So just trying to get a sense of magnitude. Previously, you've talked about kind of a 10% CAGR plus 5% from Jacobs this year. And then probably 10% to get you to your longer-range target. So I guess I'm trying to understand how we should frame or think about the pace of revenue over the next couple of years and if that long-term target is still kind of valid or not?

[Terrance McKibbon, executive]

I can take that one. Maybe I'll start, you have a point there. I think the long-term target is still valid, like we're very much committed to our 2027 targets and especially the 8% EBITDA. We think we're on a good path for that. Looking at 2025, certainly, the growth is more muted than we had originally thought in our strategic plan. Certainly, the economic uncertainty that's out there is impacting our ability to put work in place. I think on a positive note, our backlog is at a record level. The margins embedded in it are good and just trying to put the work program in place has been the challenge.

Yes, I think you're right, the range you provided, approximately 10% negative organic growth year-over-year, probably in the range. So when you look at the second half, I think the growth is going to be more muted than we had originally expected. I think we'll see still positive growth overall, but it is going to be outside of that range. But the margins we're putting in place are still pretty good, but it's hard to get the leverage we had anticipated on our cost structure when our volumes are kind of pushing to the right like that in the short term.

I think if a trade deal could be struck with the U.S. and maybe there becomes some certainty about what happens with creditor, then I think the momentum that we have going into 2026 would be very positive.

[Chris Murray, analyst]

Okay. And I guess the other piece of this just to think about, you did make the comment that you thought your payout ratio on the dividend would probably be above the kind of the target 33%. In the release, I guess the Q3 dividends have already been declared kind of in line. And look, I mean, there's certainly, I think, adequate dividend coverage where we're at right now. But the one thing that we kind of have been seeing over the last few quarters with the earnings, and it's been an increase in Q4 is, I guess, what's the tolerance or whatever way you want to frame this for the Board to continue to be able to grow the dividend even in face of this blip? Or is this something that we should just think that any sort of increase in the dividend is off the table at this point until we see or start seeing a recovery later in '26 or '27?

[Terrance McKibbon, executive]

Like in our strategic plan and the 33% of GAAP net income payout ratio, we had that in the '22 to '24 strategic plan that served us well, and we're continuing that in 2025 through our 2027 strategic plan. And there's no changes to that thinking. I mean part of the reason why we have 33% is when there is economic uncertainty or that type of thing, we're easily able to absorb that. So the payout ratio in 2025 is going to be higher than 33%, but we're still absolutely committed to our dividend. And once we get clarity on 2026 coming up, we'll evaluate our dividend again in the fourth quarter of this year going into next year.

[Operator]

Our next question comes from Michael Tupholme with TD Cowen.

[Michael Tupholme, analyst]

So just with respect to the revenue outlook here in the back half, obviously, understandable, the suggestion that some of the headwinds you've seen here in the first part of the year will persist into the third quarter. I guess, do you have any thoughts on the fourth quarter? I mean, is there -- is it likely at this point that, that's also going to experience the same sorts of pressures? Or is there any scenario here where if your customers got some comfort around certain items, you could actually see the fourth quarter begin to show some improvement? Or is this more of a 2026 improvement situation if and when the customers get comfort on the issues they need to see?

[Terrance McKibbon, executive]

I think you could see it in Q4. But again, it centers on clarity. And it's just clarity that our customers are seeking there thinking of these -- especially the larger projects a long-term view, but it's to get clarity on cost pressures and how tariffs are going to impact their sales and their inbound cost of materials. And that's really what's giving them some uncertainty. And as such, they've slowed down or delayed additional phases, things like that. What's interesting for us is we continue to get work awarded on future phases, which gives us great confidence that this is just a temporary pause until there's clarity. And that's all they're really looking for. So as we move forward, it's really just -- we just need that catalyst of what the clarity is going to be because obviously, it's easy to understand that they just want clarity.

[Michael Tupholme, analyst]

That makes sense. With respect to sort of the clarity that the customers are seeking and when you have your conversations with them, I mean, I think Wayne mentioned if we got a trade deal and if there was clarity around renegotiation of CUSMA, like clearly, those would be big items that would provide clarity. But is that -- are those the things we need to have settled and essentially get complete clarity on in order for customers to move forward? Or are there other things, other signals that they may be looking for that even in the absence of those kinds of large developments, they could still get some comfort and begin to move forward with...

[Terrance McKibbon, executive]

I think it's primarily a trade deal and settlement of trade deals around the world because many of our customers have global markets. And we -- they need that economic clarity. So they understand the impacts in global markets or some other products. We are in a situation where a high percentage of the work that we're targeting has very high demand drivers. And so we're obviously somewhat insulated, but you can see when you get a few projects that -- and obviously, we -- and these are projects that everyone would be very aware of because there's been public announcements from our clients delaying $1 billion in capital expenditure in 2025 due to the uncertainty. So although we didn't anticipate what the impact would be at the end of Q1, we started to see it certainly in Q2 that we were going to be delayed. So that's one of the challenges. It's a quarter-to-quarter sort of adjustment, and it's difficult to predict because we're kind of quarter-to-quarter right now with some of these customers as to whether we're going forward or not. So not ideal, but it's just the uncertainty that we're living with.

[Michael Tupholme, analyst]

Okay. That makes sense. Just last one for me. On the margins or margin expectations and margin outlook. So you've reaffirmed your 2027 targets, which call for the company to get to about an 8% EBITDA margin by that point. You obviously had strong margin performance in the second quarter, but are talking about the prospect of the pace of margin improvement maybe not being as robust in the second half. So when we look at 2025, like with the strength you saw in the second quarter, but this more tempered outlook for the back half, like do you still expect to be able to get to the level that the Street was looking for, for the year, which was about 7% for 2025, like with those 2 offsetting dynamics? Or is this pressure in the back half of the year that you're talking about, does that put you in a situation where we should be thinking about something less than that 7% level for 2025?

[Wayne Gingrich, executive]

I think the 7% would be difficult to achieve given some of the revenues that are pushing out just because you're not getting leverage on the cost structure in place that we would have expected previously. But the margins that we have embedded in our backlog, and we called this out in our outlook, they're higher in there than they were a year ago. They're favorable, same thing with pending backlog. So all the strategies we're putting in place tee us up well to improve margins on a go-forward basis, but it's just not probably going to be on the same pace that it was. And I think we expect them to be higher in 2025 than they were for 2024, but probably just not at that 7%.

[Terrance McKibbon, executive]

I think the scale of the opportunities continues to accelerate as well. And obviously, the scale and the pace, the frequency of these opportunities, the models are the models that we would -- we were very comfortable with. So it's -- despite this temporary uncertainty, it's very -- it's exciting to see the demand, and it's -- a lot of it's in the larger scale projects, the nation building type defense, health care. The scale of these opportunities is somewhat daunting at times. And it's -- there's only a few companies that have the capacity for this type of thing or the capabilities for these types of projects. So it's very exciting for us.

So the '27 targets, we're very comfortable with -- as comfortable or more comfortable than we were before this uncertainty. It's just -- we got to get through this uncertainty to get it clarified and that's why we're in this malaise that kind of sits on some of our clients, and we just got to work our way through it. But we're very confident that as we get through it, that acceleration. We always try to be clear about the staging construction on a year-over-year basis is never linear. So the idea that we would improve on a linear basis was difficult. So I think -- but the '26 and '27 evolution, you'll see us -- at this point, very confident you'll see us in a strong performance level through '26 and '27.

[Operator]

Our next question comes from Krista Friesen with CIBC.

[Krista Friesen, analyst]

Maybe just further on the delays that you're seeing from some of your customers. In the event we do reach some sort of trade deal, would you expect there to be a significant catch-up in 2026? And if so, would you have the capacity to accommodate that?

[Terrance McKibbon, executive]

Yes. Yes. And that's what's putting a bit of a burden on our cost structure currently because we've been -- we built -- it's the horse before the cart sort of scenario. So we've got the horse and some of these projects are delaying, so it's putting pressure on our cost structure.

[Krista Friesen, analyst]

And at this point, is it kind of on a rolling basis, like each week, you might have new customers delaying projects? Or for the most part, are you aware of the delays to the best of your knowledge at this point?

[Terrance McKibbon, executive]

Yes. Some of them, Krista, have been delayed a big turnaround that we weren't expecting to be delayed. So to a certain extent, that could be a calendar delay, it feels like it is because that's just how the big maintenance turnarounds occur. So we've had those. We've had others that were more clarifications of cost and then returning in the government sense to Treasury Board to get approvals of the project and have achieved those, but we had a delay. So those are moving now. So it's a mix, but the industrial side feels like it's going to -- those customers are going to sort of be through this year until they'll -- and these -- some of these are public, so it's pretty obvious to us and others that it's a '25 delay. So yes, but it's a bit of a mix depending on whether it's a government client or -- and it's primarily industrial on the private side.

[Krista Friesen, analyst]

Okay. Great. And then switching gears a bit to M&A. Are there any specific areas that you're really looking to build out your capabilities in that maybe are top of your list at the moment?

[Terrance McKibbon, executive]

Well, I think obviously, in keeping with what's happening in Canada currently, and we've been, I think, very strategic in positioning ourselves in the markets that have a lot of runway and a lot of demand and a lot of resiliency, companies that can support us and increase our diversification and self-perform capabilities are the companies that we're really focused on. And it's -- we're in a good spot. There's some -- we've got a good track record of integrating these types of companies. And then obviously, what's really exciting is the catalyst that each of our previous acquisitions has been for us that makes it really exciting that we can leverage off an acquisition to take us into something much larger in the scale of the larger opportunities. You sort of need that base then to leverage off of and with that experience. And so that's been exciting. But yes, that market is quite buoyant. So we're seeing some very interesting opportunities. But we're very methodical in how we approach them. We're very disciplined. We're very obviously careful. It's not a boring platform for us. So we're growing accordingly in a very measured way, not dissimilar to how we select projects that we pursue.

[Operator]

Our next question comes from Maxim Sytchev with NBF.

[Maxim Sytchev, analyst]

Yes. Lots of good questions have been already asked. But just to come back to some of the delays that you're witnessing. So if you were to delineate maybe the quantum of delays between private versus public clients, is it possible to get a bit more color there where there is more pressure or there is kind of equivalent pressure, but for different reasons?

[Terrance McKibbon, executive]

I'd say 70-30 private to public. And primarily industrial and on the public side, it's just government, primarily in BC and Ontario.

[Maxim Sytchev, analyst]

Okay. That's super helpful. And I guess, I mean, in terms of when you say that you're adding to backlog on scope and delayed projects. So in terms of sort of backlog additions, I guess there's no concern that if the client sort of push these things further out or is it just going to become sort of more of a TAM on certain things? I'm just trying to see sort of the visibility.

[Terrance McKibbon, executive]

Yes. So these additions are on -- so let me put it in 2 sort of orders. On the large industrial projects that we're doing that constitute a higher percentage of the delay, we're being awarded additional scopes on those projects. And the scopes have considerable scale. On the government side, it's more of a value engineering, reengineering dealing with cost escalation and then delay as they return to treasury board and we get moving again. It's -- if you recall, in the fourth quarter, we talked about a large long-term care package that we've been awarded. And these projects were over $1 billion. They had to be reengineered and they had to be redesigned and go back to the Treasury Board and get approvals for -- and now they're back out into a new format, and we're in the middle of those as we speak.

So that's the kind of thing that when you have uncertainty around escalation and uncertainty around -- and one of the things that has impacted us probably more than you would anticipate is the fact that we've got these collaborative models, the cost impacts are being borne by our clients to the tune of 80% to 90%. So we are in a good place that we're not impacted by them. That's why you're seeing the margin escalation. If we were -- we could be moving a lot faster if we were owning the risk of that. So I'd rather be in the place that we are in and have this little bit of softness than be in a situation where we're locked in with fixed price and have to absorb those costs because that can be really, really difficult to work your way through and try to deal with that because -- so I'm happy where we are. It's just unfortunate that because where we are, sometimes you have projects that get delayed due to clients rethinking and redesigning and revalue engineering, which we spend a lot of time on.

[Maxim Sytchev, analyst]

Yes. No, that makes sense on 100% from a risk management perspective. And then just circling back to sort of one of the emerging opportunities, do you mind providing a bit of a refresh around some of the stuff that you do on the defense side of things, kind of your exposure and where we might see sort of incremental CapEx flowing through? Because correct me if I'm wrong, but kind of the first bucket of government commitments is like around salaries and not necessarily kind of part infrastructure. So where do you see that space evolving over time?

[Terrance McKibbon, executive]

Yes. That space is really unique compared to any other market we're in because it's unfettered. It's flowing at a really rapid pace. Projects have got scale of some of the stuff is just daunting, and it's just moving. There's no permitting issues. There's no delay issues. It's just moving at a really impressive clip. And we're so grateful that we have such a strong team that has the bench strength and the depth and experience to deliver these, and it's a very small group of companies in Canada that can do this because of the secrecy and all the security clearances and by the infrastructure that you have to have set up in your organization and your facilities to handle the secrecy of all this is quite significant -- millions of dollars that we've invested to have this capability in different centers. So -- but the pace is probably the most exciting market we have.

[Operator]

[Operator Instructions] Our next question comes from Sean Jack with Raymond James.

[Sean Jack, analyst]

Just a broader question around LCIPs going forward. Any major concerns around any other LCIP projects that are in the pipeline similar to kind of what you're seeing right now?

[Terrance McKibbon, executive]

No, I don't think so, like we're seeing some -- there doesn't seem to be any pause in like LNG, for example, some of the LNG projects are getting developed. We're hearing a lot about pipelines. We're hearing a lot about ports. Some of that is defense. Some of that is just export ports to be developed, very exciting. Obviously, we have the capability. We -- both on the West Coast, East Coast, we have large centers that allow us to mobilize from. Yes. So we don't -- again, in the projects that have been delayed, we don't see that once there's clarity. We think those are long-term 50-year horizon type things. So they just want to get clarity and its one of the commitments that they make today, they want to ensure they clearly understand those. And that's what comes from the types of blue-chip clients we have. They're very, very disciplined about how they approach their expenditures.

[Sean Jack, analyst]

Perfect. And then -- okay. And then on the flip side of that, thinking about Bill C-5 and improving sentiment around nation building, et cetera. Can you give us a sense of kind of how you're seeing the market, where the market is at with some of these new large opportunities? Any sort of sense of when you could see some of these projects come to tender?

[Terrance McKibbon, executive]

Some of our opportunities that are evolving have already got consensus. So we're seeing some pretty exciting markets evolving in the remote north where the local communities have already been well engaged with the government, and those are just moving ahead now. And Bill C-5 doesn't really -- they've already dealt with it. So it doesn't have that big of an impact. I think there's been tremendous progress on bringing fire, for example, some of those projects. LNG is another example where you've got to build new pipelines, new facilities. Those are -- those have major investments from -- into those communities. So yes, it's -- I think the big government stuff, I think, is with the current program, the Build Canada program, I think, is I think they're well down the road on some of those. You're going to get groups that try to disrupt it. But I tend to think that a lot of that -- from what we're seeing, a lot of the work is done and they're rolling these out and they're happening, so.

[Operator]

Our next question comes from Ian Gillies with Stifel.

[Ian Gillies, analyst]

As it pertains to M&A pursuits, just given some of the uncertainty going on in the broader environment, can you talk a little bit about how you can derisk some of these issues when assessing potential targets? And so you're paying the right price. And I know Bird is always disciplined in that pursuit, but there's certainly some more external risk now when trying to assess backlog and future financial performance.

[Terrance McKibbon, executive]

Yes. I think we know the key is the long-term demand drivers in a sense, we're looking for companies that can benefit the broad organization as opposed to just a specific geographic or end market. And those are the kind of opportunities that you have a bit more insulation in terms of -- but the key is, as you said, we're very disciplined about how we approach an opportunity, and it's a good time to be fishing for new opportunities because there is the ability to get a better deal in this environment right now than there might be when -- so it's a good time to be hunting.

[Ian Gillies, analyst]

Understood. That's helpful. Everything else I wanted to ask has been asked.

[Operator]

Our next question comes from Chris Murray with ATB Capital Markets.

[Chris Murray, analyst]

Just got one follow-up I was going to ask about. It looks like according to the MD&A, you guys have sold your investment in Stack Modular. Wondering if you can give us just a little bit of color on that. I think you talked a little bit about the fact that given where the units were built and they were metal and some of the tariff issues, there were some, I guess, some challenges going forward. But I guess the other piece of this is in terms of construction technology, does this give you an incentive to come up with some sort of modular or large timber type technology and kind of make some investments in that area, especially like when I think about some of these northern investments, Modular was probably a good technology to think about for building those. But so any color you can add on the Stack sale and where to from here would be helpful.

[Terrance McKibbon, executive]

Yes. I think obviously, the global macroeconomic environment with China, obviously, was -- we were patient with it, but it just didn't seem like it was going to be settled anytime soon. So it was just -- it just became increasingly difficult to remain on the sidelines. And the opportunities for Stack were more global in isolated areas, and that's really not where we're focused. We were really -- our initial investment was to be able to build in Canada. I think there's some really robust wood frame builders that can build product that can handle in different jurisdictions of various site restrictions.

So we -- our competitive advantage was really where we went vertical into greater than 5 or 6 stories. And those opportunities were just weren't materializing to the extent that we would have expected. But our partnership with Stack will -- is really unaffected. We'll continue to work with them if there's an opportunity. So it's just we're not in the investment of the manufacturing. We don't have the investment on the manufacturing side now. Obviously, we worked with that team for 8 years. So we know the team. So when there's opportunities, we'll continue to partner with them. But it just felt like, especially in this environment right now with government that it's just increasingly getting difficult to bring in that product in that form.

[Chris Murray, analyst]

Okay. And I guess, any thoughts about Modular in the future for Bird or the environment or what this does to be maybe the mass timber approach or anything like that?

[Terrance McKibbon, executive]

Yes. The mass timber side certainly is continuing to grow, and it's exciting, and you can do some really unique things. It's still somewhat limited in terms of the height, but we do a lot of mass timber work currently, predominantly in education, in educational facilities on both coasts is where we've seen it in our case, where we're seeing it, but we've built a long-term care facility in Winnipeg with mass timber. So it's -- yes, it's out there. It's a good product. We've got good skill set. It's not complicated to build. So yes, there's no question, but the wood-frame Modular guys are very robust. They can support us, which, as you know, we built a 5,000-room lodge at LNG Canada. 80% of it was wood frame. We used some of our own modules for a portion of it. But yes, so we have those relationships. We have that capability, and we're continuing to seek and be awarded work that's got a modular component to it, so.

[Operator]

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

[Terrance McKibbon, executive]

Bird delivered solid margin performance in the second quarter, supported by a record backlog and continued diversification across strategic sector. Importantly, we remain focused on long-term value creation. While revenue growth and margin accretion are not always linear, we are firmly committed to achieving our 8% EBITDA target -- adjusted EBITDA target by 2027.

So thank you all for joining us this morning on our earnings call.

[Operator]

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