Aecon Buys Back Its Power Engine: Record Revenue, a Utilities Buyout, and the Gas-Turbine Bet

Q2 2026: record $1.6B revenue (+25%), a $320M Oaktree buyout for full control of Aecon Utilities, and a 932MW gas-turbine EPC win powering Meta's data center

ARE.TO · Earnings Call · 2026-07-31

Just over two years after Oaktree Capital took its strategic stake in Aecon Utilities, management has decided it wants the whole thing back. The $320 million agreement to buy out Oaktree's convertible preferred equity — implying a $1.2 billion equity and $1.5 billion enterprise value for the subsidiary — is the cleanest signal yet that the contractor is betting its future on the power grid. It also pairs neatly with a quarter of record revenue, a freshly opened international bridge, and a deliberate new foray into gas-turbine EPC.

Record Revenue and a Fully Controlled Engine

Aecon's second-quarter print was its best ever: $1.6 billion of revenue, up 25% year over year with roughly 80% of that growth organic, and adjusted EBITDA doubling to $82 million. Backlog held at $10.5 billion, and guidance was lifted to double-digit revenue growth for 2026. The utility business that Oaktree helped build is now the obvious growth engine: pro forma revenue above $1.2 billion, more than 70% under recurring master service agreements, electrical infrastructure expanded from about a quarter of revenue to nearly half, and a quarter of revenue now generated in the United States. Buying out the minority simplifies ownership and integrates Aecon utility into the broader power-and-utilities offering — a move that extends the strategic acquisition streak (Xtreme, KPC, Ainsworth, United) that reshaped the business.

Gas Turbines and Batteries: New Levers on the Same Thesis

The freshest strategic signal is the Green Light Electricity Center: a 932-megawatt combined-cycle plant in Alberta that will help power a Meta data center, delivered under an EPC model for Pembina. This is Aecon entering a niche it explicitly avoided until now — and it justifies the United Power acquisition and the Technip partnership as deliberate preparation:

In between nuclear and renewable, you have a spot which is gas turbine generation. This is going to be the strong spot during the 10 years to come. And Aecon had to be within this spot.
Jean-Louis Servranckx, President and CEO · 2026-07-31

Management stresses the de-risking: a 12-month development phase, owner-supplied long-lead equipment with associated warranties, a familiar client, and proximity to Aecon's own industrial base. Alongside the gas turbine bet, battery storage deepens — the 150-megawatt Oneida project couples a concessions equity stake with exclusive balance-of-plant EPC work, building on “roughly a gigawatt of battery storage systems... probably something akin to a market leading position.” — Jerome Julier, Executive Vice President and CFO · 2026-07-31 Combined, these push Power Generation well past the half of trailing revenue management cited, following a decade-long migration from roads and bridges.

Margins Stabilize — By Design

The construction segment delivered a 5.5% adjusted EBITDA margin (versus 3.1% a year earlier), and on a trailing basis ex-legacy it has held near 6% across the last three quarters — flat even as revenue grew 25%. Management is explicit this is engineered, not accidental: “we are working on much better quality programs from a risk perspective than we have ever had... the overall risk the enterprise is dropping.” — Jerome Julier, Executive Vice President and CFO · 2026-07-31 More work, less risk, same margin — a net positive on a risk-adjusted basis. Free cash flow swung from negative $10 million to positive $301 million over the trailing twelve months, and net debt at 2.2x (2.0x ex-legacy) absorbed the $320 million outlay without strain. The secured backlog and a pipeline of collaborative programs — Arctic Over-the-Horizon Radar, Pickering refurbishment, Darlington new nuclear, GO expansion, USVI airports — provide multi-year visibility while Gordie Howe International Bridge closed out a chapter by opening to traffic in late July.

Riding the Power Wave, Not the Tariff Wave

This season provides a contrarian contrast: while a broad swath of reporters booked tariff refunds — the IEEPA refund theme topped global keyword lists — Aecon's exposure is muted by its local, construction-in-place model. “A significant portion of our business is tied to construction in place. It is a very local business,” — Jerome Julier, Executive Vice President and CFO · 2026-07-31 as CFO Jerome Julier put it. The demand that matters to Aecon is electricity: HPC data centers and large hyperscale customers were among the tape's biggest 360-day advancers, and Aecon's concession pipeline — including the Oneida battery partnership — rides that current. The multi-year arc has been stated plainly in prior calls: a year ago Jean-Louis named power as the defining trend (“Aecon has perfectly with agility being able to adapt to serve this market.” — Jean-Louis Servranckx, President and CEO · 2025-10-30), and earlier this year he framed nuclear as technology-agnostic (“We work with GE Hitachi. We are beginning with X-energy... we are working today with Westinghouse.” — Jean-Louis Servranckx, President and CEO · 2026-03-06). Q2 2026 is the quarter that thesis started printing record revenue — and the buyout of Oaktree's stake ensures Aecon captures the full upside of the machine it just finished building. The market-wide cadence shows the same macro tailwind: AEP's concurrent call even flagged the Batch Zero federal approval process, underscoring that sovereign power infrastructure is accelerating across the board.