Wajax Corporation Reports Positive Q3 Earnings Amid Challenges

Wajax Corporation ((TSE:WJX)) has held its Q3 earnings call. Read on for the main highlights of the call.

The recent earnings call of Wajax Corporation conveyed a generally positive sentiment, highlighting steady revenue growth and improved profit margins. The company reported significant gains in adjusted EBITDA and net earnings, largely driven by increased mining sales and effective margin improvement strategies. Despite these achievements, challenges such as a decreased backlog, reduced equipment margins due to competitive pressures, and macroeconomic uncertainties were acknowledged. The call also emphasized the company’s commitment to safety improvements and inventory management.

Steady Revenue Growth

Wajax Corporation reported a revenue of $483.1 million, marking a modest increase of 0.4% compared to the same quarter in 2024. This growth was primarily fueled by higher mining sales in Western Canada and increased sales of industrial parts and Engineered Repair Services (ERS). These gains underscore the company’s strategic focus on expanding its market presence in key sectors.

Improved Gross Profit Margin

The company’s gross profit margin rose to 20.8%, reflecting a 160 basis point increase from the same period in 2024. This improvement is attributed to higher margins on product support, industrial parts, and ERS sales, demonstrating the effectiveness of Wajax’s margin improvement initiatives.

Adjusted EBITDA Growth

Wajax saw a significant increase in adjusted EBITDA, which rose by $7.4 million or 19.7% from the third quarter of 2024. This growth was primarily driven by higher gross profit margins, with the adjusted EBITDA margin improving to 9.3%, indicating robust operational efficiency.

Safety Improvements

The company reported a decrease in its Total Recordable Incident Frequency (TRIF) rate by 9% from the third quarter of 2024 and by 19% from the second quarter of 2025. These figures highlight Wajax’s ongoing commitment to enhancing workplace safety and reducing incidents.

Increased Adjusted Net Earnings

Wajax’s adjusted net earnings saw a substantial rise of 68.6%, translating to an increase of $0.31 per share compared to the third quarter of 2024. This significant growth reflects the company’s successful financial strategies and operational performance.

Backlog Decrease

The company experienced a decrease in its backlog by $17.8 million from Q2 and by $81.6 million year-over-year. This decline was mainly due to lower material handling and industrial parts orders, presenting a challenge that Wajax aims to address moving forward.

Reduced Equipment Margins

Wajax faced pressure on equipment margins due to increased market competition, which partially offset gains in other areas. The company is aware of these competitive pressures and is working to mitigate their impact on overall profitability.

Inventory Management Challenges

Inventory levels increased by $3 million compared to Q2 of 2025, although ongoing reduction initiatives have successfully decreased inventory by $144.4 million from peak levels. This reflects Wajax’s focus on optimizing inventory management to enhance operational efficiency.

Continued Market Uncertainty

The broader market environment remains challenging due to macroeconomic softness and Canada-U.S. dynamics. Wajax acknowledges these uncertainties and is strategizing to navigate through these market conditions effectively.

Forward-Looking Guidance

Looking ahead, Wajax Corporation anticipates strong demand in the mining and energy sectors despite broader market challenges. The company remains focused on inventory optimization and cost management, with a CEO succession process underway. The Board declared a Q4 2025 dividend of $0.35 per share, reflecting confidence in the company’s future performance.

In summary, Wajax Corporation’s earnings call presented a positive outlook with steady revenue growth and improved profit margins. While challenges such as decreased backlog and competitive pressures on equipment margins were noted, the company remains optimistic about future demand in key sectors. The focus on safety, inventory management, and strategic initiatives positions Wajax well for continued success.