Engineering giant WSP reports revenue growth, defying investor angst around AI — SkimNews
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- WSP Global reported net revenue of $4.3-billion for the quarter ended June 26, up 23% year-over-year, with 5% organic growth led by Canada and the United States
- WSP's stock jumped 5% to $189.99 on the TSX after the company beat analyst expectations of $2.82 per share, posting adjusted EBITDA of $2.88 per share ($815-million total, up 29% year-over-year)
- WSP's backlog reached a record $20.1-billion in the quarter, with key projects including the Purple Line subway extension in Los Angeles, described as one of the largest and most complex transit infrastructure programs in the U.S.
- Analysts at Raymond James and National Bank pushed back against the AI-disruption thesis, with Maxim Sytchev noting WSP views AI "first and foremost as a revenue opportunity" that lets it "do more work with the same experts" in a labor-constrained industry
- WSP's pursuit of Arcadis hit a wall after the Amsterdam-based firm rejected its second bid — €51.50 per share in cash and stock, valuing the target at roughly €4.7-billion (US$5.4-billion) — though CEO Alexandre L'Heureux called it a "potential friendly transaction"
- Investor anxiety over AI has depressed shares of WSP and Stantec Inc. in recent months even as broader markets gained, with Raymond James's Frederic Bastien arguing AI will widen the gap between scaled-up firms like WSP and smaller rivals
Why it matters: WSP's blowout quarter — 23% revenue growth, record $20.1-billion backlog, and a 5% stock pop — directly contradicts the AI-disruption narrative that had been dragging down engineering consultancy shares, and the analyst framing that AI advantages scale means WSP now has a structural moat against smaller rivals. The unresolved Arcadis bid adds a €4.7-billion wildcard: a successful close would vindicate WSP's roll-up strategy, while Arcadis rejection of a second offer raises the cost of getting a deal done.
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