What you need to know: • ADF reported Q1 financial results that beat our expectations, with revenue of $99.3M (+79% YoY) vs. our $80.2M and Adjusted EBITDA of $18.5M (19% margin) vs. our expected $12.7M. • Gross Margin expanded to 24% (vs. our 21% estimate and 22% a year ago) as gross profit nearly doubled to $24.0M. • The Company’s order backlog reached a record $645.8M (vs. $561.1M in Q4), now 72% Canadian and including $266.5M from Groupe LAR. • The LAR plant expansion is now underway and de-risked by $12.5M in favourable government financing. This morning, ADF Group (DRX:TSX) reported Q1 financial results (ending April 30th, 2026) that largely beat our expectations across the board. The quarter had an easy comparable period, given the effects of tariffs on Q1/26, leading to 79% revenue growth and 78% EBITDA growth in Q1/27. We reiterate our bullish view on ADF, where FY27 is shaping up to be a record year, supported by major growth tailwinds for infrastructure spending and grid/hydroelectricity modernization. The capacity expansion program is underway at LAR, allowing the Company to further take advantage of these tailwinds in the future. We are maintaining our BUY rating and raising our target price to $16.00/share (previously $13.00/share) on ADF Group. Key Highlights • Revenue for Q1/27 came in at $99.3M, ahead of our estimate of $80.2M and representing 79% YoY growth. 71% of Q1 revenue was from the U.S., and LAR contributed $18.1M to revenue in the quarter. • The order backlog came in at a record of $645.8M (vs. $561.1M in Q4). LAR’s backlog was reported at $266.5M, 41% of the total. 72% of the backlog comes from Canadian contracts and 53% of the backlog was fabrication hours (most value-added service), compared to 33% of Q1 revenue. • Gross margin for Q1 was 24% vs. our estimate of 21% and 22% in Q1 last year. Gross profit nearly doubled to $24.0M, showcasing ADF’s operating leverage. LAR contributed $1.3M to gross profit. We remind readers that ADF’s record quarterly gross margin is 37%.