WSP Books C$3.2B Q1 Revenue After TRC Acquisition, Eyes More Power Infrastructure M&A

WSP Global reported C$3.2 billion in Q1 revenue Thursday, marking a 14.2% year-over-year increase driven by power generation contracts and AI infrastructure work. The Montreal-based engineering firm closed its acquisition of New York power infrastructure specialist TRC Companies in late February for an undisclosed sum, adding 3,700 employees and strengthening its position in North American grid modernization and data center build-outs.

The quarter reflected immediate contributions from TRC's existing book of business in renewable interconnection studies and substation design. WSP said power generation revenue jumped 22% year-over-year on an organic basis, while its Earth & Environment segment—which now houses TRC—grew 31% including the acquisition effect. Management singled out AI-driven data center projects as a new vertical, with six hyperscale facilities under design across Virginia and Texas. The company did not break out data center revenue separately but noted contract signings in that category doubled sequentially from Q4 2024.

The TRC integration matters because it repositions WSP inside the bottleneck every AI infrastructure investor is watching: grid capacity. TRC specializes in utility interconnection studies—the engineering work that determines whether a new data center can physically connect to the power grid without destabilizing it. In PJM Interconnection territory alone, 1,200 projects totaling 270 GW are waiting in the queue, most of them data centers or battery storage. WSP now controls one of the largest teams capable of running those studies, giving it pricing power in a market where wait times have stretched past four years. The firm also handles Environmental Impact Statements for nuclear restarts, a discipline that matters if the 20 GW of shuttered U.S. nuclear capacity comes back online to feed AI load growth.

Management told analysts that M&A remains "a top priority" despite the TRC close, naming grid infrastructure and environmental permitting as areas of continued interest. The company has deployed C$1.8 billion in acquisitions since 2022, targeting firms that derisk power project approvals or accelerate timelines. WSP's balance sheet shows C$2.1 billion in available credit, and its net debt-to-EBITDA ratio sits at 1.4x, leaving room for another mid-sized deal before year-end. The firm did not name targets but noted it is looking at permitting specialists in Western states where transmission build-out is concentrated.

Allocators tracking infrastructure exposure should watch WSP's backlog disclosures in Q2 and Q3. The company reported C$9.7 billion in total backlog at quarter-end but did not break out the percentage tied to AI or power work. If that figure crosses 40%—roughly double the current mix—it would signal that hyperscale and utility clients are locking in multi-year master service agreements, not just project-by-project engagements. The other datapoint: whether WSP's operating margin holds above 14% as it digests TRC. Services firms typically see 200-300 basis points of margin compression in the year following a large acquisition.

The Q2 earnings call in August will show whether TRC's pipeline converted or stalled. Grid interconnection work doesn't move on quarterly cycles—it moves on regulatory cycles. If WSP adds another C$1.5 billion to backlog by mid-year, the thesis holds. If not, the bottleneck tightened somewhere upstream.