Finning sees sustained $1B power systems backlog as product support revenue climbs 7% amid mining and data center momentum

Earnings Call Insights: Finning International Inc. (FTT:CA) Q3 2025

MANAGEMENT VIEW

* CEO Kevin Parkes highlighted continued strong results, pointing to a 7% increase in revenues over the last 12 months and emphasizing the importance of product support, which reached $5.8 billion in trailing 12-month revenue, with growth across all regions. Parkes stated, "Importantly, our product support revenue continued its steady growth trajectory up to $5.8 billion over the last 12 months with growth across all regions." He noted solid performance in mining and data center markets, describing the Power Systems backlog as "robust at nearly $1 billion, up 23% from September 2024."
* Parkes discussed regional dynamics, citing a 7% increase in Canadian product support driven by mining, a 6% rise in South America, and a 2% uptick in the U.K. and Ireland. He emphasized maximizing product support as the "key value driver" and referenced ongoing cost and capital efficiency initiatives, including an SG&A margin of 15% and invested capital turns at 2.3x.
* The CEO underscored that Power Systems revenue grew 5% over the last 12 months, with product support up 7%, and deliveries in Q3 2025 nearly doubled from Q3 2024. "Our Power Systems backlog at the end of September remained robust at nearly $1 billion, up 23% from September 2024."
* Parkes signaled optimism in mining, referencing "a very constructive long-term outlook for mining driven by the demand for minerals" and noting the company is "excited about a very constructive long-term outlook for mining."
* CFO David F. Primrose reported, "Our Q3 revenue of $2.8 billion was up 14% compared to Q3 2024, higher across all regions. In aggregate, all lines of business were also higher. Q3 EBIT of $240 million was up 25% from Q3 '24 adjusted EBIT, reflecting strong revenue growth and cost control."
* Primrose added, "EPS of $1.17 was up 33% from Q3 '24 adjusted EPS, driven by higher earnings and the benefit of share repurchases."

OUTLOOK

* Parkes stated, "We remain very confident and committed to growing our business through 2026 by executing our strategy of maximizing product support, driving full cycle resilience, a sustainably growing population in our end markets by building our used equipment, rental and power capabilities."
* The company expects "steady and dynamic growth in mining activity levels in South America and Canada" and a "very constructive long-term outlook for mining."
* Primrose noted ongoing investments in core dealership to support future sustainable growth: "We will also continue to invest strategically in our core dealership to support future sustainable growth opportunities."

FINANCIAL RESULTS

* Primrose reported, "Q3 revenue of $2.8 billion was up 14% compared to Q3 2024, higher across all regions." He detailed, "Q3 EBIT of $240 million was up 25% from Q3 '24 adjusted EBIT," and "EPS of $1.17 was up 33% from Q3 '24 adjusted EPS."
* Product support revenue was up 9%, new equipment sales were up 12%, and used equipment sales increased 122%, attributed to mining sector activity in Canada and South America.
* The equipment backlog stood at $2.9 billion at the end of September, up 26% from the prior year, with order intake in Canada rising 140% from Q3 2024.
* SG&A margin decreased by 290 basis points to 13.4%, reflecting cost control and restructuring savings, while consolidated adjusted return on invested capital improved 130 basis points year-over-year to 19.3%.
* Free cash flow usage was $56 million, reflecting higher inventory to support activity.

Q&A

* Sabahat Khan, RBC: Asked about "directional puts and takes as we head into 2026" and the Power Systems market, to which Parkes responded that the company remains "super constructive on the long-term trends" and highlighted sustained power backlog at $1 billion with growing opportunities in data centers and oil and gas.
* Cherilyn Radbourne, TD Cowen: Queried about the data center power opportunity and timing of product support annuity. Parkes explained, "In terms of the lag, in terms of 24/7, it would be very similar to a mining truck in terms of how that product support opportunity develops over time."
* Yuri Lynk, Canaccord: Inquired about the data center's share of the $1 billion power backlog. Parkes clarified, "About half of that $1 billion backlog roughly is in the U.K., 1/3 of it is in Canada and about 10%, 15% is in South America."
* Devin Dodge, BMO: Asked about SG&A cost sustainability. Parkes answered, "Short answer is yes, Devin, it's absolutely sustainable. I think we have more opportunities in Canada to find even more efficiencies."
* Steven Hansen, Raymond James: Questioned the nature of product support growth in Canada. Parkes attributed it to "population, utilization and penetration," emphasizing increased scope of work and higher utilization.

SENTIMENT ANALYSIS

* Analysts' questions focused on long-term prospects in mining and data centers, SG&A cost sustainability, and regional backlog composition. The tone was generally constructive, pressing for detail but not negative.
* Management maintained a confident and optimistic tone, especially regarding product support and Power Systems. Parkes and Primrose used phrases such as "super constructive on the long-term trends" and "very confident and committed to growing our business," with no signs of defensiveness or hesitation.
* Compared to the previous quarter, management's sentiment remained optimistic, with confidence reinforced by continued growth in backlog and product support.

QUARTER-OVER-QUARTER COMPARISON

* Guidance language and strategic focus remained consistent, with continued emphasis on product support and sustainable growth.
* SG&A margin improved from 15.5% to 13.4%, and EPS rose from $1.01 in Q2 to $1.17 in Q3.
* The equipment backlog remained robust, though slightly down from the Q2 record, and Power Systems backlog continued to grow.
* Analysts' focus shifted slightly more towards Power Systems and the data center opportunity, while management's confidence in long-term mining and power trends persisted.

RISKS AND CONCERNS

* Management cited ongoing labor environment challenges in Chile and noted, "we continue to expect some challenges in the labor environment as the demand for skilled labor remains high."
* The company is monitoring government policy changes in Argentina and is taking a low-risk approach while positioning for oil and gas and mining opportunities.
* Parkes mentioned that "delayed permits, delayed contract awards or and execution challenges, which can be labor, supply, there's a lot of play on a day-to-day basis."

FINAL TAKEAWAY

Finning International's Q3 2025 results highlight robust product support and Power Systems growth, with revenues up 14% and EPS climbing 33% year-over-year. Management emphasized the durability of its $1 billion Power Systems backlog, driven by mining and data center trends, and continued operational discipline reflected in lower SG&A margins and improved return on invested capital. The company remains focused on sustainable growth, cost efficiencies, and taking advantage of long-term opportunities in mining, energy, and infrastructure across its regions, while remaining vigilant to macroeconomic and labor risks.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/ftt:ca/earnings/transcripts]

MORE ON FINNING INTERNATIONAL

* Finning International Inc. (FTT:CA) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4842568-finning-international-inc-ftt-ca-q3-2025-earnings-call-transcript]
* Finning International Inc. 2025 Q3 - Results - Earnings Call Presentation [https://seekingalpha.com/article/4842522-finning-international-inc-2025-q3-results-earnings-call-presentation]
* Seeking Alpha’s Quant Rating on Finning International [https://seekingalpha.com/symbol/FTT:CA/ratings/quant-ratings]
* Historical earnings data for Finning International [https://seekingalpha.com/symbol/FTT:CA/earnings]
* Dividend scorecard for Finning International [https://seekingalpha.com/symbol/FTT:CA/dividends/scorecard]