Colliers International Group Inc (CIGI) 2025 Q4 法說會逐字稿

Welcome to the Colliers International fourth-quarter year-end investors conference call. Today's call is being recorded. Legal counsel requires us to advise that the discussion scheduled to take place today may contain forward-looking statements that involve known and unknown risks and uncertainties. Actual results may be materially different from any future results, performance or achievements contemplated in the forward-looking statements.

Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements in the company's annual information form as filed in the Canadian Securities Administrators and the company's annual report on Form 40-F as filed with the US Securities and Exchange Commission. As a reminder, today's call is being recorded. Today is February 13, 2026.

And at this time, for opening remarks and introductions, I would like to turn the call over to the Global Chairman and Chief Executive Officer, Mr. Jay Hennick. Please go ahead, sir.

Thank you, operator, and good morning. I'm Jay Hennick, Chairman and Chief Executive Officer of Colliers. Joining me today is CFO, Christian Mayer. Our call is webcast and a call deck is available in the Investor Relations section of our website. 2025 is an exceptional year for Colliers, repeat, an exceptional year for Colliers, reflecting the strength of our diversified platform and our successful expansion into other high-quality recurring professional services.

Today, more than 70% of our earnings come from these resilient businesses, approaching 75% once recent acquisitions are included. Our fourth-quarter results were in line with expectation and were up nicely over last year, which itself was a very strong year-over-year performance. Last week, we achieved another milestone, agreeing to acquire Ayesa Engineering, a world-class business and a rare opportunity at this scale.

This acquisition meaningfully expands our avenues for growth, strengthens our ability to scale organically, pursue further acquisitions and cross-sell engineering capabilities across our global client base. Once closed, Colliers Engineering will rank among the top 30 global engineering firms with expanded presence in Europe, Latin America and the Middle East.

Operationally, in commercial real estate, we had another solid quarter. Capital markets continued its rebound, especially in the US, and leasing activity held steady with strength in both office and industrial. Demand for outsourcing solutions, including property management, valuation and other advisory also grew nicely as clients continue to look for trusted and experienced partners with global execution capabilities.

Engineering delivered another strong year of growth with internal performance and meaningful contribution from acquisitions. Growth will accelerate even further once Ayesa joins the platform. Investment management ended the year with over $108 billion in assets under management, reflecting deep investor confidence in our investment strategies across the entire Harrison Street Asset Management platform.

Throughout the year, we continued investing in leadership, talent and innovation across the board, reinforcing the entrepreneurial culture that defines Colliers. Our partnership model remains a key competitive advantage with meaningful inside ownership across the board, keeping leaders fully aligned with our clients, our investors and our shareholders.

We enter 2026 with strong momentum once again and a healthy pipeline. We expect another year of solid internal growth, ongoing contributions from recent acquisitions and a meaningful uplift once Ayesa closes. Over the past five-years, despite challenging and often unpredictable conditions, Colliers doubled its size, delivering compound annual growth rates of more than 15%.

And based on what we see today, we expect similar performance again in 2026. Our strategy is working. Our teams are performing, and we're extremely well positioned for future growth and value creation. Before I turn things over to Christian, a brief comment on AI, which is all the rage. At Colliers, we see AI as a productivity and growth enabler.

It is helping us automate routine work, improve efficiency, expand margins, allowing our professionals to focus on higher-value advisory services that are complex and rely on judgment, expertise and trusted relationships. AI also strengthens our data advantage, combining our proprietary information with advanced capabilities through our partnership with Google Cloud and other third-party providers to deliver better insights and better execution for clients.

Importantly, AI enhances rather than replaces our business across all three segments. judgment, accountability, qualifications and licensure as well as important client relationships remain central to how we operate. Put simply, it makes our professionals even better at what they do for our clients. While recent share price movements suggest AI near-term impact may be overhyped, we believe its long-term value is as an enabler and is truthfully meaningfully underappreciated as future potential for Colliers and its future.

Let me now turn things over to Christian. Christian?

Thank you, Jay, and good morning. Please note that the non-GAAP measures discussed on this call are defined in our press release and quarterly presentation. All revenue growth figures are presented in local currency terms. For the fourth-quarter, we generated revenues of $1.6 billion, up 5% year-over-year with growth across all segments.

Overall internal growth for the quarter was essentially flat and was impacted by a strong prior year comparison. On a full year basis, internal revenue growth was up a solid 5%. Adjusted EBITDA was $245 million for the quarter, up 6% over last year, in line with revenue growth. Fourth-quarter Commercial Real Estate segment net revenue was up 7%.

Capital markets revenues increased 13%, led by strong activity and market share gains in the US, where we saw our investments in recruiting and multi-market connectivity driving continued market share growth in a recovering market, albeit slower than we all would like. Growth in EMEA and Asia Pacific was modest against a strong prior year comparative.

Leasing revenues were up 3%, also led by the US in the office and industrial asset classes, again versus a strong prior year comparative. Outsourcing grew 8% in the fourth-quarter with our valuation practice driving the growth. Segment net margin was 15.8%, up 50 basis points year-over-year on operating leverage from higher transactional revenues.

Our Engineering segment net revenue was up 8%, led by recent acquisitions. End market demand continues to be strong, especially in infrastructure, transportation and environmental consulting, offset by a temporary slowdown in certain project management operations in the quarter. The net margin was 12.4%, slightly lower than last year on lower overall productivity.

Our revenue backlog is strong across the segment and provides excellent visibility for the year ahead. Investment management net revenues increased 6%, driven by a recent acquisition. The net margin declined slightly to 42.5% as we continue to integrate our operations under the Harrison Street Asset Management brand.

These strategic investments are crucial for strengthening our capital formation capabilities and unifying nonclient-facing functions. We expect these costs will continue to impact our margins through the first half of 2026. Our IM segment raised $2.1 billion in new capital commitments during the fourth-quarter and $5.3 billion for the full year, in line with our expectations.

Fundraising momentum was solid as we enter 2026 with several funds currently in the market, including our latest flagship infrastructure fund, which launched in December. Our fundraising target for 2026 is $6 billion to $9 billion as we accelerate the pace of attracting institutional and private wealth investors looking for differentiated alternative investment solutions.

Year-end AUM, as Jay mentioned, was $108 billion, flat relative to September 30, with new capital raised offset by asset sales in older vintage funds and accompanying returns of capital to our LPs. As in the past, we anticipate our LPs will reinvest a significant portion of the returned capital into our new funds. Now turning to our balance sheet.

Our leverage declined to two times as of December 31, with the benefit of strong seasonal cash flows. The recently announced Ayesa acquisition will add approximately 0.7 turns of leverage on a pro forma basis. The $700 million equivalent purchase price will be funded from our revolving credit facility, which currently has over $1.1 billion of available capacity and will be euro-denominated, bearing interest at a very attractive rate of approximately 4%.

As Jay noted, we are entering 2026 with strong momentum. Across our company, there's a tangible sense of optimism about our strategy, the investments we are making, the increasingly resilient profile of our revenues and the avenues for growth in each of our diversified segments. In that spirit, we are introducing our outlook for 2026 as follows.

In commercial real estate, we are expecting low teens top line growth and a modest increase in net margin, predicated on a continuing recovery in capital markets. It's important to note that even with this growth, our capital markets activity will remain well below prior peaks. Our engineering segment is expecting mid-single-digit internal growth and the impact of acquisitions, including Ayesa, resulting in total topline growth of over 25%.

This growth is supported by a strong backlog and favorable trends in infrastructure, urbanization and energy transition, along with increasing data center demand. Investment management net revenue growth is expected to be in the low teens, with growth led by higher management fees as fundraising continues to accelerate. Putting it all together, we're expecting mid-teens growth in all three of our key operating metrics.

That concludes my prepared remarks. Operator, can you please open the line for questions?

(Operator Instructions) Tony Paolone, JPMorgan.

I would like to start with engineering and just a bit on the organic growth there. As you roll that up, if I think about that business, I think about it being like an hourly rate, number of professionals and the number of hours worked. Can you talk about just like what's happening with some of those trends organically and where you're finding success or not and sort of those revenue synergies as you roll this up?

Yes, Tony, I'll take that. As we mentioned, demand for our services is strong across all the end markets. In terms of the questions you're asking pricing and hours and things like that, we're seeing opportunities to increase pricing. There is strong demand for our services. We're getting nice increases from institutional, public sector and private sector clients. In terms of professionals, we're hiring.

The market is still tight for qualified engineers, but we are growing our workforce to meet the demand. Our backlogs are strong, as I mentioned in my prepared remarks, and that is driving our utilization. We have business in infrastructure, power, transportation, property and building work with programmatic clients and distribution and retail. These activities are all going strong and will drive our hourly work and our ability to increase the utilization of our staff and our margins.

Let me add, Tony, a couple of things that just maybe simplify some thoughts. Probably 60% of the Engineering business is what I would categorize as design which is design of all types of solutions, which is not hourly based, although we do manage our labor on an hourly basis, but it is not priced to clients on the basis of an hourly rate.

The balance of the business is more, I would say, closer akin to project management. Once the design is complete and needs to be executed upon, it's closer to an hourly rate kind of structure. So we love that business because the design aspect allows us to generate higher margins, yet the hourly rate portion or the project management portion is something that is certain. It is long term.

For example, we have some clients where the execution of the project may be 10- or 12-years where we're allocating x number of people for a long period of time to oversee the completion of the work. So it's a very interesting business opportunity for us. It's a very good business. And as Christian said, there's a shortage of engineers virtually everywhere in the world, which is driving up pricing.

We'd like it to drive it up a little bit more, but it is driving up overall pricing because it's hard to get qualified engineers. So I thought I'd add that a little editorial.

No, that's really helpful because it kind of ties to the follow-up where I was going to go with just some of these concerns around AI and thinking about if the -- if everything gets more efficient and they could do more work quicker, does that have any implications on sort of the billable hours or just the TAM of revenue? Or are there just other ways to charge? I mean, just trying to think about how that could be disrupted by.

Well, for sure, on the design piece of the business, automation of all kinds, including AI helps drive our margins up because our professionals can do the mundane, the menial tasks faster and get to the real value-add stuff. So we see some real advantages from that aspect of our business.

Daryl Young, Stifel.

I wanted to start with a question just on capital allocation and specifically where the share price is today and your thoughts on buybacks or an SIB?

I'd love to buy back stock right now. But we have lots in the pipe, including Ayesa, as you know. And we believe more behind that. So we're watching our capital carefully. It's very easy to do an equity offering and dilute shareholders, but that's never been our MO. We're in the business of creating long-term shareholder value. So buying back stock is not really in the -- as a corporate matter is not really in the plan. But on a personal level, it might be in the plan.

Okay. And then switching to investment management. Some of the integration cost pressures have gone on a little longer than I think I originally had expected. Is the scope of what you're doing there changing and evolving? Or maybe just a little bit more color on the continuation of those pressures.

Well, we don't really see them as pressures, but it will continue again in '26. Christian will add a few little tidbits in a minute. But we're actually getting a little more ambitious on some of the initiatives as we bring everything together. And we're liking where we're coming out. So we're going to continue to do what we think is right in terms of creating a spectacular platform under a unified brand. Christian, do you want to add?

Daryl, I'd just add that we have been messaging for some time that we're going to be incurring additional costs to integrate and bring together this business. And as I mentioned in my prepared remarks, which is consistent with what I've been saying previously, we do expect this to continue through the first half of 2026 until we sort of complete the work and realize some of the benefits of the work we've been doing.

Erin Kyle, CIBC.

I wanted to start maybe on the macro here. And if you can just give us some more detail on what you're seeing from a macro perspective as it relates to the capital markets pipeline here? And then maybe just elaborate a little bit on what's baked into that 2026 guide and whether it depends on some additional rate cuts here.

Yes. Erin, we're not counting on rate cuts in terms of our outlook for capital markets. Capital markets is benefiting from a pent-up supply or pent-up demand and pent-up supply of transactions. As you know, transaction activity has been slow for a number of years, and there's a lot of people in the market that want and need to transact, and that's starting to turn into revenues for Colliers. So that's really what we're seeing.

We had strength in 2025 in capital markets, and we expect that to continue in 2026 with more transactions happening at all price points across all markets. '25 was led by the US I think the US will continue to be very strong. And hopefully, volumes will pick up in EMEA and Asia Pac, which have been a little bit slower.

Could you just remind us what the US exposure is specifically in Capital Markets as maybe a percentage of that business?

About 50%.

Okay. That's helpful. And then I just wanted to clarify on the Engineering segment. What was the internal growth in the quarter and for the year? I don't think I saw it in the slides this quarter.

Yes. Engineering internal growth was roughly flat on the quarter and 5% on a full year basis.

Stephen MacLeod, BMO Capital Markets.

Lots of great color so far. I just wanted to ask just a little bit about the sort of AI trade we're seeing going on in the marketplace right now, the stock marketplace that is. Jay, you referenced some of it in your prepared remarks, but I was just curious if you could give maybe a few examples of how you intend to leverage AI in the future. Maybe you gave a little bit of color there. And then I guess, separately from that, where you might see some potential risks to the business, if any?

So let me just sort of start with -- we don't buy and sell commodity real estate or lease commodity real estate. I heard somebody musing yesterday about selling condos. That's very different than what we do. Our professionals are handling high-value complex transactions, multiple variables. They need their judgment, they need experience, they need relationships.

So AI is not going to impact their business other than to make them better at what they do. And as I said, we have -- there's sort of three buckets there that are interesting and valuable to our professionals. One is our own data sets, and we have significant data sets that we've accumulated over many, many years, market by market, category by category, real estate asset type by real estate asset type.

And all of that is including valuation information, including real estate, property management data sets. All of those are valuable in our computer systems, et cetera. We've also entered into this partnership with Google Cloud, who have the biggest real estate, it's an exclusive partnership. We're the only ones in the industry. And they have unique and probably the most real estate -- commercial real estate data out there.

And so we're leveraging that as well as their capability at doing what they do, which I think is sort of top drawer. And our existing software suppliers are also moving in the way of AI in a rapid format. So when you bring all of those things together and you integrate that -- and by the way, this is going to be a long-term process. This is not going to be turned on this year and you're in business.

This is going to be a two-, three-year process to maximize the value. We -- we're trying to be very pragmatic about it. We're focusing on higher-value output first. But there's all of that data that we will be able to arm our professionals with that we will be able to allow them to advise clients better as they make decisions. The second piece, as I talked about, is how do we get rid of the redundancy, increase the efficiency.

There's so much that has over the past. And this is not this year, and it's not because of the fancy phrase called AI. We've been automating processes for years now and in areas like valuation and other areas where there's just a lot of mundane tasks. What AI is allowing us to do is accelerate that process. And we think that we'll become way more efficient.

We'll be able to reduce our costs, not just our IT costs, but also labor across the world, and that's going to only drive increased margins. So we're quite excited about both of them. Our CapEx this year around IT is bigger than it's ever been before in terms of our history by a meaningful amount. Our teams are centralized and excited about the possibilities.

And what we have to do as good stewards of capital is make sure that they're staying focused on the biggest opportunities for us rather than shotgun approach. So we're quite excited about all of this. But let's just put it into the -- this is just what we do for a living. This is what we do to enhance our business. And there are so many other areas we're going to continue to grow our business.

This is just going to make us better. It's going to increase our moat even more. It's going to create more value for our professionals. And all of that just leads to a better, stronger long-term business called Colliers.

Yes. That's great color, Jay. And it sounds like it's going to be a net benefit, absolutely. I just appreciate the color just given the backdrop. So that's why I asked. Just maybe one more question, more surgical, I suppose. But just on the investment management business, just as you work through the investments you're making this year and coming at the other end, better positioned to capital formation and things like that.

Christian, could you just talk a little bit about sort of where you see margins going once the investment into the unified platform has been made?

Yes. You're going to see margins decline in 2026 to the high 30s net margin area. And then in 2027, we're expecting to return to our historical average margin in the mid-40s. So that's essentially with fundraising, as we outlined, starting to accelerate and with these integration efforts behind us.

Julien Blouin, Goldman Sachs.

So Jay, it sounds like we should be thinking of the Ayesa acquisition kind of similarly to Englobe and that it sort of gives you this foothold in Europe and elsewhere from which you can grow and sort of roll up other businesses. I guess as you think about identifying those next sort of tuck-in targets, is it primarily on the basis of the geographies you want to be in? Or is it the additional capabilities that you're most interested in adding to the platform?

Well, the simple answer is both, obviously. But we have capability across the platforms everywhere, stronger in some places and weaker in others. But let me zero in on Ayesa for a second. The beauty of that deal for us, when you cut through it all is they were founded in '64 by the same family. The management team there is absolutely spectacular.

They have spent since 1964, building sizable platforms in Spain, Mexico, Europe, the Middle East, markets where we did not have a presence in. And so yes, looking at it like Englobe is a great example, except in the case of Englobe, as we consolidate the industry, we're doing it only in Canada. Now we have the opportunity to do the same thing in multiple markets.

And so our M&A teams here and at Ayesa are very excited about what they can do with their existing platforms, which themselves are extremely profitable with strong management teams already in place. So we see lots of future growth coming there. And as we look -- as we continue to look at that business, we see other areas where we can do similar things.

And again, I want to emphasize, which didn't come out in my initial comments. Our partnership philosophy is making a huge difference. We're a permanent capital source. We're partners with the operators that run these businesses every day. Yes, we have significant equity stakes in the business. Yes, we have -- we drive all of their growth initiatives.

But they finally have a partner that can help them execute on plans, help them integrate acquisitions, sort of follow some of the things that we've done for the past 30 years. And there are other potential targets out there that could continue to accelerate our growth in engineering. So it's not over now, but it's an area that we alluded to on previous conference calls over the past 12- or 18-months.

But I think there's more opportunity to be pursued. And there's similar opportunities in our other segments as well. So our philosophy of three-segments, each of them high-value, recurring professional services, high cash flow generation is working and has worked for 30-years. So we have a way of operating, which we think is unique.

We think our -- we differentiate ourselves in the marketplace when it comes to being an ideal partner for some of these great businesses. And our job, I think, in many ways is to just find that great business with the great management teams that are hungry to take the business to the next level. And that's what we focus on so much when it comes to M&A.

That's really helpful, really helpful context. And then, Christian, I think you referenced a temporary slowdown in certain project management operations in the quarter and lower overall productivity is, I think, how you stated it. Can you maybe elaborate on what drove that? And sort of what gives you confidence that these pressures won't recur as we move into 2026?

Yes. We had lower activity levels in project management operations in our legacy local project management business in EMEA and Asia Pac, and we think that was a temporary onetime thing. So comfortable that is going to be behind us. And then as it relates to margin, the engineering business does have a lot of hourly labor attached to it. utilization is extremely important.

And when you're in the holiday season, that sort of thing, it does impact the utilization and productivity of staff. So it's -- I mean, it's really a very minor change in margin, not something to be concerned about as we look ahead.

Himanshu Gupta, Scotiabank.

So on commercial real estate, I mean, you have low teens growth expectation in 2026. Can you break it down between capital markets and leasing businesses?

Sure. So the segment, as you said, is low teens revenue expectation for growth. In terms of Capital Markets, we would be looking at high teens, which is a slight acceleration from what we had in 2025, but we have a lot of visibility and confidence in the sort of return of transaction velocity there. Leasing would be something in the mid- to high single-digit area in terms of growth year-over-year. So really, the growth you're seeing in commercial real estate is focused around capital markets.

Got it. And then on leasing specifically, can you comment on industrial and office leasing expectation? I mean, is there any outlier within like regional breakdown or within asset class for leasing?

You hit the nail on the head there, Himanshu. Office and industrial were strong in the fourth-quarter in the US in particular. I think those classes are going to continue to be relevant in terms of they are our largest asset class that we provide service in. So those two asset classes will continue to drive growth as well as others like data center, in particular, would stand out there. So it's going to be based on those areas.

Got it. And then switching gears, fundraising target of, I think, $6 billion to $9 billion this year. What platforms are you expecting this level of fundraising? I mean, can you unpack this? Like how big is the infrastructure fund? What other funds will contribute to that level of fundraising?

Well, as I mentioned, we had the first close on our new vintage infrastructure fund in December of 2025. So that is a big driver of fundraising. The alternative fund at Harrison Street Fund X had its first close last year. earlier in the year. So additional activity on that fundraise. And then we've got a number of products in the market, existing open-ended vehicles and as well as new products that we're introducing to the market. So a lot of different areas of focus and credit as well is another vertical. So it's going to be broad-based.

Got it. Very helpful. And my last question is, can you speak to the performance of funds within your IM segment here last year? Was the performance of these funds in line with your expectations and how they are helping you to do more fundraising?

Fund performance has been strong, Himanshu. So we continuously rank in the top quartile for fund performance across the alts, credit and infrastructure space. In fact, our flagship open-ended vehicle, the Harris Street Core Fund exceeded the ODCE Index by 100 basis points in 2025, which the team is very proud of. So doing well.

Jimmy Shan, RBC Capital Markets.

So Christian, just on the leverage, you're going to be on a pro forma basis at 2.7 times. Is it your plan to get back to the two times leverage where you've historically been? And how do you plan to do so?

Yes. Jimmy, that's the plan. That's always the plan when we lever up for a larger acquisition. We've done so in the past with Harrison Street, with Englobe and now with Ayesa. So the plan is to generate strong operating cash flow again in '26 like we did in 2025 to grow our EBITDA organically. The combination of organic EBITDA growth and cash flow generation is a powerful delevering effect, and that's what we expect to happen here as we progress toward the end of the year.

And then my second question, I'm sorry to go back to this AI, Jay, but it seems, I guess, that your view is that not only do you not think AI will be a disruptor and it's actually going to be a margin enhancer. Is that a fair interpretation? Or am I going too far, is number one? And then do you see at all any possibility across the various services that you provide that you can actually see some fee pressure as a result of AI?

So I don't see any fee pressure at all. I see the exact opposite than that. I think it's a disruptor, not to our business, but to our mindset. It is -- the great thing about this is it has opened up everybody's eyes to accelerate automation and integration across the organization faster than we otherwise would have, I think. The -- internally, and we're a very low CapEx business. We generate huge cash flows in our business.

We're allocating a lot more capital to IT because of all this all this new focus on AI. And as we get deeper and deeper into this, we realize more potential opportunities for the way we do business and the information we can provide to our professionals. So I'd say we're quite excited about it. But I think it's only additive to our business long term.

I can't see any area where it's not. If you were selling commodities, cookies, something like that, yes, okay, great, you can use AI. But these are complex transactions. They need licenses in many cases across the board. You need personal relationships. You need all the things I've talked about. And if we can make our professionals better and have more information at their fingertips.

They're going to be able to execute transactions faster with more information to the buyers and sellers and leasing, which is a big component of our business is even more complicated in many respects given the types of leasing that we're now doing, data centers and other very complex transactions. So I see it as a benefit, an enabler is probably the best word I could use.

I have one more quick one on Ayesa. The EBITDA for 2026 is around $63 million, $64 million. Is that what's embedded in your '26 guidance?

Seven-months of that, yes.

Seven-months of the 2026 EBITDA.

Yes.

Matt Filek, William Blair.

You have Matt Filek on for Stephen Sheldon. I wanted to start with one on Ayesa. It looks like that business has historically grown faster and operated at higher margins than your broader engineering platform. So I was just wondering if you can give us a rough sense of your growth expectations for that looking ahead and talk about what drives that stronger margin profile.

Well, the growth in that business, we referenced a 13% CAGR over the last 10 years. Obviously, the business now is at a scale where it becomes more difficult to grow organically at those kinds of rates. Certainly, we expect that high single digits are achievable organically going forward. And that's what we're focused on. In terms of its margin profile, it provides high-value services, design, site supervision, project management consulting on very sophisticated products and projects in high-demand end markets.

And these are public sector, public transit, water, energy, energy transition end markets that can command higher margins. The team at Ayesa have said, for example, they're big in desalinization in the Middle East. And obviously, that's a very profitable component of their business. They've got expertise in water, in Spain, in Mexico, and they've capitalized on it in the Middle East.

And I think the team has extremely disciplined pricing and disciplined execution on their projects. And they've demonstrated that over the last decade as well and being able to consistently deliver superior margins on their business.

Got it. I appreciate that additional detail. And then I just had one on producer headcount in capital markets and leasing. In the event transactional volumes were to have a more meaningful recovery in 2026 than you've assumed in your guidance, do you feel appropriately staffed to capture that upside? Or should we expect some incremental hiring?

Well, we're very active in recruiting across the board and have been over the past number of years. So we feel like we have what we need, but we're quite active in specific areas or specific specialties, white space where we can capitalize even more.

And I think the productivity of our existing producers is not at peak levels today. So they have capacity to generate more revenues with the same professional headcount.

Frederic Bastien, Raymond James.

Just want to go back to Ayesa. I hope I said it correctly. But obviously, limited very, I guess, no overlap whatsoever from a geographical standpoint with the business and it sounds like they have niche expertise that you can probably leverage to your other operations, specifically in water. Was that kind of behind the underwriting assumptions like that over -- beyond the 12-months of the first -- the acquisition period, you're going to be able to cross-sell a lot of the Ayesa services to your other regions?

Yes. Frederic, the transferability of skills is something that we do look at whenever we make an acquisition. And in the case of Englobe, they happen to have water expertise in terms of irrigation, drinking water, sanitation in Canada. And those skills are transferable and being transferred to our US business to help grow that part of their operations. So certainly, with Ayesa's capabilities in desalinization and other areas in the water space, that will be something we'll look at.

Okay. Cool. That's great to hear. And then I don't know if you mentioned it, Christian, but did you mention how much you ended up fundraising in 2025?

Yes, it was in my prepared remarks, let me turn back $5.3 billion on the full year, I believe.

Maxim Sytchev, National Bank Financial.

Christian, I was wondering if it's possible to get a clarification on organic growth for engineering. Was it a gross or net basis, number one? And then I guess if you can provide any color in terms of how the year started to trend, I presume we should be anticipating a recovery there.

The first part of your question, the internal growth was on a net basis, net revenue basis. And I think your second part of your question was about growth trajectory into '26.

Yes.

Yes. I mean, as I said in my prepared remarks, we have strong backlogs supporting our revenue outlook for the year. And we have mid-single-digit internal growth as a result as our expectation. We also have the impact of three tuck-in acquisitions that we did just in the last couple of months as well as the annualization of a few acquisitions last year. So that, together with the Ayesa transaction, which we expect will close in Q2, brings us to the overall revenue growth outlook of 25-plus percent.

Okay. Makes sense. And then just one quick clarification around Harrison Street. So the dip in the margin to kind of high 30s. So what's driving that exactly? Is it sort of system integration, personnel? Can you maybe just explain a little bit from an operational perspective and how that will -- that trajectory will rebound on a prospective basis?

Yes. We're conducting a lot of work on our IT systems integration, bringing the platform together. So a number of different systems projects underway to make that happen, a number of headcount additions, which have occurred over the last six-months and will occur going forward and then also some planned efficiencies that we are working through today, which will yield cost savings -- run rate cost savings once we hit the latter part of the year.

There are no further questions at this time. I will now turn the call over back to Mr. Jay Hennick. Please continue.

Thank you, everyone, for participating in our fourth-quarter and full year conference call, and we look forward to the next one. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation, and have a nice day.