Financial Data and Key Metrics Changes - Stantec reported net revenue of CAD 1.6 billion for Q2 2025, an increase of 6.9% year-over-year, driven primarily by 4.8% organic growth [7][13] - Adjusted EBITDA grew by 15% with a margin of 17.8%, reflecting a 120 basis point increase compared to the previous year [8][14] - Adjusted EPS increased over 21% to CAD 1.36 compared to Q2 2024 [14] Business Line Data and Key Metrics Changes - The Energy and Resources business experienced high single-digit organic growth, while the Water segment achieved 12.4% organic growth [7][10] - In the U.S., net revenue increased by 5.7%, supported by 4.4% organic growth, with strong demand in mission-critical, science and technology, and civic sectors [8][10] - Canadian net revenue grew by 6.2%, with over 30% organic growth in the Water segment driven by major wastewater projects [10][11] Market Data and Key Metrics Changes - Global business delivered net revenue growth of 10.5% in Q2, with 4.3% organic and 3.6% acquisition growth [10] - The U.S. organic backlog increased by 9.8% year-over-year, indicating strong demand in water, energy, and data centers [20][31] - The UK, Australia, and New Zealand saw double-digit organic growth in the water business due to public sector investments [11] Company Strategy and Development Direction - Stantec aims to increase net revenue growth guidance for 2025 to 10% to 12%, up from the previous 7% to 10% [23] - The company is focused on strong project execution and operational excellence, with plans to continue pursuing acquisitions [27] - Stantec's strategic plan targets a 17% to 18% adjusted EBITDA margin, expected to be achieved a year early [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about accelerating organic growth in the U.S. for the second half of the year, despite some caution in the private sector [30][56] - The company noted that macro trends such as aging infrastructure and energy security continue to drive demand [26][90] - Management highlighted the importance of recent funding programs and infrastructure investments as supportive of future growth [89] Other Important Information - Stantec's contract backlog stood at CAD 7.9 billion, reflecting approximately twelve months of work, with year-over-year growth of nearly 10% [19] - The company completed several acquisitions, including Page, which is expected to enhance its capabilities in key growth sectors [5][18] Q&A Session Summary Question: Insights on U.S. Customers' Sentiment - Management noted some initial caution among U.S. customers but expects organic growth to accelerate in the second half of the year, particularly in water and energy sectors [30][31] Question: Integration of Recent Acquisitions - Integration of Ryan Hanley and Cosgrove is progressing well, with Page's integration planned for completion by the end of the year [34] Question: Margin Guidance and Contributors - Adjusted EBITDA margin guidance was increased to 17% to 17.4%, driven by strong project margins and lower administrative costs [41][42] Question: Water Segment Growth Drivers - Continued strength in the water business is attributed to ongoing projects in water treatment and wastewater treatment, with significant demand expected to persist [48][49] Question: U.S. Market Long-term Outlook - Management remains optimistic about the U.S. market, citing ongoing infrastructure investments and the potential for accelerated growth in the coming years [54][58] Question: Impact of Slower Growth on Pricing - No significant pricing pressure has been observed despite slower growth, with management confident in maintaining project margins [120][122] Question: M&A Landscape Update - The M&A environment is becoming increasingly active, with expectations for more assets to come to market in the near future [98]

Financial Data and Key Metrics Changes - Stantec reported net revenue of CAD 1.6 billion for Q2 2025, an increase of 6.9% year-over-year, primarily driven by 4.8% organic growth [6][12] - Adjusted EBITDA grew by 15% with an enhanced margin of 17.8%, reflecting a 120 basis point increase compared to the previous year [6][12] - Adjusted EPS increased over 21% to CAD 1.36 compared to Q2 2024 [6][12] Business Line Data and Key Metrics Changes - The Energy and Resources business delivered high single-digit organic growth, while the Water segment achieved 12.4% organic growth [6][12] - The U.S. net revenue increased by 5.7%, supported by organic growth of 4.4%, with strong demand in mission critical, science and technology, and civic sectors [7][8] - In Canada, net revenue grew by 6.2%, driven by over 30% organic growth in water and double-digit growth in energy and resources [9][10] Market Data and Key Metrics Changes - Global business delivered net revenue growth of 10.5% in Q2, with 4.3% organic and 3.6% acquisition growth [10] - The UK, Australia, and New Zealand saw double-digit organic growth in the water business due to public sector investment [11] - The U.S. organic backlog increased by 9.8% year-over-year, indicating strong demand in water, energy, and data centers [17][29] Company Strategy and Development Direction - Stantec closed the acquisition of Page, enhancing its buildings business and services in key growth sectors [3][4] - The company aims to achieve net revenue growth of 10% to 12% for 2025, up from previous guidance of 7% to 10% [21] - Stantec is focused on operational excellence and project execution, with a strong pipeline for future acquisitions [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about accelerating organic growth in the U.S. for the second half of the year, despite some caution in the private sector [28][30] - The company anticipates continued strong demand driven by macro trends such as aging infrastructure and energy security [24][54] - Management noted that while some challenges remain, they expect to see improvements in project execution and operational performance [80] Other Important Information - Stantec's contract backlog stood at CAD 7.9 billion, reflecting approximately twelve months of work, with year-over-year growth of almost 10% [16][17] - The company has increased its adjusted EBITDA margin guidance to 17% to 17.4%, up from 16.7% to 17.3% [23] - Recent financing transactions included the issuance of CAD 425 million senior unsecured notes and an increase in the unsecured revolver credit facility to CAD 1.2 billion [15] Q&A Session Summary Question: Insights on U.S. Customers' Sentiment - Management noted some initial caution in the private sector but expects organic growth to accelerate in the second half of the year, particularly in water and energy sectors [28][30] Question: Update on Acquisition Integration - Integration of Ryan Hanley and Cosgrove is progressing well, with Page's integration planned for completion by the end of the year [32][33] Question: Margin Guidance Details - Management highlighted strong project margins and lower admin and marketing costs as contributors to the increased EBITDA margin guidance [38][40] Question: Drivers of Water Business Growth - Continued strength in water treatment and wastewater projects, along with the ramp-up of AMP8, are driving organic growth in the water segment [41][44] Question: Long-term U.S. Market Outlook - Management remains optimistic about the U.S. market, citing significant infrastructure spending opportunities and a strong backlog [50][54] Question: Impact of Interest Rates on Spending - Management indicated that while interest rates may influence spending, the overall outlook remains positive with strong demand across various sectors [95] Question: Update on M&A Landscape - The M&A environment is becoming increasingly active, with expectations for more assets to come to market in the near future [91] Question: Risks of Slower Growth Environment - Management has not observed any pricing pressure despite slower organic growth, maintaining strong project margins [112]

Core Insights - Stantec reported a strong first quarter for 2025, with net revenue increasing by 13.3% year-over-year to $1.6 billion, driven by both organic growth of 5.9% and acquisition growth of 3.2% [3][6][11] - The company achieved an adjusted EBITDA of $252.3 million, reflecting a 19.1% increase, and an adjusted EBITDA margin of 16.2%, which is a 70 basis point improvement compared to the same quarter in 2024 [3][6][11] - Stantec's backlog reached a record high of $7.9 billion, up 12.8% year-over-year, indicating strong future revenue potential [4][6][11] Financial Performance - Net income for Q1 2025 increased by 29.8% to $100.1 million, with diluted EPS rising by 29.4% to $0.88 [11][12] - Adjusted net income grew by 28.9% to $132.8 million, achieving 8.6% of net revenue, an increase of 110 basis points [11][12] - Operating cash flows increased significantly by 135.8% to $100.7 million, demonstrating strong cash flow generation [11] Growth Strategy - Stantec reaffirmed its 2025 guidance, targeting net revenue growth of 7% to 10%, with adjusted EBITDA margin expected to be between 16.7% and 17.3% [5][8][9] - The company is optimistic about organic growth in both the US and Canada, expecting mid- to high-single-digit growth driven by a robust backlog [8][10] - Stantec has entered into definitive agreements to acquire Page and Ryan Hanley, which will enhance its capabilities and expand its workforce by over 1,500 team members [4][6][15] Market Position - The acquisition of Page, a 1,400-person architecture and engineering firm, positions Stantec to become the second largest architecture firm in the US, enhancing its expertise in advanced manufacturing and healthcare [4][6][11] - The acquisition of Ryan Hanley strengthens Stantec's presence in the Irish water sector, further diversifying its service offerings [15] Segment Performance - In Q1 2025, net revenue by region showed strong performance, with Canada achieving 12.2% organic growth, the US growing by 2.4%, and Global operations increasing by 7.5% [13] - The project margin increased to 54.3%, reflecting solid project execution and effective cost management [11][12] Future Outlook - Stantec anticipates continued strong demand and operational performance, with a focus on maintaining high project margins and effective cost management strategies [9][10] - The company expects adjusted EPS growth of 16% to 19% compared to 2024, indicating confidence in its financial trajectory [10]

WASHINGTON and EDMONTON, Alberta and NEW YORK, April 03, 2025 (GLOBE NEWSWIRE) -- TSX, NYSE:STN Highlights: Acquisition positions Stantec as the second largest architecture firm in the US and greatly strengthens its position as the largest integrated engineering and architecture firm in North AmericaSignificantly enhances Stantec’s service offerings in some of the fastest growing segments and regions of the USContinues to advance the achievement of Stantec’s targets in its 2024-2026 Strategic Plan Stantec, ...