Core Insights - Stantec reported strong financial results for Q2 2025, with net revenue reaching $1.6 billion, a 6.9% increase year-over-year, driven by 4.8% organic growth across all regions and business units [3][8][14] - The company has revised its 2025 guidance upward, expecting net revenue growth of 10% to 12%, adjusted EBITDA margin of 17% to 17.4%, and adjusted EPS growth of 18.5% to 21.5% [5][6][12] - Stantec's contract backlog increased to $7.9 billion, reflecting a 9.9% year-over-year growth, with notable organic growth contributions from all regional units [8][21] Financial Performance - Net revenue for Q2 2025 was $1.6 billion, up $103.4 million from Q2 2024, with organic growth of 4.8% [3][14] - Adjusted EBITDA rose 15.0% to $284.4 million, with an adjusted EBITDA margin of 17.8%, a 120 basis point increase from the previous year [3][14] - Diluted EPS increased by 63.0% to $1.19, while adjusted EPS grew 21.4% to $1.36 [3][14] Regional Performance - Canada achieved organic growth of 6.2%, the United States 4.4%, and Global operations 4.3% [3][20] - The Water segment saw significant organic growth of 12.4%, while Energy & Resources delivered 9.5% organic growth [3][14] Acquisitions and Strategic Moves - Stantec completed several acquisitions, including Ryan Hanley, Cosgroves, and Page, enhancing its capabilities in various sectors [4][8][14] - The acquisition of Page, a 1,400-person firm, is expected to strategically complement Stantec's Buildings business [8][14] Outlook and Guidance - The company has increased its guidance for 2025, reflecting strong year-to-date performance and the impact of recent acquisitions [5][6][12] - Adjusted net income is expected to exceed 8.8% of net revenue, with adjusted ROIC projected to be above 12.5% [12][14] Backlog and Cash Flow - Contract backlog reached $7.9 billion, indicating approximately 12 months of work, with 9% organic growth contributing to this increase [8][21] - Operating cash flows increased by 79.4% to $134.0 million, demonstrating solid operational performance and effective collection efforts [14][17]

Financial Data and Key Metrics Changes - The company achieved record highs for operating income and earnings per share (EPS) in Q3 2025, with operating income at $159 million, up 37% year-over-year, and EPS at $0.41, up 46% from the prior year [5][9] - Net revenue for the quarter reached $1.06 billion, an 11% increase from the same quarter last year [8] - Cash flows generated from operations improved by 23% year-over-year, totaling $462 million for the trailing twelve months [24] Business Line Data and Key Metrics Changes - The Government Services Group (GSG) segment saw a 29% increase in net revenue to $429 million, with a margin of 19.9%, up 230 basis points from the prior year [10] - The Commercial International Group (CIG) segment's revenue was $633 million, showing slight growth year-over-year, with a margin of 15.2%, up 130 basis points [11][12] - U.S. Federal work increased by 46% year-over-year, now representing about 25% of total business [14] Market Data and Key Metrics Changes - State and local revenue grew by 30% year-over-year, with ongoing water programs up 18% excluding episodic disaster contributions [15][16] - International work, representing 42% of revenues, was essentially flat year-over-year, with growth in the UK and EU offset by declines in Australia [17] Company Strategy and Development Direction - The company is focusing on higher-margin consulting and design work for water and environmental projects, aiming to increase net revenue while improving EBITDA margins by 50 basis points annually [22][23] - Recent legislation has shifted funding priorities, with significant increases in defense spending and infrastructure upgrades, presenting new opportunities for the company [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the impacts of the new administration and its effects on the business environment, particularly in federal contracting [6][30] - Despite near-term uncertainties, the company remains optimistic about long-term demand for high-end water, environmental, and sustainable infrastructure [38] Other Important Information - The company has a backlog of $4.15 billion, which is stable and has grown slightly from the previous quarter [19] - A dividend of 6.5 cents was approved, marking a 12% increase year-over-year, and the company has initiated a stock buyback program with $200 million repurchased so far in 2025 [26][28] Q&A Session Summary Question: Can you provide more details on the backlog? - Management noted that while the backlog was flat year-over-year, the actual issuance of contracts has not changed, but there has been a slowdown in the conversion of task orders due to changes in government contracting personnel [43][44] Question: How do you see the backlog impacting 2026? - Management anticipates a continuation of the current book and burn situation, with less visibility on future task orders but no expected impact on revenue [65][66] Question: What is the outlook for disaster recovery revenue in Q4? - Management expects minimal contribution from disaster recovery activities in Q4, as most recovery work has been completed [68] Question: How does water market growth compare to infrastructure demand? - Management indicated that water infrastructure work is growing at rates above 10%, with state and local work driving much of this growth [76][80] Question: What are the opportunities for increasing front-end advisory consulting work? - Management sees opportunities in energy development and renewable energy sectors, focusing on technical evaluations and permitting for new projects [83][85]

Core Points - Stantec Inc. held its annual meeting of shareholders on May 15, 2025, with 88,159,157 shares represented, accounting for 77.29% of outstanding common shares [1] Group 1: Election of Directors - All nine nominees for the Board of Directors were elected, with the highest percentage of votes for Martin A. à Porta at 99.54% and the lowest for Marie-Lucie Morin at 95.65% [1] Group 2: Appointment of Auditor - PricewaterhouseCoopers LLP was reappointed as auditor for 2025, receiving 87,906,572 votes in favor, which is 99.71% of the total votes [2] Group 3: Executive Compensation - Shareholders approved Stantec's approach to executive compensation with 80,417,027 votes for, representing 94.77% [3] Group 4: Company Overview - Stantec is a global leader in sustainable engineering, architecture, and environmental consulting, addressing challenges such as aging infrastructure and energy transition [4][6]

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]