Summary of Stantec's Q4 and Full Year 2025 Earnings Call

1Key Financial Results and Metrics

Gross Revenue: $8.1 billion for 2025, up 10.7% from 2024.

Net Revenue: $6.5 billion, reflecting an increase of almost 11% year-over-year, with 5% organic growth and 3.9% from acquisitions.

Adjusted EBITDA: Increased by 17% year-over-year, with an adjusted EBITDA margin of 17.9%, exceeding the 2024-2026 strategic plan target range of 17%-18% a year early.

Adjusted EPS: Grew by 19.9% to $5.30.

Operating Cash Flow: Increased by 43.1% to $863 million.

Backlog: Reached an all-time high of $8.6 billion, up 9.5% year-over-year.

2Strategic Updates and Business Highlights

Stantec completed three acquisitions in 2025, contributing to growth, particularly in the Buildings business, which saw over 30% net revenue growth.

Strong demand in sectors such as water, transportation, and energy transition continues to drive performance.

The Water business achieved nearly 11% organic growth, supported by large wastewater treatment projects.

The company is leveraging AI to enhance efficiency and decision-making across various projects, with a focus on integrating AI into workflows rather than acquiring AI firms.

3Forward Guidance and Outlook

For 2026, Stantec anticipates net revenue growth of 8.5% to 11.5%, primarily driven by organic growth and the Page acquisition.

Expected adjusted EBITDA margin to be between 17.6% and 18.2%.

Projected adjusted EPS growth of 15% to 18% compared to 2025.

Continued strong performance is expected in the U.S. market, particularly in infrastructure, water, and environmental services.

4Bad News, Challenges, or Points of Concern

There is uncertainty regarding the M&A market due to recent valuation resets in public equities, which may affect acquisition timing and pricing.

The company is cautious about the sustainability of current market conditions and the potential impact of geopolitical uncertainties on future performance.

Environmental Services showed weaker performance in 2025, and there are concerns about maintaining momentum in this segment moving forward.

5Notable Q&A Insights

Management expressed confidence in the integration of AI into operations, which is expected to enhance revenue per employee and overall efficiency.

There is an ongoing discussion about the potential for outcome-based pricing models, but significant challenges remain in shifting government clients away from time-and-materials contracts.

The company is actively exploring M&A opportunities, with a focus on strategic fit and value accretion rather than just growth for its own sake.

Stantec's leadership noted a strong pipeline of potential acquisitions, particularly in the power sector and other aligned businesses, indicating readiness to capitalize on market opportunities. Overall, Stantec reported a strong performance in 2025, with robust financial metrics and strategic growth initiatives, while also navigating challenges in the M&A landscape and market uncertainties.