Summary of Stantec's Q2 2026 Earnings Call

1Key Financial Results and Metrics

Net Revenue: $1.8 billion, up 12% year-over-year (YoY), driven by 3.7% organic growth and 7.1% from acquisitions.

Adjusted EBITDA: Increased over 17% YoY, with a record margin of 18.7%, up 90 basis points.

Adjusted EPS: Grew 18.4% YoY to $1.61.

Gross Revenue: $2.2 billion, an 11.5% increase YoY.

Backlog: Reached a record $9.2 billion, up 17.5% YoY, with organic growth of 7%.

Cash Flow: Operating cash flows totaled $116 million year-to-date; DSO was 75 days, within internal targets.

2Strategic Updates and Business Highlights

Stantec's diversification across regions and sectors has been key to its growth, particularly in water, energy, and infrastructure.

Strong performance in the U.S. was bolstered by the acquisition of Page, which is expected to contribute to organic growth in the latter half of the year.

The acquisition of Niche, a 200-person engineering firm in Australia, was announced to enhance environmental services.

Significant project wins include a $13 billion data center for Meta in Alberta and various water reclamation projects in the U.S.

3Forward Guidance and Outlook

Revenue Growth: Expected net revenue growth in the range of 8.5% to 11.5% for the year, with organic growth anticipated in the mid-single-digit range.

Adjusted EBITDA Margin: Guidance increased to 17.8% to 18.3%.

U.S. Market: Anticipated acceleration in organic growth in the second half of the year, supported by strong demand across all business verticals.

Canada: Expected mid-single-digit organic growth driven by public sector spending and infrastructure projects.

4Bad News, Challenges, or Points of Concern

Organic growth in the U.S. was flat in Q2 due to project delays and slower ramp-up, which raised concerns about the ability to meet growth targets.

The infrastructure business in Canada is experiencing a wind-down of certain transit and roadway projects, which could impact future revenue.

There are ongoing challenges in the acquisition environment, with a noted dislocation in valuations between public and private entities, potentially affecting future M&A activity.

5Notable Q&A Insights

Management emphasized that the slowdown in the U.S. was primarily a timing issue rather than a demand problem, with a strong sales funnel and backlog supporting future growth.

Margin expansion is expected to moderate in the second half due to increased workforce requirements to support anticipated organic growth.

The company remains focused on disciplined M&A, with plans to expand its NCIB program to 5% of outstanding shares, while also maintaining flexibility for future acquisitions.

There is confidence in the long-term growth potential of the global operations, particularly in Latin America, where demand for copper is driving significant growth. Overall, Stantec's Q2 2026 results reflect strong financial performance and a positive outlook, despite some challenges in organic growth and project timing. The company is well-positioned for future growth through strategic acquisitions and a robust project backlog.