Stantec’s Earnings Call Highlights Strong Growth and Optimism

Stantec ((TSE:STN)) has held its Q3 earnings call. Read on for the main highlights of the call.

Stantec’s recent earnings call conveyed a strong sense of optimism and resilience, driven by impressive financial performance. The company reported significant revenue and adjusted EBITDA growth, particularly in its Water and Energy segments. Despite some challenges with federal contract signings affecting backlog visibility, the overall sentiment was positive, with a promising outlook for future growth.

Strong Revenue Growth

Stantec reported a notable increase in net revenue, reaching $1.7 billion in Q3 2025. This marks an almost 12% rise compared to the same quarter last year, fueled by both organic and acquisition growth, each exceeding 5%. This robust revenue growth underscores the company’s successful expansion strategies.

Record-High Adjusted EBITDA Margin

The company achieved a record-high adjusted EBITDA margin of 19%, a 100 basis point improvement from Q3 of the previous year. This milestone reflects Stantec’s effective cost management and operational efficiency, contributing to its strong financial performance.

Significant Growth in Water and Energy Segments

Stantec’s Water business demonstrated remarkable organic growth of nearly 13%, while the Energy & Resources segment delivered close to 10% growth. These sectors also experienced double-digit growth in specific geographies, highlighting their pivotal role in the company’s overall success.

Strong Performance in U.S. Market

In the U.S., Stantec’s net revenue increased by over 14% in Q3, with organic growth at 4.6% and acquisition growth at 9%. This strong performance in the U.S. market underscores the company’s ability to capitalize on opportunities and expand its presence in key regions.

Impressive Adjusted EPS Growth

Stantec reported a 17.7% increase in adjusted EPS compared to Q3 2024. This growth in earnings per share reflects the company’s solid financial health and its ability to deliver value to shareholders.

Increase in Contract Backlog

The company’s contract backlog reached $8.4 billion, representing an almost 15% increase year-over-year. This backlog equates to approximately 13 months of work, providing a strong foundation for future revenue streams.

Strong Cash Flow and Liquidity

Year-to-date operating cash flows surged by 86% compared to 2024, driven by strong revenue growth and operational performance. This increase in cash flow enhances Stantec’s financial flexibility and ability to invest in strategic initiatives.

Flat Backlog Growth in U.S.

Despite the overall positive performance, Stantec experienced flat backlog growth in the U.S. year-to-date. This stagnation is largely attributed to slower procurement cycles and delays in project signings, presenting a challenge for future growth in this market.

Challenges in Federal Contracting

The U.S. market faced challenges with federal contract signings due to government shutdowns and procedural changes, impacting backlog visibility. These challenges highlight the need for strategic adjustments to navigate the complex federal contracting landscape.

Forward-Looking Guidance

Looking ahead, Stantec remains optimistic about its growth prospects. The company adjusted its full-year net revenue growth guidance and increased its adjusted EBITDA margin outlook to 17.2-17.5%. With continued demand across sectors such as infrastructure, energy transition, and mission-critical facilities, Stantec anticipates sustained growth and profitability.

In conclusion, Stantec’s earnings call painted a picture of a company on a strong growth trajectory, driven by robust performance in key segments and markets. Despite some challenges, the overall sentiment was positive, with a clear focus on strategic growth and operational excellence. Investors and stakeholders can look forward to continued success as Stantec navigates the evolving market landscape.