Stantec ((TSE:STN)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Stantec’s Latest Earnings Call Highlights Strong Growth Amid Challenges
The recent earnings call for Stantec painted a picture of robust growth and strategic expansion, despite some challenges in the U.S. market and concerns surrounding Thames Water. The company reported strong financial metrics and an increased guidance, showcasing its solid market position.
Acquisition and Expansion
Stantec has successfully closed significant acquisitions, including Page, a U.S.-based architecture and engineering firm, and Cosgroves, a 90-person firm in New Zealand. These acquisitions are set to enhance Stantec’s capabilities in key growth sectors such as healthcare, advanced manufacturing, and data centers. Additionally, the acquisition of Ryan Hanley aims to strengthen Stantec’s offerings in the Irish water sector.
Strong Organic Growth
The company reported a 4.8% organic growth in Q2 2025, with notable contributions from the Energy & Resources and Water sectors, which achieved a 12.4% organic growth. Stantec’s net revenue reached $1.6 billion, marking a 6.9% increase compared to the previous year.
Improved Financial Performance
Stantec’s financial performance showed significant improvement, with adjusted EBITDA growing by 15% and a margin of 17.8%. The adjusted EPS increased by over 21% compared to Q2 2024. Year-to-date operating cash flows doubled from $117 million in 2024 to $235 million in 2025.
Increased Guidance
Based on its strong performance, Stantec has increased its 2025 net revenue growth guidance to between 10% and 12%, up from the previous 7% to 10%. The company also anticipates adjusted EBITDA margins to be between 17% and 17.4%.
Robust Backlog
Stantec’s contract backlog stands at $7.9 billion, reflecting approximately 12 months of work and a nearly 10% year-over-year growth. This growth is driven by strong demand in the Water and Energy & Resources sectors.
U.S. Market Challenges
The U.S. market has faced slower growth due to procurement delays and conservative investment decisions by private sector clients, which has moderated organic growth expectations.
Thames Water Financial Difficulties
Stantec’s client, Thames Water, is experiencing financial difficulties. However, there have been no immediate impacts on payment issues reported.
Forward-Looking Guidance
Stantec’s forward-looking guidance reflects its robust financial performance, with a net revenue of $1.6 billion and a 6.9% year-over-year increase. The company anticipates net revenue growth between 10% and 12% for 2025, with adjusted EBITDA margins projected to be between 17% and 17.4%. The contract backlog and stable net debt to adjusted EBITDA ratio further support this optimistic outlook.
In summary, Stantec’s earnings call highlighted strong growth and strategic acquisitions, despite challenges in the U.S. market and concerns about Thames Water. The company’s increased guidance and robust financial metrics underscore its solid market position and growth potential.