Stantec (STN) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 net revenue of $1.5 billion (CAD 1.5 billion), up 15.8% year-over-year, driven by 6.5% organic and almost 8% acquisition growth across all regions and business units.

• Adjusted EBITDA rose 13.8% to $275 million, with an 18% margin; adjusted diluted EPS increased 14% to $1.30.

• Backlog reached a record $7.3 billion, up 15.9% since December 2023, reflecting robust demand and major project wins in water, infrastructure, and energy transition sectors.

• Strong double-digit organic growth in water and buildings segments; energy and resources segment saw mixed results but backlog up 9% YTD.

• Recognized as Newsweek's #1 most responsible company in Canada for 2025, scoring 100 in governance.

Financial highlights

• Gross revenue reached $1.93 billion (CAD 1.9 billion), net revenue $1.5 billion, both up nearly 16% year-over-year.

• Adjusted EBITDA margin for Q3 was 18%; year-to-date margin at 16.7%.

• Adjusted net income for Q3 was $147.9 million, representing 9.7% of net revenue.

• Operating cash flow for the first nine months was $296 million; Q3 operating cash flow was $178.9 million, down 15.9% due to working capital and integration costs.

• Net debt-to-adjusted EBITDA ratio improved to 1.5x, within the 1-2x target range.

Outlook and guidance

• Raised 2024 net revenue growth guidance to 14.5%-15% (from 12%-15%).

• Adjusted diluted EPS growth now expected at 16%-18%, up from 12%-16%.

• Adjusted ROIC expected to be above 12%.

• Adjusted EBITDA margin guidance maintained at 16.5%-16.9%.

• Guidance excludes impacts from future acquisitions and share price movements affecting compensation.