Stantec (STN) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 net revenue of $1.5 billion, up 16.8% year-over-year, driven by strong organic and acquisition growth across all regions and business units.

• Backlog reached an all-time high of $7.2 billion, up 13.4% since December 2023, representing 12 months of work and reflecting robust demand and major project wins.

• Recognized for sustainability leadership, ranking #2 in Corporate Knights' Best 50 Canadian Corporate Citizens and #14 globally by TIME magazine.

• Integration of recent acquisitions (ZETCON, Morrison Hershfield, Hydrock) is progressing, with 2,700 new employees joining.

• Net income for Q2 was $84.6 million, down 3.9% due to a non-cash impairment charge and higher admin/marketing expenses.

Financial highlights

• Gross revenue grew to $1.89 billion, up 15% year-over-year; net revenue up 16.8%.

• Adjusted EBITDA rose 14.5% to $247.3 million, with a margin of 16.6%.

• Adjusted diluted EPS increased 13.1% to $1.12.

• Operating cash flow for the first six months was $137 million, double the prior year period; $137 million returned to shareholders via buybacks and dividends.

• Project margin increased to 54.4% of net revenue.

Outlook and guidance

• 2024 net revenue growth guidance raised to 12–15%, with organic growth expected in the mid to high single digits.

• Adjusted EBITDA margin guidance narrowed to 16.5–16.9%.

• Adjusted diluted EPS growth expected in the 12–16% range; adjusted ROIC projected above 11%.

• Margin expansion anticipated in 2025 as integration of acquisitions completes and utilization improves.