Stantec (STN) Q3 2024 earnings summary

Executive summary

• Achieved record net revenue of $1.5 billion (CAD 1.5 billion) in Q3 2024, up 15.8%-16% year-over-year, driven by 6.5% organic and up to 8% acquisition growth across all regions.

• Adjusted EBITDA rose to $275 million (CAD 275 million), up nearly 14%, with an 18% margin; adjusted EPS increased 14% to $1.30.

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

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

• Organic growth was strong across all regions and business units except Energy & Resources; Water and Buildings saw double-digit organic growth.

Financial highlights

• Gross revenue in Q3 was $1,929 million (CAD 1.9 billion); net revenue $1,525 million (CAD 1.5 billion), up almost 16% year-over-year.

• Year-to-date net revenue reached $4.4 billion (CAD 4.4 billion), up almost 15% from last year.

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

• Operating cash flow for the first nine months was $296 million (CAD 296 million).

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

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 forecasted above 12% for 2024.

• Adjusted EBITDA margin target remains 16.5%-16.9%.

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