Stantec (STN) Q3 2024 earnings summary

Executive summary

• Achieved record net revenue of $1.52 billion in Q3 2024, up 15.8% year-over-year, driven by 6.5% organic and 7.8% acquisition growth across all regions.

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

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

• Major acquisitions (ZETCON, Morrison Hershfield, Hydrock) strengthened Infrastructure, Buildings, and Energy & Resources segments.

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

Financial highlights

• Q3 2024 net revenue: $1.52 billion (+15.8%); gross revenue: $1.93 billion; adjusted EBITDA: $274.6 million (+13.8%); adjusted EBITDA margin: 18.0%.

• Year-to-date net revenue: $4.39 billion (+14.8%); adjusted EBITDA: $733.8 million (+15.3%); adjusted EBITDA margin: 16.7%.

• Operating cash flow for the first nine months was $296 million, up from $261 million YTD 2023.

• DSO at quarter-end was 80 days, within the target range.

• Dividend of $0.21 per share declared, payable January 2025.

Outlook and guidance

• 2024 net revenue growth guidance raised to 14.5%-15.0% (from 12%-15%); organic growth expected in mid to high-single digits.

• Adjusted diluted EPS growth now expected at 16%-18% (up from 12%-16%); adjusted ROIC above 12%.

• Adjusted EBITDA margin target reaffirmed at 16.5%-16.9%; adjusted net income margin above 8%.

• Confident in achieving 2026 targets of $7.5 billion net revenue and 17%-18% EBITDA margin.

• Guidance excludes impact of future acquisitions and share price movements on compensation.