Q2 2026 Stantec Inc Earnings Call Transcript
Key Points
- Stantec Inc (STN) delivered strong Q2 2026 results with net revenue up 11.5% to $1.8 billion, driven by 3.7% organic and 7.1% acquisition growth.
- Adjusted EBITDA margin reached a record 18.7% for Q2, a 90 basis point improvement year-over-year, and the company raised its full-year margin guidance to 17.8%-18.3%.
- Adjusted EPS grew 18.4% to $1.61, reflecting strong operational execution and margin expansion.
- Contract backlog hit a record $9.2 billion, up 17.5% year-over-year, with strong organic growth in global (25%) and water (10%) segments.
- The company announced the acquisition of Niche, a 200-person environmental consultancy in Australia, and expanded its NCIB to 5%, demonstrating continued capital allocation flexibility.
- Global operations showed exceptional strength, with organic growth of 13% in Q2, driven by robust performance in the UK (15% organic), Germany (low 20s), and Latin America (over 50% organic).
- U.S. organic growth was flat in Q2, impacted by project delays and slower ramp-ups, though management expects acceleration in the second half.
- Canada's organic growth was modest at 2.4%, with infrastructure business experiencing wind-down of certain transit and roadway projects.
- Operating cash flows in the first half were lower than the prior year, partly due to the Page integration and seasonal working capital pressures.
- The company noted a dislocation between public and private market valuations, which could hinder M&A activity despite a robust pipeline.
- DSO at 75 days is at the higher end of the internal target, indicating potential working capital management challenges.
- The U.S. organic growth target for the full year implies a significant acceleration in the back half, which carries execution risk.
Welcome to Stantec's second-quarter 2026 results webcast and conference call. Leading the call today are Gord Johnston, President and Chief Executive Officer; and Vito Culmone, Executive Vice President and Chief Financial Officer.
Stantec invites those dialing in to view the slide presentation, which is available in the investor section at stantec.com. Today's call is also webcast. (Operator Instructions)
All information provided during this conference call is subject to the forward-looking statement qualifications set out on slide 2, detailed in Stantec's management's discussion and analysis, and incorporated in full for the purposes of today's call. Unless otherwise noted, dollar amounts discussed in today's call are expressed in Canadian dollars.
With that, I'll turn the call over to Mr. Gord Johnston. Please go ahead, sir.
Good morning, everyone, and thank you for joining us today. Our second quarter financial results continue to showcase the strength
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