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Executive Summary
Stantec Inc (NYSE:STN) reported strong first-quarter 2025 results on May 15, with double-digit growth across all key financial metrics. The global design and consulting firm posted a 13.3% increase in net revenue to $1.6 billion, while adjusted earnings per share surged 28.9% to $1.16. The company’s strategic acquisitions and robust organic growth, particularly in Canada and global operations, contributed significantly to these results.
"Our Q1 2025 performance demonstrates continued momentum across all regions and business lines," said Gord Johnston, President and CEO of Stantec (TSX:STN), as indicated in the presentation. The company also reaffirmed its full-year 2025 financial targets, projecting net revenue growth between 7% and 10%.
As shown in the following overview of Q1 2025 results, Stantec achieved impressive growth across key metrics, with adjusted EBITDA increasing by 19.1% to $252 million:
Detailed Financial Analysis
Stantec’s financial performance showed substantial improvement across multiple metrics in Q1 2025. The company’s adjusted EBITDA margin expanded by 70 basis points to 16.2%, reflecting enhanced operational efficiency. Gross revenue reached $1.92 billion, up from $1.72 billion in Q1 2024, while project margin as a percentage of net revenue slightly improved to 54.3%.
The company’s financial results demonstrate consistent execution of its growth strategy, balancing organic expansion with strategic acquisitions. Operating cash flow more than doubled to $101 million in Q1 2025 from $43 million in the same period last year, indicating improved cash conversion.
The detailed financial charts below illustrate Stantec’s performance across key metrics:
Stantec’s balance sheet continues to strengthen, with net debt to adjusted EBITDA ratio improving to 1.1 in Q1 2025 from 1.5 in Q1 2024. This provides the company with greater financial flexibility for future acquisitions and capital returns to shareholders, which increased to $24 million in Q1 2025.
The following slide shows the company’s cash flow, liquidity, and capital resources:
Regional Performance Analysis
Stantec’s performance varied across its three key regions, with particularly strong results in Canada and global operations.
In the United States, which accounts for 52% of Stantec’s net revenue, the company reported a 9.7% increase to $805 million in Q1 2025. Organic growth was 2.4%, supplemented by 0.8% acquisition growth. The growth was primarily driven by public and private sector investments across healthcare, industrial, and science and technology sectors in Buildings and Environmental Services.
The following slide details the US performance:
Canada delivered exceptional results with 15.0% net revenue growth to $372 million, including impressive organic growth of 12.2%. This performance was driven by continued momentum on wastewater solution projects, which contributed to 30% organic growth in Water, and the ramp-up of major power-intensive industrial process projects driving over 20% organic growth in Energy & Resources.
Global operations, which include the UK, Europe, Australia, New Zealand, and parts of Latin America, showed the strongest growth rate at 20.3%, reaching $376 million in net revenue. This included 7.5% organic growth and 9.4% acquisition growth. The industry-leading Water business delivered 20% organic growth across the UK, New Zealand, and Australia, while new projects in Chile and Peru drove growth in Energy & Resources.
Strategic Initiatives
Stantec continues to execute on its merger and acquisition strategy, which remains a key growth driver. In Q1 2025, the company announced two significant acquisitions: Page, a 1,400-person architecture and engineering firm, and Ryan Hanley, a 150-person engineering and environmental consultancy.
The Page acquisition positions Stantec to become the second largest architecture firm in the US and strengthens its position as the largest integrated engineering and architecture firm in North America. Meanwhile, the Ryan Hanley acquisition expands Stantec’s presence in Ireland, aligning with the company’s goal of growing its European footprint.
The company also secured several major project awards during the quarter, including a $1.1 billion major upgrade at Irving Pulp & Paper westside mill in New Brunswick (NYSE:BC), which represents one of the largest investment projects in the Canadian forest products industry and will increase production by approximately 66%.
The following slide highlights these recent major project wins:
Forward-Looking Statements
Stantec reaffirmed its 2025 financial targets, projecting net revenue growth of 7% to 10%, adjusted EBITDA margin of 16.7% to 17.3%, and adjusted EPS growth of 16% to 19%. The company also expects adjusted return on invested capital to remain above 12%.
These targets are supported by Stantec’s strong backlog, which grew 12.8% year-over-year to $7.9 billion in Q1 2025, with organic growth contributing 7.5% to this increase. The robust backlog provides visibility into future revenue streams and supports the company’s growth outlook.
The following chart illustrates the backlog growth by region:
Market Context
Stantec’s Q1 2025 results continue the positive momentum seen in previous quarters. In Q3 2024, the company reported a 16% increase in net revenue, slightly higher than the 13.3% growth reported in Q1 2025. The company’s stock closed at $94.72 on May 14, 2025, near its 52-week high of $95.53, reflecting investor confidence in Stantec’s performance and outlook.
The company’s strategic focus on high-growth sectors such as water infrastructure, healthcare, and renewable energy positions it well to capitalize on long-term market trends. With a strong balance sheet and growing backlog, Stantec appears well-positioned to continue its growth trajectory through both organic expansion and strategic acquisitions.
Full presentation:
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