The following is a summary of the Stantec Inc. (STN) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Stantec reported record net revenue for Q1 2024 with a 12% increase, composed of 7% organic and 6% acquisition growth.

• Gross revenue and net revenue stood at $1.7 billion and $1.4 billion respectively.

• Adjusted EBITDA increased to $212 million alongside a 15.5% margin leading to a 23% increase in the adjusted EPS of $0.90.

• Diluted EPS increased by 19% to $0.70, while the adjusted counterpart increased by 23% to $0.90.

• Maintaining a DSO at 79 days, the company stayed below the target of 80 days.

• Net debt to adjusted EBITDA ratio was 1.5x, reflecting funding for ZETCON and Morrison Hershfield acquisitions.

• The U.S. business experienced a 14% increase in net revenue.

Business Progress:

• Stantec closed acquisitions of ZETCON and Morrison Hershfield, the companies grew by over 5% organically since.

• A significant acquisition was made of Hydrock, a firm specialising in integrated engineering design and sustainability consultancy.

• The backlog reached a record $7 billion at quarter end.

• Major project wins included a design build project worth $175 million for Arlington County, $186 million agreement with BC Hydro and Power Authority and $595 million wastewater system upgrade collaboration in Sydney, Australia.

• Their Infrastructure business experienced growth due to the release of about 40% of IIJA funds.

• Stantec announced three M&A deals, and projects an acceleration in their investment in cloud infrastructure due to increased demand.

• Expansion of operations in the U.K. through Hydrock acquisition was completed.

• The company aims to double its manpower in integrated delivery centers from 1,000 to 2,000 in the next three years.

• Stantec plans expansion into the Nordics, and is improving project margins by relying more on in-house resources rather than subcontractors.

• An increase in opportunities, particularly in the transportation sector, is observed due to the IIJA funding.

More details: Stantec IR

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