Stantec Inc (STN) Q3 2024 Earnings Call Highlights: Record Revenue and Strategic Growth Amid ...

In This Article:

  • Net Revenue: $1.5 billion, up almost 16% compared to Q3 2023.

  • Organic Growth: 6.5% overall, with double-digit growth in water and buildings businesses.

  • Acquisition Growth: Almost 8%.

  • Adjusted EBITDA: $275 million, up almost 14%, with a margin of 18%.

  • Adjusted EPS: $1.30, up 14% year-over-year.

  • Gross Revenue: $1.9 billion, up almost 14% year-over-year.

  • Year-to-Date Net Revenue: Approximately $4.4 billion, up almost 15% compared to last year.

  • Operating Cash Flow: $296 million for the first 9 months of the year.

  • DSO (Days Sales Outstanding): 80 days, within target range.

  • Net Debt to Adjusted EBITDA Ratio: 1.5 times, reduced from 1.7 times at the end of Q2.

  • Backlog: Record-setting $7.3 billion, representing 9.5% acquisition and almost 5% organic growth.

  • Guidance for 2024: Net revenue growth expected to be 14.5% to 15%, with adjusted diluted EPS growth in the range of 16% to 18%.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Stantec Inc (NYSE:STN) achieved record net revenue of $1.5 billion in Q3 2024, up almost 16% compared to Q3 2023.

  • The company delivered solid organic growth in key geographies, with double-digit organic growth in the water and buildings businesses.

  • Adjusted EBITDA for the quarter rose to $275 million, up almost 14%, with a healthy margin of 18%.

  • Stantec Inc (NYSE:STN) was ranked number 1 on Newsweek's list of Canada's Most Responsible Companies for 2025, highlighting its commitment to climate, social welfare, and responsible governance.

  • The company's backlog reached a record-setting $7.3 billion, representing 9.5% acquisition and almost 5% organic growth across all regions.

Negative Points

  • The energy & resources business experienced a slight retraction, particularly in the global mining sector, offsetting growth in the US and Canada.

  • The percentage of net revenue from projects decreased by 50 basis points compared to Q3 2023, reflecting a minor shift in project mix.

  • Admin and marketing expenses as a percentage of net revenue were slightly up, reflecting increased labor training and integration costs.

  • The company's Q3 financial statements included a noncash charge reducing goodwill by approximately $310 million due to updated IFRS guidance.

  • The adjusted EBITDA margin was slightly down compared to the previous year, even after normalizing for long-term incentive programs.

Q & A Highlights

Q: Can you comment on the sustainability of double-digit growth in the water and buildings segments, and what can we expect for the energy & resources segment? A: Gordon Johnston, CEO: We see strong tailwinds for both water and buildings. Our water franchise is extremely busy across Canada, the US, Australia, and New Zealand, with significant framework agreements in the UK and Ireland. Buildings have shown strong organic growth, and we expect this to continue. For energy & resources, we anticipate a return to organic growth in Q4, supported by a 9% increase in backlog year-to-date.

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