STN

Image source: The Motley Fool. Thursday, Aug. 13, 2026 at 9:00 a.m. ET President and Chief Executive Officer - Gordon A. Johnston Executive Vice President and Chief Financial Officer - Vito Culmone Operator: 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 Investors 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 and are generally rounded. With that, I'll turn the call over to Mr. Gord Johnston. Please go ahead, sir. Gordon Johnston: Good morning, everyone, and thank you for joining us today. Our second quarter financial results continue to showcase the strength of our business. Stantec's diversification across operating regions and across sectors has kept us on track to deliver on our financial targets for the year. In the second quarter, we grew our net revenue to $1.8 billion, up almost 12% compared to Q2 2025, driven by almost 4% organic and 7% acquisition growth. Organic growth was driven by double-digit growth of approximately 13% in our global region. And our industry-leading water business achieved close to 12% organic growth. Adjusted EBITDA increased over 17%, and we achieved an adjusted EBITDA margin of 18.7%, a record for Q2, and this represents an increase of 90 basis points year-over-year. Adjusted EPS grew over 18% compared to Q2 2025. Looking at our results in each of our geographies. In the second quarter, U.S. net revenue increased almost 13%, driven by the acquisition and strong performance of Page. Underlying demand across our end markets remains very strong, supported by long-term investments in infrastructure, energy, transportation, water and advanced manufacturing facilities. Our water business saw continued demand and work on large wastewater treatment projects. In Energy & Resources, work on a major hydropower dam project drove organic growth, and our infrastructure business delivered growth through data center projects in our North Central region and benefited from favorable recoveries on a large transportation project. While organic growth was flat in the quarter, driven by some delays and the slower ramp up on certain projects, we've already started to see positive signs of acceleration in Q3 and expect this trend to continue throughout the back half of this year. In Canada, second quarter net revenue grew 2.4% organically. Double-digit organic net revenue growth in our water business was driven by biosolids projects and continued momentum on wastewater projects. Robust net revenue growth was also achieved in both our Buildings and Environmental Services businesses through public sector investment, primarily in our civic markets and an increase in environmental planning and the mining industry, respectively. Our infrastructure business continued to experience a wind down of certain transit and roadway projects in accordance with anticipated project cycles. Lastly, our global business delivered over 18% net revenue growth in the second quarter, driven by almost 13% organic and over 2% acquisition growth as well as positive foreign exchange impacts. Our industry-leading water business delivered over 20% organic growth this quarter through long-term framework agreements and public sector investments in water infrastructure across the U.K., Australia and New Zealand. The ramp-up of new projects in Chile and Peru drove strong organic growth in Energy & Resources as the growing need for energy transition solutions continues to drive demand in mining for copper. On a year-to-date basis, our global operations also had modest growth in its infrastructure business, driven primarily by double-digit organic growth in Germany due to momentum on a major public sector electrical transmission project and increased volume on transit and rail projects. I'll now turn the call over to Vito to review our second quarter financial results in more detail. Vito Culmone: Thank you, Gord, and good morning, everyone. Strong operational execution supported by sustained demand across our diversified multi-sector and multiregional platform continues to deliver solid financial results. At the midyear point of 2026, we are firmly on track to deliver against all of our financial guidance metrics. In the second quarter, we achieved gross revenue of $2.2 billion and net revenue of $1.8 billion, an 11.5% increase compared to Q2 of 2025. This growth was driven by 3.7% organic and 7.1% acquisition growth, which primarily reflects strong results from our global region and from the Page acquisition, respectively. Project margins as a percentage of our net revenue increased 30 basis points to 54.5%. We achieved an adjusted EBITDA margin of 18.7% in the quarter, a 90 basis point increase compared to Q2 of 2025. On a trailing 12-month basis, our adjusted EBITDA margin is 18%, an increase of 80 basis points compared to the prior trailing 12 months. The growth in margins continues to be driven by a methodical and disciplined approach to all aspects of our business. It all starts with a continued focus on execution and servicing of our client needs. The work we do is of meaningful value across all of our sectors and regions, and our focus remains on enabling superior outcomes for our clients, all the while focusing on efficient management of our operations and the optimization of our discretionary spending. On the back of our increase in net revenue and the expansion of our margins, our adjusted EPS in the second quarter increased 18.4% to $1.61. Turning to our cash flow, liquidity and capital resources. Following the financial integration of Page in Q1, our operating cash flows in Q2 returned to a more normalized cadence. And on a year-to-date basis, our cash flows from operations totaled $116 million. In terms of capital allocation, our strategy remains unchanged. We believe that continued disciplined M&A remains our highest source of value creation for our shareholders measured over a reasonable period of time. The pipeline remains robust, notwithstanding certain short-term dislocation in valuation ranges between public and private entities. Given our proven track record of disciplined M&A, we expect the strategic expansion of our business to continue. And to that end, although perhaps on a smaller scale, we are happy to announce the acquisition of Niche, a 200-person engineering and environmental consultancy firm in Australia. Niche helps strengthen our environmental services business in the region and supports our ability to help clients advance critical infrastructure and develop projects, while protecting and restoring natural environments. This transaction closed effective July 31. Our continued strong operating cash flow and exemplary balance sheet offers us considerable flexibility in our capital allocation activities. And in Q2, we stepped into our NCIB and repurchased approximately 1.7 million common shares or 1.5% of our outstanding shares for an aggregate purchase price of approximately $175 million. Notwithstanding this cash outflow, our net debt to adjusted EBITDA ratio remained at 1.3x within our internal target range of 1 to 2x. And given our Q2 NCIB activity, it's prudent for us to have additional flexibility, and we intend to seek TSX approval to extend the program beyond the existing 2% limit. And finally, DSO at the end of the second quarter was 75 days within our internal target. I'll now hand the call back to Gord to discuss our backlog, our recent project wins and our outlook for 2026. Gordon Johnston: Great. Thanks, Vito. At the end of Q2, our contract backlog reached a record of $9.2 billion, a 17.5% increase year-over-year, representing approximately 13 months of work. Year-over-year, our backlog has grown 7% organically. During the quarter, backlog grew in each of our regions. The most notable year-over-year growth coming from our global region, which delivered double-digit growth of almost 25%. We also saw strong backlog growth in Water, which delivered over 10% organic growth. Acquisitions completed in 2025 further contributed to backlog growth by almost 8%, primarily within our Buildings business, which had over 40% growth. I'll now highlight a few projects Stantec secured during the quarter, showcasing the breadth of opportunities we're capturing across diverse markets, project sizes and levels of complexity. Our buildings team was selected to provide architecture, engineering and integrated design services for Meta's $13 billion data center in Surgeon County, Alberta. The project strengthens our data center capabilities, while supporting the continued expansion of Alberta's critical digital infrastructure. Stantec's water team was selected to provide preliminary design and evaluation services for the Drake Water Reclamation Facility in Fort Collins, Colorado, a 23 million gallon per day wastewater treatment plant. The project will modernize critical headworks infrastructure, improving debris removal and treatment reliability, while reducing impacts to downstream processes. Activity continues to ramp-up in Australia for our buildings business, supported by increased investment in social infrastructure. During the quarter, the team was selected to provide engineering services for the Redcliffe Hospital redevelopment in Queensland, further strengthening our position in the growing health care infrastructure market. The team was also selected by the Western Australia Department of Housing and Works for a 10-year framework to provide engineering and building-related consulting services for nonresidential projects, including education, healthcare, justice and other social infrastructure. As we look toward the remainder of the year, we continue to track to our 2026 financial targets. And with the continued solid progress to date, we are increasing and narrowing the range of adjusted EBITDA margin we expect to achieve. We continue to expect net revenue growth in the range of 8.5% to 11.5%, driven by strong acquisition growth from Page and organic growth across our operating regions. Overall organic net revenue growth is now expected to be in the mid-single-digit range, driven by strong demand across all geographic reporting segments and business units. In the U.S., we expect organic net revenue growth to be in the mid-single-digit range. We expect activity to accelerate in the second half of the year, supported by the demand across all 5 of our business verticals. We are encouraged by the increased activity and movement we started to see with large environmental projects ramping up, increased demand related to Water and Energy & Resources as well as growing demand in key areas such as advanced manufacturing and data centers. In Canada, we also now expect to achieve mid-single-digit organic growth, supported by public sector spending plans and continued demand, particularly around water and buildings. There's still a lot of momentum around defense and other nation-building projects, which are still in the early stages. We expect these programs to contribute more fully in 2027 and beyond. Lastly, Global is expected to achieve high single-digit organic growth. The growth in Global is being driven by high levels of activity in our water business under AMP8 and other framework agreements, strong demand in Energy & Resources, particularly in Latin America and positive demand fundamentals across other global business units. With our strong margins year-to-date and continued focus on operational excellence, we are increasing our outlook for adjusted EBITDA margin. We now expect to deliver 17.8% to 18.3% for the year. Finally, we're maintaining our adjusted EPS target for the year of 15% to 18% growth, reflecting our confidence in delivering strong bottom line results and long-term shareholder value. Before we open up the line for questions, I'd like to take a moment to acknowledge that this is my final earnings call as Stantec's President and CEO. As announced in June, I'll be retiring from the role effective October 1 and transitioning to Vice Chair of Stantec's Board of Directors. It's been an incredible privilege to lead this company for the last 8.5 years, and I'm very proud of what our teams have accomplished together. The underlying demand for our services is strong and our diversified, resilient, stable and multi-sector platform positions us well to capture opportunities across the markets that we serve. I'm especially excited to be passing the torch to Susan Reisbord. Susan has a deep understanding of our business, our clients and our people. Having worked closely with her, I have all the confidence in her capabilities, experience and energy to lead Stantec into its next chapter. I'm looking forward to staying close to the company in my role as Vice Chair and supporting Susan and the team as they continue to execute on the opportunities ahead. Finally, I want to thank our employees, our clients and all of our analysts and shareholders for their support over the years. And with that, let me turn the call over to the operator for questions. Operator? Operator: [Operator Instructions] And our first question for today comes from Sabahat Khan from RBC Capital Markets. Sabahat Khan: Before I get into the questions, I just want to congratulate you, Gord, on a great run here in your current seat and all the best with the next chapter? Gordon Johnston: Thanks so much, Sabahat. It's been an incredible privilege to lead the team over the last 8.5 years, and I wouldn't have traded it for anything. Sabahat Khan: Great. Just maybe, I guess, starting with kind of the outlook for the back half of the year. On the U.S. segment, it looks like you're pointing to mid-single-digit organic growth. Just looking at the first half, call it, low single digit for the first half implies about a high single-digit organic for the back half of the year in the U.S. If you can maybe just detail out your sort of the building blocks and sort of your confidence in that outlook on getting to that high single-digit range over the next couple of quarters? Gordon Johnston: Yes. Thanks, Sabahat, for the question. And so in the U.S. specifically, we see that this is not a demand issue. It's really more of a timing issue for us here in Q2. We had a number of projects wrap up as per schedule and planned. And a number of projects that we've got awarded and got in backlog just were a bit slow getting out of the blocks and getting started. Now subsequent to the quarter, we've seen some good positive momentum in Q3, a number of these projects have kicked off and the field seasons are going and such. So in addition to that momentum, as we look at the back half of the year, we're looking from a demand perspective, the sales funnel is strong, the soft backlog, both trending really, really well. And also, if you look at our -- the organic backlog growth in the U.S., both year-to-date and year-over-year, both up in positive organic territory, further supporting that ramp-up and that momentum as we enter the second half of the year and particularly into 2027. One other thing that just to call out is the Page acquisition. And we've talked about in the prepared remarks and with others over the year, Page is a fantastic company, and they're performing exceptionally well, driving strong acquisition growth. As per our normal processes, when a company joins us for a year, we report that growth as acquisition growth. But now in Q3, Page is flipping over to that will be reported as organic growth in Q3 and Q4 of the year. So these projects that we've got in the backlog ramping up, strong sales, strong backlog, good organic backlog growth there in the U.S. year-to-date and year-over-year. Page transitioning from acquisition into the organic side, that all kind of supports our thesis of that continued organic acceleration into the second half of the year and good momentum into 2027. Sabahat Khan: Great. And then just on the margin side, it looks like about, call it, 80 bps or so of year-over-year EBITDA margin improvement through the first half of the year. The guidance increase implies round numbers about 15 basis points. Maybe you can just walk us through the puts and takes on the assumption of the full year guide and maybe sort of the delta between the higher amount realized versus the guide increase? Vito Culmone: Saba, it's Vito here. Yes, we're incredibly proud of the progress we've made with the margin expansion. And you heard that in my prepared remarks, that comes from really across all elements of our business. Our project margins continue to be strong, and that's all about the right client, the right price, obviously, and exemplary project execution. The team has always worked towards that. When you're looking at our admin and marketing, obviously, that's been declining as a percentage of our overall revenue. That reflects obviously improved utilization. And when you think about utilization, that's probably one of the pieces as we go into the back half and just maybe attaching myself to Gord's comments, we feel incredibly confident with the velocity of the business moving forward. That's when we're going to require and it is already requiring up headcount and expansion of our workforce. So I think what you see in the back half margin expansion moderation, if you will, relative to our year-to-date performance is really just that timing of workforce and as we obviously look to lean into our -- what will be significant organic growth in the back half. But overall, the momentum around our margin improvement, and there's probably a little bit of conservatism built into there, quite frankly. I think this is now what is it maybe the seventh quarter of year-over-year margin expansion. And on a trailing 12 months, as you heard me say, 80 bps ahead. So this just enables continued investment in our business as well as we move forward, and we're focused on ensuring we're making those internal investments moving forward as well. Sabahat Khan: Great. And then just the last one on my end. I think the commentary around Page sounds like it's trending well. Are you able to share maybe the organic growth or just the growth rate in that business on a year-over-year basis maybe through Q1 and Q2 of this year as you think about how that can contribute to the overall Stantec numbers? Vito Culmone: Yes. Sabahat, it's hard for us to do that because the baseline business is probably not in accordance with our how we convert to our IFRS accounting. But I would venture to say that it's robust. And as Gord has alluded to, we probably underreported by a smidge in our Q2 organic because of the way we do things. And that is we shifted a significant amount of our building workforce to the Page-led opportunities that, as Gord has noted, will be reflected in organic going forward. So Q2, probably a little understated, frankly, we don't get into slicing and dicing those numbers too much, but organic growth in Page, quite robust. Operator: And our next question comes from the line of Frederic Bastien from Raymond James. Frederic Bastien: How are you? How is it feel -- how does it feel for you? Gordon Johnston: It's actually been a really interesting preparing for the quarter, preparing for the earnings call. So many things were -- this is the last time we'll do this. This is the last time we'll do this. But I'm just actually so thrilled to be staying on the Board. I love our company. I love our clients. I love our people and what we do. So being able to stay connected to the company through being on the Board, I think, for me is the best of both worlds. Frederic Bastien: Great. We're excited to have you stick around a little longer, and congrats on a great career. Now on to question. As Vito, you alluded to earlier, a good chunk of the margin expansion came from the project margins, which is nice to see, not all coming from SG&A and cost optimization. How far can you get those margins going? I mean it's -- they've been in the low 54% range for quite some time. Is there an opportunity for Stantec to take them even higher on a go-forward basis? Vito Culmone: That's -- obviously, we are more centered really on continuing to provide outstanding outcomes for our customers. That really is the ethos of our organization. And along with that, obviously, is great project execution, the right risk profile, great value for our work and being obviously transparent about that with our client base. We're in the middle of our 3-year planning process right now. So we'll probably have a more robust, I'll say, aligned response to that as we roll out the back half of the year here and as we get into our Investor Day in December. But I think bottom line margins, and it does all start with the project margin, but I love the fact that you start with that because at the end of the day, that is the spine that drives bottom line. And we're really, really confident about that. With the macro demand being as strong as it is across our markets, we really can be picky and choosy, quite frankly, in some of the clients that we're choosing and whatnot. So really confident about project margins going forward. Frederic Bastien: My other question is around M&A activity. We've seen some bids recently in the public sector realm. One privatization, one obviously didn't pan through as of yet. But how are you reconciling sort of the valuations you're probably still seeing in the private sector land, which are probably still elevated and the current valuations here in the public sector and what that might bring in terms of opportunity for you to deploy capital? Gordon Johnston: Yes. The acquisition environment is incredibly active right now. And you made some reference to like a number of the typical transactions that we would see in our space where publics are bringing some private firms on. There is still a bit of a dislocation in those where those public markets who are looking to sell are still a little bit elevated over where we are in the public markets, but we're still in the midst of any number of conversations at different levels, and we have been for some time. And actually, that will be one of the things that I'll continue to work closely with Susan and the team as we're halfway through some of these M&A conversations, we want to just -- I'll stay involved in a supportive role just from a continuity perspective. But in addition to that, I think you make reference to that we've seen some big moves on the chessboard that people have been -- some that are public and others that I think people are just kind of thinking about in the back. And so this is a very attractive industry. And do I think further consolidation is likely? I think perhaps it will in the next year or so. So Stantec is -- we're very alive to all these things, and we just remain focused on doing what's best for Stantec and our shareholders in the long run. Operator: And our next question comes from the line of Yuri Lynk from Canaccord Genuity. Yuri Lynk: Congrats to both Gordon and Susan. Just wanted to turn back to the U.S. for a minute, Gord. I mean, I get that you're seeing an acceleration in some of those delayed projects. But was there an overriding theme as to the original slowdown that you saw in the U.S.? And any comment on how that might have translated into backlog -- organic backlog growth was also 2.5% lower than what we've seen. So what's going on in the quarter there? Gordon Johnston: Yes. So again, just to reiterate, I think a lot of it was just a timing issue. When we talk about some of the projects that were a little bit slower to get going out of the gate there in Q2, a little bit in all of the different groups. For example, in our Environmental Services group, we had a large program with the Navy that was a little bit slower to get moving. It's moving now. We had another really significant project with a large electrical utility in the U.S. West that got going. And so we're seeing, again, that's moving in our infrastructure group. It was a little slower than in Q2 than we would have liked. Large public transit project in the U.S. South was a little bit slow to get moving, and we were actually working on a very, very significant proposal in Q2 as well. So a number of those things just took a little bit longer to get going. But I mentioned that big -- that significant proposal that we worked on in infrastructure. That would have a very positive impact on backlog with that one came through. So I think it's just one of those quarters that the stars aligned, maybe not in the way that you would have wanted them to. But we don't -- longer term, we really don't see it having any negative impact on the business, nor do we believe it should be reflective sort of on how we'll perform in the second half of the year. Yuri Lynk: Okay. And just should we expect the organic growth recovery in the U.S. to kind of build throughout the back half of the year, especially considering you've got a pretty easy comparable in the fourth quarter? Gordon Johnston: Yes, I think that's right. I think we should -- our forecast is for some good organic growth here in Q3 and further strengthening into Q4 and really then entering 2027 with good and strong momentum. Yuri Lynk: Okay. Last one for me, just a clarification on the G&A expense. Just wondering if -- given the share price movement in the quarter, if there was any positive impact from LTIP in the quarter? Vito Culmone: Very minor. We hedge most of our long-term incentive programs. So essentially, there's an offset and between any valuation between our hedging program and then obviously, a mark-to-market on [ RSC ]. So very minor small benefit. Operator: And our next question comes from the line of Michael Tupholme from TD Cowen. Michael Tupholme: Congratulations, Gord. Gordon Johnston: Yes. Thanks so much. It's interesting as I kind of reflect on what we've done over the last 8.5 years. I'm actually just so incredibly proud of what we've collectively done as a team and positioning Stantec for success going forward. Michael Tupholme: Absolutely. The first question I wanted to ask is you've had a lot of questions here on the call about the U.S. organic growth and the pickup you expect in the second half to get you to your full year mid-single-digit organic growth target. Can we talk a little bit about Canada because it's a similar situation there where half 1 organic growth has been a little bit slow. You're trending at the moment below your mid-single-digit organic growth target for the year. So how do you think about the organic growth pickup in the back half in Canada and exactly what is driving that? Gordon Johnston: Yes. No, thanks. Great question. And so we see in Canada, again, good organic backlog growth year-to-date and year-over-year. Lot of projects. We talked about that $13 billion Meta data center project that we've just got going on. There's a really significant program that we're running just kicking off for utility here in Western Canada, an enormous amount of opportunity up in defense, in the North and with some of these nation building projects. So we see a lot of supports for us moving forward. And in particular, though, in Canada, our water and our Buildings group, backlogs are looking great, and we see continued organic expansion there. So I think we're just fairly broad-based in Canada, supportive of growth into the second half of the year here. Vito Culmone: I think you got it, Gord. Buildings and Water, we expect would be the biggest drivers of H2 increase in organic growth in Canada. Michael Tupholme: Okay. And then second question, regarding the improved margins, obviously, very, very strong performance. You called out a number of drivers. One of the things you mentioned is optimization of digital strategies. I'm just wondering, if you can elaborate a little bit on what it is you had going on in the quarter from that perspective that benefited the margins and how we think about that also going forward? Vito Culmone: Yes. I think digitization, obviously, is at the core of our ongoing strategies throughout our organization. And when we think about some of the back office-related opportunities for us, whether it's accounting, finance, accounts payable, that's always been a core component for us. When we're looking at bidding and proposals right now, we're really leaning into digitization, implementation of some artificial intelligence tools. So those are all core to what we're discussing and will continue to be part of our -- basically ingrained in our 3-year strategy. Operator: And our next question comes from the line of Chris Murray from ATB Cormark. Chris Murray: Gord, let me echo my congratulations like everyone else. I guess the first question, we talked a little bit about Canada and U.S., but global also has been very, very strong. And in fact, you're moving it higher. Is there something in particular that's driving that? Is it maybe Europe coming back a little stronger than you had expected? But any additional color that you could give us, maybe breaking down Europe versus the New Zealand or Australia, just so we have a flavor of how this is all coming together would be great. Gordon Johnston: Yes, absolutely. So we're seeing pretty broad-based strength in our global operations. Australia has returned to organic growth. I don't have the number here, but I think kind of mid-single-digit-ish organic growth in Australia. In the U.K., very, very strong. We're seeing the certainly, the growth in AMP8, extremely strong as we would have expected. We're running about 15% organic growth right now in the U.K., incredibly strong. And then another area for us, Europe, absolutely with our operations in Germany with ZETCON, we're running low-20s in terms of organic growth rates there. But in terms of just raw numbers, it's Latin America. And with the demand for copper and the work that we're doing down there, we're seeing over 50% organic growth in our Latin American operations right now. So really strong sort of across our global operations. Chris Murray: That's helpful. And I guess the next question, maybe Vito, I'm not sure if you want to -- or Gord, do you want to chime in on this one. But just thinking about the NCIB, you talked about increasing it and maybe looking at it. But your commentary around multiples in the private market versus public market, we've got public market valuations at pretty much 20-year lows. Is there any thought about doing a larger buyback? It almost makes sense if the privates are not really where you need them to be. Any thoughts around maybe doing a substantial issuer bid, maybe taking your leverage into the middle of your range and sort of waiting out whatever this valuation gap is for now? Vito Culmone: Chris, as you heard me say in my prepared remarks, at the core of what we believe is long-term value creation is continued M&A and expansion of our portfolio in our regions. And as Gord has already noted, we're seeing some really good opportunities starting to surface, and I expect us to be more active in that portfolio. We just announced Niche, as you saw, that's a relatively small but important one for us. And my prediction for the next 12 months would be more M&A relative to the last 12 months, where obviously, Page would have been our most significant acquisition. So we're feeling good about how that evolves, notwithstanding what we're describing as obviously pricing dislocation. And we'll continue to be very disciplined in that. I think SIB is one step further from where we currently are. We've stepped into the NCIB. We are going to the regulator now and essentially expanding our program from 2% to 5%. And so I just love that flexibility going from 2% to 5%. That's another meaningful step. It doesn't mean we're going to execute all the way to 5%, but continuing to have the flexibility of with respect to, obviously, where our valuation sits, which, as you noted, is not, I think, representative of what we believe long-term value is and long-term representation there, we'll take measured steps along the way here. Operator: And our next question comes from the line of Devin Dodge from BMO Capital Markets. Devin Dodge: Look, before I get started, Gord, just congrats on the well-earned semi retirement. And Susan, if she's there in the background, just best of luck with the new role. Gordon Johnston: Fabulous. Thank you so much. Devin Dodge: Look, I going to come back to Chris' question on Global. Obviously, order intake was really, really strong again there in Q2. Has the duration of that backlog changed much over the last few quarters? Or will you need to be adding -- expanding that workforce to convert that backlog into revenue? Gordon Johnston: Yes. We are actively expanding the workforce globally, particularly those regions that we discussed there, Latin America, Germany, the U.K. hiring aggressively, and we have been for the last 18 months or so. And also one thing to call out, too, is that while you've seen that incredible backlog growth there, those AMP programs, as an example, if we get a 5- or 6- or 7-year AMP program that has a not to exceed number of some very large number, that does not go into our backlog. It only goes into our backlog when we actually get a specifically assigned change order. So the contract opportunities there with AMP, and that's the same way we do it everywhere, you are much larger than even what you've seen there. But yes, absolutely to your point, we're looking -- we have been for the last year, 18 months. taking additional real estate in the U.K., hiring people aggressively. We've been ramping up the hiring in our global delivery center in India. I think we've just hit roughly 2,000 people, which was our goal for the end of the year. So we're a little bit ahead of schedule, taking more space there, looking to expand to other cities. So hiring is very much top of mind for us in order to process the backlog. Vito Culmone: Yes. I'll add, Devin, this is a bit of an inflection point for our global business. I think we're into an environment here of high single digits for several quarters to come. Devin Dodge: All right. Excellent. And then maybe a question probably for Vito here, just on working capital. Look, the first half of the year is typically a period of investment, but it seems a little bit more pronounced in 2026 than in the past. Just can you provide some color on the drivers behind that and how we should be thinking about working capital in the second half? Vito Culmone: Yes. You're absolutely right, Devin. Obviously, where our free cash flow has been on a year-to-date basis relative to where it was last year is lower. Nothing from an operational concern from my perspective to be concerned about. We're very, very focused on working capital management. That starts with obviously DSOs. And you see DSOs at 75, which is within our guidance, but it's at the higher end of our internal metrics sort of thing. So team will be totally focused on bringing that in. As you say, there is normal seasonality and back half is considerably obviously higher for us. We're coming out of what we -- you heard me reference the last call with respect to the Page integration. And so I'm overall pleased with the velocity, and I expect it to dovetail nicely into what we would otherwise normally expect here as we move into the back half. Operator: And our next question comes from the line of Krista Friesen from CIBC. Krista Friesen: Congrats, Gord, on a great tenure at Stantec and look forward to having you around a little bit longer here. Gordon Johnston: Yes. Thank you so much. Krista Friesen: Maybe just one for me, following up on the M&A questions. Can you speak to if your priorities have shifted at all just in terms of M&A targets size or end market based on what you're seeing in valuations in the private and public markets at the moment? Gordon Johnston: Yes. No, great question. But no, we're holding our consistency, holding our discipline as to where we think there are great opportunities longer term, either geographically or in certain lines of business. So yes, the current environment hasn't changed our strategy at all, really just to continue to do the right acquisitions at the right time to continue to build the strength of Stantec for the long term. Operator: And our next question comes from the line of Maxim Sytchev from NBCM. Maxim Sytchev: Gord, obviously, congrats on all the achievements and a wonderful career, and welcome to Susan. Gordon Johnston: Thank you so much. Maxim Sytchev: The first question I had was, I mean, maybe it's more sort of a philosophical approach to efficiency versus kind of organic growth. I think we saw that marketing spend was pretty controlled in Q2 and obviously, we're seeing somewhat slower growth in the U.S. Is there any correlation in relation to that? Or how, I guess, should we think about this on a prospective basis about, again, that tension of kind of getting work and versus being very efficient from a cost perspective? Vito Culmone: That's a great question, Max, and thank you for that. And one point to make is particularly impressive when you think about the margin expansion that we've had in the quarter and year-to-date in the face of the lower organic because typically, when you've got softer organic, that typically puts pressure on your margins perspective with respect to obviously getting the scale from your back office. So again, kudos to the team, and I think that bodes well. In respect to philosophy, I would say no change in philosophy. It is all about the right growth, of course. I mean this goes back to a bit of the project margin question that was asked earlier a little bit. And we need to obviously continue to be thoughtful of our client base and projects and whatnot. So the focus of 100% is on growth. And of course, that's the right growth as we move forward. So no change in philosophy. We'll just continue to shine the light, obviously, as we, I'll say, x-ray our business moving forward. Maxim Sytchev: Okay. That's great color. And then one quick question I also had just in terms of any initial thoughts in relation to kind of surface transportation spending buckets there and how that could potentially influence 2027? Gordon Johnston: Yes. Great. And so as we think about IIJA, we've been seeing this end at the end of September coming for several years now. And we see a real concerted effort to try and get those funds encumbered prior to the end of September. And while data is a little bit obscure right now, we think that about 80% of it has been encumbered is kind of the industry thought on that. So working hard to get all that encumbered and not lose the IIJA funding. But in terms of the Surface Transportation Act and the reauthorization, the House has put forward their bill, which about was $581 billion. And so -- the Senate now we're waiting for their proposal. And it's anticipated now that we're not going to get it until after Labor Day. Kind of all indications of it will be similar in size to the one put forward by the House in that $500 billion to $600 billion range. But the kind of the thought is that while those 2 things will be forward, it's likely not to move forward until after the midterms. So probably we'll get that -- my thought and our thought is that it will be reauthorized, and we'll see that coming forward early into the new year. Everyone has kind of anticipated that, that's going to be the schedule here based on where we're at. So I don't see it really being a negative impact going into next year because everyone sort of has made plans for it, got their proposals out now when they can and such. So no, looking forward to another strong year next year. Operator: And our next question comes from the line of Ian Gillies from Stifel. Ian Gillies: Gord. I look forward to catch up in Calgary at some point, hopefully in the near term. Gordon Johnston: Look forward to it. Ian Gillies: With respect to the U.S., can you maybe just help us reconcile the U.S. growth accelerating in the back half of the year in conjunction with midterm elections, which can often implies what I would call dislocations or gyrations or slowdowns. That's a bit of a challenging one right now. Gordon Johnston: Yes, absolutely. Any time there's a change, it can introduce a little bit of uncertainty. But I think based on what we've been talking about with the backlog that we've got, with the soft backlog and the -- that we see coming with the projects that have started, we actually feel good about our plans. Again, Page kind of converting from acquisition to organic. As we talk to all of our business leaders and others in the industry, as we look at the -- we see the contribution from just mathematically from Page, I think we feel good about those numbers in the second half of the year. Vito Culmone: Yes. Ian, our Buildings and Environmental Service business, they enter the second half of the year with significant momentum and driven by both the growing portfolio of recently awarded projects that are expected to ramp in Q3, Q4. So I think most of those would be insulated from midterm type activity. Ian Gillies: Okay. I'm going to try this one. Do you anticipate any of the growth issues that persisted in the first half of the year will leak into the '28 to 2030 business plan that's due in December? Vito Culmone: 2027 to -- 2025 to 2029 plan? Ian Gillies: Yes... Vito Culmone: Yes, yes. Let us continue our work, obviously. I think the more we make our way through our planning cycle and ironically, the way we make our way through our 2026, it actually just gives us continued confidence that the macro drivers and our positioning serves up really well for the next 3-year period. But let's let the process roll out. Obviously, let's let Susan get in the seat and present her perspectives there as we roll forward. But we're feeling good about the industry and our position in it. Operator: And our next question comes from the line of Jonathan Goldman from Scotiabank. Jonathan Goldman: Most of them have been asked already, but maybe, Gord, just one for you philosophically. How are you thinking about the pace of consolidation in the E&C space? Maybe you can just update us on where -- how fragmented it is today? And do you think consolidation could accelerate just given the dynamics we've seen recently on valuations and kind of the disconnect there? Gordon Johnston: Yes. Just as we look at it philosophically, as you say, our market is still really fragmented. Even the largest firm in the U.S., I think the estimate is in that 6%, 7%, 8% of market penetration. So lots of opportunities for continued consolidation. We've all seen the rumors that have been going around the industry. I wouldn't be surprised that we'll see some additional consolidation going forward, either -- it's certainly easier with the small to midsized ones, but will we see it with some of the bigger global players remains to be seen. But I certainly know that the -- that people are thinking about it now, what it could look like, what that value would be to clients, employees and shareholders. So I guess time will tell. Jonathan Goldman: Are valuations bottlenecked on the private side? You had given some commentary about things coming down to more reasonable levels, but is there enough spread still to make things value accretive at this level? Vito Culmone: Jonathan, I think that's on a case-by-case basis, as a specific sort of situation, we wouldn't do anything that we think that over the longer term, obviously. And I'm confident that those exist as we move into the next 12 months. Jonathan Goldman: Okay. And maybe if I can squeeze one more in terms of deal financing. Do you have enough capacity and dry powder now with the balance sheet if you want to run something maybe a little more sizable? Or is this going to be something bigger? Do you think possibly of going another route, maybe some sort of share exchange or equity? Vito Culmone: I think you just back to our capital allocation philosophy. We're an investment-grade company. Obviously, we think that's important for us going forward. You look at our leverage of 1.3x. We've got great relations with obviously our rating agency. We've tested the limits of that expansion from a leverage perspective and are very, very pleased with that affords. So there's a substantial amount of dry powder and debt capacity on our balance sheet. And obviously, depending on the size of what you're talking about, you would need to blend that with equity if that situation arise. But that's a very hypothetical situation, and it's all about what's in the best interest over a reasonable period of time for, of course, our shareholders, but lots of dry powder on the balance sheet. Operator: This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Gord Johnston for any further remarks. Gordon Johnston: Great. Well, thank you, operator, and thanks to everyone for joining us this morning. Serving as Stantec's CEO has been truly the highlight of my career, and I really appreciate and value all the support and the friendship and the good times and bad times as we've been traveling together all over the world with many over the years. So thank you truly for everything. And if you have any follow-up questions following today's call, please reach out to Jess Nieukerk, our Vice President of Investor Relations. Thank you. Operator: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. Before you buy stock in Stantec, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Stantec wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $419,408!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,348,694!* Now, it’s worth noting Stock Advisor’s total average return is 966% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of August 19, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has positions in and recommends Stantec. The Motley Fool has a disclosure policy. Stantec (STN) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Stantec Inc.? Here are five stocks we like better. Strong second-quarter results: Net revenue increased 11.5% year over year to CAD 1.8 billion, while adjusted EBITDA rose more than 17% and the margin reached a record 18.7%. Adjusted EPS grew 18.4% to CAD 1.61. Demand and backlog remained robust: Contract backlog reached a record CAD 9.2 billion, up 17.5% year over year, led by nearly 25% growth in the global segment. International operations posted especially strong organic growth, while flat U.S. organic growth reflected project-timing delays rather than weaker demand. Outlook and leadership transition: Stantec raised and narrowed its 2026 adjusted EBITDA margin outlook to 17.8%-18.3% while maintaining revenue and EPS growth targets. CEO Gord Johnston will retire effective Oct. 1 and be succeeded by Susan Reisbord, and the company plans to seek approval to expand its share-repurchase limit. 3 Stocks to Own If Gas Prices Keep Rising Stantec (NYSE:STN) reported higher second-quarter revenue, earnings and margins, while raising its full-year adjusted EBITDA margin outlook as management cited resilient demand across its regional and business-line portfolio. Net revenue rose 11.5% year over year to CAD 1.8 billion in the second quarter, supported by 3.7% organic growth and 7.1% acquisition growth. Gross revenue totaled CAD 2.2 billion. Adjusted EBITDA increased more than 17%, while the adjusted EBITDA margin expanded 90 basis points from a year earlier to a record second-quarter level of 18.7%. → Lumentum Just Delivered the AI Growth Investors Wanted This Freight Stock Just Got an Upgrade and Institutional Buyers Adjusted earnings per share increased 18.4% to CAD 1.61. Project margin as a percentage of net revenue rose 30 basis points to 54.5%. “Strong operational execution, supported by sustained demand across our diversified multi-sector and multi-regional platform, continues to deliver solid financial results,” Executive Vice President and Chief Financial Officer Vito Culmone said. → Ryman Checks Into a $1.38B Hospitality Upgrade Three Mid Caps Wall Street Sees Doubling Within 12 Months President and Chief Executive Officer Gord Johnston said the company’s geographic and sector diversification continued to support its financial targets. Organic growth was particularly strong in the global segment, which posted nearly 13% organic net revenue growth and more than 18% total net revenue growth, including acquisition and foreign-exchange effects. Stantec’s water business delivered nearly 12% organic growth overall. In the global business, water posted more than 20% organic growth, driven by long-term framework agreements and public-sector water infrastructure investment in the United Kingdom, Australia and New Zealand. → Joby’s Defense Pivot Accelerates With $500M Resonant Sciences Deal Global energy and resources growth was aided by new projects in Chile and Peru, where demand for energy-transition solutions is supporting mining activity related to copper. Johnston said Germany’s infrastructure operations also benefited from a major public-sector electrical transmission project and transit and rail work. During the question-and-answer session, Johnston said organic growth was broad-based across the global portfolio. He said the U.K. was producing roughly 15% organic growth, Germany was in the low-20% range, and Latin American operations were delivering more than 50% organic growth. Stantec is expanding hiring in Latin America, Germany and the U.K., as well as at its global delivery center in India. U.S. net revenue increased nearly 13%, primarily reflecting the acquisition of Page and its ongoing performance. Organic growth in the U.S. was flat during the quarter, however, as some projects ended on schedule and certain newly awarded work ramped more slowly than expected. Johnston said the issue was one of timing rather than demand. He cited a delayed U.S. Navy environmental program, a large electrical-utility project in the western U.S. and a public-transit project in the southern U.S. as examples of work that was slower to begin during the quarter but has since advanced. He also said Page will transition from being reported as acquisition growth to organic growth during the third and fourth quarters. Canadian organic net revenue grew 2.4%. The company reported double-digit organic growth in water, supported by biosolids and wastewater projects, along with growth in buildings and environmental services. Infrastructure activity was affected by the anticipated wind-down of certain transit and roadway projects. Contract backlog at the end of the second quarter reached a record CAD 9.2 billion, up 17.5% from a year earlier and representing about 13 months of work. Backlog increased in each region, with the global segment posting nearly 25% year-over-year growth. Organic backlog growth was 7% year over year, while acquisitions completed in 2025 contributed nearly 8% to backlog growth. Acquisition-related growth was concentrated primarily in the buildings business, where backlog increased more than 40%. Among projects secured during the quarter, Stantec was selected to provide architecture, engineering and integrated design services for Meta’s CAD 13 billion data center in Sturgeon County, Alberta. Its water team was selected for preliminary design and evaluation services for the Drake Water Reclamation Facility in Fort Collins, Colorado, a 23-million-gallon-per-day wastewater treatment plant. In Australia, the company was selected to provide engineering services for the Redcliffe Hospital redevelopment in Queensland. It also won a 10-year framework agreement with Western Australia’s Department of Housing and Works for engineering and building-related consulting services across non-residential social-infrastructure projects. Stantec maintained its outlook for 2026 net revenue growth of 8.5% to 11.5% and continued to target mid-single-digit organic net revenue growth overall. The company expects U.S. and Canadian organic growth in the mid-single-digit range and high-single-digit organic growth in the global business. Management raised and narrowed its adjusted EBITDA margin outlook to 17.8% to 18.3%, while maintaining its target for adjusted EPS growth of 15% to 18%. Culmone said the company expects some moderation in margin expansion during the second half as it adds employees to support anticipated growth. He also said Stantec is using digital tools, including artificial intelligence in bidding and proposal processes, as part of its operating strategy. Cash flow from operations totaled CAD 116 million year to date. Days sales outstanding ended the quarter at 75 days, within the company’s internal target, though Culmone said it was near the upper end of that range. Stantec acquired Niche, a 200-person engineering and environmental consulting firm in Australia, effective July 31. The acquisition is intended to strengthen environmental services in the region. The company repurchased about 1.7 million common shares during the quarter, equal to 1.5% of outstanding shares, for approximately CAD 175 million under its normal course issuer bid. Net debt to adjusted EBITDA remained at 1.3 times, within Stantec’s internal target range of one to two times. Culmone said the company intends to seek Toronto Stock Exchange approval to increase the repurchase program’s limit to 5% from 2%. Management said acquisitions remain its preferred source of long-term shareholder value creation, though it acknowledged a valuation gap between public and private markets. Johnston said the company’s acquisition strategy and priorities have not changed. Johnston also said the call would be his final earnings call as chief executive. He will retire from the role effective Oct. 1 and transition to vice chair of Stantec’s board. Susan Reisbord is set to succeed him as CEO. Stantec is a global design and consulting firm offering professional services in engineering, architecture, and environmental sciences. The company partners with public and private clients to deliver solutions spanning infrastructure, water, energy and resources, and community development. Through an integrated approach, Stantec manages projects from initial planning and conceptual design through construction and commissioning, focusing on sustainability and innovation. The firm's service portfolio includes civil infrastructure design, building systems engineering, environmental assessments, and project management. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Stantec Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Net Revenue: $1.8 billion, up 11.5% year-over-year, driven by 3.7% organic and 7.1% acquisition growth. Gross Revenue: $2.2 billion in Q2 2026. Adjusted EBITDA: Increased over 17% year-over-year, with a record Q2 margin of 18.7%, up 90 basis points. Adjusted EPS: $1.61, up 18.4% compared to Q2 2025. Project Margins: Increased 30 basis points to 54.5% of net revenue. Operating Cash Flow: $116 million on a year-to-date basis. Backlog: Record $9.2 billion, up 17.5% year-over-year, with 7% organic growth. U.S. Net Revenue: Increased almost 13%, driven by the Page acquisition and strong performance. Canada Net Revenue: Grew 2.4% organically. Global Net Revenue: Grew over 18%, with almost 13% organic growth. Water Business Organic Growth: Close to 12% globally, over 20% in the global region. Share Repurchases: Approximately 1.7 million common shares repurchased for about $175 million in Q2. Net Debt to Adjusted EBITDA: 1.3x, within the internal target range of 1 to 2x. DSO: 75 days at the end of Q2. Warning! GuruFocus has detected 6 Warning Signs with INRLF. Is STN fairly valued? Test your thesis with our free DCF calculator. Release Date: August 13, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Stantec Inc (NYSE: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. Q: Can you detail the building blocks and confidence behind the expected acceleration to high single-digit organic growth in the U.S. in the back half of the year?A: Gord Johnston (President and CEO) explained that the Q2 slowdown was a timing issue, not a demand issue, with several projects wrapping up and new ones slow to start. Since the quarter ended, momentum has improved with projects kicking off. The strong sales funnel, positive organic backlog growth, and the transition of the Page acquisition from acquisition growth to organic growth in Q3 and Q4 all support the thesis of continued organic acceleration into the second half and into 2027. Q: Can you walk us through the puts and takes on the full-year margin guidance, given the strong first-half performance and the modest increase to the outlook?A: Vito Culmone (CFO) stated that margin expansion is driven by strong project margins, disciplined pricing, and declining admin and marketing costs as a percentage of revenue. The moderation in margin expansion in the back half is due to the timing of workforce expansion to support significant expected organic growth. He noted there is a little conservatism built into the guidance, and the company remains focused on making internal investments. Q: How far can project margins go, given they have been in the low 54% range for some time?A: Vito Culmone (CFO) said the company is centered on providing outstanding outcomes for clients, which is the ethos of the organization. With strong macro demand across markets, Stantec can be "picky and choosy" about clients, which supports confidence in project margins going forward. He indicated a more robust response will be provided at the Investor Day in December as part of the three-year planning process. Q: How are you reconciling elevated private-sector valuations with current public-market valuations, and what might that bring in terms of M&A opportunities?A: Gord Johnston (President and CEO) noted the acquisition environment is incredibly active, with a dislocation between public and private valuations. Stantec is in the midst of several conversations and remains focused on disciplined M&A. He believes further consolidation in the industry is likely over the next year or so, and Stantec is alive to these opportunities, remaining focused on what is best for shareholders in the long run. Q: Was there an overriding theme behind the U.S. organic growth slowdown in Q2, and how did it translate into the lower organic backlog growth?A: Gord Johnston (President and CEO) reiterated that it was largely a timing issue. Specific examples included a large Navy environmental program and a significant electrical utility project in the U.S. West that were slow to start, as well as a large public transit project in the U.S. South. He also mentioned working on a very significant proposal in Q2 that would have a positive impact on backlog if it comes through, and he does not see any negative long-term impact on the business. Q: Can you provide more color on the drivers of the strong global performance, breaking down Europe versus Australia and New Zealand?A: Gord Johnston (President and CEO) highlighted broad-based strength globally. Australia has returned to mid single-digit organic growth, the U.K. is running about 15% organic growth driven by AMP8, Germany (with Zetcon) is running low 20s organic growth, and Latin America is seeing over 50% organic growth due to copper demand. This broad strength supports the increased high single-digit organic growth outlook for the global region. Q: Given the commentary on private versus public market valuations, is there any thought about doing a larger buyback or substantial issuer bid?A: Vito Culmone (CFO) reiterated that M&A remains the core of long-term value creation, and the company expects to be more active in that portfolio over the next 12 months. While a substantial issuer bid is a step further from where they are, they are seeking approval to expand the NCIB from 2% to 5%, providing flexibility given the current valuation. He noted they will take measured steps and continue to be disciplined. Q: Has the duration of the global backlog changed, and will you need to expand the workforce to convert that backlog into revenue?A: Gord Johnston (President and CEO) confirmed the company is actively expanding its workforce globally, particularly in Latin America, Germany, and the U.K. He noted that long-term framework agreements like AMP8 only enter backlog when specific change orders are assigned, so the actual contract opportunities are much larger than reported. The company is ahead of schedule on hiring at its global delivery center in India, which has reached roughly 2,000 people, and is looking to expand to other cities. Q: Can you speak to the drivers behind the more pronounced working capital investment in the first half of 2026 and how we should think about it in the second half?A: Vito Culmone (CFO) acknowledged that free cash flow year-to-date is lower than last year but stated there is nothing of operational concern. DSOs are at 75 days, within guidance but at the higher end of internal metrics, and the team is focused on bringing that in. He noted normal seasonality, with the back half being considerably higher, and expects the velocity to dovetail nicely into normal expectations as they move into the second half. Q: Have your M&A priorities shifted in terms of target size or end market based on current valuation dynamics?A: Gord Johnston (President and CEO) stated that the company is holding its consistency and discipline regarding where there are great long-term opportunities, either geographically or by line of business. The current environment has not changed the strategy at all; the focus remains on doing the right acquisitions at the right time to build the strength of Stantec for the long term. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Stantec (STN) came out with quarterly earnings of $1.16 per share, beating the Zacks Consensus Estimate of $1.15 per share. This compares to earnings of $0.98 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +0.87%. A quarter ago, it was expected that this engineering firm would post earnings of $0.95 per share when it actually produced earnings of $0.97, delivering a surprise of +2.11%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Stantec, which belongs to the Zacks Consulting Services industry, posted revenues of $1.29 billion for the quarter ended June 2026, missing the Zacks Consensus Estimate by 1.34%. This compares to year-ago revenues of $1.15 billion. The company has not been able to beat consensus revenue estimates over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Stantec shares have lost about 21% since the beginning of the year versus the S&P 500's gain of 12.9%. While Stantec has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Stantec was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.30 on $1.33 billion in revenues for the coming quarter and $4.43 on $5.12 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Consulting Services is currently in the top 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Concrete Pumping (BBCP), another stock in the broader Zacks Business Services sector, has yet to report results for the quarter ended July 2026. This company is expected to post quarterly earnings of $0.08 per share in its upcoming report, which represents a year-over-year change of +14.3%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Concrete Pumping's revenues are expected to be $108.9 million, up 5% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stantec Inc. (STN) : Free Stock Analysis Report CONCRETE PUMPING HOLDINGS, INC. (BBCP) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Net revenue of $1.8 billion, an increase of 11.5% compared to Q2 2025 Adjusted EBITDA1 increase of 17.1% to $332.9 million and adjusted EBITDA margin1 of 18.7%, a 90 basis point increase over Q2 2025 Diluted EPS of $1.32 and adjusted EPS1 of $1.61, up 10.9% and 18.4%, respectively, compared to Q2 2025 Contract backlog increased to $9.2 billion, up 17.5% year-over-year Repurchased 1,667,292 common shares for an aggregate price of $175.9 million in the first two quarters of 2026 On July 31, 2026 Stantec acquired Niche, a 200-person engineering and environmental consultancy firm in Australia, bolstering its Environmental Services operations. EDMONTON, Alberta and NEW YORK, Aug. 12, 2026 (GLOBE NEWSWIRE) -- Stantec (TSX, NYSE:STN), a global leader in sustainable engineering, architecture and environmental consulting, released its second quarter 2026 results today. In the second quarter, net revenue increased 11.5% year-over-year to $1.8 billion, driven by acquisition growth1 of 7.1%, primarily reflecting strong results from Page in our US operations, and organic growth of 3.7% which was driven primarily by 12.8% organic growth in Global. Second quarter 2026 adjusted EBITDA increased 17.1% or $48.5 million, and adjusted EBITDA margin reached 18.7%, up 90 basis points compared to the second quarter 2025. Stantec delivered diluted earnings per share (EPS) of $1.32 and adjusted EPS of $1.61. On a year-to-date basis, net revenue increased 10.3% to $3.5 billion, driven by 7.2% acquisition and 3.7% organic growth. All of Stantec's operating regions have achieved organic net revenue growth year-to-date, with Water achieving 13.0% organic net revenue growth. Adjusted EBITDA increased 15.5% to $619.9 million year-to-date, and adjusted EBITDA margin increased 80 basis points over the prior period to 17.8%. Adjusted EPS increased 16.7% to $2.94. “As reflected in Stantec's second quarter results, strong operational performance, combined with solid growth in our Global region and meaningful contributions from our acquisition of Page, have kept us on track to deliver on our 2026 financial targets,” said Gord Johnston, President and CEO. “The long-term demand drivers of our business remain intact, and with a record backlog of $9.2 billion, we expect to see an acceleration of activity in the second half of 2026.” __________________________1 Adjusted EPS, adjusted EBITDA, adjusted EBITDA margin and free cash flow to net income are non-IFRS measures; organic growth and acquisition growth are other financial measures (discussed in the Definitions section of Stantec's Q2 2026 Management's Discussion and Analysis). 2026 Outlook Stantec is reaffirming its 2026 guidance while narrowing and adjusting upward its adjusted EBITDA target for the year. In setting targets and guidance, Stantec assumed an average value for the US dollar of $1.38, GBP of $1.85, and AU of $0.98 for the remainder of the year. For all other underlying assumptions, see page M-20. note: Adjusted EBITDA, adjusted net income, adjusted EPS, and adjusted ROIC are non-IFRS measures discussed in the Definitions section of Stantec's Q2 2026 Management's Discussion and Analysis. The global environment is dynamic, and customer needs continue to evolve, as do public sector policy and investment priorities. While year-to-date results position Stantec favorably to achieve its initial estimate of net revenue growth of 8.5% to 11.5% in 2026, the Company has refined its outlook and now expects organic net revenue growth to be in the mid-single digit range. In the United States, the organic growth in backlog and other customer demand signals support Stantec's continued expectation that results will improve across our business lines and yield mid-single digit organic net revenue growth for the year. In Canada, Stantec also expects organic net revenue growth to improve moderately and achieve mid-single digits by year end, supported by public sector spending plans and continued demand, particularly in our Water and Buildings business lines. Lastly, Stantec continues to expect Global to maintain strong organic net revenue growth in the high-single digits, supported by continued high levels of activity in its Water business under the ongoing Asset Management Program and frameworks, strong demand in Energy & Resources, and positive demand fundamentals across other Global business units. Stantec's year-to-date results reflect strong margin improvements and effectiveness in managing operating costs, and the Company has refined its estimate of adjusted EBITDA margin accordingly. Stantec expects that adjusted EBITDA margin will reach a record range of 17.8% to 18.3% in 2026, reflecting an increase in the low end of its targeted range from 17.6% to 17.8%, and an increase in the high end of the range from 18.2% to 18.3%. This improvement reflects strong project margins resulting from solid project execution, as well as continued focus on enhanced strategies in the management of administration and marketing costs. These initiatives include the continued expansion of Stantec's high-value centers, optimization of digital strategies, and increased efficiencies from improved scale in certain key geographies. Overall, Stantec expects to achieve an adjusted net income margin at or above 9.5% of net revenue, an adjusted ROIC greater than 13%, and to deliver 15% to 18% growth in adjusted EPS compared to 2025. The above targets do not include any assumptions related to additional acquisitions, given the unpredictable nature of the timing and size of such transactions. Q2 2026 compared to Q2 2025 Stantec achieved strong second quarter adjusted net income of $182.5 million and adjusted earnings per share of $1.61, reflecting an increase of 18.4%, driven by net revenue growth and strong operational performance. Net revenue increased 11.5% or $183.9 million, to $1.8 billion, driven by acquisition growth of 7.1%, which primarily reflects the strong results of Page in Stantec's US operations, and organic growth of 3.7%. Organic growth was driven by Stantec's Global region of 12.8%. Project margin increased 12.3% or $106.0 million, to $970.7 million as a result of net revenue growth and solid project execution. Project margin, as a percentage of net revenue, increased by 30 basis points to 54.5%. Adjusted EBITDA increased 17.1% or $48.5 million, to $332.9 million. Adjusted EBITDA margin was 18.7%, an increase of 90 basis points compared to Q2 2025. The growth in margin was primarily due to the increase in net revenue, solid project margin, and lower administrative and marketing expenses as a percentage of net revenue, reflecting our focus on efficient management of operations and optimization of discretionary spending. Net income increased 11.0% or $14.9 million, to $150.3 million, and diluted EPS increased 11.0%, or $0.13, to $1.32, mainly due to net revenue growth and solid project margin, and, as a percentage of net revenue, a 110 basis point reduction in administrative and marketing expenses, partly offset by impairment recorded on lease assets and higher amortization of intangible assets as a result of Stantec's recent acquisitions. Adjusted net income grew 18.0% or $27.8 million, to $182.5 million, achieving 10.2% of net revenue—an increase of 50 basis points compared to Q2 2025. Adjusted EPS increased 18.4% or $0.25, to $1.61. Contract backlog grew to $9.2 billion at June 30, 2026, achieving a 17.5% year over year increase, which included 7.8% acquisition growth and 7.0% organic growth. Notably, Stantec's acquisition of Page contributed to over 40% backlog growth in its Buildings business. Additionally, organic growth was achieved in all regions, driven primarily by nearly 25% organic growth in its Global region and over 10% organic growth in its Water business. Contract backlog represents approximately 13 months of work. Cash flows from operations were $118.6 million, which was a decrease of $15.4 million compared to Q2 2025. This reflects required investment in net working capital as a result of revenue growth. Days sales outstanding (DSO) was 75 days, an increase of two days compared to Q2 2025 and within Stantec's target of 75 days. Net debt to adjusted EBITDA (on a trailing twelve-month basis) at June 30, 2026 remained at 1.3x, within Stantec's internal target range of 1.0x to 2.0x. On July 31, 2026 Stantec acquired Niche, a 200-person engineering and environmental consultancy firm in Australia, bolstering its Environmental Services operations. On August 12, 2026, Stantec's Board of Directors declared a dividend of $0.245 per share, payable on October 15, 2026, to shareholders of record on September 29, 2026. Year-to-date Q2 2026 compared to year-to-date Q2 2025 Net revenue increased 10.3% or $325.2 million, to $3.5 billion, driven by acquisition growth of 7.2%, which primarily reflects strong results of Page in Stantec's US operations, and organic growth of 3.7%. Organic growth was driven by Stantec's Global region of 10.4% combined with modest growth in Canada and the United States. The largest driver of organic growth was a 13.0% increase in net revenue from Stantec's Water business. Project margin increased $176.6 million or 10.3%, to $1.9 billion. As a percentage of net revenue, project margin remained consistent with the prior year at 54.2%. Adjusted EBITDA increased $83.2 million or 15.5%, to $619.9 million. Adjusted EBITDA margin increased by 80 basis points over the prior period to 17.8%, primarily due to lower administrative and marketing expenses as a percentage of net revenue, reflecting Stantec's focus on efficient management of operations and optimization of discretionary spending. Net income increased 10.9% or $25.6 million, to $261.1 million, and diluted EPS increased 11.2%, or $0.23, to $2.29, mainly due to higher net revenue and lower administrative and marketing expenses as a percentage of net revenue partly offset by higher amortization of intangible assets and lease asset impairment. Adjusted net income grew 16.4% or $47.2 million, to $334.7 million, achieving 9.6% of net revenue—an increase of 50 basis points—and adjusted EPS increased 16.7%, or $0.42, to $2.94. Cash flows from operations were $116.3 million, a decrease of $118.4 million compared to the prior year. This reflects the required investment in net working capital as a result of revenue growth and the impacts of the Page integration in Q1 2026. Q2 2026 Financial Highlights note: Adjusted EBITDA, adjusted net income, and adjusted EPS are non-IFRS measures (discussed in the Definitions section of the Q2 2026 MD&A). n/m = not meaningful Net Revenue by Reportable Segment Backlog Webcast & Conference Call Stantec will host a live webcast and conference call on Thursday, August 13, 2026, at 7:00 AM Mountain Time (9:00 AM Eastern Time) to discuss the Company’s second quarter performance. To listen to the webcast and view the slide presentation, please join here. If you are an analyst and would like to participate in the Q&A, please register here.   The conference call and slideshow presentation will be broadcast live and archived in their entirety in the Investors section of Stantec.com. About Stantec Stantec empowers clients, people, and communities to rise to the world’s greatest challenges at a time when the world faces more unprecedented concerns than ever before. ​We are a global leader in sustainable engineering, architecture, and environmental consulting. ​Our professionals deliver the expertise, technology, and innovation communities need to manage aging infrastructure, demographic and population changes, the energy transition, and more. ​ Today’s communities transcend geographic borders. At Stantec, community means everyone with an interest in the work that we do—from our project teams and industry colleagues to our clients and the people our work impacts. The diverse perspectives of our partners and interested parties drive us to think beyond what’s previously been done on critical issues like climate change, digital transformation, and future-proofing our cities and infrastructure. ​ We are designers, engineers, scientists, project managers, and strategic advisors. We innovate at the intersection of community, creativity, and client relationships to advance communities everywhere, so that together we can redefine what’s possible.​ Stantec trades on the TSX and the NYSE under the symbol STN. Cautionary Statements Non-IFRS and Other Financial Measures Stantec reports its financial results in accordance with IFRS. However, in this press release, the following non-IFRS and other financial measures are used by the Company: adjusted EBITDA, adjusted net income, adjusted earnings per share (EPS), adjusted return on invested capital (ROIC), free cash flow, free cash flow to net income, net debt to adjusted EBITDA, days sales outstanding (DSO), margin (percentage of net revenue), organic growth (retraction), acquisition growth, and measures described as on a constant currency basis and the impact of foreign exchange or currency fluctuations, as well as measures and ratios calculated using these non-IFRS or other financial measures. Additional disclosure for these non-IFRS and other financial measures, incorporated by reference, is included in the Definitions of Non-IFRS and Other Financial Measures section of the Q2 2026 Management’s Discussion and Analysis, available on SEDAR+ at sedarplus.ca, EDGAR at sec.gov, and the Company’s website at Stantec.com and the reconciliation of Non-IFRS Financial Measures appended hereto. These non-IFRS and other financial measures do not have a standardized meaning under IFRS and, therefore, may not be comparable similar measures presented by other issuers. Management believes that, in addition to conventional measures prepared in accordance with IFRS, these non-IFRS and other financial measures provide useful information to investors to assist them in understanding components of Stantec's financial results. These measures should not be considered in isolation or viewed as a substitute for the related financial information prepared in accordance with IFRS. Forward-looking Statements Certain statements contained in this news release constitute forward-looking statements. Forward-looking statements in this news release include, but are not limited to, Stantec's Outlook and Annual Targets for 2026 in their entirety, any projections related to revenue, adjusted EBITDA as a % of net revenue, adjusted net income as a % of net revenue, adjusted diluted EPS growth, adjusted ROIC, free cash flow to net income, net debt to adjusted EBITDA, effective tax rate, earnings patterns, and days sales outstanding. Any such statements represent the views of management only as of the date hereof and are presented for the purpose of assisting the Company’s shareholders in understanding Stantec’s operations, objectives, priorities, and anticipated financial performance as at and for the periods ended on the dates presented and may not be appropriate for other purposes. By their nature, forward-looking statements require management to make assumptions and are subject to inherent risks and uncertainties. Stantec's assumptions relating to the 2026 Outlook and Annual Targets are provided in the Company’s 2025 Annual Report. Readers of this news release are cautioned not to place undue reliance on forward-looking statements since a number of factors could cause actual future results to differ materially from the expectations expressed in these forward-looking statements. These factors include, but are not limited to, economic downturns, future pandemics or health crises that could adversely affect operations, reduced public or private sector capital spend, changing market conditions for Stantec’s services, and the risk that Stantec fails to capitalize on its strategic initiatives. Investors and the public should carefully consider these factors, other uncertainties, and potential events, as well as the inherent uncertainty of forward-looking statements, when relying on these statements to make decisions with respect to the Company. Future outcomes relating to forward-looking statements may be influenced by many factors and material risks. For the three and six month periods ended June 30, 2026, there has been no significant change in the risk factors from those described in Stantec's 2025 Annual Report. This report is accessible online by visiting EDGAR on the SEC website at sec.gov or by visiting the CSA website at sedarplus.com or Stantec’s website, stantec.com. You may obtain a hard copy of the 2025 Annual Report free of charge from the investor contact noted below. Investor Contact Jess NieukerkStantec Investor RelationsPh: [email protected] To subscribe to Stantec’s email news alerts, please fill out the subscription form, which is also available on the Contact Information page of the Investors section at Stantec.com. Design with community in mind Attached to this news release are Stantec’s reconciliation of non-IFRS financial measures. Reconciliation of Non-IFRS Financial Measures See the Definitions section for our discussion of non-IFRS and other financial measures used and additional reconciliations of non-IFRS financial measures. note 1: The net impairment of lease assets includes onerous contract provisions related to the lease agreements associated with underutilized office space for the quarter ended June 30, 2026 of $(2.8) (2025 - $0.9) and for the two quarters ended June 30, 2026 of $(2.4) (2025 -$0.9). For the quarter ended June 30, 2026, this amount is net of tax of $2.5 (2025 - nil). For the two quarters ended June 30, 2026, this amount is net of tax of $2.5 (2025 - nil). note 2: The add back of intangible amortization relates only to the amortization from intangible assets acquired through acquisitions and excludes the amortization of software purchased by Stantec. For the quarter ended June 30, 2026, this amount is net of tax of $7.6 (2025 - $5.1). For the two quarters ended June 30, 2026, this amount is net of tax of $15.6 (2025 -$9.6). note 3: For the quarter ended June 30, 2026, this amount is net of tax of $(2.4) (2025 - $(1.8)) and for the two quarters ended June 30, 2026, this amount is net of tax of $(0.5) (2025 - $0.2). note 4: The add back of certain administrative and marketing costs and depreciation primarily related to acquisition and integration expenses associated with our acquisitions and restructuring activities. For the quarter ended June 30, 2026, this amount is net of tax of $3.0 (2025 - $3.1) and for the two quarters ended June 30, 2026, this amount is net of tax of $6.3 (2025 - $6.3).

CRA International (CRAI) came out with quarterly earnings of $2.16 per share, beating the Zacks Consensus Estimate of $2.12 per share. This compares to earnings of $1.88 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +1.89%. A quarter ago, it was expected that this consulting firm would post earnings of $2.02 per share when it actually produced earnings of $1.99, delivering a surprise of -1.49%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. CRA, which belongs to the Zacks Consulting Services industry, posted revenues of $210.82 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 6.29%. This compares to year-ago revenues of $186.88 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. CRA shares have lost about 12% since the beginning of the year versus the S&P 500's gain of 12.8%. While CRA has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for CRA was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.16 on $197.87 million in revenues for the coming quarter and $8.52 on $800.44 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Consulting Services is currently in the top 26% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Stantec (STN), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This engineering firm is expected to post quarterly earnings of $1.15 per share in its upcoming report, which represents a year-over-year change of +17.4%. The consensus EPS estimate for the quarter has been revised 0.8% lower over the last 30 days to the current level. Stantec's revenues are expected to be $1.3 billion, up 13% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Charles River Associates (CRAI) : Free Stock Analysis Report Stantec Inc. (STN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The market expects Stantec (STN) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended June 2026. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on August 12. On the other hand, if they miss, the stock may move lower. While management's discussion of business conditions on the earnings call will mostly determine the sustainability of the immediate price change and future earnings expectations, it's worth having a handicapping insight into the odds of a positive EPS surprise. This engineering firm is expected to post quarterly earnings of $1.15 per share in its upcoming report, which represents a year-over-year change of +17.4%. Revenues are expected to be $1.3 billion, up 13% from the year-ago quarter. The consensus EPS estimate for the quarter has been revised 0.76% lower over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period. Investors should keep in mind that the direction of estimate revisions by each of the covering analysts may not always get reflected in the aggregate change. Price, Consensus and EPS Surprise Estimate revisions ahead of a company's earnings release offer clues to the business conditions for the period whose results are coming out. Our proprietary surprise prediction model -- the Zacks Earnings ESP (Expected Surprise Prediction) -- has this insight at its core. The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate for the quarter; the Most Accurate Estimate is a more recent version of the Zacks Consensus EPS estimate. The idea here is that analysts revising their estimates right before an earnings release have the latest information, which could potentially be more accurate than what they and others contributing to the consensus had predicted earlier. Thus, a positive or negative Earnings ESP reading theoretically indicates the likely deviation of the actual earnings from the consensus estimate. However, the model's predictive power is significant for positive ESP readings only. A positive Earnings ESP is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). Our research shows that stocks with this combination produce a positive surprise nearly 70% of the time, and a solid Zacks Rank actually increases the predictive power of Earnings ESP. Please note that a negative Earnings ESP reading is not indicative of an earnings miss. Our research shows that it is difficult to predict an earnings beat with any degree of confidence for stocks with negative Earnings ESP readings and/or Zacks Rank of 4 (Sell) or 5 (Strong Sell). For Stantec, the Most Accurate Estimate is higher than the Zacks Consensus Estimate, suggesting that analysts have recently become bullish on the company's earnings prospects. This has resulted in an Earnings ESP of +1.74%. On the other hand, the stock currently carries a Zacks Rank of #4. So, this combination makes it difficult to conclusively predict that Stantec will beat the consensus EPS estimate. Analysts often consider to what extent a company has been able to match consensus estimates in the past while calculating their estimates for its future earnings. So, it's worth taking a look at the surprise history for gauging its influence on the upcoming number. For the last reported quarter, it was expected that Stantec would post earnings of $0.95 per share when it actually produced earnings of $0.97, delivering a surprise of +2.11%. Over the last four quarters, the company has beaten consensus EPS estimates two times. An earnings beat or miss may not be the sole basis for a stock moving higher or lower. Many stocks end up losing ground despite an earnings beat due to other factors that disappoint investors. Similarly, unforeseen catalysts help a number of stocks gain despite an earnings miss. That said, betting on stocks that are expected to beat earnings expectations does increase the odds of success. This is why it's worth checking a company's Earnings ESP and Zacks Rank ahead of its quarterly release. Make sure to utilize our Earnings ESP Filter to uncover the best stocks to buy or sell before they've reported. Stantec doesn't appear a compelling earnings-beat candidate. However, investors should pay attention to other factors too for betting on this stock or staying away from it ahead of its earnings release. Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stantec Inc. (STN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Gartner (IT) came out with quarterly earnings of $4.37 per share, beating the Zacks Consensus Estimate of $3.77 per share. This compares to earnings of $3.53 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +15.92%. A quarter ago, it was expected that this technology information and analysis company would post earnings of $2.99 per share when it actually produced earnings of $3.32, delivering a surprise of +11.04%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. Gartner, which belongs to the Zacks Consulting Services industry, posted revenues of $1.68 billion for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 1.80%. This compares to year-ago revenues of $1.69 billion. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Gartner shares have lost about 39.9% since the beginning of the year versus the S&P 500's gain of 11%. While Gartner has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Gartner was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $2.71 on $1.5 billion in revenues for the coming quarter and $13.61 on $6.43 billion in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Consulting Services is currently in the top 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. One other stock from the same industry, Stantec (STN), is yet to report results for the quarter ended June 2026. The results are expected to be released on August 12. This engineering firm is expected to post quarterly earnings of $1.15 per share in its upcoming report, which represents a year-over-year change of +17.4%. The consensus EPS estimate for the quarter has been revised 0.8% lower over the last 30 days to the current level. Stantec's revenues are expected to be $1.3 billion, up 13% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Gartner, Inc. (IT) : Free Stock Analysis Report Stantec Inc. (STN) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research