Stantec Exceeds Targets, Signals Continued Growth Amidst Macro Uncertainty

Event summary

  • Stantec reported record 2025 revenue of $6.5 billion, a 10.7% increase year-over-year.
  • The company achieved an adjusted EBITDA margin of 17.6%, surpassing its strategic plan target one year early.
  • Stantec is projecting 8.5% to 11.5% net revenue growth and a 17.6% to 18.2% adjusted EBITDA margin for 2026.
  • The company's backlog reached $8.6 billion, a 9.5% increase from the prior year, driven by both acquisition and organic growth.

The big picture

Stantec's strong performance and optimistic outlook reflect the ongoing demand for sustainable design and engineering services, driven by infrastructure investment and climate change mitigation efforts. The company's early achievement of its margin target suggests effective cost management and operational improvements, but the projected growth rate necessitates careful execution and strategic allocation of resources. The company’s success is tied to broader trends in public and private sector spending on infrastructure and environmental projects, making it a bellwether for the construction and engineering sectors.

What we're watching

Execution Risk
The ability to sustain the current margin expansion will depend on Stantec's continued operational discipline and project execution, particularly given potential inflationary pressures and supply chain disruptions.
Geographic Exposure
The reliance on the US market for growth, while positive, exposes Stantec to potential economic slowdowns and regulatory changes within that region.
Acquisition Integration
Continued acquisition activity, while contributing to backlog growth, will require effective integration to realize synergies and avoid operational disruptions.