Q2 FY2026
Filed Aug 12, 2026Stantec delivers strong second quarter 2026 results, expands margins and raises adjusted EBITDA outlook for 2026
Net revenue increased 11.5%, adjusted EBITDA increased 17.1%, adjusted EBITDA margin expanded 90 basis points to 18.7%, and Stantec raised and narrowed its adjusted EBITDA margin target. Backlog increased 17.5% to $9.2 billion, while operating cash flow declined as revenue growth required working-capital investment.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Gross revenueother | $2,228.0 million | – | – |
| Net revenueother | $1,780.6 million | – | 11.5% |
| Direct payroll costsother | $809.9 million | – | – |
| Project marginother | $970.7 million | – | 12.3% |
| Project margin as a percentage of net revenueother | 54.5% | – | 30 basis points |
| Administrative and marketing expensesother | $648.2 million | – | – |
| Administrative and marketing expenses as a percentage of net revenueother | 36.4% | – | 110 basis point reduction |
| Depreciation of property and equipmentother | $18.1 million | – | – |
| Depreciation of lease assetsother | $35.3 million | – | – |
| Net impairment (reversal) of lease assetsother | $12.9 million | – | – |
| Amortization of intangible assetsother | $40.3 million | – | – |
| Net interest expense and other net finance expenseother | $27.0 million | – | – |
| Other incomeother | $(11.2) million | – | – |
| Income taxesother | $49.8 million | – | – |
| Net incomeother | $150.3 million | – | 11.0% |
| Net income as a percentage of net revenueother | 8.4% | – | – |
| Basic and diluted earnings per share (EPS)other | $1.32 | – | 11.0% |
| Adjusted EBITDAnon-GAAP | $332.9 million | – | 17.1% |
| Adjusted EBITDA marginnon-GAAP | 18.7% | – | 90 basis points |
| Adjusted net incomenon-GAAP | $182.5 million | – | 18.0% |
| Adjusted net income as a percentage of net revenuenon-GAAP | 10.2% | – | 50 basis points |
| Adjusted EPSnon-GAAP | $1.61 | – | 18.4% |
| Dividends declared per common shareother | $0.245 | – | – |
| Contract backlogother | $9,236.3 million | – | 17.5% |
| Cash flows from operationsother | $118.6 million | – | decrease of $15.4 million |
| Days sales outstanding (DSO)other | 75 days | – | increase of two days |
| Net debt to adjusted EBITDA (on a trailing twelve-month basis)other | 1.3x | – | – |
| Year-to-date net revenueother | $3.5 billion | – | 10.3% |
| Year-to-date adjusted EBITDAnon-GAAP | $619.9 million | – | 15.5% |
| Year-to-date adjusted EBITDA marginnon-GAAP | 17.8% | – | 80 basis points |
| Year-to-date net incomeother | $261.1 million | – | 10.9% |
| Year-to-date diluted EPSother | $2.29 | – | 11.2% |
| Year-to-date adjusted net incomenon-GAAP | $334.7 million | – | 16.4% |
| Year-to-date adjusted EPSnon-GAAP | $2.94 | – | 16.7% |
| Year-to-date cash flows from operationsother | $116.3 million | – | decrease of $118.4 million |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| CanadaOrganic growth was $9.5 million. | $403.2 million | – | 2.4% |
| United StatesAcquisition growth was $105.1 million, partly offset by $(0.2) million due to foreign exchange. | $924.5 million | – | – |
| GlobalOrganic growth was $49.3 million, acquisition growth was $8.8 million, and foreign exchange contributed $11.4 million. | $452.9 million | – | 12.8% |
2026 Annual Range Targets outlook
- RevenueNet revenue growth 8.5% to 11.5%
- NoteAdjusted EBITDA as % of net revenue: 17.8% to 18.3%
- NoteAdjusted net income as % of net revenue: at or above 9.5%
- NoteAdjusted EPS growth: 15% to 18%
- NoteAdjusted ROIC: above 13%
- NoteOrganic net revenue growth: mid-single digit range
- NoteUnited States organic net revenue growth: mid-single digit organic net revenue growth for the year
- NoteCanada organic net revenue growth: mid-single digits by year end
- NoteGlobal organic net revenue growth: high-single digits
- NoteAssumed average value for the US dollar: $1.38 for the remainder of the year
- NoteAssumed average value for GBP: $1.85 for the remainder of the year
- NoteAssumed average value for AU: $0.98 for the remainder of the year
Capital returns
- Repurchased 1,667,292 common shares for an aggregate price of $175.9 million in the first two quarters of 2026.
- 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.
What drove it
- Q2 net revenue growth reflected acquisition growth of 7.1%, primarily strong results from Page in United States operations, and organic growth of 3.7%.
- Global delivered 12.8% organic growth in Q2, while Water was the largest driver of year-to-date organic growth with a 13.0% increase in net revenue.
- Adjusted EBITDA margin expansion was primarily due to net revenue growth, solid project margin, and lower administrative and marketing expenses as a percentage of net revenue.
- Stantec said it expects Global to maintain high-single digit organic net revenue growth, supported by Water activity under the ongoing Asset Management Program and frameworks, Energy & Resources demand, and positive demand fundamentals across other Global business units.
- On July 31, 2026, Stantec acquired Niche, a 200-person engineering and environmental consultancy firm in Australia, bolstering Environmental Services operations.
Concerns
- Cash flows from operations declined due to required investment in net working capital as a result of revenue growth.
- Year-to-date cash flows from operations also reflected the impacts of the Page integration in Q1 2026.
- Net income margin was 8.4%, compared with 8.5% in Q2 2025, as lease asset impairment and higher amortization of intangible assets partly offset operating improvements.
- The outlook excludes assumptions related to additional acquisitions because the timing and size of such transactions are unpredictable.
- The Company cited a dynamic global environment, evolving customer needs, and public-sector policy and investment priorities.
What to watch
- Delivery of 2026 net revenue growth of 8.5% to 11.5% and organic net revenue growth in the mid-single digit range.
- Progress toward the raised adjusted EBITDA margin target of 17.8% to 18.3%.
- Expected acceleration of activity in the second half of 2026 supported by the $9.2 billion record backlog.
- United States and Canada organic growth improvement to mid-single digits, and sustained high-single digit organic growth in Global.
- Working-capital requirements, DSO relative to the 75-day target, and conversion of earnings into operating cash flow.
- Contribution from Page and the July 31, 2026 acquisition of Niche.
Balance sheet and cash flow
- Contract backlog was $9,236.3 million at June 30, 2026, compared to $7,861.8 million at June 30, 2025.
- Contract backlog represents approximately 13 months of work.
- Cash flows from operations were $118.6 million, a decrease of $15.4 million compared to Q2 2025.
- Year-to-date cash flows from operations were $116.3 million, a decrease of $118.4 million compared to the prior year.
- 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.
- DSO was 75 days, an increase of two days compared to Q2 2025 and within Stantec's target of 75 days.
Analysis
Stantec reported a strong Q2 under IFRS, with net revenue increasing 11.5% to $1,780.6 million. Growth included 7.1% acquisition growth, primarily from Page in the United States, and 3.7% organic growth. Global was the principal organic contributor, delivering 12.8% organic growth. Canada posted 2.4% organic growth, while United States segment growth was substantially driven by acquisitions.
Profit growth exceeded revenue growth. Project margin increased 12.3% to $970.7 million and expanded 30 basis points to 54.5% of net revenue. Adjusted EBITDA increased 17.1% to $332.9 million, with margin up 90 basis points to 18.7%. The release attributes the improvement to revenue growth, solid project execution, and lower administrative and marketing expenses as a percentage of net revenue. Adjusted EPS rose 18.4% to $1.61, ahead of the 11.0% increase in diluted EPS to $1.32.
Underlying operating improvements were partly offset in reported earnings by lease asset impairment and higher amortization of intangible assets associated with recent acquisitions. Net income increased 11.0% to $150.3 million, but net income margin was 8.4% versus 8.5% in Q2 2025. On a year-to-date basis, net revenue increased 10.3% to $3.5 billion, adjusted EBITDA increased 15.5% to $619.9 million, and adjusted EBITDA margin expanded 80 basis points to 17.8%.
Demand visibility strengthened through backlog. Contract backlog rose 17.5% to $9,236.3 million at June 30, 2026 and represented approximately 13 months of work. Backlog organic growth was 7.0%, led by 24.7% in Global, while Page contributed to over 40% backlog growth in Buildings. Management expects activity to accelerate in the second half, with United States and Canada organic revenue growth improving to mid-single digits and Global maintaining high-single digit growth.
Cash conversion was the principal counterpoint. Q2 cash flows from operations were $118.6 million, down $15.4 million, and year-to-date cash flows from operations were $116.3 million, down $118.4 million, reflecting working-capital investment from revenue growth and Page integration impacts. Leverage remained within the stated range at 1.3x net debt to adjusted EBITDA. Capital allocation included $175.9 million of repurchases in the first two quarters and a $0.245 per-share declared dividend. Stantec reaffirmed net revenue, adjusted EPS, adjusted net income margin, and adjusted ROIC targets while lifting and narrowing adjusted EBITDA margin guidance to 17.8% to 18.3%.
Management, verbatim
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.
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.
Gord Johnston, President and CEO
Not in the filing
stated, not guessed- Previous release outlook was not provided, so no actual-versus-prior-guidance comparison is available.
- Gross margin was not reported.
- Operating income was not reported.
- Free cash flow amount was not reported.
- Free cash flow to net income was not reported.
- Cash balance was not reported.
- Total debt was not reported.
- Effective tax rate was not reported.
- Quarter-over-quarter comparisons were not reported for the presented Q2 metrics.
- Prior-year figures were not reported in the filing for year-to-date net revenue, year-to-date adjusted EBITDA, year-to-date adjusted EBITDA margin, year-to-date net income, year-to-date diluted EPS, year-to-date adjusted net income, year-to-date adjusted EPS, and year-to-date cash flows from operations.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.