Stantec raises adjusted EPS growth target as quarterly profit increases
For the quarter ended September 30, net revenue rose 9.4%, and Stantec raised its adjusted EPS growth target to 17% to 19%.
Stantec Inc. (STN) reported higher third-quarter profit as net revenue rose to C$1.86 billion from C$1.71 billion a year earlier. The professional-services company earned C$180 million in the quarter ended September 30, 2026, up from C$150 million.
Adjusted net income rose 21.8% to C$212 million, or 11.4% of net revenue, an increase of 120 basis points from a year earlier. Adjusted earnings rose 23.5% to C$1.89 a share. Stantec also reported a 60-basis-point reduction in administrative and marketing expenses as a share of net revenue.
For the first nine months of 2026, net revenue rose 10% to C$5.34 billion. Acquisition growth contributed 5.5%, primarily reflecting results from Page in the United States, and organic growth contributed 4.3%. Stantec said its Water business recorded double-digit growth over the period.
The company measures net revenue after deducting subconsultant and other direct expenses, which can vary significantly between contracts. It said public infrastructure spending and private investment remained key growth drivers in 2026, with strong demand in the water and energy sectors.
Contract backlog reached C$9.2 billion at September 30, up 11.6% from a year earlier, including 9.9% organic growth. Stantec said backlog represented approximately 13 months of work. Organic backlog growth occurred across all regions and businesses, led by double-digit increases in Canada and Global and in the Buildings, Water and Energy & Resources businesses.
Quarterly operating cash flow increased to C$392 million from C$316 million, helped by revenue growth and the timing of collections and payments. For the first nine months, operating cash flow fell to C$509 million from C$551 million. Stantec said investment in working capital to support growth offset strong revenue and margin growth, with lower tax payments partly mitigating the decline.
Stantec paid C$54.2 million, net of cash acquired, for Niche, a 200-person Australian engineering and environmental consultancy, during the first nine months. That compared with C$454 million in net consideration paid for acquisitions in the same period of 2025. The company also repurchased C$350 million of shares for cancellation in the first nine months; its net debt was 1.2 times trailing 12-month adjusted EBITDA at September 30, within its target range.
Stantec raised its adjusted net income margin target to at least 9.8% from at least 9.5% and raised and narrowed its adjusted EPS growth target to 17% to 19% from 15% to 18%. The company attributed the changes to strong project margins and its efforts to manage administrative and marketing costs. It continues to expect adjusted return on invested capital above 13%; the targets include no assumptions for additional acquisitions.
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