Stantec announces record 2024 earnings, increases dividend by 7%, achieves all-time record backlog of $7.8 billion, and provides 2025 outlook

2024 Highlights

• Net revenue of $5.9 billion in 2024, an increase of 15.8% over 2023;
• Adjusted EBITDA¹ of $980.3 million, up 18.0% over 2023, and adjusted EBITDA margin¹ of 16.7%, a 30-basis point increase over 2023;
• Strong organic growth of 7.4% for the full year driven by 8.6% organic growth in the US, 6% in Canada, and 5.8% in Global;
• Operating cash flows increased to $603.1 million, up 16.0% over 2023;
• Adjusted diluted EPS¹ of $4.42, an increase of 20.4% over 2023;
• Backlog of $7.8 billion, up 24.1% since December 31, 2023, and;
• Ranked #8 of the most sustainable corporations in the world by Corporate Knights, first among peers.

EDMONTON, Alberta and NEW YORK, Feb. 25, 2025 (GLOBE NEWSWIRE) -- TSX, NYSE:STN Stantec, a global leader in sustainable design and engineering, released its results today for the fourth quarter and year ended December 31, 2024.

2024 was another record-setting year for Stantec, as the Company completed the first year of its ambitious 2024-2026 Strategic Plan. Net revenue increased 15.8% to $5.9 billion, driven by 7.4% organic growth¹ and 7.5% acquisition growth¹. Continued strong project execution and operational excellence drove a record adjusted  EBITDA margin¹ of 16.7%, diluted earnings per share (EPS) of $3.17, and adjusted diluted EPS of $4.42.

In the fourth quarter of 2024, Stantec grew net revenue 19.0% to $1.5 billion through 9.3% organic and 7.6% acquisition growth. Stantec achieved notable double digit organic growth in its US operations, with double digit growth in Buildings, Water, and Energy & Resources, and Canada and Global both achieved high single digit organic growth.  Adjusted EBITDA margin increased 100 basis points year-over-year to 16.7%, while both diluted EPS and adjusted diluted EPS increased over 35% to $0.86 and $1.11, respectively.

"Our strong 2024 results put us well on track to deliver on our Strategic Plan objectives,” said Gord Johnston, president and chief executive officer. "We continue to thrive in a resilient industry influenced by macro factors including water security, aging infrastructure, climate change, future technologies and an expansion in advanced manufacturing. By maintaining our strong focus on project execution and addressing our clients' most pressing challenges, we anticipate another year of exceptional performance for Stantec in 2025, driven by continued margin expansion and earnings growth."

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_{¹ Adjusted diluted EPS, adjusted EBITDA, and adjusted EBITDA margin are non-IFRS measures, and organic growth and acquisition growth are other financial measures (discussed in the Definitions section of Stantec's 2024 Annual Report).}

2025 Outlook

For 2025, Stantec has established the following targets:

Stantec expects to achieve net revenue growth of 7% to 10% in 2025, with net revenue organic growth in the mid- to high-single digits. Organic growth in both US and Canada is expected to be in the mid to high single digits, driven by continuing strong momentum as reflected in Stantec's record-high backlog between the two countries. Organic growth in Global is also expected to achieve mid to high single digit growth driven by continued high levels of activity in the Water business under the ongoing Asset Management Program and frameworks, and positive demand fundamentals in other Global business units.

Stantec anticipates adjusted EBITDA margin will be in the range of 16.7% to 17.3%, reflecting strong project margins driven by solid project execution and continued discipline and enhanced strategies in the management of administration and marketing costs, including expanding the use of our high value centers, optimizing digital strategies, and increased efficiencies from improving scale in certain geographies. Adjusted EBITDA margin in Q1 and Q4 2025 will be near or below the low end of this range because of the additional effects of regular seasonal factors in the northern hemisphere, offset by moving to the higher end of the range or above in Q2 and Q3 of 2025 as seasonal activities increase.

Overall, Stantec expects to drive adjusted net income to a margin of greater than 8.8% of net revenue and to deliver 16% to 19% growth in adjusted EPS in comparison to 2024.

The above targets do not include any assumptions for additional acquisitions given the unpredictable nature of the size and timing of such acquisitions, or the impact from share price movements subsequent to December 31, 2024 and the relative total shareholder return components on our share-based compensation programs.

Full-Year 2024 Financial Highlights

• Net revenue increased 15.8%, or $800.4 million, to $5.9 billion compared to 2023, primarily driven by 7.4% organic growth and 7.5% acquisition growth. Stantec achieved organic growth in all of its regional and business operating units with the exception of Energy & Resources which remained consistent. The Company achieved double-digit organic growth in its Water and Buildings businesses.
• Project margin increased $451.0 million, or 16.4%, to $3.2 billion and, as a percentage of net revenue, project margin increased by 30 basis points from 2023 to 54.5% as a result of net revenue growth and solid project execution.
• Adjusted EBITDA increased $149.3 million, or 18.0%, to $980.3 million. Adjusted EBITDA margin increased by 30 basis points from 2023 to 16.7% and decreased by 30 basis points when normalized for the 2023 increase in long-term incentive plan (LTIP) expense that resulted from strong share price appreciation in the prior year. The change in margin primarily reflects higher administrative and marketing expenses as a percentage of net revenue resulting from claim provision estimates increasing to historically normal levels compared to 2023.
• Net income and diluted EPS achieved record highs in 2024. Net income increased 14.2%, or $45.0 million, to $361.5 million, and diluted EPS increased 11.2%, or $0.32, to $3.17, mainly due to strong net revenue growth and solid project margins, partly offset by a non cash lease impairment charge of $34.9 million resulting from our real estate optimization strategy and higher administrative and marketing expenses as a percentage of net revenue.
• Stantec continued to execute on the real estate optimization objectives outlined in its 2024-2026 Strategic Plan and drove approximately $0.08 adjusted EPS savings while reducing its footprint by over 6.0% relative to 2023 baseline.
• Adjusted net income increased 23.5%, or $95.9 million, to a record high of $504.3 million, representing 8.6% of net revenue, up 50 basis points compared to last year. Adjusted diluted EPS increased 20.4%, or $0.75, to $4.42. The LTIP revaluation had a downward impact on adjusted diluted EPS of $0.03 in 2024 and $0.24 in 2023.
• Contract backlog stands at $7.8 billion-a 24.1% increase from December 31, 2023-reflecting 9.7% acquisition growth and 8.5% organic growth. Organic backlog growth was primarily achieved in Stantec's Canada and US operations, with Water attaining 24% organic backlog growth. Contract backlog represents approximately 13 months of work.
• Net debt to adjusted EBITDA was 1.2x at December 31, 2024-within our internal range of 1.0x to 2.0x.
• Operating cash flows increased 16.0% from $520.0 million to $603.1 million, reflecting continued strong cash flow generation, growth, and operational performance.
• Days sales outstanding was 77 days at December 31, 2024, consistent with the prior year, remaining within Stantec's target of 80 days.
• On February 24, 2025, Stantec's Board of Directors declared a dividend of $0.225 per share, payable on April 15, 2025, to shareholders of record on March 28, 2025, representing a 7.1% increase.

Fourth Quarter 2024 Financial Highlights

• Net revenue increased 19.0%, or $236.2 million, to $1.5 billion, driven by 9.3% organic growth and 7.6% acquisition growth. Stantec achieved organic growth in all of its regional and business operating units, attaining double-digit organic growth in the United States and in its Water and Buildings businesses.
• Project margin increased 21.5%, or $143.8 million, and increased 110 basis points as a percentage of net revenue from 53.9% to 55.0%, primarily due to higher project recoveries and change order approvals in the quarter as well as strong project execution.
• Adjusted EBITDA increased 26.7%, or $51.9 million, to $246.5 million. Adjusted EBITDA margin increased by 100 basis points over Q4 2023 to 16.7% and increased by 30 basis points after normalizing for the LTIP revaluation.
• Net income increased 39.0%, or $27.5 million, to $98.0 million and diluted EPS increased 36.5% to $0.86, mainly due to strong net revenue growth and solid project margins.
• Adjusted net income increased 38.1%, or $34.8 million, to $126.2 million, representing 8.5% of net revenue, up 110 basis points compared to Q4 2023. Adjusted diluted EPS increased 35.4%, or $0.29, to $1.11. The LTIP revaluation had no impact on the Company's Q4 2024 adjusted diluted EPS and a downward impact of $0.08 in 2023.

Q4 and Full-Year 2024 Financial Summary

Net Revenue by Reportable Segment

Full-Year 2024