Stantec Inc

Welcome to Stantec's first quarter 2026 results webcast and conference call. Leading the call today are Gord Johnston, President and Chief Executive Officer, and Vito Comone, 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 being webcast. Please be advised that if you have dialed in while also viewing the webcast, you should mute your computer as there is a delay between the call and the webcast. All information provided during this conference call is subject to the forward-looking statements qualifications set out on slide two, detailed in Stantec's management 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 Gord Johnston. Please go ahead, sir.

Good morning, everyone, and thank you for joining us today. Our first quarter results reflect a solid start to the year, underpinned by continued strong execution and our diversified platforms. we are well positioned to continue building momentum through the balance of the year. Macro trends across water, aging infrastructure, mission critical facilities and the energy transition continue to support strong long-term demand for our services. While the operating environment remains dynamic, we remain focused on execution, prioritizing the right work and continually driving strong operational performance. In the first quarter, We grew our net revenue to $1.7 billion, up over 9% compared to Q1 2025, driven by 3.6% organic and 7.2% acquisition growth. Organic growth was achieved in all of our regional operating units. Our water and energy and resources businesses achieved over 14% and almost 9% organic growth, respectively. Adjusted EBITDA increased close to 14% year over year, and our adjusted EBITDA margin increased to 16.9%, a year-over-year increase of 70 basis points. Adjusted EPS grew almost 15% compared to Q1 2025. Looking at our results in each of our geographies, in the first quarter, U.S. net revenue increased 11%, driven by 12.5% acquisition growth from Page and almost 3% organic growth. Our water business achieved double-digit organic growth, primarily due to activities on large wastewater treatment projects. In energy and resources, work on a major hydropower dam project contributed to solid organic growth, and our infrastructure business continued to deliver growth through data center projects in the north central region. We're seeing a number of our major clients consolidating work and awarding larger, more integrated programs to a smaller set of trusted providers like Santec. Activities beginning to ramp up across these programs, and we expect this to continue throughout 2026. In Canada, first quarter net revenue grew just over 1% organically. Strong organic net revenue growth in our water business was driven by biosolids projects and continued momentum on wastewater projects. Robust organic net revenue growth was also achieved in both our energy and resources and buildings businesses. through consistent progress on major industrial process projects and public sector investments, primarily in civic markets, respectively. While our infrastructure business experienced the wind down of certain transit and roadway projects in the quarter, we expect a ramp up of new projects to commence in Q2. Lastly, our global business delivered over 13% net revenue growth in the first quarter, driven by almost 8% organic and 3% acquisition growth, as well as positive foreign exchange impacts. Our industry-leading water business delivered 15% organic growth this quarter through long-term framework agreements and public sector investments in water infrastructure across the UK, Australia, and New Zealand. The wrap-up of new projects in Chile and Peru drove strong organic growth in energy and resources, as the growing need for energy transition solutions continues to drive demand in mining for copper. And we achieved double digit organic growth in our German infrastructure business due to continued momentum on a major public sector electrical transmission project and increased volume on transit and rail projects. Before handing the call over to Vito, I want to briefly highlight our 19th annual sustainability report, which we released in April. Accomplishments from the report include approximately 5.5 billion or 68% of total revenue was generated from work aligned with the UN sustainable development goals. We achieved operational carbon neutrality for the fourth consecutive year while continuing progress towards our net zero commitments under Canada's net zero challenge. And we maintained an A minus CDP climate score for the eighth consecutive year. reflecting sustained external recognition of our climate action efforts. Sustainability is a core driver of Stantec's strategy, shaping the markets we serve, the projects we pursue, and how we deliver work, all of which support long-term growth. I'll now turn the call over to Vito to review our first quarter financial results in more detail.

Thank you, Gord, and good morning, everyone. As Gord noted, we achieved solid financial results in the first quarter. Sustained demand across a diverse multi-sector platform combined with strong operational execution continues to support these strong results. In the first quarter, we achieved gross revenue of $2.1 billion and net revenue of $1.7 billion, an increase of 9.1% compared to Q1 of 2025. This growth was driven by 3.6% organic and 7.2% acquisition growth. Project margins as a percentage of our net revenue once again remained in line with our expectations at 54%. We achieved an adjusted EBITDA margin of 16.9% in the quarter, a 70 basis point increase compared to Q1 of 2025. The growth in margin was primarily due to lower admin and marketing expenses as a percentage of our net revenue and reflects ongoing discipline management of our operations. And our adjusted EPS in the first quarter increased 14.7% to $1.33. Turning to our cash flow liquidity and capital resources, during the first quarter, our net operating cash outflows totaled $2.3 million. The first quarter is typically a seasonally lower quarter for cash flow generation. Further, the Q1 results reflect the expected transitory disruption associated with the financial migration of page and the higher investment in working capital funding, the elevated organic growth in our global region required. Our DSO at the end of the first quarter was 74 days, an improvement of three days compared to Q1 of the prior year. and below our internal target of 75 days. Our net debt to adjusted EBITDA ratio remained at 1.3 times, and this is within our internal target range of 1 to 2 times. And our balance sheet remains very strong, leaving us well-positioned for future acquisition growth. I'll now hand the call back over to Gord to discuss our backlog, our recent project wins, and our outlook for 2026.