Stantec Inc

Welcome to Stantec's second quarter 2026 results webcast and conference call. Leading the call today are Gord Johnston, President and Chief Executive Officer, and Vito Culmone, Executive Vice President and Chief Financial Officer. Stantec invites those dialing in to view the slide presentation, which is available in the investor section at stantec.com. Today's call is also webcast. Please be advised that if you have dialed in while also viewing the webcast, you should mute your computer as there's a delay between the call and the webcast. All information provided during this conference call is subject to the forward-looking statement qualifications set out on slide two, detailed in Stantec's management's 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 Mr. Gordon Johnston. Please go ahead, sir.

Good morning, everyone, and thank you for joining us today. Our second quarter financial results continue to showcase the strength of our business. Stantec's diversification across operating regions and across sectors has kept us on track to deliver on our financial targets for the year. In the second quarter, we grew our net revenue to $1.8 billion, up almost 12% compared to Q2 2025, driven by almost 4% organic and 7% acquisition growth. Organic growth was driven by double digit growth of approximately 13% in our global region. and our industry leading water business achieved close to 12% organic growth. Adjusted EBITDA increased over 17% and we achieved an adjusted EBITDA margin of 18.7%, a record for Q2 and this represents an increase of 90 basis points year over year. Adjusted EPS grew over 18% compared to Q2 2025. Looking at our results in each of our geographies, In the second quarter, U.S. net revenue increased almost 13%, driven by the acquisition and strong performance of Page. Underlying demand across our end markets remains very strong, supported by long-term investments in infrastructure, energy, transportation, water, and advanced manufacturing facilities. Our water business saw continued demand and work on large wastewater treatment projects. In energy and resources, work on a major hydropower dam project drove organic growth and our infrastructure business delivered growth through data center projects in our north central region and benefited from favorable recoveries on a large transportation project. While organic growth was flat in the quarter, driven by some delays and the slower ramp up on certain projects, we've already started to see positive signs of acceleration in Q3 and expect this trend to continue. throughout the back half of this year. In Canada, second quarter net revenue grew 2.4% organically. Double digit organic net revenue growth in our water business was driven by biosolids projects and continued momentum on wastewater projects. Robust net revenue growth was also achieved in both our buildings and environmental services businesses through public sector investment, primarily in our civic markets and an increase in environmental planning in the mining industry respectively. Our infrastructure business continued to experience a wind down of certain transit and roadway projects in accordance with anticipated project cycles. Lastly, our global business delivered over 18% net revenue growth in the second quarter, driven by almost 13% organic and over 2% acquisition growth, as well as positive foreign exchange impacts. Our industry-leading water business delivered over 20% 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. On a year-to-date basis, Our global operations also had modest growth in its infrastructure business, driven primarily by double digit organic growth in Germany due to momentum on a major public sector electrical transmission project and increased volume on transit and rail projects. I'll now turn the call over to Vito to review our second quarter financial results in more detail.

Thank you, Gordon. Good morning, everyone. Strong operational execution supported by sustained demand across our diversified multi-sector and multi-regional platform continues to deliver solid financial results. At the mid-year point of 2026, we are firmly on track to deliver against all of our financial guidance metrics. In the second quarter, we achieved gross revenue of $2.2 billion and net revenue of $1.8 billion, an 11.5% increase compared to Q2 of 2025. This growth was driven by 3.7% organic and 7.1% acquisition growth, which primarily reflects strong results from our global region and from the page acquisition, respectively. Project margins as a percentage of our net revenue increased 30 basis points to 54.5%. We achieved an adjusted EBITDA margin of 18.7% in the quarter, A 90 basis point increase compared to Q2 of 2025. On a trailing 12 month basis, our adjusted EBITDA margin is 18%, an increase of 80 basis points compared to the prior trailing 12 months. The growth in margins continues to be driven by a methodical and disciplined approach to all aspects of our business. It all starts with a continued focus of execution and servicing of our client needs. The work we do is of meaningful value across all of our sectors and regions, and our focus remains on enabling superior outcomes for our clients, all the while focusing on efficient management of our operations and the optimization of our discretionary spending. On the back of our increase in net revenue and the expansion of our margins, our adjusted EPS in the second quarter increased 18.4% to $1.61.