STANTEC INC — Call Transcript 2026

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 Culmone, 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 platform. 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 CAD 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 Stantec. Activity is 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 U.K., Australia, and New Zealand. The ramp-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. 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 wanna briefly highlight our 19th annual Sustainability Report, which we released in April. Accomplishments from the report include: approximately CAD 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. We maintained an A- 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. 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 CAD 2.1 billion and net revenue of CAD 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 disciplined management of our operations. Our adjusted EPS in the first quarter increased 14.7% to CAD 1.33. Turning to our cash flow liquidity and capital resources. During the first quarter, our net operating cash outflows totaled CAD 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 1.3x. This is within our internal target range of 1x-2x. 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. Great. Thanks, Vito. At the end of Q1 2026, our contract backlog reached a record of CAD 9 billion, a 13.2% increase year-over-year, representing approximately 13 months of work. Acquisitions completed in 2025 contributed to backlog growth of over 9%, primarily within our buildings business. Backlog grew 5.4% organically year-over-year. Most notable year-over-year organic growth was achieved in our global region, which delivered double-digit growth of 22%. We also saw strong backlog growth in our water and buildings businesses, both achieving nearly 10% organic growth. I'll note that in the U.S. we continue to see procurement cycle activity picking up as we delivered another quarter of consecutive organic backlog growth. When compared to Q4 2025, backlog increased over 3% organically, which follows the 3% organic growth that we saw from Q3 to Q4 of last year. I'll now highlight a few projects Stantec secured over the quarter. These wins help demonstrate the breadth of opportunities we're capturing, varying in size, scope, and complexity. Drawing upon extensive experience in advanced manufacturing, our buildings team was selected to provide design services during the construction phase of a multi-billion dollar semiconductor manufacturing and research and development facility in Idaho. This project includes on-site water treatment facilities and five ancillary support buildings. Our infrastructure team, as part of a joint venture, was selected to lead the design of the first fully electric light rail system in Austin, Texas. This project includes a 10-mile, 15-station transit corridor where we will deliver full multidisciplinary design across tracks, stations, bridges, systems, utilities, drainage, and streetscape improvements. In Chile, our energy and resources team was selected to provide oversight and quality review for a tailings management facility, reflecting our continued strength in supporting complex mining infrastructure projects. Our scope spans earth moving, civil, piping, geosynthetics, and electromechanical systems. Our work will continue through construction and commissioning, including tailings pumps, water systems, piping, and electrical components. As we look toward the remainder of the year, we are reaffirming our 2026 financial targets, including net revenue growth, which is expected to be in the range of 8.5%-11.5%, with organic net revenue growth in the mid to high single digits, driven by strong demand across all geographic reporting segments and business units. In the U.S., organic growth is expected to accelerate, supported by the demand across all five of our business verticals. We are also encouraged by the growing demand in key areas such as data centers and defense, as well as in advanced manufacturing. In Canada, we expect to see growth driven by public sector spending plans and continued demand in energy and resources. We continue to see good momentum in defense and other nation-building efforts following the recent announcements by the Canadian government. While still in early stages, these programs are expected to contribute to growth well beyond 2026. Related to defense, Stantec has completed work on 16 national defense and Canadian forces bases across Canada, and is currently supporting projects that advance national sovereignty from coast to coast to coast. The Canadian Defence Review recently named Stantec within its list of top 100 defense companies in 2026. Lastly, global is expected to maintain strong organic net revenue growth, driven by continued high level of activities in our water business under AMP8 and other framework agreements, strong demand in energy and resources, and positive demand fundamentals across other global business units. With our continued focus on operational excellence, we expect our adjusted EBITDA margin will continue to expand to a record range of 17.6%-18.2%, and we expect to deliver 15%-18% growth in adjusted EPS compared to 2025. I would note that these targets do not include any assumptions related to additional acquisitions, given the unpredictable nature of the timing and size of such transactions. On M&A, we are starting to see more buyers in the market, particularly private equity. We remain active evaluating opportunities while maintaining our disciplined approach. We continue to see a healthy pipeline of firms coming into market. We remain confident that M&A represents the best use of our capital. As we close out the final year of our 2024 to 2026 strategic plan, we continue to be grounded in disciplined execution while preparing Stantec for what comes next. We are confident in our positioning and our ability to continue delivering strong performance and long-term value for years to come. With that, let me turn the call over to the operator for questions. Operator? Certainly. Our first question for today comes from the line of Frederic Bastien from Raymond James. Your question please. Good morning. Good morning. How are you? We're doing good. Thank you, Frederic. How are you? Good. Good. Thanks, guys. Listen, investors have come to expect Stantec to direct its next dollar of investment towards M&A, and Gord, you just said as much in your prepared remark. You know, how do you think about share purchases as the current dynamic around AI and just the pressure on public valuations, this narrative and this dynamic evolves? How do you think about share buybacks in this light? Yeah. Thank you, Frederic. Maybe I'll take that one. You're absolutely right. I mean, at the end of the day, fundamentally, we really continue to believe that strategic acquisitions present the highest value creation opportunity for our organization going forward. Stock buybacks are definitely a tool in our capital structure optimization toolbox, if you will. As you are describing and, you know, insinuating, I think, frankly, at these valuations levels, it's becoming increasingly hard to ignore not getting into the market and buying back stock. Look out for that as we move into our open windows here post the quarter. You know, having said that, the quantums and values contemplated, if you take into account our 2% approved in NCIB, in the scope of our balance sheet, is not overly significant and in no way would impede our M&A strategies. Thank you for the question. I appreciate the answer, Vito. Thinking more higher level on, I guess, on the organic growth front, you still the most excited about the opportunities in the U.S. or, I mean, based on your comment around Canada and, you know, defense spending, nation-building initiatives, sounds like Canada could be a great area for growth on a go-forward basis? You know, I think we see great opportunities both north and south of the border. You're right, you know, Canada started the year a little bit slow on the organic growth side. What's interesting, and we talked in the prepared remarks there about how infrastructure pulled back on a couple, you know, transportation projects that we had. We see that filling, you know, those being filled up here again in Q2. Other than that, every one of our businesses came into that mid to high single organic growth for the quarter, just pulled down a little bit by infrastructure. We're lapping a high comp, you know, it was 12% in Q1 of 2025. If you look at the Canadian business, backlog up 6% organically over the year. When you look at the opportunities, as you've said, the, with the, you know, with the federal government that in the North, the, our first defense industrial strategy, the Arctic Infrastructure Fund, you know, the Build Communities Strong Fund. There's just so much good directional activity going in Canada. You know, we do feel very good about it. We've talked before about the Arctic Over-the-Horizon Radar that we're working on, but there's a lot of opportunities coming up in the North, Frederic, that we feel really good about. Not to discount the U.S. at all. You know, we saw that in the U.S., you've seen our backlog, sort of that momentum continue to build in backlog, a little over 3% organic backlog growth this quarter, building on about 3% organic backlog growth, you know, in the last quarter. I think we see that coming and strengthening as well. We feel pretty good about North America overall. Thank you. That's all I have. Thanks, Frederic. Thank you. Our next question comes from the line of Krista Friesen from CIBC. Your question please. Hi. Thanks for taking my question. I'm just wondering if you can give a little bit more color in terms of what you're seeing from the Canadian government. Like, a lot of announcements have been made. Are we seeing that translate into awards at that point in time? Do you feel like some of the red tape has been cut here in terms of what we've historically seen from the government? You know, we certainly have seen some awards. You know, we've all talked about Arctic Over-the-Horizon Radar, there's a number of additional either proposals that we're waiting for. In fact, what's interesting as we look at the amount of opportunities, I think you'll see us being pretty discerning as to which ones we pursue because there's so many coming that we'll be looking at it pretty closely. Great opportunities there. You saw that we are named 42 in the top 100 Defense Canada's ranking. Just a lot of opportunity coming there. Krista, you know, in terms of has red tape been reduced, do we see a difference in the permitting process at this point? I think that's still evolving, you know, and we'll see more. We also note that Prime Minister Carney's coming to Alberta on Friday, we'll see what he has to say there. We certainly have some expectations of an announcement as well, which would be directionally positive for us. Indeed. Okay, that's great. Just on the M&A side, can you comment what you're seeing in terms of multiples out there for the private companies and how much of a dislocation, I guess, there is between that market and the public markets and what we're seeing? Thank you. Yeah, I'll take that one maybe, Gord, if you want. Sure. I mean, we definitely see You know, when you talk valuations on the M&A side, it's obviously very specific to sectors. You've seen some transactions occur obviously over the last several weeks and, largely on the power side that has you in the, you know, the high teens sort of area. If you look at that compared to obviously where we're trading, there's significant sort of dislocation there, but that's the power assets. I'd say right now with what's going, you know, back to almost Benoit's question, excuse me, Frederic's question around valuations, we are seeing a dislocation of valuation that I think over time, obviously, there'll be some convergence. Valuations overall are obviously very company sector specific and we'll continue to monitor that and be disciplined as we make our way through. Thank you. Appreciate the color. Great. Thank you, Krista. Thank you. Our next question comes from the line of Benoit Poirier from Desjardins. Your question please. Good morning, Gord. Good morning, Vito. Just to come back on the U.S., obviously, you've talked about the softer start with 2.8% organic growth. I was wondering, any weaker contribution from emergency response? Is the retraction in building that we saw, given the completion of certain projects, going to impact Q2 as well? I'm just trying to get some thoughts, where there's a slowdown on IIJA fund flows or anything else, would be appreciated. Yeah. You know, in the buildings business, you know, we did have a soft start to the year in Q1. That said, the backlog in our buildings business, you know, year-over-year, and actually even quarter over Q1 of this year over Q4 of last year, you know, we're seeing some positive growth in buildings momentum. You know, similar to in Canada, where infrastructure was the only group that we had that retracted and because of some project wind downs, it was the same in the U.S., that buildings was the only group we had that retracted a bit organically. Everything else grew. As building sort of strengthens here in Q2 in the last half of the year, I think that'll be generally supportive to our overall growth there in the organic growth in the U.S. Overall, backlog growth, we talked about sequential growth in, you know, this quarter and the previous quarter. Both in Canada and the U.S., we actually have a considerable amount of notified awards that hasn't yet been contracted also that we'll see that going into backlog here in Q2 and beyond. We actually feel pretty good about where we are and how the year is gonna shape up. The only other thing I'd add to that, Gord, is Benoit, with respect to the buildings practice, we're really excited about the Page acquisition. Obviously, our Page revenue and business is being reported through our acquisition sort of reporting. Year-on-year, some really nice healthy organic growth in the Page business. Those, Page and our reported organic building sector are working hand in hand, and we're very pleased with how that is evolving as we look forward to the full year. Maybe I just add on. With Page, I think our revenue synergies are even exceeding what we had hoped that we would see there. It's the two groups together are very, very strong. Okay. That's great color. On the global side, you were able to achieve 15% organic growth. That was pretty impressive. You call out the strong performance on water, but also the ramp-up of projects in Chile and Peru. Just wondering about the sustainability of the double-digit performance going forward. Thank you. You know what? When we look at the water segment in the, with the AMP8, you know, we've been talking about that for some time, that just continues to ramp up. We feel really good about that. Actively hiring everyone we can get our hands on in the U.K. You would have seen that finally now we're able to talk openly about Scottish Water because they've press released it now, how, you know, we're one of the primary design partners there. That's going to continue to ramp up active hiring there. We're hiring a lot in India to support these groups as well. That's very sustainable. When you look into our South American operations, again, primarily supporting copper, you know, with the continued run-up in and need for copper to support energy transition and such. You know, we're seeing really strong growth in our mining segment there. Actively hiring there. Interestingly, we're also starting to even more use our Indian delivery centers to support our Latin American operations as well, just because of the, you know, with the growth there, it's easier to get some folks elsewhere. Yeah, we're feeling good about that, really good about our global delivery center as well. Okay. Where would you be right now in terms of employees in those global centers, Gord? We're sitting just shy, right around 2,000 people, which is where we wanted to be sort of by the end of this year. We might achieve that goal even a little bit early. What's interesting is that we've, you know, we targeted about 2,000 people. As we continue to grow there, we've actually taken a second office in Pune as well. We've expanded within our existing office till there's no more space available. Now we've taken additional real estate. We're starting to hire some people in some other cities as well to support our continued growth. More to come there. Yeah. Just a shout-out to that team. They're extraordinary, and we thank them for their commitment. They are part of Stantec. Very interesting comments. Thank you very much for your time. Thank you. Thank you. Our next question comes from the line of Sabahat Khan from RBC Capital Markets. Your question, please. Hi, good morning, guys. This is Patty on the line for Sabah. Morning. Good morning. Maybe get a bit more color on the kind of puts and takes and drivers of the pretty good margin expansion in the quarter. Looks like you're tracking, at this rate, you know, pretty positively against your full year guidance. Looks like some leverage on the administrative and marketing expenses. Was wondering if you could kind of give color on that as well as some of the more mix-driven contractions, I guess, in project margins... Yeah ...across the business and maybe the timeline or how you expect those to play out through the rest of the year. Yeah, Patty, thanks for the question. It's Vito here. I'll take that one. You know, when we talk about margin, it always starts with obviously, you know, the right project, the right customer, the right pricing mechanics, and then, you know, strong operational execution. And I always go straight to the, you know, the project margin line as the first line of sight there. Project margins were steady this quarter, year-over-year. 54%, I think, was the number, just slightly lower than prior year, and that was largely mix related. Our global business continues to grow, which is wonderful. The margin profile there in some certain sectors, just a bit below maybe other areas. We've talked a little bit about the water business AMP8, incredible volume year-over-year, slightly lower margins, as expected, obviously very pleased with that business and the work the teams are doing. I would describe project margins evolving in a normal expanding sort of continuum there. Nothing unusual with that activity. What you're seeing as far as overall margin expansion then really comes down to the admin and marketing, and you referenced that. Our admin and marketing in Q1 was 38.3% of our net revenue, and that was just over 100 basis points lower than prior year. The drivers there really are we had improved utilization. That's very important. As the teams look to obviously hire, you heard Gord Johnston describe the strong demand environment as we move forward, while obviously putting people to work and obviously continuing to invest in billable hours and leveraging our back office as appropriate. We're really pleased with how the operations as it continues to evolve in that regard and managing overall utilization. You know, we're getting scale from our operations. That's our continued expectations of that. It's been several quarters that you've been seeing that in effect, and Q1 just continued to manifest that. I think it's the sixth or seventh consecutive quarter, perhaps of year-over-year margin expansion for us, bottom line. Very, very pleased with our margin performance. Obviously, you see that reflected obviously in our full year guidance where we guided to, you know, no changes in the guidance. Too early to make any changes, but 17.6% to 18.2% is a real step forward, building on the 90 basis point improvement in 2025 versus 2024. All right. Thanks. That's helpful color. Maybe just kind of going back to the demand of our environment in the U.S., we could hear your updated thoughts on the outlook for IIJA funding and maybe some of the new or the more emerging tailwinds. I think you had recently mentioned that you're working on a handful of kind of hyperscaler data centers, representing more than a couple of gigawatts of capacity. Just kind of your updated thoughts on that and how you feel about the region going forward, that'd be helpful. Absolutely. Yeah. For IIJA, you know, what we've talked about before, and you've heard others talk that, you know, that bill for new awards expires in September of this year. We're seeing, you know, more and more people talking about trying to get out ahead of time, make sure they get their allocations before September. It's, you know, we often get asked, "Do you think it'll all be allocated by September?" That's hard to say 'cause it's harder to get at some of the data than it would. Of course, important to note that with those IIJA-funded projects, even though that program ends at the end of September for new awards, revenue will continue to be generated on that project for the next three to five years. That's the sort of the dynamic, the period of time it takes to process those transportation projects. Parallel with that, you know, the new Surface Transportation Act reauthorization, which will provide stable funding for the next five years, is still in process, anticipated to be in that CAD 500 billion-CAD 600 billion range. We, you know, we're expecting the draft bill from the House is coming. The Senate version's not expected until June. It's not expected to pass before the end of the year, but certainly we see, you know, there'll be good bipartisan support for that. You mentioned the data centers mission critical. Absolutely. You know, that work continues to go. We're working still with the top for five of the top hyperscalers and, you know, up to and well over a gigawatt. We talked about in the prepared remarks about this multi-billion dollar semiconductor manufacturing and research and development facility in Idaho that we're working on now. We do see a lot of still great opportunities coming in the U.S. We feel, you see, you know, The momentum is coming there, 3% of growth per quarter over the last couple. You know, we feel good about the U.S. All right. That's very helpful. Thanks again. Thanks, Patty. Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. Our next question comes from the line of Maxim Sytchev from NBCM. Your question please. Hi, good morning, gentlemen. I just wanted to circle back to environmental services. Like, obviously, I realize that very often that segment acts as a sub to other verticals, but how should we think about sort of the inflection point there, especially as energy and resources is showing some pretty strong organic growth? Thank you. You know what? Interestingly, we've seen some good projects come into that Environmental Services group, some with the U.S. federal government, some with other groups, just looking to continue to push that forward. You're right, they do support a lot of newer projects, but they're also engaged in, you know, everything from, you know, the first part of pipelines that we've seen some significant organic, some backlog growth in Canada in that space. There's some good things happening in the ES space. You see, you know, organic growth in Q1, you know, little bit lighter at 1.2%, 1.5% last year, but I think we'll see that begin to continue to increase as we go through the year. Okay, that's good to hear. Maybe a question for you too. Page obviously delayed some of the working capital kind of normalization. When should we see kind of, you know, full run rate, kind of, you know, similar to Stantec's sort of standards? Can you maybe comment there, please? Thanks. Yeah. Financial migration was completed here in Q1, so our expectations would be that we are back in line and pretty well on pace here as we move through Q2 and Q3, Maxim. Not concerned about that or don't expect any significant impact moving forward. Of course. Makes sense. Then just more sort of a general question, you know, around, you know, AI and procurement methodologies. Are you seeing any pushback or demands from your customer set around, you know, sharing costs or sharing maybe upside from, you know, faster design? Do you mind maybe providing any color in terms of how these conversations are going or maybe not? Thank you. Yeah. A couple of things there. We've actually partnered with a number of our clients for the like co-creation of some AI applications. You know, an example that is down in the U.S., you know, at WSSC Water in Prince William County. You know, we're kind of partnering with them for the co-development of some AI-enabled wastewater operations space. We're working with some on digital twin development. Interesting, you know, we're seeing AI, you know, our usage, you know, continue to expand with our client base. You know, what we find is it's providing us with some new service opportunities. I'll give you example of that. In Taiwan, we recently worked with our client there and developed a digital twin of a water treatment plant, and we integrated it with some AI-driven operational models. Taiwan, of course, very mountainous area. When you get a heavy rain, not only does the water flow down towards the rivers, but so does the sediments. That increases turbidity in the water. What we do then is, using our AI models, we simulate not just the water, but the turbidity. How could the plant operations be varied in order to, you know, to deal with this water? The beautiful part of it is while we absolutely, the AI system could control the, you know, the operation of the plant from there's always a person in the middle. You know, this is a public water supply, so we give all that information to the operator, they make their decision. Then using the digital twin, you know, we can watch the dosing of the chemicals change, we can watch how the plant operations changes. That's sort of that getting into the operational phase as a new service offering for us. We, you know, consult on that often, but providing this product is new for us. Interestingly, it's working really well, and it's one of the reasons that we were recently awarded a really large water treatment plant design in the Middle East. The beauty of that is that we're getting new work from it. There's others and maybe, where we've used AI. We designed a beach club on one Caribbean island recently, and that was a fixed fee job. There, you know, we had our fixed fee. We were able to do the design a bit quicker. We did not see, we don't see clients at this point asking for a reduction in that fixed percentage of capital costs. Might that come at some point in the future perhaps, but we're not seeing it yet, Max. We're seeing some good things happening there. Yeah, absolutely. That's great color. Thank you so much, Gord. Great. Thanks. Thank you. Our next question comes from the line of Michael Tupholme from TD Cowen. Your question please. Thank you. Good morning. Morning. Just a question about the overall organic growth and the progression from here. Obviously maintaining the mid to high single-digit organic growth guidance for full year. Just if you can help us think through how that progression will play out over coming quarters, like will Q2 get you right into that range, or is this more of a building process throughout the year? Yeah. Sorry, no, we expect a sequential organic growth improvement. I mean, it's obviously hard to time quarters and what that might look like. Definitely as we move into the back half of the year and set ourselves up for 2027, our expectations would be that you'd see a ramp through the organic, particularly off the Q1 levels. Okay. Perfect. That's helpful. Then there was some commentary just a few moments ago about data centers. Gord, I know you've been asked this in the past, but can you give us an update on sort of what percentage of the business that is today, given the growth you're seeing and how you maybe see that looking as we maybe look out to, say, next year, 2027, just percentage of overall revenue? Yeah, you know, it's sitting in and around that 3% range, and it's certainly growing quickly. You know, we could see it doubling, you know, to the 5%-6% range. You know, one of the things that we've talked about before is that I would never wanna see it for our company to get up in 15%-20% because, you know, while it's good work and it's high margin work, you know, we just wouldn't want to be so exposed to one line of business. You know, we'll take the good questions. It's good work and, yeah, I could see it doubling to that 5%-6% range. Okay. That's helpful. I will leave it there. Thanks. Thanks, Michael. Thank you. Our next question comes from the line of Jonathan Goldman from Scotiabank. Your question please. Hey, good morning, team. Thanks for taking my questions. Just one for me. The larger projects that you're booking in the U.S., is it possible to quantify or maybe directionally talk about how big those projects are relative to the average size project you do in the U.S.? Maybe also if you can talk about how the delivery kind of period or the conversion of those projects would compare to an average size order. Is this part of a bigger trend moving to more complex and larger projects than in the past? We are absolutely seeing a number of clients, both in Canada and in the U.S. that are sort of bundling large packages of projects together, in part because rather than them then having to run 10 projects, they run two, for example. But they're much larger. We are seeing the competitive set on those is much different because it's really only the big majors that can pursue those. The competitive set is different, which allows a little bit of pricing power in a number of instances. It's while an average project size might be in the CAD 100 thousand, couple hundred thousand CAD range, these ones could be in the CAD 100 million to a couple hundred million CAD range. There's some big projects out there. For us, it changes the way that we manage them. We have, there's a smaller number of people within Stantec and the industry overall that can manage projects of that size. We're fortunate to have more than our fair share of them. We do see that being a growing part of the business. What's interesting about those projects is that, you know, they do typically take a little longer to ramp up. They go at a high level for multiple years, three, four, five years, before they ramp down. The magic in the Stantec model is being able to service those long duration projects, but as they're ramping up and ramping down, you use your smaller projects to fill in those ramp up and ramp down projects. That's a little bit of the beauty of the Stantec model, is that we can service both the smaller projects and the larger projects, keeping our utilization rates up, keeping our people engaged sort of at all phases of. Gord, all I'd add there is, you know, I love the way that's evolving from a competitive perspective for reasons you've described, in no way, shape, or form from a diversification perspective or from a concentration perspective does this create an issue for us in any way. The organization is so large across both our sectors and across our geographies that no single project in any way, shape, or form is makes it problematic from a cycling perspective and overall exposure perspective. Interesting. Gord, your comment about maybe bundling projects together. Is this multiple projects from a single customer that are flowing to kind of single source for, you know? Yeah You know, E&C rather than a bunch, or is it multiple phases of a project that they used to be outsourcing to a broader set of suppliers? Yeah, it's more a series of projects that they would bring together, you know, where they used to maybe issue, you know, two, three or four requests for proposals, run two, three or four concurrent projects. We're seeing sort of some bundling of multiple sort of independent projects, but also to your point, in other cases it's bundling all the phases together. 'Cause, you know, for them to go out and procure takes a lot of time and effort as well. The less times you can go to have to procure, then the, you know, the better it is for them, better it is for us actually as well. Interesting. Sounds like a good trend. Thanks for taking my question. I'll get back. Thank you. Great. Thank you. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Gord Johnston for any further remarks. Very well. Only to say, you know, thanks to everyone for joining us this morning. I know it's a busy morning there. If you have any follow-up questions following today's call, please reach out to Jess Nieukerk, our VP of Investor Relations. Enjoy the rest of your day. Thank you. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Speaker 8: 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 Culmone, 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. Welcome to Stantec's first quarter 2026 results webcast and conference call. 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 Culmone, Executive Vice President and Chief Financial Officer. 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 investors section at stantec.com. 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. 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. 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. 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. 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. With that, I'll turn the call over to Gord Johnston. with that i'll turn the call over to gord johnston Please go ahead, sir. please go ahead sir

Speaker 3: 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 platform. 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 CAD 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. Good morning, everyone, and thank you for joining us today. 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 platform. our first quarter results reflect a solid start to the year underpinned by continued strong execution and our diversified platform We are well-positioned to continue building momentum through the balance of the year. 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. 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. 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 CAD 1.7 billion, up over 9% compared to Q1 2025, driven by 3.6% organic and 7.2% acquisition growth. in the first quarter we grew our net revenue to cad 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. 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. Our water and energy and resources businesses achieved over 14% and almost 9% organic growth, respectively. 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 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. 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. 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. 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. 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 Stantec. Activity is 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. 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 Stantec. 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 stantec Activity is beginning to ramp up across these programs, and we expect this to continue throughout 2026. activity is 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. 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. 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. 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. 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 U.K., Australia, and New Zealand. The ramp-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. 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 wanna briefly highlight our 19th annual Sustainability Report, which we released in April. 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. 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 U.K., Australia, and New Zealand. 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 u.k australia and new zealand The ramp-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. the ramp-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 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. 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 wanna briefly highlight our 19th annual Sustainability Report, which we released in April. before handing the call over to vito i wanna briefly highlight our 19th annual sustainability report which we released in april Accomplishments from the report include: approximately CAD 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. We maintained an A- 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. Accomplishments from the report include: approximately CAD 5.5 billion or 68% of total revenue was generated from work aligned with the UN Sustainable Development Goals. accomplishments from the report include approximately cad 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. we achieved operational carbon neutrality for the fourth consecutive year while continuing progress towards our net-zero commitments under canada's net-zero challenge We maintained an A- CDP climate score for the eighth consecutive year, reflecting sustained external recognition of our climate action efforts. we maintained an a- 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. 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. i'll now turn the call over to vito to review our first quarter financial results in more detail

Speaker 9: Thank you, Gord. 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 CAD 2.1 billion and net revenue of CAD 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. Thank you, Gord. thank you gord Good morning, everyone. good morning everyone As Gord noted, we achieved solid financial results in the first quarter. 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. 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 CAD 2.1 billion and net revenue of CAD 1.7 billion, an increase of 9.1% compared to Q1 of 2025. in the first quarter we achieved gross revenue of cad 2.1 billion and net revenue of cad 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. 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%. 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. 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 disciplined management of our operations. Our adjusted EPS in the first quarter increased 14.7% to CAD 1.33. Turning to our cash flow liquidity and capital resources. During the first quarter, our net operating cash outflows totaled CAD 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. The growth in margin was primarily due to lower admin and marketing expenses as a percentage of our net revenue and reflects ongoing disciplined management of our operations. the growth in margin was primarily due to lower admin and marketing expenses as a percentage of our net revenue and reflects ongoing disciplined management of our operations Our adjusted EPS in the first quarter increased 14.7% to CAD 1.33. our adjusted eps in the first quarter increased 14.7% to cad 1.33 Turning to our cash flow liquidity and capital resources. turning to our cash flow liquidity and capital resources During the first quarter, our net operating cash outflows totaled CAD 2.3 million. during the first quarter our net operating cash outflows totaled cad 2.3 million The first quarter is typically a seasonally lower quarter for cash flow generation. 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. 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 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 1.3x. This is within our internal target range of 1x-2x. 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. Our net debt to adjusted EBITDA ratio remained at 1.3x . our net debt to adjusted ebitda ratio remained at 1.3x This is within our internal target range of 1x-2x . this is within our internal target range of 1x-2x Our balance sheet remains very strong, leaving us well-positioned for future acquisition growth. 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. i'll now hand the call back over to gord to discuss our backlog our recent project wins and our outlook for 2026

Speaker 3: Great. Thanks, Vito. At the end of Q1 2026, our contract backlog reached a record of CAD 9 billion, a 13.2% increase year-over-year, representing approximately 13 months of work. Acquisitions completed in 2025 contributed to backlog growth of over 9%, primarily within our buildings business. Backlog grew 5.4% organically year-over-year. Most notable year-over-year organic growth was achieved in our global region, which delivered double-digit growth of 22%. We also saw strong backlog growth in our water and buildings businesses, both achieving nearly 10% organic growth. I'll note that in the U.S. we continue to see procurement cycle activity picking up as we delivered another quarter of consecutive organic backlog growth. Great. great Thanks, Vito. thanks vito At the end of Q1 2026, our contract backlog reached a record of CAD 9 billion, a 13.2% increase year-over-year, representing approximately 13 months of work. at the end of q1 2026 our contract backlog reached a record of cad 9 billion a 13.2% increase year-over-year representing approximately 13 months of work Acquisitions completed in 2025 contributed to backlog growth of over 9%, primarily within our buildings business. acquisitions completed in 2025 contributed to backlog growth of over 9% primarily within our buildings business Backlog grew 5.4% organically year-over-year. backlog grew 5.4% organically year-over-year Most notable year-over-year organic growth was achieved in our global region, which delivered double-digit growth of 22%. most notable year-over-year organic growth was achieved in our global region which delivered double-digit growth of 22% We also saw strong backlog growth in our water and buildings businesses, both achieving nearly 10% organic growth. we also saw strong backlog growth in our water and buildings businesses both achieving nearly 10% organic growth I'll note that in the U.S. we continue to see procurement cycle activity picking up as we delivered another quarter of consecutive organic backlog growth. i'll note that in the u.s we continue to see procurement cycle activity picking up as we delivered another quarter of consecutive organic backlog growth When compared to Q4 2025, backlog increased over 3% organically, which follows the 3% organic growth that we saw from Q3 to Q4 of last year. I'll now highlight a few projects Stantec secured over the quarter. These wins help demonstrate the breadth of opportunities we're capturing, varying in size, scope, and complexity. Drawing upon extensive experience in advanced manufacturing, our buildings team was selected to provide design services during the construction phase of a multi-billion dollar semiconductor manufacturing and research and development facility in Idaho. This project includes on-site water treatment facilities and five ancillary support buildings. Our infrastructure team, as part of a joint venture, was selected to lead the design of the first fully electric light rail system in Austin, Texas. When compared to Q4 2025, backlog increased over 3% organically, which follows the 3% organic growth that we saw from Q3 to Q4 of last year. when compared to q4 2025 backlog increased over 3% organically which follows the 3% organic growth that we saw from q3 to q4 of last year I'll now highlight a few projects Stantec secured over the quarter. i'll now highlight a few projects stantec secured over the quarter These wins help demonstrate the breadth of opportunities we're capturing, varying in size, scope, and complexity. these wins help demonstrate the breadth of opportunities we're capturing varying in size scope and complexity Drawing upon extensive experience in advanced manufacturing, our buildings team was selected to provide design services during the construction phase of a multi-billion dollar semiconductor manufacturing and research and development facility in Idaho. drawing upon extensive experience in advanced manufacturing our buildings team was selected to provide design services during the construction phase of a multi-billion dollar semiconductor manufacturing and research and development facility in idaho This project includes on-site water treatment facilities and five ancillary support buildings. this project includes on-site water treatment facilities and five ancillary support buildings Our infrastructure team, as part of a joint venture, was selected to lead the design of the first fully electric light rail system in Austin, Texas. our infrastructure team as part of a joint venture was selected to lead the design of the first fully electric light rail system in austin texas This project includes a 10-mile, 15-station transit corridor where we will deliver full multidisciplinary design across tracks, stations, bridges, systems, utilities, drainage, and streetscape improvements. In Chile, our energy and resources team was selected to provide oversight and quality review for a tailings management facility, reflecting our continued strength in supporting complex mining infrastructure projects. Our scope spans earth moving, civil, piping, geosynthetics, and electromechanical systems. Our work will continue through construction and commissioning, including tailings pumps, water systems, piping, and electrical components. As we look toward the remainder of the year, we are reaffirming our 2026 financial targets, including net revenue growth, which is expected to be in the range of 8.5%-11.5%, with organic net revenue growth in the mid to high single digits, driven by strong demand across all geographic reporting segments and business units. This project includes a 10-mile, 15-station transit corridor where we will deliver full multidisciplinary design across tracks, stations, bridges, systems, utilities, drainage, and streetscape improvements. this project includes a 10-mile 15-station transit corridor where we will deliver full multidisciplinary design across tracks stations bridges systems utilities drainage and streetscape improvements In Chile, our energy and resources team was selected to provide oversight and quality review for a tailings management facility, reflecting our continued strength in supporting complex mining infrastructure projects. in chile our energy and resources team was selected to provide oversight and quality review for a tailings management facility reflecting our continued strength in supporting complex mining infrastructure projects Our scope spans earth moving, civil, piping, geosynthetics, and electromechanical systems. our scope spans earth moving civil piping geosynthetics and electromechanical systems Our work will continue through construction and commissioning, including tailings pumps, water systems, piping, and electrical components. our work will continue through construction and commissioning including tailings pumps water systems piping and electrical components As we look toward the remainder of the year, we are reaffirming our 2026 financial targets, including net revenue growth, which is expected to be in the range of 8.5%-11.5%, with organic net revenue growth in the mid to high single digits, driven by strong demand across all geographic reporting segments and business units. as we look toward the remainder of the year we are reaffirming our 2026 financial targets including net revenue growth which is expected to be in the range of 8.5%-11.5% with organic net revenue growth in the mid to high single digits driven by strong demand across all geographic reporting segments and business units In the U.S., organic growth is expected to accelerate, supported by the demand across all five of our business verticals. We are also encouraged by the growing demand in key areas such as data centers and defense, as well as in advanced manufacturing. In Canada, we expect to see growth driven by public sector spending plans and continued demand in energy and resources. We continue to see good momentum in defense and other nation-building efforts following the recent announcements by the Canadian government. While still in early stages, these programs are expected to contribute to growth well beyond 2026. Related to defense, Stantec has completed work on 16 national defense and Canadian forces bases across Canada, and is currently supporting projects that advance national sovereignty from coast to coast to coast. In the U.S., organic growth is expected to accelerate, supported by the demand across all five of our business verticals. in the u.s organic growth is expected to accelerate supported by the demand across all five of our business verticals We are also encouraged by the growing demand in key areas such as data centers and defense, as well as in advanced manufacturing. we are also encouraged by the growing demand in key areas such as data centers and defense as well as in advanced manufacturing In Canada, we expect to see growth driven by public sector spending plans and continued demand in energy and resources. in canada we expect to see growth driven by public sector spending plans and continued demand in energy and resources We continue to see good momentum in defense and other nation-building efforts following the recent announcements by the Canadian government. we continue to see good momentum in defense and other nation-building efforts following the recent announcements by the canadian government While still in early stages, these programs are expected to contribute to growth well beyond 2026. while still in early stages these programs are expected to contribute to growth well beyond 2026 Related to defense, Stantec has completed work on 16 national defense and Canadian forces bases across Canada, and is currently supporting projects that advance national sovereignty from coast to coast to coast. related to defense stantec has completed work on 16 national defense and canadian forces bases across canada and is currently supporting projects that advance national sovereignty from coast to coast to coast The Canadian Defence Review recently named Stantec within its list of top 100 defense companies in 2026. Lastly, global is expected to maintain strong organic net revenue growth, driven by continued high level of activities in our water business under AMP8 and other framework agreements, strong demand in energy and resources, and positive demand fundamentals across other global business units. With our continued focus on operational excellence, we expect our adjusted EBITDA margin will continue to expand to a record range of 17.6%-18.2%, and we expect to deliver 15%-18% growth in adjusted EPS compared to 2025. I would note that these targets do not include any assumptions related to additional acquisitions, given the unpredictable nature of the timing and size of such transactions. The Canadian Defence Review recently named Stantec within its list of top 100 defense companies in 2026. the canadian defence review recently named stantec within its list of top 100 defense companies in 2026 Lastly, global is expected to maintain strong organic net revenue growth, driven by continued high level of activities in our water business under AMP8 and other framework agreements, strong demand in energy and resources, and positive demand fundamentals across other global business units. lastly global is expected to maintain strong organic net revenue growth driven by continued high level of activities in our water business under amp8 and other framework agreements strong demand in energy and resources and positive demand fundamentals across other global business units With our continued focus on operational excellence, we expect our adjusted EBITDA margin will continue to expand to a record range of 17.6%-18.2%, and we expect to deliver 15%-18% growth in adjusted EPS compared to 2025. with our continued focus on operational excellence we expect our adjusted ebitda margin will continue to expand to a record range of 17.6%-18.2% and we expect to deliver 15%-18% growth in adjusted eps compared to 2025 I would note that these targets do not include any assumptions related to additional acquisitions, given the unpredictable nature of the timing and size of such transactions. i would note that these targets do not include any assumptions related to additional acquisitions given the unpredictable nature of the timing and size of such transactions On M&A, we are starting to see more buyers in the market, particularly private equity. We remain active evaluating opportunities while maintaining our disciplined approach. We continue to see a healthy pipeline of firms coming into market. We remain confident that M&A represents the best use of our capital. As we close out the final year of our 2024 to 2026 strategic plan, we continue to be grounded in disciplined execution while preparing Stantec for what comes next. We are confident in our positioning and our ability to continue delivering strong performance and long-term value for years to come. With that, let me turn the call over to the operator for questions. Operator? On M&A, we are starting to see more buyers in the market, particularly private equity. on m&a we are starting to see more buyers in the market particularly private equity We remain active evaluating opportunities while maintaining our disciplined approach. we remain active evaluating opportunities while maintaining our disciplined approach We continue to see a healthy pipeline of firms coming into market. we continue to see a healthy pipeline of firms coming into market We remain confident that M&A represents the best use of our capital. we remain confident that m&a represents the best use of our capital As we close out the final year of our 2024 to 2026 strategic plan, we continue to be grounded in disciplined execution while preparing Stantec for what comes next. as we close out the final year of our 2024 to 2026 strategic plan we continue to be grounded in disciplined execution while preparing stantec for what comes next We are confident in our positioning and our ability to continue delivering strong performance and long-term value for years to come. we are confident in our positioning and our ability to continue delivering strong performance and long-term value for years to come With that, let me turn the call over to the operator for questions. with that let me turn the call over to the operator for questions Operator? operator

Speaker 8: Certainly. Our first question for today comes from the line of Frederic Bastien from Raymond James. Your question please. Certainly. certainly Our first question for today comes from the line of Frederic Bastien from Raymond James. our first question for today comes from the line of frederic bastien from raymond james Your question please. your question please

Speaker 2: Good morning. Good morning. good morning

Speaker 3: Good morning. Good morning. good morning

Speaker 2: How are you? How are you? how are you

Speaker 3: We're doing good. Thank you, Frederic. How are you? We're doing good. we're doing good Thank you, Frederic. thank you frederic How are you? how are you

Speaker 2: Good. Good. Thanks, guys. Listen, investors have come to expect Stantec to direct its next dollar of investment towards M&A, and Gord, you just said as much in your prepared remark. You know, how do you think about share purchases as the current dynamic around AI and just the pressure on public valuations, this narrative and this dynamic evolves? How do you think about share buybacks in this light? Good. good Good. good Thanks, guys. thanks guys Listen, investors have come to expect Stantec to direct its next dollar of investment towards M&A, and Gord, you just said as much in your prepared remark. listen investors have come to expect stantec to direct its next dollar of investment towards m&a and gord you just said as much in your prepared remark You know, how do you think about share purchases as the current dynamic around AI and just the pressure on public valuations, this narrative and this dynamic evolves? you know how do you think about share purchases as the current dynamic around ai and just the pressure on public valuations this narrative and this dynamic evolves How do you think about share buybacks in this light? how do you think about share buybacks in this light

Speaker 9: Yeah. Thank you, Frederic. Maybe I'll take that one. You're absolutely right. I mean, at the end of the day, fundamentally, we really continue to believe that strategic acquisitions present the highest value creation opportunity for our organization going forward. Stock buybacks are definitely a tool in our capital structure optimization toolbox, if you will. As you are describing and, you know, insinuating, I think, frankly, at these valuations levels, it's becoming increasingly hard to ignore not getting into the market and buying back stock. Look out for that as we move into our open windows here post the quarter. Yeah. yeah Thank you, Frederic. thank you frederic Maybe I'll take that one. maybe i'll take that one You're absolutely right. you're absolutely right I mean, at the end of the day, fundamentally, we really continue to believe that strategic acquisitions present the highest value creation opportunity for our organization going forward. i mean at the end of the day fundamentally we really continue to believe that strategic acquisitions present the highest value creation opportunity for our organization going forward Stock buybacks are definitely a tool in our capital structure optimization toolbox, if you will. stock buybacks are definitely a tool in our capital structure optimization toolbox if you will As you are describing and, you know, insinuating, I think, frankly, at these valuations levels, it's becoming increasingly hard to ignore not getting into the market and buying back stock. as you are describing and you know insinuating i think frankly at these valuations levels it's becoming increasingly hard to ignore not getting into the market and buying back stock Look out for that as we move into our open windows here post the quarter. look out for that as we move into our open windows here post the quarter You know, having said that, the quantums and values contemplated, if you take into account our 2% approved in NCIB, in the scope of our balance sheet, is not overly significant and in no way would impede our M&A strategies. Thank you for the question. You know, having said that, the quantums and values contemplated, if you take into account our 2% approved in NCIB, in the scope of our balance sheet, is not overly significant and in no way would impede our M&A strategies. you know having said that the quantums and values contemplated if you take into account our 2% approved in ncib in the scope of our balance sheet is not overly significant and in no way would impede our m&a strategies Thank you for the question. thank you for the question

Speaker 2: I appreciate the answer, Vito. Thinking more higher level on, I guess, on the organic growth front, you still the most excited about the opportunities in the U.S. or, I mean, based on your comment around Canada and, you know, defense spending, nation-building initiatives, sounds like Canada could be a great area for growth on a go-forward basis? I appreciate the answer, Vito. i appreciate the answer vito Thinking more higher level on, I guess, on the organic growth front, you still the most excited about the opportunities in the U.S. or, I mean, based on your comment around Canada and, you know, defense spending, nation-building initiatives, sounds like Canada could be a great area for growth on a go-forward basis? thinking more higher level on i guess on the organic growth front you still the most excited about the opportunities in the u.s or i mean based on your comment around canada and you know defense spending nation-building initiatives sounds like canada could be a great area for growth on a go-forward basis

Speaker 3: You know, I think we see great opportunities both north and south of the border. You're right, you know, Canada started the year a little bit slow on the organic growth side. What's interesting, and we talked in the prepared remarks there about how infrastructure pulled back on a couple, you know, transportation projects that we had. We see that filling, you know, those being filled up here again in Q2. Other than that, every one of our businesses came into that mid to high single organic growth for the quarter, just pulled down a little bit by infrastructure. We're lapping a high comp, you know, it was 12% in Q1 of 2025. If you look at the Canadian business, backlog up 6% organically over the year. You know, I think we see great opportunities both north and south of the border. you know i think we see great opportunities both north and south of the border You're right, you know, Canada started the year a little bit slow on the organic growth side. you're right you know canada started the year a little bit slow on the organic growth side What's interesting, and we talked in the prepared remarks there about how infrastructure pulled back on a couple, you know, transportation projects that we had. what's interesting and we talked in the prepared remarks there about how infrastructure pulled back on a couple you know transportation projects that we had We see that filling, you know, those being filled up here again in Q2. we see that filling you know those being filled up here again in q2 Other than that, every one of our businesses came into that mid to high single organic growth for the quarter, just pulled down a little bit by infrastructure. other than that every one of our businesses came into that mid to high single organic growth for the quarter just pulled down a little bit by infrastructure We're lapping a high comp, you know, it was 12% in Q1 of 2025. we're lapping a high comp you know it was 12% in q1 of 2025 If you look at the Canadian business, backlog up 6% organically over the year. if you look at the canadian business backlog up 6% organically over the year When you look at the opportunities, as you've said, the, with the, you know, with the federal government that in the North, the, our first defense industrial strategy, the Arctic Infrastructure Fund, you know, the Build Communities Strong Fund. There's just so much good directional activity going in Canada. You know, we do feel very good about it. We've talked before about the Arctic Over-the-Horizon Radar that we're working on, but there's a lot of opportunities coming up in the North, Frederic, that we feel really good about. Not to discount the U.S. at all. When you look at the opportunities, as you've said, the, with the, you know, with the federal government that in the North, the, our first defense industrial strategy, the Arctic Infrastructure Fund, you know, the Build Communities Strong Fund. when you look at the opportunities as you've said the with the you know with the federal government that in the north the our first defense industrial strategy the arctic infrastructure fund you know the build communities strong fund There's just so much good directional activity going in Canada. there's just so much good directional activity going in canada You know, we do feel very good about it. you know we do feel very good about it We've talked before about the Arctic Over-the-Horizon Radar that we're working on, but there's a lot of opportunities coming up in the North, Frederic, that we feel really good about. we've talked before about the arctic over-the-horizon radar that we're working on but there's a lot of opportunities coming up in the north frederic that we feel really good about Not to discount the U.S. at all. not to discount the u.s at all You know, we saw that in the U.S., you've seen our backlog, sort of that momentum continue to build in backlog, a little over 3% organic backlog growth this quarter, building on about 3% organic backlog growth, you know, in the last quarter. I think we see that coming and strengthening as well. We feel pretty good about North America overall. You know, we saw that in the U.S., you've seen our backlog, sort of that momentum continue to build in backlog, a little over 3% organic backlog growth this quarter, building on about 3% organic backlog growth, you know, in the last quarter. you know we saw that in the u.s you've seen our backlog sort of that momentum continue to build in backlog a little over 3% organic backlog growth this quarter building on about 3% organic backlog growth you know in the last quarter I think we see that coming and strengthening as well. i think we see that coming and strengthening as well We feel pretty good about North America overall. we feel pretty good about north america overall

Speaker 2: Thank you. That's all I have. Thank you. thank you That's all I have. that's all i have

Speaker 3: Thanks, Frederic. Thanks, Frederic. thanks frederic

Speaker 8: Thank you. Our next question comes from the line of Krista Friesen from CIBC. Your question please. Thank you. thank you Our next question comes from the line of Krista Friesen from CIBC. our next question comes from the line of krista friesen from cibc Your question please. your question please

Speaker 5: Hi. Thanks for taking my question. I'm just wondering if you can give a little bit more color in terms of what you're seeing from the Canadian government. Like, a lot of announcements have been made. Are we seeing that translate into awards at that point in time? Do you feel like some of the red tape has been cut here in terms of what we've historically seen from the government? Hi. hi Thanks for taking my question. thanks for taking my question I'm just wondering if you can give a little bit more color in terms of what you're seeing from the Canadian government. i'm just wondering if you can give a little bit more color in terms of what you're seeing from the canadian government Like, a lot of announcements have been made. like a lot of announcements have been made Are we seeing that translate into awards at that point in time? are we seeing that translate into awards at that point in time Do you feel like some of the red tape has been cut here in terms of what we've historically seen from the government? do you feel like some of the red tape has been cut here in terms of what we've historically seen from the government

Speaker 3: You know, we certainly have seen some awards. You know, we've all talked about Arctic Over-the-Horizon Radar, there's a number of additional either proposals that we're waiting for. In fact, what's interesting as we look at the amount of opportunities, I think you'll see us being pretty discerning as to which ones we pursue because there's so many coming that we'll be looking at it pretty closely. Great opportunities there. You saw that we are named 42 in the top 100 Defense Canada's ranking. Just a lot of opportunity coming there. Krista, you know, in terms of has red tape been reduced, do we see a difference in the permitting process at this point? You know, we certainly have seen some awards. you know we certainly have seen some awards You know, we've all talked about Arctic Over-the-Horizon Radar, there's a number of additional either proposals that we're waiting for. you know we've all talked about arctic over-the-horizon radar there's a number of additional either proposals that we're waiting for In fact, what's interesting as we look at the amount of opportunities, I think you'll see us being pretty discerning as to which ones we pursue because there's so many coming that we'll be looking at it pretty closely. in fact what's interesting as we look at the amount of opportunities i think you'll see us being pretty discerning as to which ones we pursue because there's so many coming that we'll be looking at it pretty closely Great opportunities there. great opportunities there You saw that we are named 42 in the top 100 Defense Canada's ranking. you saw that we are named 42 in the top 100 defense canada's ranking Just a lot of opportunity coming there. just a lot of opportunity coming there Krista, you know, in terms of has red tape been reduced, do we see a difference in the permitting process at this point? krista you know in terms of has red tape been reduced do we see a difference in the permitting process at this point I think that's still evolving, you know, and we'll see more. We also note that Prime Minister Carney's coming to Alberta on Friday, we'll see what he has to say there. We certainly have some expectations of an announcement as well, which would be directionally positive for us. I think that's still evolving, you know, and we'll see more. i think that's still evolving you know and we'll see more We also note that Prime Minister Carney's coming to Alberta on Friday, we'll see what he has to say there. we also note that prime minister carney's coming to alberta on friday we'll see what he has to say there We certainly have some expectations of an announcement as well, which would be directionally positive for us. we certainly have some expectations of an announcement as well which would be directionally positive for us

Speaker 9: Indeed. Indeed. indeed

Speaker 5: Okay, that's great. Just on the M&A side, can you comment what you're seeing in terms of multiples out there for the private companies and how much of a dislocation, I guess, there is between that market and the public markets and what we're seeing? Thank you. Okay, that's great. okay that's great Just on the M&A side, can you comment what you're seeing in terms of multiples out there for the private companies and how much of a dislocation, I guess, there is between that market and the public markets and what we're seeing? just on the m&a side can you comment what you're seeing in terms of multiples out there for the private companies and how much of a dislocation i guess there is between that market and the public markets and what we're seeing Thank you. thank you

Speaker 9: Yeah, I'll take that one maybe, Gord, if you want. Yeah, I'll take that one maybe, Gord, if you want. yeah i'll take that one maybe gord if you want

Speaker 3: Sure. Sure. sure

Speaker 9: I mean, we definitely see You know, when you talk valuations on the M&A side, it's obviously very specific to sectors. You've seen some transactions occur obviously over the last several weeks and, largely on the power side that has you in the, you know, the high teens sort of area. If you look at that compared to obviously where we're trading, there's significant sort of dislocation there, but that's the power assets. I'd say right now with what's going, you know, back to almost Benoit's question, excuse me, Frederic's question around valuations, we are seeing a dislocation of valuation that I think over time, obviously, there'll be some convergence. Valuations overall are obviously very company sector specific and we'll continue to monitor that and be disciplined as we make our way through. I mean, we definitely see You know, when you talk valuations on the M&A side, it's obviously very specific to sectors. i mean we definitely see you know when you talk valuations on the m&a side it's obviously very specific to sectors You've seen some transactions occur obviously over the last several weeks and, largely on the power side that has you in the, you know, the high teens sort of area. you've seen some transactions occur obviously over the last several weeks and largely on the power side that has you in the you know the high teens sort of area If you look at that compared to obviously where we're trading, there's significant sort of dislocation there, but that's the power assets. if you look at that compared to obviously where we're trading there's significant sort of dislocation there but that's the power assets I'd say right now with what's going, you know, back to almost Benoit's question, excuse me, Frederic's question around valuations, we are seeing a dislocation of valuation that I think over time, obviously, there'll be some convergence. i'd say right now with what's going you know back to almost benoit's question excuse me frederic's question around valuations we are seeing a dislocation of valuation that i think over time obviously there'll be some convergence Valuations overall are obviously very company sector specific and we'll continue to monitor that and be disciplined as we make our way through. valuations overall are obviously very company sector specific and we'll continue to monitor that and be disciplined as we make our way through

Speaker 5: Thank you. Appreciate the color. Thank you. thank you Appreciate the color. appreciate the color

Speaker 3: Great. Thank you, Krista. Great. great Thank you, Krista. thank you krista

Speaker 8: Thank you. Our next question comes from the line of Benoit Poirier from Desjardins. Your question please. Thank you. thank you Our next question comes from the line of Benoit Poirier from Desjardins. our next question comes from the line of benoit poirier from desjardins Your question please. your question please

Speaker 1: Good morning, Gord. Good morning, Vito. Just to come back on the U.S., obviously, you've talked about the softer start with 2.8% organic growth. I was wondering, any weaker contribution from emergency response? Is the retraction in building that we saw, given the completion of certain projects, going to impact Q2 as well? I'm just trying to get some thoughts, where there's a slowdown on IIJA fund flows or anything else, would be appreciated. Good morning, Gord. good morning gord Good morning, Vito. good morning vito Just to come back on the U.S., obviously, you've talked about the softer start with 2.8% organic growth. just to come back on the u.s obviously you've talked about the softer start with 2.8% organic growth I was wondering, any weaker contribution from emergency response? i was wondering any weaker contribution from emergency response Is the retraction in building that we saw, given the completion of certain projects, going to impact Q2 as well? is the retraction in building that we saw given the completion of certain projects going to impact q2 as well I'm just trying to get some thoughts, where there's a slowdown on IIJA fund flows or anything else, would be appreciated. i'm just trying to get some thoughts where there's a slowdown on iija fund flows or anything else would be appreciated

Speaker 3: Yeah. You know, in the buildings business, you know, we did have a soft start to the year in Q1. That said, the backlog in our buildings business, you know, year-over-year, and actually even quarter over Q1 of this year over Q4 of last year, you know, we're seeing some positive growth in buildings momentum. You know, similar to in Canada, where infrastructure was the only group that we had that retracted and because of some project wind downs, it was the same in the U.S., that buildings was the only group we had that retracted a bit organically. Everything else grew. Yeah. yeah You know, in the buildings business, you know, we did have a soft start to the year in Q1. you know in the buildings business you know we did have a soft start to the year in q1 That said, the backlog in our buildings business, you know, year-over-year, and actually even quarter over Q1 of this year over Q4 of last year, you know, we're seeing some positive growth in buildings momentum. that said the backlog in our buildings business you know year-over-year and actually even quarter over q1 of this year over q4 of last year you know we're seeing some positive growth in buildings momentum You know, similar to in Canada, where infrastructure was the only group that we had that retracted and because of some project wind downs, it was the same in the U.S., that buildings was the only group we had that retracted a bit organically. you know similar to in canada where infrastructure was the only group that we had that retracted and because of some project wind downs it was the same in the u.s that buildings was the only group we had that retracted a bit organically Everything else grew. everything else grew As building sort of strengthens here in Q2 in the last half of the year, I think that'll be generally supportive to our overall growth there in the organic growth in the U.S. Overall, backlog growth, we talked about sequential growth in, you know, this quarter and the previous quarter. Both in Canada and the U.S., we actually have a considerable amount of notified awards that hasn't yet been contracted also that we'll see that going into backlog here in Q2 and beyond. We actually feel pretty good about where we are and how the year is gonna shape up. As building sort of strengthens here in Q2 in the last half of the year, I think that'll be generally supportive to our overall growth there in the organic growth in the U.S. as building sort of strengthens here in q2 in the last half of the year i think that'll be generally supportive to our overall growth there in the organic growth in the u.s Overall, backlog growth, we talked about sequential growth in, you know, this quarter and the previous quarter. overall backlog growth we talked about sequential growth in you know this quarter and the previous quarter Both in Canada and the U.S., we actually have a considerable amount of notified awards that hasn't yet been contracted also that we'll see that going into backlog here in Q2 and beyond. both in canada and the u.s we actually have a considerable amount of notified awards that hasn't yet been contracted also that we'll see that going into backlog here in q2 and beyond We actually feel pretty good about where we are and how the year is gonna shape up. we actually feel pretty good about where we are and how the year is gonna shape up

Speaker 9: The only other thing I'd add to that, Gord, is Benoit, with respect to the buildings practice, we're really excited about the Page acquisition. Obviously, our Page revenue and business is being reported through our acquisition sort of reporting. Year-on-year, some really nice healthy organic growth in the Page business. Those, Page and our reported organic building sector are working hand in hand, and we're very pleased with how that is evolving as we look forward to the full year. The only other thing I'd add to that, Gord, is Benoit, with respect to the buildings practice, we're really excited about the Page acquisition. the only other thing i'd add to that gord is benoit with respect to the buildings practice we're really excited about the page acquisition Obviously, our Page revenue and business is being reported through our acquisition sort of reporting. obviously our page revenue and business is being reported through our acquisition sort of reporting Year-on-year, some really nice healthy organic growth in the Page business. year-on-year some really nice healthy organic growth in the page business Those, Page and our reported organic building sector are working hand in hand, and we're very pleased with how that is evolving as we look forward to the full year. those page and our reported organic building sector are working hand in hand and we're very pleased with how that is evolving as we look forward to the full year

Speaker 3: Maybe I just add on. With Page, I think our revenue synergies are even exceeding what we had hoped that we would see there. It's the two groups together are very, very strong. Maybe I just add on. maybe i just add on With Page, I think our revenue synergies are even exceeding what we had hoped that we would see there. with page i think our revenue synergies are even exceeding what we had hoped that we would see there It's the two groups together are very, very strong. it's the two groups together are very very strong

Speaker 1: Okay. That's great color. On the global side, you were able to achieve 15% organic growth. That was pretty impressive. You call out the strong performance on water, but also the ramp-up of projects in Chile and Peru. Just wondering about the sustainability of the double-digit performance going forward. Thank you. Okay. okay That's great color. that's great color On the global side, you were able to achieve 15% organic growth. on the global side you were able to achieve 15% organic growth That was pretty impressive. that was pretty impressive You call out the strong performance on water, but also the ramp-up of projects in Chile and Peru. you call out the strong performance on water but also the ramp-up of projects in chile and peru Just wondering about the sustainability of the double-digit performance going forward. just wondering about the sustainability of the double-digit performance going forward Thank you. thank you

Speaker 3: You know what? When we look at the water segment in the, with the AMP8, you know, we've been talking about that for some time, that just continues to ramp up. We feel really good about that. Actively hiring everyone we can get our hands on in the U.K. You would have seen that finally now we're able to talk openly about Scottish Water because they've press released it now, how, you know, we're one of the primary design partners there. That's going to continue to ramp up active hiring there. We're hiring a lot in India to support these groups as well. That's very sustainable. You know what? you know what When we look at the water segment in the, with the AMP8, you know, we've been talking about that for some time, that just continues to ramp up. when we look at the water segment in the with the amp8, you know we've been talking about that for some time that just continues to ramp up We feel really good about that. we feel really good about that Actively hiring everyone we can get our hands on in the U.K. actively hiring everyone we can get our hands on in the u.k You would have seen that finally now we're able to talk openly about Scottish Water because they've press released it now, how, you know, we're one of the primary design partners there. you would have seen that finally now we're able to talk openly about scottish water because they've press released it now how you know we're one of the primary design partners there That's going to continue to ramp up active hiring there. that's going to continue to ramp up active hiring there We're hiring a lot in India to support these groups as well. we're hiring a lot in india to support these groups as well That's very sustainable. that's very sustainable When you look into our South American operations, again, primarily supporting copper, you know, with the continued run-up in and need for copper to support energy transition and such. You know, we're seeing really strong growth in our mining segment there. Actively hiring there. Interestingly, we're also starting to even more use our Indian delivery centers to support our Latin American operations as well, just because of the, you know, with the growth there, it's easier to get some folks elsewhere. Yeah, we're feeling good about that, really good about our global delivery center as well. When you look into our South American operations, again, primarily supporting copper, you know, with the continued run-up in and need for copper to support energy transition and such. when you look into our south american operations again primarily supporting copper you know with the continued run-up in and need for copper to support energy transition and such You know, we're seeing really strong growth in our mining segment there. you know we're seeing really strong growth in our mining segment there Actively hiring there. actively hiring there Interestingly, we're also starting to even more use our Indian delivery centers to support our Latin American operations as well, just because of the, you know, with the growth there, it's easier to get some folks elsewhere. interestingly we're also starting to even more use our indian delivery centers to support our latin american operations as well just because of the you know with the growth there it's easier to get some folks elsewhere Yeah, we're feeling good about that, really good about our global delivery center as well. yeah we're feeling good about that really good about our global delivery center as well

Speaker 1: Okay. Where would you be right now in terms of employees in those global centers, Gord? Okay. okay Where would you be right now in terms of employees in those global centers, Gord? where would you be right now in terms of employees in those global centers gord

Speaker 3: We're sitting just shy, right around 2,000 people, which is where we wanted to be sort of by the end of this year. We might achieve that goal even a little bit early. What's interesting is that we've, you know, we targeted about 2,000 people. As we continue to grow there, we've actually taken a second office in Pune as well. We've expanded within our existing office till there's no more space available. Now we've taken additional real estate. We're starting to hire some people in some other cities as well to support our continued growth. More to come there. We're sitting just shy, right around 2,000 people, which is where we wanted to be sort of by the end of this year. we're sitting just shy right around 2,000 people which is where we wanted to be sort of by the end of this year We might achieve that goal even a little bit early. we might achieve that goal even a little bit early What's interesting is that we've, you know, we targeted about 2,000 people. what's interesting is that we've you know we targeted about 2,000 people As we continue to grow there, we've actually taken a second office in Pune as well. as we continue to grow there we've actually taken a second office in pune as well We've expanded within our existing office till there's no more space available. we've expanded within our existing office till there's no more space available Now we've taken additional real estate. now we've taken additional real estate We're starting to hire some people in some other cities as well to support our continued growth. we're starting to hire some people in some other cities as well to support our continued growth More to come there. more to come there

Speaker 9: Yeah. Just a shout-out to that team. They're extraordinary, and we thank them for their commitment. They are part of Stantec. Yeah. yeah Just a shout-out to that team. just a shout-out to that team They're extraordinary, and we thank them for their commitment. they're extraordinary and we thank them for their commitment They are part of Stantec. they are part of stantec

Speaker 1: Very interesting comments. Thank you very much for your time. Very interesting comments. very interesting comments Thank you very much for your time. thank you very much for your time

Speaker 3: Thank you. Thank you. thank you

Speaker 8: Thank you. Our next question comes from the line of Sabahat Khan from RBC Capital Markets. Your question, please. Thank you. thank you Our next question comes from the line of Sabahat Khan from RBC Capital Markets. our next question comes from the line of sabahat khan from rbc capital markets Your question, please. your question please

Speaker 10: Hi, good morning, guys. This is Patty on the line for Sabah. Hi, good morning, guys. hi good morning guys This is Patty on the line for Sabah. this is patty on the line for sabah

Speaker 3: Morning. Morning. morning

Speaker 10: Good morning. Maybe get a bit more color on the kind of puts and takes and drivers of the pretty good margin expansion in the quarter. Looks like you're tracking, at this rate, you know, pretty positively against your full year guidance. Looks like some leverage on the administrative and marketing expenses. Was wondering if you could kind of give color on that as well as some of the more mix-driven contractions, I guess, in project margins... Good morning. good morning Maybe get a bit more color on the kind of puts and takes and drivers of the pretty good margin expansion in the quarter. maybe get a bit more color on the kind of puts and takes and drivers of the pretty good margin expansion in the quarter Looks like you're tracking, at this rate, you know, pretty positively against your full year guidance. looks like you're tracking at this rate you know pretty positively against your full year guidance Looks like some leverage on the administrative and marketing expenses. looks like some leverage on the administrative and marketing expenses Was wondering if you could kind of give color on that as well as some of the more mix-driven contractions, I guess, in project margins... was wondering if you could kind of give color on that as well as some of the more mix-driven contractions i guess in project margins

Speaker 3: Yeah Yeah yeah

Speaker 10: ...across the business and maybe the timeline or how you expect those to play out through the rest of the year. ...across the business and maybe the timeline or how you expect those to play out through the rest of the year. ...across the business and maybe the timeline or how you expect those to play out through the rest of the year

Speaker 9: Yeah, Patty, thanks for the question. It's Vito here. I'll take that one. You know, when we talk about margin, it always starts with obviously, you know, the right project, the right customer, the right pricing mechanics, and then, you know, strong operational execution. And I always go straight to the, you know, the project margin line as the first line of sight there. Project margins were steady this quarter, year-over-year. 54%, I think, was the number, just slightly lower than prior year, and that was largely mix related. Our global business continues to grow, which is wonderful. The margin profile there in some certain sectors, just a bit below maybe other areas. We've talked a little bit about the water business AMP8, incredible volume year-over-year, slightly lower margins, as expected, obviously very pleased with that business and the work the teams are doing. Yeah, Patty, thanks for the question. yeah patty thanks for the question It's Vito here. it's vito here I'll take that one. i'll take that one You know, when we talk about margin, it always starts with obviously, you know, the right project, the right customer, the right pricing mechanics, and then, you know, strong operational execution. you know when we talk about margin it always starts with obviously you know the right project the right customer the right pricing mechanics and then you know strong operational execution And I always go straight to the, you know, the project margin line as the first line of sight there. and i always go straight to the you know the project margin line as the first line of sight there Project margins were steady this quarter, year-over-year. 54%, I think, was the number, just slightly lower than prior year, and that was largely mix related. project margins were steady this quarter year-over-year 54% i think was the number just slightly lower than prior year and that was largely mix related Our global business continues to grow, which is wonderful. our global business continues to grow which is wonderful The margin profile there in some certain sectors, just a bit below maybe other areas. the margin profile there in some certain sectors just a bit below maybe other areas We've talked a little bit about the water business AMP8 , incredible volume year-over-year, slightly lower margins, as expected, o bviously very pleased with that business and the work the teams are doing. we've talked a little bit about the water business amp8 incredible volume year-over-year slightly lower margins as expected, o bviously very pleased with that business and the work the teams are doing I would describe project margins evolving in a normal expanding sort of continuum there. Nothing unusual with that activity. What you're seeing as far as overall margin expansion then really comes down to the admin and marketing, and you referenced that. Our admin and marketing in Q1 was 38.3% of our net revenue, and that was just over 100 basis points lower than prior year. The drivers there really are we had improved utilization. That's very important. I would describe project margins evolving in a normal expanding sort of continuum there. i would describe project margins evolving in a normal expanding sort of continuum there Nothing unusual with that activity. nothing unusual with that activity What you're seeing as far as overall margin expansion then really comes down to the admin and marketing, and you referenced that. what you're seeing as far as overall margin expansion then really comes down to the admin and marketing and you referenced that Our admin and marketing in Q1 was 38.3% of our net revenue, and that was just over 100 basis points lower than prior year. our admin and marketing in q1 was 38.3% of our net revenue and that was just over 100 basis points lower than prior year The drivers there really are we had improved utilization. the drivers there really are we had improved utilization That's very important. that's very important As the teams look to obviously hire, you heard Gord Johnston describe the strong demand environment as we move forward, while obviously putting people to work and obviously continuing to invest in billable hours and leveraging our back office as appropriate. We're really pleased with how the operations as it continues to evolve in that regard and managing overall utilization. You know, we're getting scale from our operations. That's our continued expectations of that. It's been several quarters that you've been seeing that in effect, and Q1 just continued to manifest that. I think it's the sixth or seventh consecutive quarter, perhaps of year-over-year margin expansion for us, bottom line. Very, very pleased with our margin performance. As the teams look to obviously hire, you heard Gord Johnston describe the strong demand environment as we move forward, while obviously putting people to work and obviously continuing to invest in billable hours and leveraging our back office as appropriate. as the teams look to obviously hire you heard gord johnston describe the strong demand environment as we move forward while obviously putting people to work and obviously continuing to invest in billable hours and leveraging our back office as appropriate We're really pleased with how the operations as it continues to evolve in that regard and managing overall utilization. we're really pleased with how the operations as it continues to evolve in that regard and managing overall utilization You know, we're getting scale from our operations. you know we're getting scale from our operations That's our continued expectations of that. that's our continued expectations of that It's been several quarters that you've been seeing that in effect, and Q1 just continued to manifest that. it's been several quarters that you've been seeing that in effect and q1 just continued to manifest that I think it's the sixth or seventh consecutive quarter, perhaps of year-over-year margin expansion for us, bottom line. i think it's the sixth or seventh consecutive quarter perhaps of year-over-year margin expansion for us bottom line Very, very pleased with our margin performance. very very pleased with our margin performance Obviously, you see that reflected obviously in our full year guidance where we guided to, you know, no changes in the guidance. Too early to make any changes, but 17.6% to 18.2% is a real step forward, building on the 90 basis point improvement in 2025 versus 2024. Obviously, you see that reflected obviously in our full year guidance where we guided to, you know, no changes in the guidance. obviously you see that reflected obviously in our full year guidance where we guided to you know no changes in the guidance Too early to make any changes, but 17.6% to 18.2% is a real step forward, building on the 90 basis point improvement in 2025 versus 2024. too early to make any changes but 17.6% to 18.2% is a real step forward building on the 90 basis point improvement in 2025 versus 2024

Speaker 10: All right. Thanks. That's helpful color. Maybe just kind of going back to the demand of our environment in the U.S., we could hear your updated thoughts on the outlook for IIJA funding and maybe some of the new or the more emerging tailwinds. I think you had recently mentioned that you're working on a handful of kind of hyperscaler data centers, representing more than a couple of gigawatts of capacity. Just kind of your updated thoughts on that and how you feel about the region going forward, that'd be helpful. All right. all right Thanks. thanks That's helpful color. that's helpful color Maybe just kind of going back to the demand of our environment in the U.S., we could hear your updated thoughts on the outlook for IIJA funding and maybe some of the new or the more emerging tailwinds. maybe just kind of going back to the demand of our environment in the u.s we could hear your updated thoughts on the outlook for iija funding and maybe some of the new or the more emerging tailwinds I think you had recently mentioned that you're working on a handful of kind of hyperscaler data centers, representing more than a couple of gigawatts of capacity. i think you had recently mentioned that you're working on a handful of kind of hyperscaler data centers representing more than a couple of gigawatts of capacity Just kind of your updated thoughts on that and how you feel about the region going forward, that'd be helpful. just kind of your updated thoughts on that and how you feel about the region going forward that'd be helpful

Speaker 3: Absolutely. Yeah. For IIJA, you know, what we've talked about before, and you've heard others talk that, you know, that bill for new awards expires in September of this year. We're seeing, you know, more and more people talking about trying to get out ahead of time, make sure they get their allocations before September. It's, you know, we often get asked, "Do you think it'll all be allocated by September?" That's hard to say 'cause it's harder to get at some of the data than it would. Of course, important to note that with those IIJA-funded projects, even though that program ends at the end of September for new awards, revenue will continue to be generated on that project for the next three to five years. Absolutely. absolutely Yeah. yeah For IIJA, you know, what we've talked about before, and you've heard others talk that, you know, that bill for new awards expires in September of this year. for iija you know what we've talked about before and you've heard others talk that you know that bill for new awards expires in september of this year We're seeing, you know, more and more people talking about trying to get out ahead of time, make sure they get their allocations before September. we're seeing you know more and more people talking about trying to get out ahead of time make sure they get their allocations before september It's, you know, we often get asked, "Do you think it'll all be allocated by September?" That's hard to say 'cause it's harder to get at some of the data than it would. it's you know we often get asked "do you think it'll all be allocated by september?" that's hard to say 'cause it's harder to get at some of the data than it would Of course, important to note that with those IIJA-funded projects, even though that program ends at the end of September for new awards, revenue will continue to be generated on that project for the next three to five years. of course important to note that with those iija-funded projects even though that program ends at the end of september for new awards revenue will continue to be generated on that project for the next three to five years That's the sort of the dynamic, the period of time it takes to process those transportation projects. Parallel with that, you know, the new Surface Transportation Act reauthorization, which will provide stable funding for the next five years, is still in process, anticipated to be in that CAD 500 billion-CAD 600 billion range. We, you know, we're expecting the draft bill from the House is coming. The Senate version's not expected until June. It's not expected to pass before the end of the year, but certainly we see, you know, there'll be good bipartisan support for that. You mentioned the data centers mission critical. Absolutely. You know, that work continues to go. We're working still with the top for five of the top hyperscalers and, you know, up to and well over a gigawatt. That's the sort of the dynamic, the period of time it takes to process those transportation projects. that's the sort of the dynamic the period of time it takes to process those transportation projects Parallel with that, you know, the new Surface Transportation Act reauthorization, which will provide stable funding for the next five years, is still in process, anticipated to be in that CAD 500 billion-CAD 600 billion range. parallel with that you know the new surface transportation act reauthorization which will provide stable funding for the next five years is still in process anticipated to be in that cad 500 billion-cad 600 billion range We, you know, we're expecting the draft bill from the House is coming. we you know we're expecting the draft bill from the house is coming The Senate version's not expected until June. the senate version's not expected until june It's not expected to pass before the end of the year, but certainly we see, you know, there'll be good bipartisan support for that. it's not expected to pass before the end of the year but certainly we see you know there'll be good bipartisan support for that You mentioned the data centers mission critical. you mentioned the data centers mission critical Absolutely. absolutely You know, that work continues to go. you know that work continues to go We're working still with the top for five of the top hyperscalers and, you know, up to and well over a gigawatt. we're working still with the top for five of the top hyperscalers and you know up to and well over a gigawatt We talked about in the prepared remarks about this multi-billion dollar semiconductor manufacturing and research and development facility in Idaho that we're working on now. We do see a lot of still great opportunities coming in the U.S. We feel, you see, you know, The momentum is coming there, 3% of growth per quarter over the last couple. You know, we feel good about the U.S. We talked about in the prepared remarks about this multi-billion dollar semiconductor manufacturing and research and development facility in Idaho that we're working on now. we talked about in the prepared remarks about this multi-billion dollar semiconductor manufacturing and research and development facility in idaho that we're working on now We do see a lot of still great opportunities coming in the U.S. we do see a lot of still great opportunities coming in the u.s We feel, you see, you know, The momentum is coming there, 3% of growth per quarter over the last couple. we feel you see you know the momentum is coming there 3% of growth per quarter over the last couple You know, we feel good about the U.S. you know we feel good about the u.s

Speaker 10: All right. That's very helpful. Thanks again. All right. all right That's very helpful. that's very helpful Thanks again. thanks again

Speaker 3: Thanks, Patty. Thanks, Patty. thanks patty

Speaker 8: Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. Our next question comes from the line of Maxim Sytchev from NBCM. Your question please. Thank you. thank you As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. as a reminder ladies and gentlemen if you do have a question at this time please press star one one on your telephone Our next question comes from the line of Maxim Sytchev from NBCM. our next question comes from the line of maxim sytchev from nbcm Your question please. your question please

Speaker 6: Hi, good morning, gentlemen. I just wanted to circle back to environmental services. Like, obviously, I realize that very often that segment acts as a sub to other verticals, but how should we think about sort of the inflection point there, especially as energy and resources is showing some pretty strong organic growth? Thank you. Hi, good morning, gentlemen. hi good morning gentlemen I just wanted to circle back to environmental services. i just wanted to circle back to environmental services Like, obviously, I realize that very often that segment acts as a sub to other verticals, but how should we think about sort of the inflection point there, especially as energy and resources is showing some pretty strong organic growth? like obviously i realize that very often that segment acts as a sub to other verticals but how should we think about sort of the inflection point there especially as energy and resources is showing some pretty strong organic growth Thank you. thank you

Speaker 3: You know what? Interestingly, we've seen some good projects come into that Environmental Services group, some with the U.S. federal government, some with other groups, just looking to continue to push that forward. You're right, they do support a lot of newer projects, but they're also engaged in, you know, everything from, you know, the first part of pipelines that we've seen some significant organic, some backlog growth in Canada in that space. There's some good things happening in the ES space. You see, you know, organic growth in Q1, you know, little bit lighter at 1.2%, 1.5% last year, but I think we'll see that begin to continue to increase as we go through the year. You know what? you know what Interestingly, we've seen some good projects come into that Environmental Services group, some with the U.S. federal government, some with other groups, just looking to continue to push that forward. interestingly we've seen some good projects come into that environmental services group some with the u.s federal government some with other groups just looking to continue to push that forward You're right, they do support a lot of newer projects, but they're also engaged in, you know, everything from, you know, the first part of pipelines that we've seen some significant organic, some backlog growth in Canada in that space. you're right they do support a lot of newer projects but they're also engaged in you know everything from you know the first part of pipelines that we've seen some significant organic some backlog growth in canada in that space There's some good things happening in the ES space. there's some good things happening in the es space You see, you know, organic growth in Q1, you know, little bit lighter at 1.2%, 1.5% last year, but I think we'll see that begin to continue to increase as we go through the year. you see you know organic growth in q1 you know little bit lighter at 1.2% 1.5% last year but i think we'll see that begin to continue to increase as we go through the year

Speaker 6: Okay, that's good to hear. Maybe a question for you too. Page obviously delayed some of the working capital kind of normalization. When should we see kind of, you know, full run rate, kind of, you know, similar to Stantec's sort of standards? Can you maybe comment there, please? Thanks. Okay, that's good to hear. okay that's good to hear Maybe a question for you too. maybe a question for you too Page obviously delayed some of the working capital kind of normalization. page obviously delayed some of the working capital kind of normalization When should we see kind of, you know, full run rate, kind of, you know, similar to Stantec's sort of standards? when should we see kind of you know full run rate kind of you know similar to stantec's sort of standards Can you maybe comment there, please? can you maybe comment there please Thanks. thanks

Speaker 9: Yeah. Financial migration was completed here in Q1, so our expectations would be that we are back in line and pretty well on pace here as we move through Q2 and Q3, Maxim. Not concerned about that or don't expect any significant impact moving forward. Yeah. yeah Financial migration was completed here in Q1, so our expectations would be that we are back in line and pretty well on pace here as we move through Q2 and Q3, Maxim. financial migration was completed here in q1 so our expectations would be that we are back in line and pretty well on pace here as we move through q2 and q3 maxim Not concerned about that or don't expect any significant impact moving forward. not concerned about that or don't expect any significant impact moving forward

Speaker 6: Of course. Makes sense. Then just more sort of a general question, you know, around, you know, AI and procurement methodologies. Are you seeing any pushback or demands from your customer set around, you know, sharing costs or sharing maybe upside from, you know, faster design? Do you mind maybe providing any color in terms of how these conversations are going or maybe not? Thank you. Of course. of course Makes sense. makes sense Then just more sort of a general question, you know, around, you know, AI and procurement methodologies. then just more sort of a general question you know around you know ai and procurement methodologies Are you seeing any pushback or demands from your customer set around, you know, sharing costs or sharing maybe upside from, you know, faster design? are you seeing any pushback or demands from your customer set around you know sharing costs or sharing maybe upside from you know faster design Do you mind maybe providing any color in terms of how these conversations are going or maybe not? do you mind maybe providing any color in terms of how these conversations are going or maybe not Thank you. thank you

Speaker 3: Yeah. A couple of things there. We've actually partnered with a number of our clients for the like co-creation of some AI applications. You know, an example that is down in the U.S., you know, at WSSC Water in Prince William County. You know, we're kind of partnering with them for the co-development of some AI-enabled wastewater operations space. We're working with some on digital twin development. Interesting, you know, we're seeing AI, you know, our usage, you know, continue to expand with our client base. You know, what we find is it's providing us with some new service opportunities. I'll give you example of that. Yeah. yeah A couple of things there. a couple of things there We've actually partnered with a number of our clients for the like co-creation of some AI applications. we've actually partnered with a number of our clients for the like co-creation of some ai applications You know, an example that is down in the U.S., you know, at WSSC Water in Prince William County. you know an example that is down in the u.s you know at wssc water in prince william county You know, we're kind of partnering with them for the co-development of some AI-enabled wastewater operations space. you know we're kind of partnering with them for the co-development of some ai-enabled wastewater operations space We're working with some on digital twin development. we're working with some on digital twin development Interesting, you know, we're seeing AI, you know, our usage, you know, continue to expand with our client base. interesting you know we're seeing ai you know our usage you know continue to expand with our client base You know, what we find is it's providing us with some new service opportunities. you know what we find is it's providing us with some new service opportunities I'll give you example of that. i'll give you example of that In Taiwan, we recently worked with our client there and developed a digital twin of a water treatment plant, and we integrated it with some AI-driven operational models. Taiwan, of course, very mountainous area. When you get a heavy rain, not only does the water flow down towards the rivers, but so does the sediments. That increases turbidity in the water. What we do then is, using our AI models, we simulate not just the water, but the turbidity. How could the plant operations be varied in order to, you know, to deal with this water? The beautiful part of it is while we absolutely, the AI system could control the, you know, the operation of the plant from there's always a person in the middle. In Taiwan, we recently worked with our client there and developed a digital twin of a water treatment plant, and we integrated it with some AI-driven operational models. in taiwan we recently worked with our client there and developed a digital twin of a water treatment plant and we integrated it with some ai-driven operational models Taiwan, of course, very mountainous area. taiwan of course very mountainous area When you get a heavy rain, not only does the water flow down towards the rivers, but so does the sediments. when you get a heavy rain not only does the water flow down towards the rivers but so does the sediments That increases turbidity in the water. that increases turbidity in the water What we do then is, using our AI models, we simulate not just the water, but the turbidity. what we do then is using our ai models we simulate not just the water but the turbidity How could the plant operations be varied in order to, you know, to deal with this water? how could the plant operations be varied in order to you know to deal with this water The beautiful part of it is while we absolutely, the AI system could control the, you know, the operation of the plant from there's always a person in the middle. the beautiful part of it is while we absolutely the ai system could control the you know the operation of the plant from there's always a person in the middle You know, this is a public water supply, so we give all that information to the operator, they make their decision. Then using the digital twin, you know, we can watch the dosing of the chemicals change, we can watch how the plant operations changes. That's sort of that getting into the operational phase as a new service offering for us. We, you know, consult on that often, but providing this product is new for us. Interestingly, it's working really well, and it's one of the reasons that we were recently awarded a really large water treatment plant design in the Middle East. The beauty of that is that we're getting new work from it. You know, this is a public water supply, so we give all that information to the operator, they make their decision. you know this is a public water supply so we give all that information to the operator they make their decision Then using the digital twin, you know, we can watch the dosing of the chemicals change, we can watch how the plant operations changes. then using the digital twin you know we can watch the dosing of the chemicals change we can watch how the plant operations changes That's sort of that getting into the operational phase as a new service offering for us. that's sort of that getting into the operational phase as a new service offering for us We, you know, consult on that often, but providing this product is new for us. we you know consult on that often but providing this product is new for us Interestingly, it's working really well, and it's one of the reasons that we were recently awarded a really large water treatment plant design in the Middle East. interestingly it's working really well and it's one of the reasons that we were recently awarded a really large water treatment plant design in the middle east The beauty of that is that we're getting new work from it. the beauty of that is that we're getting new work from it There's others and maybe, where we've used AI. We designed a beach club on one Caribbean island recently, and that was a fixed fee job. There, you know, we had our fixed fee. We were able to do the design a bit quicker. We did not see, we don't see clients at this point asking for a reduction in that fixed percentage of capital costs. Might that come at some point in the future perhaps, but we're not seeing it yet, Max. We're seeing some good things happening there. There's others and maybe, where we've used AI. there's others and maybe where we've used ai We designed a beach club on one Caribbean island recently, and that was a fixed fee job. we designed a beach club on one caribbean island recently and that was a fixed fee job There, you know, we had our fixed fee. there you know we had our fixed fee We were able to do the design a bit quicker. we were able to do the design a bit quicker We did not see, we don't see clients at this point asking for a reduction in that fixed percentage of capital costs. we did not see we don't see clients at this point asking for a reduction in that fixed percentage of capital costs Might that come at some point in the future perhaps, but we're not seeing it yet, Max. might that come at some point in the future perhaps but we're not seeing it yet max We're seeing some good things happening there. we're seeing some good things happening there

Speaker 6: Yeah, absolutely. That's great color. Thank you so much, Gord. Yeah, absolutely. yeah absolutely That's great color. that's great color Thank you so much, Gord. thank you so much gord

Speaker 3: Great. Thanks. Great. great Thanks. thanks

Speaker 8: Thank you. Our next question comes from the line of Michael Tupholme from TD Cowen. Your question please. Thank you. thank you Our next question comes from the line of Michael Tupholme from TD Cowen. our next question comes from the line of michael tupholme from td cowen Your question please. your question please

Speaker 7: Thank you. Good morning. Thank you. thank you Good morning. good morning

Speaker 3: Morning. Morning. morning

Speaker 7: Just a question about the overall organic growth and the progression from here. Obviously maintaining the mid to high single-digit organic growth guidance for full year. Just if you can help us think through how that progression will play out over coming quarters, like will Q2 get you right into that range, or is this more of a building process throughout the year? Just a question about the overall organic growth and the progression from here. just a question about the overall organic growth and the progression from here Obviously maintaining the mid to high single-digit organic growth guidance for full year. obviously maintaining the mid to high single-digit organic growth guidance for full year Just if you can help us think through how that progression will play out over coming quarters, like will Q2 get you right into that range, or is this more of a building process throughout the year? just if you can help us think through how that progression will play out over coming quarters like will q2 get you right into that range or is this more of a building process throughout the year

Speaker 9: Yeah. Sorry, no, we expect a sequential organic growth improvement. I mean, it's obviously hard to time quarters and what that might look like. Definitely as we move into the back half of the year and set ourselves up for 2027, our expectations would be that you'd see a ramp through the organic, particularly off the Q1 levels. Yeah. yeah Sorry, no, we expect a sequential organic growth improvement. sorry no we expect a sequential organic growth improvement I mean, it's obviously hard to time quarters and what that might look like. i mean it's obviously hard to time quarters and what that might look like Definitely as we move into the back half of the year and set ourselves up for 2027, our expectations would be that you'd see a ramp through the organic, particularly off the Q1 levels. definitely as we move into the back half of the year and set ourselves up for 2027 our expectations would be that you'd see a ramp through the organic particularly off the q1 levels

Speaker 7: Okay. Perfect. That's helpful. Then there was some commentary just a few moments ago about data centers. Gord, I know you've been asked this in the past, but can you give us an update on sort of what percentage of the business that is today, given the growth you're seeing and how you maybe see that looking as we maybe look out to, say, next year, 2027, just percentage of overall revenue? Okay. okay Perfect. perfect That's helpful. that's helpful Then there was some commentary just a few moments ago about data centers. then there was some commentary just a few moments ago about data centers Gord, I know you've been asked this in the past, but can you give us an update on sort of what percentage of the business that is today, given the growth you're seeing and how you maybe see that looking as we maybe look out to, say, next year, 2027, just percentage of overall revenue? gord i know you've been asked this in the past but can you give us an update on sort of what percentage of the business that is today given the growth you're seeing and how you maybe see that looking as we maybe look out to say next year 2027 just percentage of overall revenue

Speaker 3: Yeah, you know, it's sitting in and around that 3% range, and it's certainly growing quickly. You know, we could see it doubling, you know, to the 5%-6% range. You know, one of the things that we've talked about before is that I would never wanna see it for our company to get up in 15%-20% because, you know, while it's good work and it's high margin work, you know, we just wouldn't want to be so exposed to one line of business. You know, we'll take the good questions. It's good work and, yeah, I could see it doubling to that 5%-6% range. Yeah, you know, it's sitting in and around that 3% range, and it's certainly growing quickly. yeah you know it's sitting in and around that 3% range and it's certainly growing quickly You know, we could see it doubling, you know, to the 5%-6% range. you know we could see it doubling you know to the 5%-6% range You know, one of the things that we've talked about before is that I would never wanna see it for our company to get up in 15%-20% because, you know, while it's good work and it's high margin work, you know, we just wouldn't want to be so exposed to one line of business. you know one of the things that we've talked about before is that i would never wanna see it for our company to get up in 15%-20% because you know while it's good work and it's high margin work you know we just wouldn't want to be so exposed to one line of business You know, we'll take the good questions. you know we'll take the good questions It's good work and, yeah, I could see it doubling to that 5%-6% range. it's good work and yeah i could see it doubling to that 5%-6% range

Speaker 7: Okay. That's helpful. I will leave it there. Thanks. Okay. okay That's helpful. that's helpful I will leave it there. i will leave it there Thanks. thanks

Speaker 3: Thanks, Michael. Thanks, Michael. thanks michael

Speaker 8: Thank you. Our next question comes from the line of Jonathan Goldman from Scotiabank. Your question please. Thank you. thank you Our next question comes from the line of Jonathan Goldman from Scotiabank. our next question comes from the line of jonathan goldman from scotiabank Your question please. your question please

Speaker 4: Hey, good morning, team. Thanks for taking my questions. Just one for me. The larger projects that you're booking in the U.S., is it possible to quantify or maybe directionally talk about how big those projects are relative to the average size project you do in the U.S.? Maybe also if you can talk about how the delivery kind of period or the conversion of those projects would compare to an average size order. Is this part of a bigger trend moving to more complex and larger projects than in the past? Hey, good morning, team. hey good morning team Thanks for taking my questions. thanks for taking my questions Just one for me. just one for me The larger projects that you're booking in the U.S., is it possible to quantify or maybe directionally talk about how big those projects are relative to the average size project you do in the U.S.? the larger projects that you're booking in the u.s is it possible to quantify or maybe directionally talk about how big those projects are relative to the average size project you do in the u.s Maybe also if you can talk about how the delivery kind of period or the conversion of those projects would compare to an average size order. maybe also if you can talk about how the delivery kind of period or the conversion of those projects would compare to an average size order Is this part of a bigger trend moving to more complex and larger projects than in the past? is this part of a bigger trend moving to more complex and larger projects than in the past

Speaker 3: We are absolutely seeing a number of clients, both in Canada and in the U.S. that are sort of bundling large packages of projects together, in part because rather than them then having to run 10 projects, they run two, for example. But they're much larger. We are seeing the competitive set on those is much different because it's really only the big majors that can pursue those. The competitive set is different, which allows a little bit of pricing power in a number of instances. It's while an average project size might be in the CAD 100 thousand, couple hundred thousand CAD range, these ones could be in the CAD 100 million to a couple hundred million CAD range. We are absolutely seeing a number of clients, both in Canada and in the U.S. that are sort of bundling large packages of projects together, in part because rather than them then having to run 10 projects, they run two, for example. we are absolutely seeing a number of clients both in canada and in the u.s that are sort of bundling large packages of projects together in part because rather than them then having to run 10 projects they run two for example But they're much larger. but they're much larger We are seeing the competitive set on those is much different because it's really only the big majors that can pursue those. we are seeing the competitive set on those is much different because it's really only the big majors that can pursue those The competitive set is different, which allows a little bit of pricing power in a number of instances. the competitive set is different which allows a little bit of pricing power in a number of instances It's while an average project size might be in the CAD 100 thousand, couple hundred thousand CAD range, these ones could be in the CAD 100 million to a couple hundred million CAD range. it's while an average project size might be in the cad 100 thousand couple hundred thousand cad range these ones could be in the cad 100 million to a couple hundred million cad range There's some big projects out there. For us, it changes the way that we manage them. We have, there's a smaller number of people within Stantec and the industry overall that can manage projects of that size. We're fortunate to have more than our fair share of them. We do see that being a growing part of the business. What's interesting about those projects is that, you know, they do typically take a little longer to ramp up. They go at a high level for multiple years, three, four, five years, before they ramp down. There's some big projects out there. there's some big projects out there For us, it changes the way that we manage them. for us it changes the way that we manage them We have, there's a smaller number of people within Stantec and the industry overall that can manage projects of that size. we have there's a smaller number of people within stantec and the industry overall that can manage projects of that size We're fortunate to have more than our fair share of them. we're fortunate to have more than our fair share of them We do see that being a growing part of the business. we do see that being a growing part of the business What's interesting about those projects is that, you know, they do typically take a little longer to ramp up. what's interesting about those projects is that you know they do typically take a little longer to ramp up They go at a high level for multiple years, three, four, five years, before they ramp down. they go at a high level for multiple years three four five years before they ramp down The magic in the Stantec model is being able to service those long duration projects, but as they're ramping up and ramping down, you use your smaller projects to fill in those ramp up and ramp down projects. That's a little bit of the beauty of the Stantec model, is that we can service both the smaller projects and the larger projects, keeping our utilization rates up, keeping our people engaged sort of at all phases of. The magic in the Stantec model is being able to service those long duration projects, but as they're ramping up and ramping down, you use your smaller projects to fill in those ramp up and ramp down projects. the magic in the stantec model is being able to service those long duration projects but as they're ramping up and ramping down you use your smaller projects to fill in those ramp up and ramp down projects That's a little bit of the beauty of the Stantec model, is that we can service both the smaller projects and the larger projects, keeping our utilization rates up, keeping our people engaged sort of at all phases of. that's a little bit of the beauty of the stantec model is that we can service both the smaller projects and the larger projects keeping our utilization rates up keeping our people engaged sort of at all phases of

Speaker 9: Gord, all I'd add there is, you know, I love the way that's evolving from a competitive perspective for reasons you've described, in no way, shape, or form from a diversification perspective or from a concentration perspective does this create an issue for us in any way. The organization is so large across both our sectors and across our geographies that no single project in any way, shape, or form is makes it problematic from a cycling perspective and overall exposure perspective. Gord, all I'd add there is, you know, I love the way that's evolving from a competitive perspective for reasons you've described, in no way, shape, or form from a diversification perspective or from a concentration perspective does this create an issue for us in any way. gord all i'd add there is you know i love the way that's evolving from a competitive perspective for reasons you've described in no way shape or form from a diversification perspective or from a concentration perspective does this create an issue for us in any way The organization is so large across both our sectors and across our geographies that no single project in any way, shape, or form is makes it problematic from a cycling perspective and overall exposure perspective. the organization is so large across both our sectors and across our geographies that no single project in any way shape or form is makes it problematic from a cycling perspective and overall exposure perspective

Speaker 4: Interesting. Gord, your comment about maybe bundling projects together. Is this multiple projects from a single customer that are flowing to kind of single source for, you know? Interesting. interesting Gord, your comment about maybe bundling projects together. gord your comment about maybe bundling projects together Is this multiple projects from a single customer that are flowing to kind of single source for, you know? is this multiple projects from a single customer that are flowing to kind of single source for you know

Speaker 3: Yeah Yeah yeah

Speaker 4: You know, E&C rather than a bunch, or is it multiple phases of a project that they used to be outsourcing to a broader set of suppliers? You know, E&C rather than a bunch, or is it multiple phases of a project that they used to be outsourcing to a broader set of suppliers? you know e&c rather than a bunch or is it multiple phases of a project that they used to be outsourcing to a broader set of suppliers

Speaker 3: Yeah, it's more a series of projects that they would bring together, you know, where they used to maybe issue, you know, two, three or four requests for proposals, run two, three or four concurrent projects. We're seeing sort of some bundling of multiple sort of independent projects, but also to your point, in other cases it's bundling all the phases together. 'Cause, you know, for them to go out and procure takes a lot of time and effort as well. The less times you can go to have to procure, then the, you know, the better it is for them, better it is for us actually as well. Yeah, it's more a series of projects that they would bring together, you know, where they used to maybe issue, you know, two, three or four requests for proposals, run two, three or four concurrent projects. yeah it's more a series of projects that they would bring together you know where they used to maybe issue you know two three or four requests for proposals run two three or four concurrent projects We're seeing sort of some bundling of multiple sort of independent projects, but also to your point, in other cases it's bundling all the phases together. 'Cause, you know, for them to go out and procure takes a lot of time and effort as well. we're seeing sort of some bundling of multiple sort of independent projects but also to your point in other cases it's bundling all the phases together 'cause you know for them to go out and procure takes a lot of time and effort as well The less times you can go to have to procure, then the, you know, the better it is for them, better it is for us actually as well. the less times you can go to have to procure then the you know the better it is for them better it is for us actually as well

Speaker 4: Interesting. Sounds like a good trend. Thanks for taking my question. I'll get back. Thank you. Interesting. interesting Sounds like a good trend. sounds like a good trend Thanks for taking my question. thanks for taking my question I'll get back. i'll get back Thank you. thank you

Speaker 3: Great. Thank you. Great. great Thank you. thank you

Speaker 8: Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Gord Johnston for any further remarks. Thank you. thank you This does conclude the question and answer session of today's program. this does conclude the question and answer session of today's program I'd like to hand the program back to Gord Johnston for any further remarks. i'd like to hand the program back to gord johnston for any further remarks

Speaker 3: Very well. Only to say, you know, thanks to everyone for joining us this morning. I know it's a busy morning there. If you have any follow-up questions following today's call, please reach out to Jess Nieukerk, our VP of Investor Relations. Enjoy the rest of your day. Thank you. Very well. very well Only to say, you know, thanks to everyone for joining us this morning. only to say you know thanks to everyone for joining us this morning I know it's a busy morning there. i know it's a busy morning there If you have any follow-up questions following today's call, please reach out to Jess Nieukerk, our VP of Investor Relations. if you have any follow-up questions following today's call please reach out to jess nieukerk our vp of investor relations Enjoy the rest of your day. enjoy the rest of your day Thank you. thank you

Speaker 8: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. Thank you, ladies and gentlemen, for your participation in today's conference. thank you ladies and gentlemen for your participation in today's conference This does conclude the program. this does conclude the program You may now disconnect. you may now disconnect Good day. good day