Q2 2026 Stantec Inc Earnings Call

Operator: Welcome to Stantec's Q2 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 webcast. Please be advised that if you have dialed in while also viewing the webcast, you should mute your computer as there's a delay between the call and the webcast. All information provided during this conference call is subject to the forward-looking statement qualifications set out on Slide 2, detailed in Stantec's management's discussion and analysis and incorporated in full for the purposes of today's call. Unless otherwise noted, dollar amounts discussed in today's call are expressed in Canadian dollars and are generally rounded.

Speaker #1: during this conference call is subject to the forward-looking statement qualification set out on slide webcast. All information provided 2. Detailed and Stantec's management's discussion and analysis and incorporated in full for the purposes of today's call.

Speaker #1: Unless otherwise noted, dollar amounts discussed in today's call are expressed in Canadian dollars and are generally rounded. With that, I'll turn the call over to Mr. Gordon Johnston.

Operator: With that, I'll turn the call over to Mr. Gord Johnston. Please go ahead, sir.

Speaker #1: Please go ahead, sir.

Speaker #2: Good morning, everyone, and thank you for joining us today. Our second quarter financial results continue to showcase the strength of our business. Stantec's diversification across operating regions and sectors has kept us on track to deliver on our financial targets for the year.

Gord Johnston: Good morning, everyone, and thank you for joining us today. Our Q2 financial results continue to showcase the strength of our business. Stantec's diversification across operating regions and across sectors has kept us on track to deliver on our financial targets for the year. In Q2, we grew our net revenue to CAD 1.8 billion, up almost 12% compared to Q2 2025, driven by almost 4% organic and 7% acquisition growth. Organic growth was driven by double-digit growth of approximately 13% in our global region. Our industry-leading water business achieved close to 12% organic growth. Adjusted EBITDA increased over 17%, and we achieved an adjusted EBITDA margin of 18.7%, a record for Q2, and this represents an increase of 90 basis points year over year. Adjusted EPS grew over 18% compared to Q2 2025.

Speaker #2: In the second quarter, we grew our net revenue to $1.8 billion. Up almost 12% compared to Q2 2025, driven by almost 4% organic and 7% acquisition growth.

Speaker #2: Organic growth was driven by double-digit growth of approximately 13% in our global region. And our industry-leading water business achieved close to 12% organic growth.

Speaker #2: Adjusted EBITDA increased over 17%, and we achieved an adjusted EBITDA margin of 18.7%, a record for Q2. And this represents an increase of 90 basis points year over year.

Speaker #2: Adjusted EPS grew over 18% compared to Q2 2025. Looking at our results in each of our geographies, in the second quarter, US net revenue increased almost 13%, driven by the acquisition and strong performance of Page.

Gord Johnston: Looking at our results in each of our geographies, in Q2, US net revenue increased almost 13%, driven by the acquisition and strong performance of Page. Underlying demand across our end markets remains very strong, supported by long-term investments in infrastructure, energy, transportation, water, and advanced manufacturing facilities. Our water business saw continued demand and work on large wastewater treatment projects. In energy and resources, work on a major hydropower dam project drove organic growth, and our infrastructure business delivered growth through data center projects in our North Central region and benefited from favorable recoveries on a large transportation project. While organic growth was flat in the quarter, driven by some delays and the slower ramp-up on certain projects, we have already started to see positive signs of acceleration in Q3 and expect this trend to continue throughout the back half of this year.

Speaker #2: Underlying demand across our end markets remains very strong, supported by long-term investments in infrastructure, energy, transportation, water, and advanced manufacturing facilities. Our water business saw continued demand and work on large wastewater treatment projects.

Speaker #2: In energy and resources, work on a major hydropower dam project drove organic growth. And our infrastructure business delivered growth through data center projects in our North Central region and benefited from a favorable recovery on a large transportation project.

Speaker #2: While organic growth was flat in the quarter driven by some delays and the slower ramp-up on certain projects, we've already started to see positive signs of acceleration in Q3 and expect this trend to continue throughout the back half of this year.

Speaker #2: In Canada, second quarter net revenue grew 2.4% organically. Double-digit organic net revenue growth in our water business was driven by biosolids projects, and continued momentum on wastewater projects.

Gord Johnston: In Canada, Q2 net revenue grew 2.4% organically. Double-digit organic net revenue growth in our water business was driven by biosolids projects and continued momentum on wastewater projects. Robust net revenue growth was also achieved in both our buildings and environmental services businesses through public sector investment, primarily in our civic markets and an increase in environmental planning in the mining industry, respectively. Our infrastructure business continued to experience a wind down of certain transit and roadway projects in accordance with anticipated project cycles. Lastly, our global business delivered over 18% net revenue growth in Q2, driven by almost 13% organic and over 2% acquisition growth, as well as positive foreign exchange impacts. Our industry-leading water business delivered over 20% organic growth this quarter through long-term framework agreements and public sector investments in water infrastructure across the UK, Australia, and New Zealand.

Speaker #2: Robust net revenue growth was also achieved in both our buildings and environmental services businesses, through public sector investment, primarily in our civic markets, and an increase in environmental planning in the mining industry, respectively.

Speaker #2: Our infrastructure business continued to experience a wind-down of certain transit and roadway projects, in accordance with anticipated project cycles. Lastly, our global business delivered over 18% net revenue growth in the second quarter, driven by almost 13% organic and over 2% acquisition growth, as well as positive foreign exchange impacts.

Speaker #2: Our industry-leading water business delivered over 20% organic growth this quarter, through long-term framework agreements and public sector investments in water infrastructure, across the UK, Australia, and New Zealand.

Speaker #2: 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.

Gord Johnston: The wrap-up of new projects in Chile and Peru drove strong organic growth in energy and resources as the growing need for energy transition solutions continues to drive demand in mining for copper. On a year-to-date basis, our global operations also had modest growth in its infrastructure business, driven primarily by double-digit organic growth in Germany due to momentum on a major public sector electrical transmission project and increased volume on transit and rail projects. I will now turn the call over to Vito to review our Q2 financial results in more detail.

Speaker #2: On a year-to-date basis, our global operations also had modest growth in its infrastructure business. Driven primarily by double-digit organic growth in Germany, due to momentum on a major public sector electrical transmission project, and increased volume on transit and rail projects.

Speaker #2: I'll now turn the call over to Vito to review our second quarter financial results in more detail.

Speaker #3: Thank you, Gordon. Good morning, everyone. Strong operational execution, supported by sustained demand across our diversified multi-sector and multi-regional platform, continues to deliver solid financial results.

Vito Culmone: Thank you, Gord, and good morning, everyone. Strong operational execution, supported by sustained demand across our diversified multi-sector and multi-regional platform, continues to deliver solid financial results. At the mid-year point of 2026, we are firmly on track to deliver against all of our financial guidance metrics. In Q2, we achieved gross revenue of CAD 2.2 billion and net revenue of CAD 1.8 billion, an 11.5% increase compared to Q2 of 2025. This growth was driven by 3.7% organic and 7.1% acquisition growth, which primarily reflects strong results from our global region and from the Page acquisition, respectively. Project margins as a percentage of our net revenue increased 30 basis points to 54.5%. We achieved an adjusted EBITDA margin of 18.7% in the quarter, a 90 basis point increase compared to Q2 of 2025.

Speaker #3: At the mid-year point of 2026, we are firmly on track to deliver against all of our financial guidance metrics. In the second quarter, we achieved gross revenue of $2.2 billion and net revenue of $1.8 billion.

Speaker #3: On a 11.5% increase compared to Q2 of 2025. This growth was driven by 3.7% organic and 7.1% acquisition growth, which primarily reflects strong results from our global region and from the Page acquisition, respectively.

Speaker #3: Project margins, as a percentage of our net revenue increased 30 basis points to 54.5%. We achieved an adjusted EBITDA margin of 18.7% in the quarter, a 90 basis point increase compared to Q2 of 2025.

Vito Culmone: On a trailing 12-month basis, our adjusted EBITDA margin is 18%, an increase of 80 basis points compared to the prior trailing 12 months. The growth in margins continues to be driven by a methodical and disciplined approach to all aspects of our business. It all starts with a continued focus of execution and servicing of our client needs. The work we do is of meaningful value across all of our sectors and regions, and our focus remains on enabling superior outcomes for our clients, all the while focusing on efficient management of our operations and the optimization of our discretionary spending. On the back of our increase in net revenue and the expansion of our margins, our adjusted EPS in Q2 increased 18.4% to CAD 1.61. Turning to our cash flow liquidity and capital resources.

Speaker #3: On a trailing 12-month basis, our adjusted EBITDA margin is 18%, an increase of 80 basis points compared to the prior trailing 12 months. The growth in margins continues to be driven by methodical and disciplined approach to all aspects of our business.

Speaker #3: It all starts with a continued focus of execution and servicing of our client needs. The work we do is of meaningful value across all of our sectors and regions, and our focus remains on enabling superior outcomes for our clients all the while focusing on efficient management of our operations and the optimization of our discretionary spending.

Speaker #3: On the back of our increase in net revenue and the expansion of our margins, our adjusted EPS in the second quarter increased 18.4% to $1.61.

Speaker #3: Turning to our cash flow, liquidity, and capital resources: following the financial integration of Page in Q1, our operating cash flows in Q2 returned to a more normalized cadence.

Vito Culmone: Following the financial integration of Page in Q1, our operating cash flows in Q2 returned to a more normalized cadence. On a year-to-date basis, our cash flows from operations totaled CAD 116 million. In terms of capital allocation, our strategy remains unchanged. We believe that continued disciplined M&A remains our highest source of value creation for our shareholders, measured over a reasonable period of time. The pipeline remains robust, notwithstanding certain short-term dislocation in valuation ranges between public and private entities. Given our proven track record of disciplined M&A, we expect the strategic expansion of our business to continue. To that end, although perhaps on a smaller scale, we are happy to announce the acquisition of Niche, a 200-person engineering and environmental consultancy firm in Australia.

Speaker #3: And on a year-to-date basis, our cash flows from operations totaled $116 million. In terms of capital allocation, our strategy remains unchanged. We believe that continued disciplined M&A remains our highest source of value creation for our shareholders, measured over a reasonable period of time.

Speaker #3: A pipeline remains robust, notwithstanding certain short-term dislocation and valuation ranges between public and private entities. Given our proven track record of disciplined M&A, we expect the strategic expansion of our business to continue.

Speaker #3: And to that end, although perhaps on a smaller scale, we are happy to announce the acquisition of Niche, a 200-person engineering and environmental consultancy firm in Australia.

Speaker #3: Niche helps strengthen our environmental services business in the region and supports our ability to help clients advance critical infrastructure and develop projects while protecting and restoring natural environments.

Vito Culmone: Niche helps strengthen our environmental services business in the region and supports our ability to help clients advance critical infrastructure and develop projects while protecting and restoring natural environments. This transaction closed effective 31 July. Our continued strong operating cash flow and exemplary balance sheet offers us considerable flexibility in our capital allocation activities. In Q2, we stepped into our NCIB and repurchased approximately 1.7 million common shares, or 1.5% of our outstanding shares, for an aggregate purchase price of approximately CAD 175 million. Notwithstanding this cash outflow, our net debt to adjusted EBITDA ratio remained at 1.3x, within our internal target range of 1x to 2x. Given our Q2 NCIB activity, it is prudent for us to have additional flexibility, and we intend to seek TSX approval to expand the program beyond the existing 2% limit.

Speaker #3: This transaction closed effective July 31st. Our continued strong operating cash flow and exemplary balance sheet offers us considerable flexibility in our capital allocation activities.

Speaker #3: And in Q2, we stepped into our NCIB and repurchased approximately $1.7 million common shares, or $1.5% of our outstanding shares, for an aggregate purchase price of approximately $175 million.

Speaker #3: Now, withstanding this cash outflow, our net debt to adjusted EBITDA ratio remained at 1.3 times within our internal target range of 1 to 2 times.

Speaker #3: And given our Q2 NCIB activity, it's prudent for us to have additional flexibility and we intend to seek TSX approval to expand the program beyond the existing 2% limit.

Speaker #3: And finally, DSO, at the end of the second quarter, was 75 days. Within our internal target. I'll now hand the call back to Gord to discuss our backlog, our recent project wins, and our outlook for 2026.

Vito Culmone: Finally, DSO at the end of Q2 was 75 days, within our internal target. I will now hand the call back to Gord to discuss our backlog, our recent project wins, and our outlook for 2026.

Speaker #2: Great. Thanks, Vito. At the end of Q2, our contract backlog reached a record of 9.2 billion dollars, a 17.5% increase year over year, representing approximately 13 months of work.

Gord Johnston: Great. Thanks, Vito. At the end of Q2, our contract backlog reached a record of CAD 9.2 billion, a 17.5% increase year over year, representing approximately 13 months of work. Year over year, our backlog has grown 7% organically. During the quarter, backlog grew in each of our regions. The most notable year-over-year growth coming from our global region, which delivered double-digit growth of almost 25%. We also saw strong backlog growth in water, which delivered over 10% organic growth. Acquisitions completed in 2025 further contributed to backlog growth by almost 8%, primarily within our Buildings business, which had over 40% growth. I will now highlight a few projects Stantec secured during the quarter, showcasing the breadth of opportunities we are capturing across diverse markets, project sizes, and levels of complexity.

Speaker #2: Year over year, our backlog has grown 7% organically. During the quarter, backlog grew in each of our regions. The most notable year-over-year growth coming from our global region, which delivered double-digit growth of almost 25%.

Speaker #2: We also saw strong backlog growth in water, which delivered over 10% organic growth. Acquisitions completed in 2025 further contributed to backlog growth by almost 8%, primarily within our buildings business, which had over 40% growth.

Speaker #2: I'll now highlight a few projects Stantec secured during the quarter, showcasing the breadth of opportunities we're capturing across diverse markets, project sizes, and levels of complexity.

Speaker #2: Our Buildings team was selected to provide architecture, engineering, and integrated design services for Meta's $13 billion data center in Sturgeon County, Alberta. The project strengthens our data center capabilities while supporting the continued expansion of Alberta's critical digital infrastructure.

Gord Johnston: Our Buildings team was selected to provide architecture, engineering, and integrated design services for Meta's CAD 13 billion data center in Sturgeon County, Alberta. The project strengthens our data center capabilities while supporting the continued expansion of Alberta's critical digital infrastructure. Stantec's Water team was selected to provide preliminary design and evaluation services for the Drake Water Reclamation Facility in Fort Collins, Colorado, a 23-million-gallon-per-day wastewater treatment plant. The project will modernize critical headworks infrastructure, improving debris removal and treatment reliability while reducing impacts to downstream processes. Activity continues to ramp up in Australia for our Buildings business, supported by increased investment in social infrastructure. During the quarter, the team was selected to provide engineering services for the Redcliffe Hospital redevelopment in Queensland, further strengthening our position in the growing healthcare infrastructure market.

Speaker #2: Stantec's water team was selected to provide preliminary design and evaluation services for the Drake Water Reclamation Facility in Fort Collins, Colorado, a 23-million-gallon-per-day wastewater treatment plant.

Speaker #2: The project will modernize critical headworks infrastructure, improving debris removal and treatment reliability, while reducing impacts to downstream processes. Activity continues to wrap up in Australia for our buildings business, supported by increased investment in social infrastructure.

Speaker #2: During the quarter, the team was selected to provide engineering services for the Redcliffe Hospital redevelopment in Queensland, further strengthening our position in the growing healthcare infrastructure market.

Speaker #2: The team was also selected by the Western Australia Department of Housing and Works for a 10-year framework to provide engineering and building-related consulting services for non-residential projects, including education, healthcare, justice, and other social infrastructure.

Gord Johnston: The team was also selected by the Western Australia Department of Housing and Works for a 10-year framework to provide engineering and building-related consulting services for non-residential projects, including education, healthcare, justice, and other social infrastructure. As we look toward the remainder of the year, we continue to track toward 2026 financial targets. With the continued solid progress to date, we are increasing and narrowing the range of adjusted EBITDA margin we expect to achieve. We continue to expect net revenue growth in the range of 8.5% to 11.5%, driven by strong acquisition growth from Page and organic growth across our operating regions. Overall organic net revenue growth is now expected to be in the mid-single-digit range, driven by strong demand across all geographic reporting segments and business units. In the US, we expect organic net revenue growth to be in the mid-single-digit range.

Speaker #2: As we look toward the remainder of the year, we continue to track toward 2026 financial targets, and with a continued solid progress to date, we are increasing and narrowing the range of adjusted EBITDA margin we expect to achieve.

Speaker #2: We continue to expect net revenue growth in the range of 8.5% to 11.5%, driven by strong acquisition growth from Page and organic growth across our operating regions.

Speaker #2: Overall organic net revenue growth is now expected to be in the mid-single-digit range. Driven by strong demand across all geographic reporting segments and business units.

Speaker #2: In the US, we expect organic net revenue growth to be in the mid-single-digit range. We expect activity to accelerate in the second half of the year, supported by the demand across all five of our business verticals.

Gord Johnston: We expect activity to accelerate in the second half of the year, supported by the demand across all five of our business verticals. We are encouraged by the increased activity and movement we have started to see with large environmental projects ramping up, increased demand related to water and energy and resources, as well as growing demand in key areas such as advanced manufacturing and data centers. In Canada, we also now expect to achieve mid-single-digit organic growth supported by public sector spending plans and continued demand, particularly around water and Buildings. There is still a lot of momentum around defense and other nation-building projects, which are still in the early stages. We expect these programs to contribute more fully in 2027 and beyond. Lastly, Global is expected to achieve high single-digit organic growth.

Speaker #2: We are encouraged by the increased activity and movement we started to see with large environmental projects ramping up, increased demand related to water and energy and resources, as well as growing demand in key areas, such as advanced manufacturing and data centers.

Speaker #2: In Canada, we also now expect to achieve mid-single-digit organic growth, supported by public sector spending plans, and continued demand. Particularly around water, and buildings.

Speaker #2: There's still a lot of momentum around defense and other nation-building projects, which are still in the early stages. We expect these programs to contribute more fully in 2027 and beyond.

Speaker #2: Lastly, Global is expected to achieve high single-digit organic growth. The growth in Global is being driven by high levels of activity in our Water business under AMP8 and other framework agreements, strong demand in Energy and Resources, particularly in Latin America, and positive demand fundamentals across other Global business units.

Gord Johnston: The growth in global is being driven by high levels of activity in our water business under AMP8 and other framework agreements, strong demand in energy and resources, particularly in Latin America, and positive demand fundamentals across other global business units. With our strong margins year to date and continued focus on operational excellence, we are increasing our outlook for adjusted EBITDA margin. We now expect to deliver 17.8% to 18.3% for the year. Finally, we are maintaining our adjusted EPS target for the year of 15% to 18% growth, reflecting our confidence in delivering strong bottom-line results and long-term shareholder value. Before we open up the line for questions, I would like to take a moment to acknowledge that this is my final earnings call as Stantec's President and CEO.

Speaker #2: With our strong margins year to date, and continued focus on operational excellence, we are increasing our outlook for adjusted EBITDA margin. We now expect to deliver 17.8% to 18.3% for the year.

Speaker #2: Finally, we're maintaining our adjusted EPS target for the year of 15% to 18% growth, reflecting our confidence in delivering strong bottom-line results and long-term shareholder value.

Speaker #2: Before we open up the line for questions, I'd like to take a moment to acknowledge that this is my final earnings call as Stantec's president and CEO.

Speaker #2: As announced in June, I'll be retiring from the role effective October 1st. And transitioning to vice chair of Stantec's board of directors. It's been an incredible privilege to lead this company for the last eight and a half years, and I'm very proud of what our teams have accomplished together.

Gord Johnston: As announced in June, I will be retiring from the role effective 1 October and transitioning to Vice Chair of Stantec's Board of Directors. It has been an incredible privilege to lead this company for the last eight and a half years, and I am very proud of what our teams have accomplished together. The underlying demand for our services is strong, and our diversified, resilient, stable, and multi-sector platform positions us well to capture opportunities across the markets that we serve. I am especially excited to be passing the torch to Susan Reisbord. Susan has a deep understanding of our business, our clients, and our people. Having worked closely with her, I have all the confidence in her capabilities, experience, and energy to lead Stantec into its next chapter.

Speaker #2: The underlying demand for our services is strong, and our diversified, resilient, stable, and multi-sector platform positions us well to capture opportunities across the markets that we serve.

Speaker #2: I'm especially excited to be passing the torch to Susan Riesbord. Susan has a deep understanding of our business, our clients, and our people. Having worked closely with her, I have all the confidence in her capabilities, experience, and energy to lead Stantec into its next chapter.

Speaker #2: I'm looking forward to staying close to the company in my role as vice chair, and supporting Susan as the team as they continue to execute on the opportunities ahead.

Gord Johnston: I am looking forward to staying close to the company in my role as Vice Chair and supporting Susan as the team, as they continue to execute on the opportunities ahead. Finally, I want to thank our employees, our clients, and all of our analysts and shareholders for their support over the years. With that, let me turn the call over to the operator for questions. Operator?

Speaker #2: Finally, I want to thank our employees. Our clients, and all of our analysts and shareholders for their support over the years. And with that, let me turn the call over to the operator for questions.

Speaker #2: Operator?

Speaker #3: Certainly. Ladies and gentlemen, if you do have a question at this time, please press star 11 on your telephone. If your question has been answered, and you'd like to remove yourself from the queue, simply press star 11 again.

Operator: Certainly. Ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. If your question has been answered and you would like to remove yourself from the queue, simply press star one one again. Our first question for today comes from Sabahat Khan from RBC Capital Markets. Your question please.

Speaker #3: And our first question for today comes from Shahabat Khan from RBC Capital Markets. Your question, please.

Sabahat Khan: Great. Thanks, and good morning. Before I get into the questions, I just want to congratulate you, Gord, on a great run here in your current feat and all the best with the next chapter.

Speaker #4: Great. Thanks, and good morning. And before I get into the questions, I just want to congratulate Gordon on a great run here in your current seat, and all the best with the next chapter.

Gord Johnston: Well, thanks so much, Sabahat. It's been an incredible privilege to lead the team over the last 8 and a half years, and I wouldn't have traded it for anything.

Speaker #2: Oh, yeah. Thanks so much, Saba. It's been an incredible privilege to lead the team over the last eight and a half years, and I wouldn't have traded it for anything.

Sabahat Khan: Great. Just maybe, I guess, starting with kind of the outlook for the back half of the year. On the US segment, looks like you're pointing to mid-single digit organic growth. Just looking at the H1 and call it low single digit for the H1 implies about a high single digit organic for the back half of the year in the US. If you can maybe just detail out your sort of the building blocks and sort of confidence in that outlook on getting to that high single digit range over the next couple of quarters. Thanks.

Speaker #4: Great. Just maybe I guess starting with kind of the outlook for the back half of the year. On the US segment, it looks like you're pointing to mid-single-digit organic growth.

Speaker #4: Just looking at the first half, call it low single-digit for the first half implies about a high single-digit organic for the back half of the year in the US.

Speaker #4: If you can maybe just detail out your sort of the building blocks and sort of your confidence in that outlook on getting to that high single-digit range over the next couple of quarters.

Speaker #4: Thanks.

Speaker #2: Yeah. Thanks, Saba, for the question. And so in the US specifically, we see that this is not a demand issue. It's really more of a timing issue for us here in Q2.

Gord Johnston: Yeah. Thanks, Sabahat, for the question. In the US specifically, we see that this is not a demand issue. It's really more of a timing issue for us here in Q2. We had a number of projects wrap up as per schedule and planned, and a number of projects that we've got awarded and got in backlog just were a bit slow getting out of the blocks and getting started. Now, subsequent to the quarter, we've seen some good positive momentum. In Q3, a number of these projects have kicked off, and the field seasons are going and such. In addition to that momentum, as we look at the back half of the year, we're looking from a demand perspective. The sales funnel is strong, the soft backlog, both trending really, really well.

Speaker #2: We had a number of projects wrap up as per schedule and as planned. And a number of projects that we’ve been awarded and that are in backlog just were a bit slow getting out of the blocks and getting started.

Speaker #2: Now, subsequent to the quarter, we've seen some good positive momentum. In Q3, a number of these projects have kicked off, the field seasons are going, and such.

Speaker #2: So in addition to that momentum, as we look at the back half of the year, we're looking from a demand perspective, the sales funnel is strong, the soft backlog, both trending really, really well.

Speaker #2: And also, if you look at the organic backlog growth in the US, both year to date and year over year, both up in positive organic territory.

Gord Johnston: If you look at the organic backlog growth in the US, both year to date and year over year, both up in positive organic territory, further supporting that ramp-up and that momentum as we enter the H2 of the year, and particularly into 2027. One other thing that, just to call out, is the Page acquisition. We have talked about in the prepared remarks and with others over the year, Page is a fantastic company, and they are performing exceptionally well, driving strong acquisition growth. As per our normal processes, when a company joins us for a year, we report that growth as acquisition growth. But now in Q3, Page is flipping over to that will be reported as organic growth in Q3 and Q4 of the year.

Speaker #2: Further supporting that ramp-up and that momentum as we enter the second half of the year, and particularly into 2027. One other thing to just call out is the Page acquisition.

Speaker #2: And we've talked about in the prepared remarks, and with others over the year, Page is a fantastic company. And their performing exceptionally well, driving strong acquisition growth.

Speaker #2: As for our normal processes, when a company joins us for a year, we report that growth as acquisition growth. But now in Q3, Page is flipping over to that'll be reported as organic growth in Q3 and Q4 of the year.

Speaker #2: So these projects that we've got, in the backlog ramping up, strong sales, strong backlog, good organic backlog growth there in the US year to date and year over year.

Gord Johnston: These projects that we have got in the backlog ramping up, strong sales, strong backlog, good organic backlog growth there in the US year to date and year over year. Page transitioning from acquisition into the organic side. That all kind of supports our thesis of that continued organic acceleration into the H2 of the year and good momentum into 2027.

Speaker #2: Page transitioning from acquisition into the organic side, that all kind of supports our thesis of that continued organic acceleration into the second half of the year.

Speaker #2: And good momentum into 2027.

Sabahat Khan: Great. Just on the margin side, looks like about, I will call it 80 basis points or so of year-over-year EBITDA margin improvement through the H1 of the year. The guidance increase implies round numbers about 15 basis points. Maybe if you can just walk us through the puts and takes on the assumptions of full year guide and maybe sort of the delta between the higher amount realized versus a guide increase. Thanks.

Speaker #4: Great. And then just on the margin side, it looks like about, call it, 80 basis points or so of year-over-year EBITDA margin improvement through the first half of the year.

Speaker #4: The guidance increase implies, in round numbers, about 15 basis points. Maybe if you can just walk us through the puts and takes on the assumptions of the full-year guide, and maybe sort of the delta between the higher amount realized versus the guidance increase.

Speaker #4: Thanks.

Speaker #2: Hi, Saba. It's Vito here. Yeah, we're incredibly proud of the progress we've made with margin expansion. And you heard that in my prepared remarks. That comes from really across all elements of our business. Our project margins continue to be strong, and that's all about the right client, the right price.

Vito Culmone: Hi, Sab, it is Vito here. We are incredibly proud of the progress we have made with the margin expansion, and you heard that in my prepared remarks. That comes from really across all elements of our business. Our project margins continue to be strong, and that is all about the right client, the right price, obviously, and exemplary project execution. The teams always works towards that. When you are looking at our admin and marketing, obviously, that has been declining as a percentage of our overall revenue. That reflects, obviously, improved utilization. When you think about utilization, that is probably one of the pieces as we go into the back half and just maybe attaching myself to Gord's comments, we feel incredibly confident with the velocity of the business moving forward. That is where we are going to require, and it is already requiring, a headcount and an expansion of our workforce.

Speaker #2: Obviously, an exemplary project execution. The teams always work towards that. When you're looking at our admin and marketing, obviously, that's been declining as a percentage of our overall revenue.

Speaker #2: That reflects obviously improved utilization. And when you think about utilization, that's probably one of the pieces as we go into the back half. And just maybe attaching myself to Gordon's comments, we feel incredibly confident with the velocity of the business moving forward.

Speaker #2: That's where we're going to require—and are already requiring—headcount and expansion of our workforce. So I think what you see in the back half, margin expansion moderation, if you will, relative to our year-to-date performance, is really just that timing of workforce, and as we obviously look to lean into what will be significant organic growth in the back half.

Vito Culmone: I think what you see in the back half margin expansion, moderation, if you will, relative to our year-to-date performance, is really just that timing of workforce and as we obviously look to lean into what will be significant organic growth in the back half. But overall, the momentum around our margin improvement, and there is probably a little bit of conservatism built into there, quite frankly. I think this is now, what is it? Maybe the seventh quarter of year-over-year margin expansion. And on a trailing 12 months, as you heard me say, 80 bips ahead. This just enables continued investment in our business as well as we move forward, and we are focused on ensuring we are making those internal investments moving forward as well.

Speaker #2: But overall, the momentum around our margin improvement—and there's probably a little bit of conservatism built in there, quite frankly—I think this is now, what is it, maybe the seventh quarter of year-over-year margin expansion.

Speaker #2: And on a trailing 12 months, as you heard me say, 80 bps ahead. So this just enables continued investment in our business as well as we move forward, and we're focused on ensuring we're making those internal investments moving forward as well.

Sabahat Khan: Great. Then just the last one on my end, I think the commentary around Page sounds like it is trending well. Are you able to share maybe the organic growth or just the growth rate in that business on a year-over-year basis, maybe through Q1 and Q2 of this year, as we think about how that can contribute to the overall Stantec numbers? Thanks, and I will pass the line.

Speaker #4: Great. And then just the last one on my end, I think the commentary around Page sounds like it's trending well. Are you able to share maybe the organic growth or just the growth rate in that business on our year-over basis, maybe through Q1 and Q2 of this year as we think about how that can contribute to the overall Stantec numbers?

Speaker #4: Thanks, and I'll pass the line.

Speaker #3: Yeah, Saba, it's hard for us to do that because the baseline business is probably not in accordance with our how we convert to our IFRS accounting.

Vito Culmone: Yeah, Sab, it is hard for us to do that because the baseline business is probably not in accordance with how we convert to our IFRS accounting. But I would venture to say that it is robust. As Gord has alluded to, we probably under-reported by a smidgen our Q2 organic because of the way we do things, and that is we shifted significant amount of our building workforce to the Page-led opportunities that, as Gord has noted, will be reflected in organic going forward. So Q2, probably a little understated, frankly. We do not get into slicing and dicing those numbers too much. But organic growth in Page, quite robust.

Speaker #3: But I would venture to say that it's robust. And as Gordon has alluded to, we probably underreported by a smidgen our Q2 organic because of the way we do things.

Speaker #3: And that is, we shifted significant amount of our building workforce to the Page-led opportunities. That as Gordon has noted, we'll be reflected in organic going forward.

Speaker #3: So Q2 probably a little understated, frankly. We don't get into slicing and dicing those numbers too much. But organic growth in Page quite robust.

Speaker #4: Thanks very much.

Sabahat Khan: Thanks very much.

Speaker #1: Thank you. And our next question comes from the line of Clayman James. Your question, please.

Operator: Thank you. Our next question comes from the line of Frederic Bastien from Raymond James. Your question, please.

Speaker #4: Good morning, guys.

Frédéric Bastien: Good morning, guys.

Vito Culmone: Good morning.

Frédéric Bastien: How are you? How does it feel, Gord?

Speaker #2: Good morning.

Speaker #4: How are you? How does it feel? How does it feel, Gordon?

Speaker #2: You know, it's actually been a really interesting preparing for the quarter, preparing for the earnings call. So many things were this is the last time we'll do this.

Gord Johnston: It's actually been a really interesting, preparing for the quarter, preparing for the earnings call. So many things were, "This is the last time we'll do this." But I'm just actually so thrilled to be staying on the board. I love our company. I love our clients. I love our people and what we do. Being able to stay connected to the company through being on the board, I think, for me, is the best of both worlds.

Speaker #2: This is the last time we'll do this. But I'm just actually so thrilled to be staying on the board. I love our company. I love our clients.

Speaker #2: I love our people and what we do. So being able to stay connected to the company through being on the board, I think for me is the best of both worlds.

Frédéric Bastien: Great. Thanks, Gord. We're excited to have you stick around a little longer, and congrats on a great career. Now on to question. As Vito, you alluded to earlier, a good chunk of the margin expansion came from the project margins, which is nice to see, not all coming from SG&A and cost optimization. How far can you get those margins going? They've been in the low 54% range for quite some time. Is there an opportunity for Stantec to take them even higher on a go-forward basis?

Speaker #4: Great. Thanks, Gordon. We're excited to have you stick around a little longer and congrats on a great career. Now on to question. As Vito, you alluded to earlier, a good chunk of the margin expansion came from the project margins, which is nice to see not all coming from SG&A and cost optimization.

Speaker #4: How far can you get those margins going? I mean, they've been in the low 54% range for quite some time. Is there an opportunity for Stantec to take them even higher on a go forward basis?

Speaker #2: You know, obviously, we're really centered on continuing to provide outstanding outcomes for our customers. That really is the ethos of our organization. And along with that, obviously, is great project execution, the right risk profile, great value for our work, and being transparent about that with our client base.

Vito Culmone: Well, obviously we're centered really on continuing to provide outstanding outcomes for our customers. That really is the ethos of our organization. And along with that, obviously, is great project execution, the right risk profile, great value for our work, and being obviously transparent about that with our client base. We're in the middle of our three-year planning process right now, so we'll probably have a more robust, I'll say, aligned response to that as we roll out the back half of the year here and as we get into our investor day in December. But I think bottom line margins, and it does all start with the project margins, and I love the fact that you start with that because at the end of the day, that is the spine that drives bottom line, and we're really, really confident about that.

Speaker #2: We're in the middle of our three-year planning process right now. So we'll probably have a more robust, I'll say, aligned response to that as we roll out the back half of the year here and as we get into our investor day in December.

Speaker #2: But I think bottom-line margins—and it does all start with the project margins—and I love the fact that you start with that, because at the end of the day, that is the spine that drives the bottom line.

Speaker #2: And we're really, really confident about that with the macro demand being as strong as it is across our markets. We really can be picky and choosy, quite frankly, in some of the clients that we're choosing.

Vito Culmone: With the macro demand being as strong as it is across our markets, we really can be picky and choosy, quite frankly, in some of the clients that we're choosing and whatnot. Really confident about project margins going forward.

Speaker #2: And whatnot. So really confident about project margins, going forward.

Speaker #4: Thanks. My other question is around, I mean, any activity we've seen some bids recently in the public sector realm. One privatization, one obviously didn't pan through as of yet, but how are you reconciling sort of the valuations you're probably still seeing in the private sector land, which are probably still elevated, and the current valuations here in the public sector?

Frédéric Bastien: Thanks. My other question is around M&A activity. We have seen some bids recently in the public sector realm. One privatization, one obviously did not pan through as of yet. How are you reconciling the valuations you are probably still seeing in the private sector land, which were probably still elevated and the current valuations here in the public sector? What that might bring in terms of opportunity for you to deploy capital. Thanks.

Speaker #4: And what might what that might bring in terms of opportunity for you to deploy capital? Thanks.

Speaker #2: Yeah, the acquisition environment is incredibly active right now. You made some reference to a number of the typical transactions that we would see in our space, where a public is bringing some private firms on.

Gord Johnston: Yeah. The acquisition environment is incredibly active right now. You made some reference to a number of the typical transactions that we would see in our space where publics are bringing some private firms on. There is still a bit of a dislocation in those where those public markets who are looking to sell are still a little bit elevated over where we are in the public markets. We are still in the midst of any number of conversations at different levels, and we have been for some time. Actually, that will be one of the things that I will continue to work closely with Susan and the team. As we are halfway through some of these M&A conversations, we want to just all stay involved in a supportive role, just from a continuity perspective.

Speaker #2: There is still a bit of a dislocation in those, where those public markets who are looking to sell are still a little bit elevated over where we are in the public markets. But we're still in the midst of any number of conversations at different levels.

Speaker #2: And we have been for some time. And actually, that'll be one of the things that I'll continue to work closely with Susan and the team as we're halfway through some of these M&A conversations, we want to just all stay involved in a supportive role just from a continuity perspective.

Speaker #2: But. Addition to that, I think you make reference too that that we've seen some big moves on the chessboard that people are been that are some that are public and others that I think people are just kind of thinking about in the back.

Gord Johnston: In addition to that, I think you make reference to that we have seen some big moves on the chessboard that people are being. Some that are public, and others that I think people are just thinking about in the back. This is a very attractive industry. Do I think further consolidation is likely? I think perhaps it will in the next year or so. Stantec is, we are very alive to all these things, and we just remain focused on doing what is best for Stantec and our shareholders in the long run.

Speaker #2: And so this is a very attractive industry. And do I think further consolidation is likely? I think perhaps it will in the next year or so.

Speaker #2: So Stantec is we're very alive to all these things. And we just remain focused on doing what's best for Stantec and our shareholders in the long run.

Speaker #4: Thank you very much.

Frédéric Bastien: Thank you very much.

Speaker #2: Thanks, Frederick.

Gord Johnston: Thanks, Frederic.

Speaker #1: Thank you. And our next question comes to the line of Yuri Link from Canaccord Genuity. Your question, please.

Operator: Thank you. Our next question comes from the line of Yuri Lynk from Canaccord Genuity. Your question please.

Yuri Lynk: Hey, good morning, guys.

Speaker #4: Okay, good morning, guys. Thanks for taking my question, and congrats to both Gordon and Susan. I just wanted to turn back to the US for a minute.

Gord Johnston: Good morning.

Yuri Lynk: Thanks for taking my question, and congrats to both Gord and Susan. Just wanted to turn back to the US for a minute. Gord, I get that you are seeing an acceleration in some of those delayed projects, but was there an overriding theme as to the original slowdown that you saw in the US, and any comment on how that might have translated into organic backlog growth was also 2.5% lower than what we have seen. So what is going on in the quarter there?

Speaker #4: Gordon, I mean, I get that you're seeing an acceleration in some of those delayed projects, but was there an overriding theme as to the original slowdown that you saw in the U.S., and any comment on how that might have translated into backlog? Organic backlog growth was also two and a half percent lower than what we've seen.

Speaker #4: So what's going on in the quarter there?

Speaker #2: Yeah, so again, just to reiterate, I think a lot of it was just a timing issue. When we talk about some of the projects that were a little bit slower to get going out of the gate, they're in Q2, a little bit, in all of the different groups.

Gord Johnston: Yeah. So, again, just to reiterate, I think a lot of it was just a timing issue. When we talk about some of the projects that were a little bit slower to get going out of the gate, there in Q2, a little bit in all of the different groups. For example, in our environmental services group, we had a large program with the Navy that was a little bit slower to get moving. It is moving now. We had another really significant project with a large electrical utility in the US West that got going. And so we are seeing again, that is moving in our infrastructure group. That was a little slower in Q2 than we would have liked. Large public transit project in the US South was a little bit slow to get moving, and we were actually working on a very significant proposal in Q2 as well.

Speaker #2: For example, in our environmental services group, we had a large program with the Navy that was a little bit slower to get moving. It's moving now.

Speaker #2: We had another really significant project with a large electrical utility in the US West that got going and so we're seeing, again, that's moving in our infrastructure group that was a little slower than in Q2 than we would have liked large public transit project in the US South was a little bit slow to get moving.

Speaker #2: And we were actually working on a very, very significant proposal in Q2 as well. So a number of those things just took a little bit longer to get going.

Gord Johnston: A number of those things just took a little bit longer to get going. But I mentioned that significant proposal that we worked on in infrastructure. That would have a very positive impact on backlog if that one came through. So I think it is just one of those quarters that the stars aligned, maybe not in the way that you would have wanted them to. But longer term, we really do not see it having any negative impact on the business, nor do we believe it should be reflective on how we will perform in the H2 of the year.

Speaker #2: But I mentioned that big that significant proposal that we worked on an infrastructure, that would have a very positive impact on backlog with that one came through.

Speaker #2: So I think it's just one of those quarters that the stars aligned maybe not in the way that you would have wanted them to, but we don't longer term, we really don't see it having any negative impact on the business, nor do we believe it should be reflective sort of on how we'll perform in the second half of the year.

Speaker #4: Okay. And just should we expect the organic growth recovery in the US to kind of build throughout the back half of the year, especially considering you've got a pretty easy comparable in the fourth quarter?

Yuri Lynk: Okay. Should we expect the organic growth recovery in the US to build throughout the H2 of the year, especially considering you have got a pretty easy comparable in the Q4?

Speaker #2: Yeah. I think that's right. I think we should our forecast is for some good organic growth here in Q3 and further strengthening into Q4.

Gord Johnston: Yeah, I think that is right. I think our forecast is for some good organic growth here in Q3 and further strengthening into Q4, and really then entering 2027 with good and strong momentum.

Speaker #2: And really then entering 2027 with good and strong momentum.

Speaker #4: Okay. Last one from me, just a clarification on the G&A expense. Just wondering if given the share price movement in the quarter, if there was any positive impact from LTIP in the quarter.

Yuri Lynk: Okay. Last one from me. Just a clarification on the SG&A expense. Just wondering if, given the share price movement in the quarter, if there was any positive impact from LTIP in the quarter.

Speaker #2: Very minor. We hedge most of our long-term incentive programs. So essentially, it is an offset and between any valuation between our hedging program and then obviously the mark-to-market on our RSG.

Vito Culmone: Very minor. We hedge most of our long-term incentive programs. So essentially, there is an offset between any valuation between our hedging program and then obviously the mark to market on our RSUs. So very minor, small benefit.

Speaker #2: So very minor small benefit.

Speaker #4: Okay. I'll turn it over. Thanks.

Yuri Lynk: Okay. I will turn it over. Thanks.

Speaker #1: Thank you. And our next question comes from the line of Michael Telephone from TD Cowan. Your question, please.

Operator: Thank you. Our next question comes from the line of Michael Tupholme from TD Cowen. Your question please.

Speaker #3: Thank you. Good morning and congratulations, Gordon.

Michael Tupholme: Thank you. Good morning, and congratulations, Gord.

Speaker #2: Yeah. Thanks so much. It's interesting as I kind of reflect on what we've done over the last eight and a half years, I'm actually just so incredibly proud of what we've collectively done as a team and positioning Stantec for success going forward.

Gord Johnston: Yeah. Thanks so much. It is interesting as I reflect on what we have done over the last eight and a half years, I am actually just so incredibly proud of what we have collectively done as a team in positioning Stantec for success going forward.

Michael Tupholme: Absolutely. The first question I wanted to ask is, you have had a lot of questions here on the call about the US organic growth and the pickup you expect in the H2 to get you to your full year mid-single digit organic growth target. Can we talk a little bit about Canada? Because it is a similar situation there where H1 organic growth has been a little bit slow. You are trending at the moment below your mid-single digit, organic growth target for the year. So how do you think about the organic growth pickup in the back half in Canada, and exactly what is driving that?

Speaker #3: Absolutely. The first question I wanted to ask is you've had a lot of questions here on the call about the US organic growth and the pickup you expect in the second half to get you to your full year mid-single digit organic growth target.

Speaker #3: Can we talk a little bit about Canada? Because it's a similar situation there where half one organic growth has been a little bit slow.

Speaker #3: You're trending at the moment below your mid-single digit. Organic growth target for the year. So how do you think about the organic growth pickup in the back half in Canada?

Speaker #3: And exactly what is driving that?

Speaker #2: Yeah, no, thanks. Great question. So, we see in Canada, again, good organic backlog growth year-to-date and year over year. A lot of projects— we talked about that $13 billion META data center project that we’ve got going on.

Gord Johnston: Yeah, no, thanks. Great question. We see in Canada, again, good organic backlog growth year to date and year over year. A lot of projects. We talked about that CAD 13 billion Meta data center project that we have going on. There is a really significant program that we are running, just kicking off for a utility here in Western Canada. An enormous amount of opportunity up in defense, in the North, and with some of these nation building projects. So, we see a lot of supports for us, moving forward. In particular, though, in Canada, our water and our buildings group backlogs are looking great, and we see continued organic expansion there. So, I think, we are just fairly broad-based in Canada, supportive of growth into the H2 of the year here.

Speaker #2: There's a really significant program that we're running just kicking off for a utility here in western Canada. An enormous amount of opportunity up in defense, in the north, and with some of these nation building projects.

Speaker #2: So we see a lot of supports for us moving forward. And in particular, though, in Canada, our water and our buildings group backlogs are looking great.

Speaker #2: And we see continued organic expansion there, so I think we're just fairly broad-based in Canada, supportive of growth into the second half of the year here.

Speaker #4: I think you got it, Gordon. Buildings and water, we expect would be the biggest drivers of H2 increase in organic growth in Canada.

Vito Culmone: I think you got it, Gord. Buildings and water, we expect, would be the biggest drivers of H2 increase in organic growth in Canada.

Speaker #3: Okay. Thanks for that. And then second question, regarding the improved margins obviously very strong performance, you called out a number of drivers. One of the things you mentioned is optimization of digital strategies.

Michael Tupholme: Okay. Thanks for that. Second question, regarding the improved margins, obviously very strong performance. You called out a number of drivers. One of the things you mentioned is optimization of digital strategies, and I am just wondering if you can elaborate a little bit on what it is you had going on in the quarter, from that perspective that benefited the margins and how we think about that also going forward.

Speaker #3: And I'm just wondering if you can elaborate a little bit on what it is you had going on in the quarter from that perspective that benefited the margins and how we think about that also going forward.

Speaker #2: Yeah. I think digitization obviously is at the core of our ongoing strategies. Throughout our organization, and when we think about some of the back office related opportunities for us, whether it's accounting, finance, accounts payable, that's always been a core component for us.

Vito Culmone: Yeah, I think digitization obviously is at the core of our ongoing strategies throughout our organization. When we think about some of the back office related opportunities for us, whether it is accounting, finance, accounts payable, that has always been a core component for us. When we are looking at bidding and proposals right now, we are really leaning into digitization, implementation of some artificial intelligence tools. So, those are all core to what we are discussing, and will continue to be part of our, basically ingrained in our three-year strategy.

Speaker #2: When we're looking at bidding and proposals right now, we're really leaning into digitization implementation of some artificial intelligence tools. So those are all core to what we're discussing.

Speaker #2: And we'll continue to be part of our basically ingrained in our three-year strategy.

Michael Tupholme: Right. Perfect. I will leave it there. Thank you.

Speaker #3: All right. Perfect. That will leave it there. Thank you.

Speaker #2: Thank you.

Vito Culmone: Thank you.

Speaker #3: Thanks.

Gord Johnston: Thanks.

Speaker #1: Thank you. And our next question comes from the line of Chris Murray from ATB Cormark. Your question, please.

Operator: Thank you. Our next question comes from the line of Chris Murray from ATB Capital Markets. Your question please.

Speaker #5: Yeah. Thanks, Phil. Good morning. And Gordon, let me echo my congratulations like everyone else. I guess the first question we talked a little bit about Canada and the US, but global also has been very, very strong in fact, you're moving it higher.

Chris Murray: Yeah. Thanks, folks. Good morning. Gord, let me echo my congratulations, like everyone else. I guess the first question, we talked a little bit about Canada and the US, but global also has been very, very strong. In fact, you are moving it higher. Is there something in particular that is driving that? Is it maybe Europe coming back a little stronger than you had expected? Any additional color that you could give us, maybe, breaking down Europe versus New Zealand or Australia, just so we have a flavor of how this is all coming together would be great.

Speaker #5: Is there something in particular that's driving that? Is it maybe Europe coming back a little stronger than you had expected? But any additional color that you could give us, maybe breaking down Europe versus the New Zealand or Australia, just so we have a flavor of how this is all coming together would be great.

Speaker #2: Yeah. Absolutely. So we're seeing pretty broad-based strength in our global operations. Australia has returned to organic growth. I don't have the number here, but I think kind of mid-single digit-ish organic growth in Australia.

Gord Johnston: Yeah, absolutely. We're seeing pretty broad-based strength in our global operations. Australia has returned to organic growth. I don't have the number here, but I think mid-single digit-ish organic growth in Australia. In the UK, very, very strong. We're seeing certainly the growth in AMP8 extremely strong as we would have expected. We're running about 15% organic growth right now in the UK, incredibly strong. Another area for us, Europe, absolutely, with our operations in Germany, with ZETCON. We're running low 20s in terms of organic growth rates there. But in terms of just raw numbers, it's Latin America. With the demand for copper and the work that we're doing down there, we're seeing over 50% organic growth in our Latin American operations right now. So, really strong across our global operations.

Speaker #2: In the UK, very, very strong. We're seeing the certainly the growth in AMP-8 8 extremely strong as we would have expected. We're running about 15% organic growth right now in the UK.

Speaker #2: Incredibly strong. And then another area for us, Europe absolutely with our operations in Germany with Zetcon. We're running low 20s in terms of organic growth rates there.

Speaker #2: But in terms of just raw numbers, it's Latin America. And with the demand for copper and the work that we're doing down there, we're seeing over 50% organic growth in our Latin American operations right now.

Speaker #2: So, really strong performance across our global operations.

Chris Murray: Okay. That's helpful. Thank you. I guess the next question, maybe for Vito, I'm not sure if you wanted to, or Gord, you want to chime in on this one? Just thinking about the NCIB, you talked about increasing it and maybe looking at it, but your commentary around multiples in the private market versus public market. We've got public market valuations at pretty much 20-year lows. Is there any thought about doing a larger buyback? It almost makes sense if the privates are not really where you need them to be. Any thoughts around maybe doing a substantial issue bid? Maybe taking your leverage into the middle of your range and waiting out whatever this valuation gap is for now?

Speaker #5: Okay. That's helpful. Thank you. And I guess the next question maybe for Vito, I'm not sure if you wanted to or Gordon, do you want to chime in on this one?

Speaker #5: But just thinking about the NCIB, you talked about increasing it and maybe looking at it, but your commentary around multiples in the private market versus public market.

Speaker #5: We've got public market valuations at pretty much 20-year lows. Is there any thought about doing a larger buyback? It almost makes sense if the privates are not really where you need them to be.

Speaker #5: Any thoughts around maybe doing a substantial issuer bid? Maybe taking your leverage into the middle of your range and sort of waiting out whatever this valuation gap is for now?

Speaker #4: Chris, as you heard me say in my prepared remarks, at the core of what we believe is long-term value creation is continued M&A and expansion of our portfolio in our regions.

Vito Culmone: Chris, as you heard me say in my prepared remarks, at the core of what we believe is long-term value creation is continued M&A and expansion of our portfolio in our regions. As Gord has already noted, we're seeing some really good opportunities starting to surface, and I expect us to be more active in that portfolio. We just announced Niche, as you saw. That's a relatively small but important one for us. My prediction for the next 12 months would be more M&A relative to the last 12 months, where obviously Page would've been our most significant acquisition. So, we're feeling good about how that evolves, notwithstanding what we're describing as, obviously, pricing dislocation. We'll continue to be very disciplined in that.

Speaker #4: And as Gordon has already noted, we're seeing some really good opportunities starting to surface, and I expect us to be more active in that portfolio we just announced. As you saw, that's a relatively small but important one for us.

Speaker #4: And my prediction for the next 12 months would be more M&A relative to the last 12 months. We're obviously page would have been our most significant acquisition.

Speaker #4: So we're feeling good about how that evolves, notwithstanding what we're describing as obviously, and we'll pricing dislocation. And we'll continue to be very disciplined in that.

Speaker #4: I think SIB is one step further from where we currently are. We've stepped into the NCIB. We are going to the regulator now. And essentially expanding our program from 2% to 5%.

Gord Johnston: I think SIB is one step further from where we currently are. We've stepped into NCIB, where we are going to the regulator now and essentially expanding our program from 2% to 5%. I just love that flexibility of going from 2% to 5%. That's another meaningful step. It doesn't mean we're going to execute all the way to 5%, but continuing to have the flexibility with respect to obviously where our valuation sits, which as you just noted, is not, I think representative of what we believe long-term value is and long-term representation there. We'll take measured steps along the way here.

Speaker #4: And so I just love that flexibility. I'm going from 2 to 5. That's another meaningful step. It doesn't mean we're going to execute all the way to 5, but continuing to have the flexibility of respect to obviously where our valuation sits, which as you noted is not, I think, representative of what we believe long-term value is and long-term representation there.

Speaker #4: We'll take measured steps along the way here.

Speaker #5: Okay, thanks. I'll leave it there.

Chris Murray: Okay, thanks. I will leave it there.

Speaker #2: Thanks, Chris.

Gord Johnston: Thanks, Chris.

Speaker #1: Thank you. And our next question comes to the line of Devin Dodge from BMO Capital Markets. Your question, please.

Operator: Thank you. Our next question comes from the line of Devin Dodge from BMO Capital Markets. Your question, please.

Speaker #6: Yeah. Thanks. Good morning. Look, before I get started, Gordon, just congrats on the well-earned semi-retirement. And Susan, if she's there in the background, just best of luck with the new role.

Devin Dodge: Yeah, thanks. Good morning. Before I get started, Gord, just congrats on the well-earned, we will call it semi-retirement. Susan, if she is there in the background.

Gord Johnston: Thank you.

Devin Dodge: Just best of luck with the new role.

Gord Johnston: Yeah, fabulous.

Speaker #2: Yeah, fabulous. Fabulous. Thanks so much.

Devin Dodge: Okay.

Gord Johnston: Fabulous.

Devin Dodge: Yeah.

Gord Johnston: Thanks so much.

Speaker #6: Look, I was going to come back to Chris's question on global. Obviously, order intake was really strong again there in Q2. Has the duration of that backlog changed much over the last few quarters, or will you need to be adding expanding that workforce to convert that backlog into revenue?

Devin Dodge: Look, I was going to come back to Chris Murray's question on global. Obviously, order intake was really strong again there in Q2. Has the duration of that backlog changed much over the last few quarters, or will you need to be expanding that workforce to convert that backlog into revenue?

Speaker #2: Yes, we are actively expanding the workforce globally, particularly in the regions we discussed—Latin America, Germany, and the UK. Excuse me, we are hiring aggressively, and we have been for the last 18 months or so.

Gord Johnston: Yeah, we are actively expanding the workforce globally, particularly those regions that we discussed there, Latin America, Germany, the UK. Excuse me, hiring aggressively, and we have been for the last 18 months or so. Also, one thing to call out too is that while you've seen that incredible backlog growth there, those AMP programs, as an example, if we get a five- or a six- or a seven-year AMP program that has a not to exceed number of some very large number, that does not go into our backlog. It only goes into our backlog when we actually get a specifically assigned change order. So the contract opportunities there with AMP, and that's the same way we do it everywhere, are much larger than even what you've seen there.

Speaker #2: And also one thing to call out too is that while you've seen that incredible backlog growth there, those AMP programs, as an example, if we get a 5 or a 6 or a 7-year AMP program that has not to exceed number of some very large number, that does not go into our backlog.

Speaker #2: It only goes into our backlog when we actually get a specifically assigned change order. So the contract opportunity's there with AMP, and that's the same way we do it everywhere.

Speaker #2: Our much larger than even what you've seen there. But yeah, absolutely to your point, we're looking we have been for the last year, 18 months, taking additional real estate in the UK, hiring people aggressively.

Gord Johnston: But yeah, absolutely to your point, we have been for the last year, 18 months, taking additional real estate in the UK, hiring people aggressively. We've been ramping up the hiring in our global delivery center in India. I think we've just hit roughly 2,000 people, which was our goal for the end of the year. So we're a little bit ahead of schedule, taking more space there, looking to expand to other cities. So, hiring is very much top of mind for us in order to process the backlog. Yeah. I'll add, Devin Dodge, as this is a bit of an inflection point for our global business. I think we're into an environment here of high single digits for several quarters to come.

Speaker #2: We've been ramping up the hiring in our global delivery center in India. I think we've just hit roughly 2,000 people, which was our goal for the end of the year.

Speaker #2: So we're a little bit ahead of schedule, taking more space there, looking to expand to other cities. So hiring is very much top of mind for us in order to process the backlog.

Speaker #4: Yeah. I'll add, Devin, as this is a bit of an inflection point for our global business. I think we're into an environment here of high single digits for several quarters to come.

Speaker #6: All right. Excellent. Thanks for that. Okay. And then maybe a question probably for Vito here, just on working capital. Look, the first half of the year is typically a period of investment, but it seemed a little bit more pronounced in 2026 than in the past.

Devin Dodge: All right. Excellent. Thanks for that. Okay. Then maybe a question probably for Vito Culmone here, just on working capital. Look, the H1 of the year is typically a period of investment, but it seemed a little bit more pronounced in 2026 than in the past. Can you provide some color on the drivers behind that and how we should be thinking about working capital in the H2?

Speaker #6: Could you provide some color on the drivers behind that, and how we should be thinking about working capital in the second half?

Speaker #4: Yeah. You're absolutely right, Devin. Obviously, we're our free cash flow has been on a year-to-date basis relative to where it was last year is lower.

Vito Culmone: Yeah. You are absolutely right, Devin. Obviously, where our free cash flow has been on a year-to-date basis relative to where it was last year is lower. Nothing from an operational concern from my perspective to be concerned about. We are very focused on working capital management. That starts with obviously DSOs. You see DSOs at 75, which is within our guidance, but it is at the higher end of our internal metrics sort of thing. So team will be totally focused on bringing that in. As you say, there is normal seasonality. Back half is considerably obviously higher for us. We are coming out of what you heard me reference last call with respect to the Page integration. So I am overall pleased with the velocity, and I expect it to dovetail nicely into what we would otherwise normally expect here as we move into the back half.

Speaker #4: Nothing from an operational concern from my perspective to be concerned about. We're very, very focused on working capital management. That starts with, obviously, DSOs, and you see DSOs at 75, which is within our guidance, but it's at the higher end of our internal metrics sort of thing.

Speaker #4: So team will be totally focused on bringing that in. As you say, there is normal seasonality. Back half is considerably obviously higher for us.

Speaker #4: We're coming out of what we you heard me reference last call with respect to the page integration and the so I'm overall pleased with the velocity and I expect it to dovetail nicely into what we would otherwise normally expect here as we move into the back half.

Speaker #6: Okay. Great. Thanks for that, Vito. I'll turn it over.

Devin Dodge: Okay, great. Thanks for that, Vito. I will turn it over.

Speaker #4: Thanks, Devin.

Gord Johnston: Thanks, Devin.

Speaker #2: Thanks, Devin.

Vito Culmone: Thanks, Devin.

Speaker #1: Thank you. And our next question comes to the line of Chris Jefferson from CIBC. Your question, please.

Operator: Thank you. Our next question comes from the line of Krista Friesen from CIBC. Your question, please.

Krista Friesen: Hi. Thanks for taking my question, and congrats, Gord, on a great tenure at Stantec and look forward to having you around a little bit longer here.

Speaker #5: Hi. Thanks for taking my question. And congrats, Gordon. On a great tenure at Stantec and look forward to having you around a little

Speaker #2: Yeah. Thanks so much.

Gord Johnston: Yeah. Thanks so much.

Speaker #5: Maybe just one from me, following up on the M&A questions. Can you speak to if you're priorities have shifted at all just in terms of M&A targets size or end market based on what you're seeing in valuations in the private and public markets at the moment?

Krista Friesen: Maybe just one from me following up on the M&A questions. Can you speak to if your priorities have shifted at all just in terms of M&A targets size or end market based on what you are seeing in valuations in the private and public markets at the moment? Thank you.

Speaker #5: Thank you.

Speaker #2: Yeah, no, great question. But no, we're holding our consistency and holding our discipline as to where we think there are great opportunities longer term, either geographically or in certain lines of business.

Gord Johnston: Yeah. No, great question. We are holding our consistency, holding our discipline as to where we think there are great opportunities longer term, either geographically or in certain lines of business. Yeah, the current environment hasn't changed our strategy at all, really, just to continue to do the right acquisitions at the right time to continue to build the strength of Stantec for the long term.

Speaker #2: So yeah, the current environment hasn't changed our strategy at all, really, just to continue to do the right acquisitions at the right time to continue to build the strength of Stantec for the long term.

Speaker #5: Thank you. That's great color. I'll jump back in the queue.

Krista Friesen: Thank you. That's great color. I'll jump back in the queue.

Speaker #2: Thank you.

Gord Johnston: Thank you.

Speaker #1: Thank you. And our next question comes to the line of Maxime Saichev from NBCCM. Your question, please.

Operator: Thank you. Our next question comes from the line of Maxim Sytchev from National Bank Financial. Your question, please.

Speaker #7: Yes. Hi. Good morning. And Gordon, obviously, congrats on all the achievements and wonderful career and welcome to Susan.

Maxim Sytchev: Yes. Hi, good morning. Gord, obviously congrats on all the achievements and wonderful career and welcome to Susan.

Speaker #2: Yeah. Thanks so much.

Gord Johnston: Yeah, thanks so much.

Speaker #7: The first question I had was, I mean, maybe it's more sort of a philosophical approach to efficiency versus kind of organic growth. I think we saw that marketing spend was pretty controlled in Q2.

Maxim Sytchev: The first question I had was, maybe it is more sort of a philosophical approach to efficiency versus kind of organic growth. I think we saw that marketing spend was pretty controlled in Q2, and obviously we are seeing somewhat slower growth in the US. Is there any correlation in relation to that? Or how should we think about this on a prospective basis, about, again, that tension of getting work versus being very efficient from a cost perspective? Thank you.

Speaker #7: And obviously, we're seeing somewhat slower growth in the US. Is there any correlation in relation to that, or how, I guess, should we think about this on a prospective basis about, again, the tension of kind of getting work versus being very efficient from a cost perspective?

Speaker #7: Thank you.

Vito Culmone: That is a great question, Max, and thank you for that. One point to make is, it is particularly impressive when you think about the margin expansion that we have had in the quarter and year to date in the face of the lower organic. Because typically, when you have got softer organic, that typically puts pressure on your margins perspective with respect to obviously getting the scale from your back office. Again, kudos to the team, and I think that bodes well. In respect to philosophy, I would say, no change in philosophy. It is all about the right growth, of course. This goes back to a bit of the project margin question that was asked earlier a little bit, and we need to obviously continue to be thoughtful of our client base and projects and whatnot.

Speaker #4: That's a great question, Max, and thank you for that. One point to make is that it is particularly impressive when you think about the margin expansion we've had in the quarter and year-to-date, in the face of lower organic growth. Typically, when you've got softer organic growth, that puts pressure on your margins, especially with respect to obviously getting the scale from your back office.

Speaker #4: So again, kudos to the team, and I think that bodes well. In respect to philosophy, I would say, no change in philosophy. It is all about the right growth, of course.

Speaker #4: I mean, this goes back to a bit of the project margin question that was asked earlier a little bit. And we need to obviously continue to be thoughtful of our client base and projects and whatnot.

Speaker #4: So the focus 100% is on growth. And of course, that's the right growth as we move forward. So no change in philosophy. We'll just continue to shine the light, obviously, as we I'll say, X-ray our business moving forward.

Vito Culmone: The focus 100% is on growth, and of course, that is the right growth as we move forward. No change in philosophy. We will just continue to shine the light, obviously, as we, I will say, x-ray our business moving forward.

Speaker #7: Okay, that's great color. Thank you so much. And then one quick question I also had, just in terms of any initial thoughts in relation to surface transportation spending buckets there and how that could potentially influence 2027.

Maxim Sytchev: Okay. That is great, Colin. Thank you so much. One quick question I also had, just in terms of any initial thoughts in relation to surface transportation spending buckets there and how that could potentially influence 2027. Thank you for that.

Speaker #7: Thank you for that.

Speaker #2: Yeah, great. And so as we think about IIJA, we've been seeing this end at the end of September coming for several years now, and we see a real concerted effort to try and get those funds encumbered prior to the end of September.

Gord Johnston: Yeah, great. As we think about IIJA, we have been seeing this end at the end of September coming for several years now, and we see a real concerted effort to try and get those funds encumbered prior to the end of September. While data is a little bit obscure right now, we think that about 80% of it has been encumbered is kind of the industry thought on that. So, working hard to get all that encumbered and not lose the IIJA funding. In terms of the Surface Transportation Act and the reauthorization, the House has put forward their bill, which was about $581 billion. The Senate now, we are waiting for their proposal, and it is anticipated now that we are not going to get it until after Labor Day.

Speaker #2: And while data is a little bit obscure right now, we think that about 80% of it has been encumbered is kind of the industry thought on that.

Speaker #2: So working hard to get all that encumbered and not lose the IIJA funding. But in terms of the surface transportation act and the reauthorization, the House has put forward their bill, which about is 581 billion dollars.

Speaker #2: And so the Senate now, we're waiting for their proposal. And it's anticipated now that we're not going to get it until after Labor Day.

Speaker #2: Kind of all indications of it will be similar in size to the one put forward by the House and that 5 to 600 billion dollar range.

Gord Johnston: All indications of it will be similar in size to the one put forward by the House in that $500 to $600 billion range. The thought is that while those two things will be forward, it is likely not to move forward until after the midterms. So probably we will get that. My thought and our thought is that it will be reauthorized and we will see that coming forward early into the new year. Everyone has kind of anticipated that that is going to be the schedule here based on where we are at. So I do not see it really being a negative impact going into next year because everyone sort of has made plans for it, got their proposals out now when they can and such. So, looking forward to another strong year next year.

Speaker #2: But kind of the thought is that while those two things will be forward, it's likely not to move forward until after the midterms. So probably we'll get that my thought and our thought is that it'll be reauthorized and we'll see that coming forward early into the new year.

Speaker #2: Everyone is kind of anticipated that that's going to be the schedule here. Based on where we're at. So I don't see it really being a negative impact going into next year because everyone sort of has made plans for it, got their proposals out now when they can, and such.

Speaker #2: So no looking forward to another strong year next year.

Speaker #7: Okay. Excellent. Thank you so much.

Maxim Sytchev: Okay, excellent. Thank you so much.

Speaker #2: Thanks, Max.

Gord Johnston: Thanks, Max.

Speaker #1: Thank you. And our next question comes to the line of Ian Gillis from Tefal. Your question, please.

Operator: Thank you. Our next question comes from the line of Ian Gillies from Stifel. Your question please.

Speaker #6: Good morning, everyone, and congrats, Gordon. I look forward to catching up in Calgary at some point, hopefully in the near term.

Ian Gillies: Morning, everyone, and congrats, Gord. I look forward to catching up in Calgary at some point, hopefully in the near term.

Speaker #2: Look forward to it.

Gord Johnston: Look forward to it.

Speaker #6: With respect to the US, can you maybe just help us reconcile US growth accelerating in the back half of the year in conjunction with the midterm elections, which can often cause what I would call dislocations or gyrations, or even slowdowns?

Ian Gillies: With respect to the US, can you maybe just help us reconcile the US growth accelerating in the back half of the year in conjunction with midterm elections, which can often cause what I would call dislocations or gyrations or slowdowns? Because that is a bit of a challenging one right now.

Speaker #6: Because that's a bit of a challenging one right now.

Speaker #2: Yeah. Absolutely. Anytime there's a change, it can introduce a little bit of uncertainty. But I think based on what we've been talking about with the backlog that we've got, with the soft backlog and the that we see coming with the projects that have started, we actually feel good about our plans.

Gord Johnston: Yeah, absolutely. Anytime there is a change, it can introduce a little bit of uncertainty. But I think based on what we have been talking about with the backlog that we have got, with the soft backlog that we see coming with the projects that have started, we actually feel good about our plans. Again, Page kind of converting from acquisition to organic. As we talk to all of our business leaders and others in the industry, as we look at the when we see the contribution just mathematically from Page, I think we feel good about those numbers in the second half of the year.

Speaker #2: Again, Paige kind of converting from acquisition to organic. As we talk to all of our business leaders and others in the industry, as we look at the we see the contribution from just the mathematically from Paige, I think we feel good about those numbers in the second half of the year.

Speaker #4: Yeah. And our buildings and environmental service business, they enter the second half of the year with significant momentum. And driven by both a growing portfolio of recently awarded projects, that are expected to ramp in Q3, Q4.

Vito Culmone: Yeah. Ian, our buildings and environmental service business, they enter the second half of the year with significant momentum and driven by both a growing portfolio of recently awarded projects that are expected to ramp in Q3, Q4. So I think most of those would be insulated from midterm type activity.

Speaker #4: So I think most of those would be insulated from midterm-type activity.

Speaker #6: Okay. I'm going to try this one. Do you anticipate do you anticipate any of the growth issues that persisted in the first half of the year will leak into the 28 to 2030 business plan that's due in December?

Ian Gillies: Okay. I am going to try this one. Do you anticipate any of the growth issues that persisted in the H1 of the year will leak into the 2028 to 2030 business plan that is due in December?

Vito Culmone: The 2027 to 2029 plan?

Speaker #4: The 2027 to 2020 to 2029 plan? Sorry. Yeah. The three-year plan.

Ian Gillies: Yeah, sorry.

Speaker #6: Yes, sorry. Yeah. Sorry. Excuse me. Yeah.

Vito Culmone: Sorry. Yeah. For your plan.

Ian Gillies: Yeah, sorry. Excuse me. Yeah.

Vito Culmone: Yeah. Let us continue our work, obviously. I think the more we make our way through our planning cycle, and ironically, the way we make our way through our 2026, it actually just gives us continued confidence that the macro drivers and our positioning serves up really well for the next three-year period. But let's let the process roll out. Obviously, let's let Susan get in the seat and present her perspectives there as we roll forward. But we are feeling good about the industry and our position in it.

Speaker #4: Yeah, yeah. Let us continue our work, obviously. I think the more we make our way through our planning cycle, and ironically, the way we make our way through our 2026, it actually just gives us continued confidence that the macro drivers and our positioning serve us up really well for the next three-year period.

Speaker #4: But let's let the process roll out. Obviously, let's let Susan get in the seat and present her perspectives there as we roll forward. But we're feeling good about the industry and our position in it.

Speaker #6: Understood. I appreciate the detail and once again, congrats, Gordon. Cheers.

Ian Gillies: Understood. I appreciate the detail, and once again, congrats, Gord. Cheers.

Speaker #2: Great. Thank you.

Gord Johnston: Great. Thank you.

Speaker #1: Thank you. And our next question comes from the line of Jonathan Goldman from Scotiabank. Your question, please.

Operator: Thank you. Our next question comes from the line of Jonathan Goldman from Scotiabank. Your question please.

Jonathan Goldman: Hey, good morning, team. Thanks for taking my questions. Most of them have been asked already, but maybe Gord, just one for you philosophically. How are you thinking about the pace of consolidation in the E&C space? Maybe you can just update us on where, how fragmented it is today, and do you think consolidation could accelerate just given the dynamics we've seen recently on valuations and the disconnect there?

Speaker #5: Hey. Good morning, team. Thanks for taking my questions. Most of them have been asked already, but maybe Gordon just one for you, philosophically. How are you thinking about the pace of consolidation in the E&C space?

Speaker #5: Maybe you can just update us on how fragmented it is today and do you think consolidation could accelerate just given the dynamics we've seen recently on valuations and kind of the disconnect there?

Speaker #2: Yeah. Just as we look at it philosophically, as you say, our market is still really fragmented. Even the largest firm in the US, I think the estimate is in that six, seven, eight percent of market penetrations.

Gord Johnston: Yeah. Just as we look at it philosophically, as you say, our market is still really fragmented. Even the largest firm in the US, I think, the estimate is in that 6%, 7%, 8% of market penetration. So lots of opportunities for continued consolidation. We've all seen the rumors that have been going around the industry. I wouldn't be surprised that we'll see some additional consolidation going forward either. It's certainly easier with the small to mid-size ones, but will we see it with some of the bigger global players? Remains to be seen, but I certainly know that people are thinking about it now, what it could look like, what that value would be to clients, employees, and shareholders. So, I guess time will tell.

Speaker #2: So lots of opportunities for continued consolidation. We've all seen the rumors that have been going around the industry. I wouldn't be surprised that we'll see some additional consolidation going forward, either it's certainly easier with the small to midsize ones, but will we see it with some of the bigger global players?

Speaker #2: Remains to be seen, but I certainly know that people are thinking about it now, what it could look like, what would that value would be to clients, employees, and shareholders.

Speaker #2: So I guess time will tell.

Jonathan Goldman: Are valuations a bottleneck on the private side? You had given some commentary about things coming down to more reasonable levels, but is there enough spread still to make things value accretive at this level?

Speaker #5: Our valuations bottleneck on the private side. You had given some commentary about things coming down to more reasonable levels, but is there enough spread still to make things value-accretive at this level?

Vito Culmone: Hey, Jonathan, I think that's on a case-by-case basis, as a specific sort of situation. We wouldn't do anything that we think that over the longer term, obviously, and I'm confident that those exist as we move into the next 12 months.

Speaker #2: Hey, Jonathan. I think

Speaker #4: that's on a case-by-case basis. That's a specific sort of situation. We wouldn't do anything that we think that over the longer term, obviously, and I'm confident that those exist as we move into the next 12 months.

Speaker #5: Okay. Maybe if I can squeeze one more in terms of deal financing. Do you have enough capacity in dry powder now with the balance sheet if you wanted to take it run at something maybe a little more sizable?

Jonathan Goldman: Okay. Maybe if I can squeeze one more in terms of deal financing. Do you have enough capacity and dry powder now with the balance sheet if you wanted to take a run at something maybe a little more sizable? Or if it's going to be something bigger, do you think possibly of going another route, maybe some sort of share exchange or equity?

Speaker #5: Or if it's going to be something bigger, do you think possibly of going another route, maybe some sort of share exchange or equity?

Speaker #4: I take you just back to our capital allocation philosophy. We're an investment-grade company. Obviously, we think that's important for us going forward. You look at our leverage at 1.3 times.

Vito Culmone: I'd take you just back to our capital allocation philosophy. We're an investment grade company. Obviously, we think that's important for us going forward. You look at our leverage at 1.3 times. We've got great relations with, obviously, our rating agency. We've tested the limits of that expansion from a leverage perspective and are very, very pleased with that affords. So there's a substantial amount of dry powder and debt capacity on our balance sheet, and obviously, depending on the size of what you're talking about, you would need to blend that with equity if that situation arise. But that's a very hypothetical situation, and it's all about what's in the best interest over a reasonable period of time for, of course, our shareholders. But lots of dry powder on the balance sheet.

Speaker #4: We've got great relations with obviously our rating agency. We've tested the limits of that expansion from a leverage perspective and are very, very pleased with that affords.

Speaker #4: So there's a substantial amount of dry powder and debt capacity on our balance sheet. And obviously, dependent on the size of what you're talking about, you would need to blend that with equity if that situation arises.

Speaker #4: But that's a very hypothetical situation. And it's all about what's in the best interest over a reasonable period of time for, of course, our shareholders.

Speaker #4: But lots of dry powder on the balance sheet.

Speaker #5: Understood. Thanks for taking my question.

Jonathan Goldman: Understood. Thanks for taking my question.

Speaker #4: Thank you.

Vito Culmone: Thank you.

Speaker #2: Thanks, Jonathan.

Gord Johnston: Thanks, Jonathan.

Speaker #1: Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Gordon Johnston for any further remarks.

Operator: Thank you. This does conclude the question and answer session of today's program. I would like to hand the program back to Gord Johnston for any further remarks.

Gord Johnston: Well, thank you, operator, and thanks to everyone for joining us this morning. Serving as Stantec CEO has been truly the highlight of my career, and I really appreciate and value all the support and the friendship and the good times and bad times as we have been traveling together all over the world with many over the years. Thank you truly for everything. If you have any follow-up questions following today's call, please reach out to Jess Newkirk, our Vice President of Investor Relations. Thank you.

Speaker #2: Great. Well, thank you, operator, and thanks to everyone for joining us this morning. Serving as Stantec CEO has truly been the highlight of my career.

Speaker #2: And I really appreciate and value all the support and the friendship and the good times and bad times that we've been traveling together all over the world with many over the years.

Speaker #2: So thank you truly for everything. And if you have any follow-up questions following today's call, please reach out to Jess Newkirk, our vice president of investor relations.

Speaker #2: Thank you.

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

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