Contradictory Insights: U.S. Growth and M&A Strategies in Q1 2025 Earnings Call

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Revenue and Growth:
- Stantec reported net revenue of $1.6 billion for Q1 2025, up 13.3% year-over-year.
- This growth was driven by 5.9% organic and 3.2% acquisition growth, supported by strong execution and operational excellence.

Backlog and Demand:
- The company's backlog reached a new record of $7.9 billion, representing approximately 12 months of work.
- This growth was due to strong demand in key sectors, including water security, aging infrastructure, and advanced manufacturing.

M&A Activity:
- Stantec announced two strategic acquisitions in Q1: Page, a 1,400-person architecture and engineering firm, and Ryan Hanley, a 150-person engineering and environmental consultancy.
- These acquisitions align with the company's strategic plan to expand capabilities in growth areas like advanced manufacturing and cleanroom design.

Operational Margins and Efficiency:
- Stantec achieved an adjusted EBITDA margin of 16.2% in the quarter, representing a 70 basis points year-over-year improvement.
- This improvement was due to solid project execution, increased project margins, and operational efficiencies.

Regional Performance and Infrastructure Investments:
- In Canada, net revenues grew 15%, while in the U.S., they increased by 9.7%, reflecting positive foreign exchange and organic growth.
- The growth was driven by continued momentum in major infrastructure projects, particularly in transit and rail, and increased investments in healthcare and civic sectors.