Stantec Inc. (STN) Earnings Call Transcript

Hello, everyone, and thank you for joining us. This is my first earnings call as CEO, and I want to begin by expressing how honored I feel to lead this outstanding company. I step into this role with great pride in the strength of our business and, even more, in the people who make it what it is. Everything we deliver stems from the remarkable efforts of our colleagues worldwide, day in and day out. I am truly thankful for their dedication and proud of everything we continue to accomplish together. Now, let me turn to our third quarter results, which reflect the strength of Stantec's diversified platform and the continued advantages of disciplined execution throughout our business. Net revenue increased 9.4%, reaching about CAD 1.9 billion, supported by organic growth above 5% and acquisition-related growth of nearly 3%. Every region and every business delivered organic growth. Our water business achieved double-digit organic growth. Adjusted EBITDA rose nearly 17% to CAD 377 million, while the adjusted EBITDA margin expanded by 120 basis points to 20.2%. Adjusted net income increased roughly 22% to CAD 212 million, and adjusted EPS climbed almost 24% to CAD 1.89. These results demonstrate broad-based growth, strong project execution, and ongoing discipline in how we manage operations and discretionary spending. In the U.S., third quarter net revenue increased almost 11%, including organic growth of almost 5% and acquisition growth of 4.4%. Organic growth came in line with what we expected: delays that had weighed on projects in the first half were mostly cleared up, and robust demand for our services pulled projects ahead of schedule. Thanks to integration synergies and strength in mission-critical facilities, the Page acquisition contributed to double-digit net revenue growth in buildings. Water posted solid growth on sustained demand in water treatment, conveyance, and advanced manufacturing. Infrastructure gained from ongoing demand for critical infrastructure as well as favorable recoveries on transportation projects. Environmental services encountered strong demand across oil and gas, power and energy, and mission-critical markets. Energy and resources gained from work on a major hydropower dam; in Canada, organic net revenue growth for the third quarter was 4.1%. Water posted organic growth in the double digits, fueled by biosolids work and ongoing strength in wastewater solutions. Energy and resources also achieved double-digit organic growth, helped by higher activity and project recoveries during the quarter. Buildings and environmental services each showed steady growth — the former aided by public sector spending in civic markets, the latter by more environmental planning work in mining. Partly countering this was infrastructure, as some major transit and roadway projects kept winding down consistent with their project cycle schedules. Across our global operations, net revenue rose 11% for the quarter, mainly on the back of strong organic growth of 7.5%, with acquisition growth providing additional support. Water achieved vigorous double-digit organic growth, led by greater delivery under long-term framework programs in the U.K. Energy and resources posted organic growth in the double digits, helped along by rising activity in Latin America and the U.K., while demand kept climbing for copper mining and hydropower solutions. Environmental services benefited from stronger activity in the Netherlands and from Niche, the Australian business we bought not long ago. With that, I'll turn things over to Vito, who will take you through the third quarter financial results in more detail.

Thank you, Susan, and good morning to all of you. Our third quarter results leave us quite pleased, and they show solid execution on the operational side along with sustained demand throughout our diversified platform. Gross revenue came in at $2.4 billion, while net revenue reached $1.9 billion, which is up 9.4% against Q3 2025. That growth comprised 5.3% organic growth, 2.6% from acquisitions, and a positive 1.5% contribution from foreign exchange. Project margin rose 10.5% to slightly more than $1 billion. Measured as a percentage of net revenue, project margin climbed 60 basis points to 55%, which reflects continued strong project execution and favorable project recoveries. Adjusted EBITDA grew 16.6% to $377 million. Our adjusted EBITDA margin was up 120 basis points at 20.2%, driven by solid project margin and by administrative and marketing expenses continuing to decline as a percentage of net revenue. Adjusted net income rose 21.8% to $212 million, equal to 11.4% of net revenue. Adjusted EPS was up 23.5% to $1.89. On a year-to-date basis, net revenue grew 10% to $5.3 billion, adjusted EBITDA rose 15.9% to $997 million, and adjusted EPS climbed 19.3% to $4.83. Turning to cash flow, liquidity, and capital resources, cash flow from operations totaled $392 million in the third quarter, up $76 million versus Q3 2025, which reflects strong revenue growth, a continued solid focus on collections, and lower payments. Year to date, cash flow from operations stands at $509 million. Our strong free cash flow keeps giving us meaningful flexibility. During Q3, we amended our NCIB program to raise the maximum number of shares available for repurchase to 5% of our total shares outstanding; year to date, we have bought back 3.4 million common shares for CAD 350 million, which represents roughly 3% of total shares outstanding. Even after the significant deployment of cash into our stock buyback program, net debt to adjusted EBITDA at the close of Q3 stood at 1.2x. That is well within our internal target range of 1x-2x , toward the lower end. Our capital allocation priorities have not changed. Disciplined, accretive acquisitions remain our top priority, and our strong balance sheet and free cash flow profile give us flexibility to invest in growth, return capital to shareholders, and maintain a sustainable dividend. I will now hand the call back to Susan to discuss our backlog, some recent project wins, and our outlook for 2026.

Appreciate that, Vito. When we closed out September 30th, contracted backlog stood at CAD 9.2 billion — close to a 12% increase versus the same point last year — which represents about 13 months of work. On an organic basis, backlog was up just under 10% from a year ago, and every region and business contributed organic growth. Canada and Global both recorded double-digit organic backlog growth, at more than 18% and nearly 14%, respectively. Buildings, Water, and Energy and Resources each also generated double-digit organic backlog growth. Taken together, our backlog demonstrates how widespread demand is throughout our business and provides solid visibility into upcoming activity. Next, I'll go through several projects we won this quarter that show the breadth of opportunities across our regions and businesses. In Canada, Toronto's municipal government selected our water division to handle design plus construction administration for a treatment plant worth CAD 70 million. That plant is built to handle as much as 600 million liters daily and will assist in reducing combined sewer overflows while boosting water quality in the region. In the U.S., an unnamed worldwide tech firm chose our buildings group to design a data center in Arizona, which backs ongoing need for critical infrastructure. In Global, the Environment Agency of England chose our team to assist a fresh GBP 17.8 million framework for groundwater modeling services nationwide. Looking ahead to the remainder of the year, the solid results we've posted so far and demand that keeps holding up favorably make us confident about what 2026 holds. Our projected net revenue growth range has been tightened to 9%-11%, versus the earlier 8.5%-11.5%, and that mirrors how we performed across the first nine months. Regionally, we anticipate the pickup in organic growth observed in the U.S. and Canada in Q3 will carry on through Q4 and on into 2027; within the U.S., organic backlog gains throughout our business lines, together with robust customer demand, remain supportive of our outlook. Funding — or the ability to access it — has begun reaching key projects as well, and we expect that acceleration to keep building. Canada looks strong for us, with ongoing public-sector spending and demand in water and buildings supporting that view. We're also upbeat about the considerable momentum around the government's big projects and initiatives in defense, energy, and infrastructure, and about the 150-plus projects emerging from Canada's Investment Summit, many of which we can see clearly. All of this should create further opportunities and underpin continued growth in the years to come; in Global, robust water activity keeps propelling growth, including our long-term asset management programs and frameworks, along with healthy demand in energy and resources. With our margin results so far this year and the ongoing discipline we've shown in controlling operating costs, we've been able to lift our profitability outlook. We're now projecting a record adjusted EBITDA margin between 18.3% and 18.5%, which is up from the 17.8%-18.3% range we guided to previously. Our adjusted EPS growth target has been raised to 17%-19% from 15%-18%; these gains come from strong project margins, solid operational execution, and sustained discipline in how we manage administration and marketing costs. That includes the continued expansion of our global delivery center, along with efforts to make our operational processes more consistent and optimized, as well as efficiencies we're capturing from greater scale in key geographies. Looking beyond this year, our confidence stays very high that a diversified business model, combined with robust market demand and operational excellence, positions us well to continue producing results that lead the industry. There's a lot of excitement on our side about what's coming, and we look forward to presenting our next three-year strategic plan on December 8th at Investor Day, where we'll set out our priorities, growth ambitions, and vision for Stantec's next chapter; we'd love for you to join our live webcast virtually as we share the strategy for the future and the opportunities that will fuel our continued success. In the coming weeks, a link to the webcast will be posted on our website. So with that said, I'll now pass things over to the operator so we can take your questions. Operator?

Great. Thanks, and good morning. Perhaps we could begin with the big picture: could you share your thinking on the trends you're seeing in the U.S. market, and maybe more importantly, the pipeline of opportunities as we head into 2027? I'm not looking for guidance here, just some color on how that market is trending, and then perhaps any effect from the recent midterm elections that you'd want to flag for the outlook. Thanks.

You bet. Good morning, Saba. On the U.S. market specifically, I believe we told you last quarter that our confidence in the market remained, that we had the backlog. What had been the problem was being able to get at it, and we were observing what we thought were projects at last breaking free—really big programs that seemed to have become jammed up, funds that couldn't be reached, and so on. I think what became visible in Q3 is precisely what we told you would become visible. It makes us very happy that the U.S. market appears to be in motion. On that point, when you ask about what is moving, I think we continue to see that water shows strong demand. It's not merely the standard basic water work that would have been sitting in backlog years back for water and wastewater treatment—instead you're witnessing demand tied to advanced manufacturing, water scarcity, and flooding problems. The water business is genuinely strong. In environmental services, we're beginning to notice that shift. About three years ago we moved away from renewables permitting—a period when the environmental business had everyone fully committed—so that was a significant change in direction. What we're observing now, however, is a renewed focus on oil and gas, power and energy, and mission critical. Our infrastructure segment is intriguing, since what we're seeing—and this ties into your question about the Reauthorization Act and the midterms—is that although we have the continuing resolution bill, and I believe you're also aware that under IIJA funds were obligated, we would consistently expect demand to persist for, let's say, the coming couple of years. Transportation, I'm sure of it, has never stopped being a matter both parties care about. When administrations change, what really shifts is which states receive the funding. We've been working closely with clients—and will keep doing so—on getting access to that money so the infrastructure our business needs can move forward. So across every sector in the U.S., we're seeing solid tailwinds. As for the midterms, it's a bit too soon to say, but once again, I'm confident transportation has remained a bipartisan matter all along.

Great. Now turning to margins, strong results this quarter, and the guidance has been raised. Could you perhaps walk us through some of the components behind the full-year margin contribution — what's driving it and which offsets are you seeing? Thanks.

Hi, Saba. You're absolutely right. We're very happy with our margins on a year-to-date basis now. Adjusted EBITDA margins stand at 18.7%, roughly 100 basis points better than a year ago. What happened in Q3 is really just a continuation of the year-to-date story. Admin and marketing costs as a share of total revenue remain favorable; year to date that's 36.7%, 100 basis points below a year ago. In the quarter it was 35.5%, lower by just about 60 basis points. Several things are driving that. First is better utilization. The business keeps performing really, really well on that front. Overall, our year-to-date utilization improvement is roughly 2% plus. That's very substantial. Then there are reductions in occupancy costs and discretionary costs. When you're growing while those items come down, or you hold them growing at a slower rate, you get the scale effect from that. That's very significant. Also our continued penetration and strategic use of global delivery centers, both for our operations and for our back office — we just keep deepening that penetration, and it delivers highly strategic value to our clients as well. We're really, really pleased; in project margins you'd have noticed a particular pop this quarter. We did have some project recoveries that contributed to it. Project recoveries are obviously a consistent part of our business that, over the course of a year, I'd say, normalize. In the quarter we saw some outsized recoveries, if you will, that probably lifted our project margins by around 50 basis points. I think looking ahead at project margins, something in that 54%-54.5% range versus the 55% we contributed here is probably more appropriate. The trend in overall margins will continue as we move forward, and we're very pleased — and a quick shout-out to the operations.

Great. One final item from me. Provisions went up this quarter, I believe by roughly CAD 188 million. The notes mention that insurance may recover part of that sum. Could you explain what it relates to and how that recovery process you referenced works? Thanks.

Oh, the provisions. Okay, sorry. I believe you mean note nine in the financial statements, where we present the continuity of our provisions. You are absolutely right. Within that broader provision, you will see specifically the claims provision. At the close of Q3, just flipping through the financials, it was approximately $260 million. Claims, as you know, are a normal part of our business. We continually, excuse me, review our provisions regarding possible deficiencies identified in the performance of past services. The quarter's increase really reflects a series of related design deficiencies across multiple sites that have been alleged against Stantec. So that is what has caused the pop in the provision. These claims, including those referenced here in Q3, in aggregate, are insured, and we have sufficient insurance policies available to cover the provisions that have been recognized. There is no P&L effect, and effectively, we recognize an offsetting liability and receivable until the provision is settled; so you will see the receivable, I believe, in note seven, if I have got that accurately; so yeah, that is about Saba.

Great. Thanks very much.

Okay.

Yeah. Good morning, and thank you for taking my questions. The first item I wanted to ask about is Canada. Order intake appeared really robust in Q3. Susan, I believe you mentioned that the backlog had risen by mid-teens on a year-over-year basis. I'm just curious whether you could address where you're seeing the strongest demand in Canada and whether that backlog's duration has become longer.

You bet. Thanks, by the way. Thanks for calling in. We're genuinely excited about what the marketplace in Canada could do. We're seeing it, as you mentioned, in our backlog, but we're also seeing it in terms of just the energy that's in Canada right now. I was in Montreal shortly after the leaders had been in Halifax discussing the Investment Summit. We're looking at over 150 projects that represent CAD 600 billion in capital investment, and what we're seeing is genuinely forward-looking infrastructure and natural resource projects coming down the line. The encouraging thing about those 150 projects — actually more like 167 — is that, as we went through the investment book, these are projects we've either already worked on or have had in our opportunity pipeline that we've been monitoring. That's really exciting for us. The energy in that room felt unlike anything I'd experienced previously—folks weren't merely asking whether projects could get done, but rather how they'd get done, plus some of the fallout from all of them moving ahead simultaneously and the availability of funding. Regarding the Canadian market, our conviction is quite strong. One area where we're especially seeing plenty of activity is the north. We've got offices in Whitehorse and Yellowknife. We have an office in Nunavut, and in Alaska too, for that matter. What's going on in the north right now is genuinely exciting as well.

All right, great. Appreciate it. For my second question, I was hoping you might share what you're observing on the data center side. My assumption is that Canada is improving, but I wanted to ask whether anything has shifted meaningfully in the U.S. market during the past few months when it comes to project and RFP activity.

Yes. Let me give you some context around that. Specifically on data centers, our exposure — the portion of our net revenue — is only roughly 2%-3%. That volume of work has stayed quite steady across the last few months, though honestly it is growing. One thing we do in that area is serve the hyperscalers on projects that are already permitted today. We're seeing plenty of solid, robust activity. There's been a great deal of incoming interest where RFP-related work is concerned, yet we stay very disciplined about taking on work and pursuing work with key accounts and regarding work we feel we can complete. We're seeing intriguing data center activity throughout all of the U.S. We're seeing it in Canada, and we're seeing it in Europe.

All right. That's good to hear. Thanks. I'll hand things over.

Yes, thank you, everyone. Good morning. Perhaps going back to Canada, just a few quick questions on that. Not only was there the announcement of the 150 major projects, but there was also the shift in tax policy around the mega deduction. Could you speak a bit about how your conversations with clients are beginning to maybe shift when it comes to them putting forward projects that perhaps we wouldn't have considered before? Typically, your people are deeply involved at the early stages of what these would look like. Specifically, I'm thinking about what that would look like for, say, the energy industry and chemicals industry. In the past, you guys have been very actively involved with that, but I mean, the entire industry itself has probably been depressed for a decade. Any thoughts on how you see the development moving forward would be helpful.

Absolutely. We're hearing a great deal of discussion about, once again, about the projects that can be unlocked here in Canada, given the moment we have and the interest. I have to say, the discussions haven't centered directly with us on account of there being tax policy changes. Our conversations have been in and around access to funds, securing the right funds for the project and unlocking them. Now, probably entirely linked to tax policy as to where those funds can originate. The other item that has come up is, again, some of these projects we've been working on have been around for 10 years. So some are further along than others. I think there's also conversation in and about significant work that still needs doing, but also that's an early win because some of the planning you're referring to, with our environmental business especially, we're frequently in the upfront work, some of that has already been done or thought through, the relationships built that are needed to get them done. I'd say that's the nature of our discussions, is how much of this, how ready is this project to move? How much has already been thought through?

Right, so let me just consider the balance of the business. What I mean is, Canada has been fairly subdued for the last few years, and your attention has clearly gone toward expansion in the U.S. and internationally; with some of the shifts we're now seeing, does that alter your perspective and your thinking about the scale you hold in Canada compared with other regions? Do you believe, whether through acquisitions or organic development, that there's anything you need to build back into Canada as the environment changes?

Yes, definitely. From my perspective, it doesn't seem like Canada has been quiet, especially considering the sectors we operate in and the efforts we've undertaken. Now, when we consider our investment approach going forward, are there resources that might be necessary now that wouldn't have been under normal circumstances? So yes, we're constantly evaluating, since we're dedicated to growing organically and also through acquisitions when the right company comes along at the right moment and fits strategically. What counts as the right company at the right moment does shift when your backlog of work looks different than it used to. Of course, we'd routinely review the entire Canadian portfolio along with the market to see what opportunities might exist. Beyond that — and I've mentioned this somewhat over the past month — we're also seeking greater operational consistency throughout the platform, since this came up in one of our discussions in Montreal immediately following the Investment Summit. A key worry was: with all these projects launching simultaneously, how would that affect labor demand, wage inflation, and ultimately project cost inflation? What a worldwide platform plus consistent operations gives us, in my view, is the ability to supply resources whenever markets are strong. Growth is certainly possible, yet we can also draw resources from that entire global footprint. On your question — yes, in Canada we're seeing favorable tailwinds pointing to faster growth there than in prior periods, and we're continually seeking chances to strengthen our team through the right M&A.

Okay, that's where I'll stop. Thank you, everyone.

Thank you, Chris.

Morning, hello. If I could, I'd like to raise the topic of global growth, since it seems to me the pace of growth has eased somewhat. My assumption is that AMP8 keeps ramping up fairly aggressively. I'm just curious whether you might be able to speak to that, maybe sort of place some takes into that bucket. Thanks.

Sure thing. Hey, Max. Appreciate the question. As you're well aware, we're quite pleased when it comes to growth in our global business, especially the organic growth. Although AMP8, and Scottish Water in particular, by the way, has been growing and ramping up, we've also come across genuinely strong opportunities in Latin America with the mining-related work. We've witnessed the turn, which I believe you'd have seen as well, in Australia and New Zealand coming out of a market that was really depressed. Across our whole global platform, we're seeing genuinely encouraging green shoots.

Max, you're not doing me any favors here. Hold the organization to a demanding standard; they turned in 7.5% this quarter, and you're calling it a slowdown. I mean, I understand. Clearly, on a year-to-date basis, they're sitting at 9.4%. I'm laughing because I can picture Kath over in the U.K. saying, "Gosh." No, we're extremely, extremely pleased, and honestly, I believe you'll see things pick up in Q4 and then as we head into 2027; so a very, very strong profile for the global business there.

Yeah, no, that's fair enough. Again, just following up on that; so I was curious whether you could give us a little more detail on how the Page integration is going, perhaps any shifts in go-to-market approaches, from the standpoint of the combined core business. Any insight would be useful. Thank you.

Sure thing. In my view, the Page integration has genuinely been a textbook integration. It was a rare situation where two firms came together and actually had the chance to collaborate in partnership prior to the acquisition taking place. So, when you consider acquisitions and integration, a portion of the integration work—getting acquainted and collaborating on major projects—took place long before the deal was signed. Bringing Page into Stantec has been remarkable. In fact, Jon Sylvie, who was a leader at Page, now heads our buildings vertical in North America with a seamless team spanning the business. So, to me that has truly been textbook integration. You're seeing it in the results, in how the buildings business is growing across the U.S.

Got you. Thank you so much.

Thanks, Max.

Thanks. Earlier in this call, you talked about U.S. organic growth and some of the factors behind it. Page has been part of the company for a year now, so it would have counted toward U.S. organic growth this quarter. My question is whether you can walk through how much its move into inorganic growth affected the quarter and what it contributed.

Yeah, it actually flipped over on August 1st. If you look at Q3 organic in the U.S., honestly Page wasn't the main driver. I mean, Page clearly adds to it. Our buildings practice is really strong. That progress keeps showing up in a really powerful manner. Yet, looking at the U.S. and this quarter, the gains were broad-based. We saw momentum in water, momentum in energy, and solid momentum throughout the whole portfolio, and we anticipate that carrying forward. The Q3 bump in the U.S. — and I don't mean to imply — what was the figure here, 4% organic, 4.9% — that's a bump, but certainly a trend improvement, just as we had described, and it wasn't solely about Page. It was simply the business's overall strength, as Susan described, plus the backlog beginning to unlock throughout the business.

All right, that's really useful. Thanks. Clearly there was a very strong improvement in margin this quarter. Vito, you did point to the project recoveries and the effect those would have had. But even leaving that aside, margins overall were strong. I suppose what I'm asking about is pricing and the pricing environment. How much of a factor is that in helping drive part of the margin improvement?

Yes. Well, thanks for that. Look, 120 basis points during the quarter is extremely healthy — even after excluding the project recoveries I mentioned — and it tracks the trajectory we've been delivering, which we'll cover in more detail at our Investor Day on December 8th, and what we think this business is capable of going forward. Really strong deliveries there. Obviously, pricing shows up in our project margin. I'd say the pricing environment feels pretty balanced. Given how projects are shaping up, the value we keep providing to clients, the strategic places where we operate, and how complex the programs are, I'm not too worried about pricing. Looking at this sector, especially the multi-billion dollar programs where Stantec is involved, I believe there's a huge opportunity for us to—how should I put it—secure or request the right kind of return on our services. From what I can tell, things are fairly balanced right now. Of course, different markets will bring their own gains and losses. Susan, do you have anything to add on pricing more broadly?

No.

No. Yeah, we receive plenty of questions about AI and what impact it's having on pricing. At the end of the day, at this point in time, it isn't, and we don't anticipate that it will be.

All right, great. Only one more from me. During the prepared remarks, it was mentioned that acquisitions continue to be a leading priority. We did see the Niche acquisition during the quarter, though clearly you were also fairly active on the buyback side, and then you raised the NCIB. So I suppose my question is whether you could walk us through your current thinking on capital allocation priorities right now, along with how the M&A pipeline is shaping up, and what you're observing regarding private-side valuations compared with those in the public sector?

Yes. At the core — Susan brought it up, and I brought it up in my prepared remarks — we still hold the view that strategic acquisitions genuinely offer the greatest value creation opportunity for us as we go forward. In fact, the environment is beginning to open up a bit. The pipeline remains pretty strong. Private and public valuations are nowhere close to converged, but at least they aren't widening. Perhaps they're beginning to converge slightly — very early stages of that. We're quite active, no question. We have a strong team examining these opportunities, and obviously we wouldn't be afraid, or hesitant, to put a toe in the market. What matters most to us has always been the same thing: it's really about discipline, about patience, and about never doing an acquisition merely for the sake of doing one, correct? It must satisfy every criterion, quantitatively as well as qualitatively. I think if you look at our 2026 activity, it would demonstrate that disciplined approach, since obviously nothing was there at the right moment for us, or nothing meaningful, so to speak, from a dollar standpoint, and we applied flexibility through the share buyback. I simply love where we stand on that, because everything begins with healthy free cash flow, and when we look at our free cash flow, we remain really pleased as we progress on that front, and it gives us flexibility for capital allocation decisions of that kind. But as I said, we still fundamentally believe that acquisitions offer the greatest value creation opportunity for us going forward as an organization.

All right, thanks. That's all from me.

Morning. I want to follow up on the M&A point Michael raised. Could you speak to the competition angle? Historically we've witnessed considerable pressure from private equity firms—over the past 12 months, I'd say, though honestly it stretches back well beyond that—and that has genuinely pushed valuations up. Interest rates have climbed pretty sharply. Has that had an effect on what you're seeing today? Has it changed private equity's appetite for M&A? Is the competition maybe easing somewhat?

Hi, Frederic. I'd say there are always pluses and minuses there, and competition is always something we weigh. But honestly, in most cases it's a secondary factor. For us, it always returns to what I was just describing—the qualitative and the quantitative—and whether a deal works for us. If it's compelling, then by and large the economics line up, and we can get there with a counterparty. To address your question directly, though, in today's environment, compared with perhaps two years ago, I'd tell you that you're absolutely right. Private equity, I think, is being more thoughtful about these matters. Clearly, public valuations have come down from their peaks, and that of course influences private equity valuations as they consider exit strategies and so forth. I'm glad to see how things have moved in that respect.

Another point worth noting on that front, Vito, is that we have recently attended a number of industry conferences. Watching how mature the firms being aggregated are, along with their leadership teams, is fascinating — that maturation shows up when a firm's culture becomes decisive at the moment they are prepared to pursue a strategic deal. Once again, I view it as secret sauce in terms of what Stantec brings to the table. As an employer we enjoy a solid reputation across the business, and in conversations with potential acquisition targets that counts for a great deal. The past month's two industry meetings simply drove that home completely.

Yeah, that's well put.

Thank you. Susan, I suppose you're stepping into the top job at a favorable moment. You might hold some back for next month, but I'll give it a shot regardless. As you aim to make your own mark on the company, where do you see the biggest chance to maybe change how things are done or lean harder into what's already been done before?

Absolutely. Thanks, Fred. From where I sit, people have asked me, "Are any of our strategic priorities shifting?" They aren't, since I helped shape those strategic priorities. So I remain a believer in, and fully committed to, our five verticals and expanding our footprint. Again, that's both via organic growth and via M&A, where it must be a sound, proper strategic fit. It's not about being big just for the sake of size. What excites me a great deal is what I mentioned a bit earlier, namely operational consistency, because I believe it gives you the flexibility to serve client needs and to have Cath Schefer, our COO for Global, and Matt Travers, our COO for North America, collaborating so closely in order to, again, move forward. We had operational consistency, but we can elevate it further. I think it's a genuinely strong opportunity for us to even run things with greater discipline and make careers more interesting as well, because it provides some interoperability when it comes to staff. All of that excites me. The other point I'd make is that, with the industry shifting the way it is, like the pace of the market, the tailwinds behind us, it isn't the same. Where we stand today, what leaders require is not identical to what leaders required five or 10 years ago. We're also deeply committed to leadership development, financial acumen, commercial acumen, and cultivating that more broadly within the company. I suppose I'd frame it as a leadership readiness strategy spanning the entire organization, deeper and wider. Those are the major items.