Stantec Inc. (NYSE:STN) Q3 2023 Earnings Conference Call November 10, 2023 9:00 AM ET

Company Participants

Gord Johnston - President and Chief Executive Officer

Theresa Jang - Executive Vice President and Chief Financial Officer

Conference Call Participants

Benoit Poirier - Desjardins

Michael Doumet - Scotiabank

Chris Murray - ATB Capital Markets

Michael Tupholme - TD Securities

Sabahat Khan - RBC Capital Markets

Ian Gillies - Stifel

Maxim Sytchev - NBF

Operator

Welcome to Stantec's Third Quarter 2023 Earnings Results, Webcast and Conference Call.

Leading the call today are Gord Johnston, President and Chief Executive Officer; and Theresa Jang, Executive Vice President and Financial -- 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 is a delay between the call and the webcast.

All information provided during this conference call is subject to the forward-looking statement qualification set out on Slide 2, detailed in Stantec's management's discussion and analysis, and incorporated in full for the purpose of today's call.

Unless otherwise noted, dollar amounts discussed in today's call are expressed in Canadian dollars and are generally rounded.

With that, I'm pleased to turn the call over to Mr. Gord Johnston.

Gord Johnston

Good morning. Thank you for joining us today.

I'm very pleased to report that Stantec has delivered another quarter of record earnings. We continue to see very strong market demand across all of our geographies, with Canada in particular showing remarkable resilience. We met this demand with excellent operational performance, driven by high utilization and augmented by our effective workforce management strategies and strong talent attraction and retention.

Organic hiring remains robust. This was the busiest Q3 we've ever experienced in terms of hiring. And we are hiring at two times the rate that we were pre-pandemic. And our North American -- sorry, and our employee retention rates remain amongst the best in our industry with voluntary turnover in North America returning to pre-pandemic levels. These were some of the key drivers that led to our Q3 earnings exceeding our expectations.

Looking at our financial results, we grew our net revenue by 14% to $1.3 billion, with organic growth of 9%. For the seventh consecutive quarter, each of our regional and business operating units delivered organic growth, with double-digit growth in the U.S. region and in our Water and Environmental Services business segments. We drove significant margin expansion and delivered record-high adjusted EPS of $1.14. On the strength of our performance to date and our expectation of continued favorable tailwinds, we've raised our guidance for the second time this year, and I'll speak a little more about this a little later in the presentation.