Stantec (STN) Q3 2026: Big Miss on Paper, Record Margins Underneath

Stantec's third-quarter adjusted EPS of $1.33 landed 25.5% below the consensus estimate of $1.78, and revenue of $1.65 billion missed the $1.84 billion forecast by 10.5%. Those are headline numbers that look alarming on first read, though the gap reflects a consensus mismatch, and revenue still grew 9.9% over the prior-year period.

Beneath the miss, the underlying operating trends were notably strong. Adjusted EBITDA margin expanded 120 basis points to 20.2%, which the company described as a record. Project margin rose 60 basis points to 55.0%, and administrative and marketing expenses fell 60 basis points as a share of net revenue, pointing to genuine operating leverage.

The adjusted EPS figure excludes several after-tax items: $21.5 million in amortization of acquired intangibles, $5.7 million in acquisition and restructuring costs, and a $5.6 million accelerated long-term incentive charge tied to the CEO's retirement on September 30, 2026. GAAP diluted EPS came in at $1.60. These add-backs are worth understanding because they shaped the gap between the reported non-GAAP figure and what analysts had modeled.

Contract backlog of $9.2 billion, up 11.6% with 9.9% organic growth, is the forward-looking figure that matters most for how investors weigh the quarterly shortfall. Stantec also repurchased 1,723,229 shares for $174.5 million under its normal course issuer bid during the quarter, and 3,390,521 shares for $350.4 million year to date.

Management raised its full-year 2026 targets on the back of the year-to-date margin and earnings performance. Adjusted EPS growth guidance moved to 17% to 19% from a prior range of 15% to 18%, adjusted EBITDA margin guidance was lifted to 18.3% to 18.5%, and net revenue growth was narrowed to 9.0% to 11.0%. The company cited stronger organic trends in Canada and the US in Q3 that it expects to carry into Q4.