Willdan Group, Inc. Q4 FY2025 earnings call

2025 was a record year for Wilden. Consolidated contract revenue grew 21% to $682 million and net revenue grew 23% to $365 million. Adjusted EBITDA grew 40% to $79.5 million. Generated $71 million free cash flow and in net cash position. Upfront policy, forecasting, and data analytics inform strategy. APG acquisition provides power engineering solutions to commercial customers expected to more than double in 2026. Fourth quarter 2025: contract revenue increased 21% to $174 million, net revenue grew 13% to $89.5 million, adjusted EBITDA increased 13% to $20 million.

For 2025, both contract and net revenue grew greater than 20%, led by energy work. Adjusted EBITDA grew 40%, and yearly margins expanded to above 20% target. Organic net revenue growth was 17% driven by expansion with existing customers. Approximately 85% of revenue comes from energy segment, remaining 15% from engineering and consulting. Utility customers represent about 41% of revenue, state and local governments about 48%, commercial customers 11% with most activity tied to data centers.

2026 net revenue expected in range of $390 to $405 million, adjusted EBITDA in range of $85 to $90 million, adjusted earnings per share in range of $4.50 to $4.70 per share. Targets assume no future acquisitions but expect to make acquisitions during year and guidance updated accordingly. Expect 2026 margin to exceed 20% target.

Q: Regarding EPS guide, 179D assumption and EBITDA growth.

A: 179D set to expire end of June 2026 affecting deductions, work shift from Clark County School District reducing 179D deductions. Margins to continue above 20%, moved up value scale and back office cost absorption helps.

Q: On data centers and utility projects.

A: Utilities squeezed, energy efficiency programs growing, data center related APG acquisition expected to more than double in 2026.

Q: On Los Angeles contract and data center business.

A: Los Angeles contract ramping up, Q2 2026 to have material contribution, data center business robust with plans to diversify via acquisitions.