Willdan Group Q4 Earnings Call Highlights

27 Feb 2026, 17:39 by Danessa Lincoln · The Markets Daily

Willdan Group (NASDAQ:WLDN) executives told investors the company ended fiscal 2025 with “record financial performance” and entered 2026 with momentum driven primarily by energy-related work, expanding program activity at utilities, and growing demand from data center customers.

Record 2025 results and margin expansion

For the fourth quarter of 2025, the company reported contract revenue up 21% year over year to $174 million and net revenue up 13% to $89.5 million. Adjusted EBITDA increased 13% to $20 million. Adjusted earnings per share more than doubled to $1.57, while GAAP EPS was $1.23. CFO Kim Early said the quarter benefited from broad-based growth across service lines and contributions from recent acquisitions, while margins remained “solid” due to execution and cost discipline.

For the full fiscal year 2025, Willdan posted contract revenue of $682 million, up 21%, and net revenue of $365 million, up 23%. Early said the net revenue increase included 17% organic growth and 6% from acquisitions. Gross profit rose 26.1% to $256 million, and gross margin expanded to 37.5% from 35.8% a year earlier, which management attributed to growth and productivity gains in program management and consulting services, along with reduced direct delivery costs.

Adjusted EBITDA increased 40% year over year to $79.5 million, and Early said Willdan’s adjusted EBITDA margin reached 21.8% in 2025—exceeding the company’s long-term target of 20% for the first time. CEO Mike Bieber said contract and net revenue each grew more than 20% in 2025, led by energy work, and that strong EPS performance helped generate $71 million of free cash flow.

Tax benefit and what changes in 2026

Management highlighted a significant tax impact in 2025. Early said Willdan recorded an income tax benefit of $12.6 million, driven by energy efficiency incentives under Section 179D and the impact of a higher stock valuation. The company’s effective tax rate reflected a 31.4% benefit in 2025, compared with a 15.4% tax expense in 2024. GAAP net income more than doubled to $52.6 million, or $3.49 per diluted share, versus $22.6 million, or $1.58 per share, in 2024. Adjusted EPS rose to $4.89 from $2.43.

During the Q&A, Roth Capital Partners analyst Craig Irwin asked about 2026 adjusted EPS guidance of $4.50 to $4.70, which is below 2025’s $4.89, and about the company’s tax assumptions. Bieber said the “single biggest factor” is the assumption that Section 179D is set to expire at the end of June, limiting the company’s ability to benefit to projects started in the first six months of 2026. He also cited a shift in project mix—moving from work involving “a lot of school buildings” at the Clark County School District toward projects at Alameda County and the City of San Diego that involve fewer buildings, which are a key source of 179D deductions.

Demand drivers: load growth, data centers, and energy efficiency

Bieber framed 2025’s growth within broader market dynamics, emphasizing that electric load growth has returned in the U.S. after about 15 years of stagnation. He said artificial intelligence and data centers are accelerating electricity demand “at a scale not seen in recent years,” with transportation and building electrification and increased domestic manufacturing also contributing.

Willdan described its business mix as heavily oriented toward energy work, with approximately 85% of revenue from its energy segment and 15% from engineering and consulting. By customer type, Bieber said utilities represented about 41% of revenue, state and local governments about 48%, and commercial customers 11%, with commercial growth tied largely to power needs for data centers. He characterized the commercial category as the “most fertile business environment” the company serves and said Willdan intends to continue increasing its capabilities for commercial customers.

The company also pointed to growth in “upfront” consulting, forecasting, and analytics work. Bieber said demand for studies on electricity load growth increased more than 50% organically year over year. He connected that demand to the APG acquisition, which provides power engineering solutions to commercial customers including data centers and hyperscalers, and said that APG-related work is expected to “more than double” in 2026, with backlog building into 2027 and 2028 due to long-term contracts.

Bieber also discussed trends in energy efficiency, including more “capacity-driven and locational” efficiency programs, affordability concerns, accelerating grid modernization, and reliability needs that extend beyond traditional summer peaks.

Contract wins and pipeline commentary

Management highlighted several contracts it said were converted since the prior conference call, with Bieber emphasizing increasing average contract size. Examples included:

City of San Diego: a $112 million energy efficiency program (about two years) focused on municipal infrastructure.
Mt. San Antonio College: a $49 million integrated microgrid resiliency project over the next two years, involving collaboration across Willdan groups.
Menlo Digital: a $38 million project to design and manage construction of an interconnect substation for a new data center in Phoenix, Arizona.
SOLV Energy: a $4.5 million integrated distributed energy resource (DER) project in Utah.
LoadSEER: a confidential software license signed in Q4 for Willdan’s utility forecasting software.

In discussing data centers, Bieber said there is an estimated 35 gigawatts of active data center construction in the U.S., while noting it is “unlikely every announced project will ultimately be built.” He said the broader trend points to durable demand extending at least through the end of the decade and highlighted complexity related to transmission and distribution upgrades, interconnection, and reliability requirements.

Balance sheet, liquidity, and 2026 guidance

Early said Willdan generated $80 million in operating cash flow in 2025 and $71 million in free cash flow. The company invested $9 million in CapEx (primarily proprietary software development), used $36 million for acquisitions, and reduced borrowings by $40 million. Willdan ended the year with $49 million of debt and $66 million of unrestricted cash, resulting in a net positive cash position of $17 million—its first net cash position since 2017, according to management. Total available liquidity was cited as $216 million, including full availability under a $100 million revolving credit facility.

For 2026, management provided guidance that assumes no future acquisitions, calling for net revenue of $390 million to $405 million, adjusted EBITDA of $85 million to $90 million, and adjusted EPS of $4.50 to $4.70. Early said the guidance assumes a full-year effective tax benefit of approximately 10% and 15.8 million diluted shares outstanding, and she added that the company expects to pursue acquisitions and would update guidance accordingly.

In the Q&A, management reiterated expectations for EBITDA margins to remain above 20% in 2026, pointing to what Bieber described as a longer-term shift “up the value scale” and the ability to absorb corporate costs as the company grows. He also said the company is seeing continued expansion from long-term utility customer relationships. Executives also described a “particularly robust acquisition pipeline” entering 2026, including potential deals aimed at expanding commercial customer capabilities.

About Willdan Group (NASDAQ:WLDN)

Willdan Group, Inc provides energy efficiency, infrastructure engineering, and technical consulting services to a diverse range of public and private sector clients. The company works with utilities, municipalities, state and federal agencies, and commercial enterprises to design, implement, and manage programs that promote sustainable energy use, grid modernization, and resilient infrastructure. Willdan’s offerings span program design and implementation, energy audits, measurement and verification, and project management for both new construction and retrofit initiatives.

Core services include energy advisory and engineering solutions, including feasibility studies, facility commissioning and retro-commissioning, $0 down financing for energy projects, and demand response program development.