Willdan Group — Second Quarter 2026 Earnings Summary

Financial Performance

• Contract revenue for the quarter ended July 3, 2026, was $231.0 million, a 33.2% increase year-over-year; net revenue was $117.2 million, up 23.5%.
• Net income for the quarter was $24.3 million, up 57.7% year-over-year; GAAP diluted EPS was $1.58, up 53.4%.
• Adjusted EBITDA for the quarter was $33.0 million, up 50.6% year-over-year; Adjusted Diluted EPS was $2.07, up 38.0%.
• For the six months ended July 3, 2026, contract revenue was $386.1 million (up 18.5%, or 23.1% normalized); net revenue was $209.7 million (up 16.3%, or 20.8% normalized).
• Six-month net income was $32.9 million (up 63.4%, or 69.7% normalized); GAAP diluted EPS was $2.13 (up 56.6%).
• Six-month Adjusted EBITDA was $51.1 million (up 40.6%, or 46.0% normalized); Adjusted Diluted EPS was $2.98 (up 39.3%).
• Subcontractor services and other direct costs were $113.8 million in the quarter (49.2% of contract revenue) and $176.5 million for the six months (45.7% of contract revenue).
• Cash and cash equivalents were $34.9 million as of July 3, 2026, down from $65.9 million at January 2, 2026; restricted cash was $4.3 million.
• Total assets were $634.9 million as of July 3, 2026, compared to $544.2 million at January 2, 2026.
• Total liabilities were $284.4 million as of July 3, 2026, compared to $239.4 million at January 2, 2026.
• Notes payable (current and non-current) totaled $67.2 million as of July 3, 2026, up from $48.5 million at January 2, 2026.
• Operating cash flow for the six months ended July 3, 2026, was $19.5 million, down from $28.7 million in the prior year period.
• Investing cash flow for the six months ended July 3, 2026, was $(54.1) million, primarily due to $50.5 million paid for acquisitions.
• Financing cash flow for the six months ended July 3, 2026, was $7.9 million, driven by $30.0 million in borrowings under the revolving credit facility.

Guidance and Future Outlook

• Fiscal Year 2026 Net Revenue guidance raised to between $415 million and $430 million.
• Fiscal Year 2026 Adjusted EBITDA guidance raised to between $103 million and $107 million.
• Fiscal Year 2026 Adjusted Diluted EPS guidance raised to between $5.00 and $5.15 per share.
• FY2026 targets assume 15.9 million diluted shares, a 0% effective tax rate, and no future acquisitions.
• Long-term financial goals include 15%-20% annual growth in Revenue and Net Revenue (including acquisitions).
• Long-term goal to maintain Annual Adjusted EBITDA to Net Revenue margin in the high 20s%.

Business Segments and Product Lines

• Energy segment contract revenue was $202.6 million for the quarter (up 38.0% from $146.7 million) and $330.6 million for the six months (up 21.1% from $273.0 million).
• Engineering and Consulting segment contract revenue was $28.4 million for the quarter (up 6.4% from $26.7 million) and $55.6 million for the six months (up 5.1% from $52.9 million).
• Net revenue for the Energy segment was $91.2 million for the quarter and $158.2 million for the six months.
• Net revenue for the Engineering and Consulting segment was $26.1 million for the quarter and $51.5 million for the six months.
• Management cited strong demand for energy solutions and growth in the commercial business as drivers for margin expansion.

Market and Competitive Landscape

• Management identified compelling long-term opportunities driven by customer investments to meet growing electricity demand and improve grid reliability, resiliency, and affordability.
• The company serves utilities, state and local governments, and commercial customers in the United States and Canada.
• The business operates in a highly competitive energy services market.

Risks and Challenges

• Risks include the ability to complete projects timely, compete successfully, and reliance on top ten clients.
• Potential impacts from changes in state, local, and regional economies and government budgets.
• Challenges related to winning new contracts, renewing existing contracts, and bidding processes.
• Risks associated with supply chain constraints, labor shortages, elevated interest rates, and elevated inflation.
• Risks regarding the ability to realize the full amount of backlog and manage debt covenants.
• Risks related to integrating acquisitions and executing growth strategies.
• Risks associated with attracting and retaining managerial, technical, and administrative talent.

Management Commentary and Tone

• Mike Bieber, President and CEO, stated the company delivered "strong performance" in the second quarter of 2026.
• Management highlighted 18% organic growth in net revenue and margin expansion driven by favorable business mix and operating leverage.
• Management expressed confidence in future opportunities, citing the rationale for raising FY2026 financial targets.

Other Key Points

• The first half of fiscal 2026 had one fewer week than the first half of fiscal 2025; normalized results were provided to account for this variance.
• Cash paid for acquisitions, net of cash acquired, was $50.5 million for the six months ended July 3, 2026.
• Issuance of common stock related to business acquisitions was $9.6 million for the six months ended July 3, 2026.
• Contingent consideration related to business acquisitions was $9.4 million for the six months ended July 3, 2026.
• Goodwill increased to $212.2 million as of July 3, 2026, from $179.5 million at January 2, 2026.
• Other intangible assets, net, increased to $68.9 million as of July 3, 2026, from $35.5 million at January 2, 2026.
• Contract assets increased to $134.4 million as of July 3, 2026, from $107.3 million at January 2, 2026.
• Contract liabilities increased to $30.3 million as of July 3, 2026, from $21.6 million at January 2, 2026.
• A conference call was hosted on August 6, 2026, at 5:30 p.m. Eastern time to discuss results.