Willdan Group — Third Quarter 2026 Earnings Summary

Financial Performance

• Contract revenue for the quarter ended October 2, 2026, was $214.5 million, a 17.9% increase year-over-year.
• Net revenue for the quarter was $112.2 million, up 18.1% year-over-year.
• Net income for the quarter was $11.9 million, a 13.6% decrease year-over-year.
• Adjusted EBITDA for the quarter was $28.3 million, up 22.4% year-over-year, with an adjusted EBITDA margin of 25.2%.
• GAAP Diluted EPS was $0.76, down 15.6% year-over-year.
• Adjusted Diluted EPS was $1.20, down 0.8% year-over-year.
• For the nine months ended October 2, 2026, contract revenue was $600.7 million (up 18.3%, or 21.3% normalized), and net revenue was $321.8 million (up 16.9%, or 19.9% normalized).
• Nine-month net income was $44.7 million (up 32.2%, or 35.6% normalized), and Adjusted EBITDA was $79.4 million (up 33.5%, or 36.9% normalized).
• Nine-month GAAP Diluted EPS was $2.89 (up 27.9%), and Adjusted Diluted EPS was $4.18 (up 25.1%).
• Subcontractor services and other direct costs represented 46.4% of contract revenue for the nine months ended October 2, 2026, compared to 45.8% in the prior year period.
• Cash and cash equivalents were $39.2 million at October 2, 2026, down from $65.9 million at January 2, 2026.
• Accounts receivable increased to $97.5 million at October 2, 2026, from $64.6 million at January 2, 2026.
• Goodwill increased to $223.2 million at October 2, 2026, from $179.5 million at January 2, 2026.
• Total liabilities were $274.8 million at October 2, 2026, compared to $239.4 million at January 2, 2026.
• Net cash used in operating activities for the nine months ended October 2, 2026, was $32.9 million, down from $40.9 million in the prior year period.
• Net cash used in investing activities for the nine months ended October 2, 2026, was $61.0 million, primarily driven by $55.8 million in cash paid for acquisitions.
• Net cash provided by financing activities for the nine months ended October 2, 2026, was $4.3 million.

Guidance and Future Outlook

• Fiscal Year 2026 targets: Net Revenue between $435 million and $445 million; Adjusted EBITDA between $109 million and $111 million; Adjusted Diluted EPS between $5.15 and $5.25.
• Preliminary Fiscal Year 2027 targets: Contract Revenue greater than $1 billion; Net Revenue greater than $0.5 billion; Adjusted EBITDA greater than $140 million.
• FY2026 targets assume 15.9 million diluted shares, a 0% effective tax rate, and no future acquisitions.
• FY2027 targets assume no future acquisitions.
• Management raised FY2026 targets and introduced preliminary FY2027 targets in advance of the formal outlook in late February.
• Management aims to grow adjusted EBITDA by more than 25 percent in FY2027.

Business Segments and Product Lines

• Energy segment contract revenue for the quarter was $184.8 million, up from $154.8 million in the prior year period.
• Energy segment net revenue for the quarter was $84.3 million, up from $69.2 million in the prior year period.
• Engineering and Consulting segment contract revenue for the quarter was $29.7 million, up from $27.3 million in the prior year period.
• Engineering and Consulting segment net revenue for the quarter was $27.9 million, up from $25.8 million in the prior year period.
• Willdan closed the Mantis Innovation acquisition, described as the largest in the company's history, to expand energy management services for commercial and industrial customers.
• The company serves utilities, state and local governments, and commercial customers in the United States and Canada.

Market and Competitive Landscape

• Management stated that markets are strong and the company is well positioned to cross the $1 billion revenue threshold.
• The energy services market is described as highly competitive.

Risks and Challenges

• Risks include the ability to complete projects timely, compete successfully, and win/renew contracts.
• Potential challenges include reliance on top ten clients, changes in state/local/regional economies and government budgets, and the ability to realize the full amount of backlog.
• Risks related to debt include the ability to make principal and interest payments and comply with financial covenants.
• Operational risks include supply chain constraints, labor shortages, elevated interest rates, and elevated inflation.
• Integration risks involve successfully integrating acquisitions and executing on the growth strategy.
• Talent risks include the ability to attract and retain managerial, technical, and administrative staff.

Management Commentary and Tone

• CEO Mike Bieber described the third quarter as having "strong operational performance."
• Management noted that net revenue grew 18% and adjusted EBITDA margin expanded to 25.2% in the quarter.
• Management stated they are "executing well" and are "well positioned" for future growth.
• The tone was confident, citing strong results and visibility as reasons for raising targets.

Other Key Points

• The nine months ended fiscal 2026 had one fewer week than the nine months ended fiscal 2025; normalized results were presented to account for this difference.
• Cash paid for acquisitions, net of cash acquired, was $55.8 million for the nine months ended October 2, 2026.
• Issuance of common stock related to business acquisitions totaled $9.6 million for the nine months ended October 2, 2026.
• Contingent consideration related to business acquisitions was $11.6 million for the nine months ended October 2, 2026.
• A conference call was hosted on November 5, 2026, at 5:30 p.m. Eastern time to discuss results.
• Non-GAAP measures used include Net Revenue, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS.
• Reconciliations for forward-looking non-GAAP measures (FY2026 targets) were not provided due to the inability to predict subcontractor costs, interest expense, tax expense, stock-based compensation, and other items without unreasonable effort.