Willdan Group — Third Quarter 2026 Earnings Summary

Financial Performance:

• Contract revenue for the third quarter ended October 2, 2026, was $214.5 million, an increase of 17.9% year-over-year.
• Net revenue for the third quarter was $112.2 million, an increase of 18.1% year-over-year.
• Net income for the third quarter was $11.9 million, a decrease of 13.6% year-over-year.
• Adjusted EBITDA for the third quarter was $28.3 million, an increase of 22.4% year-over-year.
• GAAP diluted EPS for the third quarter was $0.76, a decrease of 15.6% year-over-year.
• Adjusted diluted EPS for the third quarter was $1.20, a decrease of 0.8% year-over-year.
• For the nine months ended October 2, 2026, contract revenue was $600.7 million (up 18.3%, or up 21.3% normalized).
• For the nine months ended October 2, 2026, net revenue was $321.8 million (up 16.9%, or up 19.9% normalized).
• For the nine months ended October 2, 2026, net income was $44.7 million (up 32.2%, or up 35.6% normalized).
• For the nine months ended October 2, 2026, Adjusted EBITDA was $79.4 million (up 33.5%, or up 36.9% normalized).
• For the nine months ended October 2, 2026, GAAP diluted EPS was $2.89, an increase of 27.9% year-over-year.
• For the nine months ended October 2, 2026, Adjusted diluted EPS was $4.18, an increase of 25.1% year-over-year.
• Adjusted EBITDA margin for the third quarter was 25.2%.
• Subcontractor services and other direct costs were 46.5% of contract revenue for the fiscal year 2025, 46.4% for the nine months ended October 2, 2026, and 45.8% for the nine months ended October 3, 2025.
• Cash and cash equivalents were $39.2 million as of October 2, 2026, down from $65.9 million as of January 2, 2026.
• Total assets were $645.9 million as of October 2, 2026, compared to $544.2 million as of January 2, 2026.
• Total liabilities were $274.8 million as of October 2, 2026, compared to $239.4 million as of January 2, 2026.
• Stockholders' equity was $371.1 million as of October 2, 2026, compared to $304.9 million as of January 2, 2026.
• Net cash provided by 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 cash paid for acquisitions of $55.8 million.
• 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 Net Revenue targets raised to between $435 million and $445 million.
• Fiscal Year 2026 Adjusted EBITDA targets raised to between $109 million and $111 million.
• Fiscal Year 2026 Adjusted Diluted EPS targets raised to between $5.15 and $5.25 per share.
• FY2026 targets assume 15.9 million diluted shares, 0% effective tax rate, and no future acquisitions.
• Preliminary Fiscal Year 2027 targets include Contract Revenue greater than $1 billion.
• Preliminary Fiscal Year 2027 targets include Net Revenue greater than $0.5 billion.
• Preliminary Fiscal Year 2027 targets include Adjusted EBITDA greater than $140 million.
• FY2027 targets assume no future acquisitions.
• Management aims to grow Adjusted EBITDA by more than 25 percent in FY2027.
• Management indicated visibility to cross the $1 billion revenue threshold.

Business Segments and Product Lines:

• Energy segment contract revenue for the third quarter was $184.8 million, up from $154.8 million in the prior year period.
• Energy segment net revenue for the third quarter was $84.3 million, up from $69.2 million in the prior year period.
• Engineering and Consulting segment contract revenue for the third quarter was $29.7 million, up from $27.3 million in the prior year period.
• Engineering and Consulting segment net revenue for the third 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.
• The Mantis Innovation acquisition expands energy management services for commercial and industrial customers.

Market and Competitive Landscape:

• Management stated that markets are strong.
• The company serves utilities, state and local governments, and commercial customers in the United States and Canada.
• The company operates in the highly competitive energy services market.

Risks and Challenges:

• Risks include the ability to adequately complete projects in a timely manner.
• Risks include the ability to compete successfully in the highly competitive energy services market.
• Risks include reliance on work from the top ten clients.
• Risks include changes in state, local, and regional economies and government budgets.
• Risks include the ability to win new contracts, renew existing contracts, and compete effectively for contracts awarded through bidding processes.
• Risks include the ability to realize the full amount of the backlog.
• Risks include the ability to make principal and interest payments on outstanding debt and comply with financial covenants.
• Risks include managing supply chain constraints, labor shortages, elevated interest rates, and elevated inflation.
• Risks include the ability to obtain financing and refinance outstanding debt as it matures.
• Risks include the ability to successfully integrate acquisitions and execute on the growth strategy.
• Risks include the ability to attract and retain managerial, technical, and administrative talent.

Management Commentary and Tone:

• Mike Bieber, President and CEO, stated the company delivered strong operational performance in the third quarter of 2026.
• Management noted that net revenue grew 18% and adjusted EBITDA margin expanded to 25.2% in the quarter.
• Management expressed confidence in executing well and stated they are raising FY2026 targets and introducing preliminary FY2027 targets.
• Management described the company as well-positioned to cross the $1 billion revenue threshold.

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.
• The company hosts a conference call on November 5, 2026, at 5:30 p.m. Eastern/2:30 p.m. Pacific.
• Reconciliations of GAAP financial measures to non-GAAP measures (Net Revenue, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS) are provided in the press release.
• Reconciliations for forward-looking non-GAAP measures (FY2026 targets) are not provided due to the uncertainty and inherent difficulty of predicting specific costs and expenses.
• Goodwill increased to $223.2 million as of October 2, 2026, from $179.5 million as of January 2, 2026.
• Other intangible assets increased to $59.8 million as of October 2, 2026, from $35.5 million as of January 2, 2026.
• Contingent consideration payable increased to $25.9 million (current and non-current combined) as of October 2, 2026, from $20.4 million as of January 2, 2026.
• Issuance of common stock related to business acquisitions was $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.