Bowman Consulting (BWMN) is expected to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on May 6, 2025, might help the stock move higher if these key numbers are better than e ...

Investors with an interest in Business - Services stocks have likely encountered both Bowman Consulting (BWMN) and Cintas (CTAS) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positiv ...

Bowman Consulting Group (BWMN) Q4 2024 Earnings Call March 12, 2025 05:10 PM ET Company Participants Gary Bowman - CEO & ChairmanBruce Labovitz - CFOJustin Hauke - Vice President and Senior Research Associate Conference Call Participants Aaron Spychalla - Research AnalystBrent Thielman - MD & Senior Research AnalystJeff Martin - Director of Research & Senior Research Analyst Operator Good morning. My name is Becky, and I'll be your conference operator today. At this time, I would like to welcome everyone to ...

Revenue Growth - Gross contract revenue increased to $427 million for the year ended December 31, 2024, representing a five-fold growth over the past 10 years[18]. - Organic gross contract revenue grew by $37.9 million or 10.9% compared to the year ended December 31, 2023[28]. - Approximately 60% of revenue for the year ended December 31, 2024, was derived from repeat customers[19]. - The company had a backlog of approximately $400 million as of December 31, 2024[28]. - The company aims to grow revenue five-fold over the next five years, building on a decade of both acquisitive and organic growth[58]. Market Position and Opportunities - The company ranked 78 on the ENR Top 500 Design Firms list in 2024, up from 87 in 2023[18]. - The U.S. engineering services market is projected to reach $312 billion by 2025, with a CAGR of 6.0% from 2024 to 2030[36]. - The company is positioned to capitalize on approximately $1.6 trillion in funding and incentives from U.S. federal government programs[30]. - The U.S. will need to invest $1 trillion per year in new energy capacity over the next 20 years to support economic growth and energy transition[46]. - The demand for aggregates in construction is expected to increase due to funding from the Infrastructure Investment and Jobs Act[55]. Revenue Composition - Approximately 29% of revenue in 2024 was derived from public sector customer assignments, compared to 21% in 2023[18]. - Transportation services accounted for 20.6% and 21.0% of gross contract revenue for the years ended December 31, 2024 and 2023, respectively[42]. - Power and Utilities represented 17.6% and 18.5% of gross contract revenues for the years ended December 31, 2024 and 2023, respectively[48]. - Building infrastructure constituted 51.5% and 56.3% of gross contract revenue for the years ended December 31, 2024 and 2023, respectively[52]. - Emerging markets represented 10.4% of gross contract revenue in 2024, up from 4.2% in 2023[57]. Acquisitions and Growth Strategy - The company acquired 34 operating companies and three non-operating licensing companies since its IPO in May 2021[29]. - The company plans to continue aggressive growth through acquisitions, focusing on markets with positive outlooks[59]. - Acquisition targets are evaluated based on criteria such as potential for recurring revenue and alignment with strategic growth objectives[64][66]. - In 2024, the company completed eight acquisitions for a total of approximately $79.7 million, including 1,023,786 shares of common stock valued at $33.9 million[92]. - The company maintains a dynamic pipeline for acquisitions, driven by market awareness and existing relationships[64]. Employee and Organizational Development - As of December 31, 2024, the company employed over 2,200 staff across more than 95 offices in the U.S. and two in Mexico[18]. - The company had approximately 2,200 employees as of December 31, 2024, with 93% being full-time employees[111]. - The company engages employees in organic growth through equity participation and incentives tied to performance[63]. - The company is committed to employee health and wellness, providing various innovative and flexible health programs to ensure employee safety and well-being[115]. - The company has focused on talent development, investing significant resources in training and continuous learning to maintain its position as a leading engineering services provider[117]. Financial Management - The company operates with a book-to-bill ratio for net service billing of greater than 1.0 for full years 2024 and 2023[28]. - As of December 31, 2024, the company had $37.0 million outstanding on its Credit Agreement, with interest rates tied to Term SOFR, varying between 6.91% and 8.70% based on the ratio of Funded Debt to EBITDA[343]. - A one percentage point change in the assumed interest rate of the Credit Agreement would change the company's annual interest expense by approximately $0.3 million in 2024[343]. - The company's finance lease obligations with Honour and Enterprise were $28.3 million as of December 31, 2024, bearing fixed interest rates, thus no exposure to market risk related to these obligations[344]. - The company has not entered into derivative financial instruments for trading purposes, indicating a conservative approach to market risk management[342]. Regulatory and Compliance - The company is licensed to operate in all states within the United States either directly or through an affiliate as of December 31, 2024[120]. - The company is subject to various federal, state, and local regulations that could impact its ability to obtain or renew contracts, which may impose added costs on its business[121]. Safety and Risk Management - The company’s professional safety team has established protocols leading to fewer accidents and lower associated costs, enhancing its competitive position[112]. - The company experienced a voluntary turnover rate reflective of the competitive labor market, which does not pose a substantial risk to delivering its backlog[111]. - The company’s backlog is influenced by new contracts and acquisitions, indicating effective growth strategies[102]. Marketing and Customer Relations - The company’s marketing and business development efforts focus on lead generation, cross-selling services, and expanding customer relationships[103]. - The company served a diverse portfolio of customers, with approximately 60% being repeat customers, and the ten largest customers accounting for about 18% of net service billing in both 2024 and 2023[93]. - The company aims to increase the proportion of revenue from long-term projects and multi-year contracts, with 27% of revenue in 2024 derived from public sector customers[94]. Organizational Culture - The company emphasizes a diverse and inclusive workplace to attract and retain qualified talent, which is crucial for its success[114]. - The company encourages in-person collaboration to enhance employee engagement, although it does not mandate full-time in-office attendance[116]. - A scalable organizational infrastructure has been developed to support significant growth without a proportional increase in overhead expenses[62].

Financial Performance - Gross contract revenue for Q4 2024 was $113.2 million, a 21.7% increase from $93.0 million in Q4 2023[5] - Net service billing for Q4 2024 reached $98.6 million, up 22.5% from $80.5 million in Q4 2023[5] - Adjusted EBITDA for Q4 2024 was $17.0 million, reflecting a 51.8% increase compared to $11.2 million in Q4 2023[5] - The company reported net income of $5.9 million for Q4 2024, compared to a net loss of $7.7 million in Q4 2023[5] - For the full year 2024, adjusted EBITDA was $59.5 million, a 26.6% increase from $47.0 million in 2023[5] - Net income for the year 2024 was $3.034 million, compared to a net loss of $6.624 million in 2023, marking a significant turnaround[23] - Adjusted earnings per share for Q4 2024 were $0.72, up from $0.33 in Q4 2023, reflecting a 118.2% increase[26] - Basic earnings per share for Q4 2024 were $0.34, compared to a loss of $0.59 in Q4 2023[26] Operational Metrics - Full-year 2024 gross backlog increased to $399.0 million, a 30.4% rise from $306.0 million in 2023[5] - Cash flows from operations for Q4 2024 were $11.9 million, compared to a negative cash flow of $0.5 million in Q4 2023[5] - Cash provided by operating activities for the year 2024 was $24.301 million, compared to $11.722 million in 2023, indicating a 107.3% increase[23] - The company reported a total gross revenue of $426.564 million for the year 2024, representing a 23.2% increase from $346.256 million in 2023[34] - The company’s organic growth for gross revenue in 2024 was 6.6%, with notable contributions from the Transportation segment, which grew by 16.7%[36] Strategic Initiatives - The company made eight strategic acquisitions in 2024, contributing approximately $60 million in run-rate net service billing[12] - Bowman is increasing its fiscal year 2025 guidance to a net revenue range of $428 - $440 million and adjusted EBITDA of $70 - $76 million[10] - The company incurred $24.450 million in acquisitions during 2024, slightly down from $25.687 million in 2023[23] Segment Performance - The Emerging Markets segment saw significant growth, with Q4 2024 revenue of $12.939 million, a 152.9% increase from $5.116 million in Q4 2023[34] - For the year ended December 31, 2024, the Building Infrastructure segment accounted for 51.4% of total gross revenue, while Emerging Markets contributed 10.4%[34] - The company’s gross backlog as of December 31, 2024, was composed of 41% Building Infrastructure, 35% Transportation, 15% Power and Utilities, and 9% Emerging Markets[42] Cash and Stock Management - The company repurchased $34.4 million of common stock during the twelve months ended December 31, 2024[6] - The company reported a decrease in cash and cash equivalents to $6.698 million at the end of 2024, down from $20.687 million at the beginning of the period[24] - The weighted average shares outstanding for Q4 2024 were 16,345,248, an increase from 13,043,111 in Q4 2023[21] - The company reported a net cash used in investing activities of $27.466 million for the year 2024, compared to $27.156 million in 2023[23] Expense Management - Total operating expenses for the year 2024 were $224.803 million, an increase from $176.689 million in 2023, representing a 27.2% rise[21]

Investment Preferences - The analyst favors investing in infrastructure and consulting service businesses due to their high margins and asset-light nature [1] - Bowman Consulting Group (NASDAQ: BWMN) is highlighted as a preferred investment target [1] - The analyst focuses on undercovered European and US companies, emphasizing value and income as key components of the investment thesis [1] - A diversified portfolio is recommended, with Europe containing several undercovered companies worth considering [1] - The analyst often adopts a contrarian stance toward prevailing market opinions [1] Analyst Background - The analyst has 20 years of consulting experience across various sectors, including Hi-Tech, Biotech, Healthcare, Mission Critical, Retail, Residential, and Commercial Sectors [1] - The analyst has been investing in the markets for over 15 years [1] - The analyst is associated with BioCGT Investor, who is also an author on Seeking Alpha [1] Disclosure - The analyst has no current stock, option, or derivative positions in the mentioned companies but may initiate a beneficial Long position in BWMN within the next 72 hours [2] - The article expresses the analyst's own opinions and is not compensated by any company mentioned [2]

Group 1 - The Municipality of Princeton has authorized Bowman Consulting Group, Ltd. to revamp Community Park South, allocating $709,201.50 for design services in the first phase of the project [2][4]. - The project involves renovating a 26-acre area bordered by Route 206, Birch Avenue, Community Park Elementary School, and Community Park Pool [2]. - The selection process for the consulting firm included proposals from nine firms, with four shortlisted for interviews, leading to a unanimous decision in favor of Bowman Consulting Group based on performance and criteria [3][4]. Group 2 - Funding for the initial phase of the project has been included in the 2024 capital budget, indicating a long-term commitment to the park's revitalization [4]. - Councilwoman Michelle Pirone Lambros emphasized the park's significance to the community and the importance of investing in its future for health, fitness, and recreation [5]. - Once the revitalization process begins, officials plan to seek additional funding from state and local federal programs [5].

Financial Data and Key Metrics Changes - The company reported over $100 million in net revenue for Q3 2024, marking a historic achievement as it surpassed the $103 million revenue from 2020, the last full year before the IPO [6][14] - Gross revenue increased by 21% year-over-year to $113.9 million, while net revenue rose by 23% to $101 million [14] - Year-to-date gross revenue reached $313 million, reflecting a 24% increase, and net revenue was $281 million, up 26% year-over-year [14][18] - Adjusted EBITDA for the quarter was just under $17 million, a $1.9 million increase from last year, representing a 16.7% margin on net revenue [18][19] Business Line Data and Key Metrics Changes - The distribution of gross revenue for the quarter was 49% from Building Infrastructure, 19% from Transportation, 18% from Power and Utilities, and 14% from emerging markets [21] - Year-over-year, Building Infrastructure's contribution to gross revenue decreased by 550 basis points, while emerging markets increased by nearly 800 basis points [22] - Organic growth of net revenue for the trailing four quarters was approximately 8.3%, with the most significant growth in emerging markets at 63% [24][27] Market Data and Key Metrics Changes - The company experienced a 27% year-over-year growth in backlog, with a total backlog of $380 million at the end of Q3 2024 [12][34] - The cash flow from operations for the nine months was $44 million, with a sequential increase of $5.5 million from June 30 [30] - The company has approximately $12 million in cash on hand and a leverage ratio of 1.6 times trailing four quarters adjusted EBITDA [29] Company Strategy and Development Direction - The acquisition of Exeltech Consulting is expected to enhance the company's national transportation practice and expand its service offerings [40][42] - The company aims to focus on larger M&A deals moving forward, recognizing that larger acquisitions are necessary to significantly impact growth [60] - The strategy includes a commitment to operational excellence and improving economies of scale to support margin expansion [82] Management's Comments on Operating Environment and Future Outlook - Management noted that the first Fed rate cut in years has energized real estate markets, although uncertainty remains regarding future rate cuts [43] - The company anticipates continued growth in the transportation sector, particularly with the recent awards and projects starting to move forward [44][65] - Management expressed optimism about the impact of the recent election on infrastructure spending and the potential for increased activity in fossil fuels and renewables [68] Other Important Information - The company repurchased approximately 500,000 shares of common stock under a $25 million authorization at an average price of $23.89 per share [33] - The company expects to achieve a net revenue outlook for 2025 of $422 million to $437 million, representing organic growth of 5% to 9% [37] Q&A Session Summary Question: Are internal changes complete, and is the company heading into Q4 with a clean slate? - Management confirmed that they consider the internal changes complete and are diligent in monitoring ongoing operations [56] Question: What level of organic growth is assumed for the updated 2025 guidance? - The midpoint for organic growth is projected at around 7% for 2025, based on adjusted figures from the current year [58] Question: How is the Surdex acquisition performing? - Management reported positive performance from the Surdex acquisition, noting cross-selling and revenue synergies [60] Question: How does the backlog for 2025 compare to historical levels? - The backlog is described as similar in nature but larger than in previous years, with more ready-to-go projects expected to hit quicker [72] Question: What are the levers for margin expansion in 2025? - Management indicated that improving economies of scale and operational excellence will support margin expansion [82]

Bowmar TRANSPORTATION POWER & UTILITIES ENERGY BUILDING INFRASTRUCTURE WATER RESOURCES Q3 2024 EARNINGS CALL | NOVEMBER 7, 2024 | NASDAQ: BWMN Presenters: Gary Bowman Chairman & CEO Bruce Labovitz Chief Financial Officer Safe Harbor Statement Please note that many of the comments made today are considered forward-looking statements under federal securities laws. As described in our filings with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to diffe ...

Financial Performance - Gross contract revenue for Q3 2024 was $113.9 million, a year-over-year increase of 20.7% from $94.4 million in Q3 2023[148] - For the nine months ended September 30, 2024, gross contract revenue reached $313.3 million, reflecting a year-over-year growth of 23.7% compared to $253.3 million in the same period of 2023[148] - Net income for Q3 2024 was $0.8 million, down from $1.2 million in Q3 2023, while Adjusted EBITDA increased to $17.0 million from $15.1 million[148] - Adjusted EBITDA for Q3 2024 was $16.97 million, with an adjusted EBITDA margin of 16.7% compared to 18.3% in Q3 2023[175] - Adjusted EBITDA increased by $1.9 million or 12.7% to $17.0 million for the three months ended September 30, 2024, compared to $15.1 million for the same period in 2023[195] - Adjusted EBITDA increased by $6.7 million or 18.8% to $42.5 million for the nine months ended September 30, 2024, compared to $35.8 million for the same period in 2023[215] Revenue Composition - The company reported that gross contract revenue derived from its workforce was 89.0% for Q3 2024, compared to 87.0% in Q3 2023[148] - Hourly contracts accounted for approximately 9% of gross contract revenue in Q3 2024, down from 12% in Q3 2023[157] - Lump sum contracts represented approximately 91% of gross contract revenue for Q3 2024, up from 88% in Q3 2023[158] - Revenue from acquisitions contributed $23.3 million to the increase in gross contract revenue for Q3 2024[175] - Revenue from emerging markets surged by $11.7 million or 280.5% in Q3 2024, primarily due to the acquisition of Surdex Corporation[178] - The public sector represented 32.3% of gross contract revenue in Q3 2024, up from 14.8% in Q3 2023[179] Cost and Expenses - Direct payroll costs increased by $8.3 million or 24.9% to $41.7 million in Q3 2024, accounting for 76.8% of total contract costs[182] - Operating expenses rose by $13.1 million or 28.4% to $59.2 million in Q3 2024 compared to $46.1 million in Q3 2023[186] - Total contract costs for Q3 2024 increased by $8.6 million or 18.8% to $54.3 million, representing 47.7% of total contract revenue[181] - Total contract costs increased by $26.7 million or 21.5% to $150.8 million for the nine months ended September 30, 2024, compared to $124.1 million for the same period in 2023[202] - Direct payroll costs increased by $24.2 million or 25.7% to $118.5 million for the nine months ended September 30, 2024, compared to $94.3 million for the same period in 2023[203] - Total operating expenses rose by $39.8 million or 31.5% to $166.0 million for the nine months ended September 30, 2024, compared to $126.2 million for the same period in 2023[207] Tax and Income - Income tax benefit for Q3 2024 was $1.9 million, an increase of $1.8 million from a $0.1 million benefit in Q3 2023[191] - Income tax benefit increased by $4.6 million to $6.5 million for the nine months ended September 30, 2024, compared to $1.9 million for the same period in 2023[211] - Loss before tax increased by $2.2 million to ($1.1) million for the three months ended September 30, 2024, compared to $1.1 million of income for the same period in 2023[192] Financing and Capital Structure - On April 1, 2024, the company raised approximately $51.1 million from a common stock offering, issuing 1,502,942 shares at $34.00 per share[152] - The Company entered into a new $100 million revolving credit facility, replacing the previous $70 million facility, with an outstanding balance of $32.3 million as of September 30, 2024[228] - Interest rates on the new revolving credit facility range from 7.22% to 9.20% as of September 30, 2024[228] - The Company has finance lease obligations totaling $28.6 million as of September 30, 2024, with fixed interest rates, indicating no exposure to market risk related to these obligations[240] - The New Credit Agreement requires compliance with certain financial covenants, including a fixed charge coverage ratio and leverage ratio of debt to EBITDA[228] - The Company is in compliance with all covenants under the New Credit Agreement as of September 30, 2024[228] Growth and Backlog - Backlog increased by $74.1 million or 24.2% to $379.8 million during the nine months ended September 30, 2024, compared to $305.7 million at December 31, 2023[217] - The Company evaluates options for capital and operational growth, considering structured debt and equity as potential sources of additional capital[229]