Financial Data and Key Metrics Changes - For the fourth quarter of 2025, contract revenue increased by 21% to $174 million, and net revenue grew by 13% to $89.5 million [17] - Adjusted EBITDA increased by 13% year-over-year, totaling $20 million for the quarter, while adjusted earnings per share more than doubled to $1.57 [17] - For fiscal 2025, consolidated contract revenue grew by 21% to $682 million, and net revenue grew by 23% to $365 million, with 17% of the growth being organic [18] - Net income more than doubled to $52.6 million, or $3.49 per diluted share on a GAAP basis, compared to $22.6 million or $1.58 per share in 2024 [20] Business Line Data and Key Metrics Changes - Approximately 85% of revenue comes from the energy segment, with the remaining 15% from engineering and consulting [6] - Utility customers represent about 41% of revenue, while state and local governments account for approximately 48% [7] - Commercial customers have rapidly grown to 11% of revenue, primarily tied to power for data centers [7] Market Data and Key Metrics Changes - Electric load growth has returned to the U.S. after about 15 years of stagnation, driven by AI and data centers [4] - There is currently an estimated 35 gigawatts of active data center construction in the U.S., indicating sustained demand for power from digital infrastructure [13] Company Strategy and Development Direction - The company plans to further increase capabilities through key hires and acquisitions, with a robust acquisition pipeline entering 2026 [16] - Willdan operates at the intersection of consulting services, engineering, and program management, helping clients navigate market changes [9] Management's Comments on Operating Environment and Future Outlook - Management highlighted that utilities are being squeezed as generation does not keep pace with electricity demand, leading to increased requests for energy efficiency programs [34] - The company expects margins to continue to be above 20%, reflecting structural changes and improved operational efficiencies [31] Other Important Information - The company generated $71 million in free cash flow and ended the year with a net positive cash position of $17 million, marking the first time since 2017 [21] - The company expects net revenue in the range of $390 million to $405 million for 2026, with adjusted EBITDA in the range of $85 million to $90 million [23] Q&A Session Summary Question: About the EPS guidance for 2026 - Management explained that the Section 179D provision is set to expire at the end of June 2026, limiting the ability to carry deductions through the year [27] Question: About EBITDA growth and operational improvements - Management indicated that margins are expected to remain above 20%, with structural changes allowing for better pricing and cost absorption [31] Question: On the demand for accelerated project completion from utility customers - Management confirmed that utilities are under pressure to meet electricity demand, leading to increased requests for energy efficiency programs [34] Question: Contribution from the Los Angeles Department of Water and Power contract - Management noted that while the contract's contribution was small in Q4, a significant ramp-up is expected in Q1 and Q2 of 2026 [39] Question: Potential for data center revenue to double in 2026 - Management clarified that they expect revenue from the APG acquisition related to data centers to more than double, contributing to long-term growth [41]

Financial Data and Key Metrics Changes - IT services revenue for Q2 FY 2026 was $2.6 billion, with a sequential growth of 0.3% in constant currency and a year-on-year decline of 2.6% [6][18] - Adjusted operating margin for the quarter was 17.2%, an improvement of 0.4% compared to the same period last year [6][19] - Net income and EPS grew by 1% year on year, while operating cash flows remained higher than net income at 104% for Q2 [23] Business Line Data and Key Metrics Changes - Americas One grew 0.5% sequentially and 5% year on year, while Americas Two declined 2% sequentially and 5% year on year [20] - Europe reported a sequential growth of 1.4% but a year-on-year decline of 10.2% [21] - APMEA grew 3.1% sequentially and 2.6% year on year, with strong performance in India, Australia, and Southeast Asia [21] - BFSI sector showed sequential growth of 2%, driven by Europe and APMEA [85] Market Data and Key Metrics Changes - The healthcare sector is undergoing structural changes, impacting performance, but remains a strong performer for the company [9][88] - Consumer, energy, and manufacturing sectors are facing tariff uncertainties, leading to reevaluation of supply chains [9] Company Strategy and Development Direction - The company is focusing on AI adoption and vendor consolidation as key strategies for growth [9][10] - Wipro Intelligence, a unified suite of AI-powered platforms, is being introduced to enhance client capabilities [13][14] - The company aims to maintain operational discipline while converting a strong backlog into revenue [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future growth, particularly in BFSI, as large deals begin to ramp up [30][31] - The company anticipates a sequential IT services revenue growth of -0.5% to +1.5% in constant currency for Q3 [16][24] - Management acknowledged headwinds from large deal ramp-ups and seasonal factors affecting Q3 performance [35] Other Important Information - The Harman Digital Transformation Solutions acquisition is expected to close in the upcoming quarter, but revenues from this acquisition are not included in current guidance [24] - The company is actively investing in growth, which may pressure margins in the short term [19][35] Q&A Session Summary Question: Thoughts on deal to revenue conversion and future growth - Management noted that large deal wins in BFSI are expected to ramp up in Q3, contributing to future growth [28][29] Question: Margin outlook and transition costs - Management indicated that while there are headwinds from large deals, operational improvements and currency fluctuations have positively impacted margins [32][34] Question: Sustainability of year-on-year growth in line with peers - Management expressed confidence in sustaining growth, focusing on executing deal wins and maintaining a robust pipeline [50][52] Question: Clarity on renewal deals and their impact - Management clarified that renewal deals are a mix of renewals and expansions, with some deflationary pressures expected [95][96] Question: Impact of bankruptcy on revenue - Management confirmed that there was no impact on Q2 revenue from the bankruptcy provision made [99]