Core Insights - Willdan Group, Inc. (WLDN) is set to report its fourth-quarter fiscal 2025 results on February 26, 2026, after market close [1] Financial Performance - In the last reported quarter, Willdan achieved record performance with contract revenue increasing by 15% year over year to $182 million and net revenue rising by 26% year over year to $95 million, exceeding the Zacks Consensus Estimate by 11.5% [2] - Gross profit grew by 30% year over year to $67.1 million, while adjusted EBITDA surged by 53% year over year to $23.1 million, achieving a margin of 24% of net revenue [2] - Adjusted EPS increased by 65.8% year over year to $1.21, surpassing the consensus estimate by 49.4% [2][3] Earnings Estimates - The Zacks Consensus Estimate for the fourth-quarter EPS remains unchanged at 79 cents, indicating a 5.3% growth from the year-ago reported EPS of 75 cents [4] - The consensus revenue estimate for the fourth quarter is $87.5 million, suggesting a 39.3% year-over-year decline [4] - For 2026, revenues are expected to increase by 4.8% year over year, with EPS projected to grow by 9.6% [5] Market Position and Performance - WLDN has consistently surpassed earnings estimates in the past four quarters, with an average surprise of 58.1% [3] - The stock has rallied 19.4% over the past three months, outperforming key peers and the broader Zacks Business - Services industry [19][20] Key Growth Drivers - The strength of Willdan's Energy segment, which constitutes approximately 85% of total revenue, is expected to support Q4 results despite anticipated revenue decline [9] - Recent contract wins in energy and infrastructure, along with the APG acquisition, are anticipated to contribute positively to revenues [10] - Utility programs and government work continue to provide recurring revenue visibility, supporting steady demand [11] Profitability Outlook - Management has guided for full-year 2025 adjusted EBITDA of $77-$78 million and net revenues of $360-$365 million, indicating continued margin discipline [13] - Operating leverage from revenue growth and effective cost control are expected to drive margin expansion [14] - However, integration costs from acquisitions and ongoing investments may temper margin expansion [15] Valuation and Investment Stance - WLDN stock is currently trading at a premium valuation compared to its industry [23] - The near-term outlook appears balanced, with recent share price increases suggesting that much of the optimism is already priced in, leading to a Hold stance for now [24]

Core Insights - Legence Corp. reported a 39% increase in quarterly adjusted EBITDA and a record total backlog of $3.1 billion, reflecting a 29% year-over-year growth with a robust book-to-bill ratio of 1.5x [1][2][13] - The company signed a definitive agreement to acquire Bowers for $475 million, enhancing its capabilities in the Northern Virginia/DC Metro area [1][17] - Total debt decreased to $836 million and net debt to $650 million, supported by IPO proceeds and strong cash generation [1][18] Financial Performance - Revenues for Q3 2025 reached $708 million, a 26.2% increase from $560.8 million in Q3 2024 [3][5] - Gross profit for Q3 2025 was $148.1 million with a gross margin of 20.9%, compared to $118.5 million and 21.1% in Q3 2024 [3][5] - Non-GAAP adjusted EBITDA for Q3 2025 was $88.8 million, up 38.9% from $64 million in Q3 2024 [3][5] Segment Performance - Engineering & Consulting segment revenue was $212.2 million, a 9.5% increase year-over-year, driven by demand from state & local government and life sciences clients [6][8] - Installation & Maintenance segment revenue totaled $495.8 million, a 35.1% increase, primarily due to demand from data centers and life sciences clients [10][12] - Gross profit for the Engineering & Consulting segment was $67.3 million, while the Installation & Maintenance segment gross profit was $80.7 million, reflecting increases of 5.3% and 47.9% respectively [7][11] Backlog and Contracts - Total backlog and awarded contracts increased to $3.1 billion, a 29.4% rise from $2.4 billion a year ago [13][14] - The Engineering & Consulting segment backlog grew by 1.5%, while the Installation & Maintenance segment backlog surged by 45.9% [13][14] Guidance - The company provided Q4 2025 guidance for revenue between $600 million and $630 million and adjusted EBITDA between $60 million and $65 million [19][20] - For the full year 2026, revenue guidance is set between $2.65 billion and $2.85 billion, with adjusted EBITDA between $295 million and $315 million [19][20]

Core Viewpoint - Legence Corp. is set to release its third-quarter financial results on November 14, 2025, prior to market opening [1] Group 1: Earnings Release Information - The earnings conference call and webcast will take place on November 14, 2025, at 10:00 am EST, allowing stakeholders to review the results and operations [2] - The call will be available in listen-only mode, with a replay accessible on the company's website until December 14, 2025 [2] Group 2: Company Overview - Legence is a prominent provider of engineering, consulting, installation, and maintenance services for mission-critical systems in buildings [3] - The company specializes in complex HVAC, process piping, and other mechanical, electrical, and plumbing (MEP) systems, focusing on energy efficiency, reliability, and sustainability [3] - Legence serves over 60% of the Nasdaq-100 Index clients, indicating its strong presence in technically demanding sectors [3]

Core Insights - Legence Corp. has amended its $798 million Term Loan Credit Facility, extending the maturity date to December 16, 2031, and reducing the interest rate to SOFR plus 2.25%, a 25 basis point reduction [1] - The company has also amended its Revolving Credit Facility, increasing the commitment amount to $200 million from $90 million, extending the maturity to September 22, 2030, and aligning the interest rate with the Term Loan Credit Facility [1] - The CFO of Legence highlighted that these amendments enhance financial flexibility and position the company for future growth following a recent IPO that repaid debt [2] Company Overview - Legence is a leading provider of engineering, consulting, installation, and maintenance services for mission-critical systems in buildings, specializing in HVAC, process piping, and MEP systems [3] - The company focuses on enhancing energy efficiency, reliability, and sustainability in both new and existing facilities, serving technically demanding sectors [3] - Legence counts over 60% of the Nasdaq-100 Index among its clients, indicating a strong market presence [3]

Financial Data and Key Metrics Changes - In Q2 2025, net revenue grew by 31% year over year, driven by a 23% organic growth rate and 8% from acquisitions [4][19] - Adjusted EBITDA reached $21.9 million, representing 23% of net revenue, up 71% from a year ago [21] - Net income rose to $15.4 million, up 236% from $4.6 million reported in 2024 [20] - Gross profit grew by 40%, with gross margin improving to 39.4%, up from 34.6% last year [20] Business Line Data and Key Metrics Changes - The energy segment, which constitutes about 85% of revenue, saw a 25% increase, driven by utility program funding and planning [19] - The engineering and consulting segment revenues increased by 16%, reflecting ongoing municipal demand and new contract wins [19] Market Data and Key Metrics Changes - Demand for services is expanding across end markets, particularly due to electrification and AI-driven data centers [13] - Electricity demand in the US is projected to grow by 50% between now and 2050, creating a favorable environment for the company [14] Company Strategy and Development Direction - The company is raising its full-year financial targets based on strong performance and a robust pipeline of opportunities [24][25] - The strategy includes leveraging recent acquisitions to enhance service offerings and cross-selling capabilities [32] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in the company's positioning to navigate potential economic slowdowns due to strong funding sources from utilities and public agencies [15] - The company is proactive in managing tariff risks and is working closely with clients to mitigate potential pricing pressures [14] Other Important Information - The company ended the quarter with $28 million in net debt and a net debt to adjusted EBITDA ratio of 0.4 times, indicating strong financial health [23] - Free cash flow for 2025 was consistent with the previous year at $24 million, reflecting effective cash management [24] Q&A Session Summary Question: Can you unpack the potential of Willdan to deliver on robust organic growth as we look into '26 and '27? - Management highlighted that organic growth has been increasing due to intercompany collaboration and cross-selling opportunities from recent acquisitions [31][32] Question: How does Willdan position itself for growth on the grid side? - The company emphasized its strong reputation and relationships with utility commissions, which facilitate trust and collaboration on grid planning and energy efficiency programs [35] Question: Can you provide insight into the character of your fixed-price work? - Management noted that fixed-price contracts offer good cash flows and are relatively low risk compared to traditional EPC contracts, as much of the pricing risk is managed through subcontracting [39][40] Question: Are there any specific large projects in the pipeline? - Management indicated that there are significant opportunities being pursued, including a large contract in New York and several opportunities in California expected to be awarded soon [43][44] Question: What is the impact of the elimination of the tax credit on future tax rates? - Management projected that the effective tax rate could increase by about five points if the tax credit is eliminated, but they are currently in a good position to manage this risk [61][82]