Financial Data and Key Metrics Changes - Gross revenue for Q2 2024 reached 100 million in a single quarter [7] - Net revenue was 13.4 million, representing a 14.3% margin on net revenue [8] - For the first half of 2024, gross revenue totaled 179.7 million compared to the first half of 2023 [8][9] Business Line Data and Key Metrics Changes - Revenue by vertical for Q2 2024 included building infrastructure at 53%, transportation at 18%, power at 19%, and emerging markets at 9% [10] - Organic growth rates for Q2 2024 were 33% for emerging markets, 17% for transportation, 10% for power, and effectively 0% for building infrastructure, resulting in a weighted average of around 6% [11] - For the first half of 2024, organic growth rates were 57% for emerging markets, 23% for power, 15% for transportation, and around 2% for building infrastructure, leading to a weighted average of approximately 10% [12] Market Data and Key Metrics Changes - Backlog increased by 19% year-over-year and 5% compared to the end of the previous quarter, with 48% in building infrastructure, 27% in transportation, 18% in power, and 9% in emerging markets [10] - The company noted a slowdown in the build-for-rent market, which is expected to reignite once interest rates decrease [31] Company Strategy and Development Direction - The company is focused on diversifying its services and expanding capabilities in renewable energy engineering and geospatial business [4] - Management emphasized the importance of post-closing integration of acquired firms to enhance operational efficiency and reporting accuracy [5] - The company is committed to maintaining a right-sized workforce and rationalized overhead to improve profitability [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the building infrastructure sector but remains optimistic about its long-term performance [29] - The company is adjusting its outlook for 2024 net service billing to a range of 385 million and adjusted EBITDA to 63 million, reflecting a conservative approach due to current market conditions [18] - Management expressed confidence in the transportation segment, anticipating that delayed projects will commence in the second half of the year [34] Other Important Information - Non-cash stock compensation decreased by nearly 12% year-over-year, with projections for 2024 expected to be between 26 million [9] - The company had approximately $71 million in net debt at the end of the quarter, with a debt to adjusted EBITDA ratio of just under 1.4 times [14] Q&A Session Summary Question: Changes in Building Infrastructure Market - Management noted that while they believe in the long-term strength of the building infrastructure market, clients are currently holding off on projects due to interest rate concerns [29][30] Question: Delays in Transportation Projects - Delays in transportation projects are attributed to longer negotiation processes and personnel shortages, but management remains confident that these projects will commence in the second half of the year [32][34] Question: Free Cash Flow Expectations - Free cash flow conversion is expected to remain around 70%, but short-term impacts from tax changes may affect cash flow [39] Question: EBITDA Growth Analysis - The increase in EBITDA is constrained by not hitting expected revenue levels and the need to optimize the cost structure [43] Question: Market Focus and Labor Adjustments - The company is assessing labor utilization to improve margins without making drastic workforce changes [54]
Bowman(BWMN) - 2024 Q2 - Earnings Call Transcript