Bowman(US:BWMN)2025-11-06 15:00Financial Data and Key Metrics Changes - The company achieved a significant milestone by surpassing a $500 million annualized gross revenue pace for the first time, indicating strong business model performance [3] - For Q3 2025, the company reported an 11% year-over-year growth in both gross and net revenue, with net revenue reaching $112 million [4] - Adjusted EBITDA grew by 7.6% year-over-year to $18.3 million, representing a 16.3% margin on net revenue [8] - GAAP net income increased dramatically to $6.6 million for Q3 2025, compared to $700,000 in the same period last year [6] - Cash flow from operations more than doubled to $26.5 million from $12.4 million year-over-year [6][11] Business Line Data and Key Metrics Changes - Transportation and power, utilities, and energy sectors grew over 20% during the quarter, contributing to more than 40% of the company's top line [4] - Organic net revenue, excluding acquisitions, grew by 6.6% for Q3 2025, with transportation up 10% and power and utilities up 13% [7][9] - Building infrastructure grew by 8% year-over-year, while natural resources and imaging saw a slight decline [9][21] Market Data and Key Metrics Changes - The company ended the quarter with a record backlog of $448 million, up 18% year-over-year, with significant contributions from building infrastructure and transportation [10] - The power, utilities, and energy division experienced a 38% year-over-year growth, driven by national investments in electrification and renewables [19] Company Strategy and Development Direction - The company is focused on leveraging technology and innovation to enhance margins and scalability, with ongoing investments in AI-enabled solutions [12][23] - M&A activity remains a priority, with a strong pipeline of strategic opportunities, particularly in transportation and power sectors [28][50] Management's Comments on Operating Environment and Future Outlook - The management expressed confidence in continued revenue growth, citing a healthy backlog and strong sales across various sectors [17][23] - The company reaffirmed its full-year 2025 guidance and initiated 2026 guidance with expected net revenue between $465 million and $480 million [23] Other Important Information - The company has expanded its revolver to $210 million, providing approximately $150 million in available liquidity for growth initiatives [11][12] - Non-cash stock compensation as a percentage of revenue decreased to 4.4% for the first nine months of 2025, down from 7.3% a year earlier [15][16] Q&A Session Summary Question: Competitive pressure from Total Solutions packages in data center business - Management does not see this as a threat, as larger firms often subcontract specialized work to companies like theirs [26][27] Question: M&A focus areas - The company is focused on expanding in transportation, power and energy, and water-related opportunities, rather than specific regions [28] Question: Fourth-quarter revenue acceleration - Management indicated a healthy backlog and strong sales, expecting revenue growth in the fourth quarter [33] Question: Margins and growth investments - Margins may fluctuate due to labor timing and investments in growth, but overall, the company aims to maintain a margin band of 16-18% [38] Question: Data center bidding opportunities - There are increasing opportunities in the data center market, with larger facilities being developed [45][46] Question: Solar business outlook - The solar business is expected to remain strong in 2026, driven by tax credits, but may taper off in 2027 [49] Question: M&A activity outlook - The company remains committed to M&A, with a strong pipeline and strategic focus for future acquisitions [50] Question: Building infrastructure growth in 2026 - The company plans to allocate labor effectively across markets, anticipating growth in building infrastructure [56]