Willdan Group Reports Third Quarter Results

ANAHEIM, Calif.--( BUSINESS WIRE)--Willdan Group, Inc. (“Willdan”) (Nasdaq: WLDN) today announced its financial results for the third quarter ended October 3, 2025.

Third Quarter 2025 Highlights a

Nine Months Year to Date 2025 Highlights a

Executive Management Comments

“We delivered another quarter of excellent performance,” said Mike Bieber, Willdan’s President and Chief Executive Officer. “Net revenue organic growth was 20%, operating margin continued to expand, and net debt was down to $16.0 million in Q3. This performance reflected the strength and diversity of our business, consistent execution, and growing electricity demand driven by data centers and electrification. Accordingly, we are increasing our 2025 financial targets.”

Fiscal Year 2025 Financial Targets

Willdan is raising each of its financial targets for fiscal year 2025 and now expects c:

Assumes 15.2 million diluted shares, 10% effective tax rate benefit, and no future acquisitions.

a. As compared to the same period of fiscal year 2024.

b. See “Use of Non-GAAP Financial Measures” below.

c. These updated financial targets supersede any previously disclosed financial targets and investors should not rely on any previously disclosed financial targets, and do not include any uncompleted or future acquisitions.

Third Quarter 2025 Conference Call

Willdan will be hosting a conference call to discuss its third quarter financial results today, at 5:30 p.m. Eastern/2:30 p.m. Pacific. To access the call, listeners should dial 877-407-2988 (or 201-389-0923). The conference call will be webcast simultaneously on Willdan’s website at https://edge.media-server.com/mmc/p/xwzghpu5/.

A replay of the conference call will be available through Willdan’s website at https://ir.willdangroup.com/events-presentations.

About Willdan Group, Inc.

Willdan is a nationwide provider of professional, technical and consulting services to utilities, government agencies, and private industry. Willdan’s service offerings span a broad set of complementary disciplines that include electric grid solutions, energy efficiency and sustainability, engineering and planning, and municipal financial consulting. For additional information, visit Willdan's website at www.willdan.com.

Use of Non-GAAP Financial Measures

“Net Revenue,” defined as contract revenue as reported in accordance with U.S. generally accepted accounting principles (“GAAP”) minus subcontractor services and other direct costs, is a non-GAAP financial measure. Net Revenue is a supplemental measure that Willdan believes enhances investors’ ability to analyze Willdan’s business trends and performance because it substantially measures the work performed by Willdan’s employees. In the course of providing services, Willdan routinely subcontracts various services. Generally, these subcontractor services and other direct costs are passed through to Willdan’s clients and, in accordance with GAAP and industry practice, are included in Willdan’s revenue when it is Willdan’s contractual responsibility to procure or manage such subcontracted activities. Because subcontractor services and other direct costs can vary significantly from project to project and period to period, changes in revenue may not necessarily be indicative of Willdan’s business trends. Accordingly, Willdan segregates subcontractor services and other direct costs from revenue to promote a better understanding of Willdan’s business by evaluating revenue exclusive of subcontract services and other direct costs associated with external service providers. A reconciliation of Willdan’s contract revenue as reported in accordance with GAAP to Net Revenue is provided at the end of this press release. A reconciliation of targeted contract revenue for fiscal year 2025 as reported in accordance with GAAP to targeted Net Revenues for fiscal year 2025, which is a forward-looking non-GAAP financial measure, is not provided because Willdan is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty of predicting the subcontractor services and other director costs that are subtracted from contract revenues in order to derive Net Revenues. While subcontractor costs have increased recently, subcontractor costs can vary significantly from period to period. Subcontractor costs and other direct costs were 45.8% and 48.5% of contract revenue for the nine months ended October 3, 2025 and September 27, 2024, respectively, and 47.6% of contract revenue for the fiscal year 2024.

“Adjusted EBITDA,” defined as net income plus interest expense, income tax expense, stock-based compensation, interest accretion, depreciation and amortization, transaction costs, and gain on sale of equipment, is a non-GAAP financial measure. Adjusted EBITDA is a supplemental measure used by Willdan’s management to measure Willdan’s operating performance. Willdan believes Adjusted EBITDA is useful because it allows Willdan’s management to evaluate its operating performance and compare the results of its operations from period to period and against its peers without regard to its financing methods, capital structure and non-operating expenses. Willdan uses Adjusted EBITDA to evaluate its performance for, among other things, budgeting, forecasting and incentive compensation purposes.

Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s costs of capital and stock-based compensation, as well as the historical costs of depreciable assets. A reconciliation of net income as reported in accordance with GAAP to Adjusted EBITDA is provided at the end of this press release. A reconciliation of targeted net income for fiscal year 2025 as reported in accordance with GAAP to Adjusted EBITDA for fiscal year 2025, which is a forward-looking non-GAAP financial measure, is not provided because Willdan is unable to provide such reconciliation without unreasonable effort. The inability to provide a reconciliation is due to the uncertainty and inherent difficulty of predicting the interest expense, income tax expense, stock-based compensation, interest accretion, depreciation and amortization, and gain on sale of equipment that are subtracted from net income in order to derive Adjusted EBITDA.

“Adjusted Net Income,” defined as net income plus stock-based compensation, intangible amortization, interest accretion, and transaction costs, each net of tax, is a non-GAAP financial measure.

“Adjusted Diluted EPS,” defined as net income plus stock-based compensation, intangible amortization, interest accretion, and transaction costs, each net of tax, all divided by the diluted weighted-average shares outstanding, is a non-GAAP financial measure. Adjusted Net Income and Adjusted Diluted EPS are supplemental measures used by Willdan’s management to measure its operating performance. Willdan believes Adjusted Net Income and Adjusted Diluted EPS are useful because they allow Willdan’s management to more closely evaluate and explain the operating results of Willdan’s business by removing certain non-operating expenses.

Reconciliations of net income as reported in accordance with GAAP to Adjusted Net Income and diluted EPS as reported in accordance with GAAP to Adjusted Diluted EPS are provided at the end of this press release. Reconciliations of targeted net income as reported in accordance with GAAP to targeted Adjusted Net Income for fiscal year 2025, which is a forward-looking non-GAAP financial measure, and targeted diluted EPS as reported in accordance with GAAP to targeted Adjusted Diluted EPS for fiscal year 2025, which is a forward-looking non-GAAP financial measure, are not provided because Willdan is unable to provide such reconciliations without unreasonable effort. The inability to provide such reconciliations is due to the uncertainty and inherent difficulty of predicting the stock-based compensation, intangible amortization, and interest accretion, each net of tax, that are subtracted from net income and diluted EPS in order to derive Adjusted Net Income and Adjusted Diluted EPS, respectively.

Willdan’s definitions of Net Revenue, Adjusted EBITDA, Adjusted Net Income and Adjusted Diluted EPS have limitations as analytical tools and may differ from other companies reporting similarly named measures or from similarly named measures Willdan has reported in prior periods. These measures should be considered in addition to, and not as a substitute for, or superior to, other measures of financial performance prepared in accordance with GAAP, such as contract revenue, net income and diluted EPS.

Forward Looking Statements

Statements in this press release that are not purely historical, including statements regarding Willdan’s intentions, hopes, beliefs, expectations, representations, projections, estimates, assumptions, aims, plans or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including statements regarding growing electricity demand driven data centers and electrification, and financial targets for fiscal year 2025. All statements other than statements of historical fact included in this press release are forward-looking statements. It is important to note that Willdan’s actual results could differ materially from those in any such forward-looking statements. Important factors that could cause actual results to differ materially from its expectations include, but are not limited to, Willdan’s ability to adequately complete projects in a timely manner, Willdan’s ability to compete successfully in the highly competitive energy services market, Willdan’s reliance on work from its top ten clients; changes in state, local and regional economies and government budgets; Willdan’s ability to win new contracts, to renew existing contracts and to compete effectively for contracts awarded through bidding processes; Willdan’s ability to make principal and interest payments on its outstanding debt as they come due and to comply with financial covenants contained in its debt agreements; Willdan’s ability to manage supply chain constraints, labor shortages, elevated interest rates, and elevated inflation; Willdan’s ability to obtain financing and to refinance its outstanding debt as it matures; Willdan’s ability to successfully integrate its acquisitions and execute on its growth strategy; and Willdan’s ability to attract and retain managerial, technical, and administrative talent.

All written and oral forward-looking statements attributable to Willdan, or persons acting on its behalf, are expressly qualified in their entirety by the cautionary statements and risk factors disclosed from time to time in Willdan’s reports filed with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K filed for the year ended December 27, 2024, as such disclosures may be amended, supplemented or superseded from time to time by other reports Willdan files with the Securities and Exchange Commission, including subsequent Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K. Willdan cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Willdan disclaims any obligation to, and does not undertake to, update or revise any forward-looking statements in this press release unless required by law.

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)

(Unaudited)

October 3,

December 27,

2025

2024

Assets

Current assets:

Cash and cash equivalents

33,109

74,158

Restricted cash

—

Accounts receivable, net of allowance for doubtful accounts of $354 and $1,313 at October 3, 2025 and December 27, 2024, respectively

66,742

65,557

Contract assets

116,494

88,528

Other receivables

7,342

2,302

Prepaid expenses and other current assets

5,436

4,979

Total current assets

229,123

235,524

Equipment and leasehold improvements, net

31,314

29,534

Goodwill

177,506

140,991

Right-of-use assets

14,242

14,035

Other intangible assets, net

35,622

29,414

Other assets

2,620

2,019

Deferred income taxes, net

17,498

13,346

Total assets

507,925

464,863

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

50,100

33,766

Accrued liabilities

64,769

62,776

Contingent consideration payable

8,500

2,500

Contract liabilities

23,312

21,556

Notes payable

2,500

10,137

Finance lease obligations

1,247

1,138

Lease liability

4,883

5,804

Total current liabilities

155,311

137,677

Contingent consideration payable, less current portion

10,008

1,713

Notes payable, less current portion

46,571

79,350

Finance lease obligations, less current portion

1,359

1,379

Lease liability, less current portion

11,322

9,939

Other noncurrent liabilities

262

462

Total liabilities

224,833

230,520

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.01 par value, 10,000 shares authorized, no shares issued and outstanding

—

Common stock, $0.01 par value, 40,000 shares authorized; 14,754 and 14,169 shares issued and outstanding at October 3, 2025 and December 27, 2024, respectively

148

142

Additional paid-in capital

212,284

197,368

Accumulated other comprehensive income (loss)

(331

)

(314

)

Retained earnings

70,991

37,147

Total stockholders’ equity

283,092

234,343

Total liabilities and stockholders’ equity

507,925

464,863

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share amounts)

(Unaudited)

Three Months Ended

Nine Months Ended

October 3,

September 27,

October 3,

September 27,

2025

2024

2025

2024

Contract revenue

182,006

158,252

507,865

421,737

Direct costs of contract revenue (inclusive of directly related depreciation and amortization):

Salaries and wages

27,878

24,088

82,198

69,247

Subcontractor services and other direct costs

87,039

82,563

232,592

204,667

Total direct costs of contract revenue

114,917

106,651

314,790

273,914

Gross profit

67,089

51,601

193,075

147,823

General and administrative expenses:

Salaries and wages, payroll taxes and employee benefits

31,720

25,876

95,404

78,449

Facilities and facility related

2,369

2,381

7,362

7,231

Stock-based compensation

3,147

2,020

8,755

5,355

Depreciation and amortization

3,913

3,716

13,857

10,937

Other

11,078

8,934

33,983

25,368

Total general and administrative expenses

52,227

42,927

159,361

127,340

Income (Loss) from operations

14,862

8,674

33,714

20,483

Other income (expense):

Interest expense, net

(902

)

(1,934

)

(4,890

)

(6,031

)

Other, net

330

763

840

2,293

Total other expense, net

(572

)

(1,171

)

(4,050

)

(3,738

)

Income (Loss) before income taxes

14,290

7,503

29,664

16,745

Income tax (benefit) expense

569

157

(4,180

)

1,863

Net income (loss)

13,721

7,346

33,844

14,882

Other comprehensive income (loss):

Unrealized gain (loss) on derivative contracts, net of tax

(20

)

(678

)

(17

)

(143

)

Comprehensive income (loss)

13,701

6,668

33,827

14,739

Earnings (Loss) per share:

Basic

0.94

0.53

2.35

1.08

Diluted

0.90

0.51

2.26

1.05

Weighted-average shares outstanding:

Basic

14,603

13,930

14,397

13,753

Diluted

15,229

14,358

14,987

14,130

WILLDAN GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

Nine Months Ended

October 3,

September 27,

2025

2024

Cash flows from operating activities:

Net income (loss)

33,844

14,882

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

13,857

10,937

Other non-cash items

699

459

Deferred income taxes, net

(4,152

)

1,300

(Gain) loss on sale/disposal of equipment

(26

)

(13

)

Provision for doubtful accounts

214

806

Stock-based compensation

8,755

5,355

Accretion and fair value adjustments of contingent consideration

2,145

—

Changes in operating assets and liabilities, net of effects from business acquisitions:

Accounts receivable

5,637

5,762

Contract assets

(27,501

)

(10,351

)

Other receivables

(5,040

)

(1,190

)

Prepaid expenses and other current assets

(457

)

(1,441

)

Other assets

(597

)

1,456

Accounts payable

12,214

4,814

Accrued liabilities

3,527

3,910

Contract liabilities

(2,470

)

2,019

Right-of-use assets

255

(94

)

Net cash (used in) provided by operating activities

40,904

38,611

Cash flows from investing activities:

Purchase of equipment, software, and leasehold improvements

(6,924

)

(6,074

)

Proceeds from sale of equipment

Cash paid for acquisitions, net of cash acquired

(33,431

)

—

Net cash (used in) provided by investing activities

(40,327

)

(6,045

)

Cash flows from financing activities:

Payments on notes payable

(137

)

(190

)

Payments on debt issuance costs

(332

)

—

Payments made to retire prior credit agreement

(90,000

)

—

Borrowing to fund new credit agreement

88,414

—

Principal payments on outstanding debt

(39,039

)

(5,625

)

Principal payments on finance leases

(1,142

)

(1,064

)

Proceeds from stock option exercise

2,498

2,425

Proceeds from sales of common stock under employee stock purchase plan

3,249

2,838

Cash used to pay taxes on stock grants

(5,137

)

(1,241

)

Net cash (used in) provided by financing activities

(41,626

)

(2,857

)

Net increase (decrease) in cash, cash equivalents and restricted cash

(41,049

)

29,709

Cash, cash equivalents and restricted cash at beginning of period

74,158

23,397

Cash, cash equivalents and restricted cash at end of period

33,109

53,106

Supplemental disclosures of cash flow information:

Cash paid (received) during the period for:

Interest

4,828

5,301

Income taxes

2,471

1,203

Supplemental disclosures of noncash investing and financing activities:

Issuance of common stock related to business acquisitions

5,557

—

Contingent consideration related to business acquisitions

12,150

—

Equipment acquired under finance leases

1,264

1,322

Willdan Group, Inc. and Subsidiaries

Reconciliation of GAAP Revenue to Net Revenue

(in thousands)

(Non-GAAP Measure)

Three Months Ended

Nine Months Ended

October 3,

September 27,

October 3,

September 27,

2025

2024

2025

2024

Consolidated

Contract revenue

182,006

158,252

507,865

421,737

Subcontractor services and other direct costs

87,039

82,563

232,592

204,667

Net Revenue

94,967

75,689

275,273

217,070

Energy segment

Contract revenue

154,750

134,036

427,747

352,634

Subcontractor services and other direct costs

85,536

81,805

228,410

202,015

Net Revenue

69,214

52,231

199,337

150,619

Engineering and Consulting segment

Contract revenue

27,256

24,216

80,118

69,103

Subcontractor services and other direct costs

1,503

758

4,182

2,652

Net Revenue

25,753

23,458

75,936

66,451

Willdan Group, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to Adjusted EBITDA

(in thousands)

(Non-GAAP Measure)

Three Months Ended

Nine Months Ended

October 3,

September 27,

October 3,

September 27,

2025

2024

2025

2024

Net income (loss)

13,721

7,346

33,844

14,882

Interest expense

902

1,934

4,890

6,031

Income tax expense (benefit)

569

157

(4,180

)

1,863

Stock-based compensation

3,147

2,020

8,755

5,355

Interest accretion (1)

891

—

2,145

—

Depreciation and amortization

3,913

3,716

13,857

10,937

Transaction costs (2)

—

219

—

(Gain) Loss on sale of equipment

)

(26

)

(13

)

Adjusted EBITDA

23,140

15,177

59,504

39,055

(1)

Interest accretion represents the imputed interest and fair value adjustments to estimated contingent consideration.

(2)

Transaction costs represents acquisition and acquisition related costs.

Willdan Group, Inc. and Subsidiaries

Reconciliation of GAAP Net Income to Adjusted Net Income and Adjusted Diluted EPS

(in thousands, except per share amounts)

(Non-GAAP Measure)

Three Months Ended

Nine Months Ended

October 3,

September 27,

October 3,

September 27,

2025

2024

2025

2024

Net income (loss)

13,721

7,346

33,844

14,882

Adjustment for stock-based compensation

3,147

2,020

8,755

5,355

Tax effect of stock-based compensation

(522

)

(317

)

(1,452

)

(841

)

Adjustment for intangible amortization

1,542

1,738

7,441

5,414

Tax effect of intangible amortization

(256

)

(273

)

(1,234

)

(851

)

Adjustment for interest accretion (1)

891

—

2,145

—

Tax effect of interest accretion (1)

(148

)

—

(356

)

—

Adjustment for refinancing costs

—

789

—

Tax effect of refinancing costs

—

(131

)

—

Adjustment for transaction costs (2)

—

219

—

Tax effect of transaction costs (2)

—

(36

)

—

Adjusted Net Income (Loss)

18,375

10,514

49,984

23,959

Diluted weighted-average shares outstanding

15,229

14,358

14,987

14,130

Diluted earnings (loss) per share

0.90

0.51

2.26

1.05

Impact of adjustment:

Stock-based compensation per share

0.21

0.14

0.58

0.38

Tax effect of stock-based compensation per share

(0.03

)

(0.02

)

(0.10

)

(0.06

)

Intangible amortization per share

0.10

0.12

0.50

0.39

Tax effect of intangible amortization per share

(0.02

)

(0.02

)

(0.08

)

(0.06

)

Interest accretion per share (1)

0.06

—

0.15

—

Tax effect of interest accretion per share (1)

(0.01

)

—

(0.02

)

—

Refinancing costs per share

—

0.05

—

Tax effect of refinancing cost per share

—

(0.01

)

—

Transaction costs per share (2)

—

0.01

—

Tax effect of transaction costs per share (2)

—

(0.00

)

—

Adjusted Diluted EPS

1.21

0.73

3.34

1.70

Interest accretion represents the imputed interest and fair value adjustments to estimated contingent consideration.

(2)

Transaction costs represents acquisition and acquisition related costs.