Willdan Group (WLDN) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 results, surpassing consensus and internal expectations, with 18.4% year-over-year revenue growth and improved profitability, driven by electric load growth and increased demand from AI data centers.

• Net income rose to $4.6 million in Q2 2024 from $0.4 million in Q2 2023, reflecting improved operating performance and a lower effective tax rate.

• Demand remains robust across government, utility, and commercial clients, with double-digit organic growth in government work.

• Notable contract wins include projects for Meta, State of Virginia, Glendale Water & Power, and City of Paramount, CA for energy and infrastructure projects.

• Operating income increased to $6.4 million in Q2 2024, up from $2.5 million in Q2 2023, due to higher gross profit and controlled expenses.

Financial highlights

• Q2 2024 contract revenue rose 18.4% year-over-year to $141.0 million; net revenue up 17% to $73 million.

• Adjusted EBITDA increased 56% to $12.8 million (17.7% of net revenue); GAAP and Adjusted EPS both more than doubled year-over-year.

• Six-month contract revenue $263.5 million, up 18.9%; net income $7.5 million; Adjusted EBITDA $23.9 million, up 31.9%.

• Gross profit for Q2 2024: $48.8 million (34.6% margin), up from $40.6 million (34.1%) in Q2 2023.

• Net debt reduced from $75 million to $50 million since year-end 2023; cash and cash equivalents at June 28, 2024: $44.3 million.

Outlook and guidance

• Raised full-year 2024 guidance: net revenue $280–$290 million, Adjusted EBITDA $50–$52 million, Adjusted EPS $2.00–$2.10.

• Guidance assumes 14% effective tax rate and 14.2 million shares outstanding, with no future acquisitions.

• Management expects cash, cash equivalents, and available borrowings to be sufficient for at least the next 12 months.

• Plans to pursue further growth through M&A in upcoming quarters.