Willdan Group (WLDN) Q3 2024 earnings summary

Executive summary

• Achieved record Q3 2024 results, surpassing consensus and internal expectations, with strong revenue and net income growth driven by robust demand across all business lines and electrification services.

• Employee count surpassed 1,700, with significant contributions to U.S. greenhouse gas reductions and healthy demand from commercial, government, and utility customers.

• Completed the acquisition of Enica Engineering in late October to expand energy efficiency and commercial market capabilities, particularly in pharmaceutical, healthcare, and research sectors.

• Major contract wins included a $103M energy upgrade for Clark County School District, a $9M NYPA project, and multiple civil engineering contracts.

• Gross profit and operating income rose substantially year-over-year, with improved margins and lower interest expense.

Financial highlights

• Q3 2024 contract revenue rose 19.2% year-over-year to $158.3M; net revenue up 15.9% to $75.7M; nine-month contract revenue reached $421.7M, up 19.0%.

• Q3 net income was $7.3M, up from $1.6M; adjusted EBITDA grew 49.7% to $15.2M; adjusted EPS nearly doubled to $0.73; GAAP EPS increased more than fourfold to $0.51.

• Nine-month net income was $14.9M, up from $2.9M; adjusted EBITDA $39.1M (up 38%); adjusted EPS for nine months rose 79% to $1.70.

• Gross profit for Q3 was $51.6M (32.6% margin); nine-month gross profit was $147.8M (35.1% margin).

• Cash and cash equivalents at quarter-end were $53.1M, up from $23.4M at the start of the year.

Outlook and guidance

• Raised full-year 2024 guidance: net revenue expected between $285M–$295M, adjusted EBITDA $52M–$54M, and adjusted diluted EPS $2.15–$2.25, assuming a 14% tax rate and 14.2M shares.

• Q4 2023 was a record quarter, creating a $15M headwind for Q4 2024 net revenue and $3M for adjusted EBITDA comparisons.

• 2025 organic growth modeled at high single digits (7–9%), with potential upside.

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

• Guidance assumes no future acquisitions.