Q2 2026 Willdan Group, Inc Earnings Call Transcript
Key Points
- Willdan Group Inc (WLDN) delivered a record second quarter with contract revenue up 33% year-over-year to $231 million and net revenue up 23% to $117 million.
- Adjusted EBITDA increased 51% to a record $33 million, with a record 28.2% adjusted EBITDA margin on net revenue, the highest quarterly margin in company history.
- The company is successfully diversifying its customer base, with commercial revenue now representing about a quarter of the business, driven by strong demand from data centers and the APG acquisition.
- Willdan Group Inc (WLDN) secured several significant contract wins, including a $110 million solar streetlight expansion with LADWP and a $53 million central plant upgrade for the City College of New York.
- The company raised its full-year 2026 financial targets, now expecting net revenue of $415 million to $430 million and adjusted EBITDA of $103 million to $107 million.
- Willdan Group Inc (WLDN) maintains a strong balance sheet with low leverage (0.3 times net debt to adjusted EBITDA) and $165 million in total available liquidity, positioning it well for future growth and acquisitions.
- Gross margin declined 150 basis points in the second quarter due to a shift in revenue mix toward performance engineering and commercial project revenue, which carry a heavier load of equipment and subcontractors.
- The company noted that the record 28.2% adjusted EBITDA margin in Q2 is not expected to hold for the remainder of the year due to some acceleration of revenues into the quarter.
- Willdan Group Inc (WLDN) faces uncertainty regarding the ramp-up of the LADWP project, which led to a more conservative full-year guidance despite strong Q2 performance.
- The 179D tax provision, which provided significant tax benefits, sunset at the end of June, resulting in an expected positive income tax expense of 15% to 20% in the second half of the year.
- G&A expenses increased 20% year-over-year, driven by higher stock compensation expense (up 51%) and increased non-cash charges for amortization of intangibles from acquisitions.
- The company acknowledged that labor is tight, with salaries for experienced professionals increasing, which could pressure future margins.
Greetings. Welcome to the Willdan Group second quarter fiscal year 2026 financial results conference call. (Operator Instructions) Please note this conference is being recorded.
I will now turn the conference over to Al Kaschalk. Thank you. You may begin.
Thank you, Cleo. Good afternoon, everyone, and welcome to Willdan Group's second-quarter 2026 earnings call.
Joining our call today are Mike Bieber, President and CEO; and Kim Early, Executive Vice President and CFO.
Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today's press release and in the presentation slides, all of which are available on our website.
Please note that year-over-year commentary or variances on revenue, adjusted EBITDA, and adjusted EPS discussed during our prepared remarks are on an actual basis unless otherwise specified. We will make forward-looking statements about our
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