Willdan Group, Inc. ("Willdan") (NASDAQ:WLDN) today announced its financial results for the third quarter ended October 3, 2025.

Third Quarter 2025 Highlights^a

Contract revenue of $182.0 million, up 15.0%.
Net revenue^b of $95.0 million, up 25.5%.
Net income of $13.7 million, up 86.8%.
Adjusted EBITDA^b of $23.1 million, up 52.5%.
GAAP Diluted EPS of $0.90, up 76.5%.
Adjusted Diluted EPS^b of $1.21 up 65.8%.

Nine Months Year to Date 2025 Highlights^a

Contract revenue of $507.9 million, up 20.4%.
Net revenue^b of $275.3 million, up 26.8%.
Net income of $33.8 million, up 127.4%.
Adjusted EBITDA^b of $59.5 million, up 52.4%.
GAAP Diluted EPS of $2.26, up 115.2%.
Adjusted Diluted EPS^b of $3.34, up 96.5%.

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:

Net revenue^b between $360 million and $365 million.
Adjusted EBITDA^b between $77 million and $78 million.
Adjusted Diluted EPS^b between $4.10 per share and $4.20 per share.

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		28			29
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		(3	)		4		(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

____________________

(1)

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

(2)

Transaction costs represents acquisition and acquisition related costs.

View source version on businesswire.com: https://www.businesswire.com/news/home/20251106390219/en/

Willdan Group, Inc.

Al Kaschalk

Vice President

Tel: 310-922-5643

akaschalk@willdan.com

Willdan Group Reports Third Quarter Results