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Bowman Consulting Group Ltd. (BWMN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered 11% YoY growth in gross contract revenue to $126.0M and net service billing to $112.1M, with GAAP diluted EPS of $0.37 and adjusted diluted EPS of $0.61; adjusted EBITDA rose 7.6% YoY to $18.3M while adjusted EBITDA margin compressed 40 bps to 16.3% .
  • Versus S&P Global consensus, EPS was a significant beat (0.61 vs 0.27*) while revenue was a modest miss ($126.0M vs $129.9M*); EBITDA was below consensus (company EBITDA $12.4M vs 20.7M*) . Values with * from S&P Global.
  • Backlog reached a record $447.7M (+17.9% YoY), bookings remain above one, and the revolver was upsized to $210M, expanding liquidity and M&A capacity .
  • FY2025 guidance was reaffirmed (net revenue $430–$442M; adjusted EBITDA $71–$77M) and FY2026 guidance introduced (net revenue $465–$480M; adjusted EBITDA margin 17.0%–17.5%), pointing to continued margin scaling through overhead leverage and technology .
  • Catalysts: stepped-up power/data center capabilities via SOA/ORCaS and Lazen acquisitions, revolver expansion, and internal AI/automation initiatives (BIG Fund) targeting recurring revenue and productivity gains .

What Went Well and What Went Wrong

What Went Well

  • Record backlog and sustained demand: “For the first time, we surpassed a $500 million annualized gross revenue pace…backlog grew nearly 18% YoY to $448 million” .
  • Overhead leverage and cash conversion: Total overhead down 290 bps as % of net revenue; operating cash flow $10.2M in Q3 and $26.5M YTD, more than double last year .
  • Strategic expansion in power/data centers: Acquisitions broadened high-voltage transmission design and tech-enabled tools for renewables/data centers; management expects continued revenue and margin expansion in 2026 .

What Went Wrong

  • Revenue below consensus and margin compression: Adjusted EBITDA margin declined 40 bps YoY to 16.3% despite growth, and revenue missed S&P consensus ($126.0M vs $129.9M*) . Values with * from S&P Global.
  • Natural Resources & Imaging softness in Q3: Segment gross revenue declined slightly YoY ($15.3M vs $15.9M) as the company reallocated mapping revenue across verticals .
  • Timing/slippage: Management cited project start delays and the government shutdown causing some near-term invoicing/collections delays, which can push revenue timing .

Financial Results

Quarterly progression (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Gross Contract Revenue ($USD Millions)$112.9 $122.1 $126.0
Net Service Billing ($USD Millions)$100.1 $108.0 $112.1
GAAP Diluted EPS ($USD)$(0.11) $0.34 $0.37
Adjusted Diluted EPS ($USD)$0.07 $0.55 $0.61
EBITDA ($USD Millions)$7.7 $16.2 $12.4
Adjusted EBITDA ($USD Millions)$14.5 $20.2 $18.3
Adjusted EBITDA Margin, net (%)14.5% 18.7% 16.3%
Operating Cash Flow ($USD Millions)$12.0 $4.3 $10.2
Gross Backlog ($USD Millions)$418.8 $438.2 $447.7

Q3 YoY comparison

MetricQ3 2024Q3 2025
Gross Contract Revenue ($USD Millions)$113.9 $126.0
Net Service Billing ($USD Millions)$101.4 $112.1
Net Income ($USD Millions)$0.8 $6.6
GAAP Diluted EPS ($USD)$0.04 $0.37
Adjusted EBITDA ($USD Millions)$17.0 $18.3
Adjusted EBITDA Margin, net (%)16.7% 16.3%
Operating Cash Flow ($USD Millions)$6.8 $10.2

Estimates vs Actuals (Q3 2025)

MetricConsensusActual
Primary EPS ($USD)0.27*0.61
Revenue ($USD Millions)129.9*126.0
EBITDA ($USD Millions)20.7*12.4
EPS – # of Estimates5*—
Revenue – # of Estimates5*—

Values marked with * retrieved from S&P Global.

Segment breakdown

Segment Gross Revenue ($USD Millions)Q3 2024Q3 2025
Building Infrastructure$52.6 $56.8
Transportation$21.9 $26.3
Power & Utilities$23.7 $27.6
Natural Resources & Imaging$15.9 $15.3
Total$113.9 $126.0

KPIs

KPIQ1 2025Q2 2025Q3 2025
Organic Net Service Billing Growth (%)6.0% 8.4% 6.6%
Net Leverage (x, TTM Adj. EBITDA)1.6x 1.6x 1.5x
Operating Cash Flow ($USD Millions)$12.0 $4.3 $10.2
Non‑cash Stock Compensation ($USD Millions, Qtr)$6.6 $3.1 $4.5

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net RevenueFY2025$430–$442M (Aug 2025) Reaffirmed $430–$442M (Nov 2025) Maintained
Adjusted EBITDAFY2025$71–$77M (Aug 2025) Reaffirmed $71–$77M (Nov 2025) Maintained
Net RevenueFY2026—$465–$480M (Nov 2025) Introduced
Adjusted EBITDA MarginFY2026—17.0%–17.5% (Nov 2025) Introduced
Non‑cash Stock CompFY2025/FY2026—~$19M FY2025; ~$20.5M FY2026 Disclosed trajectory

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3 2025)Trend
AI/Technology initiativesLaunched BIG Fund; focus on GIS/imaging/AI to drive productivity and recurring revenue Advancing AI-enabled asset kits; connecting platforms with AI; ~$300K spent; expecting ROI; upgrade of ERP platform Increasing investment/impact
Data centersReclassified to Power & Utilities; E3i expands end-to-end capabilities; demand rising with power-first designs Larger facilities and broader opportunities; tailwinds from AI; landowner feasibility increasing activity Strong secular growth
TransportationStrong bookings; backlog up; double-digit growth; mix ~2/3 public, 1/3 private Stable growth, multi-year pipelines across DOTs/ports; <25% IIJA funds released → multi-year runway Sustained momentum
Power & UtilitiesGrowth in transmission/renewables; geospatial wins; Surdex applications Fastest-growing market; strengthened by SOA/ORCaS and Lazen acquisitions; expanded HVTL design Accelerating
Macro/tariffs/supply chainMinimal direct tariff exposure; cautious monitoring; lumpy starts late-2024 Government shutdown causing some delays in invoicing/collections; limited direct federal exposure Near-term timing headwinds
Regulatory/taxOB‑3 benefits: 100% bonus depreciation and R&E expensing; unwind uncertain tax position Adopted new standards; released ~$52M DTA/other liabilities; $3.5M P&I accruals released Balance sheet clean-up underway
Bookings/backlogRecord bookings; book-to-bill >1 Bookings in Q4 outpacing prior quarter; backlog $448M (press: $447.7M) Strengthening

Management Commentary

  • CEO: “For the first time, we surpassed a $500 million annualized gross revenue pace…bookings in the fourth quarter are once again outpacing the prior quarter” .
  • CFO: “Total overhead…was down 290 basis points as a percentage of net revenue for the quarter at 89.5%…Operating cash flow totaled $10.2 million for the quarter and sits at $26.5 million year-to-date” .
  • CEO on transportation: “We currently have strong bridge and roadway pipelines with backlog visibility through 2026…ports and harbors practice…continues to gain momentum” .
  • CFO on capital and innovation: “We ended the quarter with $16 million in cash and $57 million drawn in our revolver…expanded our revolver to $210 million…ideas…AI-enabled capabilities…advance the efficiency of the workforce” .
  • CEO on FY2026: “We’re…initiating 2026 guidance of net revenue between $465 million and $480 million and an adjusted EBITDA margin between 17% and 17.5%” .

Q&A Highlights

  • Data center competitive dynamics: Management does not see “Total Solutions” from contractors as a threat; specialized scope often subcontracted to firms like Bowman .
  • Margin trajectory 2026: Drivers are overhead leverage, improved labor utilization, and technology-enabled efficiency gains .
  • Solar outlook: Very strong through 2026 due to tax credit timing; potential taper in 2027, but Bowman well positioned .
  • Project timing: Some start delays are project-specific; government shutdown causing invoicing/collections delays but limited direct federal exposure .
  • M&A cadence: Focus on larger, strategic deals supported by expanded revolver; competitive environment, but pipeline healthy .

Estimates Context

  • Q3 2025 EPS beat: Adjusted diluted EPS $0.61 vs S&P Global consensus 0.27* (major beat). Five estimates in the consensus pool . Values with * from S&P Global.
  • Revenue miss: $126.0M vs S&P Global consensus $129.9M* (modest miss). Five estimates in the consensus pool . Values with * from S&P Global.
  • EBITDA below consensus: Company EBITDA $12.4M vs S&P Global consensus $20.7M*, while adjusted EBITDA was $18.3M; note differing definitions between EBITDA and adjusted EBITDA . Values with * from S&P Global.
  • Potential estimate revisions: Likely upward for EPS given beat; revenue/margin expectations may be calibrated for project timing and mix (transportation lower contribution margins; temporary shutdown impacts) per management commentary .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Bowman delivered an EPS beat despite a revenue miss to consensus, underpinned by overhead leverage, utilization, and disciplined cost control; watch for continued GAAP profitability and cash conversion improvements .
  • Backlog and bookings momentum (book-to-bill >1; backlog $447.7M) support revenue visibility into 2026; transportation and power/energy are key growth engines .
  • FY2025 guidance maintained and FY2026 introduced with margin expansion targets; management outlined levers (labor utilization, technology, AI-enabled workflows) to reach 17–17.5% adjusted EBITDA margin .
  • Strengthened balance sheet/liquidity via $210M revolver and net leverage ~1.5x TTM adjusted EBITDA positions Bowman for larger, strategic M&A in power/energy/transportation .
  • Near-term timing headwinds (project starts, government shutdown) are manageable; limited direct federal exposure buffers downside risk, but could defer revenue recognition .
  • Expanding data center and HVTL capabilities (SOA/ORCaS; Lazen) broaden scope and wallet share across the “generation-to-grid” continuum, a secular growth theme tied to AI and electrification .
  • Monitor non-cash stock comp trajectory ($19M FY2025; $20.5M FY2026) and innovation investments (BIG Fund) for margin/recurring revenue uplift over time .

Other Relevant Press Releases (Q3 2025)

  • Bowman acquired Sierra Overhead Analytics and tech affiliate ORCaS, expanding energy practice and digital services (automation, optimization, hydrology tools) .
  • Bowman acquired Lazen Power Engineering, adding high-voltage transmission line design capabilities .
  • Announced attendance at investor conferences and new contracts (transportation/bridge inspections), reinforcing end-market demand and pipeline .

Additional Notes

  • Capital structure update: Second Amendment to Credit Agreement increased the revolver to $210M and clarified “Material Subsidiary” guarantor covenants .
  • Non-GAAP adjustments: Adjusted EPS adds back acquisition costs, amortization of intangibles, pre-IPO stock comp, and other non-core expenses, with tax effects applied; reconciliations provided in the 8‑K .

Values marked with * retrieved from S&P Global.