Executive Summary

Q4 2024 delivered solid topline growth but softer GAAP profitability: gross revenues rose 15% year over year to $246.5M, gross profit increased 13% to $122.2M, GAAP diluted EPS was $0.09; Adjusted EBITDA was $36.3M with 14.7% margin and Adjusted EPS of $0.28 .
Full-year 2024 gross revenues reached $941.3M (+10% YoY), gross margin expanded 160 bps to 51.3%, net leverage remained low at 1.4x; Adjusted EBITDA was $143.5M and Adjusted EPS $1.14 .
FY 2025 guidance initiated: gross revenue $1.026–$1.045B, GAAP EPS $0.52–$0.62, Adjusted EPS $1.27–$1.37; backlog entering Q1 2025 was $904M, covering 88% of low-end revenue guide, supporting confidence in outlook .
Near-term stock reaction drivers: margin expansion plan targeting +150 bps in 2025 (utilization, G&A/IT optimization, lease consolidations), cash conversion targeted to rise to ~60% via contract milestone/billing cadence renegotiations; continued data center and utility tailwinds underpin top-line momentum .

What Went Well and What Went Wrong

What Went Well
- Strong Q4 and FY topline: Q4 gross revenues $246.5M (+15% YoY) and FY 2024 gross revenues $941.3M (+10% YoY); FY gross margin expanded 160 bps to 51.3% .
- Backlog, pipeline, and secular demand: backlog entering Q1 2025 at $904M (88% coverage of low-end FY25 guide), with strong utility and data center demand; “We enter 2025 with a robust backlog and tailwinds” – CEO Ben Heraud .
- Strategic execution in high-growth verticals: NV5 awarded $14M contracts supporting AI-driven data centers, surpassing 1 GW of data center MEP/CFD analysis in 2024; “helped clients unlock ~300MW of additional computing capacity” – CEO .
What Went Wrong
- GAAP earnings pressure: Q4 GAAP EPS fell to $0.09 (vs $0.16 LY) and net income to $5.4M (vs $10.1M LY) due to higher acquisition-related costs (+$3.9M, including $2.4M earn-out fair value) and +$2.3M intangible amortization; prior-year Q4 benefited from a $5.2M flexible time-off (FTO) reversal .
- Inflation and mix headwinds: inflation impacted margins (admin costs not easily passed through), and legacy fixed-price LNG contracts weighed temporarily on margins prior to mix shift to T&M/hybrid .
- Working capital timing: elevated unbilled receivables on certain geospatial contracts due to milestone skew; management aims to renegotiate milestones to accelerate billings and collections in 2025 .

Financial Results

Quarterly Performance vs Prior Periods and Estimates

Note: Q2 2024 EPS/Adjusted EPS shown split-adjusted (4-for-1) using the announced stock split; Q3/Q4 already reflect split-adjusted reporting. Gross margin for Q4 is calculated from reported gross profit and gross revenues.

Metric	Q2 2024	Q3 2024	Q4 2024
Gross Revenues ($USD Millions)	$236.3	$250.9	$246.5
Gross Profit ($USD Millions)	$123.3	$129.5	$122.2
Gross Margin (%)	52.2%	51.6%	49.6% (calculated)
Net Income ($USD Millions)	$7.9	$17.1	$5.4
Diluted EPS ($)	$0.13 (split-adjusted)	$0.27	$0.09
Adjusted EBITDA ($USD Millions)	$38.5	$44.5	$36.3
Adjusted EBITDA Margin (%)	16.3%	17.7%	14.7%
Adjusted EPS ($)	$0.31 (split-adjusted)	$0.44	$0.28
Net Income Margin (%)	3.3% (calculated)	6.8% (calculated)	2.2% (calculated)
Consensus EPS ($)	n/a	n/a	n/a
Consensus Revenue ($USD Millions)	n/a	n/a	n/a

Consensus estimates from S&P Global were unavailable for NVEE due to data mapping limitations; we will update beat/miss once available.

Year-over-Year Context (Q4 YoY)

Metric	Q4 2023	Q4 2024	YoY Change
Gross Revenues ($USD Millions)	$214.9	$246.5	+15.0%
Gross Profit ($USD Millions)	$108.0	$122.2	+13.2%
Net Income ($USD Millions)	$10.1	$5.4	-46.4% (mix/one-time)
Diluted EPS ($)	$0.16	$0.09	-$0.07 (impact of costs)
Adjusted EBITDA ($USD Millions)	$36.7	$36.3	-1.1% (flat margin adj.)
Adjusted EPS ($)	$0.28	$0.28	0.0%

Segment Breakdown (Q4 2024)

Segment	Revenue ($USD Millions)	Notes
Infrastructure Support	$111	Strength led by utility undergrounding/LNG; strong East/West coast design & surveying
Geospatial	$69	50% Federal, 31% Utilities, 19% State/Local; AI/LLM use cases scaling
Buildings & Technology	~$66.5 (calculated residual)	Data centers now ~15% of B&T portfolio; expanding into APAC & Middle East

KPIs

KPI	Q2 2024	Q3 2024	Q4 2024 / FY 2024
Backlog ($USD Millions)	$877	$914	$904 entering Q1 2025
Net Leverage (x)	1.5x	1.3x	1.4x (FY)
CFO ($USD Millions)	$8.2 (YTD)	$48.9 (Q3)	$57.3 (FY)
Weighted Avg Borrowing Rate	~6.5% avg; 5.8% YE	—	—

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Gross Revenues ($USD Millions)	FY 2024	$944–$950 (raised in Q2)	$939–$943 (revised preliminary Q3)	Lower (cautious year-end)
GAAP EPS ($)	FY 2024	$2.87–$2.93 (pre-split)	$0.48–$0.54 (split-adjusted)	Rebased for split
Adjusted EPS ($)	FY 2024	$5.13–$5.20 (pre-split)	$1.15–$1.19 (split-adjusted)	Rebased for split
Gross Revenues ($USD Billions)	FY 2025	n/a	$1.026–$1.045	New
GAAP EPS ($)	FY 2025	n/a	$0.52–$0.62	New
Adjusted EPS ($)	FY 2025	n/a	$1.27–$1.37	New

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
AI/Data Centers	Target $400M in 5 years; ~30% organic growth; expanding APAC/US; unlocking unused capacity via power delivery, energy efficiency, commissioning; digital twin recurring revenue	$14M awards; surpassed 1 GW; clients unlocking ~300MW; U.S. expansion to 4 major players, confidentiality maintained	~25% organic growth cited; power delivery constraints domestically; strong international growth; cross-selling fire protection, structural, power delivery; opportunities in U.S. and APAC	Strengthening; broader service mix and geographies
Utilities/Grid Hardening/Undergrounding	$42B grid modernization projects; >700 miles undergrounding; cost down >50% since 2019	$46M contracts for Western U.S. (undergrounding, substation, DPM)	Utility Services drove Infrastructure revenue; increased demand post LA fires; expanding relationships (APS, PG&E)	Accelerating demand/cross-sell
Geospatial Federal/AI	Strong bookings post CR resolution; NV ecosystem SaaS; DoD/Intel use; commercial software >0.5M users	Preliminary Q3: gross margin expansion to 51.6%; awards for Hurricane/NOAA; NGA Luna A multi-award	$69M Q4 revenue; LLM deployments (USACE dredging); AI detection workflows (NGA Luna A/B, Space Force POC)	Scaling AI-driven analytics; resilient federal demand
Margins/Inflation	Full-year EBITDA margin target ~17% and EBITDA ~$160M; mix benefit expected from Geospatial	Preliminary Q3 margin strength (Adj. EBITDA 17.7%); cautious FY end	2025 plan +150 bps margin via utilization, indirect/G&A cuts, real estate optimization; LNG contract mix shift to T&M/hybrid	Improvement expected FY25
Working Capital/Cash Conversion	Ramp-up drove unbilled; expect conversion improvement as business stabilizes	Record Q3 CFO $48.9M; low net leverage 1.3x	CFO $57.3M (FY); targeted FCF conversion ~60% via milestone renegotiation and billing cadence optimization	Improving in 2025
M&A Pipeline	Pending utility O&M and water resources deals (~400 personnel)	California Water Resources Group; myBIMteam acquisitions	Acquisitions in fire protection (Global FPG), energy efficiency (Southport); strategic TIC/recurring services	Accretive, strengthens recurring/service mix

Management Commentary

“NV5 delivered a strong performance in 2024, with 10% growth in gross revenues and a 13% increase in gross profit over 2023… We enter 2025 with a robust backlog and tailwinds in our target sectors.” – Ben Heraud, CEO .
“We currently have several initiatives actively in place to expand our adjusted EBITDA margins in 2025 by a targeted expansion of 150 basis points… and anticipate free cash flow conversion rate of 60% in 2025.” – Edward Codispoti, CFO .
“Data center systems… continue to grow and now make up 15% of our Buildings and Technology portfolio… expanding into Thailand, South Korea, Indonesia and the Middle East.” – CEO .

Q&A Highlights

Margin path: Management detailed a balanced plan (utilization lift, G&A/IT cost reductions, lease consolidation) and noted LNG contract mix shift supports margins; 150 bps improvement seen as reasonable and repeatable .
Backlog coverage: Backlog at $904M equals ~88% of low-end FY25 revenue guide, diversified across segments; minimal federal disruption; utilities are a key growth driver (APS, PG&E) .
Geospatial organic growth: Targeting ~10–11% organic revenue growth; medium-term margin focus on EBIT improvement .
Guidance composition: FY25 guide assumes ~5–7% organic growth and ~$17M acquisition carryover from 2024 closes; excludes yet-to-close M&A .
Working capital/DSO: Quality of unbilled remains high; milestone alignment and contract design changes aim to reduce unbilled days and accelerate cash .

Estimates Context

S&P Global consensus (EPS, revenue) for NVEE was unavailable due to data mapping limitations at the time of this analysis. We will update beat/miss and estimate comparisons once consensus values are available.

Key Takeaways for Investors

Topline momentum intact: Q4 revenue +15% YoY and FY +10%, with secular tailwinds in utilities and data centers; backlogs provide high visibility into FY25 targets .
Margin/cash catalysts: 2025 initiatives (utilization, G&A optimization, lease consolidation) plus contract milestone renegotiations should lift margins and FCF conversion; watch execution in H1 2025 for confirmation .
Data center growth runway: NV5’s cross-sell advantage (MEP, commissioning, fire protection, power delivery) and international footprint support >25–30% organic growth trajectory; AI-driven workloads require complex thermal/power solutions .
Utilities/grid modernization: Strategic undergrounding and grid hardening awards ($46M) reinforce multi-year demand; wildfire mitigation and reliability upgrades drive sustained activity .
GAAP EPS volatility near term: Acquisition-related costs and amortization will continue to pressure GAAP EPS vs Adjusted metrics; mix should improve as integrations mature .
Estimate comparisons pending: With consensus unavailable, focus on internal guidance, backlog coverage, and margin roadmap; monitor subsequent updates for beat/miss catalysts.
M&A enhances recurring TIC platform: Recent deals (Global FPG, Southport) add high-margin, mandated services that deepen client relationships and expand cross-sell opportunities .

Sources: Q4 press release and 8-K (financials/guidance) ; Q4 earnings call transcript (segment updates, backlog, margin/cash initiatives, Q&A) ; Q3 preliminary press release and call (trend analysis, guidance revision) ; Q2 press release and call (raised guidance, segment context) ; Q4-relevant press releases (data center awards, Western utilities contracts, fire protection and energy efficiency acquisitions) .

NV5 Global, Inc. (NVEE)·Q4 2024 Earnings Summary