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Introduction & Market Context
Willdan Group, Inc. (NASDAQ:WLDN) reported exceptional third-quarter results during its November 6, 2025, earnings call, highlighting record performance across all key financial metrics. Despite the strong showing, Willdan’s stock fell 9.2% to $94.11 in regular trading and continued to decline slightly in aftermarket trading.
The energy and infrastructure solutions provider delivered significant year-over-year growth in both revenue and profitability, with executives attributing the success to strong execution and favorable market conditions in the electricity sector, particularly related to data center growth.
Quarterly Performance Highlights
Willdan’s third-quarter results demonstrated robust growth across all key financial metrics, with both top and bottom-line performance exceeding analyst expectations.
Contract revenue reached $182 million, representing a 15% increase compared to Q3 2024, while net revenue (which excludes subcontractor services and other direct costs) grew 26% to $95 million. The company reported that 20% of this growth was organic, with the remaining 6% coming from acquisitions.
As shown in the following chart of quarterly financial performance:
Profitability metrics showed even stronger improvement, with adjusted EBITDA surging 53% to $23.1 million and adjusted EPS climbing 66% to $1.21 compared to $0.73 in the prior-year period. GAAP EPS increased 77% to $0.90.
The nine-month year-to-date results reflected similar strength, with net revenue up 27% to $275 million and adjusted EPS nearly doubling to $3.34, a 97% increase from the same period in 2024.
Willdan maintained a strong balance sheet with net debt of $16 million, representing just 0.2x trailing twelve-month adjusted EBITDA. Year-to-date free cash flow reached $34 million ($4.34 per share), while total liquidity stood at $183 million.
Strategic Initiatives
Willdan’s business is heavily weighted toward the energy sector, which accounts for approximately 85% of revenue. The company’s strategic approach begins with policy and forecasting work, which informs its engineering and program management services.
Management highlighted several notable project wins since the previous earnings call, including a $97 million energy and infrastructure upgrade project for Alameda County, California, and multiple substation projects related to solar battery energy storage systems totaling over $47 million.
The company emphasized its positioning to benefit from projected growth in electricity demand, particularly driven by data centers. As illustrated in the following forecast:
This chart demonstrates the expected growth in U.S. electricity demand by 2035, with data centers representing the largest single driver of incremental load. Willdan, through its subsidiary E3, is actively involved in forecasting and planning for this growth, which management believes creates significant long-term opportunities.
Forward-Looking Statements
Based on strong year-to-date performance and a positive outlook, Willdan increased its financial guidance for fiscal year 2025 across all key metrics.
The company’s updated targets are shown in the following slide:
Net revenue is now expected to reach $360-365 million, up from the previous guidance of $340-350 million. Adjusted EBITDA guidance was raised to $77-78 million from $70-73 million, while adjusted diluted EPS is now projected at $4.10-4.20, compared to the previous range of $3.50-3.65.
The company also improved its full-year effective tax rate benefit from 15% to 10%. These projections assume no additional acquisitions and approximately 15.2 million average diluted common shares outstanding.
Management pointed to the company’s 15-quarter performance trends as evidence of consistent execution and growth potential:
The charts illustrate Willdan’s impressive growth trajectory, with a 22% compound annual growth rate (CAGR) in gross revenue, 20% CAGR in net revenue, and a remarkable 92% CAGR in adjusted EBITDA over the past 15 quarters.
Market Reaction
Despite Willdan’s strong financial results and increased guidance, the stock fell 9.2% to $94.11 during regular trading on November 6, with a slight additional decline in aftermarket trading. This negative reaction came despite the company significantly exceeding analyst expectations, with actual EPS of $1.21 surpassing the forecasted $0.82 by 47.56% and revenue exceeding expectations by 22.58%.
The disconnect between financial performance and stock price movement suggests investors may have had even higher expectations or concerns about sustainability of growth rates. The stock remains significantly above its 52-week low of $30.43 but has retreated from its 52-week high of $121.
CEO Mike Bieber emphasized the company’s strong position in the transforming electricity market during the earnings call, stating, "Electricity load growth is transforming electricity markets from a once-static landscape into a dynamic long-term growth market." He also highlighted the company’s ability to attract talent, noting, "We are the employer of choice. We have not had major impediments in hiring employees."
With its raised guidance, strong balance sheet, and strategic positioning in growing energy markets, Willdan’s management remains confident in the company’s trajectory despite the market’s initial reaction to the third-quarter results.
Full presentation:
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