Willdan ((WLDN)) has held its Q4 earnings call. Read on for the main highlights of the call.
Willdan Group, Inc. Reports Record-Breaking Year with Strong Positive Sentiment
Willdan Group, Inc. has concluded a record-breaking year in 2024, marked by significant revenue growth, successful acquisitions, and strategic contract wins. The earnings call conveyed a strong positive sentiment, highlighting the company’s robust cash flow and financial position. Despite some challenges in comparing quarterly results due to the timing of revenue recognition from a major contract and the impact of prior exceptional opportunities, the overall outlook remains optimistic for 2025.
Record-Breaking Financial Performance
In 2024, Willdan Group, Inc. achieved remarkable financial milestones, with contract revenue increasing by 11% to a record $566 million. The company’s adjusted EBITDA rose by 24% year over year, while adjusted EPS surged by 39%. Additionally, free cash flow per share stood at $4.49, underscoring the company’s strong financial health.
Successful Strategic Acquisitions
The company completed three strategic acquisitions in 2024, including Enica and APG. These acquisitions have bolstered Willdan’s technical capabilities, particularly in the commercial technology sector, with a focus on data center electricity, positioning the company for future growth.
Major Contract Wins
Willdan secured all major recompetes in 2024, including a significant $330 million, five-year contract with the Los Angeles Department of Water and Power. This contract is expected to drive substantial future revenue, reinforcing the company’s market position.
Strong Cash Flow and Liquidity
Willdan generated $72 million in cash flow from operations and $64 million in free cash flow in 2024, resulting in a robust financial position with total liquidity of $124 million. This financial strength provides a solid foundation for continued growth and investment.
Positive Market Outlook
The company anticipates a robust pipeline of opportunities for 2025, with expected net revenue between $320 million to $330 million and adjusted EBITDA between $63 million to $67 million. These projections are above current street estimates, reflecting a positive market outlook.
Impact of Previous Exceptional Opportunities
The fourth quarter of 2024 appeared flat or slightly lower compared to 2023 due to exceptional opportunities in the previous year, which contributed $20 million in contract revenue. This context is important for understanding the year-over-year comparison.
Delay in Revenue Recognition from LADWP Contract
The new contract with the Los Angeles Department of Water and Power will not contribute significant revenue until the latter half of 2025. This delay is due to the timing of the contract’s ratification and startup, affecting short-term revenue recognition.
Forward-Looking Guidance
Willdan Group, Inc. provided robust guidance for fiscal year 2025, reflecting its strong financial performance and strategic growth initiatives. The company expects net revenue between $320 million and $330 million, adjusted EBITDA of $63 million to $67 million, and adjusted EPS ranging from $2.70 to $2.85 per share. This guidance surpasses current consensus estimates and highlights Willdan’s strategic focus on diversifying its customer base.
In conclusion, Willdan Group, Inc.’s earnings call highlighted a year of record-breaking performance and strategic growth, with a strong positive sentiment for the future. The company’s financial achievements, strategic acquisitions, and major contract wins position it well for continued success in 2025, despite some short-term challenges in revenue recognition.