Willdan Group Inc. (NASDAQ: WLDN) released its fourth‑quarter and full‑year 2025 financial results, reporting double‑digit growth across key metrics and outlining a cautious outlook for 2026.
In the fourth quarter, Willdan generated contract revenue of $173.7 million, up 21% from $137.5 million a year earlier, and net revenue of $89.5 million, a 13% increase. Adjusted earnings per share rose to $1.57, a $0.78 beat on a consensus estimate of $0.79, while GAAP EPS was $1.23. Net income reached $18.7 million, up 143% YoY, and adjusted EBITDA climbed to $20.0 million, a 13% gain. The earnings beat was driven by disciplined cost control, a favorable mix of high‑margin energy contracts, and the continued impact of Section 179D tax deductions that reduced effective tax expense.
For the full year, contract revenue totaled $681.6 million, up 21% from $564.5 million, and net revenue reached $364.8 million, a 23% increase. Adjusted EPS was $4.89, more than double the $2.43 estimate, and GAAP EPS was $3.49. Net income hit $52.6 million, up 133% YoY, and adjusted EBITDA reached $79.5 million, a 40% jump. The company’s adjusted EBITDA margin expanded to 21.8%, surpassing its 20% target for the first time, thanks to higher pricing power in the energy segment and efficient scaling of acquisitions.
Management guided 2026 revenue to $390–$405 million, adjusted EBITDA to $85–$90 million, and adjusted EPS to $4.50–$4.70, a decline from the 2025 adjusted EPS of $4.89. The lower EPS guidance reflects the expected expiration of the Section 179D tax deduction, which had provided a significant benefit in 2025. The company remains confident in revenue growth, citing continued demand from AI and data‑center deployments, but signals caution about margin compression from rising subcontractor costs and higher G&A expenses.
Market reaction was mixed. While the earnings beat generated short‑term enthusiasm, investors focused on the lower 2026 EPS guidance, which tempered enthusiasm and led to a subdued market response. Analysts noted that the guidance signals a normalization of tax benefits and a potential slowdown in margin expansion, which may influence future valuation expectations.
"We closed 2025 with record financial performance and strong momentum across our business. For 2025, both contract and net revenue grew greater than 20%, led by our energy work. Adjusted EBITDA grew 40%, and yearly margins expanded to above our 20% target for the first time in 2025," said CEO Michael Bieber. "For the fourth quarter of 2025, contract revenue increased 21% to $174 million, and net revenue grew 13% to $89.5 million for the quarter. Adjusted EBITDA also increased 13% compared to the prior year, totaling $20 million for the quarter, and adjusted earnings per share more than doubled to $1.57, which is $1.23 on a GAAP basis, aided by exceptional tax deductions from energy efficiency incentives under Section 179D," added CFO Kim Early. "We ended the year with $66 million of unrestricted cash and a net positive cash position of $17 million—its first net cash position since 2017 and effectively 0 leverage compared to the 0.3x EBITDA at the end of 2024. We generated $80 million in operating cash flow in 2025 and $71 million in free cash flow."
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