Willdan’s Earnings Call Highlights Strong Growth

Willdan ((WLDN)) has held its Q2 earnings call. Read on for the main highlights of the call.

Willdan’s Recent Earnings Call Reflects Strong Financial Performance

The recent earnings call for Willdan highlighted a positive sentiment, driven by strong financial performance. The company reported significant revenue growth, improved margins, and increased financial targets. Despite acknowledging potential risks such as tariffs and economic downturns, the overall sentiment remained optimistic due to the company’s robust results and strategic outlook.

Record First Half in 2025

The second quarter concluded a record-breaking first half of 2025 for Willdan, with results surpassing expectations across key financial metrics. The company reported exceptional performance in revenue, adjusted EBITDA, and earnings per share (EPS), setting a strong foundation for the remainder of the year.

Strong Year-Over-Year Revenue Growth

Willdan experienced a remarkable 31% increase in net revenue year-over-year, with 23% attributed to organic growth and 8% to acquisitive growth. This impressive growth underscores the company’s successful expansion strategies and market penetration.

Increased Financial Targets

Reflecting confidence in its sustained long-term growth, Willdan has raised its full-year financial targets. This upward revision signals the company’s optimistic outlook and its ability to capitalize on emerging opportunities.

Improved Gross Margin

The company’s gross margin improved significantly to 39.4% from 34.6% the previous year. This improvement was driven by a favorable revenue mix and solid project execution, highlighting operational efficiency.

Significant Net Income Growth

Willdan reported a substantial increase in net income, which rose to $15.4 million, marking a 236% increase from the $4.6 million reported in the second quarter of 2024. This growth reflects the company’s effective cost management and revenue strategies.

Successful Debt Reduction

During the quarter, Willdan reduced its total debt by $28 million, demonstrating its commitment to disciplined capital deployment and strengthening its financial position.

Strong Free Cash Flow

The company maintained strong free cash flow, reporting $24 million for the first half of 2025, consistent with the previous year. This stability in cash flow supports ongoing investments and strategic initiatives.

Tariff Risk Concerns

Despite the positive financial performance, Willdan acknowledged uncertainty around tariff risks, which could potentially impact pricing and supply chain costs in the future. The company remains vigilant in monitoring these external factors.

Potential Recession Risk

While the economic environment is generally constructive, Willdan recognized the potential risk of a recession that could affect business performance. The company is prepared to navigate these challenges should they arise.

Los Angeles Water & Power Contract Delay

The Los Angeles Department of Water and Power (LADWP) program, a significant $330 million 5-year contract, restarted in July. However, it is not expected to materially contribute to 2025, indicating a longer-term strategic focus.

Forward-Looking Guidance

Willdan provided robust forward-looking guidance, projecting full-year 2025 net revenue between $340 million and $350 million. The company anticipates adjusted EBITDA in the range of $70 million to $73 million and adjusted diluted EPS between $3.50 and $3.65. With a strong pipeline of opportunities, strategic acquisitions, and increasing demand for its energy solutions, Willdan remains optimistic about its growth trajectory.

In summary, Willdan’s earnings call conveyed a positive sentiment, underscored by strong financial performance and strategic growth initiatives. The company’s record first half of 2025, increased financial targets, and robust forward-looking guidance reflect its confidence in sustained growth, despite potential risks on the horizon.