Willdan Group, Inc.

Greetings. Welcome to the Wilden Group second quarter fiscal year 2026 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Al Kaschalk, Thank you. You may begin.

Thank you, Cleo. Good afternoon, everyone, and welcome to Will Dan Group's second quarter 2026 earnings call. Joining our call today are Mike Bieber, President and CEO, and Kim Early, Executive Vice President and CFO. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today's press release and in the presentation slides, all of which are available on our website. Please note that year-over-year commentary or variances on revenue, adjusted EBITDA, and adjusted EPS discussed during our prepared remarks are on an actual basis unless otherwise specified. We will make forward-looking statements about our performance. These statements are based on how we see things today. While we may elect to update these forward-looking We had a very strong second quarter, capping a strong first half.

and continuing the momentum we've built across the business. Demand remains healthy, execution strong, and we delivered significant growth in both revenue and profitability. In the second quarter, contract revenue increased 33% year-over-year to $231 million. Net revenue grew 23% to $117 million, and adjusted EBITDA increased 51% to a record $33 million in the quarter. Gap earnings per share increased 53%, even faster, to $1.58, and adjusted earnings per share increased 38% to $2.07. All those growth metrics are on top of strong performance we had a year ago. Overall, the business is performing well. We're seeing strength across all of our customer groups, but commercial demand, in particular, is accelerating and expanding our addressable market. AI is adding to electric load growth and is also improving Will Ben's productivity to help us solve clients' more complex problems. With a strong first half behind us and good visibility into the remainder of the year, we're raising our full-year financial targets. On slide three. When I became CEO at the beginning of 2024, I talked about our strategy to significantly increase our presence in the commercial market. We believed then and a broader customer base would add stability, create new growth opportunities and support higher margins. That strategy has worked well, and commercial revenue has now added a third leg to the stool. It's currently about a quarter of our business and is helping create more balanced, consistent results. Importantly, this growth complements our strong utility and government and other data centers, and is the fastest growing part of World Bank. As another data point, revenue from our APG acquisition, which is commercially focused, is projected to nearly triple this year over last, for roughly $75 million. The commercial market also gives us another channel to deploy our engineering, software, procurement and energy management capabilities. We believe that broadens our addressable market and strengthens Wildan's long-term growth profile. On slide four, this slide shows how that diversification is taking shape across our customers, contracts, and services. We now serve a broader mix of utilities, public agencies, and commercial clients. We balance recurring program work with project-based engagement and our services now span advisory, engineering, software, implementation and ongoing energy management. This balance matters because it reduces our dependence on any single customer type or service line, allows us to participate across more of the energy investment lifecycle and positions us to pursue larger and more complex opportunities. Burton Energy is a good example of how we're extending that strategy. So on the next slide, slide five. Burton is performing well right out of the gate. It had the characteristics we'd look for in all acquisitions, a strong management team, differentiated capabilities, strong client relationships, and meaningful cross-selling opportunities with the rest of the company. Since closing on May 4th, we've focused on converting to a wheeled-end CRP system, customer continuity, and cross-selling. We're pleased with the early progress. including new customer relationships with Walgreens, Carter's, and Five Below, all since May. Burton adds significant expertise in building HVAC and energy controls technology. It also adds a new line of business in commercial energy procurement. Burton is already involved in two Wildan utility programs, and we're particularly optimistic about cross-selling Burton's commercial experience with Wildan's broader technical capabilities