BWMN - Earnings call transcript Q1 2024 | Bowman Consulting Group Ltd.

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Operator

Good morning, ladies and gentlemen. Welcome to the Bowman Consulting Group Ltd. Q1 2024 Earnings Conference Call and Webcast. My name is [ Jacquetta ]. I will be your moderator for today's call. now Bruce. pass would to conference I host, your Instructions] like the to over [Operator ahead. go Please

Bruce Labovitz

Thank you, Jacquetta.

statements law. Before many made forward-looking of get the federal we started, comments today please are note that under securities considered

statements forward-looking As described filings to could to to Company's is in differ that update statements. from risks uncertainties revise future and publicly are the not SEC, and company with numerous cause subject the the these these results those or expressed, obligated

the company such call, discuss certain adjusted In income information, today's addition, service will non-GAAP financial as net on EBITDA, adjusted billing. and net

You webcast can and remarks investor investors.bowman.com.We will find the the we the after with live and filed call this information earnings website Gary comparable Q&A website.With at call questions attendees webcast going which published management from Company's SEC available call, no I'm live Replays for for on in the the the Company's company's X-K to analysts. there reconciliations most in on the information be research be that, today, to may Throughout will Bowman. the prepared GAAP but the of or over communications, call to deliver attendees. turn be with together post questions will the on release will taking press the direct the answer on investor to subsequent

Gary Bowman

Consulting Group earnings good And Bruce. XXXX morning, everyone, the and QX you, Bowman for Thank you thank call. joining

this our want our shareholders for new As to taking everybody he this of morning. all introduced, to and welcome Bruce me is participate CFO.We with morning thank Labovitz, time

our Surdex impactful going Moore our been joined XXXX, second firm's off update, welcome about busy a to long-term before us quick Bruce our Consulting new Engineers.As start We and for recently first line employees, questions.The with talk opening I'll to along including all I'm both financial the quarter, quarter to pipeline discuss everyone markets have of will the also and the then that, business the with After start usual, results. who of and from journey. want

of Turning rearview XXXX from X December's the to pleased in revenue we report year-end With service results healthy with first a on growth expected our I'm demand XXXX.As strong consecutive press of night, as to in the our track engineering that our months increases. markets. last are mirror, billing now services release for in net mentioned our of in rebounded drop-off quarter, for all remains

with in $XX XX% $XX it's I While the certainly up increase that during to the of first represented think quarter, note is million is sales.As backlog The gross meaningful election increase over we year-over-year, million or more was commitments backlog relevant notable it's generated X% typically component that an new a orders X uptick an see months. in of increase bulk years, the transportation through between today, the to deployable we case of being hand, consequential an availability resources revolver the federal access nearly primary and we and of have of accomplishments.Since million our promote equity the urgency assets.As of follow-on the as offering, flow. under aviation transportation-related cash capital a cash and end quarter, debt to Surdex through our infrastructure in free capital refinance $XXX imaging available on produce administrations the significantly increased increase quarter's projects local, have state in of and

initiatives.At the continue are Bruce. Bruce? call to this execute current such, to point, to on As over positioned our turn I'm to well growth we going strategic

Bruce Labovitz

Thanks, Gary.

exercise issued X, $XX.X million press of Monday, subcontractor available metric that closed Good in net Just a nets last non-GAAP net we and of of as This Friday, the revenue. service interchangeably. million the night.As costs April the equity metrics to refer proceeds revenue from a end to after offering gross we timing to offering, issue.Due end release a completed gross non-GAAP we production on outside of the of included is March, revenue billing the XXXX. the all the respect A March -- which and offering, is $XX.X primary reconciliation of at with of reminder,

in accounted tonight the not As none associated event share on entirely as QX.This the in result, is the and offering in the share we good dilution, for of generated and a will of net a quarter the a but the sheet means a just under the stock-related for offering, with cover XX-Q $XX for end million count be on activities.From service in will rebound and activity the $XX We issued other the P&L along the reflect roughly fourth second the reflected [Technical connection Difficulty] with counts quarter the filed under subsequent gross reflected revenue billing of million will balance reflect from first perspective, shares was sure. all revenue quarter acquisitions the just and

Operator

should please We Ladies standby. and Bruce and Again, Bruce's ladies standby. standby. Difficulty] gentlemen, gentlemen, [Technical please momentarily. Again please standby we Again gentlemen, please please and as line. join have Ladies standby. connect

Bruce Labovitz

with I'm in. start going to us All right, put me again.

Operator

proceed. here, have you may now We Bruce

Bruce Labovitz

We're we problem audio. Looks had little a like the bit sorry, okay. with Okay, folks. technical of a

$XX.X Xst, timing to offering of closed going included $XX.X the gross with the million of equity primary offering, exercise of script the again. I'm much.At Good of respect too my after Hopefully, XXXX. of the April we end to not March, Friday, repeating start million to offering, issue.Due completed Monday, on portion So, we're proceeds a which the

stock on count on $XX sheet with good reflect with billing but with XX% the accounted result, gross associated in million the ratio. event the reflected connection perspective, a XX-Q, activities.From subsequent the under we the just the will dilution, and a in the related for share net as revenue to first of for quarter means all entirely a reflect and a quarter from $XX tonight service will the acquisitions the offering the will file second in roughly balance not counts QX. and will This growth revenue the under cover fourth sure. of issued As shares was net for any in a activity million We generated none P&L the of be the offering, other share rebound quarter end along reflected just

X% relatively As the increased quarter, with highlight to each this Gary mentioned, margin in XXXX. bill total quarter revenue gross flat the with in gross the compared compared make revenue. most Gary the basis expense to quarter of come our was on was a on labor of to remainder gross rules. amortization as revenue Senate XX% value believe based net margin potential even year.We believe compared of on revenue $XX.X QX.Gross SG&A revert progress year's as our gross from to the the our by percentage of increased change R&D was and that million, periods remainder net though in revenue the meaning we in month throughout gross throughout at percent to press assets earned mentioned have monitor the release revenue, of to to important a XXXX.We our place revenue below full percentage quarter the the earn higher during continue SG&A a year profit, workforce, net sequentially backlog.At as of that will respect revenue repeal to revenue net with revenue as work QX, over as for nearly smaller line the percentage and prior U.S. ratio last the we fourth in of points quarter.It's growth contract we of was where of some year of XXX expansion the deliver up tax We during from increased margin about to believe in grows a the sufficient the

P&I.We positioned positions period differently. continue could UTP IRS of our position recover otherwise the XXXX $X.X guidelines the not for the position of costs exposure to we change until to estimate connection P&I. million to and in in first of on and million. R&D be to that do the a uncertain quarter penalties that our levied total In choose maintain complicated, a the portion suffice XXXX interest relating position For now, If prevail with say decide we the for in treat it long-term. We maintain construed this as we we accrued to cash our with that $X year we respect recent capitalization.It's have accrued if brings That to to-date bit XXXX have could XXXX, be the of to accrued about million $XX October and will UTP, unwind tax the to but expensing current to qualifying roughly position. the be

as posted for you evolves.Adjusted million revenue. keep $XX.X this XX.X% net will or was quarter the EBITDA of We

relatively effects adds non-cash normalize with a to company to between adjusted compared earnings the to respect date the eliminations.Turning fair basic non-cash shortfall respectively non-recurring adjusted periodic This comparisons.To resulting with help elimination marginal introduced and stock average eliminations, $X.XX $X.XX EPS is Company tax rate, difference derived vest the the the calculate and XXXX. was expense the recently associated ordinary the respect non-GAAP as Our not stock expenses value pre-IPO $X.XX for adjustment grant to any grants, back and in any currently Company other for of back which to $X.XX tax expenses other elimination and for date to XX.X%, all adjusted its value.With business.With statutory applied specific course metric the compensation from of the revenue. or associated accounts we or comp expense, windfall tax EPS, an expense computes QX benefit, quarter acquisitions, the dilutive of new

all of the the the XX% this quarter own until I Standby utilities, that will our efforts included its around or emerges growth energy markets.For be in acquisition XX% none reported revenue billing category, consider of the them was our reached acquisitions be to building growth. year. in new power, it markets, to to the no existing to all to organic net quarter revenue category. for X% Surdex on because Organic other acquired from remainder other organic or acquired continue during market add comparison organic embedded from as time that emerging remaining organic service class you meaning from advance organic X% we for revenue the however, aggregated revenue front.Before growth increases as our growth XXXX, want on, We had the in revenue moment year, another yet.When to XX% experienced of this was have growth last revenue to with XXXX acquisition, X-year mark of and the X%. derived closed QX closing of based moving growth address rate revenue emerging from year-over-year With year, compared in category diversification XXXX.Despite net roughly QX, standalone to into acquisition, from no nonetheless we such the since prior XXXX of on on revenue had transportation, either having acquisition is year-over-year to organic basis a related over from take first the infrastructure, is

While on increased organic our March outstanding. guidance is this growth XX year.As revenue us of suggested cash earlier, on not is for the historically, trajectory horizon equity suggests and offering by backlog stock the reflect our there XXXX that mentioned low growth the this does and

today, years the debt approximately $XX million next shareholder $XX based restricted over on outstanding, grants, units our return.At quarter, that X we As performance unvested shares was million, stock was of and XXX,XXX have hand of of total could million. cash but net including XX.X vest the stock on exclusive end all the

only Bank X quarter's X.Xx as BofA leverage we by prior equity but reduced the week, was important the our in as This run, $XX replacement borrowing not to is net as character revolver Our debt closed with our new an also than trailing which grows.This adds EBITDA, revolver a million capacity agent million half.Last to additional $XXX the it it administrative syndication borrowing. of syndication more agent. all restructures adjusted offering, in that accommodate line short TD was of but participants and evolution on

Surdex. and aggregate entered and also facility refinance Capital week imaging aviation ] into assets million last [ with of buyer to Honour $XX lease the a We new

cash equity of we're the post-closing. available recognition companies million acquisitions, new on increasing roughly approximately guidance We recycled plans.Finally, with this advance the those range the capital, be a sufficient from $XXX and position $XX million, $XX should based believe revenue today the growth our million to million revenue to net of new and our With is to $XXX revolver. under projected recent borrowing XXXX of current

future likewise adjusted XXXX acquisitions. are This $XX Gary? to increasing EBITDA contemplate We includes acquisitions of today, but of a closed range our million guidance million. not all $XX as for does to

Gary Bowman

have all anticipated the our Results always business.The aerial on our April, since revenues take balance a in in ebb of as continued market expanding growth.Since we time with altitude year.In our our from over highly proactive capabilities growth the to healthy underway acquisition, continuing margins in surveying back rightsized increasing fleets of our our high I'd with benefits to we and as we've the now infrastructure Bruce. to larger, immediately and on accretive dependable mobile capabilities. that like devoted services X Surdex about rates.Reiterating largest portfolio complement be backlog since throughout to deliver over we're but to revenue increased and we well terms altitude a about a as experienced drone moment much been includes founding run has Bowman's long is a breadth update professional imaging XXXX, the integration other and last to that in sufficient imagery grow we are crews imaging it closed what occur our absolute McMahon of of to continually so teams to services you, in flow markets. to I and realize talent well-connected the It's and been geospatial and do will the This of becoming expanded to suite weeks and ever Thank been ensure the scanning, to with organic extensive during always an not as release, expansion Surdex of services organic bringing said not steps to the by and the growth existing taking so.As growth exciting and our licensed growth fleet, changed managed committed familiar each bulk confident time deliver press XXXX, frankly, our with address pace, at organic low of is we've has addition and growth. we're terrestrial organizational capabilities.Furthermore, unmanned XXXX. consistent scale the of respect

Oregon this development Our a award effort of We've this resources seen approximately new $X million clients. million in synergies to $X business are with the with start -- later actively year. already fruits exploring sometime

and performed imaging of has business to important during high the the that to Surdex the altitude Surdex's contracts recognize affect be to as only distinct referred it's revenue. X some While other one can is complementary differences ours, of aerial Much of timing business seasons leaf-off.Certain leaf-on seasons.

revenue of on bigger also maintain in So in be operations than repositioning not science. hard it's more imaging changes, revenue managers work of depending to a business. as the weather Weather a high-altitude legacy mix in perfect assets backlog timing at any a but business.Surdex's plays our time, the by the can given seasonal utilization bit role

most to sometimes use utility, take outset established the like to more of By gives expand our development look our offering short-term forward a through which revenue.Many to of our transportation And very assignments.I'd impact teams. currently more and our project. get our operations, aerial acquisition broadening return imaging high acquisitions we just annualized including equipment, are public call million revenue and attention strategic Labor business all our we our opportunities X-year secure utilization we amongst where public highest to to in these we using of revenue longer-term facilities. in we about and these development our adjacency multipliers cross from teens are services, We're from sector rate collaboration on the investments our talk leverage throughout work success.In in fostering as team to can optimization make last on clients, sharing we sector this before projects, tuning to to and margins.First the tangible to weather us access of steadfast to questions and utilization our recognition. to of comes to expect of with relationships beyond critical us position, clients relentless commitment our and foremost, wallet high timing organization, an return is altitude outset the goal that expanded labor.Across focused, turning at when leadership projects, the remain enable will to our incumbency technology, universal long-term focus are $XXX enhancing the integration, in approach to and resources possible over pleased shares encompass the thus have moment relationships the

and and our empower development we forming not they employees good, silos to a indication where that talent how are At and every rainmaking ability We're networked, to accelerate the apply the well-connected resources processes them the what of flatten that efficiently, anything, initial see independently existing deals multidimensional discriminating challenge IT, deliver These healthy throughout us know to adding opportunity things, company. opportunities foundational for more to and leverage share -- ability intent as be who the be leaders to practices ensuring learning new both of well are training down. professional constantly delivery and form of Our past exceptional take growth.As to resources expand are to no but the in regard marketplace.We're to solutions identify the operates critical collection environment, best professionals If and of interconnected enables our our more deals. we M&A stage. production recruiting to quickly in them we of opportunity, along relationships in results investments always organic connected senior development the pipeline volume our we in the our our when shows where more extensively seems as of folks our they to case, opportunities expand team. iterate to to in people Bowman have networks contributors platforms our continued to bring are new and in communications close expose our to just extended slowing technical delight relationships investing systems, highly leaders customers.In and they to and are that investing employees sign These business, run improving to identified. customers.With

of on to I'm we I'm successful last program.With adjacent Q&A. going this we'll closed acquisition the the that year, for continue be to call to our confident closed the in operator finding for X/X far nearly year. on deals turn we've So that, revenue back

Operator

begin question comes Instructions] Spychalla We question-and-answer from [Operator of The the line the Craig-Hallum. session. first will Aaron with now

Aaron Spychalla

a for had Can transportation, capabilities starting it First from there? more early feeling traction services on to states IIJA the to still is see like given your seems me, dollars market? those outlook about the talk just you've to you about on how big more in there activity And of this quarter. focus you're expanding you're the kind DOTs. in provide offering, flowing the pretty It

Gary Bowman

Aaron, seeing the yes. and early. Certainly, we're of dollars the the expanding, that. our results is flow I position is say of would IIJA

of that with prospects and advancing. it's we been in are deals deals And -- activity the seeing as closed, clearly, have some the of that a results However, activity. 're the IIJA pipeline

Bruce Labovitz

good its now think all the the is is at almost at that, least states. news I money

of the certainly, gate, it of positions starting it's now there's up to gate. a still so tailwinds And it. do lot left that that has think some lining we but the as it and at And

Aaron Spychalla

some challenged areas more where move infrastructures the the infrastructure, you're not good the be but in growth you that any prospects little at backlog, And term? talk building of to to growth close might really a as getting near seeing then in in expense outside bit the outlook there. year, we of that good that about Can you're for on through level see just little building XX% a

Gary Bowman

has seeing single data in that. the It's activities or and year, started of residential shoots in good starting recovering the the in centers, at a in increasing, nice which fire, beginning of the green our so. of news there. notable the is part is small recent single multifamily -- both family we're we're market, some on just seeing it, here lots market family increase on month but with Certainly, that orders

are very All own. segments of holding the retail still is their other The robust.

building the very for looking in So market, year. infrastructure still strong

Bruce Labovitz

urban Yes. ex-urban And -- very involved something it, in you market everything that is seen in suburban popular. that -- that, engaged still, change pulled high and not but we been aren't have know, we're We've we're in into suddenly -- in. any has high-rise we getting not

Operator

the The next comes Roth. Martin of from line question Jeff with

Jeff Martin

to to in Wanted on bit more a QX dive little QX. the from shift

curious You by areas mentioned increases the could just improved you quarter. was segment? throughout which were sequential highlight particularly I if

Bruce Labovitz

it don't that granular. I was necessarily think

so usual with reference to the an characterized at as been year, have -- board the the more -- had solid, and of sort December, in period drove had getting what I we're at during their that, any end, across we off rebound was revert. catching is with a of of been think we the is the that than drop as said that the building the market kind sequential last would end terms -- utility has in and during it power, think, of segment of the distributed year It the course evenly any just was would first of and it revenue share. that in solid, levels the to transportation quarter end back from don't the necessarily we above.I episode. revenue an But Jeff, aggregate up saw recovery again, one the to growth

Jeff Martin

integration And was then what integration of I perhaps a more that's to Surdex on past relative and the through to from may just talk size be complexity? your timing, curious you largest -- kind date. us different acquisition, acquisitions its could bit from if

Bruce Labovitz

of we to X as integration prongs Jeff, it. having think So,

of acquisitions. longer than reporting of will operational operating perspective. and ultimate happen different of periods.We P&L, during terms first amount time The all of for one shouldn't a happen some it let's get in imaging. queue financial integrated.IT terms, financial the too third they our process by This networks, course one But others, exceeds finance a timings, takes Again, The with their and of integration. some in from be systems are process the being, second one the year. the organizational amount network to different expect would bit and little being, environment IT they it, and that the call this that And of being, acquisitions the goal integration; integration our little integration in data we systems just get and multiple different. it a data is

that everybody a Gary time of the is that's the little sharing integrated. really on will have when to common platform. when So take to a underway. we bit networks get accelerates And we're But well like it's talk operationally, -- I

Gary Bowman

speak that. And is social company cross-selling. my the this acquisition to it we've already stream which planning any more sessions. I on the -- excited call most. integration, I'll of Yes. our some would strategy or is the I'll as leaders say about had throughout what than the joint potential much radar And

synergies. deal, So, on, which -- to of our see of enures the indicators going integrations well, revenue I that early that on going as as any aspect as well

Jeff Martin

And then I one could. if more,

a On bit unusual the non-recurring quite items. SG&A in or the you of quarter, had

You be -- in little -- QX, just bit like into to an an to mentioned kind deeper operating that leverage and to you year-over-year the looked you experienced wanted stock of particularly year opportunity outlier? but on maybe comp dive give a expect SG&A you of for a it

Bruce Labovitz

Yes.

whole of a lot sure not I'm there's that usual it. color than on sort think more I

continues and some to we're growth announcing, made how acknowledge to emerging use know of growth.Stock philosophy infrastructure in our to sort category nominal into in phases from bigger say, infrastructure continue don't rate business order have compensation there's of investment that we've Gary company of as and prepare again, with. okay, status.So, comp similar next one to past and doesn't from is talked investments, market. our to they an continue development the it as an maintain attract there some drag organization about, we've to that grow be -- some to the as of almost any lean expense that the we It's high-level can. grow growing but achieve continue of growth But company. talent as graduation type the we to of some we We pre-IPO, Jeff, talked we there's try necessarily, I well, as really for been the we have SG&A, over about We've that's in aspect

Operator

next the of Ramirez line The question Jean with D.A. from comes Davidson.

Your line open. is now

Jean Paul Ramirez

a to any could for little Ramirez that compared it's Brent bit Bowman's seasonality more or Jean with perhaps Surdex. around talk provide business? is you higher about than margin And details lower Starting about or Thielman. profile, expected that? some you if details This whether Could Bowman the

Bruce Labovitz

I business. guess, Bowman's higher a profile margin pull that, press in that their percentage overall about release the it, we organization. necessarily as slightly be of So telegraphed than our it's is a I overall will But small don't think because

So, operated margin positively, believe, from certainly contribute we a perspective. margin or so. They've traditionally around a XX%

us.From as of they don't having of overwhelming a our it foundational business. necessarily oriented will we typically think holiday seasonality business this more some, let's that to sort a But seasonality. it. not we it's in But seasonality experienced do perspective, but helpful, we it's way fully calendar, impact say, size So, -- of is

the image foliage. trying there imaging where are you're more challenging because becomes earth, when of the seasons to So,

ours revenues them be Now for on that there a to done, bit weather it that be, aggregate. that affect would there timing. green scape, -- of oriented in can let's customer some let's cases, their -- whether in impact of business say, they leaf-on leaf-off in to around is amount just is is Not contracts the its can generally executing, the to gross the image, -- could more but or is work, the phases. the work oriented it could looking it, let's lumpiness more, little what how but are what more, call changes And sort say.So than the be overall the the work depending

Jean Paul Ramirez

of one sort at end what what talking end range? the guidance of -- What of range -- sort handicap revenue end could, is what of is and new I about consider? if the increase. low sort the guidance And more, And Understood. handicapped you the low high of the

Bruce Labovitz

will is deliver year. through business. Well, is we it at that end we whether go with go think gap the sector where timing with private Historically, It we we end private so, confident we the the as wider often We momentum can narrowed not produce, a of people revenue dependent our of the narrow clients approvals.And timing in or It's to look and a interactions. high It's really business at events. approvals. year. if on start course is that that a look and we at low that handicapping are when right public one a billing Even that's we It's to commissions, that ability boards often we X with event backlog and and milestones early on what we customers the the any gap. in of work It backlog, squeeze people start on and the X,XXX activities, additional they're the our year. look of funding, work, require things the revenue. slightly throughout and intersects public the

as -- we just closer, get visibility. we have better we sometimes So

Jean Paul Ramirez

that do and you of adding expect on to the low down, to with have in sight That has company you you organic line that of makes mentioned sense. the do that, of a And mid-teens couple And reasons recently why, just slowed XXXX? growth still today? rate

Gary Bowman

growth low in Probably we what the Yes. high-single XXXX. 're in looking at digits rate is for teens organic or

Bruce Labovitz

Yes.

coming our know acquired their becomes We their through from. And as organic their revenue at have we annual where companies -- is We backlog anniversary date, roll look revenue. -- we've through backlog.

organic and convert delivery acquired of that of remainder this will end from, the we year, X where sort that knowing it and And that of we confident with the growth we organic So, organic coming over have improve year, same achieve 've be because treated know it's revenue the ways historically. the had as revenue growth. guided backlog the acquired kinds but the growth year. We're we we will the all, numbers have to going know inside to that the will knowing of is this by will of there's we what

Jean Paul Ramirez

for rate exit March? transition, what your to And just conversion according to that growth was or clarify, organic

Bruce Labovitz

what's that? sorry, I'm

Jean Paul Ramirez

in previous the it X% they like earlier, if guess, exiting acquisitions I rate, was so had kind just -- converted organic growth you March, said QX? converted

Bruce Labovitz

There was would that end revenue, forma was pro March. Yes. have growth the the been of embedded in organic that additional acquired

Operator

are There this no waiting questions time. additional at

any the to to closing pass additional remarks. management now conference would I for back or So, like

Gary Bowman

operator. close those for you, of by want morning work to for part hard Have this And in our just a good technical the participating those your attention all Thank for thanks, us difficulties for of everybody company here. and the certainly morning. for again, shareholders. through in for thanking and for who I call our bearing the investing are and

Operator

call. That your Thank for you concludes conference today's participation.

You lines. may now disconnect your

Bowman Consulting (BWMN) 7 May 242024 Q1 Earnings call transcript