Bowman Consulting Group NASDAQ: BWMN reported first-quarter 2026 results that management said reflected broad-based demand across its end markets and continued execution of its acquisition-led growth strategy. On the company’s earnings call, CEO Gary Bowman said the firm delivered “double-digit growth in gross contract revenue, net service billing, and Adjusted EBITDA,” while backlog reached “a record level of over $650 million.”
Based on first-quarter performance and its outlook, Bowman said the company raised full-year 2026 guidance and now expects “over 20% revenue growth for the year.”
First-quarter results and backlog
CFO Bruce Labovitz said the quarter ended with a “record March,” describing the start to 2026 as solid and supported by durable end markets and the scalability of Bowman’s operating platform.
- Gross contract revenue was $126.5 million, up 12% year over year.
- Net service billing was $114.2 million, up 14% year over year, supported by 6% organic growth and contributions from recent acquisitions. Labovitz cited a 90% net-to-gross ratio.
- GAAP net loss was $3.7 million, which Labovitz said included non-cash amortization of acquired intangibles, acquisition-related expenses, financing costs, and other non-recurring items, including those tied to the CEO transition.
- Adjusted EBITDA totaled $16.8 million, up nearly 16%, with margin expanding to 14.7%.
- Cash from operations was $11.6 million, which management said represented about 70% conversion of Adjusted EBITDA to cash.
- Backlog increased to about $653 million, up 56% year over year and 36% sequentially. Labovitz said backlog growth in the quarter was “entirely organic,” and that excluding “one unusually large” organically generated award, backlog grew at a 20% annualized pace.
Labovitz also noted contract costs were approximately 48% of gross contract revenue, equating to a 52% gross margin. He said overhead as a percentage of revenue was up about 50 basis points from last year due to a slower start in January and February and mobilization costs for assignments beginning in the second quarter. He also said 2026 is the year the company exits emerging growth company status, which adds incremental costs that he expects will normalize next year.
Sector performance and mix shift
Management highlighted growth across the company’s diversified end markets. Labovitz said power was the fastest-growing sector, with 37% year-over-year growth in gross revenue. Transportation grew 13%, natural resources 6%, and building infrastructure 1%.
On an organic net service billing basis, Labovitz said natural resources posted the highest organic growth rate at 16%, followed by transportation at 13%, power at 5%, and building infrastructure at 2%. He added there is “a significant amount of organic growth embedded in power and utilities revenue characterized as inorganic for now.”
Mix continued to evolve, with power rising to 28% of gross revenue and building infrastructure declining to 41%, according to Labovitz. He also said data center activity has “more than doubled” over the past year to “a bit over 6% of revenue.” Over coming quarters, the company expects “a noticeable shift in mix” as natural resources expand due to a significant new award that will be classified in that category.
Updated 2026 guidance and revenue cadence
Bowman raised full-year guidance and said the company now expects 2026 net revenue between $520 million and $540 million, with adjusted EBITDA margin between 17.25% and 17.75%.
Labovitz said the updated forecast implies more than 20% growth in organic net revenue for 2026 and nearly 28% year-over-year growth in adjusted EBITDA at the midpoints. He also described a change in expected revenue cadence versus prior years, with the remaining three quarters expected to “build on each other” as assignments ramp in the second half; he said third-quarter revenue should be “at or near the midpoint of the second and fourth quarters.”
COO Dan Swayze discussed backlog conversion and booking needs. He reiterated that historically 70% to 80% of backlog converts to revenue within 12 months, depending on contract structure and timing. For the remainder of 2026, Swayze said about 60% of expected revenue is supported by existing backlog, with the balance coming from “sell and deliver” activity. He said roughly $250 million of revenue for Q2 through Q4 is supported by backlog, leaving about $170 million to be delivered through new bookings within the year.
That level of in-year execution equates to “just under 0.7 times book-to-burn ratio,” Swayze said, which he described as manageable given Bowman’s ability to deliver book-to-burn above 1.0 times consistently.
Large government award, data centers, and M&A strategy
During Q&A, analysts asked about a large government contract referenced on the call. Labovitz said the company is limited in what it can disclose due to non-disclosure agreements, but confirmed the award has a “36-month term” and a “not to exceed value of in total about $177 million.” He said the contract should have a lower than average net-to-gross ratio and suggested the math implies a net-to-gross spread “probably somewhere in the 75%-ish range.” Labovitz added the company is mobilizing and expects the contract to have its “most consequential impact on the second half of this year, and into next year.”
Asked why Bowman pursued a contract of that scale, Labovitz said larger opportunities can emerge as the firm grows, calling the contract “opportunistic,” but “not accidental,” because the company had assembled the right capabilities. Swayze said the contract aligns directly with Bowman’s core services and “was not a reach at all.” Gary Bowman added the award expands the company’s “paradigm internally” and has had a positive cultural impact.
On data centers, Labovitz said management could not provide an exact number of projects, and Gary Bowman noted many data center clients are strict about NDAs. Labovitz said Bowman is “doing more for more data centers,” and characterized data center exposure in backlog as “maybe slightly disproportionate to recognized revenue,” reflecting expected growth. Swayze added that operationally “there isn’t a week that goes by where we’re not trying to shift resources to accommodate additional data center work.”
Management also discussed its most recent acquisition, Smith and Associates Land Surveying in Las Vegas. Gary Bowman said the deal was aimed at adding talent and productive capability to support an existing large client in that geography, while also expanding the firm’s presence in Las Vegas. He said the M&A pipeline remains robust, but Bowman is becoming more “narrow-focused and strategic” in targets, evaluating both large and small deals. On valuations, he said the market is “fairly steady,” but multiples can increase for more strategic targets given high demand in energy and utility markets.
Technology and AI: focus on higher-value deliverables
Labovitz also addressed AI and automation, pushing back on the idea that AI will inevitably compress pricing and margins across engineering services. He emphasized that Bowman’s work is relationship-based and often priced on fixed fee or not-to-exceed structures, where clients pay for the value of deliverables over the asset lifecycle rather than individual hourly tasks.
He said Bowman has developed and introduced “more than 25 proprietary tools” and is building an integrated operating environment to better connect internal systems and data with clients after projects are operationalized. While he acknowledged automation can improve back-office efficiency, Labovitz said the company’s primary focus is on improving “front office” client engagement and producing higher-value deliverables through better execution and faster delivery.
“We do not view the impending wave of AI as a driver of commoditization,” Labovitz said. “Rather, we see it as an opportunity to enhance differentiation.”
About Bowman Consulting Group NASDAQ: BWMN
Bowman Consulting Group Ltd. NASDAQ: BWMN is a multidisciplinary professional services firm that provides engineering, environmental, planning and surveying services to public and private sector clients. Its service offerings encompass civil, geotechnical and environmental engineering; land development planning and permitting; construction management; survey and geospatial services; and ecological and water resources consulting. The firm supports infrastructure, real estate, energy, utilities and telecommunications projects, delivering site characterization, design, permitting and construction-phase oversight.
Since its founding in 1980, Bowman Consulting Group has grown organically and through strategic acquisitions to expand its technical capabilities and geographic footprint.
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