Willdan Group NASDAQ: WLDN reported record second-quarter profitability as revenue growth in commercial energy work, including data centers and battery storage projects, complemented continued demand from utility and municipal customers.
Contract revenue rose 33% year over year to $231 million in the second quarter of 2026, while net revenue increased 23% to $117 million, President and CEO Mike Bieber said on the company’s earnings call. Adjusted EBITDA climbed 51% to a quarterly record of $33 million, and adjusted earnings per share rose 38% to $2.07. GAAP diluted earnings per share increased 53% to $1.58.
Bieber said commercial revenue now represents about one-quarter of the company’s business, providing what he described as a “third leg to the stool” alongside its established utility and government operations. The company’s largest commercial revenue source is electricity-related work at data centers, which Bieber called Willdan’s fastest-growing area.
Commercial Expansion and Acquisitions
Willdan said its commercially focused APG acquisition is projected to generate roughly $75 million in revenue this year, nearly triple its contribution in the prior year. The company said commercial expansion gives it another route to deploy engineering, software, procurement and energy-management capabilities while broadening its addressable market.
The recently acquired Burton Energy business has also begun contributing to that strategy. Since Willdan closed the acquisition on May 4, the company has focused on transitioning Burton to its enterprise resource planning system, maintaining customer continuity and developing cross-selling opportunities.
Bieber said Burton has established new customer relationships with Walgreens, Carter’s and Five Below since May. Burton brings expertise in building HVAC systems, energy controls technology and commercial energy procurement. It has also joined two Willdan utility programs, according to management.
During the question-and-answer session, Bieber said cross-selling with Burton is occurring in both directions. Willdan has met with several of Burton’s larger customers to discuss additional company services, while Burton’s HVAC capabilities have been introduced to utility programs on the East and West coasts.
Project Awards and Data Center Demand
Willdan highlighted several recent contract awards, including a $110 million expansion of its solar streetlight work for the Los Angeles Department of Water and Power. The expansion was awarded through an existing commercial direct-install program, and Willdan has authorization to proceed on about half of the newly awarded amount, Bieber said.
The solar streetlight project is expected to ramp through the third and fourth quarters and potentially into early 2027. Bieber said the timing remains uncertain but added that LADWP could become Willdan’s largest customer in 2027. The project is intended to remove streetlight load from the utility’s power grid while supporting resiliency and public safety.
Other recently announced wins included:
- A $53 million central plant upgrade for the City College of New York.
- A five-year, $49 million energy-efficiency contract with Southern California Regional Energy Network.
- A $31 million renewable biogas cogeneration and microgrid project.
- A $15 million battery energy storage project in Texas.
- A $6 million substation project in Illinois.
Bieber said these awards reflect customers’ willingness to entrust Willdan with larger and more complex projects across a wider range of customer types. He also cited increasing demand for battery storage, which can help manage peak demand, support renewable generation, improve resiliency and provide backup power for critical facilities.
Data center development remains a key driver of electricity demand, management said. Bieber said speed to power is a primary consideration in determining data-center locations and noted that Willdan has multiple projects underway in Texas. The company has also expanded its geographic footprint over the past 18 months, establishing hubs in Florida, Georgia, North Carolina, Kentucky and Texas.
Margins, Cash Flow and Balance Sheet
Executive Vice President and CFO Kim Early said organic net revenue growth was 18% in the quarter, excluding the contribution from Burton. The growth reflected higher revenue from data centers, battery storage projects and the company’s utility and municipal infrastructure businesses.
Gross profit dollars increased 28%, although gross margin declined 150 basis points because performance engineering and commercial project revenue includes more equipment and subcontractor costs. Early said those project types tend to have lower gross margins but also carry lower overhead rates, supporting higher adjusted EBITDA margins on net revenue.
Second-quarter adjusted EBITDA margin reached a company-record 28.2%, though Early said the company does not expect that margin level to continue throughout the year because the quarter benefited from revenue acceleration in some utility programs and performance-contracting work.
For the first half, contract revenue increased 19% to $386 million and net revenue grew 16% to $210 million. Adjusted EBITDA rose 41% to $51.1 million, while adjusted EPS increased 39% to $2.98. On a trailing 12-month basis, adjusted EBITDA increased 36% to $94.3 million and adjusted EPS rose 60% to $5.76.
Willdan generated $71 million of operating cash flow and $62 million of free cash flow over the trailing 12 months. It ended the quarter with $33 million in net debt, a net-debt-to-trailing-12-month-adjusted-EBITDA ratio of 0.3 times, and total available liquidity of $165 million, including cash and available borrowing capacity.
Raised 2026 Outlook
Based on first-half performance, Willdan raised its full-year 2026 targets. The company now expects net revenue of $415 million to $430 million, adjusted EBITDA of $103 million to $107 million, and adjusted diluted EPS of $5.00 to $5.15.
The outlook assumes approximately 15.9 million diluted shares outstanding at year-end and a 0% full-year effective tax rate. Early said the company expects a positive income-tax expense rate of roughly 15% to 20% in the second half after the expiration of certain 179D-related benefits, though deferred tax assets are expected to continue supporting cash flow.
Management said it continues to pursue acquisitions while investing in organic growth, and cited AI adoption as a contributor to productivity and the ability to address more complex client needs.
About Willdan Group (NASDAQ:WLDN)
Willdan Group, Inc provides energy efficiency, infrastructure engineering, and technical consulting services to a diverse range of public and private sector clients. The company works with utilities, municipalities, state and federal agencies, and commercial enterprises to design, implement, and manage programs that promote sustainable energy use, grid modernization, and resilient infrastructure. Willdan's offerings span program design and implementation, energy audits, measurement and verification, and project management for both new construction and retrofit initiatives.
Core services include energy advisory and engineering solutions, including feasibility studies, facility commissioning and retro-commissioning, $0 down financing for energy projects, and demand response program development.
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