Q3 2025 Bowman Consulting Group Ltd Earnings Call

November 6, 2025

All lines will be placed on mute for the presentation portion of the call, but the opportunity for questions and answers at the end. Please note that many of the comments made today are considered forward looking statements under federal security laws as described in the company's filing with the SEC. These statements are subject to numerous risks and uncertainties that could cause actual results to differ from those.

The spreads and the company is not obligated to publicly update or revise these forward looking statements.

In addition on today's call the company will discuss certain non-GAAP financial information such as adjusted EBITDA adjusted net income and net servicing building you can find this information together with a reconciliation to the most directly comparable GAAP information in the company's earnings press release filed with the SEC on the Companys Investor Relations website.

At investors that Bowman Dot com.

Management will deliver prepared remarks, after which they will take questions from research analysts replay of the call will be available on the company's Investor Relations website. Mr. Bowman you may begin your prepared remarks.

Thank you Jasmine and good morning, everyone. Thank you for joining our third quarter earnings call Bruce Labor. That's our CFO is here with me. This morning, I'm going to start today's call with a welcome to all new bone employees, who joined US this quarter.

After my introductory remarks, I'll turn the call over to Bruce who will cover our financial performance.

I will then end the call with closing statements before opening it to Q&A.

Turning to slide three.

The third quarter marked an important milestone in our continued evolution.

For the first time, we surpassed our $500 million annualized gross revenue pace.

This is a meaningful achievement and the fact that we are ahead of schedule on this milestone demonstrates both the strength of our business model and the capabilities of our skilled team of professionals.

For the third quarter, we delivered 11% year over year growth in both gross and net revenue and a seven 6% growth in adjusted EBITDA, while maintaining healthy cash flow generation and a solid balance sheet.

Our net revenue for the quarter was $112 million and was supported by strong activity in transportation and power and utilities and energy.

Together these end markets grew over 20% during the quarter and account for more than 40% of our topline.

Importantly, our backlog grew nearly 18% year over year to $448 million. This sustained growth reflects continued demand across our end markets.

Our book to Bill ratio continues to be above one a clear indicator of the momentum we are seeing as we head towards the end of 2025 and into 2026.

In fact bookings in the fourth quarter are once again outpacing the prior quarter.

We've worked hard over the past year to regain our footing and I'm proud to report that today, we are a larger more efficient and more resilient organization than ever before.

Our growing base of recurring public sector work and a solid foundation of private demand positions us well for the years ahead.

With that I will turn the call over to Bruce to review the financials in more detail Bruce great. Thank you, Gary and good morning, everyone.

The third quarter marked an important milestone for <unk> in terms of reaching the $500 million annualized gross revenue rate. It also represents our achievement of two basic commitments, we've made to our shareholders. This time last year.

To prioritize GAAP profitability and to improve our conversion of earnings to cash.

This year, we've been hypervigilant about delivering on these two basic commitments because unlike political macroeconomic and labor market uncertainties. These are outcomes we control.

We're pleased to have delivered on these commitments.

For the third quarter and the nine months ending September 30th with dramatically increased GAAP net income to $6 6 million and $10 9 million, respectively compared to net income of 700000, and a loss of $2 9 million for the same periods last year.

Concurrently we more than doubled our cash flow from operations to $26 5 million from $12 4 million affirming the capital efficiency of our effort.

We achieved this improved performance in part through consistent and sequential growth in billed revenue throughout this year with an 11% year over year increase in net revenue in the third quarter with no erosion of our net to gross ratio.

Organic net revenue, which excludes revenue from acquisitions closed after September 32024 grew six 6% for the third quarter and now stands at approximately 11% through nine months.

Also contributing to our improved profitability was our ability to achieve the benefits of scale with revenue growth rates that outpace overhead growth rates.

To that end as revenue grew year over year total overhead redefine has caused the SG&A was down 290 basis points as a percentage of net revenue for the quarter at 89, 5% and down 500 basis points for the nine months at 80, 989%.

This disciplined approach to overhead growth will be a significant contributor to sustained positive GAAP earnings and an industry leading margin profile.

Turning to some non-GAAP metrics adjusted EBITDA in the quarter increased by 8% to $18 3 million, representing a 16, 3% margin on net revenue with adjusted EPS of <unk> 61.

Double in Q3 2024.

Through nine months adjusted EBITDA is up nearly 25% to 53 billion at a margin of 16, 6% on net revenue a 150 basis point year over year expansion with adjusted EPS of $1 26, again, doubling adjusted EPS in the same period last year.

Absolute growth in revenue was broad based with transportation up 20%.

Operator: Quarter 2025 conference call. All lines will be placed on mute for the presentation portion of the call, with the opportunity for questions and answers at the end. Please note that many of the comments made today are considered forward-looking statements under federal securities laws. As described in the company's filing with the SEC, these statements are subject to numerous risks and uncertainties that could cause future results to differ from those expressed, and the company is not obligated to publicly update or revise these forward-looking statements. In addition, on today's call, the company will discuss certain non-GAAP financial information, such as adjusted EBITDA, adjusted net income, and net servicing billing. You can find this information, together with the reconciliations to the most directly comparable GAAP information, in the company's earnings press release filed with the SEC on the company's Investor Relations website at investors.bowman.com.

Our utilities and energy up 17% and building infrastructure up 8%.

Coach to overhead growth will be a significant contributor to sustained positive GAAP earnings and an industry leading margin profile.

Natural resources and imaging to which we allocated all <unk> related manned aerial at high resolution mapping revenue last year saw a slight decline as we now allocate that revenue in a more deliberate manner across verticals.

Turning to some non-GAAP metrics adjusted EBITDA in the quarter increased by 8% to $18 3 million, representing a 16, 3% margin on net revenue with adjusted EPS of <unk> 61.

On an organic basis building infrastructure grew 6% transportation grew 10% powered utilities grew 13% and natural resources and imaging grew around 1%.

Double in Q3 2024.

Through nine months adjusted EBITDA is up nearly 25% to $53 million at a margin of 16, 6% on net revenue a 150 basis point year over year expansion with adjusted EPS of $1 26, again, doubling adjusted EPS in the same period last year.

In previous quarterly calls we've been asked about the relative gross margins of our primary verticals we've.

We suggested we believe they are relatively equal apart from transportation, which has a lower contribution margin based on the nature of its primarily cost plus contracts.

Absolute growth in revenue was broad based with transportation up 20%.

To corroborate this assertion we calculated the gross margin of each vertical for the third quarter during which gross margin was 53% and concluded that our representation was accurate.

Operator: Management will deliver prepared remarks, after which they will take questions from research analysts. Replays of the call will be available on the company's Investor Relations website. Mr. Bowman, you may begin your prepared remarks.

Utilities, and energy up 17% and building infrastructure up 8%.

During the quarter gross margins by vertical were 56% for both building infrastructure and power and utilities, 57% for natural resources in imaging and 46% for transportation.

Gary Bowman: Thank you, Jasmine. Good morning, everyone. Thank you for joining our third-quarter earnings call. Bruce Labovitz, our CFO, is here with me this morning. I'm going to start today's call with a welcome to all new Bowman employees who joined us this quarter. After my introductory remarks, I'll turn the call over to Bruce, who will cover our financial performance. I'll then end the call with closing statements before opening it to Q&A. Turn to slide three. The third quarter marked an important milestone in our continued evolution. For the first time, we surpassed a $500 million annualized gross revenue pace. This was a meaningful achievement, and the fact that we are ahead of schedule on this milestone demonstrates both the strength of our business model and the capabilities of our skilled team of professionals.

On an organic basis building infrastructure grew 6% transportation grew 10% power utilities grew 13% and natural resources and imaging grew around 1%.

With building infrastructure gross margin is benefited by more fixed fee contracting with natural resources and imaging gross margin is advantaged from a disproportionate use of labor leveraging technology.

In previous quarterly calls we've been asked about the relative gross margins of our primary verticals.

With transportation, we enjoyed meaningfully longer and larger government contracts that have lower labor multipliers, but generally generate higher utilizations and overhead leverage along with lower turnover costs.

We suggested we believe they are relatively equal apart from transportation, which has a lower contribution margin based on the nature of its primarily cost plus contracts.

We will include this gross margin analysis in our quarterly presentations going forward.

To corroborate this assertion we calculated the gross margin of each vertical for the third quarter during which gross margin was 53% and concluded that our representation was accurate.

We ended the quarter with a record $448 million backlog up 18% year over year with 38% of that backlog from building infrastructure, 30% per transportation, 23% from power and utilities and 9% from natural resources in imaging.

During the quarter gross margins by vertical were 56% for both building infrastructure and power and utilities, 57% for natural resources in imaging and 46% for transportation.

Gary Bowman: For the third quarter, we delivered 11% year-over-year growth in both gross and net revenue, and a 7.6% growth in adjusted EBITDA while maintaining healthy cash flow generation and a solid balance sheet. Our net revenue for the quarter was $112 million, supported by strong activity in transportation, power and utilities, and energy. Together, these end markets grew over 20% during the quarter and account for more than 40% of our top line. Importantly, our backlog grew nearly 18% year-over-year to $448 million. This sustained growth reflects continued demand across our end markets. Our book-to-bill ratio continues to be above one, a clear indicator of the momentum we are seeing as we head toward the end of 2025 and into 2026. In fact, bookings in the fourth quarter are once again outpacing the prior quarter.

This imbalance relative to revenue should indicate continuing diversification of our revenue mix, but it's likely not as dramatic as the percentage is in backlog today reflect.

With building infrastructure gross margin is benefited by more fixed fee contracting.

With natural resources and imaging gross margin is advantaged from a disproportionate use of labor leveraging technology.

Operating cash flow totaled $10 2 million for the quarter and sits at $26 $5 million year to date, both more than twice last year's levels. While we are pleased with the significant increase in conversion. We're confident there is room for continuing improvement.

With transportation, we enjoy meaningfully longer and larger government contracts that have lower labor multipliers, but generally generate higher utilization and overhead leverage along with lower turnover costs.

Our balance sheet remains a strength and provides a solid foundation for growth.

We will include this gross margin analysis in our quarterly presentations going forward.

We ended the quarter was $16 million in cash and 50 $657 million drawn on our revolver.

Net debt of approximately $105 million with a net leverage ratio of one five times trailing 12 months adjusted EBITDA.

After quarter end, we expanded our revolver to $210 million from $140 million, adding PNC bank to the existing bank of America, and TD Bank Syndicate.

This imbalance relative to revenue should indicate continuing diversification of our revenue mix, but it's likely not as dramatic as the percentage is in backlog today reflect.

Gary Bowman: We've worked hard over the past year to regain our footing, and I'm proud to report that today we are a larger, more efficient, and more resilient organization than ever before. Our growing base of recurring public sector work, and a solid foundation of private demand, positions us well for the years ahead. With that, I'm going to turn the call over to Bruce to review the financials in more detail. Bruce.

As a result, we have roughly $150 million in available liquidity for investments in growth initiatives.

Our internal innovation incubator, the Big fund continues to produce high value ideas and opportunities that present, the prospect of tangible returns for us long term.

Bruce Labovitz: Great. Thank you, Gary, and good morning, everyone. Well, the third quarter marked an important milestone for Bowman in terms of reaching the $500 million annualized gross revenue rate. It also represents our achievement of two basic commitments we made to our shareholders this time last year: to prioritize GAAP profitability, and to improve our conversion of earnings to cash. This year, we've been hyper-vigilant about delivering on these two basic commitments because, unlike political, macroeconomic, and labor market uncertainties, these are outcomes we control. We're pleased to have delivered on these commitments. For the third quarter and the nine months ending 30 September 2023, we dramatically increased GAAP net income to $6.6 million and $10.9 million, respectively, compared to net income of $700,000 and a loss of $2.9 million for the same period as last year.

We're actively engaged in advancing concepts.

Our balance sheet remains a strength and provides a solid foundation for growth.

That accelerate revenue growth through the deployment of proprietary AI enabled asset control kits, which extend engagement with clients throughout the asset lifecycle.

We ended the quarter was $16 million in cash and 50 $657 million drawn on our revolver and net debt of approximately $105 million with a net leverage ratio of one five times trailing 12 months adjusted EBITDA.

With concepts that expand the application of the proprietary technology tools, we acquired in the recent orcas acquisition, which drastically reduced the time it takes to perform repetitive feasibility and planning functions, thereby unlocking additional labor utilization.

After quarter end, we expanded our revolver to $210 million from $140 million, adding PNC bank to the existing bank of America, and TD Bank Syndicate.

Also concepts that connect all boehm in operating systems and platforms with AI enabled capabilities, which empower employees to ask Bowman plain English questions. The timely informed answers to which improved business acquisition efforts and streamline proposal generation estimation and profitable project execution.

As a result, we have roughly $150 million in available liquidity for investments in growth initiatives.

Our internal innovation incubator, the Big fund continues to produce high value ideas and opportunities that present, the prospect of tangible returns for us long term.

Lastly, we're working on ideas that modify extend and evolve the inherent capabilities and uses of our high end geospatial assets to expand their applications improve the quality of capture extend revenue opportunities shorten delivery times and increase return on investment.

We're actively engaged in advancing concepts that accelerate revenue growth through the deployment of proprietary AI enabled asset control kits, which extend engagement with clients throughout the asset lifecycle.

Bruce Labovitz: Concurrently, we more than doubled our cash flow from operations to $26.5 million from $12.4 million, affirming the capital efficiency of our effort. We achieved this improved performance in part through consistent and sequential growth in billed revenue throughout this year, with an 11% year-over-year increase in net revenue in the third quarter, with no erosion of our net-to-gross ratio. Organic net revenue, which excludes revenue from acquisitions closed after 30 September 2024, grew 6.6% for the third quarter and now stands at approximately 11% through nine months. Also contributing to our improved profitability was our ability to achieve the benefits of scale with revenue growth rates that outpace overhead growth rates.

With concepts that expand the application of the proprietary technology tools, we acquired in the recent orcas acquisition, which drastically reduce the time it takes to perform repetitive feasibility and planning functions, thereby unlocking additional labor utilization.

All investments in innovation are measured against defined return thresholds, ensuring innovation spending meets the same rigorous financial discipline is acquisitions.

To date, we've expanded a little bit over $300000 on advancing these ideas.

Cost of which are not added back to adjusted EBITDA and the benefits of which are not yet contemplated in our current projections.

And while not a big fund project. We also completed the upgrade of our accounting and enterprise management platform. This quarter in effort to consumed a meaningful amount of time and energy, but it will be a solid foundation for our next phase of growth.

Bruce Labovitz: To that end, as revenue grew year-over-year, total overhead, which we define as COGS and SG&A, was down 290 basis points as a percentage of net revenue for the quarter at 89.5%, and down 500 basis points for the nine months at 89%. This disciplined approach to overhead growth will be a significant contributor to sustained positive GAAP earnings and an industry-leading margin profile. Turning to some non-GAAP metrics, adjusted EBITDA in the quarter increased by 8% to $18.3 million, representing a 16.3% margin on net revenue, with adjusted EPS of $0.61, doubling Q3 2024. Through nine months, adjusted EBITDA is up nearly 25% to $53 million and a margin of 16.6% on net revenue, a 150 basis point year-over-year expansion, with adjusted EPS of $1.26, again doubling adjusted EPS in the same period last year.

These costs were likewise, not add back to adjusted EBITDA.

It wouldn't be an earnings call if I didn't reference tax so here goes.

Following enactment of Ob three we filed message change notifications with the IRS that allowed us to unwind, our uncertain tax position with retroactive audit protection.

All investments in innovation are measured against defined return thresholds, ensuring innovation spending meets the same rigorous financial discipline as acquisitions today.

The change in law and associated adoption by BOMA to the new standards released approximately $52 million of deferred tax assets and other non current liabilities on our balance sheet and released $3 $5 million in P&I accruals, which had previously run through the tax expense.

To date, we've expanded a little bit over $300000 on advancing these ideas the cost of which are not added back to adjusted EBITDA and the benefits of which are not yet contemplated in our current projections.

In addition to committing to GAAP profitability and cash flow conversion. We also committed to the reduction of noncash stock compensation as a percentage of revenue.

For the first nine months of 2025 stock based compensation totaled $14 2 million or four 4% of net service billing down from seven 3% a year earlier excluding.

These costs were likewise, not add back to adjusted EBITDA.

It wouldn't be an earnings call if I didn't reference tax so here goes.

Excluding about $1 million of pre IPO related issuances adjusted stock based compensation was approximately four 1% of net revenue.

Following enactment of Ob three we filed message change notifications with the IRS that allowed us to unwind, our uncertain tax position with retroactive audit protection.

Bruce Labovitz: Absolute growth in revenue was broad-based, with transportation up 20%, power, utilities, and energy up 17%, and building infrastructure up 8%. Natural resources and imaging, to which we allocated all CERDEX-related manned aerial and high-resolution mapping revenue last year, saw a slight decline as we now allocate that revenue in a more deliberate manner across verticals. On an organic basis, building infrastructure grew 6%, transportation grew 10%, power and utilities grew 13%, and natural resources and imaging grew around 1%. In previous quarterly calls, we've been asked about the relative gross margins of our primary verticals. We've suggested we believe they are relatively equal, apart from transportation, which has a lower contribution margin based on the nature of its primarily cost-plus contracts.

As we've discussed in the past these pre IPO grant expenses represent the run out of GAAP costs related to awards issued prior to our IPO in 2021 and are not part of normalized long term incentive costs were.

The change in law and associated adoption by Bowman of the new standards released approximately $52 million of deferred tax assets and other non current liabilities on our balance sheet and released $3 $5 million in P&I accruals, which had previously run through the tax expense.

We expect total noncash stock compensation for 2025, and 26 to be roughly 19, and $25 million, respectively, which is consistent with our pledge to reduce equity compensation as a percentage of revenue while balancing its benefits for recruiting retention and efficient capital allocation.

In addition to committing to GAAP profitability and cash flow conversion. We also committed to the reduction of noncash stock compensation as a percentage of revenue.

For the first nine months of 2025 stock based compensation totaled $14 2 million or four 4% of net service billing down from seven 3% a year earlier excluding.

Thank you for your continued confidence in Beaumont with that I'll turn the call back over to Gary.

Okay, Yes. Thank you Bruce as Bruce mentioned, our improved profitability and working capital management. Once again drove strong cash flow this quarter with cash conversion now at about 50% year to date.

Excluding about $1 million of pre IPO related issuances adjusted stock based compensation was approximately four 1% of net revenue.

Bruce Labovitz: To corroborate this assertion, we calculated the gross margin of each vertical for the third quarter, during which gross margin was 53%, and concluded that our representation was accurate. During the quarter, gross margins by vertical were 56% for both building infrastructure and power and utilities, 57% for natural resources and imaging, and 46% for transportation. With building infrastructure, gross margin is benefited by more fixed-fee contracting. With natural resources and imaging, gross margin is advantaged from a disproportionate use of labor-leveraging technology. With transportation, we enjoy meaningfully longer and larger government contracts that have lower labor multipliers but generally generate higher utilizations and overhead leverage, along with lower turnover costs. We will include this gross margin analysis in our quarterly presentations going forward.

Our margins and cash efficient efficiency place us solidly in line with the best performing firms in the E&C space.

Okay.

Now, let me take a few minutes to share a summary of our market performance and outlook as we move into 2026.

We expect total noncash stock compensation for 2025, and 26 to be roughly <unk> 19, and $25 million, respectively, which is consistent with our pledge to reduce equity compensation as a percentage of revenue while balancing its benefits for recruiting retention and efficient capital allocation.

Transportation remains one of our most stable and resilient end markets delivering double digit growth year to date our.

Our expanding client base spans a broader range of state and municipal transfer rate transportation agencies than ever before.

We're deeply engaged across state programs and large local agencies throughout the Pacific Northwest Midwest and East Coast, where our teams are supporting multi year bridge roadway and multimodal infrastructure programs.

Thank you for your continued confidence in Beaumont with that I'll turn the call back over to Gary.

Our long standing relationship with Dot's continued to be a key competitive advantage, creating recurring opportunities as agency partners with both specialized technical expertise and the capacity to scale across geographies.

Our margins and cash efficient efficiency place us solidly in line with the best performing firms in the E&C space.

Bruce Labovitz: We ended the quarter with a record $448 million backlog, up 18% year-over-year, with 38% of that backlog from building infrastructure, 30% for transportation, 23% from power and utilities, and 9% from natural resources and imaging. This imbalance relative to revenue should indicate continuing diversification of our revenue mix, but it's likely not as dramatic as the percentages in backlog today reflect. Operating cash flow totaled $10.2 million for the quarter and sits at $26.5 million year-to-date, both more than twice last year's levels. While we are pleased with this significant increase in conversion, we're confident there is room for continuing improvement. Our balance sheet remains a strength and provides a solid foundation for growth. We ended the quarter with $16 million in cash and $57 million drawn in our revolver, a net debt of approximately $105 million with a net leverage ratio of 1.5 times trailing 12-month adjusted EBITDA.

Okay.

Now, let me take a few minutes to share a summary of our market performance and outlook as we move into 2026.

We currently have strong bridge and roadway pipelines with backlog visibility through 2026, we.

Transportation remains one of our most stable and resilient end markets delivering double digit growth year to date our.

We continue to benefit from recurring construction management and inspection programs with multiple state agencies, including a major multi year assignment with Illinois.

Our expanding client base spans a broader range of state and municipal transfer rate transportation agencies than ever before.

Our ports and harbors practice, which is part of our transportation segment continues to gain momentum with coastal and port authorities, extending our reach into critical intermodal and maritime infrastructure projects and regions, including Houston, Philadelphia and the Pacific Northwest.

We're deeply engaged across state Dod programs and large local agencies throughout the Pacific Northwest Midwest and East Coast, where our teams are supporting multi year bridge roadway and multimodal infrastructure programs.

We have a growing active backlog in ports and harbors much anticipated wins, continuing through 2026 and existing and new geographies.

Overall, we expect transportation to maintain steady healthy growth.

Less than 25% of II JA funds have been released so far for permitted transportation projects, which we believe coupled with state programs insurance multiyear nationwide demand runway.

We currently have strong bridge and roadway pipelines with backlog visibility through 2026, we.

Bruce Labovitz: After quarter-end, we expanded our revolver to $210 million from $140 million, adding PNC Bank to the existing Bank of America and TD Bank syndicate. As a result, we have roughly $150 million in available liquidity for investment and growth initiatives. Our internal innovation incubator, the Big Fund, continues to produce high-value ideas and opportunities that present the prospect of tangible returns for us long-term. We're actively engaged in advancing concepts that accelerate revenue growth through the deployment of proprietary AI-enabled asset control kits, which extend engagement with clients throughout the asset lifecycle. With concepts that expand the application of the proprietary technology tools we acquired in the recent Orkus acquisition, which drastically reduced the time it takes to perform repetitive feasibility and planning functions, thereby unlocking additional labor utilization.

We continue to benefit from recurring construction management and inspection programs with multiple state agencies, including a major multiyear assignment with Illinois.

We expect transportation will continue to provide the backbone of stability and recurring revenue across our portfolio.

Our power utilities and energy Division continues to be our fastest growing market up 38% year over year and driven by national investment in electrification renewables grid modernization and data infrastructure.

We have a growing active backlog in ports and harbors much anticipated wins, continuing through 2026 and existing and new geographies.

The recent acquisitions of Sierra overhead analytics forecast and laser power engineering significantly enhance our strategic positioning within this high growth market.

Overall, we expect transportation to maintain steady healthy growth.

Sierra and its affiliate <unk> expand our capabilities and technology enabled engineering, adding automation precision mapping hydrology and optimization tools that improve project delivery and efficiency across renewable energy datacenter and utility scale infrastructure design.

Less than 25% of II JA funds had been released so far for permitted transportation projects.

Which we believe coupled with state programs insurance multi year nationwide demand runway.

Bruce Labovitz: Also, concepts that connect all Bowman operating systems and platforms with AI-enabled capabilities, which empower employees to ask Bowman plain English questions, the timely, informed answers to which improve business acquisition efforts, and streamline proposal generation, estimation, and profitable project execution. Lastly, we're working on ideas that modify, extend, and evolve the inherent capabilities and uses of our high-end geospatial assets to expand their applications, improve the quality of capture, extend revenue opportunities, shorten delivery times, and increase return on investment. All investments in innovation are measured against defined return thresholds, ensuring innovation spending meets the same rigorous financial discipline as acquisitions. To date, we have expended a little bit over $300,000 on advancing these ideas, the cost of which is not added back to adjusted EBITDA, and the benefits of which are not yet contemplated in our current projections.

We expect transportation will continue to provide the backbone of stability and recurring revenue across our portfolio.

These digital solutions strengthen our ability to provide faster smarter and more cost efficient design workflows to clients in the power and energy transition space.

The additional <unk> establishes our platform in high voltage overhead transmission line design immediately positioning us to compete in one of the fastest growing recurring revenue segments of the power industry.

The recent acquisitions of Sierra overhead analytics forecast and laser power engineering significantly enhance our strategic positioning within this high growth market.

Ladies and his expertise enhances our credentials with major utilities and transportation operators transmission operators, while complementing our advanced geospatial and aerial imaging services for power and corridor mapping.

Sierra and its affiliate ARCUS expand our capabilities and technology enabled engineering, adding automation precision mapping hydrology and optimization tools that improve project delivery and efficiency across renewable energy datacenter and utility scale infrastructure design.

Together these acquisitions broadened our reach across the generation to grid continuum connecting our existing strengths and site design renewables in data centers with the infrastructure that delivers power across the U S.

Looking forward power utilities and energy represent a long term growth engine for US. We expect continued revenue and margin expansion in 2026 as integration matures, our national footprint expands and our clients increasingly turn to us for end to end power infrastructure solutions.

These digital solutions strengthen our ability to provide faster smarter and more cost efficient design workflows to clients in the power and energy transition space.

Bruce Labovitz: While not a Big Fund project, we also completed the upgrade of our accounting and enterprise management platform this quarter, an effort that consumed a meaningful amount of time and energy but will be a solid foundation for our next phase of growth. These costs were likewise not added back to adjusted EBITDA. It wouldn't be an earnings call if I didn't reference tax, so here goes. Following enactment of OB-3, we filed message change notifications with the IRS that allowed us to unwind our uncertain tax position with retroactive audit protection. The change in law and associated adoption by Bowman of the new standards released approximately $52 million of deferred tax assets and other non-current liabilities on our balance sheet, and released $3.5 million in P&I accruals, which had previously run through the tax expense.

The additional evasion establishes our platform in high voltage overhead transmission line design immediately positioning us to compete in one of the fastest growing recurring revenue segments of the power industry.

Our well balanced building infrastructure business grew by just over 8% year over year and gross revenue, reflecting solid execution in public and mixed use work that continues to balanced softer conditions in the residential space.

While some private development remains slightly constrained by interest rates, we see clear rebound potential emerging in mid to late 2026 as financing conditions improve.

Our current building infrastructure projects continue to generate long term revenue visibility through 2027.

And we remain well positioned to capture renewed private sector growth as market conditions improve.

Looking forward, our utilities and energy represent a long term growth engine for US. We expect continued revenue and margin expansion in 2026 as integration matures, our national footprint expands and our clients increasingly turn to us for end to end power infrastructure solutions.

Bruce Labovitz: In addition to committing to GAAP profitability and cash flow conversion, we also committed to the reduction of non-cash stock compensation as a percentage of revenue. For the first nine months of 2025, stock-based compensation totaled $14.2 million, or 4.4% of net service billing, down from 7.3% a year earlier. Excluding about $1 million of pre-IPO-related issuances, adjusted stock-based compensation was approximately 4.1% of net revenue. As we've discussed in the past, these pre-IPO grant expenses represent the run-out of GAAP costs related to awards issued prior to our IPO in 2021 and are not part of normalized long-term incentive costs. We expect total non-cash stock compensation for 2025 and 2026 to be roughly $19 and $20.5 million, respectively, which is consistent with our pledge to reduce equity compensation as a percentage of revenue while balancing its benefits for recruiting, retention, and efficient capital allocation.

Our natural resources and imaging segment remains a steady performer and margin stabilizer, representing roughly 11% of our net service revenue.

We have robust visibility into 2026, and this market supported by recurring federal programs and strong municipal demand in water environmental and Geospatial services.

Automation and recurring federal mapping programs will continue to underpin growth in this segment and our geospatial and remote sensing services continue to enhance efficiency across our broader business.

While some private development remains slightly constrained by interest rates, we see clear rebound potential emerging in mid to late 2026th as financing conditions improve.

Operating margins in this market remain among the highest companywide and we expect growth to be driven by technology enabled delivery and long term public sector finance funding.

Our current building infrastructure projects continue to generate long term revenue visibility through 2027.

Now I'd like to address the current operating environment, which includes the government shutdown.

And we remain well positioned to capture renewed private sector growth as market conditions improve.

While the shutdown is causing some delays in project progression invoicing collections within select federally supported programs and federally adjacent projects our direct exposure to federal contracts remains limited and we are not experiencing any unusual cancellation activity.

Our natural resources and imaging segment remains a steady performer and margin stabilizer, representing roughly 11% of our net service revenue.

Bruce Labovitz: Thank you for your continued confidence in Bowman. With that, I'll turn the call back over to Gary.

We have robust visibility into 2026, and this market supported by recurring federal programs and strong municipal demand in water environmental and Geospatial services.

Gary Bowman: Thank you, Bruce. As Bruce mentioned, our improved profitability and working capital management once again drove strong cash flow this quarter, with cash conversion now at about 50% year-to-date. Our margins and cash efficiency place us solidly in line with the best-performing firms in the EMC space. Let me take a few minutes to share a summary of our market performance and outlook as we move into 2026. Transportation remains one of our most stable and resilient end markets, delivering double-digit growth year-to-date. Our expanding client base spans a broader range of state and municipal transportation agencies than ever before. We're deeply engaged across state DOT programs and large local agencies throughout the Pacific Northwest, Midwest, and East Coast, where our teams are supporting multi-year bridge, roadway, and multimodal infrastructure programs.

Most of our public sector work is performed for state and local governments, which provide a natural buffer to extended interruptions such as the current government shutdown.

We continue to monitor this particular situation closely noting that the longer the shutdown continues the more likely it is to extend near term revenue somewhat further into the future.

Operating margins in this market remain among the highest companywide and we expect growth to be driven by technology enabled delivery and long term public sector finance funding.

Looking ahead, our focus remains clear we.

We will continue to convert backlog into revenue, while improving utilization and project delivery efficiency.

Now I'd like to address the current operating environment, which includes the government shutdown.

We will aggressively leverage technology and innovation to enhance margins and scalability.

While the shutdown is causing some delays in project progression invoicing collections within select federally supported programs and federally adjacent projects.

And we will deploy capital strategically through disciplined M&A and organic growth derived from continued investment in people and systems.

Our direct exposure to federal contracts remains limited.

We are reaffirming we are reaffirming our full year 2025 guidance.

And we are not experiencing any unusual cancellation activity.

We're also initiating 2026 guidance of net revenue between $465 and $480 million and an adjusted EBITDA margin between 17% and 17, 5%.

Most of our public sector work is performed for state and local governments, which provide a natural buffer to extended interruptions such as the current government shutdown.

Gary Bowman: Our longstanding relationship with DOTs continues to be a key competitive advantage, creating recurring opportunities as agencies seek partners with both specialized technical expertise and the capacity to scale across geographies. We currently have strong bridge and roadway pipelines with backlog visibility through 2026. We continue to benefit from recurring construction management and inspection programs with multiple state agencies, including a major multi-year assignment with Illinois. Our ports and harbors practice, which is part of our transportation segment, continues to gain momentum with coastal and port authorities, extending our reach into critical intermodal and maritime infrastructure projects in regions including Houston, Philadelphia, and the Pacific Northwest. We have a growing active backlog in ports and harbors, with anticipated winds continuing through 2026 in existing and new geographies. Overall, we expect transportation to maintain steady, healthy growth.

We continue to monitor this particular situation closely noting that the longer the shutdown continues the more likely it is to extend near term revenue somewhat further into the future.

With that I'll now turn the call back to Jasmine for questions.

Thank you we will now begin the Q&A portion of the call.

Looking ahead, our focus remains clear we.

I would like to ask a question. Please press star followed by one on your telephone keypad.

We will continue to convert backlog into revenue, while improving utilization and project delivery efficiency.

We're moving a question press star followed by two again to ask a question press Star one.

We will aggressively leverage technology and innovation to enhance margins and scalability.

As a reminder.

Speakerphone, please pick up your handset before asking a question.

And we will deploy capital strategically through disciplined M&A and organic growth derived from continued investment in people and systems.

We'll pause briefly ask questions a registry.

Yeah.

We are reaffirming reaffirming our full year 2025 guidance.

Our first question comes from Laura EMEA.

Riley Securities you May now proceed.

We're also initiating 2026 guidance of net revenue between $465 and $480 million and an adjusted EBITDA margin between 17% and 17, 5%.

Good morning, Gary and Brian Thanks for taking the question.

Good morning.

So some of the larger specialty contractors has mentioned the total operations packages do you see this create on competitive pressure in your data center business.

With that I'll now turn the call back to Jasmine for questions.

Thank you we will now begin the Q&A portion of the club.

Gary Bowman: Less than 25% of IIJA funds have been released so far for permitted transportation projects, which we believe, coupled with state programs, ensures a multi-year nationwide demand runway. We expect transportation will continue to provide the backbone of stability and recurring revenue across our portfolio. Our power, utilities, and energy division continues to be our fastest-growing market, up 38% year-over-year, and driven by national investment in electrification, renewables, grid modernization, and data infrastructure. The recent acquisitions of Sierra Overhead Analytics, Orkus, and Lazen Power Engineering significantly enhance our strategic positioning within this high-growth market. Sierra and its affiliate Orkus expand our capabilities in technology-enabled engineering, adding automation, precision mapping, hydrology, and optimization tools that improve project delivery and efficiency across renewable energy, data center, and utility-scale infrastructure design.

No I don't think that that's going to.

I would like to ask a question. Please press star followed by one on your telephone keypad.

Compete on any of the work that we do I think.

To remove your question Chris starts I would like to.

Similar to any trends in design build or that don't necessarily compete with with other industries.

Again to ask a question please.

As a reminder.

A speaker phone.

Please limit you pick up your handset before asking a question, we'll pause briefly ask questions a registry.

I think it's a big market in and.

Even when firms offer complete solutions, they end up sub contracting.

So thats a specialized contractors like us anyway, so I don't think Thats a real threat.

Our first question comes from Laura EMEA with B Riley Securities You May now proceed.

I agree with that.

Good morning, Gary and Brian Thanks for taking the call everyone.

Great. Thanks, and then one more.

M&A are there specific service lines or regions, where you still see gaps relative T aircrafts objective.

Good morning.

So some of the larger specialty contractors had mentioned perforation packages do you see this create on competitive pressure in your data center business.

Yes.

Really focused on some of these markets that we've been focused on expanding into four for four years now.

No I don't think that that's going to.

And Pete on any of the work that we do I think it's similar to any trends in design build or that don't necessarily compete with with other industries.

Transportation, certainly power and energy and data centers.

And also water related opportunities as they come along.

No specific regions were focused on.

Gary Bowman: These digital solutions strengthen our ability to provide faster, smarter, and more cost-efficient design workflows to clients in the power and energy transition space. The addition of Lazen establishes our platform in high-voltage overhead transmission line design, immediately positioning us to compete in one of the fastest-growing recurring revenue segments of the power industry. Lazen's expertise enhances our credentials with major utilities and transportation transmission operators, while complementing our advanced geospatial and aerial imaging services for power corridor mapping. Together, these acquisitions broaden our reach across the generation-to-grid continuum, connecting our existing strengths in site design, renewables, and data centers with the infrastructure that delivers power across the US. Looking forward, power, utilities, and energy represent a long-term growth engine for us. We expect continued revenue and margin expansion in 2026 as integration matures, our national footprint expands, and our clients increasingly turn to us for end-to-end power infrastructure solutions.

I think it's a big market and <unk>.

Find the usual suspects appealing, Texas, California.

Even when firms offer complete solutions, they end up sub contracting good pork.

The southeast, but we're not particularly focused on any particular region in the U S.

So that two specialized contractors like us anyway, so I don't think Thats a real threat.

More service line and skill set focused in and then it is geographically focused.

I agree with that.

Great. Thanks, and then one more.

On M&A are there specific service lines or regions, where you still see gaps relative T aircrafts objective.

Great. Thanks, I'll pass it on.

Thank you <unk>.

Thank you. Our next question comes from Andy Wittmann with Baird You May now proceed.

Yes.

Really focused on some of these markets that we've been focused on expanding into four for four years, now, especially transportation, certainly power and energy and data centers.

Good morning, Andy.

Okay great.

Hey, good morning.

Let's I guess I'll start with some top line questions here it looks like the fourth quarter Guy.

And also water related opportunities as they come along.

Guidance here for 25 isn't.

It's implying a bit of a revenue acceleration.

No specific regions were focused on.

To something in the double digits. So.

We find the usual suspects appealing, Texas, California.

That's right Bruce I was just wondering if you could comment on which end markets you think will pick up.

The southeast, but we're not particularly focused on any particular region of the U S. It's more service line and skill set focused in.

The growth rate here as we move into the fourth quarter and what gives you confidence in that.

And then it is geographically focused.

Yeah. The pickups, a couple of days' worth of work its not I don't know that I would necessarily say, it's anything extraordinary.

Gary Bowman: Our well-balanced building infrastructure business grew by just over 8% year-over-year in gross revenue, reflecting solid execution in public and mixed-use work that continues to balance softer conditions in the residential space. While some private development remains slightly constrained by interest rates, we see clear rebound potential emerging in mid to late 2026 as financing conditions improve. Our current building infrastructure projects continue to generate long-term revenue visibility through 2027. We remain well-positioned to capture renewed private sector growth as market conditions improve. Our natural resources and imaging segment remains a steady performer and margin stabilizer, representing roughly 11% of our net service revenue. We have robust visibility into 2026 in this market, supported by recurring federal programs, and strong municipal demand in water, environmental, and geospatial services.

Great. Thanks, I'll pass it on.

Thank you <unk>.

We think that across the board, we've got a healthy backlog of work.

Thank you.

Next question comes from Andy Wittmann with Baird you May now proceed.

That is making its way through sales are strong in all of the sales have been strong in what we consider to be shorter term term contracts areas. We can earn revenue relatively quickly. So we have a good sense that.

Good morning, Andy.

Okay great.

Hey, good morning.

Okay.

I guess I'll start with some top line questions here it looks like the fourth quarter guide.

With.

With what would be a couple of days' worth of improvement in the fourth quarter, we can grow revenue.

Guidance here for 25 isn't.

It's implying a bit of a revenue acceleration.

To something in the double digits. So.

A couple of sorry Bruce.

That's right Bruce I was just wondering if you could comment on which end markets you think will pick up.

The idea of a couple of value worth of work days in the fourth quarter of 'twenty.

No I'm, just saying that we have it.

The growth rate here as we move into the fourth quarter and what gives you confidence in that.

Is that the amount of revenue that is to be to be accelerated as the equivalent of just a couple of days, where the work. So a coupled of improved utilization week here and there.

Yeah. The pickups, a couple of days' worth of work its not I don't know that I would necessarily say, it's anything extraordinary.

Got it okay. Okay. Okay. Okay.

We think that across the board, we've got a healthy backlog of work.

Gary Bowman: Automation and recurring federal mapping programs will continue to underpin growth in this segment, and our geospatial and remote sensing services continue to enhance efficiency across our broader business. Operating margins in this market remain among the highest company-wide, and we expect growth to be driven by technology-enabled delivery, and long-term public sector funding. Now, I'd like to address the current operating environment, which includes the government shutdown. While the shutdown is causing some delays in project progression, invoicing, collections within select federally supported programs, and federally adjacent projects, our direct exposure to federal contracts remains limited, and we are not experiencing any unusual cancellation activity. Most of our public sector work is performed for state and local governments, which provide a natural buffer to extended interruptions such as the current government shutdown.

Yes, we don't do the days of the quarter gain like we quarters do have extra days more holidays, but we really just think of the next quarters.

Yeah, Yeah, that's what I thought that's why when you were talking about days worth of work I was trying to make sure that I just thought I'd put it is basically think get a little bit more utilization out of the people.

What would be a couple of days' worth of improvement in the fourth quarter, we can grow revenue.

What's really great about that that accrues to the margins even better so.

A couple of sorry Bruce.

Got it that makes sense and then I guess just kind of related to that.

The idea of a couple of value worth of work days in the fourth quarter of 'twenty.

And the performance in the third quarter.

I thought I'd ask a little bit about margins there too and you know your business mix is changing a lot as you've been diversifying. So I just was wondering and maybe I missed a little bit of a comment that the early part of the conference call, but did you comment on the margins I guess, they were where they're down slightly year over year was that like investments in <unk>.

No I'm, just saying that we have is.

Is that the amount of revenue that has to be to be accelerated as the equivalent of just a couple of days' worth of work. So a coupled of improved utilization week here and there.

Got it okay. Okay. Okay. Okay.

We don't do the yes.

<unk> was that utilization rates was that mix.

Yes, we don't do the days of the quarter gain like we quarters do have extra days in more holidays, but we really just think of them as quarters.

Gary Bowman: We continue to monitor this particular situation closely, noting that the longer the shutdown continues, the more likely it is to extend near-term revenue somewhat further into the future. Looking ahead, our focus remains clear. We'll continue to convert backlog into revenue while improving utilization and project delivery efficiency. We will aggressively leverage technology and innovation to enhance margins and scalability, and we'll deploy capital strategically through disciplined M&A and organic growth derived from continued investment in people and systems. We're reaffirming our full year 2025 guidance. We're also initiating 2026 guidance of net revenue between $465 and $480 million, and an adjusted EBITDA margin between 17% and 17.5%. With that, I'll now turn the call back to Jasmine for questions.

Every quarter is kind of its own thing, but I wanted to try to understand that a little bit better is it how is it compared to the prior year.

Yeah, Yeah, that's what I thought that's why when you were talking about days worth of work I was trying to yes. So I'll just try to put it just briefly I think get a little bit more utilization out of the people.

Yeah, I think Andy every year as you said.

Every quarter is a little bit different we talk about how we time labor sometimes can can impact margins you have to prepare for what's coming next and so sometimes we'll get a little bit heavy on labor.

What's really great about that that accrues to the margins even better so.

So that makes sense and then I guess, just kind of related to that in the <unk>.

Quarter in anticipation of stronger growth in the next quarter.

Performance in the third quarter I thought I'd ask a little bit about margins there too in your business mix is changing a lot as you've been diversifying. So I just was wondering and maybe I missed a little bit of a comment that the early part of the conference call, but did you comment on the margins I guess, there where they're down slightly year.

We are not downsizing labor.

At the <unk> contrary to two employment reports come out we're in the higher end game and so when will they ever becomes available we take it.

The margin change there's a couple of hundred thousand dollars worth of revenue on this fixed set of labor. So we talk about our band today is at 16% to 18% margin will fall in there between periods.

The year was that like investments in growth was that utilization rates was that mix.

Every quarter is kind of its own thing, but I wanted to try to understand that a little bit better or is it how is it compared to the prior year.

So I do think there is anything to read into.

Operator: Thank you. We will now begin the Q&A portion of the call. If you would like to ask a question, please press Star followed by 1 on your telephone keypad. To remove your question, press Star followed by 2. Again, to ask a question, press Star 1. As a reminder, if you're using a speakerphone, please remember to pick up your headset before asking a question. We will pause briefly as questions are registered. Our first question comes from Laura Mayer with B-Riley Securities. You may now proceed.

40 basis point change between last year and this year in <unk>.

Yes, I think Andy every year as you said every quarter is a little bit different we talk about how we time labor sometimes can can impact margins you have to prepare for what's coming next and so sometimes we'll get a little bit heavy on labor and in a quarter in anticipation of stronger growth in the next quarter.

Okay.

Okay, and then I guess, there's a similar question that just happened since you gave us initial guidance for 'twenty six.

Your margins are either up a little or up a little bit more to the 17% to 17% range. Obviously this is a mistake.

We are not downsizing labor.

That'd be good.

Good year.

Ammonia contrary to two employment reports come out we are in the hiring game and so when will they ever becomes available we take it.

To be able to get the margins up there and I was just wondering kind of what what the what the knobs are to get you. There next year you talked about the overhead leverage I have to imagine that's a big part of it but but what other things there's mix in your favor.

The margin change there's a couple of hundred thousand dollars worth of revenue on this fixed set of labor. So we talk about our band today is at 16% to 18% margin will fall in there between periods.

Aaron Spychalla: Good morning, Gary and Bruce. Thanks for taking the question.

Bruce Labovitz: Morning.

Maybe just want to just kind of fill us into what do you think is going to drive.

Aaron Spychalla: Some of the larger specialty contractors have mentioned Total Solutions packages. Do you see this creating competitive pressure in your data center business?

The year over year margin expansion in 'twenty six.

Yeah in large part I think it is improved overhead leverage right. We continue to be very focused on growing revenue faster than we grow overhead. So there is additional <unk>.

So I don't think theres anything to read into.

Yes.

40 basis points change between last year and this year in margin.

Bruce Labovitz: No, I don't think that that's going to impede on any of the work that we do. I think it's similar to any trends in design build or that don't necessarily compete with other industries. I think it's a big market, and even when firms offer complete solutions, they end up subcontracting a good portion of that to specialized contractors like us anyway. I don't think that's a real threat.

Okay, and then I guess there was a similar question that just happened since you gave us initial guidance for 'twenty six.

Margin expansion to be had from that Theres also.

Improved utilization of our labor. So we look at next year and we look at the mix of work. We think we can do it at a slightly higher revenue factor, which is our internal measurement of the efficiency of our labor and so we gain a little bit of margin.

Your margins are either up a little or up a little bit more to.

So the 17% to 17% range.

This is.

That'd be.

Good year.

Which is somewhat embedded in that total overhead.

Do you think about it because we kind of combine those together, but but it's really a combination of.

Gary Bowman: No, I agree with that.

The way, where we are utilizing geospatial technologies and technologies that exist today to advance the efficiency of the work.

Aaron Spychalla: Great, thanks. One more. On M&A, are there specific service lines or regions where you still see gaps relative to your growth objectives?

Maybe just want to just kind of filter into what do you think is going to drive.

The year over year margin expansion in 2006.

The workforce and grow revenue quicker than we're growing overhead.

Yeah in large part I think it is improved overhead leverage right. We continue to be very focused on growing revenue faster than we grow overhead. So there is additional.

Gary Bowman: Yes. We're really focused on some of these markets that we've been focused on expanding into for years now, especially transportation, certainly power and energy, and data centers, and also water-related opportunities as they come along. No specific regions we're focused on. We find the, I'll say, usual suspects appealing: Texas, California, Southeast, but we're not particularly focused on any particular region of the US.

Okay great.

I think I'll leave it there thanks for.

Margin expansion to be had from that Theres also.

Thanks Randy.

Well see you soon at your conference.

Proved utilization of our labor. So we look at next year and we look at the mix of work.

Thank you.

Next question comes from Alex Rygiel with Barclays Capital You May now proceed.

We think we can do it at a slightly higher revenue factor, which is our internal measurement of the efficiency of our labor until we gain a little bit of margin.

Good morning, guys.

Good morning, Bruce and Gary.

Very nice quarter there.

Which is somewhat embedded in that total overhead.

As it relates to data centers can you talk a bit about bidding opportunities.

Think about it because we kind of combine those together, but but it's really a combination of.

Bruce Labovitz: It's more service line and skill set focused than it is geographically focused.

And how you see that progressing sort of in 2026 versus maybe 2025, and 2024 are you seeing sort of bidding opportunities or.

The way, where we are utilizing geospatial technologies and technologies that exist today to advance the efficiency of the work.

Aaron Spychalla: Great. Thanks. I'll pass it on.

New project opportunities to be greater than the prior year or as the average project.

Gary Bowman: Thank you, Laura.

Bruce Labovitz: Thanks.

Operator: Thank you. Our next question comes from Andy Whitman with Barrett. You may now proceed.

The workforce and grow revenue quicker than we're growing overhead.

Or contract size kind of greater than they had been in the past year. So just a little bit of color on on that.

Bruce Labovitz: Morning, Andy.

Yeah, Alex it's certainly.

Jeff Martin: Yeah, great. Hey, good morning. I guess I'll start with some top-line questions here. It looks like the fourth-quarter guidance here for 2025 is implying a bit of a revenue acceleration to something in the double digits. That's right. Bruce, I was just wondering if you could comment on which end markets you think will pick up the growth rate here as you move into the fourth quarter, and what gives you confidence in that?

Okay great.

I think I'll leave it there thanks for.

Certainly <unk> in that market. So so.

Thank you Andrew.

Yeah.

Well see you soon at your conference.

Continuing greater number of opportunities.

Thank you.

The facilities are.

Next question comes from Alex Slagle with Barclays Capital You May now proceed.

We are getting larger.

Really as the data centers, we've spoken to this as well.

Good morning.

Good morning, Bruce and Gary Fair.

Very nice quarter there.

With AI as opposed to before the lack of being critical to be.

As it relates to data centers can you talk a bit about bidding opportunities.

Located proximate to fiber.

And how you see that progressing sort of in 2026 versus maybe 2025, and 2024 are you seeing sort of bidding opportunities or.

Just provides a lot more opportunities for data centers spread out across the country, we're seeing.

Bruce Labovitz: Yeah, it'll pick up a couple of days' worth of work. It's not—I don't know that I would necessarily say it's anything extraordinary. We think that across the board, we've got a healthy backlog of work that's making its way through. Sales are strong, and a lot of the sales have been strong in what we consider to be shorter-term turn contracts, areas we can earn revenue relatively quickly. We have a good sense that with what would be a couple of days' worth of improvement in the fourth quarter, we'll grow revenue.

New project opportunities to be greater than the prior year or as the average project.

Lots of.

Drivers to relocate Datacenters near natural gas to power them.

Or contract size kind of greater than they had been in the past years, just a little bit of color on on that.

And and our acquisition of <unk> as an example, just has expanded our network so that in itself expands our opportunities.

Yeah, Alex it's.

Certainly <unk> in that market. So so.

Alex I will take that.

Yeah.

Data centers have become the hot ticket item for landowners and so some extent theres a little bit of Phantom amount of data center work that occurs within our building infrastructure portfolio, because when when landowners come to as I say what are the options, we want our projects to be a datacenter right with everybody wants their pre.

Continuing greater number of opportunities.

The facilities are getting larger.

Really as the data centers, we've spoken to this as you know with.

Jeff Martin: Sorry, Bruce. The idea of a couple of days' worth of workdays in the fourth quarter of 2020?

With AI as opposed to before.

The lack of being critical to be.

Bruce Labovitz: No, I'm just saying that we have. The amount of revenue that is to be accelerated is the equivalent of just a couple of days' worth of work, a couple of improved utilization weeks here and there.

Now to be a datacenter there's feasibility work, we do within that building infrastructure segment related to data centers, but until it becomes a data center. It doesn't really become part of the kind of what we call the data center.

Located proximate to fiber.

Just provides a lot more opportunities for data centers spread out across the country, we're seeing.

Lots of.

Drivers to relocate Datacenters near natural gas to power them.

Jeff Martin: Got it. Okay. Okay. Okay.

Our portfolio of revenue so there's a little bit of because there is a <unk>.

Bruce Labovitz: Yeah, we don't do the—yeah, we don't do the days of the quarter game. Quarters do have extra days and more holidays, but we really just think of them as quarters.

And and our acquisition of <unk> as an example, just has expanded our network so that in itself expands our opportunities.

Increased availability of opportunity for land to the data center.

There is there is more activity on it.

And to take that another step.

Alex I would say that the data centers have become the hot ticket item for landowners and so some extent theres little bit of Phantom amount of data center work that occurs within our building infrastructure portfolio, because when when landowners come to as I say what are the options, we want our projects to be a data center.

Jeff Martin: Yeah. Yeah. That's what I thought. That's why when you were talking about days' worth of work, I was trying to make sure that we're—

Clearly landowners in the past had seen sort of stoller as being a big opportunity, how do you see or solar or solar business right now and sort of as we think about the next one to two years.

Bruce Labovitz: Yeah, I just want to put it in briefly, saying get a little bit more utilization out of the people. What's really great about that is that it accrues to the margins even better. Got it. That makes sense. I guess just kind of related to that, in the performance in the third quarter, I thought I'd ask a little bit about margins there too. Your business mix is changing a lot as you've been diversifying. I just was wondering, and maybe I missed a little bit of the comments at the early part of the conference call, did you comment on the margins? I guess they were down slightly year over year. Was that investments in growth? Was that utilization rates? Was that mix?

Oh for for the next year, we're seeing it very strong it's really being driven by.

The Oh I guess.

Right because everybody wants their project out to be a datacenter. There's feasibility work, we do within that building infrastructure segment related to data centers, but until it becomes a data center. It doesn't really become part of the kind of what we call the data center.

A moment in the tax credits next year, that's driving a lot of demand accelerate planning.

Our projects to get.

To get to get a critical mass of a project done before the middle of next year. So we see it.

Portfolio of revenue, so there's a little bit because there is an increased availability of opportunity for land to the data center.

We see a very strong in 2026.

It's certainly likely to taper off in 2027, but we were well positioned in that market and the development of solar projects is not going to go away. So we see a very strong 2026 cautious outlook after that.

Bruce Labovitz: Every quarter is kind of its own thing, but I wanted to try to understand that a little bit better as it compared to the prior year. Yeah. Yeah, I think, Andy, every year, as you said, every quarter is a little bit different. We talk about how we time labor sometimes can impact margins. You have to prepare for what's coming next. Sometimes we'll get a little bit heavy on labor in a quarter in anticipation of stronger growth in the next quarter. We are not downsizing labor. At the moment, contrary to employment reports that come out, we're in the hiring game. When labor becomes available, we take it. The margin change is a couple hundred thousand dollars' worth of revenue on this fixed set of labor. We talk about our band today is a 16% to 18% margin.

There is more activity on it.

And to take that another step.

Clearly landowners in the past had seen sort of still are seeing a big opportunity, how do you see or solar or solar business right now and sort of as we think about the next one to two years.

Excellent and then lastly.

Your M&A activity this year.

A little bit slower.

Oh for for the next year, we're seeing it very strong it's really being driven by.

Then the last few years and any comment on that and how we can think about the M&A activity in 2026.

The Oh I guess.

Yeah.

We're still committed to M&A.

A moment in the tax credits next year, that's driving a lot of demand to accelerate our planning.

I have a strong pipeline of opportunities.

I think we've we've shifted maybe more focus of our M&A to really focus on strategic opportunities.

Our projects to get.

To get to get to critical mass the project done before the middle of next year. So we see it.

And certainly with the new revolver in place and that dry powder really positions us for some strong M&A activity.

We see a very strong in 2026.

Certainly likely to taper off in 2027, but we were well positioned in that market and the development of solar projects is not going to go away. So we see a very strong 2026 cautious outlook after that.

Bruce Labovitz: We'll fall in there between periods. I don't think there's anything to read into, a 40 basis point change between last year and this year in margin.

Towards the end of this year and certainly into 2027. So we are we're still.

Fully committed to inorganic growth to supplement our organic growth.

Jeff Martin: Okay. Okay. I guess there's a similar question that just happened since you gave us initial guidance for 2026. Your margins are either up a little or up a little bit more to the 17% to 17.5% range. Obviously, this is a—that'd be, I think, a good year to be able to get the margins up there. I was just wondering kind of what the knobs are to get you there next year. You talked about the overhead leverage. I have to imagine that's a big part of it. What other things? Is mix in your favor? Maybe Bruce wants you to just kind of fill us in to what do you think is going to drive the year-over-year margin expansion in 2026?

Great. Thank you very much.

Excellent and then lastly.

Thanks Ross.

Your M&A activity this year.

Thank you.

A little bit slower.

Our next question comes from Eric <unk> with Craig Hallum, You May now proceed.

Then the last few years any comment on that and how we can think about M&A activity in 2026.

Good morning Air Yeah, Good morning, Gary and Bruce Thanks for taking the questions. Good morning.

Yeah.

We're still committed to M&A.

I have a strong pipeline of opportunities.

Maybe first on building infrastructure can you kind of talk about how youre thinking about growth in that segment in 2026. It sounds like there's some crosscurrents between some of the some of the sub areas and just maybe talk about your ability to kind of.

I think we've we've shifted maybe more focus of our M&A to really focus on strategic opportunities.

And certainly with the new revolver in place and that dry powder really positions us for some strong M&A activity.

Move labor or you know kind of projects kind of ebb and flow in that segment.

Towards the end of this year and certainly into 2027. So we are we're still.

Bruce Labovitz: Yeah. In large part, I think it is improved overhead leverage, right? We continue to be very focused on growing revenue faster than we grow overhead, so there's additional margin expansion to be had from that. There's also improved utilization of our labor. If we look at next year and we look at the mix of work, we think we can do it at a slightly higher revenue factor, which is our internal measurement of the efficiency of our labor. We gain a little bit of margin, which is somewhat embedded in that total overhead when you think about it, because we kind of combine those together. It's really a combination of the way we are utilizing geospatial technologies and technologies that exist today to advance the efficiency of the workforce and grow revenue quicker than we're growing overhead.

Well.

It's a nice thing about our business as the skill set.

Fully committed to inorganic growth to supplement our organic growth.

Excuse me.

That we that we apply to building infrastructure is transferable to many of our other markets.

Great. Thank you very much.

Thanks Ross.

So we do move that labor around readily.

Thank you.

Our next question comes from Aaron Kessler with Craig Hallum, You May now proceed.

Where we're seeing with the interest rate decline.

We're seeing projects come off the shelf.

Good morning Air Yeah, Good morning, Gary and Bruce Thanks for taking the questions. Good morning.

Earlier in the year little more localized geographically as we come into the end of the year here, we're seeing it more broadly across the.

Maybe first on building infrastructure.

Can you kind of talk about how youre thinking about growth in that segment in 2026, it sounds like there's some crosscurrents between some of the some of the sub areas and just maybe talk about your ability to kind of.

The geographies that we're located in so where are we.

We're probably looking at in 2026, maybe as we allocate labor.

But I would I would bet.

Move labor or you know kind of projects kind of ebb and flow in that segment.

The directionality would be some labor allocated towards the building infrastructure as opposed to away from it.

Well it's.

It's a nice thing about our business as the skill set.

With me.

That we that we apply to building infrastructure is transferable to many of our other markets.

Jeff Martin: Okay. Great. I think I'll leave it there. Thanks for your time.

Alright, Thanks for that and then maybe you know on Opex. Just there was an earlier question, but you know kind of a pick up in SG&A.

Bruce Labovitz: Thanks, Andy.

Gary Bowman: Thanks, Andy.

Bruce Labovitz: We'll see you soon at your conference.

So we we we do move that labor around readily.

Operator: Thank you. Our next question comes from Alex Regal with Baptist Capital. You may now proceed.

You know this this quarter.

Where we are seeing with the interest rate decline, we're seeing projects come off the shelf.

There are some.

The allocation of projects and timing there or is that kind of advantage in advance of growth moving forward or just opportunistic maybe just a little bit of color on that.

Bruce Labovitz: Morning, Alex.

Gary Bowman: Hey. Good morning, Bruce and Gary. Very nice quarter there. As it relates to data centers, can you talk a bit about bidding opportunities, and how you see that progressing sort of in 2026 versus maybe 2025 and 2024? Are you seeing sort of bidding opportunities or new project opportunities to be greater than the prior year, or is the average project or contract size kind of greater than they have been in the past years? Just a little bit of color on that. Yeah, Alex. Certainly, tailwinds in that market. There are a continuing greater number of opportunities. The facilities are getting larger, really, as the data centers—we've spoken to this—is with AI as opposed to before. The lack of being critical to be located proximate to fiber just provides a lot more opportunities for data centers spread out across the country. We're seeing lots of.

Earlier in the year little more localized geographically.

Coming to the end of the year here, we're seeing it more broadly across the geographies that we're located in.

Yeah, one of the reasons, we talk we try to talk about total overhead as opposed to the SG&A relative to to Cogs that are our labor and operations, depending on utilization will be allocated a little bit more towards Cogs are a little bit more towards SG&A in any given period.

Where we.

We're probably looking at 2026, maybe as we allocate labor.

But I would I would bet the directionality would be some labor allocated towards the building infrastructure as opposed to away from it.

Depending on on the proportion of direct and indirect labor.

I'd say theres anything consequential thats really driven.

SG&A higher.

Alright, Thanks for that and then maybe you know on Opex. Just there was an earlier question, but you know kind of a pick up in SG&A.

Going to grow as we grow.

A question is just can we can we meter it at a lower pace.

And then revenues growing so.

You know this this quarter.

I really look at it as is.

There are some kind of allocation of projects and timing there or is that kind of advantage in advance of growth moving forward or just opportunistic maybe just a little bit of color on that.

Overall, all in is down as a percentage of revenue that's the that's really what we're focused on.

Alright, Thanks, and then just maybe one last one I mean on labor you know how are you feeling about you know availability. There is as you grow the business moving forward.

Yeah, one of the reasons, we talk we tried talking about total overhead as opposed to the SG&A relative to to Cogs that are our labor and operations, depending on utilization will be allocated a little bit more towards Cogs are a little bit more towards SG&A in any given period.

We have.

Very very aggressive talent acquisition group excuse me.

Gary Bowman: Drivers to locate data centers near natural gas to power them. Our acquisition of E3I, as an example, just has expanded our network. That in itself expands our opportunities.

Yeah.

Depending on on the proportion of direct and indirect labor.

So it's a.

It's a labor challenged market and in a good way. It's it's there is a.

I'd say theres anything consequential thats really driven.

SG&A higher.

Going to grow as we grow.

It's a challenge to do to find staff.

The question is can we can we meter it at a lower pace than revenues growing so.

Bruce Labovitz: I think, Alex, the other thing that data centers have become the hot ticket item for landowners. To some extent, there's a little bit of a phantom amount of data center work that occurs within our building infrastructure portfolio because when landowners come to us and say, what are the options, we want our project to be a data center, right? Because everybody wants their project now to be a data center. There's feasibility we do within that building infrastructure segment related to data centers. Until it becomes a data center, it doesn't really become part of the kind of what we call the data center portfolio of revenue. There's a little bit of, because there's an increased availability of opportunity for land to be data center, there's more activity in it.

But they're out there and we have a good machine to recruit onboard them. So it's a.

And I really look at it as is.

Overall, all in is down as a percentage of revenue that's the that's really what we're focused on.

So we're well positioned to bring on the labor that we need.

So yes, thats why we are so focused on developing labor leveraging.

Innovation within the organization not to shrink the labor pool, but to not have to grow it as dramatically as as otherwise.

Alright, Thanks, and then just maybe one last one I mean on labor you know how how are you feeling about you know availability. There is as you grow the business moving forward.

We have.

Great understood great. Thanks for taking the questions I'll turn it over.

Very very aggressive talent acquisition group excuse me.

Thank you Aaron.

Okay.

Thank you our.

So it's a.

The next question comes from Jeff Martin with Roth Capital Partners You May now proceed.

It's a labor challenged market and a good way. It's it's there is a.

Good morning, Jeff. Thank you Hey, good morning, Gary and Bruce.

It's a challenge to try to find staff, but but they're out there and we have a good machine to recruit onboard them. So it's a it's a.

I wanted to dive into a specific segment of the backlog and you look at power and utilities.

Gary Bowman: To take that another step, clearly, landowners in the past had seen sort of solar as being a big opportunity. How do you see your solar business right now and sort of as we think about the next one to two years? Well, for the next year, we're seeing it very strong. It's really being driven by, I guess, a moment in the tax credits next year that's driving a lot of demand to accelerate planning of projects to get a critical mass of the project done before the middle of next year. We see it very strong in 2026, certainly likely to taper off in 2027, but we're well positioned in that market, and the development of solar projects is not going to go away. We see a very strong 2026, cautious outlook after that. Excellent.

Looks like it's on a trajectory.

The double from where it was in the middle of 2024, where are you seeing the strongest backlog grew up there.

We're well positioned to bring on the labor that we need.

So yes, thats why we are so focused on developing labor leveraging <unk>.

And is there.

And if that's the segment that.

Innovation within the organization not to shrink the labor pool, but to not have to grow it as dramatically as as otherwise.

You are most focused on for M&A.

We're seeing it certainly in the linear projects the transmission corridor.

Great understood great. Thanks for taking the questions I'll turn it over.

We've included Datacenters in there now so it's our data center activity certainly is growing that.

Thank you Aaron.

Okay.

Thank you our next.

Next question comes from Jeff Martin with Roth Capital Partners You May now proceed.

Is it I wouldn't say it is the primary focus of our M&A.

But it is one of a couple of primary.

Morning, Jeff. Thank you Hey, good morning, Gary and Bruce.

I wanted to dive into a specific segment of the backlog you look at power and utilities.

Power and power and utilities energy.

Certainly transportation.

If I if I pick the areas that we're really focused on.

Looks like it's on a trajectory to that.

And the opportunity set.

Double from where it was in the middle of 2024, where are you seeing the strongest backlog grew up there.

Gary Bowman: Lastly, your M&A activity this year has been, I don't know, a little bit slower than the last few years. Any comment on that and how we can think about M&A activity in 2026? We're still committed to M&A. We have a strong pipeline of opportunities. I think we've shifted maybe more focus of our M&A to really focus on strategic opportunities. Certainly, with the new revolver in place and that dry powder, it really positions us for some strong M&A activity toward the end of this year and certainly into 2027. We're still fully committed to inorganic growth to supplement our organic growth. Great. Thank you very much.

They're really we find exciting.

And yes, and yes.

Great and then just how would you characterize the environment in terms of.

This segment that.

You're most focused on for M&A.

Yeah, the timeliness of projects in my time in this I mean, starting on time.

Yeah.

We're seeing it certainly in the linear projects see the transmission corridor.

No.

No delays and weather delays no.

There are factors driving and convenient transportation is a bit of a wildcard. When you have large projects that can come on they can get pushed out of market share. It can get pushed out a little longer.

We've included Datacenters in there now so our datacenter activity certainly is growing that.

Is it I wouldn't say it is the primary focus of our M&A.

If you could just give us enough data.

How that's progressed this year I know going back.

But it is it is one of a couple of primary.

Several quarters transportation kind of caused some disruption for you so any insight there would be really helpful.

Power and power and utilities energy.

Certainly transportation.

If I if I pick the areas that we're really focused on.

We did have some some projects that got it.

And the opportunity set.

Bruce Labovitz: Thanks, Alex.

They're really we find exciting.

So delayed in the start they Didnt go away. So this business is lumpy and it's why we guide to year, not a quarter or so.

Operator: Thank you. Our next question comes from Aaron Spicello with Gray Column. You may now proceed.

Great and then just how would you characterize the environment in terms of.

The timeliness of projects in my time in this I mean, starting on time.

There is it's we have seen some delays and starts here recently.

Bruce Labovitz: Morning, Aaron.

Jeff Martin: Yeah. Good morning, Gary and Bruce. Thanks for taking the questions. Morning. Maybe first on building infrastructure, can you kind of talk about how you're thinking about growth in that segment in 2026? Sounds like there's some cross currents between some of the sub-areas. Just maybe talk about your ability to kind of move labor or kind of as projects kind of ebb and flow in that segment.

No.

No delays and weather delays.

Just that's only attributed to <unk>.

Other factors driving that because I know transportation is a bit of a wildcard. When you have large projects can come on they can get pushed out a month or two you can get pushed out a little longer.

Project specific issues nothing nothing in the macro economy.

And the funding of transportation driving that.

If you could just give it enough data.

Okay, and then how would you characterize the M&A environment from a valuation standpoint, I know yeah.

How that's progressed this year I know going back.

Several quarters transportation kind of caused some disruption for ya.

Gary Bowman: Well, the nice thing about our business is the skill set, excuse me, that we apply to building infrastructure is transferable to many of our other markets. We do move that labor around readily. We're seeing, with the interest rate decline, we're seeing projects come off the shelf earlier in the year and a little more localized geographically. As we come into the end of the year here, we're seeing it more broadly across the geographies that we're located in. We're probably looking at in 2026, maybe as we allocate labor. I would bet that the directionality would be some labor allocated toward the building infrastructure as opposed to away from it.

And when you're ready to strategic acquisitions I assume.

So any insight there would be really helpful.

Roger than you've done historically, so just curious how you're seeing the competitiveness of those more strategic level acquisitions out in the market today.

We did have some some projects that got it.

So delayed in the start they Didnt go away. So this business is lumpy and it's why we guide to year, not a quarter or so.

It's competitive it's it's it's I'll say no no more competitive than it has been over the last year or so.

There's it's we we had we have seen some delays and starts here recently.

But these new strategic opportunities.

They drive a lot of attention.

Just that's only attributed to the project specific issues nothing nothing in the macro economy.

So it's we have to sharpen our pencil.

We have to sell ourselves.

But it's we are where we are winning out on our share of those nice strategic opportunities.

The funding of transportation driving that.

Okay, and then how would you characterize the M&A environment from a valuation standpoint no.

Great. Thanks for taking my questions.

Thank you Jeff.

And when you're allowed to strategic acquisitions I assume.

Thank you. Our next question comes from Jim <unk> with D. A Davidson you May now proceed.

And then you've done historically, so just curious how you're seeing the competitive missteps.

Jeff Martin: All right. Thanks for that. Maybe on OpEx, just there's an earlier question, but kind of a pickup in SG&A this quarter. Is there some kind of allocation of projects and timing there? Is that kind of in advance of growth moving forward or just opportunistic? Maybe just a little bit of color on that.

It's more strategic level acquisitions out in the market today.

Good morning Angie.

Yeah.

It's competitive it's it's it's I'll say no no more competitive than it has been over the last year or so.

Good morning. Thank you so much for your time.

Just a quick question some of the comments you made about hiring.

You guys are so youre in hiring mode, and then I just wanted to sort of understand.

But the strategic opportunities.

They drive a lot of attention.

Bruce Labovitz: Yeah. One of the reasons we try to talk about total overhead as opposed to the SG&A relative to COGS is that our labor and operations, depending on utilization, will be allocated a little bit more towards COGS or a little bit more towards SG&A in any given period, depending on the proportion of direct and indirect labor. I wouldn't say there's anything consequential that's really driven SG&A higher. It's going to grow as we grow. The question is, can we meter it at a lower pace than revenue is growing? I really look at it as the overall all-in is down as a percentage of revenue, and that's really what we're focused on.

But.

Some project delays and that's growth that you're experiencing how would you characterize sort of the growth cadence.

So it's we have to sharpen our pencil.

We have to sell ourselves.

But it's we are where we're winning out on our share of those.

In 2026 versus <unk>.

Nice strategic opportunities.

Previous here.

Should we expect some maybe a higher pickup in the first half.

Great. Thanks for taking my questions.

Of next year versus this year, I guess and how should we think about.

Thank you Jeff.

Thank you. Our next question comes from Jim <unk> with D. A Davidson you May now proceed.

EBITDA margins given that.

There could be some increase in SG&A or I guess or should I think about differently as you progress through the year.

Good morning.

Yeah.

Good morning. Thank you so much for your time.

Sufficient to start to kick in.

Just a quick question some of the comments you made about hiring.

And when would they kick in.

So I think what they were hoping for for next year. The first half of this year was a relatively chaotic time with a lot of disruption associated with uncertainty around tariffs and.

You guys are so youre in hiring mode, and then I just wanted to sort of understand.

Jeff Martin: All right. Thanks. Maybe one last one. I mean, on labor, how are you feeling about availability there as you grow the business moving forward?

But.

Some project delays and that's growth that you're experiencing how would you characterize sort of the growth cadence.

In other and other economic issues and so I think that that.

Stifled split first half a little bit.

Gary Bowman: We have a very aggressive talent acquisition group. Excuse me. It's a labor challenge market, I mean, in a good way. There's a challenge to find staff, but they're out there, and we have a good machine to recruit, onboard them. It's a, we're well positioned to bring on the labor that we need.

So hopefully ex that factor, yes, we will see a little bit more more balanced growth first quarter second quarter.

In 2026 versus <unk>.

Previous here.

Should we expect some maybe a higher pickup in the first half.

<unk> of next year into third in and it kind of through the end of the year. So I think our.

Of next year versus this year I guess.

And how should we think about.

But EBITDA margins given that.

Cycles are relatively the same hopefully there'll be maybe a little bit more calm.

There could be some increase in SG&A or I guess or should I think about differently as you progressed through the year.

With rates lower than in some of the transition issues behind us.

Sufficient to start to kick in.

And when would they kick in.

I think one thing we're hoping for for next year. The first half of this year was a relatively chaotic time with a lot of disruption associated with uncertainty around tariffs and other and other economic issues and so I think that that step.

Bruce Labovitz: I would say it's why we are so focused on developing labor-leveraging innovation within the organization, not to shrink the labor pool, but to not have to grow it as dramatically as otherwise.

We're still there.

Yes, yes, I'm, sorry, I apologize about that.

In terms of the.

The EBITDA margins.

<unk> for the first half a little bit.

Jeff Martin: Right. Understood. Great. Thanks for taking the questions. I'll turn it over.

So hopefully ex that factor, yes, we will see a little bit more more balanced growth first quarter second quarter.

Yes.

Thank you so much for all the comments and color, but I just sort of wanted to understand a little more.

Gary Bowman: Thank you, Aaron.

Operator: Thank you. Our next question comes from Jeff Martin with Roth Capital Partners. You may now proceed.

With the pickup in projects or expected work.

Of next year into third in and it kind of through the end of the year. So.

I guess going into the fourth quarter.

I think.

Bruce Labovitz: Morning, Jeff.

Our cycles are relatively the same hopefully there'll be maybe a little bit more calm.

Gary Bowman: Thank you. Good morning, Gary, Bruce.

Should we see it kind of.

Jeff Martin: Morning, Jeff.

Gary Bowman: I wanted to dive into a specific segment of the backlog. You look at power and utilities. It looks like it's on a trajectory to double from where it was in the middle of 2024. Where are you seeing the strongest backlog growth there? Is this the segment that you're most focused on for M&A? We're seeing it certainly in the linear projects, the transmission corridors. We've included data centers in there now, so our data center activity certainly is growing that. I wouldn't say it is the primary focus of M&A, but it is one of a couple of primary. Power and utilities, energy, certainly transportation. If I picked areas that we're really focused on, and the opportunities that we find exciting.

Come down too.

The second quarter.

With rates lower than in some of the transition issues behind us.

<unk> in terms of SG&A.

Or or it should be more in line with what you experience this quarter.

I think it'll be in between.

We're still there.

Makes sense.

And just I guess.

Yes, yes, I'm, sorry, I apologize about that.

2026.

Okay.

And in terms of the.

Going back to my first question should we.

The EBITDA margins.

Spec more efficiencies and you talked about having a greater impact in SG&A sort of from the start of 2026 or or will that develop more as you head into the second half of 2020 thick.

Yes.

Thank you so much for all the comments and color, but I just wanted to understand a little more.

With the hiccups and projects are expected to work.

I guess going into the fourth quarter.

And then <unk> around that helps.

Should we see it kind of.

Yeah, I would expect it to be more beneficial on a relative basis in the second half of the year, but still be beneficial in the first half of the year.

Come down too.

Second quarter <unk>.

Levels are in terms of SG&A.

Or.

Or it should be more in line with what you experienced this quarter.

Okay.

Yeah.

Got it I appreciate it. Thank you so much for your time.

I think it'll be in between.

Thank you.

Jeff Martin: Great. How would you characterize the environment in terms of the timeliness of projects? By timeliness, I mean starting on time, no delays in the weather delays, no other factors driving. I know transportation is a bit of a wild card. You have large projects that can come on, they can get pushed out a month or two, they can get pushed out a little longer. If you could just give an update of kind of how that's progressed this year. I know going back several quarters, transportation kind of caused some disruption for you. Any insight there would be really helpful.

Makes sense.

Thank you.

And just I guess into 2026.

Hearing no questions, let's see Kelly as a reminder, it is star one to ask a question.

Okay.

Yeah.

Going back to my first question should we expect more efficiencies and you talked about having a greater impact in SG&A sort of from the start of 2026 or would that develop more as you head into the second half a point in time.

Yeah.

And no questions waiting at this time, so I'll pass the conference back over to the team for any closing remarks.

Thank you Jasmine and thank you everyone for joining us on this call. This morning.

And then <unk> around that helps yes.

We're.

Really looking forward to finishing out the year on a high note and certainly looking forward to a banner 2026. So thanks for all the all the employees who are listening for all you're doing and for all the investors for the faith you put into us.

I would expect it to be more beneficial on a relative basis in the second half of the year, but still be beneficial in the first half of the year.

Gary Bowman: We did have some projects that got sort of delayed in the starts. They didn't go away. This business is lumpy. That's why we guide to a year, not a quarter. We have seen some delays in starts here recently, but that's only attributed to project-specific issues. Nothing in the macroeconomy or in the funding of transportation driving that.

Okay.

Yeah.

The analysts for four.

Got it I appreciate it. Thank you so much for your time.

Staying in touch with us.

Thank you.

With that I'll wrap it up good morning, everyone.

Thank you.

Ladies and gentlemen that will conclude today's conference call. Thank you for joining.

Hearing no questions, let's see two as a reminder, it is star one to ask a question.

Yeah.

And no questions waiting at this time I'll pass the conference back over to the team.

For any closing remarks.

Thank you Jasmine and thank you everyone for joining us on this call. This morning.

Jeff Martin: Great. How would you characterize the M&A environment from an evaluation standpoint? I know when you alluded to strategic acquisitions, I assume those are larger than you've done historically. I'm just curious how you're seeing the competitiveness of those more strategic-level acquisitions out in the market today.

Where are you.

And really looking forward to finishing out the year on a high note and certainly looking forward to a banner 2026. So thanks for all the all the employees who are listening for all youre doing and for all the investors for the faith, you put into us and fully analysts for for her.

Gary Bowman: It's competitive. I'll say no, more competitive than it has been over the last year or so. These strategic opportunities drive a lot of attention. We have to sharpen our pencil, we have to sell ourselves, but we're winning out on our share of nice strategic opportunities.

Staying in touch with us.

With that we'll wrap it up good morning, everyone.

Ladies and gentlemen that will conclude today's conference call. Thank you for joining.

Jeff Martin: Great. Thanks for taking the questions.

Bruce Labovitz: Thank you, Jeff.

Operator: Thank you. Our next question comes from Jane Phillies with DA Davidson. You may now proceed.

Bruce Labovitz: Morning.

Gary Bowman: Hi, Jane.

Jeff Martin: Good morning. Thank you so much for your time. Just a quick question on some of the comments you made about hiring. You guys said you're in hiring mode. I just wanted to sort of understand, with some project delays and this growth that you're experiencing, how would you characterize sort of the growth cadence in 2026 versus the previous year? Should we expect maybe a higher pickup in the first half of next year versus this year, I guess? How should we think about EBITDA margins given that there could be some increase in SG&A? Or, I guess, should I think about it differently as you progress through the year? Do the sufficiencies start to kick in, and when will they kick in?

Bruce Labovitz: I think one thing we're hoping for for next year, the first half of this year was a relatively chaotic time with a lot of disruption associated with uncertainty around tariffs and other economic issues. I think that stifled the first half a little bit. Hopefully, X that factor, we'll see a little bit more balanced growth, first quarter, second quarter of next year into third, and kind of through the end of the year. I think our cycles are relatively the same. Hopefully, they'll be maybe a little bit more calm, with rates lower and some of the transition issues behind us. We still there?

Operator: Dina, you still there?

Jeff Martin: Yeah, yeah. Sorry. I apologize about that. In terms of the EBITDA margins, yeah. Thank you so much for all the comments and color. I just sort of wanted to understand a little more. With the pickups in projects or expected work, I guess going into the fourth quarter, should we see it kind of come down to second quarter levels in terms of SG&A, or should it be more in line with what you experience this quarter?

Bruce Labovitz: I think it'll be in between.

Jeff Martin: Makes sense. Just, I guess, into 2026, going back to my first question, should we expect more efficiencies that you talked about to have a greater impact in SG&A sort of from the start of 2026, or will that develop more as you head into the second half of 2026? Any kind of comments around that helps.

Bruce Labovitz: Yeah, I would expect it to be more beneficial on a relative basis in the second half of the year, but still be beneficial in the first half of the year.

Jeff Martin: Got it. I appreciate it. Thank you so much for your time.

Bruce Labovitz: Thank you.

Operator: Thank you. There are currently no questions registered. As a reminder, it is Star 1 to ask a question. There are no questions waiting at this time. I'll pass the conference back over to the team for any closing remarks.

Gary Bowman: Thank you, Jasmine. Thank you, everyone, for joining us on this call this morning. We're really looking forward to finishing out the year on a high note and certainly looking forward to a banner 2026. Thanks for all the employees who are listening, for all you're doing, and for all the investors, for the faith you put into us, and for the analysts, for staying in touch with us. With that, I'm going to wrap it up. Good morning, everyone.

Operator: Ladies and gentlemen, that will conclude today's conference call. Thank you for joining.

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