Bowman Consulting Group Ltd.

Bowman Consulting Group Ltd. operates as a professional services firm, providing integrated engineering, technical consulting, and program management services to customers involved in owning, developing, and maintaining the built environment. The company offers a diverse range of services including planning, engineering, program management, commissioning, environmental consulting, geospatial imaging, surveying, and land procurement. Bowman serves a broad base of public and private sector customers, with public sector assignments accounting for approximately 30% ⁴ of revenue in 2025 and 27% ⁵ in 2024. The private sector customer base spans investor-owned utilities, oil & gas extractors, renewable energy participants, data center developers, real estate developers, and mine operators. The U.S. engineering services market is projected to grow from approximately $410 billion ¹² in 2026 to over $530 billion ¹³ by 2031, representing an approximately 5.4% ¹⁴ compound annual growth rate. The broader domestic infrastructure investment landscape is expected to expand from approximately $1.50 trillion ¹⁵ in 2026 to over $2.25 trillion ¹⁶ by 2034. The industry is highly fragmented, with over 130,000 ¹⁷ firms, predominantly small-scale organizations, leading to active consolidation.

The company emphasizes its competitive strengths, including a full-service platform with comprehensive end-to-end capabilities and a national reputation for excellence, supported by over 2,300 ⁷ employees across more than 135 ⁸ U.S. locations and four offices in Mexico. Bowman is committed to technological innovation, investing in tools for aided design, 3-D modeling, large-scale imaging, data collection and processing, predictive planning, and AI applications. In 2025, the company launched the Bowman Innovation Growth Fund (BIG Fund) with a $25 million ¹⁸ investment commitment for workforce-developed ideas. Its diversified portfolio across growing end-markets and a broad array of engineering services, coupled with a consistent delivery of organic growth and margin expansion, are also highlighted. The company's proven track record of successful acquisitions, with forty-one operating companies and three non-operating licensing companies acquired over the past five years, further strengthens its position.

Bowman's core business model revolves around generating revenue from services performed by its employees, pass-through fees from sub-consultants, and reimbursable contract costs. Net service billing, a non-GAAP metric, represents the portion of gross contract revenue attributable to services performed by its workforce, excluding pass-throughs. For the years ended December 31, 2025 and 2024, net service billing accounted for 88.7% ³⁵ and 89.0% ³⁶ of gross contract revenue, respectively. The company primarily serves public and private sector customers through fixed-price (lump sum) and hourly (time and materials) contracts. Approximately 59% ²² of gross contract revenue in 2025 and 60% ²³ in 2024 was derived from lump sum assignments, while 34% ²⁴ and 33% ²⁵ came from hourly assignments, respectively. The remaining revenue was from reimbursements for itemized pass-through items.

The company operates as a single business segment, providing multi-disciplinary professional engineering solutions. Revenue is disaggregated into four core end markets: Building Infrastructure, Transportation, Power, Utilities & Energy, and Natural Resources.

In the Building Infrastructure market, gross contract revenue increased by $15.2 million ⁴⁰ or 7.4% ⁴¹ to $220.2 million ³⁸ in 2025, compared to $205.1 million ³⁹ in 2024. This segment includes commercial, municipal, and residential infrastructure, with 39.2% ⁴² from residential, 42.8% ⁴³ from commercial, and 18.0% ⁴⁴ from municipal assignments in 2025. Within residential, 49.1% ⁴⁵ was from for-sale homebuilding, 44.1% ⁴⁶ from multi-family, and 6.8% ⁴⁷ from mixed-use projects. For-sale residential services represented 8.6% ⁴⁸ of total gross contract revenue in 2025. Commercial revenue was 45.7% ⁴⁹ from office and industrial, 49.2% ⁵⁰ from retail, hospitality, and QSR, and 5.1% ⁵¹ from healthcare.

Transportation revenue increased by $16.0 million ⁵² or 18.2% ⁵³ to $103.7 million ³⁸ in 2025, from $87.7 million ³⁹ in 2024. Public sector roadway customers accounted for 64.4% ⁵⁴ of this revenue, private sector roadway customers for 23.0% ⁵⁵, ports & harbors for 3.8% ⁵⁶, aviation for 2.6% ⁵⁷, and bus, rail, and transit for 6.2% ⁵⁸. The Power, Utilities & Energy market saw a $20.3 million ⁵⁹ or 22.7% ⁶⁰ increase in revenue to $109.8 million ³⁸ in 2025, from $89.5 million ³⁹ in 2024. This growth was driven by acquisitions and expansion of a multi-year utility undergrounding assignment in Florida, as well as gas pipeline and electric transmission projects. Traditional transmission operations contributed 62.4% ⁶¹ of this market's revenue, alternative energy operations 19.4% ⁶², and data center customers 18.2% ⁶³. The Natural Resources market, formerly "emerging markets," increased by $12.0 million ⁶⁴ or 27.2% ⁶⁵ to $56.2 million ³⁸ in 2025, from $44.2 million ³⁹ in 2024, primarily due to the acquisition of Surdex Corporation. Imaging and mapping activities comprised 48.3% ⁶⁶ of this segment's revenue, mining activities 15.7% ⁶⁷, water resources 26.4% ⁶⁸, and environmental and other natural resources consulting 9.6% ⁶⁹.

For the fiscal year ended December 31, 2025, Bowman reported gross contract revenue of $490.0 million ²⁶, an increase of 14.9% ³⁷ from $426.6 million ²⁷ in 2024. Net income for 2025 was $12.8 million ²⁸, a significant increase from $3.0 million ²⁹ in 2024. Basic EPS was $0.74 ³⁰ and diluted EPS was $0.73 ³¹ for 2025, compared to $0.18 ³² and $0.17 ³³ respectively for 2024. Adjusted EBITDA increased by 22.4% ⁷² to $72.9 million ³⁴ in 2025 from $59.5 million ³⁴ in 2024, with an Adjusted EBITDA margin, net of 16.8% ⁷³ in 2025, up from 15.7% ⁷⁴ in 2024. Cash and equivalents at year-end 2025 stood at $11.1 million ⁷⁵, up from $6.7 million ⁷⁶ in 2024. Total debt, represented by the Revolving Credit Facility balance, was $95.4 million ⁷⁷ in 2025, compared to $37.0 million ⁷⁸ in 2024. The company's gross backlog increased by $80 million ⁷⁹ or 20.1% ⁸⁰ to approximately $479 million ⁸¹ as of December 31, 2025, from $399 million ⁸² in 2024.

During 2025, Bowman completed seven acquisitions, four of which closed after September 30, 2025. These included UP Engineering, LLC (civil engineering and surveying in Texas), Birck Engineering, LLC (civil, structural, MEP, and chemical manufacturing in Colorado), E3i Engineers, Inc. (data centers, energy infrastructure in Massachusetts), ORCaS, Inc. (design automation, location optimization, hydrological studies), Sierra Overhead Analytics, Inc. (civil design, precision mapping, hydrology), Lazen Power Engineering, LLC (high-voltage transmission line infrastructure in Florida), and RPT Alliance, LLC (natural gas transmission and power generation infrastructure in Texas). The total consideration paid for these acquisitions was approximately $75.4 million ²⁰, including 73,567 ²¹ shares of common stock valued at $3.1 million ²¹ (average $41.81 ²¹ per share), with the remainder in cash and seller notes. The company also launched the Bowman Innovation Growth Fund (BIG Fund) with a $25 million ¹⁸ investment commitment.

Bowman intends to continue its growth through acquisitions, focusing on markets and service line expansion opportunities characterized by high potential for recurring revenue and multi-year assignments, engagement with power, electrification or other energy imbalance activities, aging and failing infrastructure in need of upgrade and replacement, transformational investment paradigms such as privatization, economic vitality and attractive growth in population and workforce, long-term and durable public sector funding, prime for technology advancement with respect to delivery of services, and complex regulatory environments. The company's geographic expansion plans are generally focused on North America, specifically the United States, with potential secondary focus on Canada and Mexico, primarily through acquisitions but also by opening new offices.

The company plans to grow by investing in and acquiring skillsets, service lines, technology solutions, production tools, and equipment to deepen market penetration and enhance revenue capture with existing customers. Strategic service line extensions include program management, energy management, and data management and analytics. Bowman has built a scalable organizational infrastructure designed to accommodate significant growth without a proportionate increase in overhead expense, expecting to expand operating margins by leveraging investments and general overhead structure over a larger revenue pool.

Management expects to achieve organic growth by adding new customers through vigorous business development, increasing wallet share with existing customers, adding new services, introducing innovation and advanced equipment, and growing labor capacity. The company's backlog of approximately $479 million ⁸¹ as of December 31, 2025, and a consistent book-to-bill ratio for net service billing of greater than 1.0 ¹⁹ for full years 2025 and 2024, provide confidence in maintaining significant organic growth and improving margin profiles.

The company's operational outlook includes a continued focus on technology investments to enhance capacity and work-sharing across the company, increases in the breadth of services, and expansion of its geographic footprint. Bowman is committed to being an industry leader in the adoption of adaptive technology, geospatial mapping, geographic information systems (GIS), orthoimaging tools, and collaboration-enabling deliverables. The company endeavors to utilize technology applications and high-resolution capture devices to enhance delivery timeframes, expand service offerings, repurpose and monetize collected information, improve customer engagement, and expand margins.

Regarding capital allocation, Bowman's principal uses of cash are operating expenses, working capital requirements, capital expenditures, repayment of debt, acquisitions, and acquisition-related payments. The company maintains a $250.0 million ⁸³ Revolving Credit Facility as of March 3, 2026, which was increased from $210.0 million ⁸⁴ on October 30, 2025, and from $140.0 million ⁸⁵ on March 12, 2025. The company repurchased 272,885 ⁸⁶ shares of common stock at an average price of $34.25 ⁸⁷ per share under the 2025 Repurchase Authorization, with $15.7 million ⁸⁸ remaining available for future repurchases as of December 31, 2025. The company does not anticipate paying cash dividends in the foreseeable future, intending to retain all future earnings to finance business growth and development.

Management explicitly flagged several structural headwinds and execution risks to the growth plan. These include the ability to identify and engage a qualified Chief Executive Officer candidate in a timely manner and achieve an orderly transition upon the retirement of Gary Bowman, the current CEO. The company also faces risks related to retaining other key professionals and hiring additional qualified personnel. Demand from customers is cyclical and vulnerable to economic downturns, which could lead to project delays, curtailments, or cancellations. The company's ability to integrate acquired businesses successfully and realize anticipated synergies and cost savings is also a key execution risk.

Geographic, regulatory, and macro factors identified as constraints include changes in general domestic and international economic conditions such as inflation rates, interest rates, tax rates, higher labor and healthcare costs, recessions, tariffs, trade wars, and changing government policies, laws, and regulations. The company is subject to stringent and evolving laws, regulations, rules, contractual obligations, policies, and other obligations related to data privacy and security. Changes in resource management or infrastructure industry laws, regulations, and programs could directly or indirectly reduce demand for services. The company is also exposed to risks related to ongoing instability and conflicts in global markets, including Eastern Europe, the Middle East, and Asia, and the economic consequences of related events and resulting market volatility.

The company faces several material risks, including intense competition in the highly fragmented engineering and consulting industry, which could lead to market share loss or reduced profitability. Operational risks include potential significant losses on complex projects due to factors outside of control, such as unavoidable delays, cost overruns on fixed-price contracts (which comprised over 59% ²² of revenue in 2025), and liability for damages from negligent acts or errors, potentially exceeding insurance limits. The company's continued success is highly dependent on its ability to attract, hire, and retain key executives and qualified personnel, with the announced retirement of CEO Gary Bowman in 2026 posing a succession risk. Acquisitions, a core growth strategy, carry risks of unsuccessful integration, failure to achieve synergies, and assumption of unknown liabilities. Financial risks include the cyclical nature of customer demand, vulnerability to economic downturns, and the impact of inflation on labor and material costs. Cybersecurity threats, including unauthorized access and data breaches, pose risks to operations and reputation. The company's credit agreement contains restrictive covenants that could limit its ability to finance future operations or acquisitions, and variable rate indebtedness exposes it to interest rate risk, with a one percentage point change in the Credit Agreement's interest rate potentially changing annual interest expense by approximately $0.3 million ⁹⁰ in 2025. Regulatory risks include compliance with complex government contract rules, professional licensing requirements, and environmental laws, with potential for contract termination, penalties, or debarment for non-compliance. Changes in tax laws or their interpretation could also materially affect results of operations.

Management's message to shareholders conveys a tone of confidence in the company's strategic direction and resilience, emphasizing a commitment to growth through both organic initiatives and disciplined acquisitions. They highlight the four-fold increase in gross contract revenue over the past five years to $490.0 million ²⁶ for the year ended December 31, 2025, and the company's improved ranking on the ENR Top 500 Design Firms list. Key strategic priorities include sustaining a unique entrepreneurial culture to drive organic growth, continuing acquisitive growth focused on adjacency and synergistic opportunities, and deliberate geographic expansion primarily within North America. Management also stresses investment in technology and advanced production systems to enhance efficiency and expand margins, as evidenced by the $25 million ¹⁸ commitment to the Bowman Innovation Growth Fund. They believe the diversified business model, strong backlog of approximately $479 million ⁸¹, and consistent book-to-bill ratio of greater than 1.0 ¹⁹ position the company for continued organic growth and improved margin profiles. Management also noted the intention of Gary Bowman, Chief Executive Officer, to retire later in 2026, with a search for his successor underway.