Bowman Consulting Group Ltd.

Q1 gross contract revenue was $126.5 million, up 12% year over year, and net service billing was $114.2 million, up 14% year over year. Gross margin was 52%, with contract costs at approximately 48% of gross contract revenue. Adjusted EBITDA was $16.8 million, up nearly 16%, and adjusted EBITDA margin expanded to 14.7%; the company reported a GAAP loss of $3.7 million. Cash from operations was $11.6 million, and backlog ended at approximately $653 million, up 56% year over year and 36% sequentially. For 2026, management raised net revenue guidance to $520 million to $540 million and expects adjusted EBITDA margin of 17.25% to 17.75%; they said this implies more than 20% organic net revenue growth and nearly 28% year-over-year adjusted EBITDA growth at the midpoint.

Gary Bowman said the quarter showed the strategy is working, citing record backlog, diversified demand, and a scalable operating model. He emphasized that growth is coming from both organic execution and acquisitions, and said Bowman sees a clear path to sustained growth, margin expansion, and performance into 2027 and beyond. His tone was confident and upbeat, especially around the company’s expanding capabilities in technology, integrated service delivery, and targeted M&A.

Bruce Labovitz highlighted Q1 gross contract revenue of $126.5 million, net service billing of $114.2 million, adjusted EBITDA of $16.8 million, and cash from operations of $11.6 million, noting about 70% conversion of adjusted EBITDA to cash. He said gross contract costs were about 48% of revenue, while overhead was about 50 basis points higher year over year due to a slow start in January and February, mobilization costs, and incremental expenses tied to exiting emerging growth company status. He also said the revolving credit facility was expanded to $250 million to support higher CapEx and continued investment in growth and acquisitions, and that the company repurchased about $9.2 million of stock in the quarter.

Analysts pressed for details on the large government contract, and management said it has a 36-month term, a not-to-exceed value of about $177 million, and a lower-than-average net-to-gross ratio, with the biggest revenue impact expected in the second half of 2026 and into 2027. Questions also focused on margins, fixed-price mix, permitting, AI, and data centers; management said fixed-price contracts are becoming a larger part of the mix, permitting is not materially faster yet, and AI should improve process efficiency without commoditizing engineering services. On data centers, management said activity is growing quickly, is hard to count precisely because of NDAs, and is taking an increasing share of backlog and resources.