Bowman Consulting Group Ltd (BWMN) Surpasses $300 Million in Net Service Billing
Net Service Billing: Achieved nearly 30% year-over-year growth, surpassing $300 million.
Acquisitions: Completed 11 acquisitions, contributing approximately $60 million in annualized net service billing.
Stock Repurchase: Repurchased 28,704 shares under the 2022 Stock Repurchase Program; a new $10.0 million program authorized for 2023.
Adjusted Earnings per Share (EPS): Introduced non-GAAP Adjusted EPS metric, reconciling differences from GAAP EPS.
2024 Guidance: Adjusted full-year 2024 outlook for net service billing to be in the range of $363 to $378 million, and Adjusted EBITDA in the range of $59 to $65 million.
Legislative Impact: Potential reversal of uncertain tax position liability, tax expense, and deferred tax assets if HR 7024 is enacted.
Bowman Consulting Group Ltd (NASDAQ:BWMN) released its 8-K filing on March 11, 2024, announcing its financial results for the fiscal year ended December 31, 2023. The multi-faceted consulting firm, which offers a broad range of solutions in real estate, energy, infrastructure, and environmental management, has reported a significant milestone by surpassing $300 million in net service billing, marking nearly 30% year-over-year growth.
Financial Performance and Strategic Growth
Bowman's Chairman and CEO, Gary Bowman, highlighted the company's robust growth trajectory, with a compound annual growth rate of approximately 31% since 2020. The firm's strategic focus on becoming one of the top 50 domestic engineering firms is underscored by its healthy pipeline of opportunities and the significant public funding available for infrastructure projects.
The company's growth was further accelerated by the completion of 11 acquisitions, which added around $60 million in annualized net service billing. These acquisitions have expanded Bowman's geographic footprint and service offerings, particularly in geospatial solutions, which are expected to enhance market-share and wallet-share gains.
Challenges and Legislative Impacts
Despite the positive growth, Bowman faces challenges due to the altered treatment of Research and Experimental (R&E) expenditures under IRC Section 174, as amended by the Tax Cuts and Jobs Act (TCJA). The company is maintaining an uncertain tax position (UTP) with respect to the deductibility of its R&E expenses. However, the potential enactment of HR 7024 could restore the ability to deduct these costs, prompting a reversal of the UTP related liability, tax expense, and deferred tax assets.
Stock Repurchase and Non-GAAP Financial Metrics
Bowman's Board of Directors authorized a stock repurchase program in November 2022, under which the company repurchased 28,704 shares. A new $10.0 million repurchase program has been authorized for 2023. Additionally, Bowman introduced a non-GAAP financial metric, Adjusted EPS, to provide a clearer picture of its core financial performance by adjusting for non-recurring expenses, non-cash stock compensation, and other non-ordinary expenses.
Looking Ahead: FY 2024 Guidance
For the full year 2024, Bowman is adjusting its outlook for net service billing to be in the range of $363 to $378 million and Adjusted EBITDA in the range of $59 to $65 million. This forecast accounts for completed acquisitions and does not include contributions from any future acquisitions. The company's CFO, Bruce Labovitz, anticipates uneven growth in net service billing from the first to the third quarter, with a modest seasonal impact during the fourth quarter.
Bowman Consulting Group Ltd (NASDAQ:BWMN) is poised for continued growth and remains committed to delivering shareholder value through its integrated operating model and strategic acquisitions. The company's financial achievements and adjustments to its growth strategy reflect its resilience and adaptability in the dynamic engineering services industry.
Explore the complete 8-K earnings release (here) from Bowman Consulting Group Ltd for further details.
This article first appeared on GuruFocus.
