Thank you, Rochelle. Good afternoon, everyone, and welcome to Willdan Group's Fourth Quarter 2025 Earnings Call. Joining our call today are Mike Bieber, President and Chief Executive Officer; and Kim Early, Executive Vice President and Chief Financial Officer. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today's press release and in the presentation slides, all of which are available on our website. Please note that year-over-year commentary or variances on revenue, adjusted EBITDA, and adjusted EPS discussed during our prepared remarks are on an actual basis unless otherwise specified. We will make forward-looking statements about our performance. These statements are based on how things we see today. While we may elect to update these forward-looking statements at some point in the future, we do not undertake any obligation to do so. As described in our SEC filings, actual results may differ materially due to risks and uncertainties. With that, I'll hand the call over to Mike, who will begin on Slide 2.

Thanks, Al. We closed 2025 with record financial performance and strong momentum across our business. For 2025, both contract and net revenue grew greater than 20%, led by our energy work. Adjusted EBITDA grew 40%, and yearly margins expanded to above our 20% target for the first time in 2025. Strong EPS growth allowed us to generate $71 million of free cash flow, and we are now in a net cash position. In 2025, organic net revenue growth was 17% and was largely driven by expansion with existing customers. Electric load growth has returned to the United States after about 15 years of stagnation. Artificial intelligence and data centers are accelerating electricity demand at a scale not seen in recent years. To a lesser extent, transportation and building electrification and increased domestic manufacturing are also contributing to electricity demand growth. Our utility customers are confronting a grid that must manage more power, more intermittency, and more complexity than ever before. At the same time, affordability has moved to the forefront. As infrastructure investment increases, regulators must balance reliability, decarbonization and cost containment, which increases the need for smarter planning and cost-effective execution. Many studies have shown that energy efficiency usually increases rates slightly but drives down bills for participants because you're using less energy and thus improves affordability. The dynamic plays directly into where Willdan operates, and the results reflect strong execution, which fuels our positive long-term outlook. On Slide 3. Let me step back for a moment and remind everyone how our business is structured and where we're seeing demand. Willdan delivers a broad range of energy and infrastructure solutions to utilities, state and local governments, and commercial customers. On the left side of the slide, approximately 85% of our revenue comes from the Energy segment with the remaining 15% from Engineering and Consulting. On the right side, activity remains healthy across all customer groups. Our utility customers represent about 41% of revenue and continue to perform well. These programs are typically 3- to 5-year contracts funded through ratepayer mechanisms, which provide strong visibility and recurring revenue. Importantly, we're seeing program sizes usually grow over time as energy efficiency becomes recognized as a system resource. State and local governments account for approximately 48% of revenue and remain a steady source of growth. Most of this work is supported by user fees and municipal bond funding, both of which remain stable. Commercial customers have rapidly grown to 11% of revenue, with most of that activity tied to power for data centers. AI-driven load growth is creating meaningful infrastructure and energy optimization needs, and we're helping these clients navigate grid constraints, design solutions, and meet aggressive power requirements. Commercial customers represent the most fertile business environment we serve, and we plan to continue intentionally increasing our capabilities offered to the commercial sector. Taken together, this mix reflects a diversified, durable business supported by long-term contracts, relatively stable funding sources, and growing demand across multiple end markets. On Slide 4. Our upfront policy, forecasting, and data analytics work informs our strategy and helps us navigate market change. We operate at the intersection of consulting services, engineering, and program management, helping clients plan for new load, design infrastructure upgrades, manage grid complexity, and implement cost-effective energy solutions. In our upfront work, we are seeing particular demand for studies on the impacts of electricity load growth, and that work grew more than 50% organically year-over-year. As I mentioned in prior earnings calls, those market changes led us to the APG acquisition. That provides power engineering solutions to commercial customers, including data centers and hyperscalers. We expect that work to more than double in 2026, and we are growing that backlog into 2027 and 2028 now because they're long-term contracts. In other parts of engineering, we saw strong execution and growth with both commercial and municipal customers. In program management, we performed above our plan on utility programs and building energy programs for cities. Demonstrating this model in an example, I'll walk through what we are doing around data centers. First, we work with both hyperscalers and government regulators to optimize the siting and mitigate the electric load impacts of data centers. Our consulting work for Amazon noted in our December press release is an example of this, along with our studies for the states of Virginia, Michigan, and California. Next, we work for data center developers to design and manage the construction of substations that power new data centers, which enable AI. I'll provide you some examples of that in a moment. And finally, as Willdan has done for more than 10 years, we provide energy efficiency optimization for data center operators, mostly through long-term master service agreements. On Slide 5. We have a strong pipeline of opportunities that we are converting into contracts, and the pipeline is solid heading into 2026. Importantly, our average contract size has continued to grow, fueling the overall growth of Willdan. Here are just a few examples we converted since our last conference call. For the city of San Diego, we recently signed a $112 million energy efficiency program that will help save electricity at municipal infrastructure owned by the city. This program is about 2 years in duration and addresses a wide range of civic buildings and other infrastructure that uses electricity. This follows a similar $97 million win with Alameda County, California we announced last quarter. For Mt. San Antonio College, we were just awarded an exciting new contract that demonstrates how acquisition integration can provide larger scale and more effective client solutions. This $49 million brand-new project is an integrated microgrid resiliency project. Within Willdan, it will involve the legacy civil engineering group collaborating with several previously acquired energy groups to deliver a comprehensive energy solution to the college over the next 2 years. Next, for Menlo Digital, one of America's largest data center developers and a large customer of ours, we are now breaking ground on a $38 million project to design and manage the construction of an interconnect substation that powers a new data center in Phoenix, Arizona. For SOLV Energy, we signed a $4.5 million integrated distributed energy resource, or DER, project in Utah. And finally, we signed a smaller confidential LoadSEER software license in Q4. LoadSEER is our flagship long-term utility forecasting software. On Slide 6. This slide highlights what we continue to see in the data center market, sustained growth in electricity demand. There is currently an estimated 35 gigawatts of active data center construction in the U.S. While it's unlikely every announced project will ultimately be built, the broader trend is clear. Demand for power from digital infrastructure remains durable and is expected to extend at least through the end of the decade. Importantly, this isn't just about megawatts. It's about complexity. Data center load growth is driving transmission upgrades, distribution system expansion, interconnection challenges and increasing reliability requirements. Virginia and the more rural states of Texas, Georgia, Arizona, Tennessee and Wisconsin are all experiencing rapid growth in energy demand from data centers. This dynamic plays directly to Willdan's strengths from power system engineering and grid modernization to targeting energy efficiency and load optimization solutions. As electricity demand grows, utilities and commercial customers need technically advanced partners to plan, design and optimize the system. That's exactly where we operate. On Slide 7. We continue to see energy efficiency evolve in ways that reinforce its strategic importance within tomorrow's power grid. There is an increasing focus on capacity-driven and locational efficiency programs. Targeted efficiency and non-wire solutions are now delivering measurable distribution-level value directly supporting grid planning and load management. Next, affordability is now a nationwide concern. Utilities and regulators are attempting to mitigate customer bill impacts, and energy efficiency remains one of the most cost-effective and immediate tools to reduce customer bills while accommodating load growth. Next, grid modernization is accelerating. Advanced metering infrastructure and AI-enabled analytics are improving measurement, targeting and performance optimization, further integrating planning studies and efficiency into core systems operations. Finally, reliability has become more of a year-round concern than just the historical concern of summer peaking. Now winter and summer grid events reinforce the role of efficiency as a dependable system resource. Willdan is well positioned today and plans to further increase our capabilities through key hires and acquisitions. I want to mention that we have a particularly robust acquisition pipeline entering 2026 that will better enable us to serve customers in the future. Kim, over to you.

Thanks, Mike, and good afternoon, everyone. For the fourth quarter of 2025, contract revenue increased 21% to $174 million, and net revenue grew 13% to $89.5 million. Adjusted EBITDA rose 13% compared to the previous year, totaling $20 million for the quarter, and adjusted earnings per share more than doubled to $1.57, which is $1.23 on a GAAP basis, supported by significant tax reductions from energy efficiency incentives under Section 179D. The quarter benefited from broad growth across our service lines and contributions from recent acquisitions. Margins remained solid due to strong execution and cost discipline. Fiscal 2025 was a record year for Willdan, with consolidated contract revenue growing 21% to $682 million, and net revenue growing 23% to $365 million. This growth was widespread across our segments, service lines, and customer base, aided by contributions from our acquisitions. Of the 23% increase in net revenue, 17% was organic and 6% was from acquisitions. Importantly, our revenue growth led to substantial profitability growth as well. Gross profit rose 26.1% to $256 million, and gross margin expanded to 37.5% from 35.8% in the prior year, reflecting growth and productivity gains in our program management and consulting services, as well as success in reducing direct costs. General and administrative expenses grew as we invested in talent and technology, performance-related incentive compensation, and acquisition integration. However, the resulting operating leverage helped adjusted EBITDA increase 40% year-over-year to $79.5 million. Net interest expense declined by 26% to $5.7 million for 2025, driven primarily by lower debt levels and a reduced interest rate spread from lower leverage ratios. We also benefited from interest income from consistently high cash balances. Furthermore, we recorded an income tax benefit of $12.6 million due to 179D deductions and the impact of a higher stock valuation, adding to our bottom line and resulting in an effective tax rate benefit of 31.4%, compared to a tax rate expense of 15.4% in 2024. Consequently, net income more than doubled to $52.6 million for the year, or $3.49 per diluted share on a GAAP basis, up from net income of $22.6 million or $1.58 per share in 2024. Adjusted earnings per share increased to $4.89, compared to $2.43 in the previous year. Revenue growth and margin expansion fueled these strong results. We generated $80 million in cash flow from operations due to continued improvements in working capital, resulting in $71 million in free cash flow, or $4.69 per share in 2025. We invested $9 million in capital expenditures mainly for proprietary software development and used $36 million for acquisitions. We also reduced borrowings by $40 million under our credit facility, ending the year with only $49 million in outstanding debt. We finished the year with $66 million in unrestricted cash and a net positive cash position of $17 million, marking the first time since 2017 with effectively zero leverage compared to 0.3x EBITDA at the end of 2024. Additionally, we maintained full availability under our $100 million revolving credit facility, resulting in total available liquidity of $216 million at year-end, providing significant financial flexibility as we approach 2026. Our capital allocation priorities remain consistent, focusing on reinvesting in the business to support organic growth and pursuing profitable acquisitions that expand and enhance our capabilities and geographic reach. Over the past four years, our growth profile has been durable and increasingly profitable, with gross revenue and net revenue growing at compound annual rates of 18% and 16%, respectively, while adjusted EBITDA expanded at a 30% compounded annual rate. We have demonstrated the ability to expand margins over time through disciplined execution and productivity improvements, alongside favorable mix and prudent cost management. The margin of 21.8% in 2025 exceeded our long-term target of a 20% EBITDA margin for the first time, and we expect the 2026 margin to also surpass that target. For 2026, we anticipate net revenue to be between $390 million to $405 million, adjusted EBITDA in the range of $85 million to $90 million, and adjusted earnings per share between $4.50 and $4.70 per share. These targets assume a full year effective tax benefit of around 10% and approximately 15.8 million diluted shares outstanding, excluding any future acquisitions, though we expect to make acquisitions during the year, and our guidance will be updated as necessary. In summary, fiscal 2025 was a record year characterized by continued growth and margin expansion. We entered 2026 with a solid balance sheet and ample liquidity to support strategic growth, positioning us at the center of expanding energy and infrastructure markets with a strong M&A pipeline to enhance our scale and capabilities. With that, operator, we are ready to take questions.

And we'll take a question from Craig Irwin with ROTH Capital Partners.

So I'll start off the top by asking about the thing that I think is affecting aftermarket trading, right? Your EPS guide of $4.50 to $4.70 is fantastic, but it is below the $4.93 last year. When I look at the tax rate that you're guiding us to a 10% benefit, that compares to negative 31% last year. So there's obviously quite a difference in the 179D assumption for 2026. This doesn't impact EBITDA. But can you maybe walk us through what your assumptions are for 179D in 2026, how this worked so very well for you last year? And is there a potential for us to see 179D maybe become more favorable for you over the course of the year?

Yes. Thanks, Craig. Well, the first big assumption is that consistent with the One Big Beautiful Bill, the 179D is set to expire at the end of June for this year. So that inability to carry that through to the end of the year means that we can only take advantage of that through projects that are started within the first 6 months of 2026, so that's the single biggest factor there. There's also a little bit of a shift in just the work that we're doing from the Clark County School District. So we have a lot of school buildings within that school district to the shift into work we're doing for Alameda County and San Diego, which will involve fewer buildings, which are really the source of a lot of those 179D deductions that we got. So the main driver is just the assumption that the 179D provision is not being renewed as of the end of June and secondarily, that there's just fewer buildings in some of the projects that we're doing that would qualify.

Understood. That makes complete sense. So my next question is about the EBITDA growth, right? So for the trailing 4 quarters, your EBITDA growth has been between 67% and 190% year-over-year, really just absolutely crushing it. So when I look at this, I know your markets are helping in a big way, but I kind of have a suspicion that Willdan is humming on all cylinders, that there's certain significant operating improvements that are happening at the company that might be improving the fundamental profitability of the company moving forward. Can you maybe unpack for us any of these operational changes that might be taking place? I know you're conservative in your guide and you give us numbers that you firmly believe in. But how should we look at the potential for your initiatives on profitability and performance as contributors over the course of the next year?

Yes, Craig. First, we anticipate that margins will remain above 20%, which is our long-term target. We achieved this this year, and our guidance indicates that the midpoint is also above 20%, showing a slight improvement from this year. This improvement is ongoing, and a significant structural change over the past five years is that we've enhanced our value proposition, allowing us to charge more for our services. Additionally, as the company has grown, back-office costs are not increasing at the same rate as our top line, suggesting that this trend will persist, which is reflected in our guidance. Looking back at last year's projections, our long-term expectations for investors are to experience overall growth of 15% to 20% in both revenue and profits. By the end of the year, we expect to be in that range, if not better, which is what we achieved in '25. We have a similar strategy prepared for '26. We will provide appropriately conservative guidance at the start of the year, with the understanding that you expect us to outperform. We believe this positions us favorably, and I think the outlook for '26 is positive.

Excellent. Last question if I may. So you guys are winning in data center, right? Why? Because you bring the right resources to the customer quickly and they can rely on Willdan to execute the project impeccably. But you've historically done the same thing for utilities, and utility demand seems to be going up because of the reserve margins that are falling across the country, right? Load growth is becoming a big problem. Do you see potential for continued request for accelerated project completion that tends to drive margins upward over the next couple of years? I mean, is this a theme that you're seeing more predominantly across your utility customer base?

It is, Craig. You're absolutely right that utilities are being squeezed now. Generation is not necessarily keeping pace with the demand for that electricity. And so yes, energy efficiency is the cost-effective resource. They're trying to get as much out of those programs as they can get. And that's why you've seen those programs grow over time. If you look back over 2025, 17% organic growth, there wasn't any single big win that drove that. It was mostly expansion from those long-term customer relationships, many of which are utilities, as you pointed out. That's exactly what we're seeing, and that trend is continuing.

Congratulations on the hard work and excellent execution throughout the year. You took advantage of the favorable conditions and scale benefits. This was evident as all your stocks still show momentum. I have a couple of questions. If I remember correctly from last year, the Los Angeles Department of Power and Water contract wasn’t reflected in the fourth quarter of 2024 revenue. Did it see significant growth in this December quarter? I know you were comparing it to a period with not much contribution from the previous year.

On a percentage basis, it increased significantly, but its actual dollar contribution for Q4 was very small. That program is increasing, though. We will see an improvement in Q1 compared to Q4, but the major increase for the Los Angeles Department of Power and Water is expected in Q2 of this year, and that's just around the corner. We have the necessary amendments in place, the contract changes are set, and the contracting community is prepared for it. I believe you will see a significant contribution from that contract starting in Q2, and it will continue for the next four years.

That's good. I was estimating revenue to be between $7 million and $8 million per quarter, which could potentially be higher. It seems that it might exceed the initial terms that were reduced before renewal. Additionally, Mike, I wanted to clarify something I heard during your call. I will check the transcript, but did you suggest that revenue from data centers could double in 2026, or did I misunderstand the market you were referring to?

No, we were talking specifically about the APG acquisition that does that type of substation design and construction management for those data centers, and we are expecting that to more than double for us this year. A lot of those projects, though, are 2 or more years in duration, so we're actually building backlog into '27 and '28. This is going to be a long-term trend.

That's great. I mean, it seems like it could be about 20% of your revenue by the end of the year from data centers related if it does double. I mean, I imagine it would. Does that make sense, it could be maybe 20%? I mean, I know APG gets some AT&T before that, but it seems like you could get to 20% data centers.

It will certainly grow from 11% year-over-year. I don't know where we'll end up. We mentioned it's the most robust area we're serving. And in addition, I'll mention, we're looking at acquisitions that specifically expand our capabilities to the commercial customers overall. We want to diversify in that direction. So we'd like to catalyze and drive that number up even further into the 20s. We have a financial services group that we've had for over 15 years at Willdan, although we don't discuss it frequently. It's a legacy activity that we primarily provide for communities in the western United States, with much of the work taking place in California and Texas, and a bit in Florida. This represents a geographic expansion for that group. Previously, we did not serve any customers in North and South Carolina and Kentucky. You're correct that this can be a higher-margin business, and we see significant cross-selling opportunities between our upfront financing work, especially for school districts, and other services we offer for those schools, such as energy efficiency.

Thank you. That will conclude the question-and-answer session. And this does conclude today's teleconference. You may now disconnect your line.