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What changed in Bowman Consulting Group Ltd.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Bowman Consulting Group Ltd.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+365 added−365 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-12)

Top changes in Bowman Consulting Group Ltd.'s 2024 10-K

365 paragraphs added · 365 removed · 318 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

148 edited+26 added−25 removed76 unchanged
Biggest changeIn the event a state does not allow a corporation to hold a license, we have in the past, formed professional services corporations owned by Mr. Bowman and other employees to facilitate our ability to work in such states. To the extent we cannot adequately satisfy a state’s licensing requirements, we do not operate in that state.
Biggest changeCertain states allow only individuals and individually owned professional services corporations to hold licenses. In those states there may be grandfathering exemptions that allow corporations to hold licenses. In the event a state does not allow a corporation to hold a license, we have in the past, formed professional services corporations owned by Mr.
Our public sector assignments originate from customers that are transportation departments, utilities, government agencies (federal, state, and local), military branches, school systems, water authorities and other general infrastructure operators.
Our public sector assignments originate from customers that are transportation departments, utilities, government agencies (federal, state, and local), military branches, school systems, water authorities and other general public infrastructure operators.
Our base of repeat customers and multi-year contracts reduce our customer acquisition expenses and provide increased visibility into future revenues, allowing us to make investments confidently to expand and take market share from competitors. We believe we have the following competitive strengths: Scalable platform with differentiated capabilities and national reputation for operational excellence.
Our base of repeat customers and multi-year contracts reduce customer acquisition expenses and provide increased visibility into future revenues, allowing us to make investments confidently to expand and take market share from competitors. We believe we have the following competitive strengths: Scalable platform with differentiated capabilities and national reputation for operational excellence.
We believe these relationships benefit us through lower business development and customer acquisition expenses as compared to those associated with developing new customers. Our strategic focus is on penetrating and expanding our presence in markets which best afford us opportunities to secure assignments that provide recurring revenue and multi-year customer assignments.
We believe these relationships benefit us through lower business development and customer acquisition expenses as compared to those associated with developing new customers. Our strategic focus is on expanding our presence in markets which best afford us opportunities to secure assignments that provide recurring revenue and multi-year customer assignments.
The aging of the current installed transportation base and increasing load usage are forcing public authorities to invest in repairs, increase the capacity of their systems or privatize the operation of their roads, bridges, and tollways. The Federal Highway Administration has estimated that nearly a quarter of the nation’s bridges are deficient and require replacement or rehabilitation.
The aging of the current installed transportation base and increasing load usage are forcing public and quasi-public authorities to invest in repairs, increase the capacity of their systems or privatize the operation of their roads, bridges, and tollways. The Federal Highway Administration has estimated that nearly a quarter of the nation’s bridges are deficient and require replacement or rehabilitation.
Fundamental to our successful acquisition strategy has been our leadership team’s ability to identify, execute, and integrate strategic acquisitions of companies with workforces that align with our culture and are expected to provide synergies for our existing operations. Our acquisition integration approach rapidly facilitates cross-cultivation of experiences, employee collaboration and cross selling of services.
Fundamental to our successful acquisition strategy has been our leadership team’s ability to identify, execute, and integrate strategic acquisitions of companies with workforces that align with our culture and are expected to provide synergies for our existing operations. Our complete acquisition integration approach rapidly facilitates cross-cultivation of experiences, employee collaboration and cross selling of services.
Participants aspiring to enter the market must have sufficient skilled human capital to complete complex projects, and the financial resources to provide adequate risk management and cover working capital and professional liability, cyber liability and other insurance requirements. These factors serve as both a barrier to entry and a catalyst for consolidation.
Participants aspiring to enter the market must have sufficient skilled human capital to complete complex projects, and the financial resources to cover working capital and provide adequate risk management including professional liability, cyber liability and other insurance requirements. These factors serve as both a barrier to entry and a catalyst for consolidation.
Providing construction management and design services to departments of transportation and toll authorities has been a proven and dependable source of multi-year and reoccurring revenue. Within our transportation practice we serve customers that include multiple state and local departments of transportation, tollway authorities, transit authorities, and private roadway owners.
Providing construction management and design services to departments of transportation and toll authorities has been a proven and dependable source of multi-year and reoccurring revenue. Within our transportation practice we serve customers that include state and local departments of transportation, tollway authorities, transit authorities, and private roadway owners.
Fueled by changing population demographics and evolving remote work dynamics, the market for design, construction and maintenance of new and renewed building infrastructure presents us with continually expanding opportunities. With respect to building infrastructure, we are agnostic as to the end use of the site we are planning.
Fueled by changing population demographics and evolving work dynamics, the market for design, construction and maintenance of new and renewed building infrastructure presents us with continually expanding opportunities. With respect to building infrastructure, we are agnostic as to the end use of the site we are planning.
Examples of projects include: • Filtration systems • Water pumping and storage systems • Elevated storage tanks • Reverse osmosis systems • Disinfection / treatment systems • Distribution systems • Water treatment systems • Nutrient removal systems • Pump stations • Collection systems • Reuse systems • Membrane treatment systems Acquisitions Acquisitions are a core component of our growth plans.
Examples of projects include: • Filtration systems • Water pumping and storage systems • Elevated storage tanks • Reverse osmosis systems • Disinfection / treatment systems • Distribution systems • Water treatment systems • Nutrient removal systems • Pump stations • Collection system • Reuse systems • Membrane treatment systems Acquisitions Acquisitions are a core component of our growth plans.
Examples of services include: • Constructability review 11 Table of Content • Value engineering • Budgeting and cost estimating • Bid solicitation, documentation, and preparation • Interagency and utility coordination • Onsite observation and report evaluation • Traffic routing, planning and management • Resident engineer service • Public communication and outreach Environmental Consulting Sound environmental management is essential to the health and safety of our surroundings and is a critical aspect of the development of any energy, transportation, or community development project.
Examples of services include: • Constructability review • Value engineering • Budgeting and cost estimating • Bid solicitation, documentation, and preparation • Interagency and utility coordination • Onsite observation and report evaluation • Traffic routing, planning and management • Resident engineer service • Public communication and outreach 12 Table of Content Environmental Consulting Sound environmental management is essential to the health and safety of our surroundings and is a critical aspect of the development of any energy, transportation, or community development project.
While price differentiation remains an important element in competitive bidding and is often the most significant factor in securing public sector contracts, we believe that value, quality, reputation and scale are competitive differentiators that positively affect our ability to win work. The importance of the foregoing factors varies widely based upon the nature, location, and size of the project.
While price differentiation remains an important element in competitive bidding and is often a significant factor in securing public sector contracts, we believe that value, quality, reputation and scale are competitive differentiators that positively affect our ability to win work. The importance of the foregoing factors varies widely based upon the nature, location, and size of the project.
We provide employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs, including: 1) benefits that provide protection and security so employees have peace of mind concerning events that may require time away from work or that impact financial well-being; 2) support for physical and mental health through tools, resources and leave policies that help improve or maintain health status and encourage engagement in healthy behaviors; and 3) choices where possible, so employees can customize benefits to meet their needs and the needs of their families.
We provide employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs, including: 1) benefits that provide protection and security so employees have peace of mind concerning 19 Table of Content events that may require time away from work or that impact financial well-being; 2) support for physical and mental health through tools, resources and leave policies that help improve or maintain health status and encourage engagement in healthy behaviors; and 3) choices where possible, so employees can customize benefits to meet their needs and the needs of their families.
Our success in customer acquisition and retention is the result of our investment in relationships over time and the delivery of highly creative and cost-effective solutions. We are defined by our core values and purpose. Our culture revolves around a top to bottom commitment to the creation of opportunities for aspiring people to thrive and achieve their goals.
Our success in customer acquisition and retention is the result of our investment in relationships over time and the delivery of highly creative, technology-enabled and cost-effective solutions. We are defined by our core values and purpose. Our culture revolves around a top to bottom commitment to the creation of opportunities for aspiring people to thrive and achieve their goals.
Examples of services and projects include: • Heating ventilating and a/c systems • Medical-grade air filtration • Indoor air quality monitoring • Smoke control and evacuation • Energy management and controls • Medical gas and vacuum • Lighting design and lighting controls • Low and medium voltage power distribution • Fire / life safety systems • Standby power and UPS systems • Telecom/Data/AV Infrastructure • Arc flash hazard analysis • Acoustic engineering 13 Table of Content Structural Engineering Our structural engineers work on the design and technical challenges involved in creating durable structures that meet the challenges of increasing 21st century demands.
Examples of services and projects include: • Heating ventilating and a/c systems • Medical-grade air filtration • Indoor air quality monitoring • Smoke control and evacuation • Energy management and controls • Medical gas and vacuum • Lighting design and lighting controls • Low and medium voltage power distribution • Fire / life safety systems • Standby power and UPS systems • Telecom/Data/AV Infrastructure • Arc flash hazard analysis • Acoustic engineering Structural Engineering Our structural engineers work on the design and technical challenges involved in creating durable structures that meet the challenges of increasing 21st century demands.
Examples of services include: • ALTA boundary surveys • Topographic surveys • Route surveys • Right of way mapping • Drone inspection of transmission lines • Laser scanning and LiDAR imaging • Land title surveys • Underground utility location • Reality capture • GIS mapping • Underwater and marine survey • Hydrology and geoscience Landscape Architecture Landscape architecture is place-making within the exterior environment.
Examples of services include: • ALTA boundary surveys • Topographic surveys • Route surveys • Right of way mapping • Drone inspection of transmission lines • Laser scanning and LiDAR imaging • Land title surveys • Underground utility location • Reality capture • GIS mapping • Underwater and marine survey • Hydrology and geoscience • Aerial orthoimagery Landscape Architecture Landscape architecture is place-making within the exterior environment.
On highly complex and sought-after projects, our breadth of services, financial foundation, work-sharing orientation and geographic reach afford us flexibility in pricing and cost estimation. Our ability to provide comprehensive and integrated solutions gives us flexibility when it comes to pricing strategies to meet customer budgets and funding limitations.
On highly complex and sought-after projects, our breadth of services, technology tools, financial foundation, work-sharing orientation and geographic reach afford us flexibility in pricing and cost estimation. Our ability to provide comprehensive and integrated solutions gives us flexibility when it comes to pricing strategies to meet customer budgets and funding limitations.
Some significant laws and regulations that affect us include: 19 Table of Content • federal, state, and local laws and regulations (including the Federal Acquisition Regulation or “FAR”) regarding the formation, administration, and performance of government contracts; • the Civil False Claims Act, which provides for substantial civil penalties for violations, including for submission of a false or fraudulent claim to the U.S. government for payment or approval; and • federal, state, and local laws and regulations regarding procurement integrity including gratuity, bribery and anti-corruption requirements as well as limitations on political contributions and lobbying.
Some significant laws and regulations that affect us include: • federal, state, and local laws and regulations (including the Federal Acquisition Regulation or “FAR”) regarding the formation, administration, and performance of government contracts; • the Civil False Claims Act, which provides for substantial civil penalties for violations, including for submission of a false or fraudulent claim to the U.S. government for payment or approval; and • federal, state, and local laws and regulations regarding procurement integrity including gratuity, bribery and anti-corruption requirements as well as limitations on political contributions and lobbying.
In its report, Renewables 2020—Analysis and forecast to 2025, the International Energy Agency predicts that renewables are expected to account for 95% of the net increase in global power capacity through 2025. During that period, the share of renewables in electricity generation is forecast to grow from 27% in 2020 to 33% in 2025.
In its report, Renewables 2020—Analysis and forecast to 2025, the International Energy Agency predicts that renewables are expected to account for 95% of the net increase in global power capacity through 2025. During that period, the share of renewables in electricity generation was forecast to grow from 27% in 2020 to 33% in 2025.
We have achieved this increase in revenue through both organic growth and acquisitions. In 2023, we ranked 87 th on the ENR Top 500 Design Firms list, up from 144 th in 2021, the year of our initial public offering.
We have achieved this increase in revenue through both organic growth and acquisitions. In 2024, we ranked 78 th on the ENR Top 500 Design Firms list, up from 144 th in 2021, the year of our initial public offering and 87 th in 2023.
Consumers of engineering and technical services consistent with those we offer can be local, regional, and national organizations with projects ranging from a single, quick-turn deliverable to complex long-term assignments and multi-year engagements with multiple phases and deliverables.
Consumers of engineering and technical services consistent with those we offer can be local, regional, and national organizations with projects ranging from a single, quick-turn deliverable to complex long-term assignments and multi-year engagements with evolving phases and deliverables.
For the year ended December 31, 2023, we did not have any individual customers that represented more than 5% of our gross contract revenue. Our operations encompass nearly every aspect of the U.S. domestic built environment.
For the year ended December 31, 2024, we did not have any individual customers that represented more than 5% of our gross contract revenue. Our operations encompass nearly every aspect of the U.S. domestic built environment.
Our disciplined acquisition objectives include earnings accretion, geographic and market diversification, scale, cross-selling and revenue synergy, and talent acquisition. Growing franchise in secular growth markets. Our growth initiatives are especially focused on markets that possess strong secular growth characteristics.
Our disciplined acquisition objectives include earnings accretion, geographic and market diversification, scale, cross-selling and revenue synergy, technology advancement and talent acquisition. Growing franchise in secular growth markets. Our growth initiatives are especially focused on markets that possess strong secular growth characteristics.
The American Society of Civil Engineers (“ASCE”) 2021 Infrastructure Report Card rated the state of the U.S. Highway system as “D+” and estimates spending requirements of over $2.5 trillion over ten years on U.S. surface transportation infrastructure.
The American Society of Civil Engineers (“ASCE”) 2021 Infrastructure Report Card rated the state of the U.S. Highway system as “D+” and estimated spending requirements of over $2.5 trillion over ten years on U.S. surface transportation infrastructure.
We believe that we benefit from our diversified service offerings and highly skilled, diverse and qualified employees. Credentials, licensing and the ability to secure and demonstrate sufficient professional liability insurance present significant barriers to entry in the industry.
We believe that we benefit from our diversified service offerings, adaptable technology and highly skilled, diverse and qualified employees. Credentials, licensing and the ability to secure and demonstrate sufficient professional liability insurance present significant barriers to entry in the industry.
We believe that our proven track record, ownership culture, and unyielding commitment to preserving our uniquely entrepreneurial and founder-led culture as we grow will provide us a competitive edge with acquisition targets as a desirable transaction partner.
We believe that our proven track record, ownership culture, and unyielding commitment to preserving a uniquely entrepreneurial culture as we grow will provide us a competitive edge with acquisition targets as a desirable transaction partner.
Examples of services include: • Conceptual land planning • Environmental consulting and permitting • Planning / zoning and entitlements • Roadway, bridge and highway designs • Erosion and Sediment designs • Stormwater management designs • Construction administration • Traffic studies • Floodplain studies 10 Table of Content • Utility relocation designs Transportation Functional transportation systems are crucial in connecting our communities and play an essential role in the development of society.
Examples of services include: • Conceptual land planning • Environmental consulting and permitting • Planning / zoning and entitlements • Roadway, bridge and highway designs • Erosion and Sediment designs • Stormwater management designs • Construction administration • Traffic studies • Floodplain studies • Utility relocation designs Transportation Functional transportation systems are crucial in connecting our communities and play an essential role in the development of society.
Under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (“CERCLA”), and comparable state laws, we may be required to investigate and remediate regulated hazardous materials. CERCLA and comparable state laws typically impose strict joint and several liabilities without regard to whether a company knew of or caused the release of hazardous substances.
Under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (“CERCLA”), and comparable state laws, we may be required to investigate and remediate regulated hazardous materials. CERCLA and comparable state laws typically impose strict joint and several liabilities without regard 20 Table of Content to whether a company knew of or caused the release of hazardous substances.
Changes in shopping and consuming habits spurred by e-commerce have, in our belief, catalyzed a massive reconfiguration of commercial and retail physical plant along with the configuration of their surrounding site elements. Brands have been adapting their customer engagements because of fundamental changes in consumption patterns that resulted from the pandemic experience.
Changes in shopping and consuming habits spurred by e-commerce have, in our belief, catalyzed a massive reconfiguration of commercial and retail physical plant along with the configuration of their surrounding site elements. Brands have been adapting their customer engagement models because of fundamental changes in consumption patterns that resulted from the pandemic experience.
Our commitment to sustaining our unique culture as we continue to expand has been, and will continue to be, fundamental to maintaining an engaged workforce and driving organic growth throughout our organization. We intend to continue to grow through acquisitions.
Our commitment to sustaining our unique culture as we continue to expand has been, and will continue to be, fundamental to maintaining an engaged workforce and delivering organic growth throughout our organization. We intend to continue to grow through acquisitions.
Operators of the U.S. power grid face unrelenting pressure to increase resiliency and to integrate technologies such as electric vehicles, distributed generation, and battery storage, as well as to upgrade and replace aging infrastructure. According to the ASCE Infrastructure 2021 Report Card, the U.S. electric infrastructure will require capital investment of $637 billion by 2031.
Operators of the U.S. power grid have faced unrelenting pressure to increase resiliency and to integrate technologies such as electric vehicles, distributed generation, and battery storage, as well as to upgrade and replace aging infrastructure. According to the ASCE Infrastructure 2021 Report Card, the U.S. electric infrastructure will require capital investment of $637 billion by 2031.
Our breadth of our customer base diversifies risk, with the ten largest customers we served accounting for approximately 18% and 26% of our net service billing during the years ended December 31, 2023 and 2022, respectively. We avoid concentration of exposure with no single customer accounting for more than 5% of our net service revenue during either of these periods.
Our breadth of our customer base diversifies risk, with the ten largest customers we served accounting for approximately 18% and 18% of our net service billing during the years ended December 31, 2024 and 2023, respectively. We avoid concentration of exposure with no single customer accounting for more than 5% of our net service revenue during either of these periods.
To achieve the aggressive growth targets we have established, we plan to focus effort and resources on markets and opportunities with the following characteristics: • High potential for reoccurring revenue and multi-year assignments • Engagement with renewable energy, energy transitions, and energy efficiency 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 public sector funding • Prime for technology advancement with respect to delivery of our services • Complex regulatory environments These characteristics of market opportunities are fluid, and we may adapt them from time to time to evolving dynamics.
To achieve the 9 Table of Content aggressive growth targets we have established, we plan to focus effort and resources on markets and service line expansion opportunities with the following characteristics: • High potential for reoccurring revenue and multi-year assignments • Engagement with renewable energy, energy transitions, and energy efficiency 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 public sector funding • Prime for technology advancement with respect to delivery of our services • Complex regulatory environments These characteristics of market and service line opportunities are fluid, and we may adapt them from time to time to evolving dynamics.
This broad field ranges from small-scale garden design and community parks to the large-scale design of plazas, institutional campuses, and streetscape settings. 12 Table of Content Each space is important to its users and to function well, it must meet specified programmatic needs while being aesthetically pleasing.
This broad field ranges from small-scale garden design and community parks to the large-scale design of plazas, institutional campuses, and streetscape settings. Each space is important to its users and to function well, it must meet specified programmatic needs while being aesthetically pleasing.
Degradation of the safety and sustainability of natural gas distribution systems is advancing the infusion of public investment and private, returns-driven capital. The entrance of private capital into the historically public utility market, and the associated timely demand for return on investment, has catalyzed the pace of multi-year expenditures on critical infrastructure.
Degradation of the safety and sustainability of natural gas distribution systems is advancing the infusion of public investment and private, returns-driven capital. The entrance of private capital into the historically public utility market, and the associated timely demand for return on investment driven by rate adjustments, has catalyzed the pace of multi-year expenditures on critical infrastructure.
Examples of services include: • Conceptual planning • Master planning • Hardscape design and details • Streetscape design • Sustainable / low impact design • Construction documentation • Construction administration • Arborist services Land Procurement and Right-of-Way Land procurement and right-of-way acquisition is a critical component of practically any significant utility, infrastructure, or utility scale energy project.
Examples of services include: • Conceptual planning 13 Table of Content • Master planning • Hardscape design and details • Streetscape design • Sustainable / low impact design • Construction documentation • Construction administration • Arborist services Land Procurement and Right-of-Way Land procurement and right-of-way acquisition is a critical component of practically any significant utility, infrastructure, or utility scale energy project.
Examples of projects include: • Highway bridges • Culverts • Retaining walls • Pedestrian bridges • Buildings • Railroad bridges • Tanks • Contractor services Water Resources The U.S. water supply is becoming scarcer and in need of protection while at the same time our water infrastructure renewal needs increase.
Examples of projects include: 14 Table of Content • Highway bridges • Culverts • Retaining walls • Pedestrian bridges • Buildings • Railroad bridges • Tanks • Contractor services Water Resources The U.S. water supply is becoming scarcer and in need of protection while at the same time our water infrastructure renewal needs increase.
We focus our business development efforts on increasing the proportion of our revenue generated by long-term projects and multi-year contracts. We intend to continue expanding long-term relationships and multi-year assignments with both public and private sector customers through organic growth and acquisitions.
We focus our business development 16 Table of Content efforts on increasing the proportion of our revenue generated by long-term projects and multi-year contracts. We intend to continue expanding long-term relationships and multi-year assignments with both public and private sector customers through organic growth and acquisitions.
By focusing our business development efforts more on long-term assignments and multi-year opportunities in growing end markets, we extend the visibility of future revenue forecasts and reduce the costs and uncertainty associated with backlog depletion and revenue replacement.
By focusing our business development efforts more on long-term assignments and multi-year engagement opportunities in growing end markets, we extend the visibility of future revenue forecasts and reduce the costs and uncertainty associated with backlog depletion, staffing optimization and revenue replacement.
The team has a proven record of accomplishment with respect to driving organic growth, executing, and integrating acquisitions, implementing internal controls, and managing regulatory compliance. We have a highly technical workforce, of which approximately 33% hold professional certifications from various industry and regulatory bodies.
The team has a proven record of accomplishment with respect to sustained revenue growth, executing, and integrating acquisitions, implementing internal controls, and managing regulatory compliance. We have a highly technical workforce, of which approximately 33% hold professional certifications from various industry and regulatory bodies.
For the years ended December 31, 2023 and 2022, these emerging markets collectively represented 4.2% and 5.3%, respectively, of our gross contract revenue. Growth Strategies We continue to focus our efforts on the goal of growing our revenue to become an ENR Top 50 firm within five years of the completion of our initial public offering in May 2021.
For the years ended December 31, 2024 and 2023, these emerging markets collectively represented 10.4% and 4.2%, respectively, of our gross contract revenue. Growth Strategies We continue to focus our efforts on the goal of growing our revenue to become an ENR Top 50 firm within five years of the completion of our initial public offering in May 2021.
We believe savvy and well capitalized developers and operators in this market will continue to demand our services in response to evolving market forces. We serve national retailers, big box retailers, distribution center owners, office building owners and developers, convenience store operators, quick serve restaurant owners and others. 7 Table of Content Residential.
We believe savvy and well capitalized developers and operators in this market will continue to demand our services in response to evolving market forces. We serve national retailers, big box retailers, distribution center owners, office building owners and developers, convenience store operators, quick serve restaurant owners and others. Residential.
The proliferation of data centers, the internet of things, and artificial intelligence with its associated electrical demand are straining the U.S. power grid and creating a sense of urgency around maintenance and upgrade.
The proliferation of data centers, the internet of things, and artificial intelligence applications and the associated electrical demand are straining the U.S. power grid and creating a sense of urgency around maintenance and upgrade.
We have experience with and understand agency rules and regulations, and we work closely with municipal, county and state officials to provide guidance, professional insight, and functional and cost-effective designs while staying up to date on continually changing industry trends.
We have experience with and understand agency rules and regulations, and we work closely with municipal, county and 11 Table of Content state officials to provide guidance, professional insight, and functional and cost-effective designs while staying up to date on continually changing industry trends.
Gary Bowman, our President, Chairman, Chief Executive Officer, and largest individual stockholder, founded Bowman in 1995. Over the past 10 years, we have experienced a roughly five-fold increase in gross contract revenue to $346 million for the year ended December 31, 2023 (we interchangeably refer to gross contract revenue as "revenue" or "gross contract revenue").
Gary Bowman, our Chairman, Chief Executive Officer, and largest individual stockholder, founded Bowman in 1995. Over the past 10 years, we have experienced a roughly five-fold increase in gross contract revenue to $427 million for the year ended December 31, 2024 (we interchangeably refer to gross contract revenue as "revenue" or "gross contract revenue").
For the years ended December 31, 2023 and 2022, Power and Utilities represented 18.5% and 12.5%, respectively, of our gross contract revenues. Building Infrastructure Encompassing all the places we live, sleep, work, shop, and play, the building infrastructure market is foundationally aligned with all day-to-day factors that are either influenced by or influence economic activity.
For the years ended December 31, 2024 and 2023, Power and Utilities represented 17.6% and 18.5%, respectively, of our gross contract revenues. Building Infrastructure Encompassing all the places we live, sleep, work, shop, interact, and play, the building infrastructure market is foundationally aligned with all day-to-day factors that are either influenced by or influence economic activity.
During each of the years ended December 31, 2023 and 2022, approximately 21% of our revenue was derived from assignments with public sector customers directly.
During each of the years ended December 31, 2024 and 2023, approximately 27% and 21% of our revenue was derived from assignments with public sector customers directly.
As our economy and population grows, the market to construct new, expanded, and modernized government facilities, schools, state-of-the-art educational institutions, military installations, and mission critical complexes expands continuously. State and local governments experience increasing demand from their constituents for safe, efficient, and environmentally friendly facilities.
As our economy and population grows, the market to construct expand, and modernize government facilities, schools, state-of-the-art educational institutions, military installations, and mission critical complexes expands continuously. State and local governments experience increasing demand from their constituents for safe, efficient, and environmentally friendly facilities.
We maintain professional marketing and business development staffs that work closely with our managers and leadership to develop strategic, targeted programs for affecting outreach, advancing our brand, developing new opportunities and securing new assignments.
We maintain professional marketing and business development staffs that work closely with our managers and leadership to develop strategic, targeted programs for affecting outreach, advancing our brand, producing professional project bids and submissions, developing new opportunities and securing new assignments.
Our continued dedication to investment in our existing capabilities, coupled with our strong backlog of $306 million as of December 31, 2023, consistent book-to-bill ratio for net service billing of greater than 1.0 for full years 2023 and 2022, and deep customer relationships, gives us confidence in our ability to maintain robust organic growth and an attractive margin profile for the foreseeable future.
Our continued dedication to investment in our existing capabilities, coupled with our strong backlog of approximately $400 million as of December 31, 2024, consistent book-to-bill ratio for net service billing of greater than 1.0 for full years 2024 and 2023, and deep customer relationships, gives us confidence in our ability to maintain significant organic growth and an attractive margin profile for the foreseeable future.
Item 1. Business Bowman is a professional services firm delivering innovative engineering solutions to customers who own, develop, and maintain the built environment. We provide planning, engineering, construction management, commissioning, environmental consulting, geospatial, survey, land procurement and other technical services to customers operating in a diverse set of end markets.
Item 1. Business Bowman is a professional services firm delivering innovative engineering, technology and program management services to customers who own, develop, and maintain the built environment. We provide planning, engineering, construction management, commissioning, environmental consulting, geospatial imaging, surveying, land procurement and other technical services to customers operating in a diverse set of end markets.
During each of the years ended December 31, 2023 and 2022, approximately 21% of our revenue was derived from public sector assignments. We develop and maintain loyal and long-standing relationships with our customers that result in repeat assignments.
During each of the years ended December 31, 2024 and 2023, approximately 29% and 21%, respectively of our revenue was derived from public sector customer assignments. We develop and maintain loyal and long-standing relationships with our customers that result in repeat assignments.
We are committed to promoting inclusion and engagement in our workplace, principles we believe are critical to our success. We continue to focus on the hiring, retention, and advancement of a representative workforce.
We remain committed to promoting inclusion and engagement in our workplace, principles we believe are critical to our long-term success. We continue to focus on the hiring, retention, and advancement of a qualified representative workforce.
Our dedication to growth of opportunity for our employees has enabled us to attract and retain exceptional talent. We have built an organization uniformly aligned in its mission, values, purpose, and goals. We embody a set of cultural values that promote entrepreneurship, personal growth, and responsible freedom. We are committed to advancing diversity and inclusion in our workforce.
Our dedication to growth of opportunity for our employees has enabled us to attract and retain exceptional talent. We have built an organization uniformly aligned in its mission, values, purpose, and goals. We embody a set of cultural values that promote entrepreneurship, personal growth, and responsible freedom.
The transportation market has experienced broad increases in federal funding from U.S. government and U.S. Department of Transportation infrastructure spending initiatives along with increased for-profit privatization referred to as private public partnerships. We believe that economic and population growth in major metropolitan areas will drive demand for spending on expanded roadway capacity.
In recent years, the transportation market has experienced broad increases in federal funding from U.S. government and U.S. Department of Transportation infrastructure spending initiatives along with increased for-profit privatization referred to as private-public partnerships (PPPs). We believe that economic and population growth will drive demand wholesale for spending on expanded roadway capacity.
As of December 31, 2023, we have a work force of over 2,000 employees that provides services to thousands of customer projects both big and small, as well as both short- and long-term, from more than 90 offices throughout the United States and two offices in Mexico.
As of December 31, 2024, we have a work force of over 2,200 employees that provides services to thousands of customer projects both big and small, as well as both short- and long-term, from more than 95 offices throughout the United States and two offices in Mexico.
We have served institutional, government and quasi-public customers including large universities, state and local school systems, military branches, healthcare systems and others. For the years ended December 31, 2023 and 2022, Building infrastructure represented 56.3% and 65.1%, respectively, of our gross contract revenue.
We have served institutional, government and quasi-public customers including large universities, state and local school systems, military branches, healthcare systems and others For the years ended December 31, 2024 and 2023, Building infrastructure represented 51.5% and 56.3%, respectively, of our gross contract revenue.
The current outlook is positive for each of the markets we work in, and we intend to grow aggressively and opportunistically in each of them.
The current outlook is positive for each of the markets we work in and services we provide, and we intend to grow aggressively and opportunistically within each of them.
For the years ended December 31, 2023 and 2022, we derived approximately 62% and 70%, respectively, of our gross contract revenue from lump sum assignments and approximately 28% and 23%, respectively, from hourly assignments. The remainder of our gross contract revenue in each year was derived from reimbursements for itemized passthrough items such as consultants and direct expenses.
For the years ended December 31, 2024 and 2023, we derived approximately 60% and 62%, respectively, of our gross contract revenue from lump sum assignments and approximately 33% and 28%, respectively, from hourly assignments. The remainder of our gross contract revenue in each year was derived from reimbursements for itemized passthrough items such as consultants and direct expenses.
Marketing and Sales We position ourselves as a preferred provider of services to those who own, construct and maintain the built environment. We secure assignments primarily through business development efforts targeted at new customers, cross-selling of our services to existing customers, expanding customer relationships into new geographies, referrals and social media outreach.
Marketing and Sales We position ourselves as a preferred provider of services to those who own, construct and maintain the built environment. We secure assignments primarily through business development efforts targeted at cultivating new customers, cross-selling of our services to existing customers to increase wallet share, expanding customer relationships into new geographies as we grow, referrals and social media campaigns.
Our five-fold growth of revenue over the past ten years is comprised of both acquisitive and organic growth, including significant post-acquisition organic growth in the businesses we have acquired. Two of our bedrock cultural values are growth and entrepreneurial spirit.
Our five-fold growth of revenue over the past ten years is derived from both acquisitive and organic growth, including significant post-integration organic growth in the businesses we have acquired. Two of our bedrock cultural values are growth and entrepreneurial spirit.
Competitive Strengths 3 Table of Content We are an agile, growth-oriented consulting and engineering services firm committed to providing essential technical and professional services to a broad base of long-term and repeat customers. The recurring needs of our customers for technical services to monetize and operate their assets makes us a very important part of their ongoing operations.
Competitive Strengths We are an agile, growth-oriented consulting, technology and engineering services firm committed to providing essential technical and professional services to a broad base of project-specific, long-term and repeat customers. The recurring needs of our customers for technical services to monetize, operate and maintain their assets makes us a very important part of their ongoing operations.
The market for engineering services in the United States is large, with an expected total revenue of $360 billion in 2023, according to IBISWorld. With over 130,000 firms, a large proportion of whom are small-scale organizations focused 5 Table of Content on specific local markets or specialized niches, the industry is extremely fragmented.
The market for engineering services in the United States is large, with an expected total revenue of $312 billion in 2025, according to IBISWorld. With over 130,000 firms, a large proportion of whom are small-scale organizations focused on specific local markets or specialized niches, the industry is extremely fragmented.
We have experienced growth in our backlog as we have expanded our footprint, increased our customer base, more deeply penetrated our end markets and been successful in our acquisitions program. We believe that our growth in backlog is an indicator of the performance of our growth strategies.
We have experienced growth in our backlog as we have expanded our footprint, increased our customer base, more deeply penetrated our end markets and been successful in our acquisitions program. We believe that our growth in backlog is a positive indicator of the efficacy of our growth strategies.
As society continues to adapt to a post-pandemic state, we have experienced increased demand for retrofits of ventilation, air handling, air quality monitoring, and filtration systems to ensure healthier indoor environments necessary to mitigate the spread of infectious respiratory diseases.
As society adapts to a post-pandemic state and return-to-work mandates, we have experienced increased demand for retrofits of ventilation, air handling, air quality monitoring, and filtration systems to ensure healthier indoor environments necessary to mitigate the spread of infectious respiratory diseases.
We believe our positioning enables us to continue winning incrementally larger work assignments that will grow our business. Human Capital Resources As of December 31, 2023, we had approximately 2,000 employees, of which approximately 92% are full-time employees.
We believe our positioning enables us to continue winning incrementally larger work assignments that will grow our business. Human Capital Resources As of December 31, 2024, we had approximately 2,200 employees, of which approximately 93% are full-time employees.
More than 78% of our revenue for the year ended December 31, 2023 was derived from repeat customers, which we define as any customer from which revenue was earned in both the full years ended December 31, 2023 and 2022, excluding revenue derived from companies we acquired in 2023. Our customers are international, national, regional, and local in their focus.
Approximately 60% of our revenue for the year ended December 31, 2024 was derived from repeat customers, which we define as any customer from which revenue was earned in both the full years ended December 31, 2024 and 2023, excluding revenue derived from companies we acquired in 2024. Our customers are international, national, regional, and local in their focus.
Backlog definitions and methods of calculation vary within our industry. As such, backlog is not a reliable metric on which to evaluate us relative to our peers. As of December 31, 2023, we had approximately $306 million of gross backlog, representing a 25.9% increase as compared to $243 million as of December 31, 2022.
Backlog definitions and methods of calculation vary within our industry. As such, backlog is not a reliable metric on which to evaluate us relative to our peers. As of December 31, 2024, we had approximately $399 million of gross backlog, representing a 31.0% increase as compared to $306 million as of December 31, 2023.
Since our initial public offering in May 2021 through December 31, 2023, we have successfully acquired twenty-six operating engineering and consulting companies and three non-operating companies from which we strictly acquired grandfathered, state-specific licensing rights. Our acquisitions activities have added numerous capabilities, services, leadership and customers in addition to expanding our operations throughout the continental United States.
Since our initial public offering in May 2021 through December 31, 2024, we have successfully acquired thirty-four operating engineering and consulting companies and four non-operating companies from which we strictly acquired certain, state-specific licensing rights. Our acquisitions activities have added numerous capabilities, services, leadership and customers in addition to expanding our operations throughout the continental United States.
We provide planning, engineering, construction management, commissioning, environmental consulting, geospatial, survey, land procurement and other technical consulting services to customers that (i) develop and manage infrastructure supporting places where people live, work, play and learn; (ii) build and operate systems that manage and distribute vital life services such as water, electricity, and other critical utilities; (iii) manage roads, bridges, and transportation systems used to get from place to place; (iv) advance technologies that provide clean energy, energy transition and decarbonization initiatives; (v) maintain ports and other marine facilities used to transport and distribute goods; (vi) operate mission critical facilities where public and private data is stored, commercial transactions are processed, and communications are enabled; and (vii) promote public health and safety every day.
We provide planning, engineering, construction management, commissioning, environmental consulting, geospatial imaging, surveying, land procurement and other technical consulting services to customers that (i) develop and manage infrastructure supporting places where people live, work, play and learn; (ii) build and operate systems that collect, produce, manage and distribute vital life services such as water, electricity, and other critical utilities; (iii) manage roads, bridges, ports, marine facilities and transportation systems used to transport people, goods and services from place to place; (iv) develop and advance technologies that provide clean energy, energy transition and decarbonization initiatives; (v) operate mission critical facilities where public and private data is stored, commercial transactions are processed, and communications are enabled; (vi) provide healthcare, education, military readiness and other public safety services every day; and (vii) protect and preserve the environment.
We provide planning, engineering, construction management, commissioning, environmental consulting, geospatial, survey, land procurement and other technical consulting services to customers that 1) develop and manage the infrastructure supporting places where people live, work, play and learn; 2) build and operate the systems that manage and distribute vital life services such as water, electricity, and other critical utilities; 3) manage the roads, bridges, and transportation systems used to get from place to place; 4) maintain the ports and other marine facilities used to transport and distribute goods; 5) advance technologies that provide clean energy, energy transition and decarbonization initiatives; 6) operate mission critical facilities where public and private data is stored, commercial transactions are processed, and communications are enabled; and 7) promote public health and safety every day.
We provide planning, engineering, construction management, commissioning, environmental consulting, geospatial imaging, surveying, land procurement and other technical consulting services to customers that 1) develop and manage the infrastructure supporting places where people live, work, play and learn; 2) build and operate the systems that collect, produce, manage and distribute vital life services such as water, electricity, and other critical utilities; 3) manage the roads, bridges, and transportation systems used to transport people, goods and services from place to place; 4) maintain the ports and other marine facilities used to load, ship and distribute goods; 5) develop and advance technologies that provide clean energy, energy transition and decarbonization initiatives; 6) operate mission critical facilities where public and private data is stored, commercial transactions are processed, and communications are enabled; 7) provide healthcare, education, military readiness and other public safety services every day; and 8) protect and preserve the environment.
Our private sector customers include owners and operators from multiple industries such as investor-owned utilities, participants in the renewable energy and decarbonization marketplace, wastewater treatment operations, data center operators, developers and owners of residential and commercial real estate, big-box and convenience retail chains, mine operators and others.
Our private sector customers include owners and operators from multiple industries such as investor-owned utilities, oil & gas extractors and operators, participants in the renewable energy and decarbonization marketplace, data center developers and operators, wastewater treatment facilities, developers and owners of residential and commercial real estate, big-box and convenience retail chains including quick-serve restaurants, mine operators and others.
As an example, as part of an initiative to “increase convenience-led formats” in the U.S., a large coffee shop chain with both drive-thru and curbside pickup options closed 400 traditional locations in North America while adding 300 net new convenience-oriented locations throughout North America in their place.
As an example, as part of an initiative to “increase convenience-led formats” in the U.S., a large coffee shop chain with both drive-thru and curbside pickup options closed 400 traditional locations in North America while adding 300 net new convenience-oriented locations throughout North America in their place. We believe that change can be good for our business .
As of December 31, 2023, we have a professional staff of more than 2,000 employees that operate out of more than 90 offices throughout the United States and two offices in Mexico and we are licensed in all states within the continental United States.
As of December 31, 2024, we have a professional staff of more than 2,200 employees that operate out of more than 95 offices throughout the United States and two offices in Mexico and we are licensed in all states within the United States.
Power, Utilities & Energy Services We believe that demand for power, gas, and water in the U.S. and the threats from increasingly more severe and frequent weather events result in the ability of the infrastructure supporting such resources to provide adequate supply of services.
Power, Utilities & Energy Services - orient to oil & gas /away from alternative energies We believe that demand for power, gas, and energy services in the U.S. and the threats from increasingly more severe and frequent weather events result in the inability of the infrastructure supporting such resources to provide adequate supply of services.
For the year ended December 31, 2023, we had an increase in organic gross contract revenue of $54.0 million or 20.7%, compared to the year ended December 31, 2022. We have been able to achieve these growth rates while expanding our margin profile during this period.
For the year ended December 31, 2024, we had an increase in organic gross contract revenue of $37.9 million or 10.9%, compared to the year ended December 31, 2023. We have been able to achieve these growth rates while expanding our margin profile during this period.
We expect to continue to see organic growth in sales based on our commitment to delivering the highest quality and most creatively conceived solutions to our customers. 17 Table of Content Our business development and marketing efforts emphasize lead generation, industry group networking, project and staff promotion and general corporate visibility.
We expect to continue to experience continued organic growth based on our commitment to delivering the highest quality and most creatively conceived solutions to our customers. Our business development and marketing efforts emphasize lead generation, industry group networking, project and staff promotion and general corporate visibility.
We evaluate targets holistically, considering all the factors mentioned above. Geographic Expansion We intend to continue a program of deliberate and opportunistic geographic expansion. Over the foreseeable future, we plan our geographic footprint to be generally focused on North America including the continental United States, Canada and Mexico.
We evaluate targets holistically, considering all the factors mentioned above. Geographic Expansion We intend to continue a program of deliberate and opportunistic geographic expansion. Over the foreseeable future, we plan our geographic footprint to be generally focused on but not limited to North America, concentrating on the United States, with a potential secondary focus on Canada and Mexico.
Recent acquisitions have provided us the capability and reputation needed to enter the energy efficiency market. Energy efficiency plays a pivotal role in advancing sustainable development within the global economy. Efforts to decarbonize the global energy system and advance the world’s climate objectives are dependent on improving energy efficiency.
Recent acquisitions have provided us the capability and reputation needed to serve the renewables energy 7 Table of Content market. Over the long-term, energy efficiency plays a pivotal role in advancing sustainable development within the global economy. Efforts to decarbonize the global energy system and advance the world’s climate objectives are dependent on improving energy efficiency.
Backlog We calculate the value of our undelivered gross contract revenue to measure backlog and predict future revenue. Backlog includes fully awarded and contracted work along with revenue we expect to realize over an eighteen-month time frame for renewable long-term and undefined multi-year assignments.
Backlog We calculate the value of our not yet billed gross contract revenue to measure backlog and predict future revenue. Backlog includes fully awarded and contracted work along with revenue we expect to invoice over an eighteen-month time frame for open-ended long-term engagements and undefined multi-year assignments.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese inherent 34 Table of Content limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls.
Biggest changeAdditionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements, or insufficient disclosures due to error or fraud may occur and not be detected.
Our results of operations depend on the award of new contracts and the renewal of existing contracts and the timing of the performance of these contracts. Our revenues derive from new contract awards and the renewal of existing contracts.
Our results of operations depend on the award of new contracts, the renewal of existing contracts and the timing of the performance of these contracts. Our revenues derive from new contract awards and the renewal of existing contracts.
We may experience reduced profits or, in some cases, losses if costs increase above budgets or estimates or if the project experiences schedule delays; • Governmental agencies may modify, curtail or terminate our contracts at any time prior to their completion and, if we do not replace them, we may suffer a decline in revenue; • Our failure to comply with a variety of complex procurement rules and regulations could damage our reputation and result in our being liable for penalties, including termination of our government contracts, disqualification from bidding on future government contracts and suspension or debarment from government contracting; • We are dependent on third parties to complete certain elements of our contracts; • Our quarterly results may fluctuate significantly, which could have a material negative effect on the price of our common stock; • If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.
We may experience reduced profits or, in some cases, losses if costs increase above budgets or estimates or if the project experiences schedule delays; 21 Table of Content • Governmental agencies may modify, curtail or terminate our contracts at any time prior to their completion and, if we do not replace them, we may suffer a decline in revenue; • Our failure to comply with a variety of complex procurement rules and regulations could damage our reputation and result in our being liable for penalties, including termination of our government contracts, disqualification from bidding on future government contracts and suspension or debarment from government contracting; • We are dependent on third parties to complete certain elements of our contracts; • Our quarterly results may fluctuate significantly, which could have a material negative effect on the price of our common stock; • If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud.
The market price for our common stock may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including: • the recruitment or departure of key personnel; • actual or anticipated changes in estimates as to financial results, acquisitions or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • market conditions in the utility and infrastructure markets where we focus; • future sales of our common stock by us or our stockholders; • the trading volume of our common stock; • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
The market price for our common stock may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control, including: • the recruitment or departure of key personnel; • actual or anticipated changes in estimates as to financial results, acquisitions or recommendations by securities analysts; • variations in our financial results or those of companies that are perceived to be similar to us; • market conditions in the utility and infrastructure markets where we focus; • future sales of our common stock by us or our stockholders; • the trading volume of our common stock; 35 Table of Content • general economic, industry and market conditions; and • the other factors described in this “Risk Factors” section.
We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
We will remain an emerging growth company until the earlier of: (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date 38 Table of Content of the completion of our initial public offering; (iii) the date on which we have issued more than $1 billion in non-convertible debt during the prior three-year period; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
Some significant laws and regulations that affect us include: • federal, state, and local laws and regulations (including the Federal Acquisition Regulation or “FAR”) regarding the formation, administration, and performance of government contracts; • the Civil False Claims Act, which provides for substantial civil penalties for violations, including for submission of a false or fraudulent claim to the U.S. government for payment or approval; and 32 Table of Content • federal, state, and local laws and regulations regarding procurement integrity including gratuity, bribery and anti-corruption requirements as well as limitations on political contributions and lobbying.
Some significant laws and regulations that affect us include: • federal, state, and local laws and regulations (including the Federal Acquisition Regulation or “FAR”) regarding the formation, administration, and performance of government contracts; • the Civil False Claims Act, which provides for substantial civil penalties for violations, including for submission of a false or fraudulent claim to the U.S. government for payment or approval; and • federal, state, and local laws and regulations regarding procurement integrity including gratuity, bribery and anti-corruption requirements as well as limitations on political contributions and lobbying.
Such restrictions affect or could affect, and in many respects limit or prohibit, among other things, our ability, and the ability of certain of our subsidiaries to: • incur additional indebtedness; • create liens; • pay dividends and make other distributions in respect of our equity securities; • redeem our equity securities; • enter into certain lines of business; • make certain investments or certain other restricted payments; • sell certain kinds of assets; • enter into certain types of transactions with affiliates; and • undergo a change in control or effect certain mergers or consolidations.
Such restrictions affect or could affect, and in many respects limit or prohibit, among other things, our ability, and the ability of certain of our subsidiaries to: • incur additional indebtedness; • create liens; • pay dividends and make other distributions in respect of our equity securities; • redeem our equity securities; • enter into certain lines of business; • make certain investments or certain other restricted payments; • sell certain kinds of assets; • enter into certain types of transactions with affiliates; and 31 Table of Content • undergo a change in control or effect certain mergers or consolidations.
In addition, under the 2017 Tax Cut & Jobs Act, research and experimental costs are no longer fully deductible and are required to be capitalized and amortized for U.S. tax purposes effective for our fiscal year ended December 31, 2023.
In addition, under the 2017 Tax Cut & Jobs Act, research and experimental costs are no longer fully deductible and are required to be capitalized and amortized for U.S. tax purposes effective for our fiscal year ended December 31, 2024.
The lack of this in person interaction may adversely impact our work product and our financial results. Inflation could adversely affect our business and results of operations. During 2022 and 2023, the economy in the United States and global markets encountered a material increase in the level of inflation.
The lack of this in person interaction may adversely impact our work product and our financial results. Inflation could adversely affect our business and results of operations. During 2023 and 2024, the economy in the United States and global markets encountered a material increase in the level of inflation.
The instability created by these global uncertainties can make it extremely difficult for our customers, our vendors and us to accurately forecast and plan future business activities, and could cause constrained spending on our services, 24 Table of Content delays and a lengthening of our business development efforts, the demand for more favorable pricing or other terms and/or difficulty in collection of our accounts receivable.
The instability created by these global uncertainties can make it extremely difficult for our customers, our vendors and us to accurately forecast and plan future business activities, and could cause constrained spending on our services, delays and a lengthening of our business development efforts, the demand for more favorable pricing or other terms and/or difficulty in collection of our accounts receivable.
The difficulties of integrating acquisitions include, among other things: • unanticipated issues in integration of information, communications and other systems; • unanticipated incompatibility of logistics, marketing and administration methods; • maintaining employee morale and retaining key employees; • integrating the business cultures of companies; • preserving important strategic customer relationships; • consolidating corporate and administrative infrastructures and eliminating duplicative operations; and • coordinating geographically separate organizations.
The difficulties of integrating acquisitions include, among other things: • unanticipated issues in integration of information, communications and other systems; • unanticipated incompatibility of logistics, marketing and administration methods; 23 Table of Content • maintaining employee morale and retaining key employees; • integrating the business cultures of companies; • preserving important strategic customer relationships; • consolidating corporate and administrative infrastructures and eliminating duplicative operations; and • coordinating geographically separate organizations.
Additionally, the forum 37 Table of Content selection clauses in our amended and restated bylaws may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our stockholders.
Additionally, the forum selection clauses in our amended and restated bylaws may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers, or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our stockholders.
Further, even where coverage applies, the policies have deductibles, which result in our assumption 26 Table of Content of exposure for certain amounts with respect to any claim filed against us. In addition, customers or sub-consultants who have agreed to indemnify us against any such liabilities or losses might refuse or be unable to pay it.
Further, even where coverage applies, the policies have deductibles, which result in our assumption of exposure for certain amounts with respect to any claim filed against us. In addition, customers or sub-consultants who have agreed to indemnify us against any such liabilities or losses might refuse or be unable to pay it.
Under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (“CERCLA”), and comparable state laws, we may be required to investigate and remediate regulated 33 Table of Content hazardous materials. CERCLA and comparable state laws typically impose strict joint and several liabilities without regard to whether a company knew of or caused the release of hazardous substances.
Under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (“CERCLA”), and comparable state laws, we may be required to investigate and remediate regulated hazardous materials. CERCLA and comparable state laws typically impose strict joint and several liabilities without regard to whether a company knew of or caused the release of hazardous substances.
If we are unable to compete effectively, we could lose market share and our business and results of operations could be negatively impacted; • Our continued success is dependent upon our ability to hire, retain and utilize qualified personnel; continued success is dependent upon our ability to hire, retain and utilize qualified personnel; • Our profitability could suffer if we are not able to maintain adequate utilization of our workforce due to slowdowns in the economy, or reduced demand for our services; 20 Table of Content • If we are unable to integrate acquired businesses successfully, our business could be harmed; • We cannot assure you that we will achieve synergies and cost savings in connection with prior or future acquisitions; • Demand from customer is cyclical and vulnerable to economic downturns.
If we are unable to compete effectively, we could lose market share and our business and results of operations could be negatively impacted; • Our continued success is dependent upon our ability to hire, retain and utilize qualified personnel; continued success is dependent upon our ability to hire, retain and utilize qualified personnel; • Our profitability could suffer if we are not able to maintain adequate utilization of our workforce due to slowdowns in the economy, or reduced demand for our services; • If we are unable to integrate acquired businesses successfully, our business could be harmed; • We cannot assure you that we will achieve synergies and cost savings in connection with prior or future acquisitions; • Demand from customers is cyclical and vulnerable to economic downturns.
In addition, if any of our key personnel retire or otherwise leave the company, we need to have appropriate succession plans in place and successfully implement such plans. Implementing a succession plan requires that we devote time and resources toward identifying and integrating new personnel into leadership roles and other key positions.
In addition, if any of our key personnel or members of executive management retire or otherwise leave the company, we need to have appropriate succession plans in place and successfully implement such plans. Implementing a succession plan requires that we devote time and resources toward identifying and integrating new personnel into leadership roles and other key positions.
Unsafe work sites also have the potential to increase employee turnover, increase the cost of a project to our customers, and raise our operating and insurance costs. Any of the foregoing could result in financial losses or reputational harm, which could have a material adverse impact on our business, financial condition and results of operations.
Unsafe work sites also have the potential to increase employee turnover, increase the 26 Table of Content cost of a project to our customers, and raise our operating and insurance costs. Any of the foregoing could result in financial losses or reputational harm, which could have a material adverse impact on our business, financial condition and results of operations.
The uncertainties inherent in the estimating process make it possible for actual costs to vary materially from initial and updated estimates. We are dependent on third parties to complete certain elements of our contracts. 27 Table of Content We engage third-party sub-consultants to perform certain work under our contracts.
The uncertainties inherent in the estimating process make it possible for actual costs to vary materially from initial and updated estimates. We are dependent on third parties to complete certain elements of our contracts. We engage third-party sub-consultants to perform certain work under our contracts.
In many of our contracts with customers, sub-consultants, and vendors, we agree to retain or assume potential liabilities for damages, penalties, losses and other exposures relating to projects that could result in claims that greatly exceed the anticipated profits relating to those contracts.
In many of our contracts with customers, sub-consultants, and vendors, we agree to retain or assume potential liabilities for damages, penalties, losses and other exposures relating to projects that could result in claims that greatly 33 Table of Content exceed the anticipated profits relating to those contracts.
The impact of COVID-19, geopolitical developments such as the Russia-Ukraine conflict, the conflict in the Middle East and global supply chain disruptions continue to increase uncertainty in the outlook of near-term and long-term economic activity, including whether inflation will continue and how long, and at what rate.
Geopolitical developments such as the Russia-Ukraine conflict, the conflict in the Middle East and global supply chain disruptions continue to increase uncertainty in the outlook of near-term and long-term economic activity, including whether inflation will continue and how long, and at what rate.
Our government customers may face budget deficits that prohibit them from funding proposed and existing projects or that cause them to exercise their right to terminate our contracts with little or no prior notice. In addition, any financial difficulties suffered by our sub-consultants or suppliers could increase our cost or adversely impact project 29 Table of Content schedules.
Our government customers may face budget deficits that prohibit them from funding proposed and existing projects or that cause them to exercise their right to terminate our contracts with little or no prior notice. In addition, any financial difficulties suffered by our sub-consultants or suppliers could increase our cost or adversely impact project schedules.
Any of these amounts may be substantial, and together with the size, 22 Table of Content timing, and number of acquisitions we pursue, may negatively affect, and cause significant volatility in our financial results. In addition, we have assumed, and may in the future assume, liabilities of the companies we acquire.
Any of these amounts may be substantial, and together with the size, timing, and number of acquisitions we pursue, may negatively affect, and cause significant volatility in our financial results. In addition, we have assumed, and may in the future assume, liabilities of the companies we acquire.
It is particularly difficult to predict whether or when we will receive large-scale projects as these contracts are affected by several factors including lengthy and complex bidding and selection process, among others. Other factors include market conditions, financing arrangements, and required governmental approvals.
It is particularly difficult to predict whether or when we will receive large-scale projects as these contracts are affected by several factors including lengthy and complex 24 Table of Content bidding and selection process, among others. Other factors include market conditions, financing arrangements, and required governmental approvals.
For financial reporting, any contract with one or more lump-sum fee assignment is characterized in total as a fixed fee contract and is reported in the aggregate as such. During the years ended December 31, 2023 and 2022, we derived over 62% and 70%, respectively, of our revenue from lump-sum assignments.
For financial reporting, any contract with one or more lump-sum fee assignment is characterized in total as a fixed fee contract and is reported in the aggregate as such. During the years ended December 31, 2024 and 2023, we derived over 60% and 62%, respectively, of our revenue from lump-sum assignments.
For each of the years ended December 31, 2023 and 2022, approximately 21% of our gross revenue was derived from services performed under contracts with governmental agencies. While attempts at such legislation have failed in the past, such measures could be adopted in the future.
For each of the years ended December 31, 2024 and 2023, approximately 27% and 21% of our gross revenue was derived from services performed under contracts with governmental agencies, respectively. While attempts at such legislation have failed in the past, such measures could be adopted in the future.
As a result, any sudden loss, disruption or unexpected costs to maintain these systems could significantly increase our operational expense and disrupt the management of our business operations. 28 Table of Content We rely on third-party software to run our critical accounting, project management and financial information systems.
We rely on third-party internal and outsourced software to run our critical accounting, project management and financial information systems. As a result, any sudden loss, disruption or unexpected costs to maintain these systems could significantly increase our operational expense and disrupt the management of our business operations.
There is a risk that we may have disputes with our sub-consultants arising from, among other things, the quality and timeliness of work performed, customer concerns, or failure to extend existing task orders or issue new task orders under a subcontract.
We depend on sub-consultants in conducting our business. There is a risk that we may have disputes with our sub-consultants arising from, among other things, the quality and timeliness of work performed, customer concerns, or failure to extend existing task orders or issue new task orders under a subcontract.
Legislation is proposed periodically that attempts to limit the ability of governmental agencies to contract with private consultants to provide services. Should such changes occur and be upheld, demand for our services may be materially adversely affected.
Such changes would affect our ability to obtain new contracts and may decrease the demand for our services. Legislation is proposed periodically that attempts to limit the ability of governmental agencies to contract with private consultants to provide services. Should such changes occur and be upheld, demand for our services may be materially adversely affected.
Borrowings under our credit agreement with Bank of America, N.A. bear interest at variable rates, exposing us to interest rate risk. Interest rates in the United States increased during fiscal year 2023 and may continue to increase in the future.
Borrowings under our credit agreement with Bank of America, N.A. bear interest at variable rates, exposing us to interest rate risk. Interest rates in the United States may continue to increase in the future.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
Some of these provisions include: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder action through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action or to amend specific provisions of our certificate of incorporation; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock. 37 Table of Content In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporate Law, or DGCL, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock.
The duration and extent to which this will impact our future financial condition and results of operations remains uncertain. Global or national health concerns, including the outbreak of pandemic or contagious disease, can negatively impact the U.S. economy and, therefore, demand and pricing for our services.
The duration and extent to which this will impact our future financial condition and results of operations remains uncertain. Global or national health concerns, including the outbreak of pandemic or contagious disease, can negatively impact the U.S. economy and, therefore, demand and pricing for our services. Additionally, we have an increased number of employees working remotely.
These risks include: • The ability of the public agency to terminate the contract with 30 days’ prior notice or less; • Changes in public agency spending and fiscal policies which can have an adverse effect on demand for our services; • Contracts that are subject to public agency budget cycles, and often are subject to renewal on an annual basis; • The often wide variation of the types and pricing terms of contracts from agency to agency; • The difficulty of obtaining change orders and additions to contracts; and • The requirement to perform periodic audits as a condition of certain contract arrangements.
These risks include: • The ability of the public agency to terminate the contract with 30 days’ prior notice or less; • Changes in public agency spending and fiscal policies which can have an adverse effect on demand for our services; • Contracts that are subject to public agency budget cycles, and often are subject to renewal on an annual basis; • The often wide variation of the types and pricing terms of contracts from agency to agency; • The difficulty of obtaining change orders and additions to contracts; and • The requirement to perform periodic audits as a condition of certain contract arrangements. 32 Table of Content Legislation, policy, rules, or regulations may be enacted that limit or change the ability of state, regional or local agencies to contract for our privatized services.
Accordingly, these factors affect our ability to forecast our future revenue and earnings from business areas that may be adversely impacted by market conditions. Outbreaks of communicable diseases, including the global pandemic related to COVID-19 and its variants may have, directly or indirectly, a material and adverse effect on our business, financial condition, and results of operations.
Accordingly, these factors affect our ability to forecast our future revenue and earnings from business areas that may be adversely impacted by market conditions. Outbreaks of communicable diseases, directly or indirectly, a material and adverse effect on our business, financial condition, and results of operations.
For example, as part of the recently adopted Inflation Reduction Act of 2022, the United States implemented a 1% excise tax on the value of certain share repurchases by publicly traded companies. As discussed below, this tax could increase the costs to us of any share repurchases.
Further, as part of the recently adopted Inflation Reduction Act of 2022, the United States implemented a 1% excise tax on the value of certain share repurchases by publicly traded companies and this excise tax rate could plausibly increase through additional legislation. As discussed below, this tax could increase the costs to us of any share repurchases.
Our continued success is dependent upon our ability to hire, retain and utilize qualified personnel. As a professional and technical engineering and consulting solutions provider we depend upon our ability to hire, retain, and utilize qualified personnel, including engineers, architects, designers, craft personnel and corporate management professionals who have the required experience and expertise at a reasonable cost.
As a professional and technical engineering and consulting solutions provider we depend upon our ability to hire, retain, and utilize qualified personnel, including our executive management team, engineers, architects, designers, craft personnel and corporate management professionals who have the required experience and expertise at a reasonable cost. The market for these and other personnel is competitive.
Losses under lump-sum contracts and assignments may adversely impact our business operations and financial results. Our contracts include one or more assignments and often include assignments through which we commit to the performance of work for a specified lump-sum fee, subject to price adjustments if the scope of the assignment changes or unforeseen conditions arise.
Our contracts include one or more assignments and often include assignments through which we commit to the performance of work for a specified lump-sum fee, subject to price adjustments if the scope of the assignment changes or unforeseen conditions arise.
Our quarterly operating results may fluctuate due to several factors, including: • fluctuations in the spending patterns of our customers; • the number and significance of projects executed during a quarter; • unanticipated changes in contract performance, particularly with contracts that have funding limits; • the timing of resolving change orders, requests for equitable adjustments and other contract adjustments; • the timing of our meeting a project milestone that allows us to bill our customer and recognize revenue; • project delays; • changes in prices of commodities or other supplies; • weather conditions that delay work at project sites; • the timing of expenses incurred in connection with acquisitions or other corporate initiatives; • natural disasters or other crises; • staff levels and utilization rates; • changes in prices of services offered by our competitors; and • general economic and political conditions.
Our quarterly operating results may fluctuate due to several factors, including: • fluctuations in the spending patterns of our customers; • the number and significance of projects executed during a quarter; • unanticipated changes in contract performance, particularly with contracts that have funding limits; • the timing of resolving change orders, requests for equitable adjustments and other contract adjustments; • the timing of our meeting a project milestone that allows us to bill our customer and recognize revenue; • project delays; • changes in prices of commodities or other supplies; • weather conditions that delay work at project sites; • the timing of expenses incurred in connection with acquisitions or other corporate initiatives; • natural disasters or other crises; • staff levels and utilization rates; • changes in prices of services offered by our competitors; and • general economic and political conditions. 30 Table of Content If our quarterly operating results fluctuate significantly, it could have a material negative affect on our financial condition and results of operations and could cause the price of our common stock to decrease, perhaps substantially and disproportionately to the actual effect on our business.
Cybersecurity and Infrastructure Security Agency issued a “Shields Up” alert for American organizations noting the potential for Russia’s cyber-attacks on Ukrainian government and critical infrastructure organizations to impact organizations both within and beyond the U.S., particularly in the wake of sanctions imposed by the United States and its allies.
For example, as a result of the conflict between Russia and the Ukraine, in February 2022 the U.S. 29 Table of Content Cybersecurity and Infrastructure Security Agency issued a “Shields Up” alert for American organizations noting the potential for Russia’s cyber-attacks on Ukrainian government and critical infrastructure organizations to impact organizations both within and beyond the U.S., particularly in the wake of sanctions imposed by the United States and its allies.
As of December 31, 2023 and 2022, we had $96.5 million and $53.2 million of goodwill, representing 24.2% and 20.8%, respectively, of our total assets as of December 31, 2023 and 2022. Under U.S. GAAP, we are required to evaluate goodwill carried in our consolidated balance sheet for possible impairment on an annual basis using a fair value approach.
As of December 31, 2024 and 2023, we had $134.7 million and $96.4 million of goodwill, representing 26.8% and 23.9%, respectively, of our total assets as of December 31, 2024 and 2023. Under U.S. GAAP, we are required to evaluate goodwill carried in our consolidated balance sheet for possible impairment on an annual basis using a fair value approach.
The market for these and other personnel is competitive. From time to time and in different regions, it may be difficult to attract and retain qualified individuals with the expertise, and in the timeframe, demanded by our customers, or to replace such personnel when needed in a timely manner.
From time to time and in different regions, it may be difficult to 22 Table of Content attract and retain qualified individuals with the expertise, and in the timeframe, demanded by our customers, or to replace such personnel when needed in a timely manner.
In the event a state does not allow a corporation to hold a license, we have in the past formed professional services corporations owned by Mr. Bowman and other employees to facilitate our ability to work in such states. To the extent we cannot adequately satisfy a state’s licensing requirements, we do not operate in that state.
In the event a state does not allow a corporation to hold a license, we have in the past formed professional services corporations owned by Mr. Bowman and other employees to facilitate our ability to work in such states.
We issue reports and opinions to customers based on our professional engineering expertise as well as our other professional credentials that subject us to professional standards, duties and obligations regulating the performance of our 30 Table of Content services.
We are subject to professional standards, duties and statutory obligations on professional reports and opinions we issue, which could subject us to monetary damages. We issue reports and opinions to customers based on our professional engineering expertise as well as our other professional credentials that subject us to professional standards, duties and obligations regulating the performance of our services.
In addition, a failure by a third-party sub-consultant, supplier, or manufacturer to comply with applicable laws, regulations or customer requirements could negatively impact our business and, for government customers, could result in fines, penalties, suspension or even debarment being imposed on us, which could have a material adverse impact on our business, financial condition, and results of operations.
In addition, a failure by a third-party sub-consultant, supplier, or manufacturer to comply with applicable laws, regulations or customer requirements could negatively impact our business and, for government customers, could result in fines, penalties, suspension or even debarment being imposed on us, which could have a material adverse impact on our business, financial condition, and results of operations. 28 Table of Content Failure of our sub-consultants to satisfy their obligations to us or other parties, or the inability to maintain these relationships, may adversely impact our business operations and financial results.
The market price of our common stock has been, and may in the future be highly, volatile. The stock market in general and the market for emerging growth companies have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
The stock market in general and the market for emerging growth companies have experienced extreme volatility that has often been unrelated to the operating performance of particular companies.
Our President, Chairman and Chief Executive Officer owns a large percentage of our voting stock, which may allow him to have a significant influence on all matters requiring stockholder approval. 35 Table of Content Gary Bowman, our President, Chairman and Chief Executive Officer, beneficially owned 2,587,749 shares, or approximately 19.04% of our common stock as of March 12, 2024. Mr.
Our Chairman and Chief Executive Officer owns a large percentage of our voting stock, which may allow him to have a significant influence on all matters requiring stockholder approval. Gary Bowman, our Chairman and Chief Executive Officer, beneficially owned 2,339,041 shares, or approximately 13.57% of our common stock as of March 12, 2025. Mr.
A variety of risks could cause us not to realize some or all of these expected benefits. These risks include, among others, higher than expected standalone overhead expenses, delays in the anticipated timing of activities related to such initiatives and the incurrence of other unexpected costs associated with operating the business.
These risks include, among others, higher than expected standalone overhead expenses, delays in the anticipated timing of activities related to such initiatives and the incurrence of other unexpected costs associated with operating the business.
The current U.S. presidential administration has called for fiscal and tax policies, which may include comprehensive tax reform. Many of these proposed changes to the taxation of our activities could increase our effective tax rate and harm our results of operations.
The current U.S. presidential administration has called for fiscal and tax policies, which may include extension of the 2017 Tax Cut & Jobs Act as well as other aspects of tax reform. Some of these proposed changes to the taxation of our activities could increase our effective tax rate and harm our results of operations.
Demand for new homes has historically been fueled by continued low interest rates and changing population demographics but remains sensitive to changes in economic conditions such as the level of employment, consumer confidence, consumer income, the availability of financing and interest rate levels. Demand for new homes is subject to fluctuations, often due to factors outside of our control.
Our customers include many of the top homebuilders in the United States. Demand for new homes has historically been fueled by continued low interest rates and changing population demographics but remains sensitive to changes in economic conditions such as the level of employment, consumer confidence, consumer income, the availability of financing and interest rate levels.
We face the threat to our computer systems of unauthorized access, computer hackers, computer viruses, malicious code, organized cyber-attacks and other security problems and system disruptions, including possible unauthorized access to our and our customers’ proprietary or classified information. As a result of the conflict between Russia and the Ukraine, in February 2022 the U.S.
We face the threat to our computer systems of unauthorized access, computer hackers, computer viruses, malicious code, organized cyber-attacks and other security problems and system disruptions, including possible unauthorized access to our and our customers’ proprietary or classified information.
The full economic and social impact of the sanctions imposed on Russia (as well as possible future punitive measures that may be implemented), as well as the counter measures imposed by Russia, in addition to the escalating military conflict between Ukraine and Russia as well as conflicts in the Middle East remains uncertain; however, the conflicts and sanctions have resulted and could continue to result in disruptions to trade, commerce, pricing stability, credit availability, and/or supply chain continuity, in both Europe and globally, and has introduced significant uncertainty into global markets and the global economy.
The military conflict between Ukraine and Russia as well as conflicts in the Middle East remains uncertain; however, the conflicts and sanctions have resulted and could continue to result in disruptions to trade, commerce, pricing stability, credit availability, and/or supply chain continuity, in both Europe and globally, and has introduced significant uncertainty into global markets and the global economy.
If the economy weakens or customer spending declines, then our revenue, profits and overall financial condition may deteriorate. If there is additional economic downturn, including as a result of the worldwide political, social and economic uncertainties described above, our existing and potential customers may either postpone entering into new contracts, renew existing contracts or request price concessions.
If there is additional economic downturn, including as a result of the worldwide political, social and economic uncertainties described above, our existing and potential customers may either postpone entering into new 25 Table of Content contracts, renew existing contracts or request price concessions.
Risks Relating to Government Contracts, Regulation and Litigation Governmental agencies may modify, curtail, or terminate our contracts at any time prior to their completion and, if we do not replace them, we may suffer a decline in revenue. 31 Table of Content Most government contracts may be modified, curtailed, or terminated by the government either at its discretion or upon the default of the contractor.
Risks Relating to Government Contracts, Regulation and Litigation Governmental agencies may modify, curtail, or terminate our contracts at any time prior to their completion and, if we do not replace them, we may suffer a decline in revenue.
There is no assurance that we will achieve synergies and cost savings in connection with prior or future acquisitions. 23 Table of Content We may not achieve anticipated cost savings in connection with prior or future acquisitions within the anticipated time frames or at all.
There is no assurance that we will achieve synergies and cost savings in connection with prior or future acquisitions. We may not achieve anticipated cost savings in connection with prior or future acquisitions within the anticipated time frames or at all. A variety of risks could cause us not to realize some or all of these expected benefits.
Although our share repurchase program is intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness. 36 Table of Content Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control, which could limit the market price of our common stock and may prevent or frustrate attempts by our stockholders to replace or remove our current management.
Anti-takeover provisions under our charter documents and Delaware law could delay or prevent a change of control, which could limit the market price of our common stock and may prevent or frustrate attempts by our stockholders to replace or remove our current management.
As of December 31, 2023, we were licensed to operate in all states in the continental U.S. Changes in tax laws could increase our tax rate and tax payments and materially affect our results of operations. We are subject to tax laws in the United States.
Changes in tax laws could increase our tax rate and tax payments and materially affect our results of operations. We are subject to tax laws in the United States and various states.
We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.
Backlog represents the total dollar amount of revenues we expect to record in the future from the performance of work under contracts we have been awarded. As of December 31, 2023, our gross backlog totaled approximately $306 million. There is no assurance that backlog will be realized as revenues in the amounts reported or, if realized, will result in profits.
Backlog represents the total dollar amount of revenues we expect to record in the future from the performance of work under contracts we have been awarded. As of December 31, 2024, our gross backlog totaled approximately $358 million.
We also depend on our software vendors to provide long-term software maintenance support for our information systems.
We rely on third-party software to run our critical accounting, project management and financial information systems. We also depend on our software vendors to provide long-term software maintenance support for our information systems.
A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows.
A failure to adequately respond to these risks could have a material adverse impact on our financial condition, results of operations or cash flows. A significant decline in new home construction, and/or a deterioration in expectations regarding the homebuilding market, could have a material adverse impact on our business, financial condition and results of operations.
For example, during 2022, the housing market weakened in response to the Federal Reserve’s aggressive increase in interest rates in an effort to curtail inflation. We cannot predict whether and to what extent housing markets will grow, particularly if interest rates for mortgage loans, land costs, and construction costs continue to rise.
We cannot predict whether and to what extent housing markets will grow, particularly if interest rates for mortgage loans, land costs, and construction costs continue to rise.
Any failure to repurchase shares after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and may negatively impact our stock price.
Any failure to repurchase shares after we have announced our intention to do so may negatively impact our reputation and investor confidence in us and may negatively impact our stock price. Although our share repurchase program is intended to enhance long-term stockholder value, short-term stock price fluctuations could reduce the program’s effectiveness.
As a result, all such shares can be freely sold in the public market upon issuance, subject to any vesting conditions or contractual lock-up agreements.
As a result, all such shares can be freely sold in the public market upon issuance, subject to any vesting conditions or contractual lock-up agreements. 36 Table of Content If additional shares of our common stock are issued or sold, or if it is perceived that they will be issued or sold, in the public market, the market price of our common stock could decline.
The quality of our performance on such projects depends in large part upon our ability to manage the relationship with our customers and our ability to effectively manage the project and deploy appropriate resources, including third-party contractors and our own personnel, in a timely manner. 21 Table of Content If a project is not completed by the scheduled date or fails to meet required performance standards, we may either incur significant additional costs or be held responsible for the costs incurred by the customer to rectify damages due to late completion or failure to achieve the required performance standards.
If a project is not completed by the scheduled date or fails to meet required performance standards, we may either incur significant additional costs or be held responsible for the costs incurred by the customer to rectify damages due to late completion or failure to achieve the required performance standards.
The contracts in our backlog are subject to changes in the scope of services to be provided as well as adjustments to the costs relating to the contracts. The revenue for certain contracts included in backlog is based on estimates. Additionally, the way we perform on our individual contracts can affect greatly our gross margins and hence, future profitability.
The revenue for certain contracts included in backlog is based on estimates. Additionally, the way we perform on our individual contracts can affect greatly our gross margins and hence, future profitability. Losses under lump-sum contracts and assignments may adversely impact our business operations and financial results.
Projects can remain in backlog for extended periods of time because of the nature of the project and the timing of the services required by the project. The risk of contracts in backlog being cancelled or suspended generally increases during periods of widespread economic slowdowns or in response to changes in commodity prices.
The risk of contracts in backlog being cancelled or suspended generally increases during periods of widespread economic slowdowns or in response to changes in commodity prices. The contracts in our backlog are subject to changes in the scope of services to be provided as well as adjustments to the costs relating to the contracts.
Accordingly, because of the inherent limitations in our control system, misstatements, or insufficient disclosures due to error or fraud may occur and not be detected. The price of our common stock has been, and may continue to be, volatile and the value of our common stock could decline.
The price of our common stock has been, and may continue to be, volatile and the value of our common stock could decline. The market price of our common stock has been, and may in the future be highly, volatile.
In accordance with industry practice, substantially all our contracts are subject to cancellation, termination, or suspension at the discretion of the customer. In the event of a project cancellation, we would generally have no contractual right to the total revenue reflected in our backlog.
There is no assurance that backlog will be realized as revenues in the amounts reported or, if realized, will result in 27 Table of Content profits. In accordance with industry practice, substantially all our contracts are subject to cancellation, termination, or suspension at the discretion of the customer.
If additional shares of our common stock are issued or sold, or if it is perceived that they will be issued or sold, in the public market, the market price of our common stock could decline. We cannot guarantee that our share repurchase program will be fully implemented or that it will enhance long-term stockholder value.
We cannot guarantee that our share repurchase program will be fully implemented or that it will enhance long-term stockholder value. On August 15, 2024, our board of directors authorized a $25 million share repurchase program under which we may repurchase up to $25 million of our common stock.
Current global geopolitical tensions, including those related to Ukraine and the Middle East, may exacerbate any economic downturn.
Current global geopolitical tensions, including those related to Ukraine and the Middle East, may exacerbate any economic downturn. In addition, recent significant changes in U.S. trade policies and actual or potential tariffs may create uncertainty regarding the relationship between the United States and certain other countries with respect to trade policies, treaties and tariffs.
For example, financial markets around the world experienced volatility following the invasion of Ukraine by Russia in February 2022. In response to the invasion, the U.S., U.K. and European Union, along with others, imposed significant new sanctions and export controls against Russia. Russian banks and certain Russian individuals may implement additional sanctions or take further punitive actions in the future.
For example, financial markets around the world experienced volatility following the invasion of Ukraine by Russia in February 2022.
Removed
For example, the outbreak of the COVID-19 pandemic and the measures taken to address and limit the spread of the virus adversely affected the U.S. economy and financial markets, resulting in an economic downturn that negatively impacted demand for services like ours. Additionally, we have an increased number of employees working remotely.
Added
The quality of our performance on such projects depends in large part upon our ability to manage the relationship with our customers and our ability to effectively manage the project and deploy appropriate resources, including third-party contractors and our own personnel, in a timely manner.
Removed
A significant decline in new home construction, and/or a deterioration in expectations regarding the homebuilding market, could have a material adverse impact on our business, financial condition and results of operations. 25 Table of Content Our customers include many of the top homebuilders in the United States.
Added
Our continued success is dependent upon our ability to hire, retain and utilize qualified personnel.
Removed
Failure of our sub-consultants to satisfy their obligations to us or other parties, or the inability to maintain these relationships, may adversely impact our business operations and financial results. We depend on sub-consultants in conducting our business.
Added
These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States.
Removed
We rely on third-party internal and outsourced software to run our critical accounting, project management and financial information systems.
Added
These factors could restrict some of our customers’ access to products, components, raw materials or construction materials or otherwise increase the cost of such goods, which may have a material adverse effect on their business, financial condition and results of operations, which in turn could negatively impact us.
Removed
If our quarterly operating results fluctuate significantly, it could have a material negative affect on our financial condition and results of operations and could cause the price of our common stock to decrease, perhaps substantially and disproportionately to the actual effect on our business.
Added
If the economy weakens or customer spending declines, then our revenue, profits and overall financial condition may deteriorate.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHowever, the sophistication of cyber threats continues to increase, and the preventative actions that we have taken and continues to take to reduce the risk of cyber incidents and protect its systems and information may not successfully protect against all cyber incidents.
Biggest changeHowever, the sophistication of cyber threats continues to increase, and the preventative actions that we have taken and continue to take to reduce the risk of cyber incidents and protect its systems and information may not 39 Table of Content successfully protect against all cyber incidents.
This integration aims to ensure that cybersecurity considerations are an integral part of our decision-making processes at every level. We have developed an enterprise risk 38 Table of Content management program (“ERM”) designed to assess, identify, manage and mitigate material risks, including cybersecurity risk. ERM is a Company-wide initiative that involves both the board of directors and our management.
This integration aims to ensure that cybersecurity considerations are an integral part of our decision-making processes at every level. We have developed an enterprise risk management program (“ERM”) designed to assess, identify, manage and mitigate material risks, including cybersecurity risk. ERM is a Company-wide initiative that involves both the board of directors and our management.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWhile we do believe it is necessary to maintain offices through which our services are coordinated and our employees collaborate in person, we feel there are an ample number of available office rental properties that could adequately serve our needs should we need to relocate or expand any of our operations. 39 Table of Content
Biggest changeWhile we do believe it is necessary to maintain offices through which our services are coordinated and our employees collaborate in person, we feel there are an ample number of available office rental properties that could adequately serve our needs should we need to relocate or expand any of our operations.
We currently operate out of more than 90 core locations nationally, of which one is a related party transaction with a property owner including members of our management team, and two offices in Mexico. Our lease terms vary ranging from month-to-month to multi-year commitments.
We currently operate out of more than 95 core locations nationally, of which one is a related party transaction with a property owner including members of our management team, and two offices in Mexico. Our lease terms vary ranging from month-to-month to multi-year commitments.
Item 2. Properties Our principal executive office is located at 12355 Sunrise Valley Drive, Suite 520, Reston, Virginia 20191, which we lease under a seven-year commitment with annual lease terms of $0.3 million. We do not own any real property.
Item 2. Properties Our principal executive office is located at 12355 Sunrise Valley Drive, Suite 520, Reston, Virginia 20191, which we lease under a seven-year commitment with annual lease payments of $0.3 million. We do not own any real property.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities The following table summarizes the purchases of shares of our common stock made by us during the three months ended December 31, 2023 (in thousands, except share data and average price per share): Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) 10/1/23 - 10/31/23 16,749 26.21 28,404 11/1/23 - 11/30/23 10,416 28.91 - 10,000,000 12/1/23 - 12/31/23 14,462 34.56 - 10,000,000 (1) This column reflects shares owned and tendered by employees to satisfy the required withholding taxes related to share-based payment awards, which are not deducted from shares available to be purchased under publicly announced programs. 42 Table of Content (2) On November 10, 2022, our board of directors authorized a share repurchase program, to spend up to $10.0 million for the repurchase of our common stock (the "2022 Repurchase Authorization").
Biggest changeIssuer Purchases of Equity Securities The following table summarizes the purchases of shares of our common stock made by us during the three months ended December 31, 2024 (in thousands, except share data and average price per share): Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (3) 10/1/24 - 10/31/24 224 21.75 179,512 17,146,588 11/1/24 - 11/30/24 - 24.43 114,131 14,358,018 12/1/24 - 12/31/24 320 26.78 100,849 11,656,400 (1) This column reflects shares owned and tendered by employees to satisfy the required withholding taxes related to share-based payment awards, which are not deducted from shares available to be purchased under publicly announced programs.
Unregistered Sales of Equity Securities Sales of unregistered securities during the year ended December 31, 2023 were previously disclosed in our Quarterly Reports on Form 10-Q for each of the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023.
Unregistered Sales of Equity Securities Sales of unregistered securities during the year ended December 31, 2024 were previously disclosed in our Quarterly Reports on Form 10-Q for each of the quarters ended March 31, 2024, June 30, 2024 and September 30, 2024.
ASSUMES $100 INVESTED ON MAY 7, 2021 FOR THE YEAR ENDED DECEMBER 31, 2023 2021 2022 2023 Bowman Consulting Group Ltd. 100.00 156.07 253.71 Russell 2000 Index 100.00 77.53 89.23 Nasdaq Market Index 100.00 76.11 109.16 The performance graph above and related text are being furnished solely to accompany this annual report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Exchange Act, 41 Table of Content and are not to be incorporated by reference into any of our filings with the SEC, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
ASSUMES $100 INVESTED ON MAY 7, 2021 FOR THE YEAR ENDED DECEMBER 31, 2024 2021 2022 2023 2024 Bowman Consulting Group Ltd. 100.00 156.07 253.71 114.19 Russell 2000 Index 100.00 77.53 89.23 126.62 Nasdaq Market Index 100.00 76.11 109.16 184.50 The performance graph above and related text are being furnished solely to accompany this annual report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Exchange Act, 41 Table of Content and are not to be incorporated by reference into any of our filings with the SEC, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
The recipients of securities in the above transactions acquired the securities for investment only and not with a view to, or for sale in connection with any, distribution thereof and appropriate legends were affixed to the securities issued in the transactions. The transactions did not involve any underwriters, underwriting discounts or commissions, or any public offering.
The recipient of securities in the above transaction acquired the securities for investment only and not with a view to, or for sale in connection with any, distribution thereof and appropriate legends were affixed to the securities issued in the transaction. The transaction did not involve any underwriters, underwriting discounts or commissions, or any public offering.
The share repurchase program does not obligate Bowman to acquire a specific number of shares of common stock and may be suspended, modified, or discontinued at any time without notice. As of December 31, 2023, we have repurchased no shares of our common stock under the 2023 Repurchase Authorization. Item 6. [RESERVED] 43 Table of Content
The share repurchase program does not obligate Bowman to acquire a specific number of shares of common stock and may be suspended, modified, or discontinued at any time without notice. 42 Table of Content As of December 31, 2024, we have repurchased 958,013 shares of our common stock under the 2024 Repurchase Authorization. Item 6. [RESERVED] 43 Table of Content
The recipients had adequate access, through employment, business, or other relationships, to information about us.
The recipient had adequate access, through employment, business, or other relationships, to information about us.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol BWMN. There were approximate ly 14 sto ckholders of record at February 29, 2024.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is traded on the Nasdaq Global Select Market under the symbol BWMN. There were approximate ly 12 share holders of record at February 28, 2025.
The execution of the repurchase program is expected to be consistent with the Company’s strategic initiatives which prioritize investments in organic and acquisitive growth. The timing and amount of any share repurchases will be determined by management at its discretion based on several factors including share price, market conditions and capital allocation priorities.
The timing and amount of any share repurchases will be determined by management at its discretion based on several factors including share price, market conditions and capital allocation priorities.
(3) On November 17, 2023, our board of directors authorized a new $10 million share repurchase program under which the Company may repurchase up to $10 million of our common stock (the "2023 Repurchase Authorization"). The 2023 Repurchase Authorization is effective from November 17, 2023, through November 16, 2024.
(2) On August 15, 2024, the board of directors authorized a $25 million share repurchase program under which the Company may repurchase up to $25 million of our common stock. On November 29, 2024, the board of directors authorized an increase to this repurchase authorization from $25 million to $35 million (collectively referred to as the "2024 Repurchase Authorization").
For a description of these acquisitions, see Note 4, Acquisitions , appearing in Part IV of this Annual Report on Form 10-K. The offer, sale and issuance of the securities described above were deemed to be exempt from registration under Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.
If the request is made with respect to a regularly scheduled quarterly payment of principal, then the accrued interest shall be paid in cash. The offer, sale and issuance of the securities described above were deemed to be exempt from registration under Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.
Subsequent to September 30, 2023 and through the reporting date of this Annual Report on Form 10-K, we made sales of the following unregistered securities: On October 2, 2023, we issued 14,622 shares of common stock at $26.35 per share as partial consideration for our acquisition of Excellence Engineering, LLC.
Subsequent to September 30, 2024 and through the reporting date of this Annual Report on Form 10-K, we made no sales of the unregistered securities, other than the following: On November 5, 2024, we issued a $2.2 million 5.00% unsubordinated convertible note with a maturity date in November 2028 as partial consideration for the acquisition of Exeltech Consulting, Inc.
The convertible promissory note will be convertible into shares of our common stock at the option of the holders at any time, at a conversion price of $28.13 per share. On December 11, 2023, we issued 4,085 shares of common stock at $33.54 per share as partial consideration for our acquisition of Hess Rountree, Inc.
(see Note 4 Acquisitions ). The convertible note will be convertible into shares of common stock at the option of the holders, at any time, at a conversion price of $32.32 per share upon proper notice.
Removed
On October 12, 2023, we issued 80,088 shares of common stock at $27.12 per share as partial consideration for our acquisition of Dennis Corporation. On November 9, 2023, we issued 94,090 shares of common stock at $29.06 per share as partial consideration for our acquisition of CFA, Inc.
Added
Subject to the exercise of the conversion, the convertible note will have quarterly payments of principal, interest or both beginning in April 2025 and ending in November 2028.
Removed
On November 10, 2023, we issued 57,755 shares of common stock at $30.30 per share as partial consideration for our acquisition of Blankinship and Associates, Inc.
Added
At any time, upon ten (10) business days’ notice to the Company, the holders may request that a prepayment of the principal or all or part of a regularly scheduled quarterly payment of the principal be made in the form of common stock of the Company, with the number of shares of common stock equal to the amount of the requested prepayment divided by the stock conversion price.
Removed
On November 14, 2023, we issued 131,515 shares of common stock at $30.74 per share and $1.3 million 8.00% unsubordinated convertible note with a maturity date in May 2024 as partial consideration for the acquisition of High Mesa Consulting Group, Inc.
Added
The authorization is effective through July 31, 2025. The execution of the repurchase program is expected to be consistent with the Company’s strategic initiatives which prioritize investments in organic and acquisitive growth.
Removed
The common stock may have been repurchased from time to time depending upon market conditions and may have been purchased in the open market and through one or more trading plans designed to comply with Rule 10b5-1 under the Exchange Act.
Removed
The plan did not obligate us to repurchase any specific number or any specific dollar amount of shares and may have been suspended at any time at our discretion. The 2022 Repurchase Authorization expired on November 10, 2022, with $9.3 million remaining available for repurchase.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

81 edited+7 added−8 removed69 unchanged
Biggest changeChanges in gross contract revenue (“GCR”) for the year ended December 31, 2023, disaggregated between our core and emerging end markets, were as follows (in thousands other than percentages): For the Year Ended December 31, Consolidated Gross Contract Revenue 2023 %GCR 2022 %GCR Change % Change Building Infrastructure $ 194,867 56.3 % $ 170,431 65.1 % $ 24,436 14.3 % Transportation 72,829 21.0 % 44,846 17.1 % 27,983 62.4 % Power & Utilities 64,156 18.5 % 32,672 12.5 % 31,484 96.4 % Other emerging markets 1 14,404 4.2 % 13,765 5.3 % 639 4.6 % Total: $ 346,256 100.0 % $ 261,714 100.0 % $ 84,542 32.3 % Organic $ 315,759 91.2 % $ 261,714 100.0 % $ 54,045 20.7 % Acquired 2 30,497 8.8 % - n/a n/a n/a Total: $ 346,256 100.0 % $ 261,714 100.0 % $ 54,045 32.3 % 1 represents environmental, mining, water resources and other 2 after four quarters post-closing, acquired revenue is reclassified as organic; this results in a change from previously reported numbers 49 Table of Content For the year ended December 31, 2023, gross contract revenue from our building infrastructure market increased $24.4 million or 14.3% as compared to the year ended December 31, 2022.
Biggest changeChanges in gross contract revenue (“GCR”) for the year ended December 31, 2024, disaggregated between our core and emerging end markets, were as follows (in thousands other than percentages): For the Year Ended December 31, Consolidated Gross Contract Revenue 2024 %GCR 2023 %GCR Change % Change Building Infrastructure 3 $ 219,596 51.4 % $ 194,867 56.3 % $ 24,729 12.7 % Transportation 87,746 20.6 % 72,829 21.0 % 14,917 20.5 % Power & Utilities 3 75,026 17.6 % 64,156 18.5 % 10,870 16.9 % Emerging Markets 1 44,196 10.4 % 14,404 4.2 % 29,792 206.8 % Total: $ 426,564 100.0 % $ 346,256 100.0 % $ 80,308 23.2 % Acquired 2 $ 42,454 10.0 % $ 30,497 8.8 % $ 11,957 39.2 % 1 Represents environmental, mining, water resources, imaging and mapping and other. 2 .
We do not limit our consideration to traditional bank financing, but rather include other structured debt and equity as option for additional capital. For more information about our credit facilities, see Note 11 – Revolving Credit Facility and Fixed Credit Facilities.
We do not limit our consideration to traditional bank financing, but rather include other structured debt and equity as option for additional capital. For more information about our credit facilities, see Note 11 – Revolving Credit Facility and Fixed Credit Facility .
We work as both a prime and sub-consultant for a broad base of public and private sector customers that generally operate in highly regulated environments. We have a diversified business that is not dependent on any one service line, geographic region, or end market.
We work as both a prime and sub-consultant for a broad base of public and private sector customers that generally operate in highly regulated environments. We have a diversified business that is not dependent on any one customer service line, geographic region, or end market.
Based on recent increases in program commitments within the gas pipeline replacement market, we believe trends in power and utilities provide meaningful opportunity for continued growth and we are committed to investing resources accordingly. Our other emerging markets consist of mining, water resources, environmental consulting, and other natural resources services.
Based on recent increases in program commitments within the gas pipeline replacement market, we believe trends in power and utilities provide meaningful opportunity for continued growth and we are committed to investing resources accordingly. Our emerging markets consist of mining, water resources, environmental consulting, imaging and mapping and other natural resources services.
At December 31, 2023, we maintained a fleet of approximately 500 vehicles. All of our leasing facilities allow for both operating and finance leasing. We allocate finance lease payments between amortization and interest. The payment terms on the lease agreements range between 30 and 50 months with payments totaling approximately $0.6 million per month.
At December 31, 2024, we maintained a fleet of approximately 500 vehicles. All of our leasing facilities allow for both operating and finance leasing. We allocate finance lease payments between amortization and interest. The payment terms on the lease agreements range between 30 and 50 months with payments totaling approximately $0.6 million per month.
The net outflow from changes in operating assets and liabilities was primarily due to a $13.6 million increase in accounts receivable resulting from increased billing to our clients as well as additional billing from the acquired companies, a $0.1 million decrease in prepaid expenses and a $7.1 million net increase in contract assets and liabilities, offset by a $27.7 million increase in accounts payable and accrued expenses, inclusive of a long-term accrual relating to an uncertain tax position with respect to the capitalization of research and development expenses.
The net outflow from changes in operating assets and liabilities was primarily due to a $13.6 million increase in accounts receivable resulting from increased billing to our customers as well as additional billing from the acquired companies, a $0.1 million decrease in prepaid expenses and a $14.6 million net increase in contract assets and liabilities, offset by a $27.7 million increase in accounts payable and accrued expenses, inclusive of a long-term accrual relating to an uncertain tax position with respect to the capitalization of research and development expenses.
We define Adjusted EBITDA as net income before interest expense, income taxes and depreciation and amortization, plus expenses associated with discontinued operations, legal settlements not related to our general course of business professional services, and other costs not in the ordinary course of business, non-cash stock-based compensation (inclusive of expenses associated with the adjustment of our liability for common shares subject to redemption), and other adjustments such as costs associated with raising equity and other forms of capital.
We define Adjusted EBITDA as net income before interest expense, income taxes and depreciation and amortization, plus expenses associated with discontinued operations, legal settlements not related to our general course of 46 Table of Content business professional services, and other costs not in the ordinary course of business, non-cash stock-based compensation (inclusive of expenses associated with the adjustment of our liability for common shares subject to redemption), and other adjustments such as costs associated with raising equity and other forms of capital.
The estimated fair value is based on forward-looking estimates of performance and cash flows of our reporting units, which are based on historical operating results, adjusted for current and expected future market conditions, as well as various internal projections and external sources.
The estimated fair value is based on forward-looking estimates of performance and cash flows of our reporting 47 Table of Content units, which are based on historical operating results, adjusted for current and expected future market conditions, as well as various internal projections and external sources.
Our peers may define Adjusted EBITDA differently. 46 Table of Content Adjusted EBITDA Margin, net Adjusted EBITDA Margin, net, which is a non-GAAP financial measure, represents Adjusted EBITDA, as defined above, as a percentage of net service billings, as defined above. Critical Accounting Policies and Estimates We use estimates in the determination of certain financial results.
Our peers may define Adjusted EBITDA differently. Adjusted EBITDA Margin, net Adjusted EBITDA Margin, net, which is a non-GAAP financial measure, represents Adjusted EBITDA, as defined above, as a percentage of net service billings, as defined above. Critical Accounting Policies and Estimates We use estimates in the determination of certain financial results.
Under the terms of our Revolving Credit Facility, available cash in our primary operating account sweeps against the outstanding balance every evening. Our cash 53 Table of Content on hand therefore generally consists of petty cash and other non-operating funds not included in the nightly sweep.
Under the terms of our Revolving Credit Facility, available cash in our primary operating account sweeps against the outstanding balance every evening. Our cash on hand therefore generally consists of petty cash and other non-operating funds not included in the nightly sweep.
Our principal uses of cash are operating expenses, working capital requirements, capital expenditures, repayment of debt, acquisitions, and acquisition related payments. On December 31, 2023, we maintained a $70.0 million Revolving Credit Facility with Bank of America, our primary lender. See - "Credit Facilities and Other Financing" below for more information on our Revolving Credit Facility.
Our principal uses of cash are operating expenses, working capital requirements, capital expenditures, repayment of debt, acquisitions, and acquisition related payments. On December 31, 2024, we maintained a $100.0 million Revolving Credit Facility with Bank of America, our primary lender. See - "Credit Facilities and Other Financing" below for more information on our Revolving Credit Facility.
Lump sum contracts can involve both hourly and fixed fee tasks. The majority of our assignments are lump sum in nature representing approximately 62% and 70% of our gross contract revenue for the years ended December 31, 2023 and 2022, respectively.
Lump sum contracts can involve both hourly and fixed fee tasks. The majority of our assignments are lump sum in nature representing approximately 60% and 62% of our gross contract revenue for the years ended December 31, 2024 and 2023, respectively.
We perform an annual impairment test as of October 1 of each year with quarterly confirmations that no changes in circumstances have occurred. As our business is highly integrated and its components have similar economic characteristics, we have concluded we operate as one reporting unit at the combined entity level.
We perform an annual impairment test as of October 1 of each year with quarterly confirmations that no triggering events have occurred. As our business is highly integrated and its components have similar economic characteristics, we have concluded we operate as one reporting unit at the combined entity level.
For the year ended December 31, 2023 and 2022, direct labor costs represented 27.7% and 28.4% of gross contract revenue, respectively and represented 31.6% and 31.6% of the revenue attributable to our workforce, respectively. Labor costs not charged directly to customer contracts is considered indirect time and is treated as selling, general and administrative expense.
For the year ended December 31, 2024 and 2023, direct labor costs represented 27.7% and 27.7% of gross contract revenue, respectively and represented 31.1% and 31.6% of the revenue attributable to our workforce, respectively. Labor costs not charged directly to customer contracts is considered indirect time and is treated as selling, general and administrative expense.
Overview Bowman is a professional services firm delivering innovative engineering solutions to customers who own, develop, and maintain the built environment. We provide planning, engineering, construction management, commissioning, environmental consulting, geospatial, survey, land procurement and other technical services to over 4,750 customers operating in a diverse set of end markets.
Overview Bowman is a professional services firm delivering innovative engineering, technology and program management services to customers who own, develop, and maintain the built environment. We provide planning, engineering, construction management, commissioning, environmental consulting, geospatial imaging, surveying, land procurement and other technical services to over 4,750 customers operating in a diverse set of end markets.
This increase includes an increase of $2.9 million in the cost of non-cash stock compensation relating to direct payroll costs to $7.1 million for the year ended December 31, 2023, as compared to $4.2 million for the year ended December 31, 2022. The increase in non-cash stock compensation is likewise attributable to the increase in the overall labor pool.
This increase includes an increase of $1.1 million in the cost of non-cash stock compensation relating to direct payroll costs to $8.2 million for the year ended December 31, 2024, as compared to $7.1 million for the year ended December 31, 2023. The increase in non-cash stock compensation is likewise attributable to the increase in the overall labor pool.
Adjusted EBITDA Margin, net (non-GAAP) Adjusted EBITDA Margin, net represents Adjusted EBITDA (as defined above) as a percentage of net service billing (as defined above). For the years ended December 31, 2023 and 2022, Adjusted EBITDA Margin, net was 15.5% and 14.5% respectively.
Adjusted EBITDA Margin, net (non-GAAP) Adjusted EBITDA Margin, net represents Adjusted EBITDA (as defined above) as a percentage of net service billing (as defined above). For the years ended December 31, 2024 and 2023, Adjusted EBITDA Margin, net was 15.7% and 15.5% respectively.
We do not amortize goodwill, but rather evaluate goodwill for potential impairment on an annual basis or at other times during the year if indicators of impairment exist. We evaluate goodwill for potential impairment by comparing the carrying value of the reporting unit to its fair value.
We evaluate goodwill for potential impairment on an annual basis or at other times during the year if indicators of impairment exist. We evaluate goodwill for potential impairment by comparing the carrying value of the reporting unit to its fair value.
Components of Income and Expense Revenue We generate revenue from services performed by our employees, pass-through fees from sub-consultants, and reimbursable contract costs. On our consolidated financial statements, we report gross revenue, which represents total 44 Table of Content revenue billed to customers excluding taxes collected from customers.
Our financial statements present results as a single operating segment. 44 Table of Content Components of Income and Expense Revenue We generate revenue from services performed by our employees, pass-through fees from sub-consultants, and reimbursable contract costs. On our consolidated financial statements, we report gross revenue, which represents total revenue billed to customers excluding taxes collected from customers.
Our net (loss) income for the years ended December 31, 2023, and 2022 was ($6.6) million and $5.0 million, respectively. Our Adjusted EBITDA (see Adjusted EBITDA - non-GAAP below) was $47.0 million on net loss of $6.6 million and $34.0 million on net income of $5.0 million for the years ended December 31, 2023, and 2022, respectively.
Our net income (loss) for the years ended December 31, 2024, and 2023 was $3.0 million and ($6.6) million, respectively. Our Adjusted EBITDA (see Adjusted EBITDA - non-GAAP below) was $59.5 million on net income of $3.0 million and $47.0 million on net loss of $6.6 million for the years ended December 31, 2024, and 2023, respectively.
Other Expense Other expense increased by $2.4 million to $5.8 million of expense for the year ended December 31, 2023 as compared to $3.4 million of expense for the year ended December 31, 2022. Interest expense increased by $2.9 million. This increase is primarily attributable to increases in finance leases and acquisitions.
Other Expense Other expense increased by $1.1 million to $6.9 million of expense for the year ended December 31, 2024 as compared to $5.8 million of expense for the year ended December 31, 2023. Interest expense increased by $2.6 million. This increase is primarily attributable to increases in finance leases and acquisitions.
The increase was attributable to new contract awards in transportation both from public and private customers along with acquired transportation backlog which we were able to deliver to customers, within transportation, 66.7% of our gross contract revenue was derived directly from public sector customers including DOTs, tollway operators, transit authorities aviation operators and others with the remaining 33.3% derived from private sector customers.
The increase was attributable to new contract awards in transportation both from public and private customers along with acquired transportation backlog which we were able to deliver to customers, within transportation, 61.8% of our gross contract revenue was derived directly from public sector customers including DOTs, tollway operators, transit authorities aviation operators and others with the remaining 38.2% derived from private sector customers.
This increase includes a $3.4 million increase in employee payroll taxes and a $3.3 million increase in health benefits for the year ended December 31, 2023, primarily due to the increase in the overall labor pool.
This increase includes a $3.5 million increase in employee payroll taxes and a $1.1 million increase in health benefits for the year ended December 31, 2024, primarily due to the increase in the overall labor pool.
Within the building infrastructure market, 35.7% of gross contract revenue was derived from residential assignments including single family, multi-family and mixed-use housing stock, 48.3% from commercial assignments including retail, hospitality and quick-serve restaurants (QSR), office and industrial, data centers and healthcare, and 16.0% from municipal assignments.
Within the building infrastructure market, 36.0% of gross contract revenue was derived from residential assignments including single family, multi-family and mixed-use housing stock, 45.0% from commercial assignments including retail, hospitality and quick-serve restaurants (QSR), office and industrial, data centers and healthcare, and 19.0% from municipal assignments.
Gross contract revenue for the years ended December 31, 2023, and 2022 was $346.3 million and $261.7 million, respectively. Gross contract revenue derived from our workforce represented 87.8% and 89.9% of gross contract revenue for the years ended December 31, 2023 and 2022, respectively (see Net service billing – non-GAAP below).
Gross contract revenue for the years ended December 31, 2024, and 2023 was $426.6 million and $346.3 million, respectively. Gross contract revenue derived from our workforce (see Net service billing – non-GAAP below) represented 89.0% and 87.8% of gross contract revenue for the years ended December 31, 2024 and 2023, respectively.
At December 31, 2023 and 2022, our backlog was comprised as follows: December 31, 2023 December 31, 2022 Building Infrastructure 54.7 % 51.2 % Transportation 24.2 % 30.6 % Power & Utilities 17.4 % 13.4 % Other Emerging Markets 3.7 % 4.8 % Liquidity and Capital Resources Our principal sources of liquidity are our cash and cash equivalents balances, cash flow from operations, borrowing capacity under our Revolving Credit Facility (as defined below), lease financing, proceeds from stock sales and other structured debt securities.
At December 31, 2024 and 2023, our backlog was comprised as follows: December 31, 2024 December 31, 2023 Building Infrastructure 41.1 % 54.7 % Transportation 34.5 % 24.2 % Power & Utilities 15.4 % 17.4 % Emerging Markets 9.0 % 3.7 % Liquidity and Capital Resources Our principal sources of liquidity are our cash and cash equivalents balances, cash flow from operations, borrowing capacity under our Revolving Credit Facility (as defined below), lease financing, proceeds from stock sales and other structured debt securities.
The net outflow from changes in operating assets and liabilities was primarily due to a $13.8 million increase in accounts receivable resulting from increased billing to our clients as well as additional billing from the acquired companies, a $2.0 million increase in prepaid expenses and a $5.9 million net increase in contract assets and liabilities, offset by a $15.8 million increase in accounts payable and accrued expenses, inclusive of a long-term accrual relating to an uncertain tax position with respect to the capitalization of research and development expenses.
The net inflow from changes in operating assets and liabilities was primarily due to a $9.3 million increase in accounts receivable resulting from increased billing to our customers as well as additional billing from the acquired companies, a $5.7 million increase in prepaid expenses and a $7.1 million net increase in contract assets and liabilities, offset by a $7.6 million increase in accounts payable and accrued expenses, inclusive of a long-term accrual relating to an uncertain tax position with respect to the capitalization of research and development expenses.
Total contract costs include both direct payroll costs, and sub-consultants and other expenses. Total direct payroll costs increased $27.9 million or 27.9% to $128.0 million for the year ended December 31, 2023, as compared to $100.1 million for the year ended December 31, 2022 due to increased staffing resulting from acquisitions and organic growth.
Total contract costs include both direct payroll costs, and sub-consultants and other expenses. Total direct payroll costs increased $28.9 million or 22.6% to $156.9 million for the year ended December 31, 2024, as compared to $128.0 million for the year ended December 31, 2023 due to increased staffing resulting from acquisitions and organic growth.
We utilize master lease facilities primarily with Honour Capital LLC (“Honour”) and Enterprise Leasing (“Enterprise”). The Honour Capital lease facility finances our acquisition of IT infrastructure, geospatial and survey equipment, furniture and other long-lived assets. The Enterprise lease facility finances the acquisition of field trucks and other service vehicles.
At December 31, 2024, we were in compliance with all covenants. We utilize master lease facilities primarily with Honour Capital LLC (“Honour”) and Enterprise Leasing (“Enterprise”). The Honour Capital lease facility finances our acquisition of IT infrastructure, geospatial and survey equipment, furniture and other long-lived assets. The Enterprise lease facility finances the acquisition of field trucks and other service vehicles.
While we evaluate revenue and other key performance indicators relating to various divisions of labor, our leadership neither manages the business nor deliberately allocates resources by service line, geography, or end market. Our financial statements present results as a single operating segment.
While we evaluate revenue and other key performance indicators relating to various divisions of labor, our leadership neither manages the business nor deliberately allocates resources by service line, geography, or end market.
Cash Flows The following table summarizes our cash flows for the periods presented: For The Year Ended December 31, Consolidated Statement of Cash Flows (amounts in thousands) 2023 2022 Net cash provided by operating activities $ 11,722 $ 9,170 Net cash used in investing activities (27,156) (18,754) Net cash provided by financing activities 22,839 2,247 Change in cash and cash equivalents 7,405 (7,337) Cash and cash equivalents, end of period 20,687 13,282 Operating Activities During the year ended December 31, 2023, net cash provided by operating activities was $11.7 million, which primarily consisted of ($6.6) million net loss, adjusted for stock-based compensation expense of $24.7 million and depreciation and amortization expense of $18.7 million, offset by an increase in deferred taxes relating to the capitalization of research and development costs of $25.5 million, and an increase in a net cash outflow of $0.3 million from changes in operating assets and liabilities.
Cash Flows The following table summarizes our cash flows for the periods presented: For The Year Ended December 31, Consolidated Statement of Cash Flows (amounts in thousands) 2024 2023 Net cash provided by operating activities $ 24,301 $ 11,722 Net cash used in investing activities (27,466) (27,156) Net cash (used) provided by financing activities (10,824) 22,839 Change in cash and cash equivalents (13,989) 7,405 Cash and cash equivalents, end of period 6,698 20,687 Operating Activities During the year ended December 31, 2024, net cash provided by operating activities was $24.3 million, which primarily consisted of $3.0 million net income, adjusted for stock-based compensation expense of $25.7 million and depreciation and amortization expense of $28.4 million, offset by an increase in deferred taxes relating to the capitalization of research and development costs of $20.0 million, and an increase in a net cash inflow of $14.5 million from changes in operating assets and liabilities.
Other direct payroll costs, the component of total direct payroll costs associated with fringe and incentive compensation (cash and non-cash) increased by $6.0 million or 23.2% to $31.9 million for the year ended December 31, 2023 as compared to $25.9 million for the year ended December 31, 2022.
Other direct payroll costs, the component of total direct payroll costs associated with fringe and incentive compensation (cash and non-cash) increased by $6.9 million or 21.6% to $38.8 million for the year ended December 31, 2024 as compared to $31.9 million for the year ended December 31, 2023.
Within residential, 43.9% of gross contract revenue was derived from for-sale homebuilding assignments, 47.0% from residential multi-family and 9.1% from mixed use projects. While the homebuilding market shows signs of rebounding from prior year interest rate impacts, for-sale residential services represented just 8.8% of our total gross contract revenue for year ended December 31, 2023.
Within residential, 53.3% of gross contract revenue was derived from for-sale homebuilding assignments, 40.4% from residential multi-family and 6.3% from mixed use projects. While the homebuilding market shows signs of rebounding from prior year interest rate impacts, for-sale residential services represented just 9.9% of our total gross contract revenue for year ended December 31, 2024.
For the year ended December 31, 2023, gross contract revenue attributable to work performed by our workforce increased $68.8 million, or 29.3% to $304.0 million or 87.8% of gross contract revenue as compared to $235.2 million or 89.9% for year ended December 31, 2022 (see Net service billing – non-GAAP).
For the year ended December 31, 2024, gross contract revenue attributable to work performed by our workforce increased $75.7 million, or 24.9% to $379.7 million or 89.0% of gross contract revenue as compared to $304.0 million or 87.8% for year ended December 31, 2023 (see Net service billing – non-GAAP).
This was primarily due to net proceeds of $45.3 million from our Revolving Credit Facility, offset by $4.8 million of payments for the purchase of treasury stock, $0.7 million for repurchase of common stock, $6.8 million of payments on finance leases and $11.2 million of payments on notes payable and our fixed lines of credit.
This was primarily due to net borrowing of $8.3 million from our Revolving Credit Facility, $11.1 million of payments for the purchase of treasury stock, $23.3 million for repurchase of common stock, $9.0 million of payments on finance leases and $16.6 million of payments on notes payable and our fixed lines of credit, offset by $47.2 million of proceeds from a common share offering.
Within the power and utilities market, 78.3% of our gross contract revenue was derived from customers operating traditional power operations and 21.7% was derived from customers focused on renewables, EV infrastructure and energy transition operations.
Within the power and utilities market, 75.4% of our gross contract revenue was derived from customers operating traditional power operations and 24.6% was derived from customers focused on renewables, EV infrastructure and energy transition operations.
Under Credit Agreement, the Company is required to comply with certain covenants, including covenants related to indebtedness, investments, liens and restricted payments, as well as to maintain certain financial covenants, including a fixed charge coverage ratio and leverage ratio of debt to EBITDA (as defined in the Credit Agreement).
Under the Revolving Credit Facility 2024, we are required to comply with certain covenants, including covenants on indebtedness, investments, liens and restricted payments, as well as to maintain certain financial covenants, including a fixed charge coverage ratio and leverage ratio of debt to EBITDA (as defined in the Revolving Credit Facility 2024).
The Credit Agreement is secured by all the assets of the Company and the subsidiary guarantors.
The Revolving Credit Facility 2024 is secured by all the assets of the Company and the subsidiary guarantors.
General overhead increased $11.1 million or 27.8% to $51.0 million for the year ended December 31, 2023, as compared to $39.9 million for the year ended December 31, 2022, due to increased costs associated with operating as a public company, geographic expansion, and the overall growth of the company.
General overhead increased $15.1 million or 29.6% to $66.1 million for the year ended December 31, 2024, as compared to $51.0 million for the year ended December 31, 2023, due to increased costs associated with operating as a public company, geographic expansion, and the overall growth of the company.
There can be no assurance that any opportunity in the process of being reviewed will close but we expect over time to utilize a meaningful portion our current liquidity and capital resources for acquisitions.
In connection with acquisitions, we use a combination of cash, bank financing, seller financing, and equity to satisfy the purchase price. There can be no assurance that any opportunity in the process of being reviewed will close but we expect over time to utilize a meaningful portion our current liquidity and capital resources for acquisitions.
For the year ended December 31, 2023 and 2022, total contract costs represented 49.1% and 48.4% of total contract revenue, 50 Table of Content respectively. For the years ended December 31, 2023 and 2022 total contract costs represented 56.0% and 53.8% of revenue attributable to our workforce, respectively (see Net Service Revenue).
For the years ended December 31, 2024 and 2023, total contract costs represented 47.8% and 49.1% of total contract revenue, respectively. For the years ended December 31, 2024 and 2023 total contract costs represented 53.7% and 56.0% of revenue attributable to our workforce, respectively (see Net Service Revenue).
Investing Activities Net cash used in investing activities was $27.2 million for the year ended December 31, 2023, $25.7 million was related to acquisitions that occurred in 2023 and $2.1 million was for purchases of property and equipment. 54 Table of Content Financing Activities Net cash provided by financing activities was $22.8 million during the year ended December 31, 2023.
Investing Activities Net cash used in investing activities was $27.5 million for the year ended December 31, 2024, $27.4 million was related to acquisitions that occurred in 2024 and $0.1 million was for purchases of property and equipment. 54 Table of Content Financing Activities Net cash used in financing activities was $10.8 million during the year ended December 31, 2024.
Cash on hand includes the cash we keep in short-term investment accounts along with deposits and payments in transit in our operating sweep account. Our cash on hand increased by $7.4 million at December 31, 2023 as compared to December 31, 2022.
Cash on hand includes the cash we keep in short-term investment accounts along with deposits and payments in transit in our 53 Table of Content operating sweep account. Our cash on hand decreased by $14.0 million at December 31, 2024 as compared to December 31, 2023.
The Credit Agreement has a maturity date of July 31, 2025. Under the terms of the Revolving Credit Facility, available cash in our primary operating account sweeps against the outstanding balance every evening. As of December 31, 2023, the balance on this Revolving Credit Facility was $45.3 million.
The Revolving Credit Facility 2024 has a maturity date of May 2, 2029. Under the terms of the Revolving Credit Facility 2024, available cash in our primary operating account sweeps against the outstanding balance every evening. As of December 31, 2024, the balance on this Revolving Credit Facility 2024 was $37.0 million.
This change was within our expected range of 85% to 90% depending on contract mix. 52 Table of Content Adjusted EBITDA (non-GAAP) Adjusted EBITDA increased $13.0 million or 38.2% to $47.0 million for the year ended December 31, 2023 as compared to $34.0 million for the year ended December 31, 2022.
This change was within our expected range of 85% to 90% of gross contract revenue, and varies depending on contract mix. 52 Table of Content Adjusted EBITDA (non-GAAP) Adjusted EBITDA increased $12.5 million or 26.6% to $59.5 million for the year ended December 31, 2024 as compared to $47.0 million for the year ended December 31, 2023.
Net service billing reconciles to gross contract revenue as follows (in thousands): For The Year Ended December 31, 2023 2022 Gross revenue $ 346,256 $ 261,714 Less: sub-consultants and other direct expenses 42,262 26,510 Net services billing $ 303,994 $ 235,204 Net service billing decreased by 2.1 percentage points to 87.8% of gross contract revenue for the year ended December 31, 2023, as compared to 89.9% for the year ended December 31, 2022.
Net service billing reconciles to gross contract revenue as follows (in thousands): For The Year Ended December 31, 2024 2023 Gross revenue $ 426,564 $ 346,256 Less: sub-consultants and other direct expenses 46,895 42,262 Net services billing $ 379,669 $ 303,994 Net service billing increased by 1.2 percentage points to 89.0% of gross contract revenue for the year ended December 31, 2024, as compared to 87.8% for the year ended December 31, 2023.
Significant judgment is required in determining our tax expense and in evaluating our tax positions, including evaluating uncertainties in the application of tax laws and regulations. We account for income taxes under the provisions of ASC 740, "Income Taxes" ("ASC 740").
Tax laws are complex and subject to different interpretations by the taxpayer and respective government taxing authorities. Significant judgment is required in determining our tax expense and in evaluating our tax positions, including evaluating uncertainties in the application of tax laws and regulations. We account for income taxes under the provisions of ASC 740, "Income Taxes" ("ASC 740").
During the year ended December 31, 2022, net cash provided by operating activities was $9.2 million, which primarily consisted of $5.0 million net income, adjusted for stock-based compensation expense of $15.1 million and depreciation and amortization expense of $12.3 million, offset by an increase in deferred taxes of $18.0 million, and an increase in a net cash outflow of $6.1 million from changes in operating assets and liabilities.
During the year ended December 31, 2023, net cash provided by operating activities was $11.7 million, which primarily consisted of ($6.6) million net loss, adjusted for stock-based compensation expense of $24.7 million and depreciation and amortization expense of $18.7 million, offset by an increase in deferred taxes relating to the capitalization of research and development costs of $25.5 million, and an increase in a net cash outflow of $0.3 million from changes in operating assets and liabilities.
For the year ended December 31, 2023, revenue from power and utilities increased $31.5 million or 96.4% as compared to the year ended December 31, 2022.
For the year ended December 31, 2024, revenue from power and utilities increased $10.9 million or 16.9% as compared to the year ended December 31, 2023.
Operating Expense Operating expenses consists of selling, general and administrative costs, non-cash stock compensation, depreciation and amortization and settlements and other non-core expenses. 45 Table of Content Selling, general and administrative expenses represent corporate and other general overhead expenses, salaries and wages not allocated to customer projects including management and administrative personnel costs, incentive compensation, personal leave, office lease and occupancy costs, legal, professional and accounting fees.
Selling, general and administrative expenses represent corporate and other general overhead expenses, salaries and wages not allocated to customer projects including management and administrative personnel costs, incentive compensation, personal leave, office lease and occupancy costs, legal, professional and accounting fees.
Backlog (other key performance metrics) Our backlog increased $63 million or 25.9% to approximately $306 million during the year ended December 31, 2023, as compared to $243 million at December 31, 2022.
Backlog (other key performance metrics) Our backlog increased $93 million or 30.5% to approximately $399 million during the year ended December 31, 2024, as compared to $306 million at December 31, 2023.
Sub-consultants and expenses increased $15.8 million or 59.6% to $42.3 million for the year ended December 31, 2023, as compared to $26.5 million for the year ended December 31, 2022. For the year ended December 31, 2023 and 2022, sub-consultant and expenses represented 12.2% and 10.1% of gross contract revenue, respectively.
Sub-consultants and expenses increased $4.6 million or 10.9% to $46.9 million for the year ended December 31, 2024, as compared to $42.3 million for the year ended December 31, 2023. For the years ended December 31, 2024 and 2023, sub-consultant and expenses represented 11.0% and 12.2% of gross contract revenue, respectively.
Net loss increased by $11.6 million or 232.0% to ($6.6) million for the year ended December 31, 2023, as compared to $5.0 million for the year ended December 31, 2022.
Net income (loss) increased by $9.6 million or 145.5% to $3.0 million of income for the year ended December 31, 2024, as compared to ($6.6) million of loss for the year ended December 31, 2023.
This increase is primarily due to an increase in leased assets and intangible assets accumulated through acquisitions. We continue to increase the use of our finance lease facility as we continue to grow. Intangible assets have increased due to multiple acquisitions in 2023.
We continue to increase the use of our finance lease facility as we continue to grow. Intangible assets have increased due to multiple acquisitions in 2024.
Income (Loss) Before Tax Expense and Net Income Loss before tax expense increased by $8.1 million or 476.5% to $6.4 million loss for the year ended December 31, 2023, as compared to a $1.7 million income for the year ended December 31, 2022.
Our effective tax rate for the year ended December 31, 2024 was 133.91%. Income (Loss) Before Tax Expense and Net Income Loss before tax expense increased by $2.5 million or 39.1% to $8.9 million loss for the year ended December 31, 2024, as compared to a $6.4 million loss for the year ended December 31, 2023.
Other financial information and non-GAAP key performance indicators Net service billing (non-GAAP) Net service billing increased $68.8 million or 29.3% to $304.0 million for the year ended December 31, 2023, as compared to $235.2 million for the year ended December 31, 2022.
Other financial information and non-GAAP key performance indicators Net service billing (non-GAAP) Net service billing increased $75.7 million or 24.9% to $379.7 million for the year ended December 31, 2024, as compared to $304.0 million for the year ended December 31, 2023.
Year ended December 31, 2023 as compared to the year ended December 31, 2022 Gross Contract Revenue Gross contract revenue for the year ended December 31, 2023 increased $84.6 million or 32.3% to $346.3 million as compared to $261.7 million for the year ended December 31, 2022.
Year ended December 31, 2024 as compared to the year ended December 31, 2023 Gross Contract Revenue Gross contract revenue for the year ended December 31, 2024 increased $80.3 million or 23.2% to $426.6 million as compared to $346.3 million for the year ended December 31, 2023.
Gains on the sale of certain IT equipment and automobiles increased $0.3 million or 300% to $0.4 million for the year ended December 31, 2023, as compared to $0.1 million for the year ended December 31, 2022.
Gains on the sale of certain IT equipment and automobiles increased $0.1 million or 25.0% to $0.5 million for the year ended December 31, 2024, as compared to $0.4 million for the year ended December 31, 2023. 51 Table of Content (Loss) Income from Operations Loss from operations increased $1.3 million to ($2.0) million for the year ended December 31, 2024 as compared to ($0.7) million for the year ended December 31, 2023.
Total direct payroll accounted for 75.2% of total contract costs for the year ended December 31, 2023, a decrease of 3.9 percentage points as compared to 79.1% for the year ended December 31, 2022.
Total direct payroll accounted for 77.0% of total contract costs for the year ended December 31, 2024, an increase of 1.8 percentage points as compared to 75.2% for the year ended December 31, 2023.
Selling, general and administrative expenses increased $40.6 million or 34.5% to $158.4 million for the year ended December 31, 2023, as compared to $117.8 million for the year ended December 31, 2022.
Selling, general and administrative expenses increased $39.1 million or 24.7% to $197.5 million for the year ended December 31, 2024, as compared to $158.4 million for the year ended December 31, 2023.
Of the $84.6 million increase in gross contract revenue during the year ended December 31, 2023, acquisitions completed in 2023 represented $30.5 million or 36.5% of the increase.
Of the $80.3 million increase in gross contract revenue during the year ended December 31, 2024, acquisitions completed in 2024 represented $42.5 million or 52.9% of the increase.
Within commercial, 42.1% of revenue was derived from office and industrial assignments, 39.1% from retail, hospitality, and quick serve restaurants, 11.6% from data centers, 5.1% from healthcare and 2.1% was from other projects.
Within commercial, 36.6% of revenue was derived from office and industrial assignments, 40.0% from retail, hospitality, and quick serve restaurants, 15.1% from data centers, 8.3% from healthcare.
Non-cash stock compensation associated with indirect labor hours, those not charged to customer contracts, increased $6.7 million or 61.5% to $17.6 million for the year ended December 31, 2023, as compared to $10.9 million for the year ended December 31, 2022, primarily resulting from the increase in our overall labor pool.
Non-cash stock compensation associated with indirect labor hours, those not charged to customer contracts, decreased ($0.1) million or (0.6%) to $17.5 million for the year ended December 31, 2024, as compared to $17.6 million for the year ended December 31, 2023.
If the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss would be recognized in our consolidated statement of operations in an amount equal to the excess of the carrying value over the estimated fair value, limited to the total amount of goodwill allocated to that reporting unit. 47 Table of Content We performed our annual impairment analysis for the years ended December 31, 2023 and 2022 and did not identify any indicators of impairment.
If the carrying value of the reporting unit exceeds its estimated fair value, an impairment loss would be recognized in our consolidated statement of operations in an amount equal to the excess of the carrying value over the estimated fair value, limited to the total amount of goodwill allocated to that reporting unit.
For the year ended December 31, 2023, revenue from transportation increased $28.0 million or 62.4% as compared to the year ended December 31, 2022.
For the year ended December 31, 2024, revenue from transportation increased $14.9 million or 20.5% as compared to the year ended December 31, 2023.
Direct labor, the component of total direct payroll costs associated with the labor time charged to contracts (often referred to within or industry as utilization) increased $21.7 million or 29.2% to $96.0 million for the year ended December 31, 2023 as compared $74.3 million for the year ended December 31, 2022.
Direct labor, the component of total direct payroll costs associated with the cost of labor relating to work performed on contracts (often referred to within our industry as utilization) increased $22.0 million or 22.9% to $118.0 million for the year ended December 31, 2024 as compared $96.0 million for the year ended December 31, 2023.
Other Acquisitions For information on the terms of additional promissory notes issued by the Company in connection with acquisitions during 2023 and 2022 that were not deemed significant acquisitions, see Note 4 – Acquisitions and Note 12 – Notes Payable Off-Balance Sheet Arrangements We have no material off-balance sheet arrangements, no special purpose entities, and no activities that include non-exchange-traded contracts accounted for at fair value. 55 Table of Content Effects of Inflation Based on our analysis of the periods presented, we believe that inflation has not had a material effect on our operating results.
Off-Balance Sheet Arrangements We have no material off-balance sheet arrangements, no special purpose entities, and no activities that include non-exchange-traded contracts accounted for at fair value. Effects of Inflation Based on our analysis of the periods presented, we believe that inflation has not had a material effect on our operating results.
Operating Expense Total operating expense increased $46.7 million or 35.9% to $176.7 million for the year ended December 31, 2023, as compared to $130.0 million for the year ended December 31, 2022.
Operating Expense Total operating expense increased $48.1 million or 27.2% to $224.8 million for the year ended December 31, 2024, as compared to $176.7 million for the year ended December 31, 2023.
Indirect labor increased $20.2 million or 39.7% to $71.1 million for the year ended December 31, 2023, as compared to $50.9 million for the year ended December 31, 2022, as a result of increased staffing to accommodate growth and a seasonally impacted decrease in utilization in December 2023.
Indirect labor increased $19.2 million or 27.0% to $90.3 million for the year ended December 31, 2024, as compared to $71.1 million for the year ended December 31, 2023, as a result of increased staffing to accommodate growth.
Adjusted EBITDA reconciles to net income as follows (in thousands): For The Year Ended December 31, 2023 2022 $ Change % Change Net Service Billing $ 303,994 $ 235,204 $ 68,790 29.2 % Net (Loss) Income $ (6,624) $ 5,005 $ (11,629) (232.3 %) + interest expense 5,340 2,457 2,883 117.3 % + depreciation & amortization 18,723 12,251 6,472 52.8 % + tax benefit 177 (3,269) 3,446 (105.4 %) EBITDA $ 17,616 $ 16,444 $ 1,172 7.1 % + non-cash stock compensation 24,984 15,409 9,575 62.1 % + settlements and other non-core expenses 1,170 654 516 78.9 % + acquisition expenses 3,261 1,515 1,746 115.2 % Adjusted EBITDA $ 47,031 $ 34,022 $ 13,009 38.2 % Adjusted EBITDA margin, net 15.5 % 14.5 % For the years ended December 31, 2023 and 2022, Adjusted EBITDA includes $25.0 million and $15.4 million, respectively, relating to non-cash stock compensation expenses resulting from the on-going vesting of restricted stock awards.
Adjusted EBITDA reconciles to net income as follows (in thousands): For The Year Ended December 31, 2024 2023 $ Change % Change Net Service Billing $ 379,669 $ 303,994 $ 75,675 24.9 % Net Income (Loss) $ 3,034 $ (6,624) $ 9,658 (145.8 %) + interest expense 7,951 5,340 2,611 48.9 % + depreciation & amortization 27,828 18,723 9,105 48.6 % + tax (benefit) expense (11,980) 177 (12,157) (6868.4 %) EBITDA $ 26,833 $ 17,616 $ 9,217 52.3 % + non-cash stock compensation 25,841 24,984 857 3.4 % + settlements and other non-core expenses 3,000 1,170 1,830 156.4 % + acquisition expenses 3,846 3,261 585 17.9 % Adjusted EBITDA $ 59,520 $ 47,031 $ 12,489 26.6 % Adjusted EBITDA margin, net 15.7 % 15.5 % For the years ended December 31, 2024 and 2023, Adjusted EBITDA includes $25.8 million and $25.0 million, respectively, relating to non-cash stock compensation expenses resulting from the on-going vesting of restricted stock awards.
We present direct costs exclusive of depreciation and amortization and as such we do not present gross profit on our consolidated financial statements.
We present direct costs exclusive of depreciation and amortization and as such we do not present gross profit on our consolidated financial statements. 45 Table of Content Operating Expense Operating expenses consists of selling, general and administrative costs, non-cash stock compensation, depreciation and amortization and settlements and other non-core expenses.
Adjusted for the change, for the year ended December 31, 2023, revenue from emerging markets increased $0.6 million or 4.6% as compared to the year ended December 31, 2022. Emerging market sectors represent lines of business that have not yet grown to a size whereby we would distinguish them as a separate market.
Emerging market sectors represent lines of business that have not yet grown to a size whereby we would distinguish them as a separate market.
Gross contract revenue within our emerging markets was 46.6% from mining activities where we have specialized in copper mining, 43.7% from water resources activities, and 9.7% from environmental and other natural resources consulting. Scarcities in water resources and the increasing need for water management gives us confidence that we will be able to increase revenue accordingly.
Gross contract revenue within our emerging markets was 43.7% from imaging and mapping, 19.9% from mining activities where we have specialized in copper mining, 26.3% from water resources activities, and 10.1% from environmental and other natural resources consulting.
Estimates of our tax expense include both current and deferred tax expense along with all available tax incentives and credits. 48 Table of Content Results of Operations Consolidated results of operations The following represents our consolidated results of operations for periods indicated (in thousands): For The Year Ended December 31, 2023 2022 Gross contract revenue $ 346,256 $ 261,714 Contract costs (exclusive of depreciation and amortization) 170,223 126,586 Operating expense 176,689 130,008 (Loss) Income from operations (656) 5,120 Other expense 5,791 3,384 Income tax benefit 177 (3,269) Net (loss) income $ (6,624) $ 5,005 Net margin (1.9) % 1.9 % Other financial information 1 Net service billing $ 303,994 $ 235,204 Adjusted EBITDA 47,031 34,022 Adjusted EBITA margin, net 15.5 % 14.5 % 1 Represents non-GAAP financial measures.
We are continuing to monitor the implications resulting from the potential enactment of Pillar Two rules in the jurisdictions where we operate, and do not currently anticipate a material impact. 48 Table of Content Results of Operations Consolidated results of operations The following represents our consolidated results of operations for periods indicated (in thousands): For The Year Ended December 31, 2024 2023 Gross contract revenue $ 426,564 $ 346,256 Contract costs (exclusive of depreciation and amortization) 203,761 170,223 Operating expense 224,803 176,689 (Loss) Income from operations (2,000) (656) Other expense 6,946 5,791 Income tax (benefit) expense (11,980) 177 Net income (loss) $ 3,034 $ (6,624) Net margin 0.7 % (1.9) % Other financial information 1 Net service billing $ 379,669 $ 303,994 Adjusted EBITDA 59,520 47,031 Adjusted EBITDA margin, net 15.7 % 15.5 % 1 Represents non-GAAP financial measures.
Income Tax - We are subject to income taxes in the U.S. in which we operate and record our tax provision for the anticipated tax consequences in our reported results of operations. Tax laws are complex and subject to different interpretations by the taxpayer and respective government taxing authorities.
We performed our annual impairment analysis for the years ended December 31, 2024 and 2023 and did not identify any indicators of impairment. Income Tax We are subject to income taxes in the U.S. in which we operate and record our tax provision for the anticipated tax consequences in our reported results of operations.
We maintain what we believe to be an appropriate reserve against our accumulated credits.
We maintain what we believe to be an appropriate reserve against our accumulated credits. Estimates of our tax expense include both current and deferred tax expense along with all available tax incentives and credits.
With recent and future acquisitions, we expect to experience continued growth from investment in various emerging market services. For the year ended December 31, 2023 and 2022, public sector customers, defined as direct contracts with municipalities, public agencies, or governmental authorities, remained relatively unchanged at 20.8% and 21.0% of our gross contract revenue, respectively.
For the years ended December 31, 2024 and 2023, public sector customers, defined as direct contracts with municipalities, public agencies, or governmental authorities, represented 26.8% and 20.8% of our gross contract revenue,, respectively. A portion of that increase is due to the reclassification of Pike Corporation from the private sector to the public sector.
Credit Facilities and Other Financing As of December 31, 2023, we maintained a $70.0 million revolving credit facility (the “Revolving Credit Facility”) and two non-revolving credit facilities (“Fixed Line 1” and “Fixed Line 2”) pursuant to an Amended and Restated Credit Agreement (collectively with the Revolving Credit Facility, as amended and restated the “Credit Agreement”) with Bank of America, our primary lender.
Credit Facilities and Other Financing As of December 31, 2024, we maintained a $100.0 million revolving credit facility (the “Revolving Credit Facility 2024”) pursuant to a credit agreement with lenders, Bank of America N.A., as Administrative Agent, the Swingline Lender and L/C Issuer, and TD Bank, N.A. as syndication agent.
Contract costs (exclusive of depreciation and amortization) Total contract costs, exclusive of depreciation and amortization, increased $43.6 million or 34.4% to $170.2 million for the year ended December 31, 2023, as compared to $126.6 million for the year ended December 31, 2022.
Gross contract revenue from projects for public sector customers are included in the end market most aligned with work performed. 50 Table of Content Contract costs (exclusive of depreciation and amortization) Total contract costs, exclusive of depreciation and amortization, increased $33.6 million or 19.7% to $203.8 million for the year ended December 31, 2024, as compared to $170.2 million for the year ended December 31, 2023.
This affects the timing of the payment of tax but not the expense of tax. Our effective tax rate for the year ended December 31, 2023 was (2.7%).
Income Tax (Expense) Benefit Income tax benefit for the year ended December 31, 2024 increased $12.2 million or 6,100% to $12.0 million benefit, as compared to ($0.2) million income tax expense for the year ended December 31, 2023. As an accrual basis taxpayer, this affects the timing of the payment of tax but not the expense of tax.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAs of December 31, 2023, there was $45.3 million outstanding on the Credit Agreement. A one percentage point change in the assumed interest rate of the Credit Agreement would change our annual interest expense by approximately $0.5 million in 2023. Our finance lease obligations with Honour and Enterprise were $20.4 million as of December 31, 2023.
Biggest changeAs of December 31, 2024, there was $37.0 million outstanding on the Credit Agreement. A one percentage point change in the assumed interest rate of the Credit Agreement would change our annual interest expense by approximately $0.3 million in 2024. Our finance lease obligations with Honour and Enterprise were $28.3 million as of December 31, 2024.
Our only debt subject to interest rate risk is the Credit Agreement under which rates are tied to Term SOFR (Secured Overnight Financing Rate), plus an applicable rate which varies between 2.10% and 2.60% based on our ratio of Funded Debt to EBITDA (as each is defined in the Credit Agreement).
Our only debt subject to interest rate risk is the Credit Agreement under which rates are tied to 55 Table of Content Term SOFR (Secured Overnight Financing Rate), plus an applicable rate which varies between 6.91% and 8.70% based on our ratio of Funded Debt to EBITDA (as each is defined in the Credit Agreement).

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