Bowman Consulting Group Ltd

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.

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"). 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. 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, 2023, we have approximately 11,500 active projects and more than 4,750 customers with active projects.

We work as both a prime and sub-consultant for a broad base of public and private sector customers that generally operate in regulated environments. 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 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. 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. 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. These assignments typically produce dependable and predictable revenue streams resulting in high employee utilization which leads to increased profitability. 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. 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. 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 have focused our recent efforts in four areas: inspiring innovation through an engaging culture; expanding our efforts to recruit and hire diverse talent; advocating and facilitating internal affinity groups; and identifying opportunities to implement environmental, social and governance initiatives.

We have a diversified business that is not dependent on any one customer, service line, geographic region, or end market. We are deliberate in our efforts to balance our sources of revenue and avoid reliance on any one significant customer, service line, geography, or end market concentration. As a result, we believe our business is resilient and less exposed to the impacts of political and economic cycles.

While we report our results of operations using General Accepted Accounting Principles (“GAAP”) including gross contract revenue and net income, we also utilize non-GAAP metrics to manage our business and provide what we believe are meaningful metrics to the investment community. These non-GAAP metrics include Net Service Billing (the amount of gross contract revenue generated by our workforce), Adjusted EBITDA (our earnings before taxes, interest and depreciation and amortization with non-cash stock compensation and other non-recurring, non-core, and acquisition related costs added), and Backlog (the aggregate amount of undelivered gross contract revenue relating to assignment in place with customers).

Competitive Strengths

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. Our commitment to quality and reliability with respect to designs, plans and customer service has enabled us to create durable, long-term customer relationships. We focus many of our business pursuits in end markets where laws and regulations create a level of complexity that places a premium on the value of our services, thereby providing us openings to develop new customer loyalty through creative problem solving. 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 national presence and strong operational foundation support our growth across geographic regions and service offerings. Our scale has helped to create a national brand within our industry associated with high quality and timely delivery of technical services. We believe the reputation of our brand allows us to extend existing customer relationships, efficiently attract new customers and recruit and retain a credentialed and representative workforce. 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. The strategic locations of our offices support broad recruiting capabilities while the integrated nature of our technology enables efficient cross-utilization of both technical experience and production resources. Our diversified geography increases our sources of revenue and income, thereby helping insulate us from concentrated economic or political disruptions.

Diversified portfolio across growing end-markets and broad array of engineering services. We are deliberate in our efforts to balance our sources of revenue and avoid reliance on any one significant customer, service line, geography, or end market concentration. As a result, we believe our business is resilient and less exposed to the impacts of political and economic cycles. 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. 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. Our services are aligned with attractive and growing market trends such as transportation infrastructure development, utility pipeline rehabilitation, electrical transmission and distribution expansion, mission critical facilities design, and urban and suburban commercial and residential building development, among other areas, which are providing notable organic growth and are expected to accelerate in the coming years.

Consistent record of robust double-digit organic growth with a strong margin profile. We have a long-standing history of robust organic growth rates. Our five-fold growth of revenue over the past ten years is derived from organic and acquisitive growth, including significant post-acquisition organic growth in the businesses we have acquired. We have accelerated our growth organically through investments to expand our capacity and ability to share work across our company, our breadth of services and our geographic footprint, along with a commitment to cross-selling and business development. 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. 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. We calculate book-to-bill as bookings of new work divided by net service billing during the same period. Our leaders and managers are personally invested in our success through equity participation and incentives that are targeted to reward organic growth and successful execution.

Proven track record of successful acquisitions, with demonstrated ability to achieve integration milestones and deliver synergies. Since our initial public offering in May 2021, we have acquired 26 different operating companies as of December 31, 2023. Through these acquisitions, we have expanded our geographic reach, added service lines, increased our depth of leadership, broadened our end markets, enhanced our portfolio of experience, and significantly increased our revenue and profitability. 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. Historically, this has generally enabled us to fully consolidate most of the acquired entity’s operations into ours within one year. Our target for acquisitions has focused on companies with annual net service revenue of between $3 million and $30 million, with the largest being $28 million. 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. We target growth opportunities related to renewable energy, energy transition, and energy efficiency activities, aging, and failing infrastructure in need of upgrade and replacement, economic vitality and attractive growth in population and workforce, long-term public sector funding and regulatory complexity. Our target market characteristics are fluid, and our adaptability enables us to adjust swiftly to evolving market dynamics. We continuously evaluate opportunities in different markets and are responsive to evolving macro-economic trends. We believe we are well positioned to capitalize on U.S. Federal government funded programs such as the Infrastructure Investment and Jobs Act, the Inflation Reduction Act, and the CHIPS and Science Act, which in the aggregate provide for approximately $1.6 trillion in funding and incentives that impact our current and target markets. Our scalable organizational infrastructure is designed to accommodate significant growth without a proportionate need to increase corporate overhead expenses, positioning us for expansion into attractive growing markets and potentially increasing margins over time.

Dedicated founder, experienced leadership team, valuable technical workforce, and entrepreneurial culture. Gary Bowman has led our Company since its founding in 1995. In his position as President, Chairman and Chief Executive Officer, Mr. Bowman sets our vision, guides the establishment of our strategic objectives, and leads our executive team. Mr. Bowman’s institutional knowledge, connection with customers, and engagement with our staff is rooted in over 40 years of experience in our industry. As our largest individual stockholder, Mr. Bowman continues to be committed to actively leading the Company and maintaining a substantial ownership position.

Our senior executive team is highly experienced, with an average tenure of over 35 years in their respective areas of responsibility. 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. 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.

Industry Overview

Our operations encompass nearly every aspect of the U.S. domestic built 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. Our public sector customers include government agencies (federal, state, and local), military branches, educational institutions, transportation departments, water authorities and other general infrastructure managers. 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 chain owners, mine operators and others.

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 on specific local markets or specialized niches, the industry is extremely fragmented. Modor Intelligence projects the US domestic engineering services market will register a compound annual growth rate (CAGR) of 8.75% from 2022 to 2027.

As with most fragmented industries with extensive participation of privately held companies, there is an active market for ownership transition and consolidation activity with larger participants actively engaging in growth through acquisitions. The technical complexity and financial risks associated with designing a substantial number of projects performed in the industry effectively discourages the free flow of new entrants, limiting participation to those with demonstrated capacities across a range of projects. Qualifications, sophisticated technical skills, expertise, financial resources, and scale are prerequisites for successful industry participation. 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.

Our Markets

We have strategically and deliberately diversified the markets that we serve to reduce our dependence on any single market segment and to dampen the effects of business cycles in our markets. While we are bullish on all the market spaces that we currently serve, we intend to especially focus our growth initiatives on markets that possess the following characteristics:

•High potential for reoccurring revenue and multi-year assignments

•Engagement with renewable energy, energy transition, 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

The markets we serve typically require participants to engage with several of our services, affording us the opportunity to cross sell, optimize revenue potential, and differentiate ourselves as a single source supplier.

We have a significant presence in each of the following markets we currently serve:

Transportation

We believe the current and future utilization of transportation infrastructure within the domestic built environment far exceeds its intended capacity. 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 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. 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. 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. For the years ended December 31, 2023 and 2022, Transportation represented 21.0% and 17.1%, respectively, of our gross contract revenue.

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. Major power outages due to increasingly severe weather events are a growing contributor to the problem which the Department of Energy estimates costs the U.S. economy at least $150 billion per year.

Utilities, policy makers, and communities have agreed for years that the aging electric transmission and distribution grid in the U.S. needs to be substantially upgraded to withstand the challenges of the future. The Electric Power Research Institute estimated the cost to move the U.S. to a smarter national grid with better protection against major outages to be somewhere between $338 billion and $476 billion. 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. 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.

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. As reported by The Council of State Governments, natural gas utilities spend $19 billion annually to enhance the safety of the natural gas system. Examples of our multi-year reoccurring revenue assignments in the utilities space include undergrounding of electric distribution lines, procurement of rights-of-way and easements, gas distribution system mapping, and design for gas distribution pipeline replacement.

Renewable energy encompasses all activities supporting the energy sector’s transition away from fossil-based systems of energy production in favor of renewable energy sources such as wind and solar, as well as lithium-ion batteries. According to Wood Mackenzie, the U.S. will need to invest one trillion dollars per year in new energy capacity over 20 years to meet the demands of economic growth and energy transition. 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. Limited natural resources, increasing demand, and disruptive innovation are driving consequential private and public investment in the expansion of renewable energy facilities. We believe that increasing demand for industrial grade renewable infrastructure and expanded capacity within existing facilities create a meaningful opportunity for the sale of our services. 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. We view the energy efficiency market as one that is synergistic with the renewable energy market as well as the power and utilities market.

Within our power, utility and energy services practice we work for customers that include large electric transmission systems, gas utilities, and renewables and decarbonization providers. 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. 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. Our business is one of inventory creation, not of land development or construction of structures. Interest rate hikes by the Federal Reserve Bank in 2022 and 2023, however, introduced an element of uncertainty as to the continued growth of the market for residential, commercial and mixed-use building infrastructure.

Commercial and Retail. 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. 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 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. More than a decade into the recovery from the Great Recession of the late 2000s, household formation continues while home sales have yet to recover fully from pre-recession highs. According to IBISWorld, the land development industry represents a market valued at roughly $11.7 billion annually. Within the residential market there are fundamentally three sub-markets in which our customers participate: 1) for-sale residential housing; 2) multi-family rental housing, and 3) mixed-use and urban cluster developments. Common to each of these sub-markets is the long lead time for the planning, design and approval of land inventory. The process of land inventory creation for residential use involves entitlement, environmental impact analysis, preliminary infrastructure planning and final layout. Each phase in the process involves public scrutiny and input along with regulatory review and approval. Land use entitlements for residential use are often flexible with respect to the ownership structure of the dwellings constructed, thereby allowing landowners to adapt to highest and best use throughout economic cycles and consumer preferences. Changes in interest rates can impact demand for fee-simple, for-sale and rental housing but they do not necessarily impact the demand for household formation and the need for new housing stock. Our history serving the residential market goes back to our beginning and we work for most of the large national homebuilders.

Institutional and Government. 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. Evolving demographics and associated demands for municipal and recreational services are increasing the need for new and updated government infrastructure. Communities are placing a growing emphasis of focus on environmental impact and sustainability as seen through the implementation of smart- and green-building technologies in new and retrofit facilities. 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. 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 are engaged in activities in each of the following markets which we consider to be emerging opportunities.

Water Resources

Water is essential to our lives and our communities, making it critical that we create a sustainable future for our water supply. Balancing the world’s needs for safe, reliable water with protection of this critical natural resource for the future requires a deep understanding of multiple interconnected systems. As water supplies become scarce and in increasing need of protection, and infrastructure needs increase contemporaneously, we collaborate with our customers to develop sustainable solutions to their water, wastewater, and water resources challenges. Our team of water professionals provides water supply distribution and treatment, wastewater collection and treatment, and asset management engineering and consulting services to customers. Rapid urbanization, industrial growth, suburban sprawl, and depleting sources of fresh water are increasing domestic demand for water and wastewater solutions. Expanding regulations governing the treatment, distribution and storage of water resources will intensify demand for adaptive water and wastewater treatment solutions. We assist municipalities, county agencies, public utilities, and private customers in addressing their potable water and wastewater challenges. Our expertise with water solutions ranges from planning, design, construction management, and funding identification. We serve the water resource needs of a variety of customers.

Mining

Mining facilities require a variety of the general and specialty engineering services we provide. We serve the Southwest U.S. copper mining industry where we have developed specialized capabilities over time. Copper is buoyed by both near and long-term favorable fundamentals. Policy driven decarbonization targets are accelerating and copper is a critical component for electric vehicles, charging stations, high-efficiency motors, and renewable energy. According to the International Copper Association, electric vehicles use up to four times as much copper as internal combustion vehicles and renewable energy power generation uses four to five times as much copper as fossil fuel power generation. Copper is crucial for connecting and advancing development of core technologies and smart cities, including artificial intelligence, smart grids, 5G technologies, mobile phones and computers. Supply of copper is limited due to an aging base supply, limited numbers of in-progress and planned expansion projects, and the substantial time and entitlement challenges for execution of new projects. We also serve customers focused on mining of aggregates which are essential to the construction of roads and other transportation related infrastructure. The demand for mined aggregates is strongly correlated to transportation construction. According to the U.S. Geological Survey, 94% of the materials used in the construction of interstate highways are natural aggregates including crushed stone, sand and gravel. We expect the funding provided by the Infrastructure Investment and Jobs Act to stimulate increasing long-term demand for aggregates. We believe our clients are well positioned to benefit from supply constraints facing increasing copper and aggregates demand.

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. 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 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. 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. 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. We intend to be opportunistic, responsive to evolving macro-economic trends, and deliberate in our evaluation of attractive and synergistic opportunities in other markets when they present themselves.

In addition to market expansion, we intend to grow by adding skillsets, service lines and geographic footprints which deepen our market penetration and provide enhanced revenue capture opportunities with our existing and prospective customers. Such strategic and synergistic service line extensions include, but are not limited to, program management, energy management and data management and analytics.

We have built a scalable organizational infrastructure that can accommodate significant growth without a proportionate increase in expense. We have invested time and resources in developing our accounting and financial systems, integration expertise, management reporting processes, human capital development programs and information technology infrastructure. As we grow the size and scale of the company, we expect to leverage our investments and general overhead structure over a larger labor pool, thereby expanding operating margins.

Organic Growth

We engage all our managers in our commitment to responsible growth by encouraging responsible freedom, entrepreneurial spirit, innovative thinking, and collaborative business development through cross-selling. Our leaders and managers are personally invested in our success through equity participation and incentives that are targeted to reward organic growth and successful execution. As a public company, we use our publicly traded equity to enhance this compensation strategy. Creative use of growth-connected and retention-oriented equity incentives along with a commitment to maintaining our core culture are key to the entrepreneurial spirit that will drive our organic growth.

Acquisitive Growth

We are actively engaged in discussions with prospective acquisition targets. The theme of our acquisition initiatives is adjacency – we want to identify companies that provide customer, geographic, service line, skillset and cultural adjacencies to our business. We maintain full-time, in-house acquisitions, diligence, and integrations teams and have developed a robust network of third-party representatives working on our behalf to identify future acquisition targets that meet our strategic objectives. We maintain a dynamic pipeline driven by general market awareness of our demand for acquisition, existing relationships we have cultivated, and deliberately directed activity of our representatives. 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 generally impose stringent criteria to the evaluation of targets including:

•Advances one or more of our strategic growth objectives

•Provides opportunities for cross-selling additional Bowman services

•Embodies a culture that is entrepreneurial and compatible with the existing Bowman culture

•Satisfies a robust infrastructure spending need

•Is accretive to our leadership and executive talent pool

•Creates technology advancement opportunity

•Aligns within our net service revenue size and profile for acquired companies

Although we generally apply rigorous financial discipline in the execution of our acquisition program, purchase price is not always the primary deal determinant. 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. While acquisitions will generally be the source of geographic expansion, we may also establish presence in new areas by opening new offices. To maintain consistency with our acquisition program, we maintain a dynamic list of target metropolitan statistical areas (“MSAs”) that will serve as focus areas for expansion. General criteria for our target expansion MSAs include:

•Population scale of one million or greater

•Highly ranked in the Urban Land Institute’s publication Emerging Trends in Real Estate

•Location which complements and/or expands customer opportunities

•Availability of high caliber, skilled labor force

We expect our geographic expansion decision making to be fluid, flexible, opportunistic, and loosely bound by the criteria described above.

Description of Services

We provide a broad array of professional engineering, technical, and technology enhanced consulting services to customers who own, construct, and maintain the built environment. Our highly accredited and skilled workforce utilizes an integrated methodology to provide our customers with a consistent and accountable one-stop solution for both simple and highly complex assignments. Our scale, complemented by our breadth and depth of subject matter expertise and suite of service-enabling technology assets, allows us to secure work by delivering comprehensive and complete solutions.

Civil and Site Engineering

Since our founding in 1995 as a civil engineering and surveying firm, we have expanded our presence across the U.S. providing site planning and design services instrumental to creating communities where people live, work and play. Our land plans are attractive, marketable, and economically feasible. We creatively solve the toughest site challenges. Our awareness of, and sensitivity to time, cost, and impacts on surrounding neighborhoods distinguishes us and has made us ago-to brand for civil and site engineering. 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. Our engineers apply proven methods and technologies to support our customers’ objectives, strengthen communities and positively impact quality of life. With significant experience in alternative delivery methods, our local knowledge is backed by the deep resources and stability of a national company. We excel on challenging transportation projects that require complex solutions within both congested urban and rural environments. From major freeway systems and urban arterials to rural highways, rail and bridge projects, our transportation engineers plan, design and oversee the construction process for safe, efficient, reliable and user-friendly transit projects of all sizes and scopes. 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. Examples of services include:

•Traffic engineering

•Traffic signal design

•Traffic studies

•Intersection improvements

•Route/alignment studies

•Signing/pavement marking plans

•Roadway design

•Drainage design

•Bridge design

•Hydraulics

•Public involvement/consensus building

•Corridor and program management

•Traffic control plans

•Alternate delivery methods

Commissioning and Energy Efficiency

Commissioning involves ensuring that a new building operates in as energy efficient a manner as the original design intent. Over time, the intended use and operation of a building can change significantly. The retro-commissioning process assures that a building and its systems are optimized to perform interactively to minimize energy demands. In addition to aligning the systems with the current usage, the retro-commissioning process will typically result in substantial reduction of both operating costs and energy consumption. In addition to commissioning, we provide energy related services such as energy modeling, Energy Star certifications, LEED consulting, and energy audits that result in substantial reductions in energy consumption. Examples of services include:

•Construction observation

•Direct systems functional performance testing

•Develop systems readiness checklist

•Post occupancy review

•Review of construction documents

•Deferred / seasonal functional testing

•Final commissioning report

•Commissioning review of submittals

Construction Management & Oversight

The quality, durability, and safety of our infrastructure are all ensured by proficient construction engineering and management services augmented by sound quality assurance practices. Our construction engineering team consists of professional engineers, construction managers, inspectors, and certified technicians. We approach assignments with a depth of experience that enables us to anticipate the challenges associated with successfully delivering complex infrastructure construction projects. Every project has a comprehensive plan to address stakeholder issues, utilities, construction access and safety, pedestrian movements, environmental constraints, and schedule and budgetary limitations. It is important to note that we do not provide general contracting services to our customers. 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

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. With a focus on the environmental impact of a project, a comprehensive plan requires solutions for issues such as water scarcity, climate change, managing environmental liabilities, regulatory obligations, risk management, and good environmental stewardship. Our team of scientists and licensed environmental professionals possess a broad range of experience in natural resource inventories, wetland delineations, and threatened and endangered species habitat assessments for conservation, development, and infrastructure improvement projects. Our environmental teams have developed, or contributed to numerous regional habitat conservation plans, statewide parks planning assessments, and endangered species research, planning, and compliance projects. Examples of services include:

•Wetlands and waters of the U.S. delineations

•Natural resources inventories

•Wildlife and vegetation surveys

•Threatened and endangered species surveys

•Endangered species conservation and management

•Wetland creation and enhancement design

•NEPA documentation

•Section 404/401 permitting and compliance

•NPDES permitting

•Phase I environmental site assessment

Surveying and Geospatial Engineering

Our industry-leading land surveying and geospatial services provide a reliable foundation for a broad range of project types. We deploy a full suite of advanced technology solutions allowing us to capture data efficiently in even the most remote and access challenged locations. We create, analyze, and build tools to share 3-D geospatial data, as well as help our customers integrate these tools into their daily business activities. We seamlessly provide GIS mapping and IT services, as well as technical enhancements to projects. Our in-house teams of accredited land surveying experts have a deep understanding of local, county, and state jurisdiction requirements and review processes. Our one stop shop approach to survey and geospatial engineering streamlines our customer experience and enhances the accuracy, outcome and experience of any development services or public sector project. 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. 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. We work with our customers to develop the big picture ideas that can strengthen and transform a community, create tools needed to make vision a reality, guide our customers through regulatory approvals processes, and work closely with developers to ensure market success once projects are completed. Balancing aesthetics, function, and sustainability, we skillfully translate raw ideas into successful projects tailored for each site. 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. We provide turn-key services related to the real estate aspects of large projects including public outreach, property owner negotiation, appraisal services, relocation services, and expert testimony. Examples of services include:

•Public information meeting support

•Right of entry agreements

•Title searches/title curatives

•Appraisals/appraisal reviews

•Relocation advisory assistance

•Encroachment resolutions

•Expert witness court testimony

•Eminent domain/condemnation support

Building Services - Mechanical, Electrical and Plumbing

Our mechanical, electrical, and plumbing engineering services are focused on creating high performance connected environments. Our solutions support a facility’s purpose with systems that optimize the personal experience and deliver practical results to owners, tenants, and operators while promoting productivity and energy efficiency. Our electrical engineers are highly experienced in the field of photovoltaics to serve our customers in the renewable energy, energy transition and energy efficiency space. Our mechanical engineers have the expertise necessary to deliver cost effective plans and designs for ventilation and medical-grade air filtration to meet stringent indoor air quality requirements to assist in reducing the spread of infectious respiratory diseases. 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. From simple culverts to complex interchanges and long-span bridges, we incorporate unique architectural treatments and other features that contemplate the full spectrum of modern construction techniques and materials, including steel trusses, curved beams, box beams, precast/prestressed concrete, timber, and fiber-reinforced polymer spans. 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. To address these challenges, we work with our customers to develop sustainable solutions to their water, wastewater, and water resources challenges. Our team of water professionals and technologists provide specialized water supply, distribution, wastewater infrastructure and treatment, and asset management engineering and consulting services to customers. Our in-house expertise ranges from planning, design, and construction assistance to municipalities, county agencies, public utilities, and private customers in helping them meet potable water and wastewater needs. We work regularly with state and federal governments in maintaining existing systems. For customers who need funding assistance, our teams have expertise in attaining grants, funds, and loans. 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. 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. Many of the senior leaders in our company today come from companies we acquired both before and after becoming a public company.

Our acquisition program revolves around a theme of adjacency whereby we target acquisitions that provide strategic service line extensions, have a geographic footprint complementary to our existing operations or customer assignments, demonstrate capacity for profitability with strong potential for organic growth, align with our corporate culture and have management we can develop into leaders within our operations. We pursue opportunities that we can integrate efficiently. We do not intend to maintain multiple brands or stand-alone operations for extended periods post-closing. Our goal is for an acquired company to be fully integrated into our operation within one year of closing. We are cautious about advancing discussions or extending terms until we have ascertained a target is compatible with our culture and thoroughly committed to our strategic direction. We add value to the operations of our acquisitions by providing technical resources and subject matter experts that broaden opportunities with existing customers, technology investment to improve utilization, information systems to support productivity, professional development programs to promote staff engagement, supportive growth-oriented leadership, growth capital, and corporate services that improve customer focus and utilization while leveraging overhead through scale.

We are regularly engaged in discussions with acquisition prospects. These discussions range in formality from an initial inquiry to a non-binding letter of intent. Not all prospective acquisitions materialize as completed transactions.

Recent Acquisitions

In 2023, we completed 11 acquisitions, six of which closed after September 30, 2023. None of these recent acquisitions was individually or collectively in the aggregate significant under Rule 3-05 of Regulation S-X. The 2023 acquisitions are summarized below in order of acquisition.

•Richter & Associates (“Richter”). On April 3, 2023, we acquired the business and operations of Richter & Associates. Richter is a Rockville, Maryland based professional services firm focused on dry utility infrastructure engineering. The company works with private and public customers along with utility services providers to navigate the complexities of design, development, and implementation of natural gas, electric and telecommunications infrastructure.

•Fisher Engineering, Inc. (“Fisher”). On May 12, 2023, we acquired the business and operations of Fisher Engineering, Inc. Fisher is a professional services firm specializing in customized fire protection and life safety engineering for public and private customers and serves customers across the United States and internationally from offices in Atlanta, Baltimore, Charlotte, Detroit, Portland (ME), Phoenix and Virginia Beach

•Hole Montes, Inc. (“Hole Montes”). On May 16, 2023, we acquired the business and operations of Hole Montes, Inc. With offices in Naples, FL and Fort Myers, Florida, Hole Montes provides comprehensive design, survey, GIS, and construction management expertise to customers focused on environmental engineering, transportation infrastructure, airport facilities, storm water and wastewater systems, land planning, landscape architecture, and more.

•MTX Surveying, LLC (“MTX”). On June 2, 2023, we acquired the business and operations of MTXSurveying, LLC. MTX is a geospatial, land survey and project management company based in Marshall, Texas. The company provides full-service consulting, project management, surveying, mapping, and permitting services for customers working in oil and gas, energy and renewables, utility services, and land development.

•Advanced Applied Engineering, Inc., dba Infrastructure Engineers (“Infrastructure”). On June 12, 2023, we acquired the business and operations of Advanced Applied Engineering, Inc, a California-based firm that provides a breadth of professional engineering, planning, environmental, geospatial, and municipal infrastructure services to cities and counties throughout Southern and Central California

•Excellence Engineering, LLC (“EEI”). On October 2, 2023, we acquired the business and operations of Excellence Engineering, LLC. EEI is Tulsa, Oklahoma based firm and leading full-service provider of engineering, procurement, project management, and automation services to customers operating in and supporting the petrochemical, hydrogen, industrial and electric vehicle industries.

•Dennis Corporation (“Dennis”). On October 12, 2023, we acquired the business and operations of Dennis Corporation. Dennis is a Columbia, South Carolina based company that specializes in delivering general civil infrastructure planning and design; program and construction management and oversight; environmental and geotechnical services for traffic and transportation; intelligent transportation systems (ITS), aviation, water resources and public sector facilities.

•CFA, Inc. (“CFA”). On November 9, 2023, we acquired the business and operations of CFA, Inc. a Reno, Nevada based company that provides a mix of civil engineering, planning, surveying, mapping, and remote sensing to a mix of public and private sector customers.

•Blankinship & Associates (“Blankinship”). On November 10, 2023, we closed on the purchase of assets and operations of Blankinship & Associates, a California based environmental sciences and engineering firm, that specializes in providing water resources services, natural resource management services, permitting and compliance services, and specialized training.

•High Mesa Consulting Group (“High Mesa”). On November 14, 2023, we acquired the business and operations of High Mesa Consulting Group, a multi-disciplinary consulting firm headquartered in Albuquerque, New Mexico. High Mesa provides land and UAV (drone) based surveying, mapping, and geospatial services; sub-surface utility infrastructure engineering, inspection, and mapping; civil engineering; and planning services throughout New Mexico, Eastern Arizona, and Southwestern Colorado.

•Hess-Rountree (“Hess-Rountree”). On December 11, 2023, we acquired the business and operations of Hess-Rountree, a multi-disciplinary consulting firm headquartered in Phoenix, Arizona. Hess-Rountree provides professional engineering, surveying, and contract administration services to public and private customers throughout Arizona.

Under the acquisition purchase agreements, we paid a total of approximately $66.0 million for these acquisitions, including 904,608 shares of common stock valued at a total of $25.6 million or an average of $28.35 per share. The remaining consideration was comprised of a combination of cash and seller notes, including notes convertible into shares of common stock at the option of the seller. For full purchase price accounting, see Note 4 Acquisitions in Part IV of this Annual Report on the 10-K, for additional information. Consistent with our acquisition strategy, we generally intend to have fully integrated the operations, systems, and employees of our acquired companies into our organization during a transition and integration period of up to one year, after which we expect to phase out the individual brands.

Key Customers and Projects

We serve a diverse portfolio of public and private customers, who own, construct, and maintain the built environment. More than 78% of our gross contract 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 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. 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. 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.

Contracts

We enter into contracts with customers that either cover a single performance obligation consisting of one or more tasks (also referred to as assignments and deliverables) or are open-ended engagements that create a framework for our being retained for one or more discrete performance obligations and tasks (often referred to as master services agreements). Our contracts contain two principal types of pricing provisions: (1) fixed price, also referred to as lump sum, and (2) hourly, also referred to as time and materials or cost plus. In many cases, a single contract will contain both fixed price and hourly priced tasks. From a financial reporting perspective, a contract is categorized as fixed fee and therefore subjected to percentage completion accounting under Accounting Standards Codification "ASC" Topic 606 if any one task within the contract is priced on a fixed fee basis. For management discussion and analysis purposes, we evaluate the percentages of our revenues that are fixed fee and hourly based on the pricing of each individual task or assignment within our contracts. When we distinguish percentages of revenue based on contracts, we are considering any contract with at least one fixed fee task to be completely characterized as fixed fee. We believe the percentage allocation relating to assignments is a more accurate assessment of the risk and opportunity associated with our revenue distribution.

The characteristics of the two contract and task types are as follows:

Hourly contracts and/or assignments are common for professional and technical consulting assignments both short-term and multi-year in duration. Under these types of engagements, there is no predetermined maximum fee, and we generally experience no risk associated with cost overruns. For hourly engagements, we negotiate hourly billing rates and charge our customers based upon the actual hours expended toward a deliverable. Direct project expenditures such as subconsultants and other expenses generally pass through to the customer for reimbursement. These engagements may have not-to-exceed parameters requiring us to receive additional authorizations from our customer to continue working but in these cases, we have no obligation to deliver a pre-negotiated result without authorization to continue at additional cost to the customer. Purely hourly contracts for financial reporting purposes do not include any lump sum components as outlined below.

Lump sum contracts and/or assignments typically require the completion of a deliverable for a specified lump-sum or fixed fee, subject to price adjustments if the scope of the assignment changes or unforeseen requirements arise. With lump sum assignments, modified schedules and expansions of scope will likely result in additional fees through change orders issued by our customers. Our fixed fee assignments generally include a specified scope of work and a defined set of deliverables. For accounting and financial reporting purposes we classify a contract as fixed fee if any portion of the performance obligation under the contract requires us to complete work outlined in the contract for a pre-determined fixed price.

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.

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. To calculate backlog, we assess the gross contract revenue we will recognize in connection with the completion of undelivered near-term and long-term customer commitments. Our backlog increases both because of new contracts entered into with customers and acquisitions. On December 31, 2023 and 2022, our gross backlog was divided among our markets as follows:

We use backlog to determine appropriate staffing levels and predict gross contract revenue growth, both of which typically move accordingly over time with changes in backlog. 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.

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.

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. 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.

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. 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. 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.

Our business development and marketing efforts emphasize lead generation, industry group networking, project and staff promotion and general corporate visibility. We support our managers’ business development efforts with a seasoned team of marketing professionals embedded throughout our organization working to professionalize every touchpoint with customers, prospects and influencers. We complement our marketing and business development efforts with extensive social media awareness. We are neither engaged with, nor dependent on, traditional paid media advertising.

We actively engage in creating revenue synergy by cross selling our services between customers, geographies and markets. We define cross-selling and revenue synergy as either expanding our relationship with a particular customer by providing additional services and expanded geographic coverage or expanding our overall market penetration with respect to a particular service offering by introducing it throughout our national operation. Our acquisitions offer significant cross selling and revenue synergy opportunities which facilitates organic growth. As our service offerings continue expanding and we expand our portfolio of services, we anticipate increases in our cross-selling successes.

Competition

Our competition varies according to the market, geographical area of the project and the nature and scope of a particular opportunity. The engineering and consulting industry is highly fragmented and characterized by many small and mid-sized companies that focus their operations on regional markets or specialized service niches. On any given opportunity, we compete and/or team with many of the same local, regional and national companies.

Industry participants compete on the strength of customer relationships, reputation for quality of service and reliability, expertise in local markets, technical capabilities, and price. 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. 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. 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. Within the engineering market, scale and breadth of service offerings can also act as a barrier for entry for companies that do not have adequate professional and financial resources to compete for and execute complex, large-scale projects. Customers are increasingly emphasizing safe work practices by placing a premium on limiting liability, thus creating an additional barrier to entry for those who cannot demonstrate and maintain a safety record at or above industry standards. The opportunity and financial cost to customers of delivery delays has a meaningful impact on their willingness to rely on smaller firms.

It is common for many of the companies we compete with to have greater financial resources, larger national platforms or more extensive service offerings than we currently have. Factors affecting our ability to win assignments include our marketing effectiveness, our customer relationships, our ability to team with larger organizations, our capacity to accurately estimate costs and quantify the quality assurance requirements of the work, our ability to hire, train and retain qualified personnel, our ability to deliver timely, and our ability to obtain adequate professional liability, cyber liability, and other insurance for the work we perform. 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 2023 voluntary turnover rate among our full-time and part-time professional staff, inclusive of acquisition related hires, was reflective of the competitive labor market in our industry and our commitment. Our reputation, aided by our dedicated internal recruiting staff and nationally scaled work-share platform, has afforded us the ability to be successful in locating and engaging with qualified and credentialed employees as needed on an anywhere-anytime basis. We do not expect our growth efforts to be significantly constrained by a lack of qualified personnel or by any geographic limitations. We consider our employee relations to be exceptional and our level of engagement with employees to be high. As of December 31, 2023, our licensed professional staff represented approximately 33% of our workforce, which we consider appropriate for our operating profile.

Approximately 30% of our workforce works primarily outside one of our offices performing geospatial engineering, construction management, land procurement and field surveying. Our professional safety team administers a disciplined compliance routine with complex and comprehensive protocols that lead to fewer accidents, lower costs associated with accidents, lost productivity, and insurance. We have earned a safety record that distinguishes us relative to our competitors.

It is crucial that we continue to attract and retain top talent to continue to maintain our reputation for delivering high-quality services. To facilitate talent attraction and retention, we strive to make Bowman a diverse, inclusive, safe and community-oriented workplace, with opportunities for our employees to grow and develop in their personal and professional lives.

Diversity and Inclusion. We believe that a diverse workforce is critical to success, and we continue to focus on the hiring, retention and advancement of underrepresented populations in our industry. We have focused our recent efforts in four areas: inspiring innovation through an inclusive and diverse culture; expanding our efforts to recruit and hire diverse talent; advocating and facilitating affinity group engagement; and identifying strategic partners to accelerate our inclusion and diversity programs.

Health, Safety and Wellness. Fundamental to the success of our business is our commitment to the safety and well-being of our employees and customers. Accordingly, we dedicate resources to making sure our employees are trained and equipped to carry out their job functions to keep themselves, our customers, and the communities in which we work safe. 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. During the COVID-19 pandemic, we implemented adaptive policies that included allowing employees to work from home. We believe that in-person collaboration is a critical component of employee engagement. All our offices are open to employees, and we encourage managers to implement policies that encourage employees to work collaboratively on a regular basis in our offices as opposed to exclusively remotely.

Talent Development. We invest significant resources to develop the talent needed to remain a leading engineering services provider. We deliver numerous training opportunities, provide geographic flexibility, have expanded our focus on continuous learning and development, and implemented “industry-leading” methodologies to manage performance, provide feedback and develop talent.

Our talent development programs provide employees with the resources they need to help achieve their career goals, to build management skills and lead their organizations. We provide a series of employee workshops throughout the company that support professional growth and development. Additionally, our manager and leadership development programs provide an ongoing opportunity for employees to practice and apply learning around conversations aligned with our annual review process. We offer employees a breadth of on-line tools that provide quick access to learning resources that are personalized to the individual’s development objectives.

Regulation

While our business is not generally subject to significant regulation, the services we provide to our customers address various federal, state and local regulations that must be complied with to receive approval to proceed. With respect to the operation of our business, we are subject to certain professional licensing and human resources requirements that vary by state. We maintain a large fleet of vehicles, some of which are subject to various federal regulations.

Each state establishes licensing and organizational requirements for our services. Certain 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. 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. As of December 31, 2023, we were licensed to operate in all states within the continental United States either directly or through an affiliate.

We must comply with laws and regulations relating to government contracts, which affect how we do business with our customers and may impose added costs on our business. In connection with the process of bidding for and being awarded certain government assignments we are required to provide an annual Federal Acquisition Regulation rate audit that determines our overhead reimbursement allowance. 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.

Any failure to comply with applicable laws and regulations could result in contract termination, damage to our reputation, price or fee reductions, suspension, or debarment from contracting with the government, each of which could have a materially adverse effect our business, results of operations and financial condition.

In addition, federal, state, and local government entities may revise existing contract rules and regulations or adopt new contract rules and regulations at any time and may also face restrictions or pressure regarding the type and number of services that they may obtain from private contractors. Any of these changes could impair our ability to obtain new contracts or renew contracts under which we currently perform when those contracts are subject to recompete.

We must comply with several laws that strictly regulate the handling, removal, treatment, transportation and disposal of toxic and 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. The liability for the entire cost of clean-up could be imposed upon any responsible party. Other principal federal environmental, health, and safety laws affecting us include, among others, the Resource Conversation and Recovery Act, the National Environmental Policy Act, the Clean Air Act, the Occupational Safety and Health Act, the Toxic Substances Control Act, and the Superfund Amendments and Reauthorization Act. Our business operations may also be subject to similar state and international laws relating to environmental protection. Liabilities related to environmental contamination or human exposure to hazardous substances, or a failure to comply with applicable regulations, could result in substantial costs to us, including clean-up costs, fines and civil or criminal sanctions, third-party claims for property damage or personal injury, or cessation of remediation activities. Our continuing work in the areas governed by these laws and regulations exposes us to the risk of substantial liability. To help ensure compliance with these laws and regulations, our employees are sometimes required to complete tailored ethics and other compliance training relevant to their position and our operations.

Available Information

Our principal office is located at 12355 Sunrise Valley Drive, Suite 520, Reston, Virginia 20191, and our telephone number at that address is (703) 464-1000. Our Internet website is http://www.bowman.com. The reports we file with or furnish to the SEC, including our annual report, quarterly reports and current reports, as well as amendments to those reports, are available free of charge on our Internet website under “Investors–Financials–SEC Filings” as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at http://www.sec.gov.