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We continue to experience strong, and what we believe to be, sustainable long-term demand for our services from both existing and new customers, including new-to-Bowman customers added through acquisitions. We are experiencing significant tailwinds related to the funding for transportation, energy and re-shoring initiatives, which are propelling us forward. We believe the recent Fed signals regarding monetary policy will further stimulate our industry in the near-term. According to recently published government announcements around $200 billion of Infrastructure Investment and Jobs Act funded public transportation and infrastructure projects have been announced to date. This spending represents less than 20% of the more than $1.2 trillion of funding secured under the IIJA.

We are clearly still in the early stages of this spending. Another roughly $60 billion in grants, incentives and initiatives for clean energy, clean water and community resiliency projects have been announced under the Inflation Reduction Act. This likewise represents just a small percentage of the committed funding available into this program. As various deadlines for long-term IRA qualification approach, the rush to start projects and secure standing for benefits is underway. With respect to manufacturing and other re-shoring initiatives, the private sector has responded to funding by announcing over $600 million in new manufacturing infrastructure projects in the U.S., including over $200 million in clean energy, EVs, batteries and storage, all sectors in which we are active.

Now I'm going to turn the call over to Bruce to review our financial results, after which I will take a few minutes to discuss our markets, our M&A pipeline and our 2024 outlook. Bruce?

Bruce Labovitz: Terrific. Thanks, Gary. The third quarter was a breakout quarter for us in terms of demonstrating our capacity for revenue growth and operational efficiency. As we continue to grow, not every quarter will be a reflection of the last one or predictive of the next one, but the trends we are demonstrating are representative of what we believe we can achieve over time. Gross revenue for the third quarter increased to 33% to $94.4 million as compared to the third quarter of last year. Year-over-year, organic growth or gross revenue for the quarter was 11%. Net service billing, a non-GAAP result for which we provide reconciliations in our press release and disclosures, increased 27% to $82.1 million in the third quarter compared to the third quarter of last year.

Year-over-year organic growth of net service billing was just over 9% in the quarter. During the third quarter, building infrastructure represented 55% of our gross revenue, with transportation at 21% and power and utilities representing 20%. Nonresidential revenue represented nearly 66% of building infrastructure or 36% of gross revenue. Residential revenue represented just under 19% of gross revenue with what we would characterize as for sale-related residential, accounting for just around 10% of gross revenue. In 2021, building infrastructure represented nearly 70% of gross revenue. While we are pleased with the progress we are making towards our long-term revenue diversification goals, there is more to be achieved. Year-to-date, gross revenue was up 36% to $253.3 million for the first 9 months of last year.

Year-to-date, organic growth of gross revenue was just under 22%. Year-to-date, net service billing increased 32% to $223 million 0.5% as compared to the first 9 months of last year. Year-to-date organic growth of net service billing is just under 20%. Gross margin for the second quarter was 51.6% on gross revenue, which was 70 basis points lower than gross margin in the third quarter last year. Year-to-date, gross margin was 51%, which is 40 basis points below the first 9 months of last year. We consider these to be normal fluctuations in gross margin based on mix of business and utilization, which impacts the allocation of fringe cost to COGS. Included in cost of goods sold for the quarter and the year are $2.1 million and $5.3 million of noncash stock compensation, respectively.

Net of these noncash costs, gross margin would have been 54% and 53% for the quarter and year-to- date, respectively. While we continue to believe these margins are normal for our current business model, we're optimistic that evolutions in disruptive technologies for our industry will help expand these margins over time. SG&A, which included $5 million of noncash stock compensation for the quarter and $13 million year-to- date was up 160 basis points as a percentage of net service billing in the third quarter compared to last year, but was down 120 basis points sequentially when compared to the second quarter of this year. This sequential period reduction in SG&A as a percentage of net service billing is the predictable result of the combination of outsized labor investments made in the second quarter and increased revenue generated this quarter.

For the third quarter, we reported a net income of $1.2 million, which brings year- to-date net income to $1.1 million, inclusive of a $1.8 million tax benefit in large part derived from R&D tax credits and windfalls related to stock vesting values higher than grant date fair value. Adjusted EBITDA was up 57% in the second quarter to $15.1 million as compared to third quarter last year. Adjusted EBITDA margin net increased 350 basis points to 18.3% in the quarter. Year-to-date adjusted EBITDA is up 45% to $35.8 million and adjusted EBITDA margin net is up 140 basis points to 16%. As we grow, intra-year margins can be uneven based on the timing of expenses and revenue mix. As such, we recommend investors focus on margin developed over multiple periods as a directional indicator.

While this quarter's margin is a positive display of our potential, I don't believe it is the new baseline, at least not yet. Backlog at the end of the quarter was just under $300 million and is made up of approximately 54% building infrastructure, 25% transportation, 19% power and utility and 2% other emerging revenue areas. We are pleased with our ability to generate backlog growth that continues to outpace revenue recognition. Backlog is work that's contracted to be performed and is capped at 18 months in the case of long-term programmatic assignments. We generally expect roughly 75% of our backlog to turn in any 12-month period, but that number varies based on the composition of backlog. Cash flow from operations was $12.3 million through 9 months, which represents a little over $10 million in the quarter.

Cash flow from operations before changes in working capital for the 9 months was nearly $21.8 million. We are pleased with our progress on cash flow generation. Net debt at the end of the quarter was just under $53 million, down from 63 -- $61 million on June 30. This net debt represents a leverage ratio of around 1.2x trailing four quarters adjusted EBITDA. With over $14 million in cash on hand and over $45 million of capacity under the line, we are pleased with the state of our balance sheet. On the tax front, we continue to monitor guidance issued with respect to changes to research and development expense capitalization. Based on recent IRS guidance, we continue to proceed with a belief that the characteristics of our business practices afford us the ability to expense our R&D costs currently as opposed to capitalizing them.

Because this is evolving tax law, we continue to maintain an uncertain tax position, also referred to as a UTP, relating to the possibility that in the future, our position will change. The uncertain tax liability is reflected on our statement of cash flows before changes in working capital as deferred tax as if it were spent, but it is later added back to cash from operations through accrued expenses since we are not actually expending the cash. This neutralizes its impact on cash from operations. On our balance sheet, the UTP is included in other noncurrent liabilities along with accruals for contingent consideration. On September 30, and as of today, we have 14.6 million shares outstanding, including all shares issued in connection with the restricted stock awards.

During the third quarter, based on what we believe was an undervaluation of our equity relative to the performance of the business, the multiples of our peer group and comparable transaction valuations, we established a limit-order-based buying program under our $10 million stock repurchase authorization. During and subsequent to the quarter, we have purchased nearly 29,000 shares at an average price of $25.94 per share. While these numbers aren't big, they should communicate our commitment to flexible deployment of capital to protect and advance shareholder value. This quarter, we introduced a new non-GAAP metric of adjusted EPS for which we provide a reconciliation to GAAP EPS in our press release. I want to reiterate that adjusted EPS should be evaluated as a non-GAAP measure that may not be calculated consistently with others in our peer group who likewise present this metric.

In calculating this metric, consistent with our peers, we add back costs associated with acquisitions and pre-IPO stock compensation expense, along with other nonrecurring noncore expenses. We do not add back noncash stock compensation in the normal course. When computing the tax effect of these add- backs, we first recalculate our tax expense exclusive of any periodic windfall or shortfall tax impact of noncash stock compensation vesting, then apply an average marginal effective tax rate to other add backs. While it may not necessarily be the most advantageous to us way to present the tax benefit, we feel it is the most accurate and reflective approach. We believe this is useful information for investors to use to evaluate us against our peers.

As such, we will continue to include it in our press releases going forward. As we near the end of the year, we are tightening our 2023 guidance and introducing our outlook for 2024 based on current backlog, a preliminary understanding of our clients' intentions for next year and our forecast for business development. For 2023, we are narrowing our forecast to net service billing to be in the range of $306 million to $312 million, with adjusted EBITDA in the range of $48 million to $52 million. For 2024, we are initiating guidance of $345 million to $360 million, with adjusted EBITDA in the range of $56 million to $62 million. As always, these do not contemplate future acquisitions. With that, I'm going to turn the call back over to Gary, for concluding remarks.

Gary Bowman: Thank you, Bruce. I'm going to take a moment here to discuss our markets, our M&A pipeline and our strategic planning before turning the call back over to the operator for our questions. Since we last reported our results, there hasn't been much change in terms of the general profile of demand for services in the market for infrastructure planning and engineering, which remains strong. What has evolved, however, is the breadth and scope of services we provide to meet that demand and the incremental wallet share and market share we can support. Our penetration of the traffic and transportation market is growing as we take on new clients, larger assignments and expanding scope of service covering roads, bridges and highways, railroad infrastructure, bus and light rail and aviation.

I'm particularly encouraged by recent wins in our East Coast transportation group that continues to expand our assignments throughout Florida and Rhode Island. We expect to continue to add several new Departments of Transportation to our client roster over the next 12 months. In the power and utility market, we continue to grow our footprint and service offerings through acquisitions and strategic hiring. Our electric undergrounding practice continues to be a growing market for us as we expand our client base from Florida and the Mid-Atlantic to Southern California and several markets in between. We recently announced expansion into Nevada as we grow our engagement with our largest gas utility client for whom we are working on a series of multiyear programs for pipeline replacement, new construction and high-pressure gas station design.

We are actively engaged in efforts to build our gas pipeline revenue throughout both Nevada and California. With the Excellence Engineering team now on board in Tulsa, we are experiencing increasing demand in our energy services practice for upstream and midstream pipeline projects throughout the Central and Midwest regions. On the renewables front, battery storage facilities and commercial solar are among our faster growing revenue generators with EV-related infrastructure close behind. We continue to experience growth in our building infrastructure group with much of that coming from nonresidential assignments. Data centers, quick-serve restaurants, municipal facilities and other non-urban commercial clients are keeping us very busy. On the residential front, homebuilders, multifamily developers and build-for-rent owners appear optimistic about the mid and long-term demand profiles in their markets.

As evidenced by comments made on recent homebuilder earnings calls, there appears to be a renewed commitment to investing in the creation of finished lot inventory to meet stronger secular demand for years to come. Within emerging markets, we've had several big wins in mining with top tier mine operators in Arizona, including a large solvent extraction process design award and multiple surveying assignments. In the water and wastewater market, we've been experiencing an uptick in design and engineering contracts for new sewage systems, elevated water storage tanks and transport lines. We recently completed a pilot program for an innovative rest area wastewater reclamation system with application for thousands of rest areas nationally. While geospatial is technically a service line for us, I want to talk about the impact it is having in our industry.

Our vision for its future at Bowman, and investments we are making in advanced surveying, mapping and high-resolution imaging technologies. Several of our acquisitions have been focused on developing a comprehensive end-to-end geospatial capability within Bowman. As of today, our broadly defined geospatial group generates about 30% of our revenue across all markets. We currently operate at both ground level and at low altitudes utilizing traditional survey equipment and advanced geomatics technologies, including UAVs, UAS and LiDAR to develop both two and three dimensional visualizations for our clients in a manner they can utilize with their vendors and customers. These skills create tremendous opportunity for us as the technologies advance and as our customers recognize the value proposition associated with virtual modeling, digital interaction and high-resolution imaging.

Recent investments in mobile mapping technologies, for example, have enabled us to secure new assignments with interstate highway operators based on the requirements associated with the speed of travel in these settings. Our balance sheet positions us to continue to grow this service aggressively, both through technology investment and acquisitions. Our industry is evolving at a rapid pace with respect to the introduction of technologies that help us satisfy demand and deliver better solutions in an efficient and timelier manner. I am committed -- Bowman being among the technological elites in the industry. We are investing in digital delivery of services and are early adopters of new technologies, which provide disruptive approaches to accelerating growth and enhancing margins over time.

We are actively engaging with solutions related to AI capabilities, GIS systems, high-resolution imaging equipment, mapping and modeling software, digital twin technologies, generative design and more. This commitment to digital technologies will, I believe, create a beneficial differentiation for Bowman in the short and long-term. Since going public, we've focused our M&A program on a theme of adjacency, whereby we identify and transact with businesses that complement our evolving core suite of services, geographies, client needs and skill sets. I am pleased to report that our pipeline remains full of adjacency-focused opportunities within our target size and profile. We expect to continue to be active acquirers during the remainder of this year and into 2024.

I will conclude by reiterating that we maintain a positive outlook towards the remainder of this year and next year as we progress toward achieving our long-term strategic goals. Thank you for participating in today's call, and thank you to all our employees for everything you do for Bowman, our clients, our shareholders and our communities. Operator, I will now turn the call back to you for questions and answers.

Operator: [Operator Instructions] Your first question comes from the line of Aaron Spychalla with Craig-Hallum. Your line is open.

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