NV5 Global, Inc. : An infrastructure consultant experts in acquisitions

Published: 2025-06-02 04:15:12 ET NVEE

Published on 06/02/2025 at 04:15

By Grégoire Legrand

NV5 Global operates as a provider of consulting solutions to public and private sector clients in the infrastructure, utility services, construction, real estate, environmental, and geospatial markets, operating nationwide and abroad to various clients including the US Federal, state and local governments, and the private sector. On May 15th, Acuren and NV5 merged, creating a $2 billion combined revenue TICC and engineering services company. NV5 has established itself within the Architecture, Engineering, and Consulting (AEC) sector through an aggressive acquisition-based growth strategy.

The global architectural, engineering, and related services market is projected to grow from $1.29 trillion in 2021 to $2.01 trillion by 2031, driven by rising demand for infrastructure development and modernization. This growth is supported by major public investments, including $580 billion through the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. Key drivers include population growth - expected to increase by one billion every 12 years - rapid urbanization, and aging infrastructure. A projected 40% surge in global energy demand is adding further strain to outdated systems, with 47,300 GW-miles of new electrical transmission capacity needed by 2035. Meanwhile, digital transformation is fueling demand for secure, high-performance data infrastructure, and private equity is accelerating industry consolidation, accounting for 40% of M&A activity in 2024.

Engineering services are set to generate the highest gains by 2026, adding $274 billion globally, led by civil engineering with $122.5 billion in projected growth. Architectural services will be driven by building and structural projects, expected to add $45.6 billion. Geophysical services will see smaller but notable growth in data collection, contributing $0.5 billion. The “other” segment is expected to add $146.2 billion, while small and medium enterprises will account for $195.7 billion in additional revenue, and the US will lead geographic expansion, contributing $88.9 billion in growth through 2026.

Statista - New residential construction put in place in the United States from 2005 to 2024, with forecasts until 2028

The group operates within three reportable segments:

Infrastructure (INF) is NV5’s largest segment, covering engineering, civil program management, utility services, and construction quality assurance. Projects include roadways, bridges, tunnels, water systems, and power delivery. The segment also offers land development, surveying, geotechnical work, and forensic consulting, supporting complex infrastructure from planning through inspection.

Sustainable Infrastructure delivers tech-enabled solutions across electrical transmission, asset management, and grid hardening for public and private clients. Using tools like geospatial analysis, remote inspection, and 3D modeling, it supports resilient infrastructure design. The CHW acquisition expanded services in Florida’s high-growth metros, while $80 million in California awards—$65 million tied to transportation—underscore strong public investment. Real estate services grew 14% organically, and demand remains high for grid upgrades and natural gas system improvements.

Building, Technology & Sciences (BTS) includes energy consulting, MEP and technology design, and environmental health sciences. It supports building efficiency through HVAC, electrical, and plumbing system design, energy performance upgrades, and sustainability consulting. BTS also provides acoustical and audiovisual solutions for facilities like data centers, hospitals, and stadiums.

Data Centers represent a fast-growing area, with over 30% organic growth year-over-year driven by demand from hyperscalers and tech providers. NV5 delivers specialized engineering for mission-critical facilities, focusing on energy efficiency, airflow, cooling optimization, and grid-connected power delivery. As AI transformation accelerates, NV5 helps clients unlock power capacity through optimized design and remains a trusted partner in ensuring uptime, security, and long-term reliability across digital infrastructure.

Geospatial Solutions (GEO) delivers data analytics and remote sensing services to support asset management and environmental monitoring. Using proprietary tech, GEO helps utilities and agencies with vegetation control, floodplain mapping, and coastal analysis—critical for infrastructure resilience amid climate change and extreme weather.

The segment’s services are powered by advanced data collection tools, including topographic and topobathymetric LiDAR, nadir and oblique imagery, and multispectral thermal and hyperspectral imagery. These inputs are processed through scalable, proprietary platforms that leverage artificial intelligence, predictive modeling, automated enrichment, and subscription-based software to deliver actionable insights. With ~600 geospatial, data science, and technology professionals, GEO supports clients in all 50 U.S. states and British Columbia, and is undergoing active international expansion.

The geospatial market represents a $21.6 billion TAM in 2024, and GEO’s model benefits from a high proportion (96%) of annual recurring revenue. Since entering the sector in 2017 through the acquisition of SkyScene, NV5 has built a world-class remote sensing platform through key acquisitions such as Quantum Spatial (2019), Geodynamics (2021), GEO1 (2022), Axim and L3Harris VIS (2023), and GIS Solutions (2024). These moves expanded NV5’s capabilities across low to high-altitude data capture, full-ocean depth LiDAR and sonar, pole-top inspection, and mission-critical geospatial software used by federal, defense, and utility clients.

NV5 works with around 11,300 clients across public, quasi-public, and private sectors. In 2024, its ten largest clients made up 25% of revenue, with none exceeding 10%. About 63% of revenue came from government agencies, utilities, and healthcare systems. Private clients include REITs, engineering firms, and industrial operators, supporting both revenue stability and margin growth.

Between 2022 and 2024, NV5 completed 27 acquisitions with a value of over $325 million, expanding its footprint in infrastructure, geospatial, and environmental services. In 2024, eleven deals valued at $86.9 million added $40.7 million in revenue, including Global Fire Protection Group, which enhanced fire protection services and cross-selling to MEP clients, and Group Delta, adding geotechnical, conformity assessment, and PFAS consulting services in Southern California. In 2023, NV5 acquired Visual Information Solutions for $75.4 million and Geospatial, LLC (Axim) for $139.6 million, further developing its defense markets and geospatial analytics. Five lower-takeover acquisitions added 2023 spending of $224.4 million and revenue contributions of $91.7 million. Five 2022 acquisitions totaling $14.2 million added to NV5's service lines.

NV5 operates in a fragmented and competitive engineering and consulting industry, facing rivals that range from small regional firms to large multinationals. Competition depends on project type, location, and client needs, with public sector contracts often awarded based on price, with key factors including service quality, technical expertise, staffing, and reputation. NV5 (P/E ratio: 43x) competes with both national and global firms such as AECOM (35x), Jacobs Solutions (24.6x), Tetra Tech (37.7x), Stantec (35.6x), and Bureau Veritas (23.5x). It also faces competition from regionally focused companies like Dewberry, POWER Engineers, TRC Companies, Willdan Group (24.3x), and Woolpert. Additionally, it competes with diversified firms such as Burns & McDonnell, Intertek Group (22.2x), and the Hill International division of Global Infrastructure Solutions.

In 2024, NV5 reported total gross revenues of $941.3 million, up 10% from $857.2 million in 2023. Gross profit rose 13% to $483.2 million while adjusted EBITDA increased 7% YoY to $143.5 million, and adjusted EPS held steady at $1.14 per share compared to $1.15 in 2023.

By segment, Infrastructure (INF) revenue grew 8% to $379.3 million, driven by $27.9 million in acquisition-related gains and organic growth in infrastructure and civil program management services. Segment income before taxes rose 4%, partially offset by a decline in LNG project activity. Building, Technology & Sciences (BTS) revenue increased 15% to $253.5 million, fueled by acquisitions and a $14.7 million organic gain in international engineering and consulting services. Segment income before taxes improved 10%. Geospatial Solutions (GEO) posted 9% revenue growth to $284.7 million, with $16.5 million from acquisitions and $6.6 million from increased activity in geospatial operations.

Despite strong top-line performance, net income declined to $28.0 million from $43.7 million in 2023. The decrease was mainly due to $9.6 million in higher amortization expense from acquisitions, $4.2 million in increased interest expense, and $11.2 million in acquisition-related costs, including $9.9 million in earn-out fair value adjustments. EPS fell to $0.44 from $0.71 while maintaining low net leverage at 1.4x.

EBITDA increased slightly by 4% between 2023 and 2024, rising from $137.9 million to $143.5 million, with an EBITDA margin of 15.24%. Net debt stood at $215 million in 2024 and is expected to decline significantly to $2.37 million by 2027. Since 2021, the group’s margins have dropped sharply, with the operating margin falling from 9.67% to 4.61%, and the net margin decreasing from 6.67% to 2.97%. Profitability has also declined: ROA fell from 7.27% in 2022 to 2.24% in 2024, while ROE dropped from 10.46% to 3.48% over the same period. Free cash flow is projected at $40 million for 2024, with forecasts of $111 million in 2025 and $138 million in 2027, following a decline from $86 million in 2020.

In Q1 2025, NV5 posted gross revenues of $234.0 million, up 10% from $212.6 million in Q1 2024, with gross profit also rising 10% to $123.2 million. Gross margins remained strong at 52.6%. Adjusted EBITDA increased 8% to $29.7 million, and adjusted EPS grew 13% to $0.17. Net income reached $0.4 million, compared to $0.1 million the previous year, despite higher amortization tied to acquisitions. GAAP EPS was $0.01. Operating cash flow more than doubled, up 96% to $38.4 million.

The Infrastructure segment generated $101 million in Q1 revenue, driven by growth in infrastructure design and survey (54%), utility services (27%), and conformity assessment (19%). Segment revenue rose 12%, supported by stable multi-source infrastructure funding (including state and federal programs, utility bills, and gas taxes), with no project cancellations or delays. Key demand drivers included grid safety, DOT program management, and increased transportation investment across the Northeast and Southeast.

Buildings & Technology delivered $70 million in Q1 revenue, with building systems engineering accounting for 43%, environmental services 30%, clean energy 12%, and data centers 15%. Real estate due diligence grew 19% organically. The segment benefited from strong demand across healthcare, education, and industrial sectors, as well as U.S. onshoring trends. NV5’s fire protection acquisition significantly enhanced cross-sell opportunities for MEP and infrastructure clients. The group remains insulated from tariff exposure, with its design and commissioning services outside tariff scope.

Geospatial Solutions contributed $63 million in revenue, with 48% from federal civil and defense clients, 32% from utilities, and 20% from state and local government. Growth was fueled by mandated services tied to national security, water and natural resources, and coastal resilience. Transportation asset management and maritime navigation emerged as high-potential areas, while the 2024 software investments supported profitability. The segment continues to benefit from rising federal demand, including a record DoD budget and consultant mandates, with minimal exposure to federal budget disruptions.

NV5 faces structural risks tied to its reliance on skilled personnel and government contracts. The company’s performance depends on retaining key staff and leadership, particularly CEO Dickerson Wright, and delays in hiring or leadership changes could disrupt operations. With over two-thirds of revenue tied to public and quasi-public clients - especially in California - budget constraints, shifting political priorities, and the potential cancellation or modification of contracts present ongoing challenges to revenue stability and growth.

NV5 has solidified its position as a leader in the AEC industry through targeted acquisitions, sector diversification, and growing exposure in high-growth verticals such as data centers, geospatial intelligence, and grid modernization. While profitability has come under pressure from rising costs and integration fees, the group's revenue foundation remains diversified and supported by long-term public and private sector demand. With all-time high federal infrastructure spending and strong tailwinds in digital transformation, NV5 is well-positioned to capture growth in core infrastructure and environmental segments—though with continued margin compression and reliance on public spending still top things to monitor.

Grégoire Legrand