Company: BWMN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050314
Chunk: 96

Company: Bowman Consulting Group Ltd.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 96
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 years ended December 31, 2022, 2023, and 2024, as specified research or experimental (SRE) expenses under Section 174. Accordingly, the Company decreased the uncertain tax positions and established a deferred tax liability related to capitalized and amortizable research and development (R&D) costs for tax years 2022, 2023, and 2024 of $52 million. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in income in the period that includes the enactment date. The Company’s effective tax rate for the nine months ended September 30, 2025 and September 30, 2024 was (12.1)% and 69.5%, respectively. The change in the Company’s effective tax rate is predominantly due to certain non-recurring discrete items in addition to changes in the estimated annual effective tax rate, as discussed below.The most prominent factors impacting the estimated annual effective tax rate computation include a decrease in the projected limitation on deductible executive compensation for 2025, a decrease in projected R&D credits generated for 

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2025, and an increase in forecasted pre-tax book income for 2025 compared to a pre-tax loss for 2024. Additionally, the Company recognized a net discrete benefit of $2.3 million for the nine months ended September 30, 2025, compared to a net discrete benefit of $7.0 million for the nine months ended September 30, 2024. The decrease in net discrete benefit is predominantly the result of lower windfall tax benefits for restricted stock awards and decrease in penalties and interest recorded for uncertain tax positions for the nine months ended September 30, 2025 compared to nine months ended September 30, 2024. The windfall tax benefit for restricted stock awards is $0.5 million for the nine months ended September 30, 2025 compared to $4.4 million for the nine months ended September 30, 2024. Net reversal of penalties and interest on uncertain tax positions is $2.0 million for the nine months ended September 30, 2025, compared to $2.6 million for the nine months ended September 30, 2024. These factors as a function of pre-tax book income of $9.7 million for the nine months ended September 30, 2025, compared to pre-tax book loss of $9.4 million for the nine months