Company: BWMN
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001628280-25-039001
Chunk: 97

Company: Bowman Consulting Group Ltd.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 97
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 provisions within the Tax Cuts and Jobs Act. The Company is evaluating the future impact of these tax law changes on its financial statements.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 six months ended June 30, 2025 and June 30, 2024 was 33.7% and 56.0%, respectively. The change in the Company’s effective tax rate is predominantly due to certain non-recurring discrete events 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 include an increase in the projected limitation of the deductible executive compensation for 2025, an increase in projected R&D credits generated for 2025, and an overall increase in forecasted pre-tax book income for 2025 relative to a pre-tax loss for 2024. Further, the Company also recognized a net discrete expense of $1.4 million for the six months ended June 30, 2025, compared to a net discrete 

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benefit of $7.6 million for the six months ended June 30, 2024. The net discrete expense is predominantly the result of increase in the windfall tax benefit for restricted stock awards, increase in penalties and interest recorded for uncertain tax positions as a function of pre-tax income for 2025 compared to pre-tax loss for 2024. More specifically, the windfall tax benefit for restricted stock awards recognized at a value higher than the grant date fair value is $0.3 million for the six months ended June 30, 2025 compared to $4.3 million for the six months ended June 30, 2024. Penalties and interest accrued for uncertain tax positions are $1.5 million for the six months ended June 30, 2025, compared to a net reversal of $3.3 million for the six months ended June 30, 2024. These factors as a function of pre-tax book income of $6.4 million for the six months ended June 30, 2025, compared to pre-tax book loss of $8.3 million for the six months ended June 30, 2024 increased the rate by 21.3% for the six months ended June 30, 2025, and by 91.9% for the six