DIRTT Environmental Solutions (DRTT) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $41.3 million, up 1% year-over-year, driven by large education, healthcare, and commercial projects, but down 16% sequentially.

• Net loss after tax was $0.7 million (net loss margin 1.6%), compared to net income of $3.0 million (7.5% margin) in Q1 2024, mainly due to lower gains on debt extinguishment and FX.

• Adjusted EBITDA was $2.1 million (5.1% margin), down from $2.7 million (6.5%) year-over-year, exceeding expectations despite tariff and litigation headwinds.

• Liquidity at quarter-end was $36.0 million, including $28.4 million in cash and $7.6 million undrawn ABL facility.

• Innovation and process simplification remain strategic priorities, with recognition as #1 in manufacturing on Fast Company's 2025 Most Innovative Companies list.

Financial highlights

• Gross profit margin declined to 35.2% from 35.9% year-over-year, impacted by $0.6 million in new tariffs.

• Adjusted Gross Profit Margin was 37.5%, slightly lower than 37.9% in Q1 2024.

• Operating expenses were $14.9 million, flat year-over-year; higher professional and litigation fees offset by lower compensation.

• Cash at quarter-end was $28.4 million; positive operating cash flow of $3.7 million in Q1 2025.

• Inventory decreased to $14.5 million from $15.1 million sequentially; average inventory per $1M revenue was $588,737.

Outlook and guidance

• Full-year 2025 revenue and earnings guidance withdrawn due to tariff and macroeconomic uncertainty.

• Twelve-month forward sales pipeline grew 5% to $292 million, with leads up 47% since January; pipeline up 8% year-over-year.

• Management expects to generate positive adjusted EBITDA for 2025, supported by cost controls and process improvements.