Team (TISI) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $198.7 million, essentially flat year-over-year, with IHT segment growth offset by MS segment decline and a gross margin of 23.8%.

• Net loss widened to $29.7 million, including an $11.9 million loss on debt extinguishment from March 2025 refinancing.

• Adjusted EBITDA was $5.3 million (2.7% of revenue), down from $6.5 million in the prior year quarter.

• Operating performance and cash flow improvements enabled a successful refinancing in March 2025, extending maturities to 2030 and improving covenants.

• Regained compliance with NYSE listing standards in March 2025.

Financial highlights

• IHT segment revenue increased 6.8% year-over-year to $106.2 million, while MS segment revenue declined 7.7% to $92.4 million.

• Gross margin was $47.3 million (23.8% of revenue), down from 24.4% in the prior year.

• Adjusted net loss was $14.9 million, nearly flat compared to $14.7 million in Q1 2024.

• Free cash flow was negative $30.1 million, compared to negative $1.1 million in the prior year.

• Net loss per share was $6.61, compared to $3.89 in Q1 2024.

Outlook and guidance

• Expects at least 15% year-over-year growth in Adjusted EBITDA for the full year 2025 and top-line growth in Q2.

• Management expects current working capital, forecasted cash flows, and available credit to be sufficient for operations and debt service for at least the next twelve months.

• Anticipates improved performance from Canadian and international operations and full-year impact of cost-saving initiatives in 2026.

• Ongoing optimization program targeting at least $10 million in annualized cost savings.