Thermal Energy International (TMG) Q3 2025 earnings summary

Executive summary

• Year-to-date revenue reached a record $23.0 million, up 25% year-over-year, despite a 4.1% decline in Q3 revenue to $5.8 million, mainly due to lower heat recovery project revenues.

• EBITDA for Q3 was negative ($130,000 to $167,000), with a net loss of $400,000; trailing 12-month EBITDA remained positive at $0.76 million to $1.1 million, and trailing 12-month net income was $230,000.

• Significant investments of $2.5 million over the past two years in growth, R&D, and team expansion are expected to drive profitability in fiscal 2026 and beyond.

• Business development pipeline and order backlog remain strong, positioning for future growth.

Financial highlights

• Trailing 12-month revenue was $30.5 million, up 15% to 76% over two years.

• Q3 gross profit was $2.3 million, with a gross margin of 39%, down from 50% in Q3 2024.

• Cash and cash equivalents at quarter end were $5.1 million; working capital was $2.4 million.

• Long-term debt reduced to $1.4 million, down by $2.1 million over two years; net working capital increased by $600,000, funded by internal cash flow.

• Operating expenses increased due to higher headcount, travel, and inflation, but Q3 expenses were $379,000 lower year-over-year due to foreign exchange gains.

Outlook and guidance

• Management expects recent investments to drive higher revenue and profitability in fiscal 2026 and beyond, with a focus on maximizing returns from prior investments.

• No additional growth-oriented expenses planned for the coming quarter.

• Business development pipeline remains robust, with strong demand for energy efficiency and carbon reduction solutions.