Executive Summary

Q1 2025 revenue of $63.2M declined 8.0% YoY and 1.8% QoQ, as seasonal softness in Property Management offset a 5.6% sequential increase in Professional; GAAP EPS improved to ($0.07) from ($0.10) in Q4, and Adjusted EBITDA rose to $2.4M (3.8% margin) from $1.4M (2.2%) in Q4 .
Against S&P Global consensus, BGSF missed on revenue ($63.2M vs $65.3M*) but beat on EPS ( ($0.07) vs ($0.11)* ); Q4 and Q3 had also missed revenue, with Q4 at $64.4M vs $67.7M* and Q3 at $71.2M vs $75.0M* (EPS: Q4 slight miss; Q3 miss) . Values retrieved from S&P Global.
Cost-reduction actions initiated in late 2024 flowed through; management estimates 65–70% of savings in Q1, with full run-rate benefit in Q2, helping Adjusted EBITDA and EPS sequentially despite lower revenue .
Commentary signaled sequential momentum: Professional billed hours up ~5%, 23 new logos (+60% YoY), and revenue-per-billing-day improved Feb–Apr; management remains “cautiously optimistic” given tariff-policy uncertainty and a still-choppy demand environment .
Liquidity/credit: Company entered covenant waiver/amendments with lenders on Mar 12 and May 7 to allow time to “properly structure capital needs” amid strategic alternatives review (12–18 months timeline re-affirmed) .

What Went Well and What Went Wrong

What Went Well
- Professional segment revenue grew 5.6% QoQ on ~5% billed-hours increase; operating income in Professional rose YoY despite lower sales, reflecting cost cuts .
- Sequential gross margin held roughly flat overall; Property Management gross margin improved 30 bps QoQ to 36.2% despite seasonal volume decline .
- Business development traction: 23 new logos (+60% YoY) and Workday ecosystem momentum (Deployment Partner designation and higher-ed compliance product work) support medium-term pipeline .
What Went Wrong
- Topline underperformed estimates and declined 8% YoY; Property Management revenue fell 14.9% YoY (seasonality plus macro pressure in rental/property mgmt) .
- Gross margin down 100 bps YoY (33.1% vs 34.1%) on lower Property volume; Adjusted EBITDA down YoY ($2.4M vs $2.9M), though improved QoQ .
- Credit covenant non-compliance at 2024 year-end necessitated waivers/amendments in March and May, highlighting balance sheet constraints until strategic review/capital actions progress .

Financial Results

Headline performance (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$71.186	$64.411	$63.234
Gross Profit ($USD Millions)	$24.329	$21.466	$20.921
Gross Margin %	34.2%	33.3%	33.1%
Operating Income ($USD Millions)	$0.470	$0.246	$0.339
Net (Loss) Income ($USD Millions)	($0.804)	($0.981)	($0.722)
Diluted EPS ($)	($0.07)	($0.10)	($0.07)
Adjusted EBITDA ($USD Millions)	$3.208	$1.387	$2.372
Adjusted EBITDA Margin %	4.5%	2.2%	3.8%
Adjusted EPS ($)	$0.10	($0.06)	$0.05

Actuals vs S&P Global consensus (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue Actual ($M)	$71.186	$64.411	$63.234
Revenue Consensus Mean ($M)	$75.0*	$67.65*	$65.25*
Revenue Surprise ($M / %)	($3.81) / (5.1%)	($3.24) / (4.8%)	($2.02) / (3.1%)
Diluted EPS Actual ($)	($0.07)	($0.10)	($0.07)
Primary EPS Consensus Mean ($)	$0.11*	($0.08)*	($0.11)*
EPS Surprise ($)	-$0.18	-$0.02	+$0.04

Values retrieved from S&P Global for consensus figures (marked with *). Note: EPS surprises computed from reported diluted EPS vs consensus.

Segment breakdown (revenue and margins; oldest → newest)

Segment	Q3 2024 Revenue ($M)	Q3 2024 GM%	Q4 2024 Revenue ($M)	Q4 2024 GM%	Q1 2025 Revenue ($M)	Q1 2025 GM%
Property Management	$29.824	35.9%	$24.306	35.9%	$20.883	36.2%
Professional	$41.362	33.0%	$40.105	31.7%	$42.351	31.5%

Selected KPIs (Q1 2025)

Professional billed hours up ~5% QoQ .
23 new logos in Q1 (up >60% YoY) .
Revenue per billing day improved sequentially Feb–Apr .

Non-GAAP reconciliation highlights (Q1 2025)

Adjusted EBITDA reflected add-backs for D&A ($1.671M), share-based comp ($0.186M), and SaaS implementation costs ($0.176M) among others .
Adjusted EPS add-backs included acquisition amortization ($0.11), SaaS ($0.02), and tax adjustment (-$0.01) per share .

Guidance Changes

BGSF did not issue quantitative forward guidance for revenue/EPS/margins. Management provided qualitative color on sequential trends and cost restructuring cadence; Q1 captured ~65–70% of cuts with full benefit expected in Q2 .

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY/Q2 2025	Not provided	Not provided	Maintained “no formal guidance”
EPS	FY/Q2 2025	Not provided	Not provided	Maintained “no formal guidance”
Cost Restructuring Savings	2025	Announced late-2024 plan	65–70% realized in Q1; 100% in Q2	Clarified timing (near-term ramp)
Dividend	Quarterly	$0.15 declared in Q1 2024	No dividend declared in Q1 2025	Suspended vs prior year

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Strategic alternatives review	“Work continues” (no updates) ; 12–18 months expectation reiterated in March	Timeline “remains realistic” at 12–18 months; no Q&A on review	Steady; process ongoing
Cost restructuring	Late-2024 plan; $7–$9M annual savings targeted	65–70% benefit in Q1; full in Q2	Positive execution ramp
Technology modernization / demand gen	Advanced lead gen engine launched Q3	Platform fully rolled out; ongoing 2-week sprints; efficiency wins “several million dollars” from web push; Workday Deployment Partner added	Improving execution and pipeline support
Macro/tariffs	Demand choppy in IT consulting; cautious tone (Q3)	Tariff-policy uncertainty created project headwinds; cautious optimism	Macro drag persists
Property Management seasonality/agreements	Seasonal lift in Q3; margin stable	Seasonal softness in Q1; margin +30 bps QoQ; pursuit of exclusive/semi-exclusive agreements; salesforce realignment	Seasonal normalization; structural actions underway
Liquidity/credit	Not highlighted in Q3 PR	Covenant waivers/amendments Mar 12 and May 7 to structure capital needs	Addressing near-term constraints

Management Commentary

“During the first quarter, business results strengthened as we moved through the quarter… Professional segment revenues were sequentially up 5.6%… Property Management revenues were seasonally soft; however, gross margins sequentially improved.”
“We generated adjusted EBITDA of $2.4 million with an EBITDA margin of 3.8%, and our adjusted EPS was $0.05 per share.”
“Tariffs did not impact first quarter results. However, uncertainties and concerns over the administration’s trade policies created headwinds in project hiring and spending.”
“SG&A… $18.9 million vs $20.8 million in Q4 and $21 million in the prior year’s quarter… improvements primarily a result of restructuring actions taken in December.”
“We beat the estimates for the first quarter on the revenue line… net income and EPS.”

Q&A Highlights

New logos and pipeline: 23 new logos (+60% YoY); several signed in March; management to follow up on deal-size details .
Macro and tariffs: Customers in some sectors are in “wait-and-see” mode; management sees pent-up demand once policy clarity returns .
Technology platform: Fully rolled out; continuous sprints drive “several million dollars” in efficiency gains; operational excellence program in place .
Cost savings cadence: ~65–70% of actions reflected in Q1; 100% by Q2; ongoing cost-effectiveness initiatives .
Property Management: Competition unchanged; progressing preferred-partner agreements; slightly-above-seasonal rebound attributed to sales-force realignment and territory focus .
Outlook tone: Tracking to internal plan ~midway through Q2; cautious but not fearful given momentum in both segments .

Estimates Context

Q1 2025: Revenue $63.2M vs $65.25M* (miss); EPS ($0.07) vs ($0.11)* (beat). Management noted beats vs Street on revenue, net income and EPS . Values retrieved from S&P Global.
Q4 2024: Revenue $64.4M vs $67.65M* (miss); EPS ($0.10) vs ($0.08)* (miss) . Values retrieved from S&P Global.
Q3 2024: Revenue $71.2M vs $75.0M* (miss); EPS ($0.07) vs $0.11* (miss) . Values retrieved from S&P Global.
Implications: Despite a revenue miss in Q1, sequential cost benefits drove an EPS beat; near-term estimate revisions may modestly lift EPS and EBITDA trajectories while leaving revenue largely unchanged until PM seasonality and macro clarity improve .

Key Takeaways for Investors

Sequential improvement: Adjusted EBITDA and EPS improved QoQ despite lower revenue, driven by restructuring savings; full run-rate benefits expected in Q2 .
Mix and momentum: Professional segment returning to sequential growth on higher billed hours; PM margins improved QoQ despite seasonal revenue pressure .
Demand signals: 23 new logos and Workday ecosystem momentum (Deployment Partner and higher-ed compliance solution) add medium-term visibility, though macro/tariff uncertainty remains a headwind .
Credit actions: Covenant waivers/amendments provide runway to address capital structure during strategic alternatives review; monitor liquidity and debt trajectory closely .
Estimates: Q1 revenue miss but EPS beat suggest operating leverage from cost actions; watch for estimate revisions upward on EPS/EBITDA into Q2 .
PM cycle watch: Q2 is the seasonal “barometer” for PM; management expects above-normal seasonal progression given sales reorg and agreements—key determinant of 2H setup .
Execution risk: Sustaining margin gains amid choppy demand, and converting pipeline/new logos to revenue in Professional, are the near-term swing factors .

Appendix: Source Documents

Q1 2025 8-K and Exhibit 99.1 press release with full financials and segment data .
Q1 2025 earnings call transcript –.
Other relevant Q1 press releases: Workday Deployment Partner (May 14) ; Strategic partnership with SISSCORP (Apr 8) .
Prior quarters: Q4 2024 8-K and press release ; Q3 2024 8-K and press release .
Consensus estimates from S&P Global (values marked with * in tables).

BGSF, INC. (BGSF)·Q1 2025 Earnings Summary