Executive Summary

Q1 2025 delivered sequential improvement: revenue $159.3M (+5% q/q, -5% y/y) and adjusted EBITDA attributable to DMC $14.4M (+39% q/q), with consolidated gross margin expanding to 25.9% (from 20.8% in Q4) .
Results materially exceeded Wall Street consensus: revenue beat by ~$10.4M, EPS swung from a consensus loss to a profit, and EBITDA was well above estimates; key drivers were improved cost absorption at Arcadia and Dyna’s product reengineering/automation progress (see Estimates Context) .
Q2 2025 guidance introduced: sales $149–$157M and adjusted EBITDA $10–$13M; softer Arcadia billings post project completion, tariff-driven demand uncertainty at NobelClad, and stable Dyna well completions embedded in assumptions .
Near-term catalysts revolve around execution of “back to basics” cost containment and manufacturing absorption at Arcadia, DynaStage 2.0 and automation ramp at Dyna, and tariff visibility impacting bookings at NobelClad .

What Went Well and What Went Wrong

What Went Well

Arcadia’s refocus on core commercial operations and cost control drove net sales of $65.6M (+9% q/q, +6% y/y) and a sharp EBITDA improvement; adjusted EBITDA attributable to DMC rose to $5.6M (+149% q/q) with better manufacturing cost absorption .
DynaEnergetics improved margins via product reengineering and automation: adjusted EBITDA $7.4M (+45% q/q) and margin 11.3% (+325 bps q/q), supported by DynaStage 2.0 and automation at Blum, TX .
Consolidated gross margin expanded to 25.9% (from 20.8% in Q4), reflecting improved absorption and operational initiatives across businesses .

Quoted management: “Our first quarter was a solid start to 2025… we still saw meaningful progress on our operational improvement initiatives.”

What Went Wrong

Demand uncertainty and tariffs pressured NobelClad bookings and backlog; backlog fell to $41M (from $49M in Q4) and adjusted EBITDA declined 7% q/q amid lower-margin global project mix .
DynaEnergetics remained down y/y on pricing and unit volumes (net sales -16% y/y), with management flagging risk if oil stays in the $50s and frac stages decline .
SG&A rose sequentially to $28.3M (from $25.1M) due to higher professional services, bad debt resets, and incentive compensation normalization, tempering operating leverage .

Financial Results

Consolidated Performance vs prior periods

Metric	Q1 2024	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$166.9	$152.4	$152.4	$159.3
Gross Profit Margin %	25.4%	19.8%	20.8%	25.9%
Adjusted EBITDA attributable to DMC ($USD Millions)	$16.7	$5.7	$10.4	$14.4
GAAP Diluted EPS ($USD)	$0.01	($8.27)	($0.17)	$0.04
Adjusted Diluted EPS ($USD)	$0.21	($0.49)	$0.09	$0.11

Notes: Q1 2025 revenue +5% q/q, -5% y/y; adjusted EPS $0.11 vs $0.09 in Q4 2024; gross margin rebounded q/q .

Segment Breakdown

Segment	Metric	Q1 2024	Q4 2024	Q1 2025
Arcadia	Net Sales ($USD Millions)	$61.9	$60.3	$65.6
Arcadia	Adjusted EBITDA attributable to DMC ($USD Millions)	$3.5	$2.2	$5.6
Arcadia	Adj. EBITDA before NCI Margin %	9.5%	6.2%	14.2%
DynaEnergetics	Net Sales ($USD Millions)	$78.1	$63.7	$65.6
DynaEnergetics	Adjusted EBITDA ($USD Millions)	$10.5	$5.1	$7.4
DynaEnergetics	Adj. EBITDA Margin %	13.5%	8.0%	11.3%
NobelClad	Net Sales ($USD Millions)	$26.8	$28.4	$28.2
NobelClad	Adjusted EBITDA ($USD Millions)	$5.9	$5.8	$5.4
NobelClad	Adj. EBITDA Margin %	21.9%	20.6%	19.2%

KPIs

KPI	Q1 2025
Cash and Cash Equivalents ($USD Millions)	$14.7
Accounts Receivable, net ($USD Millions)	$114.5
Inventories ($USD Millions)	$148.7
Long-term Debt ($USD Millions)	$69.9
Current Portion of Long-term Debt ($USD Millions)	$2.5
NobelClad Backlog ($USD Millions)	$41.0
NobelClad Rolling 12m Bookings ($USD Millions)	$94.4

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Sales ($USD Millions)	Q2 2025	N/A	$149–$157	New
Adjusted EBITDA attributable to DMC ($USD Millions)	Q2 2025	N/A	$10–$13	New
Consolidated Sales ($USD Millions)	Q1 2025	$146–$154 (Feb 24)	Actual $159.3	Beat vs guidance
Adjusted EBITDA attributable to DMC ($USD Millions)	Q1 2025	$8–$11 (Feb 24)	Actual $14.4	Beat vs guidance
Segment Notes	Q2 2025	—	Arcadia: lower project billings post large CA project; Dyna: stable U.S. completions assumed; NobelClad: slower sequential sales amid tariff policy uncertainty	—

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q1 2025)	Trend
Tariffs/macro	Monitoring evolving U.S./reciprocal tariffs; high rates pressuring luxury residential (Q4) ; Q3 noted market volatility across energy and construction	Tariffs causing demand destruction; surcharge partially recovered (>50%); lightest tariff impact expected in Q2 due to timing	Persistent headwind; mitigation improving
Arcadia execution	“Back to basics,” rightsizing high-end residential; ERP/supply chain fixes (Q3/Q4)	Better absorption; profitable in Q2 despite lower billings; continued cost containment and commercial focus	Improving operations; margin lift
DynaStage/Automation	Phase 1 complete; next-gen DynaStage and Phase 2 automation planned (Q3); Phase 2 targeted for Q2 (Q4)	Automation completed; margin expansion from 8.0% to 11.3%; benefits to continue in Q2 though tariff headwinds may offset	Ramping efficiency
NobelClad bookings/backlog	Strong shipments; backlog down; opportunities in downstream energy (Q4)	Backlog $41M vs $49M; bookings volatile amid tariff discussions	Softer near term; visibility key
Regional trends (LA rebuild)	Potential long-tail rebuild opportunity supporting Arcadia commercial and select residential (Q4)	Strategy unchanged; Arcadia refocus on commercial; residential presence maintained but rightsized	Watch for medium-term tailwind
Shareholder/Legal (Steel Connect)	Strategic review concluded; maintaining asset value (Q3)	Largest shareholder; no new updates	Neutral

Management Commentary

“This laid the foundation for our renewed ‘back to basics’ operating and commercial strategies focused on driving absolute EBITDA growth and free cash flow with a focus on further deleveraging.” — James O’Leary, Executive Chairman & Interim CEO .
“Adjusted EBITDA margin was 11.3%, which reflects an improvement of 325 basis points due to the launch of a second-generation DynaStage… and the completion of a major automation initiative at… Blum, Texas.” — Eric Walter, CFO .
“This would be the least quarter going forward for the year that's impacted by tariffs… That ignores the fact that tariffs are creating demand destruction now.” — James O’Leary .

Q&A Highlights

Tariff impact and demand: Management expects Q2 to have the lightest direct tariff cost impact due to timing and mitigation, but warns tariffs are destroying demand, notably at NobelClad; guidance factors “a little tariffs, a lot of demand destruction” .
Arcadia profitability and project timing: Large California project substantially complete; Arcadia expected to remain profitable in Q2 despite lower billings; size undisclosed .
Dyna surcharge recovery and pricing: Surcharge recovery >50%, not fully passed through; structured as temporary surcharge tied to tariffs to avoid permanent price hikes .
Dyna outlook: If oil remains in the $50s and rig/frac stages decline, second-half could be “substantially worse”; baseline expectation is flat to modestly down activity .
Supplier pricing/supply chain: Management is evaluating supply chain across businesses; difficult to predict organic pricing in near term .

Estimates Context

Metric	Q1 2025 Consensus	Q1 2025 Actual
Revenue ($USD Millions)	148.9*	159.3
Primary EPS ($USD)	(0.085)*	Adjusted: 0.11 ; GAAP: 0.04
EBITDA ($USD Millions)	9.9*	Adjusted EBITDA attributable to DMC: 14.4
Primary EPS – # of Estimates	2*	—
Revenue – # of Estimates	3*	—

Values with asterisk retrieved from S&P Global.

Implications:

Bold beat on revenue (+$10.4M vs consensus) and EBITDA (+$4.5M vs consensus adjusted) driven by Arcadia absorption and Dyna margin uplift; EPS flipped from a consensus loss to positive adjusted EPS, reflecting operating improvements and lower interest expense q/q .
Low estimate coverage (# of estimates 2–3) suggests consensus may lag rapid intra-quarter operational changes; expect upward revisions to EBITDA/EPS trajectory given Q1 execution and sequential gross margin expansion .

Key Takeaways for Investors

Q1 was an operational beat: margin expansion and absorption improvements across Arcadia and Dyna drove revenue and EBITDA above consensus; non-GAAP adjustments (strategic review, restructuring) boosted adjusted EPS to $0.11 vs GAAP $0.04 .
Near-term guidance (Q2) embeds softer Arcadia billings and tariff-related demand risks; execution on cost containment and backlog conversion becomes the key lever for maintaining margins in a softer revenue setup .
DynaStage 2.0 and automation are tangible margin drivers; watch Q2 for further efficiency realization against potential tariff and oil price headwinds .
NobelClad bookings/backlog are tariff-sensitive; clarity on tariff policies is the swing factor for sequential improvement; backlog at $41M provides some revenue visibility .
Balance sheet stable with ~$15M cash and manageable leverage (debt/adj EBITDA 1.38); management reaffirmed priority on free cash flow and deleveraging, aided by extended Arcadia put/call maturity .
Tactical: Expect estimate revisions higher for revenue/EPS post-beat; stock narrative sensitive to updates on tariff policy, Arcadia project cadence, and Dyna surcharge recovery rates .
Medium-term thesis: Margin recovery via self-help at Arcadia/Dyna and normalized demand in core end markets; watch LA rebuild and commercial pipelines for Arcadia, and U.S. completion activity trends for Dyna .

DMC Global Inc. (BOOM)·Q1 2025 Earnings Summary