Executive Summary

Q2 2025 revenue of $37.5M declined 9% YoY and 7% QoQ, but exceeded S&P Global consensus of $35.5M by ~6% as small-scale fabrication slowed and Services activity remained soft; GAAP diluted EPS was $(0.04) vs $0.11 in Q2 2024 and $0.23 in Q1 2025 (EPS consensus not available) . Revenue consensus: $35.5M; actual: $37.538M* .
Adjusted EBITDA was $1.9M, down from $2.5M in Q2 2024 and $4.7M in Q1 2025; Q2 includes $0.5M post-acquisition losses from ENGlobal and excludes $1.8M of ENGlobal transaction costs .
Management highlighted a $20M limited notice-to-proceed (LNTP) for a structural steel project, with an expected full award of ~$35M in Q3 2025—a near-term catalyst and evidence of diversification beyond oil & gas .
Outlook: Q3 2025 results expected comparable to Q2 (ex-ENGlobal), with a significant improvement in Q4 and into 2026; ENGlobal expected to incur $1.5–$2.0M of operating losses in H2 2025 during integration .

What Went Well and What Went Wrong

What Went Well

Diversification traction and large-project pipeline: “We received a limited notice to proceed contract for approximately $20.0 million… full award expected during the third quarter 2025,” expanding into structural steel and non-O&G end markets .
Strategic acquisition to broaden offerings: ENGlobal adds automation/engineering/government services, enabling turnkey module offerings; initial customer reception is “very positive” with new RFQs already coming in .
Strong liquidity and capital returns: Cash and short-term investments totaled $62.2M; the company repurchased 437k shares for $2.8M in Q2 under its buyback program .

What Went Wrong

Demand softness and delays: Revenue fell YoY on lower small-scale fabrication activity and weaker offshore maintenance; project awards saw extended decision cycles amid trade/macroeconomic uncertainty .
Margin pressure: Services EBITDA margin fell to 9.1% (from 11.7% in Q2 2024) on lower revenue and less favorable mix; Fabrication EBITDA fell on reduced utilization and ENGlobal-related losses .
Near-term drag from ENGlobal: Q2 included ~$0.5M of post-acquisition losses, with another $1.5–$2.0M expected in H2 2025 as the business transitions out of bankruptcy .

Financial Results

Headline P&L vs prior periods

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($M)	$41.262	$40.273	$37.538
Diluted EPS ($)	$0.11	$0.23	$(0.04)
Adjusted EBITDA ($M)	$2.514	$4.749	$1.940

Notes: Q2 2025 Adjusted EBITDA excludes $1.8M ENGlobal transaction costs; includes ~$0.5M post-acquisition losses .

Q2 2025 vs S&P Global consensus

Metric	Consensus	Actual	Surprise
Revenue ($M)	$35.5*	$37.538	+$2.0M (~+6%)*
Primary EPS ($)	N/A (insufficient coverage)*	$(0.04) (GAAP diluted)	N/A

Footnote: *Values retrieved from S&P Global.

Methodology note: S&P “Primary EPS” basis can differ from GAAP diluted EPS. Company-reported diluted EPS for Q2 2025 was $(0.04) .

Segment performance (Revenue, Operating income, EBITDA)

Segment	Metric	Q2 2024	Q1 2025	Q2 2025
Services	Revenue ($M)	$22.767	$19.855	$21.978
Services	Operating Income ($M)	$2.189	$1.583	$1.569
Services	EBITDA ($M)	$2.675	$2.065	$2.006
Fabrication	Revenue ($M)	$18.727	$20.694	$15.845
Fabrication	Operating Income ($M)	$1.129	$3.795	$0.407
Fabrication	EBITDA ($M)	$1.803	$4.493	$1.140

Drivers: Services margin compression (~9.1% EBITDA) on mix and lower offshore maintenance; Fabrication slowed as small-scale projects completed and award timing pushed, partly offset by favorable mix .

KPIs and balance sheet

KPI	Q2 2024	Q1 2025	Q2 2025
New Project Awards ($M)	$39.810	$33.980	$32.131
Cash & Short-term Investments ($M)	$—	$67.5 (at 3/31/25)	$62.2 (at 6/30/25)
Total Debt ($M)	$—	$19.0 (3.0% fixed)	$19.0 (3.0% fixed)
Share Repurchases	—	86,364 shares for $0.6M	437,229 shares for $2.8M

Note: LNTP ~$20M (materials procurement) in Q3 with expected full award ~$35M; fabrication work to commence in Q4, if timing proceeds as planned .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated results (ex-ENGlobal)	Q3 2025	Q2 (May): Anticipated significant decline in Q2 vs Q1; back-half difficult to predict	Q3 expected comparable to Q2; significant improvement in Q4 and into 2026	Updated with clearer trajectory (flat Q3, stronger Q4)
ENGlobal operating losses	H2 2025 / Integration window	April/May: ~$(1.0)–$(2.0)M during 6–12 months post-close	$(1.5)–$(2.0)M during remainder of 2025	Narrowed/timed to H2 2025
Structural steel award	2H 2025	N/A	LNTP ~$20M; full ~$35M award expected Q3; fabrication start Q4 if awarded	New catalyst introduced

No formal quantitative revenue/EPS/tax/OpEx guidance was issued; commentary focuses on trajectory and integration impacts .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
Trade/tariffs & macro uncertainty	Harder to forecast 2025; extended decision cycles; services customers cutting 2025 capex	Ongoing uncertainty delaying fabrication awards; Services still pressured by lower Gulf capex	Persistent headwind
Diversification beyond O&G	Emphasis on small-scale fab; expand into infrastructure/government/high-tech	LNTP for structural steel project outside O&G; expect full award in Q3	Improving; tangible wins
LNG/petrochemical pipeline	Positioned well; timing uncertain	Pick-up in LNG & petrochemical dialogues as tariff positions stabilize and LNG FIDs gain momentum	Positive momentum
ENGlobal integration	Agreement announced; strategic rationale articulated	Closed; broadens automation/engineering; positive customer reception; near-term losses during integration	Integration underway
Labor availability	Not highlighted	Confident in ability to hire for upcoming projects despite Gulf Coast activity	Manageable risk
Capital allocation	Strong cash; buybacks; organic & M&A focus	Continued buybacks ($2.8M); maintain balanced approach	Ongoing discipline

Management Commentary

Strategic positioning: “We have taken important strategic actions to develop a business that is more stable and durable… reducing risk, growing services and small-scale fabrication, and strengthening project execution” .
ENGlobal rationale: “Broaden our product and services offerings with automation and engineering; expand customer base into onshore O&G, data centers, government; strengthen fabrication with systems integration for turnkey modules” .
Commercial traction: “We have already received requests for quotation… including turnkey fabrication with systems control installed… opportunities for larger systems integration projects” .
Near-term outlook: “Expect Q3 consolidated results to be comparable to Q2 (ex-ENGlobal), with significant improvement in Q4 and into 2026” .
Catalyst: “Subsequent to quarter-end, we received a limited notice to proceed contract for approximately $20.0 million… full award expected during the third quarter 2025” .

Q&A Highlights

End-market color: Management sees improved dialogues in LNG and petrochemical projects as tariff positions stabilize and LNG FID momentum builds .
Structural steel award details: Outside O&G; time-sensitive; customer valued Gulf Island’s large yard, rolling capacity, and execution track record; high-visibility project expected to be fully awarded in Q3 .
Policy tailwinds: Combination of tariffs and “Buy America / Made in America” is driving more opportunities toward domestic fabricators like Gulf Island .
Labor: Despite large projects nearby, management is confident in recruiting/hiring capacity based on prior experience managing large ramp-ups .

Estimates Context

Revenue: Actual $37.538M beat S&P Global consensus $35.5M by ~6%—driven by Services resilience and favorable mix in Fabrication despite lower volume* .
EPS: GAAP diluted EPS $(0.04); S&P Primary EPS consensus not available (insufficient coverage). Note: S&P’s “Primary EPS” basis may differ from GAAP diluted EPS; company-reported diluted EPS is used for result comparison* .
Coverage remains thin (one revenue estimate), implying outsized sensitivity to single-model changes and potentially higher post-print estimate volatility*.