Executive Summary

Q3 2025 delivered solid topline with revenue of $51.5M and adjusted EBITDA of $2.5M; net income was $1.6M. Year-over-year, revenue rose versus $37.6M in Q3 2024 while net income declined from $2.3M as Services softness and Englobal underutilization weighed on margins .
Material consensus beats: revenue ($51.5M vs ~$34.0M estimate*) and EBITDA ($2.5M adj. vs ~$0.7M estimate*), driven by large structural steel procurement for the Francis Scott Key Bridge and contribution from the Englobal automation business; Services underperformed on margin mix and underutilization . Estimates from S&P Global*.
Strategic catalysts: awarded >$35M fixed-price contract to support the rebuild of the Francis Scott Key Bridge (procurement began; fabrication to start Q4 2025), reinforcing diversification beyond oil & gas . Pending acquisition by IES Holdings at $12.00 per share, expected to close in Q1 2026; Q3 conference call suspended due to transaction .
Operating context: Englobal businesses incurred $1.0M operating losses in Q3, with the company expecting ~another $1.0M loss in Q4 2025 as integration continues, consistent with prior guidance ranges .

What Went Well and What Went Wrong

What Went Well
- Large structural steel components award for the Francis Scott Key Bridge (> $35M fixed-price) and procurement commenced; fabrication expected to begin Q4 2025, advancing diversification into infrastructure end markets .
- Consolidated revenue outperformed consensus by a wide margin ($51.5M actual vs ~$34.0M estimate*), supported by Fabrication division procurement and Englobal automation activity . Estimates from S&P Global*.
- Management emphasized strategic progress: “We have made meaningful progress toward our strategic goal of business diversification… including our recent award with the U.S. Defense Logistics Agency…” — Richard Heo, CEO .
What Went Wrong
- Services EBITDA compressed to $1.3M (6.0% margin) vs $1.9M (9.3%) YoY, driven by underutilization in Englobal engineering and a less favorable margin mix .
- Englobal integration headwinds: $1.0M operating losses in Q3 and expectation for ~another $1.0M in Q4 2025 as business transitions out of bankruptcy .
- Net income declined YoY ($1.6M vs $2.3M) and consolidated gross margin was ~9.5%* vs prior-year levels, reflecting Services softness and underutilization in automation; Q2 was weaker sequentially (net loss), although Q3 recovered . Margin values from S&P Global*.

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$37.640	$40.273	$37.538	$51.540
Diluted EPS ($USD)	$0.14	$0.23	$(0.04)	$0.10
EBITDA ($USD Millions)	$2.880	$4.536	$0.115	$2.374
Adjusted EBITDA ($USD Millions)	$2.858	$4.536	$1.940	$2.465
Gross Profit Margin %	12.37%*	16.43%*	9.49%*	9.47%*
EBITDA Margin %	7.65%*	11.76%*	0.04%*	4.80%*
EBIT Margin %	4.44%*	8.64%*	(3.14%)*	2.42%*
Net Income Margin %	6.16%*	9.50%*	(1.53%)*	3.02%*

Values with asterisks retrieved from S&P Global.

Segment Breakdown (Revenue, Operating Income, EBITDA):

Segment	Q3 2024	Q2 2025	Q3 2025
Services Revenue ($USD M)	$20.245	$21.978	$21.494
Services Operating Income ($USD M)	$1.396	$1.569	$0.843
Services EBITDA ($USD M)	$1.891	$2.006	$1.282
Fabrication Revenue ($USD M)	$17.110	$15.845	$30.551
Fabrication Operating Income ($USD M)	$2.034	$0.407	$2.131
Fabrication EBITDA ($USD M)	$2.667	$1.140	$2.896

KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
New Project Awards ($USD Thousands)	$36,902	$32,131	$81,474
Share Repurchases (shares / $USD)	—	437,229 / $2.8M	42,761 / $0.3M
Cash + Short-term Investments ($USD Millions)	—	$62.2	$64.6
Total Debt ($USD Millions)	—	$19.0	$19.0

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated results (ex-Englobal)	Q3 2025	Q3 expected comparable to Q2; significant improvement in Q4 2025	No formal guidance; Q3 call suspended due to pending transaction	Maintained qualitative view; formal guidance paused
Englobal operating losses	H2 2025	~$1.5M–$2.0M losses expected over H2 2025	~$(1.0)M expected in Q4 2025	Narrowed/lowered for Q4
Share repurchase program	FY 2025	Active; $2.8M repurchased in Q2	Suspended due to merger covenants	Suspended

Note: No quantified revenue/margin guidance ranges provided in Q3; IR conference call suspended due to pending IES transaction .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 2025)	Previous Mentions (Q2 2025)	Current Period (Q3 2025)	Trend
Diversification beyond oil & gas	Expanding Services; planning ENG acquisition to add automation/engineering/government services	Integration progressing; broaden offerings and end-markets; govt and data centers potential	Highlighted bridge award and DLA win; continued integration of Englobal	Strengthening
Tariffs / Buy America	Trade uncertainty delaying awards; domestic supply more favorable but paused decisions	LNG/petrochem dialogues improving; tariffs and Buy America driving domestic opportunities	Noted strategic focus on infrastructure/government markets	Improving dialogue
Fabrication pipeline	Small-scale strong Q1; delays expected Q2	Limited notice to proceed ~$20M; expected full ~$35M award; fabrication to begin Q4	Key Bridge procurement driving Q3 revenue; backlog additions	Acceleration Q4 setup
Services market	Customers targeting lower capex in Gulf of America; margin mix pressures	Softer offshore maintenance; Services EBITDA down	Softer trends persisted; underutilization in Englobal engineering	Softness persists
Englobal integration	Expect $1–$2M losses 6–12 months post-acquisition	H2 losses ~$1.5–$2.0M expected; integration ongoing	Q3 loss $1.0M; ~$(1.0)M expected Q4	On plan, narrowing
Capital allocation	Cash/investments >$67M; repurchases ongoing	$62M cash/investments; $2.8M repurchases; remaining authorization $5.3M	Repurchases suspended per merger covenants	Paused due to deal

Management Commentary

“We delivered strong third-quarter results with revenue of $51.5 million and adjusted EBITDA of $2.5 million, despite softer trends in our services business, a decline in small-scale fabrication activity and anticipated losses from our recently acquired Englobal business.” — Richard Heo, CEO .
“We believe our contract supporting the rebuild of the Francis Scott Key Bridge directly demonstrates the success of this strategy and highlights our competitive advantages in various end markets.” — Richard Heo .
“During the second and third quarters of 2025, the Englobal Business incurred operating losses of $0.5 million and $1.0 million, respectively, and… additional operating losses of approximately $1.0 million may be incurred during the fourth quarter 2025 as the business continues to transition out of bankruptcy.” — Company statement .

Q&A Highlights

Large-project pipeline and end markets: LNG and petrochemical dialogues improving; structural steel project outside oil & gas with high visibility and time-sensitive requirements leveraging GIFI’s capacity .
Tariffs/Buy America impact: Customers shifting toward domestic fabrication given tariff/freight uncertainty; domestic providers gain attractiveness .
Labor environment: Management confident in hiring quality labor despite large Gulf Coast projects nearby, citing prior success on large projects .
Integration synergies: ENGlobal expands reach to onshore, data centers, government services; opens turnkey systems integration opportunities .

Estimates Context

Metric	Q2 2025	Q3 2025
Revenue Consensus Mean ($USD)	$35.5M*	$34.0M*
Revenue Actual ($USD)	$37.538M	$51.540M
EBITDA Consensus Mean ($USD)	—	$0.700M*
EBITDA Actual ($USD)	$0.115M	$2.374M
Primary EPS Consensus Mean	—	—
Primary EPS Actual (Diluted)	$(0.04)	$0.10

Values with asterisks retrieved from S&P Global. Note: Quarterly EPS consensus was unavailable; FY 2025 EPS consensus mean is ~$0.34* with one estimate [functions:GetEstimates].

Implications: Consensus materially underestimated Q3 revenue and EBITDA; estimate models likely need to reflect procurement timing from the Key Bridge project and Englobal automation contributions, while maintaining lower Services margin assumptions .

Key Takeaways for Investors

Q3 revenue strength was driven by large structural steel procurement and automation contributions; expect fabrication activity to step up in Q4 as Key Bridge fabrication begins .
Services margin compression and Englobal underutilization remain near-term headwinds; management expects ~$(1.0)M Englobal losses in Q4 2025 as integration continues .
The IES $12.00/share cash deal is a dominant near-term catalyst; IR activities (including buybacks) are paused under merger covenants .
Estimate models should raise near-term revenue/EBITDA for Fabrication on project timing and procurement flows, but hold cautious Services margin assumptions and include Englobal loss drag in Q4 .
Balance sheet remains strong (cash + short-term investments ~$64.6M; fixed 3.0% debt $19.0M), supporting operational execution into the merger timeline .
New project awards surged in Q3 ($81.5M), indicating improving backlog momentum and diversified end-market exposure (infrastructure/government) .
Trading lens: Merger arb dynamics likely dominate; fundamentals show improving fabrication trajectory into Q4 against Services softness—risk/reward tied to deal closure and ongoing integration execution .

GULF ISLAND FABRICATION INC (GIFI)·Q3 2025 Earnings Summary