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Shimmick Corp (SHIM)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $141.92m, up 5% YoY ex a $31m one-time Q3’24 claim; Adjusted EBITDA turned positive at $4.33m, the first positive print in four quarters, aided by stronger Shimmick Projects margin and backlog conversion .
  • Versus consensus, SHIM materially beat on revenue ($141.92m vs $120.20m*) and modestly beat on consensus “primary” EPS (adjusted) (-$0.01 vs -$0.04*). Management reaffirmed FY25 and now expects revenue at the high end and adjusted EBITDA at the low end of the range (revenue mix shift toward Non‑Core raises headwinds) . Values retrieved from S&P Global.
  • Backlog rose 15% QoQ to ~$754m (book-to-burn 1.7x), the first >1.0x since 2023; Shimmick Projects are 86% of backlog. Management highlighted accelerating bid activity (>$1B monthly; 12‑month bid outlook >$9B) and traction in California and Texas, plus Axia Electric exposure to data centers/manufacturing .
  • Liquidity ended Q3 at $48m (cash $18m; $30m availability). Near-term catalysts: continued backlog growth (Oct added $60m; $169m preferred-bid awards pending), improving Shimmick mix/margins, and proof of Q4 delivery to hit the low end of EBITDA guidance despite seasonality .

What Went Well and What Went Wrong

  • What Went Well
    • Positive adjusted EBITDA ($4.33m) for the first time in four quarters; Shimmick Projects gross margin rose to $10m (9%) from $6m (6%) YoY on new, higher-margin wins ramping .
    • Backlog inflected higher (+15% QoQ to ~$754m) with 1.7x book-to-burn; $190m new awards in Q3 and $60m in October, plus $169m preferred-bid awards pending; strong pipelines in CA/TX and electrical/data centers support 2026 visibility .
    • Operational discipline: G&A trending down sequentially vs Q2; CFO reiterated focus on “winning the right way” and pivot toward negotiated work over time (target 50% mix by 2027) .
  • What Went Wrong
    • GAAP net loss widened YoY to -$4.40m as Q3’24 had a $17m gain on sale and a one-time $11m gross margin from GGB claim settlement; Non‑Core continues to pressure mix and cash conversion .
    • Liquidity declined to $48m from $73m in Q2; management avoided forecasting near-term liquidity given lumpiness (advance/retention/claims/AP swings) .
    • FY25 adjusted EBITDA guide reaffirmed at $5–$15m as management now expects revenue at the high end but EBITDA toward the low end due to higher-than-initially-planned Non‑Core burn (~20% of FY revenue) .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD)$122,110,000 $128,402,000 $141,920,000
Gross Margin ($USD)$4,696,000 $8,129,000 $10,789,000
Gross Margin (%)4% 6% 8%
Net Loss ($USD)$(9,770,000) $(8,525,000) $(4,396,000)
Diluted EPS (GAAP)$(0.28) $(0.25) $(0.12)
Adjusted Diluted EPS$(0.22) $(0.14) $(0.01)
Adjusted EBITDA ($USD)$(2,954,000) $(234,000) $4,329,000

Segment breakdown

SegmentMetricQ1 2025Q2 2025Q3 2025
Shimmick ProjectsRevenue ($m)$93 $113 $107
Gross Margin ($m)$5 $15 $10
Gross Margin (%)6% 13% 9%
Non‑Core (Legacy/Foundations)Revenue ($m)$29 $16 $35
Gross Margin ($m)$(1) $(7) $1
Gross Margin (%)(2%) (43%) 2%
ConsolidatedRevenue ($m)$122 $128 $142
Gross Margin ($m)$5 $8 $11
Gross Margin (%)4% 6% 8%

Key KPIs

KPIQ1 2025Q2 2025Q3 2025
Backlog ($m)~$740 ~$652 ~$754
Book-to-Burn (x)n/an/a1.7x
New Awards (in-period)n/a$70m (July) $190m (Q3)
Preferred Bidder/Pendingn/a$164m $169m
Liquidity ($m)$71 $73 $48
Backlog mix (% Shimmick)>87% >88% 86%
12‑mo Bidding OutlookNearly $2B anticipated projects >$4.5B >$9B; >$1B monthly bids

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Shimmick Projects RevenueFY 2025+10–15% YoY; GM 9%–12% (Q1) $405–$415m; GM 9%–12% (Q2 update reaffirmed Q3) Updated range, mix clarity (raised)
Non‑Core RevenueFY 2025$50–$60m; GM (5%)–(15%) (Q1) $80–$90m; GM (15%)–(5%) (Q2 update reaffirmed Q3) Raised revenue; wider negative GM
Consolidated Adjusted EBITDAFY 2025$15–$25m (Q1) $5–$15m (Q2 update reaffirmed Q3; expect low end) Lowered; aiming at low end

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Bidding pipeline/visibilityReaffirmed strong 2025 bids; nearly $2B in core capabilities (Q1) . 12‑mo outlook >$4.5B (Q2) .>$1B monthly bids; 12‑mo outlook >$9B; backlog +15% QoQ to $754m; B2B 1.7x .Improving
Regional strengthGeneral demand in electrical/water/environmental (Q1) .Strong traction in CA & TX water; pursuing data center/manufacturing electrical in TX/TN/GA .Improving
Electrical/Axia strategyAxia Electric launched in Q2 targeting industrial, data center, advanced manufacturing .Axia mid‑teens % of pipeline; data center bids accelerating (TX, TN, GA) .Expanding
Mix shift & negotiated workFocus on sustainable backlog, operational excellence (Q1) .Target 50% negotiated by 2027; pivot reduces risk profile over time .Structural shift underway
Non‑Core wind‑downLegacy/Foundations drag persists but improving YoY (Q1–Q2) .Non‑Core ~20% FY revenue; no further margin expected; may incur costs to completion through 2026 .Headwind, diminishing
Liquidity/cash flowLiquidity $71m (Q1) ; $73m (Q2) .Liquidity $48m; lumpy working capital dynamics; avoiding liquidity forecasts More constrained

Management Commentary

  • “Our transformation is clearly gaining momentum... Our book‑to‑burn ratio improved to 1.7x, resulting in backlog growth for the first time in over eight quarters… We continue to be optimistic about 2026.” — Ural Yal, CEO .
  • “We delivered positive adjusted EBITDA of $4 million, for the first time in four quarters… We are pleased to reaffirm our full year 2025 guidance and now anticipate full year revenue in the higher end… and adjusted EBITDA in the lower end.” — Todd Yoder, CFO .
  • “We surpassed $1 billion in monthly bidding volume… our 12‑month bidding outlook stands at over $9 billion… notably strong traction in California and Texas… Axia [electrical] positioning us well for future success.” — Ural Yal, CEO .
  • “Backlog… $754 million… book‑to‑burn 1.7x… Shimmick projects now representing 86% of our total backlog.” — Todd Yoder, CFO .

Q&A Highlights

  • Axia/electrical exposure: Axia is mid‑teens percent of pipeline with rising share; pursuing data center/mission‑critical in TX/TN/GA; expected to increase backlog mix and translate to top line over time .
  • Guidance confidence and seasonality: Low‑end EBITDA guide implies a strong Q4; management expects higher‑margin new work to offset Non‑Core seasonality drag in Q4 .
  • Negotiated work mix: Multi‑year transition toward 50% negotiated by 2027 to de‑risk portfolio while maintaining some fixed‑price exposure for growth .
  • Non‑Core projects: Slightly positive Q3 margins tied to close‑out scope/recoveries; remaining Non‑Core runs through 2026; aim to keep impact as even as possible .
  • Liquidity/cash flow: Liquidity $48m; cash flows remain lumpy (advances, retention, claims, AP); management refrained from forecasting near‑term liquidity .

Estimates Context

MetricQ3 2025 ConsensusQ3 2025 ActualResult
Revenue ($)$120,200,000*$141,920,000 Beat
Primary EPS (Adjusted)-$0.04*-$0.01 Beat
  • Note: Company also reports GAAP diluted EPS of -$0.12 for Q3 . Consensus EPS refers to “primary” adjusted EPS; definitions may differ from GAAP. For EBITDA, consensus mean was $3.7m*, while company reported Adjusted EBITDA of $4.33m; methodology differences between SPGI and company reporting can cause “actual” fields to differ . Values retrieved from S&P Global.

Guidance Changes — Detail and Implications

  • Reaffirmed FY25: Shimmick Projects $405–$415m at 9–12% GM; Non‑Core $80–$90m at (15%)–(5%) GM; consolidated adjusted EBITDA $5–$15m, likely low end .
  • Why the guardrails: Increased Non‑Core burn (closer to ~20% of FY revenue) depresses consolidated margins even as Shimmick margins improve; mix normalizes as backlog converts in 2026 .
  • Execution bar for Q4: Requires a strong seasonal quarter with higher‑margin project ramp to deliver low‑end EBITDA target; backlog and pending awards provide near‑term conversion opportunities .

Key Takeaways for Investors

  • Backlog inflection and >1.0x B2B for the first time in two years support revenue visibility; continued awards and preferred-bid pipeline ($169m) are near-term catalysts for 2026 setup .
  • Electrical/Axia optionality into data centers and industrial lends upside to mix and negotiated work share over 2026–2027, potentially improving risk-adjusted margins .
  • Near-term earnings path still constrained by Non‑Core through 2026; watch QoQ mix, cash burn, and claim recoveries; sustained positive adjusted EBITDA is a key milestone just achieved .
  • Liquidity fell to $48m; monitor working-capital swings, revolver availability ($30m), and backlog conversion pace into cash .
  • For Q4, delivery against reaffirmed guidance is the swing factor; stronger Shimmick margin ramp can offset Non‑Core seasonality and validate low‑end EBITDA guide .
  • Narrative shift: from turnaround to growth execution—management emphasis on negotiated work, regional strengths (CA/TX), and larger bid funnel (>$9B/12mo) are supportive of estimate revisions if conversion persists .

Bolded beats/misses:

  • Revenue beat vs consensus and adjusted EPS beat are material positives; EBITDA trajectory improving, with first positive adjusted EBITDA in four quarters . Values retrieved from S&P Global.

Non‑GAAP adjustments and context:

  • Q3’24 included non‑recurring positives (GGB settlement ~$31m revenue/$11m gross margin; $17m gain on sale) and a $16m ERP impairment add‑back; comparisons normalize favorably ex these items .
  • Adjusted metrics exclude stock‑based comp, transformation costs, Non‑Core legal/other, and other items; reconciliations provided in Tables A/B of the release .

Values retrieved from S&P Global.