Name: TEAM INC Q3 2025 Earnings Call
Start: 2025-11-13T16:00:00.000Z

Executive Summary

Revenue of $224.976M grew 6.7% year over year, with gross margin rising 8.4% to $58.044M; Adjusted EBITDA increased 28.6% to $14.541M and margin expanded 110 bps to 6.5% .
Net loss widened slightly to $(11.447)M (EPS $(2.68)), reflecting higher corporate costs tied to non-recurring professional fees and legal reserves .
Management lowered full-year Adjusted EBITDA growth guidance to ~13% from “at least 15%” previously, while introducing quantified revenue guidance of ~+5% and calling for Q4 y/y top-line growth and improved Adjusted EBITDA; focus remains on reaching ≥10% Adjusted EBITDA margin over time .
Balance sheet actions (September preferred stock) materially reduced debt and enhanced liquidity to $57.1M; net debt fell to $288.0M as of 9/30/25—an important catalyst for investor confidence in funding the transformation plan .

What Went Well and What Went Wrong

Segment growth across IHT (+5.7% y/y) and MS (+7.8% y/y); international/Canada revenue improved with IHT operating income up 16.9% and MS op income up 31.2% .
Adjusted SG&A leverage improved to 20.8% of revenue versus 21.7% in the prior year, evidencing cost discipline and operating efficiency .
Strategic financing: $75M preferred investment and facility amendments reduced debt and added optionality for an additional $30M, strengthening financial flexibility. “This investment recognizes the measurable progress...and reflects the significant opportunities that remain” — CEO Keith Tucker .

Corporate and shared support services costs rose $4.9M (+43.6%) due to non-recurring professional fees and legal reserves, compressing consolidated operating income y/y .
Sequential revenue declined from Q2 to Q3 (seasonality), while cash flow remains a focus given year-to-date working capital headwinds; Q3 CFO noted negative YTD FCF from refinancing and AR/AP dynamics expected to reverse in Q4 .
Full-year Adjusted EBITDA growth guide reduced from ≥15% (Q1/Q2) to ~13% (Q3), signaling tempered expectations despite ongoing margin initiatives .

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$198.655	$248.026	$224.976
EPS ($USD)	$(6.61)	$(0.95)	$(2.68)
Gross Margin ($USD Millions)	$47.266	$68.089	$58.044
Gross Margin (%)	23.8%	27.5%	25.8%
Net Income ($USD Millions)	$(29.718)	$(4.266)	$(11.447)
Adjusted EBITDA ($USD Millions)	$5.310	$24.471	$14.541
Adjusted EBITDA Margin (%)	2.7%	9.9%	6.5%
Cash from Operations ($USD Millions)	$(28.661)	$(3.344)	$3.883

Metric	Q1 2025	Q2 2025	Q3 2025
YoY Revenue Growth (%)	(0.5)%	8.5%	6.7%

Segment breakdown (Q3 2025):

Segment	Revenue ($USD Thousands)	Operating Income ($USD Thousands)
Inspection & Heat Treating (IHT)	113,778	11,522
Mechanical Services (MS)	111,198	5,853
Corporate & Shared Support Services	—	(16,033)
Total	224,976	1,342

KPIs and Balance Sheet/CF:

KPI	Q1 2025	Q2 2025	Q3 2025
Adjusted SG&A (% of revenue)	22.7%	18.9%	20.8%
Free Cash Flow ($USD Millions)	$(30.067)	$(6.254)	$1.044
Total Liquidity ($USD Millions)	$29.1	$49.3	$57.1
Net Debt ($USD Millions)	$336.8	$349.5	$288.0
Total Debt ($USD Millions)	$353.6	$370.2	$302.8

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	Directional: y/y top-line growth (no % specified)	~+5% y/y	Introduced quantified guidance
Adjusted EBITDA	FY 2025	≥+15% y/y	~+13% y/y	Bold: lowered
Revenue & Adj. EBITDA	Q4 2025	—	y/y top-line growth; improved Adj. EBITDA	New directional
Adjusted EBITDA Margin Target	LT	≥10% target	≥10% target; progressing	Maintained

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Balance Sheet actions	March refinancing lowered blended rate >100 bps; maturities extended to 2030; liquidity improving	$75M preferred closed; ~$67M debt repaid; delayed draw up to $30M; option to issue through Sept 2027	Strengthening
Cost savings & SG&A discipline	Launched next phase; targeted ≥$10M annualized savings ; ~$6M savings expected in 2H25	Additional actions identified; implementation starting in Q4	Continuing
Canada/international performance	Expected improvements; Canada growth emerging	Canada revenue +25% across segments; continued improvement expected	Improving
End-market focus	Midstream revenue +~15% Q1; diversification emphasized	Focused on higher-margin markets: power, aerospace, LNG; increasing wallet share	Strategic focus
Tariffs/macro	Monitoring tariff policy; supply chain adjustments	Continued monitoring; cost mitigation plans	Ongoing
EBITDA margin target	≥10% target reiterated	≥10% target reiterated; “meaningful progress” expected	Maintained
Q&A format	No Q&A hosted	No Q&A hosted	Unchanged

“Adjusted EBITDA increased by 28.6% to $14.5 million, our best third quarter performance since 2016… underscoring the progress we’ve made toward margin improvement and increased cash flow generation” — CEO Keith D. Tucker .
“These actions have helped to increase our liquidity… $57.1 million… [and] pay down about $67 million of debt” — CFO Nelson M. Haight .
“We have line of sight to full year 2025 revenue growth of approximately 5% and adjusted EBITDA growth of approximately 13%” — CEO Keith D. Tucker .

The company did not host questions during the Q3 or recent earnings calls, opting for prepared remarks only .

S&P Global consensus for Q3 2025 EPS and revenue was unavailable in our retrieval; GetEstimates returned actuals only with no consensus values or counts for EPS or revenue. As a result, we could not benchmark “beat/miss” vs Street for Q3, Q2, or Q1 (Values retrieved from S&P Global).*

Revenue growth and margin expansion continued, with IHT and U.S. MS driving the quarter; Canada operations are now a positive contributor, supporting the multi-quarter turnaround narrative .
Bold: full-year Adjusted EBITDA growth guidance reduced to ~13% from ≥15% earlier; use caution on near-term estimate models despite improved Q4 outlook .
Liquidity and net debt profile improved post-preferred financing; optionality remains via the $30M delayed draw, potentially smoothing seasonal working capital demands .
Corporate/non-recurring costs weighed on operating income; watch for normalization as management expects fewer non-recurring fees and working capital reversal in Q4 to support FCF .
The ≥10% Adjusted EBITDA margin target remains the strategic North Star, with actions underway; continued SG&A leverage and mix shift to higher-margin markets (power, aerospace, LNG) are the levers .
Seasonal sequential volatility is evident (Q2 to Q3), but y/y trajectory is constructive; investors should track Q4 execution on top-line and cash generation .
Balance sheet progress and operational discipline are key near-term stock drivers; quantified revenue guidance (~5% y/y) increases transparency and may help anchor expectations .