Core Insights - Matrix Service Company reported a 12% year-over-year revenue increase to $210.5 million for the fiscal second quarter, driven by growth across all segments, particularly in utility and power infrastructure [2][4] - The company experienced a consolidated gross profit increase of 21% to $13.1 million, with gross margin improving to 6.2% from 5.8% a year earlier, despite a $3.6 million project-related charge impacting earnings [1][6] - Leadership changes were announced, with President and CEO John Hewitt set to step down on June 30, 2026, and COO Shawn Payne to assume the CEO role, credited with significant contributions to backlog growth and strategic planning [3][7] Financial Performance - Revenue rose to $210.5 million, an increase of $23.3 million or 12% from the prior year, with utility and power infrastructure contributing over 60% of this growth [2][4] - Adjusted EBITDA turned positive at $2.4 million, while the net loss narrowed to $0.9 million compared to a $5.5 million loss in the same quarter last year [6][7] - The company expects to achieve full-year revenue guidance of $875 million to $925 million, anticipating profitability in the second half of the fiscal year [5][8] Segment Performance - The Storage and Thermal Solutions segment represented 47% of consolidated revenue, with revenue of $99.9 million, but gross profit declined due to a $3.6 million charge [18] - The Utility and Power Infrastructure segment saw a 23% revenue increase to $75.4 million, with gross profit rising to $7.2 million [18] - The Process and Industrial Facilities segment reported revenue of $35.3 million, with gross profit improving to $1.2 million, although margins remain pressured [18] Market Outlook - The company has a backlog of $1.1 billion and an opportunity pipeline of $7.3 billion, although project awards were described as "muted" with a book-to-bill ratio of 0.8 [5][9] - Management noted a "once-in-a-generation surge" in demand for energy, power, and industrial infrastructure, particularly linked to AI data centers and natural gas as a transitional fuel [14][15] - The midstream market is experiencing strong natural gas activity, while crude activity remains muted, with a focus on specialty vessel work that offers better margins [16] Capital Allocation and Liquidity - The company ended the quarter with $224 million in cash and total liquidity of $258 million, with no outstanding debt, indicating a strong cash position to support growth [20] - Management is focused on returning to profitability and considering potential uses of cash for internal investments, inorganic opportunities, or share repurchases if no suitable opportunities arise [19]

Financial Performance - Consolidated revenue increased by $23.3 million, or 12%, to $210.5 million for the three months ended December 31, 2025, compared to $187.2 million in the same period of 2024[83]. - For the six months ended December 31, 2025, consolidated revenue increased by $69.6 million, or 20%, to $422.4 million, primarily due to increased volumes in Storage and Terminal Solutions and Utility and Power Infrastructure segments[96]. - Total revenue for the six months ended December 31, 2025, was $422.4 million, a 20% increase from $352.7 million in the same period last year[1]. Profitability - Gross profit rose by $2.2 million, or 21%, to $13.1 million, with a gross margin of 6.2% for the three months ended December 31, 2025, compared to 5.8% in the same period last year[84]. - Gross profit for the six months ended December 31, 2025, increased by $8.6 million, or 46%, with a gross margin of 6.5%, up from 5.3% in the same period last year[97]. - Total gross profit increased by $8.6 million, or 46%, reaching $27.3 million, with a gross margin improvement from 5.3% to 6.5%[1]. Segment Performance - Project awards for the Storage and Terminal Solutions segment totaled $124.5 million in Q2 of fiscal 2026, contributing to a total of $260.6 million for the six months ended December 31, 2025[76]. - The Utility and Power Infrastructure segment secured $15.8 million in project awards during Q2 of fiscal 2026, with a total of $50.5 million for the six months ended December 31, 2025[77]. - The Process and Industrial Facilities segment achieved $36.2 million in project awards in Q2 of fiscal 2026, totaling $53.2 million for the six months ended December 31, 2025[78]. - Utility and Power Infrastructure segment revenue increased by $14.3 million, or 23%, driven by higher volumes in power delivery and natural gas projects[91]. - Storage and Terminal Solutions revenue increased by $35.6 million, or 20%, driven by higher LNG peak shaving work, despite decreases in tanks and terminal work[2]. - Utility and Power Infrastructure revenue rose by $32.9 million, or 28%, primarily due to increased volumes for LNG peak shaving projects and power delivery work[4]. Backlog and Project Awards - The company reported a backlog of $1,127.1 million as of December 31, 2025, down from $1,161.0 million as of September 30, 2025, reflecting a decrease of approximately 2.9%[72]. - The book-to-bill ratio for the Storage and Terminal Solutions segment was 1.2x for the three months ended December 31, 2025, indicating a healthy project award to revenue recognized ratio[72]. - The company anticipates that bidding activity in LNG, NGLs, and ammonia projects will continue to be strong, positioning these areas as key growth drivers[76]. Cash Flow and Liquidity - Unrestricted cash and cash equivalents at December 31, 2025, totaled $199.0 million, with total liquidity amounting to $257.6 million[9]. - Liquidity decreased by $26.9 million during the six months ended December 31, 2025, primarily due to changes in working capital and capital expenditures[9]. - Cash flows used by operating activities were $(18.4) million for the six months ended December 31, 2025, compared to $45.5 million in the same period last year[15]. - Cash flows provided by operating activities were $(18.4) million for the six months ended December 31, 2025, compared to $45.5 million for the same period in 2024[116]. - Accounts receivable increased by $77.0 million in the six months ended December 31, 2025, negatively impacting cash flows from operating activities[116]. - Billings on uncompleted contracts in excess of costs and estimated earnings increased by $59.3 million, positively impacting cash flows from operating activities[116]. Operating Loss and Net Loss - The operating loss improved by $4.2 million, or 66%, to $(2.2) million for the three months ended December 31, 2025, compared to $(6.4) million in the same period last year[88]. - Net loss decreased by $4.6 million, or 84%, to $(0.9) million for the three months ended December 31, 2025, compared to $(5.5) million in the same period last year[83]. - For the six months ended December 31, 2025, the net loss was $4.6 million compared to a net loss of $14.8 million for the same period in 2024[116]. Strategic Decisions - The company removed certain projects from backlog due to increased risk profiles, reflecting a strategic decision to maintain a high-quality financial and commercial risk profile[79]. - The company has a competitive advantage due to its strong balance sheet, which provides financial capacity to pursue high-quality opportunities[68]. - The company noted that structural macrotrends, including the clean energy transition and increased power requirements, are expected to support durable growth in end markets[69]. Stock and Dividends - The company has never paid cash dividends on its common stock, and future dividend payments will depend on various factors including financial condition and capital requirements[121]. - The Stock Buyback Program allows for the repurchase of up to 2,707,175 shares, with 1,349,037 shares available for repurchase as of December 31, 2025[122]. Accounting Policies - There have been no material changes in critical accounting policies and estimates from those reported in the fiscal 2025 Annual Report[124].

Financial Data and Key Metrics Changes - Revenue for the second quarter of fiscal 2026 was $210.5 million, reflecting a 12% increase compared to the same period last year, driven by growth across all segments [19] - Consolidated gross profit increased by 21% to $13.1 million, with a gross margin of 6.2%, up from 5.8% in the prior year [19][20] - The company reported a net loss of $0.9 million, an improvement from a net loss of $5.5 million in the second quarter last year, with EPS at a loss of $0.03 compared to a loss of $0.20 [23] Business Line Data and Key Metrics Changes - The storage and thermal solutions segment generated revenue of $99.9 million, up from $95.5 million last year, but gross profit decreased to $4.8 million due to a $3.6 million charge [24][25] - The utility and power infrastructure segment saw revenue increase by 23% to $75.4 million, with gross profit rising by 112% to $7.2 million, reflecting improved project execution [26] - The process and industrial facility segment revenue was $35.3 million, an increase from $30.6 million last year, with gross profit improving to $1.2 million [27] Market Data and Key Metrics Changes - The overall opportunity pipeline expanded to $7.3 billion, a 10% increase from the previous quarter, driven by activity in the LNG and NGL markets, as well as mining and minerals [10][34] - Project awards during the second quarter were approximately $177 million, resulting in a book-to-bill ratio of 0.8, with expectations for awards to improve in the second half of the fiscal year [9][10] Company Strategy and Development Direction - The company is focused on capitalizing on a generational investment cycle in critical energy, power, and industrial infrastructure, positioning itself as a leading EPC contractor [11][14] - Matrix has strategically exited non-core businesses and invested in its core expertise in energy and industrial projects to drive sustainable growth [15] - The company aims to leverage its strong balance sheet and liquidity to support growth and potentially pursue share buybacks or acquisitions in the future [64] Management's Comments on Operating Environment and Future Outlook - Management highlighted a surge in demand for energy and industrial infrastructure, driven by the need for reliable power generation and the growth of AI data centers [12][13] - The company anticipates achieving its full-year revenue guidance of $875 million to $925 million, with profitability expected in the second half of the fiscal year [19][28] - Management acknowledged challenges in the market related to permitting and trade policy, but remains optimistic about the long-term demand for their services [10][35] Other Important Information - The company has a current backlog of $1.1 billion and expects to convert this backlog into revenue efficiently [9][22] - Cash increased by $7 million in the quarter, ending at $224 million, with no outstanding debt, indicating a strong liquidity position [28] Q&A Session Summary Question: Is the $3.6 million issue bleeding into the current quarter? - Management confirmed that they do not expect any similar issues to affect the third quarter and have a plan to resolve the current issue [31][33] Question: What is driving the growth in the opportunity pipeline? - The growth is primarily attributed to increased activity in the LNG and NGL markets, as well as mining and minerals [34] Question: What is the status of the backlog and market conditions? - Management noted that the award cycle has been muted due to uncertainty in energy markets and permitting processes, but they are tracking opportunities closely [35][39] Question: Are new jobs being written at target margins? - Management indicated that bookings are falling within targeted margin ranges, with no significant pressure on margins compared to previous years [69] Question: What are the prospects in the midstream gas market? - Management expressed optimism about opportunities in the natural gas sector, despite challenges related to permitting [56] Question: What is the company's positioning in the mining and minerals market? - Management highlighted a resurgence in the mining sector, with several projects being bid, supported by government investment in rare earth minerals [60][62]

Financial Data and Key Metrics Changes - Revenue for the second quarter of fiscal 2026 was $210.5 million, reflecting a 12% increase compared to the same period last year, driven by growth across all segments [19] - The company recorded a net loss of $0.9 million, an improvement from a net loss of $5.5 million in the prior year, with EPS at a loss of $0.03 compared to a loss of $0.20 [23] - Adjusted EBITDA improved to a positive $2.4 million, compared to a loss of $2.2 million in the second quarter last year [24] Business Line Data and Key Metrics Changes - The storage and thermal solutions segment generated revenue of $99.9 million, up from $95.5 million last year, but gross profit decreased by $2.5 million due to a $3.6 million charge [24][25] - The utility and power infrastructure segment saw revenue increase by 23% to $75.4 million, with gross profit rising by 112% to $7.2 million, reflecting strong project execution [26] - The process and industrial facility segment revenue was $35.3 million, up from $30.6 million, with gross profit improving to $1.2 million from $0.4 million [27] Market Data and Key Metrics Changes - The overall opportunity pipeline expanded to $7.3 billion, a 10% increase from the previous quarter, driven by activity in the LNG and NGL markets, as well as mining and minerals [10][33] - Demand for natural gas has surged by over 100%, while pipeline capacity has only increased by 50%, indicating a critical shortage of reliable power generation [11][12] Company Strategy and Development Direction - The company is focused on capitalizing on a generational investment cycle in energy, power, and industrial infrastructure, positioning itself as a leading EPC contractor [13][14] - Matrix has strategically exited non-core businesses and invested in its core expertise to strengthen its market position [15] - The company aims to return to profitability in the second half of the fiscal year, supported by a strong backlog and ongoing projects [19][28] Management's Comments on Operating Environment and Future Outlook - Management highlighted the challenges posed by permitting delays and uncertainty in trade policy, which have tempered project awards [10][34] - The leadership transition is set for June 30, 2026, with confidence in the new CEO's ability to drive future growth [7][8] - The company remains optimistic about the long-term demand for critical infrastructure, particularly in energy and mining sectors [12][60] Other Important Information - The company has a current backlog of $1.1 billion and is reiterating its full-year revenue guidance of $875 million to $925 million [9] - Cash increased by $7 million in the quarter, ending at $224 million, with no outstanding debt [28] Q&A Session Summary Question: Is the $3.6 million issue bleeding into the current quarter? - Management confirmed that they do not expect any similar issues to affect the third quarter [31][32] Question: What is driving the growth in the opportunity pipeline? - The growth is attributed to increased activity in the LNG and NGL markets, as well as mining and minerals [33] Question: What is the status of the backlog in the utility segment? - Management noted that the award cycle has been muted due to uncertainty in energy markets and permitting processes [34][35] Question: Are new jobs being written at target margins? - Management indicated that bookings are falling within targeted margin ranges, with no significant pressure on margins [68] Question: What are the prospects in the midstream gas market? - Management expressed optimism about opportunities in gas storage and LNG, despite permitting challenges [55][56]

Financial Data and Key Metrics Changes - Revenue for Q2 2026 was $210.5 million, an increase of 12% or $23.3 million compared to the same quarter last year [19] - EPS was a loss of $0.03, which included a negative impact of $0.13 from warranty responsibilities and other issues [9][23] - Consolidated gross profit increased by 21% to $13.1 million, with a gross margin of 6.2% compared to 5.8% in the prior year [19][20] Business Line Data and Key Metrics Changes - Storage and thermal solutions segment revenue was $99.9 million, up from $95.5 million last year, but gross profit decreased by $2.5 million due to a $3.6 million charge [24][25] - Utility and power infrastructure segment revenue increased by 23% to $75.4 million, with gross profit rising by 112% to $7.2 million, reflecting strong project execution [26] - Process and industrial facility segment revenue was $35.3 million, compared to $30.6 million last year, with gross profit improving to $1.2 million [27] Market Data and Key Metrics Changes - The overall opportunity pipeline expanded to $7.3 billion, driven by increased activity in LNG, NGL, and mining sectors [10] - Demand for natural gas has surged by over 100%, while pipeline capacity has only increased by 50%, indicating a critical shortage of reliable power generation [11][12] Company Strategy and Development Direction - The company is focused on capitalizing on a generational investment cycle in energy, power, and industrial infrastructure, positioning itself as a leading EPC contractor [13][14] - Strategic exits from non-core businesses and investments in core expertise are aimed at sustainable and profitable growth [14][15] - The company is actively pursuing opportunities in the mining and minerals sector, which is expected to see significant growth due to national security concerns [12][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate current market uncertainties and emphasized the importance of maintaining safety and mental health among employees [4][5] - The leadership transition is set for June 30, 2026, with Shawn Payne becoming the new CEO, ensuring continuity in strategic direction [6][7] - The company anticipates achieving full-year revenue guidance of $875 million to $925 million, with profitability expected in the second half of the fiscal year [19][28] Other Important Information - The company has a strong balance sheet with cash increasing by $7 million to $224 million, and no outstanding debt [28] - SG&A expenses decreased by 13% to $15.1 million due to organizational realignment and lower stock-based compensation [21] Q&A Session Summary Question: Is the $3.6 million issue bleeding into the current quarter? - Management believes they have captured the issues and do not expect any bleeding into the third quarter [31][33] Question: What is driving the growth in the opportunity pipeline? - Growth is primarily in the LNG and NGL markets, with increased activity in mining and electrical projects [34] Question: What is the status of the backlog? - The award cycle has been muted due to uncertainty in energy markets and permitting processes, but management is optimistic about future project awards [35][39] Question: Are new jobs being written at target margins? - The company is booking work within targeted margin ranges, with no significant pressure on margins compared to previous years [70]

INVESTOR PRESENTATION Q2 FY26 Results | February 2026 Safe Harbor Statement © Matrix Service Company. All rights reserved. 2 Investing in MTRX 3 • Experienced EPC general industrial contractor of scale with a 40+ year track record supporting energy, power, and industrial infrastructure customers • Provider of end-to-end services across entire asset life-cycle with niche capabilities in cryogenic storage for LNG, NGLs, and chemical applications as well as other cryogenic infrastructure such as thermal vacuum ...

Core Insights - Matrix Service (MTRX) reported a quarterly loss of $0.02 per share, which was better than the Zacks Consensus Estimate of a loss of $0.04, but still represents a significant earnings surprise of -157.14% compared to a loss of $0.20 per share a year ago [1] - The company posted revenues of $210.51 million for the quarter ended December 2025, missing the Zacks Consensus Estimate by 2.48%, but showing an increase from $187.17 million in the same quarter last year [2] - The stock has increased by approximately 22.4% since the beginning of the year, outperforming the S&P 500's gain of 1.1% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $232.63 million, and for the current fiscal year, it is $0.33 on revenues of $914.72 million [7] - The estimate revisions trend for Matrix Service was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Engineering - R and D Services industry, to which Matrix Service belongs, is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Performance - Revenue for Q2 FY2026 was $210.5 million, a 12% increase from $187.2 million in Q2 FY2025[6]. - Total revenue for the three months ended December 31, 2025, was $210,508 thousand, a 12.4% increase compared to $187,169 thousand for the same period in 2024[39]. - Revenue recognized for the six months ended December 31, 2025, was $422,392, with project awards totaling $364,316[43]. Profitability and Loss - Net loss per share improved to $(0.03) from $(0.20) in the prior year[9]. - The company reported a net loss of $894 thousand for the three months ended December 31, 2025, an improvement from a net loss of $5,533 thousand in the same period of 2024[37]. - Adjusted net loss for the three months ended December 31, 2025, was $(692), compared to a reported net loss of $(894)[48]. - Adjusted EBITDA for Q2 FY2026 was $2.4 million, compared to $(2.2) million in Q2 FY2025[9]. - Adjusted EBITDA for the three months ended December 31, 2025, was $2,420, a significant improvement from an adjusted EBITDA of $(2,183) for the same period in 2024[52]. Costs and Expenses - SG&A expenses decreased to $15.1 million from $17.3 million in the prior year, primarily due to cost reductions from organizational realignment[8]. - The company incurred restructuring costs of $202 thousand for the three months ended December 31, 2025, compared to $6,640 thousand in operating losses for the same period in 2024[39]. - Interest expense for the three months ended December 31, 2025, was $118, while interest income was $(1,543)[52]. - Depreciation and amortization for the three months ended December 31, 2025, amounted to $2,232[52]. Backlog and Project Awards - Total backlog as of December 31, 2025, was $1.1 billion, with project awards totaling $176.6 million in Q2 FY2026, resulting in a book-to-bill ratio of 0.8x[13]. - Backlog as of December 31, 2025, totaled $1,127,073, a decrease from $1,161,020 as of September 30, 2025[42]. - Project awards for the three months ended December 31, 2025, amounted to $176,561, while revenue recognized during the same period was $210,508, resulting in a book-to-bill ratio of 0.8x[42]. - The company’s total backlog includes only amounts expected to be recognized as revenue over the next 12 months for long-term maintenance contracts[41]. Financial Position - Total liquidity as of December 31, 2025, was $257.6 million, with no outstanding debt[17]. - Total assets increased to $650,204 thousand as of December 31, 2025, up from $600,256 thousand on June 30, 2025, representing an 8.5% growth[33]. - Cash and cash equivalents at the end of the period were $223,964 thousand, up from $181,777 thousand at the end of December 31, 2024, marking a 23.2% increase[37]. - Accounts receivable increased to $205,948 thousand as of December 31, 2025, compared to $154,994 thousand on June 30, 2025, a 32.8% rise[33]. - Total current liabilities rose to $495,143 thousand as of December 31, 2025, from $436,375 thousand on June 30, 2025, reflecting a 13.5% increase[35]. Guidance and Outlook - The company reaffirmed its full-year revenue guidance for FY2026, expecting revenue between $875 million and $925 million, representing a 14% to 20% increase from FY2025[19][20]. - The opportunity pipeline stands at $7.3 billion, reflecting strong long-term demand in energy and industrial infrastructure[3].

Core Viewpoint - Matrix Service Company has announced the appointment of Shawn P. Payne as Chief Operating Officer, effective immediately, and he will become President and Chief Executive Officer when John R. Hewitt steps down on June 30, 2026 [1][2]. Group 1: Leadership Transition - John R. Hewitt has been recognized for his leadership, expanding the company's market capabilities and transforming it from a focus on oil storage to a leading EPC industrial contractor [2][3]. - Shawn P. Payne has been with the company since 2012 and has held various leadership roles, including President of Engineering & Construction [3][4]. - The Board expresses confidence in Shawn's ability to lead the company into its next phase of value creation [3]. Group 2: Company Overview - Matrix Service Company is a leading specialty engineering and construction firm, committed to safety, quality, and integrity, providing infrastructure solutions across multiple end markets [5]. - The company is headquartered in Tulsa, Oklahoma, with offices in the United States, Canada, Australia, and South Korea, and reports financial results in three key operating segments: Storage and Terminal Solutions, Utility and Power Infrastructure, and Process and Industrial Facilities [6].

Core Insights - Matrix Service Company reported solid performance in the second quarter of fiscal 2026, with expectations for improving profitability driven by higher volumes in the Storage and Terminal Solutions segment [2][3] - The company reaffirmed its full-year revenue guidance of $875 million to $925 million, reflecting a 14% to 20% increase compared to fiscal 2025 [19][20] Financial Performance - Revenue for the second quarter of fiscal 2026 was $210.5 million, a 12% increase from $187.2 million in the same period of fiscal 2025 [5][8] - Gross profit increased to $13.1 million (6.2% margin) from $10.9 million (5.8% margin) year-over-year, despite a $3.6 million reduction in gross profit due to commissioning costs [6][9] - SG&A expenses decreased to $15.1 million from $17.3 million, attributed to cost reductions from organizational realignment [7] Segment Performance - The Storage and Terminal Solutions segment revenue rose 5% to $99.9 million, with a gross margin of 4.8%, down from 7.6% due to warranty-related costs [10] - The Utility and Power Infrastructure segment saw a 23% revenue increase to $75.4 million, with a gross margin improvement to 9.6% from 5.6% [11] - The Process and Industrial Facilities segment revenue increased to $35.3 million, with a gross margin of 3.5%, up from 1.2% [12] Backlog and Project Awards - The total backlog as of December 31, 2025, was $1.1 billion, with project awards totaling $176.6 million for the quarter, resulting in a book-to-bill ratio of 0.8x [13][14] - The Storage and Terminal Solutions segment had a book-to-bill ratio of 1.2x, indicating strong demand in that area [15] Liquidity and Financial Position - As of December 31, 2025, the company had total liquidity of $257.6 million, with no outstanding debt [17] - The company reported a net loss of $(0.9) million, or $(0.03) per share, compared to a net loss of $(5.5) million, or $(0.20) per share in the prior year [9]