Core Insights - Matrix Service Company reported improved first-quarter results for fiscal 2026, driven by disciplined execution across its Storage & Terminal Solutions and Utility & Power Infrastructure segments [2][4] - The company has a robust opportunity pipeline of $6.7 billion and secured over $187 million in new awards during the quarter, indicating strong demand in the specialty engineering and construction sector [3][9] - The company reaffirmed its full-year revenue guidance, expecting revenue between $875 million and $925 million, representing a 14% to 20% increase compared to fiscal 2025 [19][20] Financial Summary - First-quarter fiscal 2026 revenue was $211.9 million, a 28% increase from $165.6 million in the same period of fiscal 2025 [5][9] - Gross margin improved to $14.2 million (6.7%) compared to $7.8 million (4.7%) in the prior year, attributed to better project execution and increased revenue volumes [6][9] - The company reported a net loss of $3.7 million ($0.13 per share), an improvement from a net loss of $9.2 million ($0.33 per share) in the first quarter of fiscal 2025 [8][9] Segment Performance - The Storage and Terminal Solutions segment saw revenue increase by 40% to $109.5 million, driven by higher work volumes for LNG storage and specialty vessel projects [10] - The Utility and Power Infrastructure segment's revenue rose by 33% to $74.5 million, benefiting from increased work in power delivery and natural gas projects [11] - The Process and Industrial Facilities segment experienced a revenue decline to $27.9 million, primarily due to lower volumes in thermal vacuum chamber projects [12] Backlog and Awards - The total backlog as of September 30, 2025, was $1.2 billion, with project awards totaling $187.8 million for the quarter, resulting in a book-to-bill ratio of 0.9x [13][9] - The Storage and Terminal Solutions segment had a book-to-bill ratio of 1.2x, indicating strong demand and project activity [13][9] Financial Position - As of September 30, 2025, the company had total liquidity of $248.9 million, with no outstanding debt [15][9] - The company reported a total of $192.3 million in unrestricted cash and cash equivalents [15] Guidance - The company reaffirmed its revenue guidance for fiscal year 2026, expecting revenue between $875 million and $925 million, reflecting a significant increase from the previous fiscal year [19][20]

Core Points - Matrix Service Company will release its first quarter Fiscal 2026 results on November 5, 2025, after market close [1] - A conference call to discuss the financial results and forward outlook is scheduled for November 6, 2025, at 10:30 a.m. Eastern time [1] Company Overview - Matrix Service Company is a leading North American industrial engineering, construction, and maintenance contractor headquartered in Tulsa, Oklahoma, with offices across the United States, Canada, Australia, and South Korea [3] - The company operates in three key segments: Utility and Power Infrastructure, Process and Industrial Facilities, and Storage and Terminal Solutions [4] Sustainability and Recognition - The company emphasizes sustainability and strong Environment, Social and Governance (ESG) practices, ranking among the Top Contractors by Engineering-News Record [5] - Matrix has been recognized for its Board diversification and is an active signatory to CEO Action for Diversity and Inclusion, also noted as a Great Place to Work® [5]

Core Insights - The article compares two stocks in the Engineering - R and D Services sector: Matrix Service (MTRX) and Aecom Technology (ACM), focusing on which stock offers better value for investors [1]. Valuation Metrics - Matrix Service has a Zacks Rank of 2 (Buy), indicating a stronger earnings outlook compared to Aecom Technology, which has a Zacks Rank of 4 (Sell) [3]. - MTRX has a forward P/E ratio of 19.47, while ACM's forward P/E is 23.55, suggesting MTRX is more attractively priced [5]. - The PEG ratio for MTRX is 1.08, compared to ACM's 1.96, indicating MTRX has a better balance of price to expected earnings growth [5]. - MTRX's P/B ratio is 2.54, significantly lower than ACM's P/B of 6.55, further supporting MTRX's valuation attractiveness [6]. - Based on these metrics, MTRX holds a Value grade of A, while ACM has a Value grade of C, highlighting MTRX as the superior option for value investors [6][7]. Earnings Outlook - MTRX has experienced stronger estimate revision activity, which is a positive indicator for its future earnings potential compared to ACM [7].

Core Insights - Pomerantz LLP is investigating claims on behalf of investors of Matrix Service Company regarding potential securities fraud or unlawful business practices by the company and its officers [1][3] Financial Performance - For the fiscal year 2025 fourth quarter, Matrix reported non-GAAP earnings per share of -$0.28, missing consensus estimates by $0.29 [3] - The company's revenue for the quarter was $216.4 million, which fell short of consensus estimates by $15.85 million [3] - The fourth quarter net income was impacted by a total of $14.9 million due to several issues, including labor cost overruns, contract disputes, unfavorable court decisions, and restructuring costs [3] Stock Market Reaction - Following the announcement of the financial results, Matrix's stock price decreased by $1.98 per share, or 13.89%, closing at $12.27 per share on September 10, 2025 [3]

Core Insights - Matrix Service Company has released its Fiscal 2025 Sustainability Report, emphasizing its commitment to sustainability and the importance of infrastructure in meeting energy and industrial demands in North America [1][2] Group 1: Sustainability Commitment - The company views sustainability as a foundational principle for its strategic approach and value creation [2] - The report highlights significant progress in returning to profitability, supported by a strong project backlog and advancements in multi-year projects [2] Group 2: Stakeholder Engagement - Matrix Service Company is focused on continuous improvement and addressing the diverse needs of stakeholders, including shareholders, employees, clients, suppliers, and communities [3] - The company aims to empower future generations while building infrastructure that meets current demands [3] Group 3: Operational Segments and Locations - The company operates in three key segments: Utility and Power Infrastructure, Process and Industrial Facilities, and Storage and Terminal Solutions [5] - Matrix Service Company is headquartered in Tulsa, Oklahoma, with offices across the United States, Canada, Australia, and South Korea [5] Group 4: Safety and Employee Development - Safety is a top priority, with significant improvements in overall safety performance and initiatives to address mental health stigma in the construction industry [5] - Enhanced recruitment strategies and comprehensive training and development opportunities have been implemented for the workforce [5] Group 5: Environmental Initiatives - The company has assessed climate-related risks and opportunities in partnership with third-party experts, affirming its ESG strategy [5] - Matrix has reported on material Scope 3 emissions, demonstrating its commitment to transparency and accountability in environmental practices [5] - Ongoing efforts are in place to ensure compliance with ESG-specific regulatory reporting [5]

Core Viewpoint - Pomerantz LLP is investigating potential securities fraud and unlawful business practices involving Matrix Service Company and its officers or directors [1] Financial Performance - For Q4 of fiscal year 2025, Matrix reported non-GAAP earnings per share of -$0.28, missing consensus estimates by $0.29 [2] - Revenue for the quarter was $216.4 million, falling short of consensus estimates by $15.85 million [2] - The company cited a $14.9 million impact on net income due to several issues, including labor cost overruns, contract disputes, unfavorable court decisions, and restructuring costs [2] Stock Market Reaction - Following the announcement of the financial results, Matrix's stock price dropped by $1.98 per share, or 13.89%, closing at $12.27 per share on September 10, 2025 [2]

Core Insights - Matrix Services (NASDAQ: MTRX) experienced a significant decline in stock price, closing nearly 14% lower after a disappointing quarterly earnings report, despite the S&P 500 rising by 0.3% [1] Financial Performance - For the fiscal fourth quarter of 2025, Matrix reported revenue of just over $216 million, reflecting a 14% year-over-year increase. However, the company doubled its non-GAAP adjusted net loss to $7.8 million ($0.28 per share) compared to a $3.9 million loss in the same quarter last year [2][3] - Analysts had anticipated better performance, with consensus estimates for revenue exceeding $286 million and an expected adjusted net income of $0.33 per share [3] Revenue Drivers and Challenges - The increase in revenue was attributed to a 6% rise in total project awards, driven by strong demand in the utility and power infrastructure segment [3] - The bottom line was negatively impacted by labor cost overruns on an oil industry project and restructuring expenses [4] Future Guidance - Matrix provided annual revenue guidance for the new fiscal year, expecting to earn between $875 million and $925 million, which falls short of the average analyst projection of $945.5 million [5]

Revenue and Profitability - Revenue for fiscal 2025 increased by $41.1 million, or 6%, to $769.3 million, driven primarily by higher volumes in the Storage and Terminal Solutions and Utility and Power Infrastructure segments [167]. - Total revenue for fiscal 2025 was $769.3 million, an increase of $41.1 million or 6% compared to fiscal 2024 [173]. - Gross profit for fiscal 2025 decreased by $0.8 million, or 2%, with a gross margin of 5.2%, down from 5.6% in fiscal 2024 [168]. - Total gross profit for fiscal 2025 was $39.7 million, a decrease of $796,000 or 2% compared to fiscal 2024 [173]. - Utility and Power Infrastructure gross profit increased by $7.7 million, or 83%, with a gross margin of 6.8% compared to 5.0% in fiscal 2024 [177]. Project Awards and Backlog - Project awards during fiscal 2025 totaled $726.0 million, resulting in a book-to-bill ratio of 0.9x and maintaining a backlog of $1.4 billion [156]. - The backlog as of June 30, 2025, was $1.38 billion, down from $1.43 billion a year earlier, with significant contributions from the Storage and Terminal Solutions segment [160]. - Approximately 55% of the total backlog reported as of June 30, 2025, is expected to be recognized as revenue within fiscal 2026 [165]. - The Utility and Power Infrastructure segment booked $215.4 million in project awards during fiscal 2025, with strong long-term prospects driven by increasing electrical demand [163]. - The Process and Industrial Facilities segment secured $172.9 million in project awards, including a five-year renewal of a refinery maintenance contract [164]. Cash Flow and Liquidity - Cash flows provided by operating activities were $117.5 million for fiscal 2025, up from $72.6 million in fiscal 2024 [189]. - Unrestricted cash and cash equivalents at June 30, 2025, totaled $224.6 million, with total liquidity of $284.5 million, an increase of $114.9 million during fiscal 2025 [182]. - Cash flows used by investing activities amounted to $7.4 million in fiscal 2025, primarily due to capital expenditures for improvements at a fabrication facility in Bakersfield, California [193]. - Financing activities used $10.4 million of cash in fiscal 2024, mainly due to $10.0 million in advances and $20.0 million in net repayments under the ABL facility [195]. Restructuring and Costs - Restructuring costs for fiscal 2025 amounted to $3.6 million, reflecting organizational restructuring efforts [169]. - Costs and estimated earnings in excess of billings on uncompleted contracts (CIE) decreased by $4.1 million, while billings on uncompleted contracts in excess of costs and estimated earnings (BIE) increased by $152.3 million, contributing positively to cash flows from operating activities [192]. Net Loss and Financial Position - The company reported a net loss of $29.5 million for fiscal 2025, compared to a net loss of $25.0 million in fiscal 2024 [190]. - The borrowing base under the ABL Facility was $64.6 million as of June 30, 2025, with no borrowings outstanding [188]. Stock and Dividends - The company has never paid cash dividends on its common stock, and future dividend payments will depend on the terms of the ABL Facility and other financial conditions [196]. - The stock repurchase program allows for the repurchase of up to 2,707,175 shares, with 1,349,037 shares available for repurchase as of June 30, 2025 [197]. - The company had 277,731 treasury shares as of June 30, 2025, intended for use in equity awards and the Employee Stock Purchase Plan [198]. Goodwill and Impairment - The company performed its annual goodwill impairment test as of May 31, 2025, resulting in no impairment [211]. Future Commitments and Risks - Future payments for operating leases were $25.9 million as of June 30, 2025, with $5.8 million payable within the next 12 months [199]. - A 100-basis point (or 1%) increase or decrease in the interest rate would increase or decrease interest income by approximately $2.5 million per year [215]. - The applicable margin for Base Rate and Canadian Prime Rate borrowings is between 1.00% to 1.50%, and for Term SOFR borrowings, it is between 2.00% and 2.50% [215]. - The company has not entered into derivative instruments to hedge foreign currency risk, but evaluates the materiality of foreign currency exposure periodically [218]. - A 10% unfavorable change in the Canadian Dollar against the U.S. Dollar would not have had a material impact on the financial results for the fiscal year ended June 30, 2025 [218]. - The company has exposure to materials derived from commodities such as steel plate, steel pipe, and copper, which are key materials used [219]. - The company mitigates risks associated with commodity price exposure by procuring materials upon contract execution and negotiating contract provisions [219]. - Movements in the Canadian Dollar to U.S. Dollar exchange rate have not significantly impacted the company's results historically [217]. - The company has subsidiaries in Canada and South Korea, using Canadian Dollar and South Korean Won as functional currencies, respectively [216]. - Further growth in Canadian, South Korean, and/or Australian operations could impact financial results due to exchange rate fluctuations [217].

Financial Data and Key Metrics Changes - The company reported revenue of $216.4 million for the fourth quarter of fiscal 2025, with an EPS loss of $0.40 and adjusted EBITDA loss of $4.8 million [18] - Revenue was impacted by a $6.4 million reduction due to lowered recovery expectations on a legacy project, resulting in a total revenue decrease of $6.4 million [22] - The revenue run rate increased by 31% over the fiscal year, supporting positive earnings potential [23] Business Line Data and Key Metrics Changes - Storage and Terminal Solutions segment revenue increased by 37% to $96.1 million, driven by higher volumes in specialty vessel and LNG storage projects [24] - Utility and Power Infrastructure segment revenue rose by 12% to $73 million, with gross margin improving to 9.1% due to strong project execution [25] - Process and Industrial Facility segment revenue decreased to $47.3 million, primarily due to the completion of a large renewable diesel project last year, with gross margin dropping to 5.9% [26] Market Data and Key Metrics Changes - The company entered fiscal 2026 with a backlog of approximately $1.4 billion, supported by project awards totaling $186.3 million in the fourth quarter [26] - The utility and power infrastructure segment had a strong quarter with $121.9 million in awards and a book-to-bill ratio of 1.7 [26] Company Strategy and Development Direction - The company is focused on a strategy of winning, executing, and delivering, with an emphasis on safety, quality, and operational efficiency [11][12] - The opportunity pipeline stands at $5.9 billion, with a focus on both current business and new high-growth markets [14] - The company aims to achieve durable, return-focused growth through organic means supplemented by targeted M&A activities [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in returning to profitability, supported by a quality backlog and strong revenue projections for fiscal 2026 [36] - The company anticipates fiscal year 2026 revenue to be between $875 million and $925 million, representing a year-over-year growth of 17% at the midpoint [16] - Management highlighted the importance of maintaining a strong financial position and leveraging ongoing infrastructure investments for growth [17] Other Important Information - The company incurred $3.4 million in restructuring costs aimed at improving operational efficiencies, which is expected to reduce annual overhead costs by approximately $12 million [21] - Cash balance increased by $109 million to $249.6 million as of June 30, 2025, with available liquidity rising to $284.5 million [27] Q&A Session Summary Question: Are there still delays in project timelines due to economic uncertainty? - Management acknowledged an overhang in the industry but noted that only a few projects were directly impacted, with ongoing smaller projects continuing to come through the pipeline [32] Question: What is the outlook for the book-to-bill ratio exiting fiscal 2026? - Management indicated that there is potential for a near 1.0 book-to-bill ratio, with opportunities for both large and smaller projects available [34][35] Question: What is the confidence level for returning to profitability? - Management expressed high confidence in returning to profitability, citing the quality of the backlog and projected revenue levels [36] Question: How much of the cash position is from customer advances? - Management clarified that the cash position has built considerably, with a portion from upfront payments on long-term projects, and emphasized a strong balance sheet [37] Question: Are there any remaining COVID-era legacy jobs in dispute? - Management confirmed that the legacy pandemic issues are largely resolved, with only one significant project still in dispute [44] Question: What are the expected cost savings from restructuring actions? - Management indicated that restructuring actions are expected to yield approximately $12 million in cost savings, with SG&A costs projected to decrease in fiscal 2026 [48]

Financial Data and Key Metrics Changes - Revenue for the fourth quarter of fiscal 2025 was $216.4 million, with an EPS loss of $0.40 and adjusted EBITDA loss of $4.8 million [18] - The revenue growth for the year was 31% compared to the start of fiscal 2025, but the overall revenue was below expectations due to delays and issues in certain service lines [23][9] - The company expects fiscal year 2026 revenue to be between $875 million to $925 million, representing a year-over-year growth of 17% at the midpoint of the range [16] Business Line Data and Key Metrics Changes - Storage and Terminal Solutions segment revenue increased 37% to $96.1 million, driven by higher volumes in specialty vessel and LNG storage projects [24] - Utility and Power Infrastructure segment revenue rose 12% to $73 million, benefiting from natural gas heat shaving projects, with gross margin improving to 9.1% [25] - Process and Industrial Facility segment revenue decreased to $47.3 million, primarily due to the completion of a large renewable diesel project last year, with gross margin dropping to 5.9% [26] Market Data and Key Metrics Changes - The company maintained a near-record backlog of approximately $1.4 billion, with project awards totaling $186.3 million in the fourth quarter, resulting in a book-to-bill ratio of 0.9 [26] - The utility and power infrastructure segment had a strong quarter with $121.9 million in awards and a book-to-bill of 1.7, indicating robust demand in that market [26] Company Strategy and Development Direction - The company is focused on a strategy built around three pillars: win, execute, and deliver, emphasizing safety, quality, and operational efficiency [11][12] - The strategic focus includes pursuing awards with the right risk profile, maintaining strong client relationships, and capitalizing on growth opportunities in LNG storage, electrical infrastructure, and advanced manufacturing [13][14] - The company aims to achieve durable, return-focused growth through organic means supplemented by targeted M&A activities [15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that while fiscal 2025 results did not meet initial expectations, the underlying performance of the business remains strong, with a focus on improving operational efficiencies [8][29] - The company is optimistic about entering fiscal 2026 with a strong backlog and a healthy bidding environment, expecting continued revenue growth [16][29] - Management highlighted the importance of adapting to economic uncertainties and maintaining strong relationships with clients to navigate challenges [32][33] Other Important Information - The company reported significant improvements in safety metrics, with TRIR improving from 0.91 to 0.51 and DART rate from 0.28 to 0.21 in fiscal 2025 [5][6] - Cash balance increased by $109 million to $249.6 million as of June 30, 2025, with available liquidity rising to $284.5 million [27][28] Q&A Session Summary Question: Are there still delays in project timelines due to economic uncertainty? - Management noted an overhang in the industry but indicated that only a few projects were directly impacted, with ongoing energy-related projects remaining strong [32] Question: What is the outlook for the book-to-bill ratio by the end of fiscal 2026? - Management expressed confidence in achieving a near 1.0 book-to-bill ratio, with opportunities for smaller projects in the pipeline [34][35] Question: What is the timeline for returning to profitability? - Management is confident in returning to profitability, supported by a quality backlog and projected revenue levels [36] Question: How much of the cash position is from customer advances? - The cash position has built considerably, with a portion from upfront payments on long-term projects, and the balance sheet is strong [37] Question: Are there any remaining legacy COVID-era projects in dispute? - Management indicated that the current dispute is the final material legacy issue from the pandemic [44] Question: What are the expected cost savings from restructuring actions? - The restructuring is expected to yield about $12 million in annual savings, with SG&A costs projected to decrease in fiscal 2026 [48]