Delivering Record Revenue, Profitability and Bookings Raising Full-Year Fiscal 2026 Guidance AUSTIN, TX / ACCESS Newswire / February 5, 2026 / Thermon Group Holdings, Inc. (NYSE:THR) ("Thermon" or the "Company"), a diversified industrial technology company and a global leader in industrial process heating solutions, today announced consolidated results for the third quarter ("Q3 2026") of the fiscal year ending March 31, 2026 ("Fiscal 2026"). THIRD QUARTER 2026 HIGHLIGHTS (all comparisons versus the prior y ...

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Core Viewpoint - Thermon Group Holdings, Inc. is set to release its consolidated financial results for the third quarter of the fiscal year ending March 31, 2026, on February 5, 2026, before market opening [1] Group 1: Financial Results Announcement - The earnings release will be followed by a conference call hosted by key executives including the President and CEO, CFO, and COO at 10:00 a.m. Central Time [1] - The conference call will be available via webcast on Thermon's investor relations website [1] - Investment professionals can participate in the Q&A session by dialing specific numbers for the U.S./Canada and international callers [1] Group 2: Company Overview - Thermon is a diversified industrial technology company and a global leader in industrial process heating, temperature maintenance, environmental monitoring, and temporary power distribution solutions [3] - The company focuses on delivering engineered solutions that enhance operational awareness, safety, reliability, and efficiency, aiming for the lowest total cost of ownership [3] - Thermon is headquartered in Austin, Texas, and more information can be found on their official website [3]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, with the aim of buying high and selling higher, capitalizing on established price movements [1] Company Overview: Thermon Group (THR) - Thermon Group currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance in the market [3] Price Performance - Over the past week, THR shares increased by 2.84%, matching the performance of the Zacks Instruments - Control industry [5] - In a longer timeframe, THR's monthly price change is 15.91%, outperforming the industry's 13.67% [5] - Over the last quarter, THR shares rose by 42.95%, and over the past year, they increased by 27.58%, while the S&P 500 only moved 3.47% and 13.15%, respectively [6] Trading Volume - THR's average 20-day trading volume is 400,775 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, two earnings estimates for THR have been revised upwards, increasing the consensus estimate from $1.85 to $2.07 [9] - For the next fiscal year, one estimate has moved upwards with no downward revisions during the same period [9] Conclusion - Considering the strong momentum indicators and positive earnings outlook, THR is identified as a 2 (Buy) stock with a Momentum Score of A, making it a promising near-term investment option [11]

Core Insights - The research focuses on identifying asymmetrical risk/reward profiles within five key market themes: Semiconductor Supply Chain, Grid/Power/Energy Transition, Critical Materials, Biotechnology, and Artificial Intelligence/Cloud Computing [1] Group 1 - The investment strategy combines deep value investing principles with a forward-looking approach to uncover high-potential opportunities in the market [1] - The aim is to provide valuable perspectives and foster a community of investors who can share knowledge and insights [1]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Thermon Group (THR) currently holding a Momentum Style Score of A [2][3] Group 2: Thermon Group Performance - Thermon Group has a Zacks Rank of 2 (Buy), indicating strong potential for outperformance in the market [3] - Over the past week, THR shares increased by 19.07%, while the Zacks Instruments - Control industry remained flat [5] - In a longer timeframe, THR shares rose by 36.75% monthly, significantly outperforming the industry's 0.62% [5] - Over the last quarter, THR shares increased by 37.02%, and by 19.57% over the past year, compared to the S&P 500's gains of 7.27% and 15.21%, respectively [6] Group 3: Trading Volume and Earnings Outlook - THR's average 20-day trading volume is 221,969 shares, which is a useful indicator of market interest [7] - In terms of earnings estimates, THR has seen 2 upward revisions in the past two months, raising the consensus estimate from $1.85 to $2.06 [9] - For the next fiscal year, there has been 1 upward revision with no downward revisions, indicating positive earnings outlook [9] Group 4: Conclusion - Considering the positive momentum indicators and earnings outlook, Thermon Group is positioned as a 2 (Buy) stock with a Momentum Score of A, making it a strong candidate for near-term investment [11]

Revenue and Sales Performance - Revenue for YTD 2026 was generated approximately 44% from outside the United States, compared to 50% in YTD 2025[104] - Sales for the three months ended September 30, 2025, increased by 15% to $131.7 million compared to $114.6 million in 2024, driven by higher demand and contributions from acquisitions[121] - For the six months ended September 30, 2025, sales increased by 5% to $240.6 million compared to $229.8 million in 2024[135] - EMEA segment revenue doubled to $18.1 million, reflecting a 100% year-over-year increase, largely due to the F.A.T.I. acquisition[123] Profitability and Income - Gross profit rose by 20% to $61.1 million, with a gross margin improvement of 200 basis points to 46.4%[121] - Net income for the three months ended September 30, 2025, increased by 58% to $14.9 million, up from $9.5 million in 2024[121] - Gross profit for the six-month period rose by 8% to $109.1 million, with a gross margin improvement of 120 basis points to 45.3%[135] Costs and Expenses - Incremental direct tariff costs incurred were approximately $0.7 million for the three months and $1.6 million for the six months ended September 30, 2025[115] - Selling, general and administrative expenses increased by 14% to $35.5 million, but as a percentage of sales, it slightly decreased to 27.0% from 27.3%[121] - Interest expense decreased by 28% to $2.0 million due to a lower average outstanding principal balance and reduced interest rates[121] Cash Flow and Capital Expenditures - Free Cash Flow for YTD 2026 totaled $12.7 million, a decrease from $15.4 million in YTD 2025, primarily due to increased investments in working capital[162] - Operating cash flows decreased by $3.054 million in YTD 2026 compared to YTD 2025, attributed to higher investments in working capital[154] - The company expects capital expenditures to be approximately 2.5% to 3.0% of revenue in fiscal 2026[153] Financial Position and Debt - As of September 30, 2025, the company had $29.7 million in cash and cash equivalents and $99.4 million in available borrowing capacity under its Revolving Credit Facility[150] - The company had $125.0 million of outstanding principal under its Term Loan Facilities as of September 30, 2025, with a 1% change in interest rate impacting annual interest expense by $1.4 million[174] - In YTD 2026, the company had a net interest expense decrease due to a lower average debt balance of $139.3 million compared to $169.1 million in YTD 2025, and a reduced average interest rate of 5.79% versus 6.87%[145] Tax and Regulatory - The effective tax rate for the company was 24.1% in YTD 2026, down from 25.0% in YTD 2025, influenced by discrete tax items[147] Strategic Initiatives and Growth - The company aims to strategically pursue emerging growth opportunities, including acquisitions in diverse regions[98] - The company has a diversified product offering with over 250 products, software, and services across multiple brands[102] - The company entered into an amendment to its existing Credit Agreement on July 24, 2025, to align with long-term strategic initiatives[117] Risks and Challenges - The company is exposed to commodity price risks due to reliance on market prices for raw materials without long-term purchase commitments or hedging instruments[175] - Recent periods have seen shortages in certain raw materials and increased costs attributed to tariffs, alternative suppliers, higher freight costs, and increased lead times[175] - The company cannot guarantee the ability to mitigate temporary raw material shortages or pass cost increases to customers, which may adversely affect operational results[176] - A 10% appreciation of the U.S. dollar relative to the Canadian dollar would result in a net decrease in net income of $1.4 million for YTD 2026[170] Currency and Foreign Exchange - The company had approximately $14.6 million in notional forward contracts to mitigate foreign currency exchange rate fluctuations as of September 30, 2025[172] - The unrealized effects of foreign currency translations resulted in gains of $12.1 million in YTD 2026, compared to $1.7 million in YTD 2025[173]

Financial Data and Key Metrics Changes - Reported revenues increased by 15% year-over-year, reaching $131.7 million for the quarter [16] - Adjusted EBITDA rose by 29% to $30.6 million, with adjusted EBITDA margins at 23.2%, up from 20.8% last year [17][18] - Gross profit increased by 20% to $61 million, resulting in a gross margin of 46%, up from 44% [17] - GAAP earnings per share increased by 61% to $0.45, while adjusted earnings per share rose by 45% to $0.55 [18] Business Line Data and Key Metrics Changes - Large project revenue was $24.7 million, a 41% increase year-over-year, driven by several CapEx projects moving to execution [17] - OPEX revenues were $107 million, up 10% year-over-year, representing 81% of total revenues [16][17] - Organic revenue growth, excluding FOTI, was 9% year-over-year [16] Market Data and Key Metrics Changes - U.S. land sales increased by 8%, while Canada saw a 10% increase in revenue [19] - EMEA revenue doubled, driven by strong performance in organic business and contributions from FOTI [19] - APAC experienced a 4% decline, primarily due to uncertainties surrounding global trade policies with China [19] Company Strategy and Development Direction - The company is focused on a 3D strategy of decarbonization, digitization, and diversification to drive organic growth [9][25] - The establishment of a global engineering center in Mexico aims to handle increased project workloads [8] - The company is actively pursuing opportunities in the data center market, particularly with liquid-cooled data centers and medium voltage heaters [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong second-half results and raised full-year 2026 financial guidance [23][24] - The company is well-positioned to benefit from favorable secular demand trends, including reshoring, electrification, and decarbonization [7][25] - Management noted that the current tariff structures are expected to remain stable, which is crucial for maintaining customer sentiment [24] Other Important Information - The company ended the quarter with total liquidity of $129 million and a net leverage ratio of 1.0 times [8][22] - The backlog increased by 17% year-over-year, with a 4% organic increase due to positive book-to-bill ratios [18][19] Q&A Session Summary Question: Expectations for large CapEx projects, particularly in LNG - Management indicated robust activity in the LNG market, with a 140% year-over-year increase in the LNG pipeline [29] Question: Details on digitization efforts and their impact - Management highlighted that digitization differentiates the company from competitors and enhances customer engagement, leading to recurring revenues [30][31] Question: Dynamics of gross margin in relation to large projects - Management acknowledged that large projects typically have lower margins but noted that increased volumes and productivity gains helped maintain solid margins [34][35] Question: Timing for other large projects to move to execution - Management confirmed that a broader range of projects across various sectors is moving to execution, not just LNG [38] Question: Impact of data center and medium voltage heater opportunities on results - Management stated that there was no impact in the second quarter, but they are beginning to book orders and see high-probability opportunities [39] Question: Balance between organic and inorganic growth investments - Management emphasized a priority on organic growth initiatives while also tracking potential inorganic opportunities [45]

Core Insights - Thermon reported strong third-quarter 2025 results, with revenue growth of 14.9% year-on-year to $131.7 million and adjusted earnings per share of $0.55, exceeding Wall Street forecasts by 51.7% [1] - Following the positive results, Thermon raised its full-year guidance, projecting revenue at a midpoint of $516.5 million and adjusted earnings per share at a midpoint of $2.08 [1] - The stock price of Thermon increased by 10.6% in response to the earnings report, indicating strong investor optimism and healthy demand for the company's products [1][3] Financial Performance - Revenue for the third quarter reached $131.7 million, reflecting a year-on-year increase of 14.9% [1] - Adjusted earnings per share were reported at $0.55, which is 51.7% higher than analyst expectations [1] - The company has set a new revenue guidance for the full year at a midpoint of $516.5 million and adjusted earnings per share at a midpoint of $2.08 [1] Market Reaction - Thermon's shares experienced a significant increase of 10.6% in the morning session following the earnings announcement, highlighting a strong market reaction [1][3] - The stock has shown low volatility, with only 7 moves greater than 5% over the past year, indicating that this news had a substantial impact on market perception [3] - Year-to-date, Thermon shares have risen by 14.5%, reaching a new 52-week high of $32.63 [5]

Financial Performance - Revenue increased by 7.7% to $115.1 million, driven by Vapor Power and OPEX growth[11] - Organic revenue declined by 5% despite a 34% decline in large project revenue[10] - Adjusted EBITDA increased by 5% year-over-year to $23.2 million[11] - Adjusted EPS decreased by 5% to $0.38[11] - Free Cash Flow was $8.8 million, a significant increase of 663.2% year-over-year[11] Strategic Initiatives and Diversification - The company achieved its 70% diversification target ahead of plan[10] - OPEX sales increased by 22% year-over-year, or 4% organically[13] - Revenue from diversified end markets increased by 16%, while revenue from Oil & Gas decreased by 7%[29] Balance Sheet and Cash Flow - Net debt to Adjusted EBITDA leverage was 1.1x[11] - Cash and cash equivalents increased by 47.9% to $49.1 million[30] - Total debt increased by 49% to $169.1 million[30] Fiscal Year 2025 Guidance - The company projects revenue between $527 million and $553 million, representing 7%-12% growth[33] - Adjusted EPS is projected to be between $1.90 and $2.06[33] - Adjusted EBITDA is expected to be between $112 million and $120 million, representing 8%-15% growth[33]