DIRTT Reports Second Quarter 2025 Financial Results

Core Insights - DIRTT Environmental Solutions Ltd. reported financial results for Q2 2025, highlighting challenges due to macroeconomic conditions and tariff impacts, but remains optimistic about growth strategies and product innovations [1][3][17] Financial Performance - Q2 2025 revenue was $38.9 million, a decrease of $2.3 million or 6% from $41.2 million in Q2 2024 [4][15] - Gross profit margin fell to 27.8% in Q2 2025 from 37.3% in Q2 2024, with gross profit impacted by tariffs amounting to 5.1% of revenue [4][6] - Net loss after tax for Q2 2025 was $6.6 million, compared to a net income of $0.6 million in Q2 2024 [15][20] - Adjusted EBITDA was $(2.0) million in Q2 2025, down from $3.2 million in Q2 2024, reflecting a significant decrease in profitability [16][29] Operational Highlights - The twelve-month forward pipeline increased by 7% from April 1, 2025, surpassing $300 million, indicating a strong project pipeline despite current challenges [3][19] - The introduction of new products, such as a one-hour fire-rated wall, aims to capture additional market sectors including healthcare, hospitality, and multi-family housing [3][19] Cost Management - Tariffs imposed in 2025 have significantly affected gross profit margins, with an additional 25% tariff on aluminum and steel announced in June 2025 [18][19] - The company has implemented various tariff mitigation strategies, including price adjustments and strategic sourcing, to preserve margins [18][19] Market Conditions - The construction industry continues to face challenges such as labor shortages and supply chain pressures, which are impacting DIRTT's operations [19] - Despite macroeconomic uncertainties, the company is focusing on growth and transforming its business to compete more effectively with conventional construction [19][36]