SPAR Group, Inc. Reports Third Quarter 2025 Results

Core Insights - SPAR Group, Inc. reported a 28.2% increase in net revenues for the third quarter of 2025 compared to the same period last year, reaching $41.4 million, driven by growth in the U.S. and Canada [2][4] - The company aims to create a leaner and more profitable business by focusing on higher-margin merchandising services, reducing management costs, and enhancing cash generation [2][3] - The gross margin decreased to 18.6% in Q3 2025 from 22.3% in the prior year, primarily due to a higher proportion of lower-margin retailer remodeling work [4][11] Financial Performance - For the first nine months of 2025, net revenues totaled $114.1 million, a 12.6% increase compared to the previous year [11] - The company incurred restructuring costs of approximately $4.0 million in Q3 2025, impacting overall profitability [4][11] - The net loss attributable to SPAR Group, Inc. was $8.8 million, or $0.37 per diluted share, compared to a loss of $0.2 million, or $0.01 per diluted share, in the prior year quarter [11][28] Strategic Initiatives - The leadership team is focused on leveraging technology and AI to enhance SPAR's market strategy and drive innovation [2] - The company is targeting selling, general, and administrative expenses (SG&A) at approximately $6.5 million per quarter or lower, excluding one-time costs [3][4] - SPAR Group has amended and extended its asset-based lending facilities to $36 million, providing greater financial flexibility [11] Cash Flow and Liquidity - As of September 30, 2025, SPAR Group had total liquidity of $10.4 million, with $8.2 million in cash and cash equivalents [8] - The net cash used by operating activities for the first nine months of 2025 was $16.0 million, indicating challenges in cash flow management [8][23] - Accounts receivable balances increased significantly in 2025, reflecting both revenue growth and the impact of a program management agreement with a large retail client [3][8]