Core Insights - DIRTT Environmental Solutions Ltd. reported a revenue of $37.7 million for Q3 2025, a decrease of 13% compared to Q3 2024, attributed to higher order delays and tariff impacts [4][6][20] - The company achieved a gross profit margin of 30.4% in Q3 2025, an increase from 27.8% in Q2 2025, but a decrease from 38.8% in Q3 2024, as tariff mitigation actions began to take effect [4][7][20] - DIRTT's net loss after tax for Q3 2025 was $3.5 million, compared to a net income of $7.1 million in Q3 2024, reflecting a significant decline in profitability [18][24] - Adjusted EBITDA for Q3 2025 was $1.2 million, down from $4.1 million in Q3 2024, with an Adjusted EBITDA margin of 3.1% compared to 9.4% in the prior year [19][20] - The company has a twelve-month forward pipeline of $333.5 million as of September 30, 2025, indicating a 7.2% increase from July 1, 2025 [3][21] Financial Performance - Total revenue for the first nine months of 2025 was $117.9 million, down from $125.4 million in the same period of 2024 [28] - Gross profit for Q3 2025 was $11.5 million, a decrease from $16.8 million in Q3 2024, with gross profit margin declining from 38.8% to 30.4% year-over-year [4][7][28] - The company incurred $1.9 million in tariffs during Q3 2025, representing 5.1% of total revenue, primarily due to a 50% tariff on Canadian aluminum exports to the U.S. [4][24] Cost Management - Sales and marketing expenses decreased by $0.4 million to $4.8 million in Q3 2025, driven by lower commissions and reduced marketing costs [8] - General and administrative expenses also decreased by $1.4 million to $4.4 million, primarily due to lower professional services costs [9] - Reorganization expenses increased to $2.6 million in Q3 2025 from $0.6 million in the prior year, related to the establishment of a Transformation Office [14] Future Outlook - For Q4 2025, DIRTT expects revenue between $48.0 million and $52.0 million and Adjusted EBITDA between $5.0 million and $7.0 million [5][20] - The company is focusing on transforming its business through a Transformation Office aimed at streamlining processes and improving productivity, with completion expected in 2026 [21][24] - DIRTT has entered a non-binding term sheet with the Business Development Bank of Canada for proposed financing of up to C$15 million to partially settle its January Debentures [24]