Core Viewpoint - Thermal Energy International Inc. reported a strong order intake in Q1 2026, with a 37% year-over-year increase in order backlog, indicating positive long-term growth despite a decrease in revenue for the quarter [2][5][9]. Financial Performance - Q1 2026 revenue decreased by 19% year-over-year to $6.85 million, primarily due to lower revenues from heat recovery projects, but still represented a 32% increase compared to Q1 2024 and a 119% increase compared to Q1 2023 [3][4][5]. - Gross profit for the quarter was $3.19 million, down 9.5% from the previous year, while gross margin improved to 47% from 42% [3][4]. - Operating expenses decreased by $207 thousand year-over-year, mainly due to favorable foreign exchange changes [6]. - The company reported a net income of $166 thousand and an Adjusted EBITDA of $350 thousand for the quarter [5][6]. Order Intake and Backlog - The order intake for Q1 2026 was $11.86 million, marking a 323% increase compared to the same quarter last year, the highest order intake for any first quarter in the company's history [5][8]. - The order backlog at the end of the quarter was $18.5 million, a 37% increase from the previous year, and grew to $20.8 million by October 27, 2025 [5][9]. Debt Management - The company repaid $130 thousand in long-term debt during the quarter, with a remaining balance of only $200 thousand at quarter end [5][7]. - Since the end of fiscal 2022, the company has repaid a total of $3.7 million in acquisition and COVID-related debt, with plans for full repayment by January 2026 [2]. Cash Position - As of August 31, 2025, the company had a cash position of approximately $4.29 million and working capital of $2.74 million [7].

Core Insights - Thermal Energy International Inc. reported record revenue of CAD 29.8 million for fiscal year 2025, marking a 15% increase year-over-year [10] - The company experienced a decrease in revenue for Q4 2025, but improved gross profit and Adjusted EBITDA margins [2][5] - Order intake for Q1 fiscal 2026 reached CAD 11.3 million, the highest first quarter intake in the company's history, significantly higher than the previous year [2][15] Financial Performance - Q4 2025 revenue decreased by 9.3% to CAD 6.8 million compared to Q4 2024, primarily due to lower revenues from heat recovery projects [5][7] - Gross profit for Q4 2025 increased by 17.3% to CAD 3.7 million, with a gross margin improvement to 53.9% [5][7] - For the fiscal year ended May 31, 2025, gross profit decreased by 1% to CAD 12.3 million, attributed to lower GEM revenues and reduced gross margins on heat recovery projects [10][11] Debt Management - The company repaid CAD 1.1 million in long-term debt during Q4 2025 and CAD 2 million for the entire fiscal year, reducing total debt by CAD 3.6 million over the last three years [3][5] Strategic Initiatives - The company plans to develop higher-margin standardized equipment packages, add independent sales representatives, and expand Boilerroom Equipment Inc. into Europe to drive profitable growth [4][5] - The introduction of the Efficiency Scoping Tool ("CREST") aims to enhance the identification of thermal energy savings and carbon reduction opportunities [6] Order Backlog and Future Outlook - The order backlog as of May 31, 2025, was CAD 12.9 million, which increased to CAD 24.3 million by September 22, 2025, following significant new orders [5][15] - The company anticipates that most revenue from new orders will be recognized in the second half of fiscal 2026 [2][5]