Core Insights - Team, Inc. (TISI) shares have decreased by 6.3% following the third-quarter 2025 results, contrasting with a 1.9% decline in the S&P 500 index, although the stock has increased by 11.4% over the past month, indicating improved investor sentiment [1] Financial Performance - Revenues for the quarter rose by 6.7% year-over-year to $225 million, with gross margin expanding by 8.4% to $58 million, and adjusted EBITDA increasing by 28.6% to $14.5 million, leading to a margin improvement of 110 basis points [2] - The net loss was reported at $11.4 million, slightly higher than the $11.1 million loss from the previous year, with earnings per share reflecting a loss of $2.68 compared to a loss of $2.52 last year [2] Segment Performance - The Inspection & Heat-Treating (IHT) segment generated revenues of $113.8 million, a 5.7% increase, driven by higher service activity in the U.S. and an 8.9% increase in international markets [3] - The Mechanical Services (MS) segment saw revenues improve by 7.8% to $111.2 million, supported by stronger U.S. turnaround activity and better results in Canada, with operating income rising by 31.2% to $5.9 million [3] Cost Management - Adjusted selling, general and administrative expenses decreased to 20.8% of revenues from 21.7% in the prior-year quarter, indicating progress in cost control, although corporate expenses increased due to non-recurring legal fees, compressing consolidated operating income to $1.3 million from $3.2 million [4] Management Commentary - Management noted that adjusted EBITDA reached its highest level for a third quarter since at least 2016, with growth in adjusted EBITDA outpacing revenue gains, reflecting successful cost-reduction and margin-expansion initiatives [5] - The company is focused on maintaining cost discipline, enhancing commercial execution in higher-margin markets, and expanding wallet share among existing customers, with ongoing improvements in margin and cost structure simplification [6] Revenue Drivers - Revenue growth was primarily driven by volume gains in both core segments, with IHT benefiting from increased U.S. activity and international work, while MS saw elevated demand in the U.S. and improved Canadian activity [7] Cost Factors - Margin improvements were attributed to field cost rationalization and a better project mix, although consolidated operating income contracted due to higher non-recurring corporate expenses [8] Guidance - Management expects full-year 2025 revenue growth of approximately 5% and adjusted EBITDA growth of roughly 13%, with anticipated year-over-year gains in the fourth quarter and further improvements in international operations [10] Other Developments - Team completed a $75 million private placement of preferred stock, using proceeds to reduce total debt from $325.1 million to $302.8 million, enhancing liquidity and financial flexibility [11]

Core Viewpoint - Team, Inc. has demonstrated solid performance in Q2 2025, with significant revenue growth and improvements in adjusted EBITDA, despite a net loss widening, indicating progress in its transformation initiatives [12]. Financial Performance - Revenues for Q2 2025 reached $248 million, an 8.5% increase from $228.6 million in the same quarter last year [2]. - Gross margin expanded to $68.1 million, reflecting a 7.1% year-over-year increase [2]. - The company reported a net loss of $4.3 million, compared to a loss of $2.8 million in the prior-year quarter, while adjusted EBITDA improved by 12.4% to $24.5 million from $21.8 million [2]. Segment Performance - Inspection and Heat Treating (IHT) revenues grew 15.2% year over year to $130.4 million, with U.S. operations up 13.4% and Canadian operations up 31.4% [3]. - Mechanical Services (MS) revenues increased by 1.9% to $117.6 million, with U.S. operations gaining 6.6%, but international markets showed weakness [4]. Balance Sheet and Liquidity - Liquidity at the end of the quarter totaled $49.3 million, including $16.6 million in cash and $32.7 million in undrawn credit availability [5]. - Total debt increased to $370.2 million from $325.1 million at the end of 2024, reflecting refinancing and seasonal working capital demands [5]. Management Insights - CEO Keith D. Tucker highlighted progress in the transformation program, with double-digit growth in the IHT segment and ongoing cost optimization efforts expected to yield approximately $10 million in annualized savings [6]. - CFO Nelson M. Haight noted the benefits of refinancing, which lowered the blended interest rate by over 100 basis points and extended loan maturities to 2030 [7]. Revenue Drivers and Challenges - Revenue growth was primarily driven by strong U.S. and Canadian operations in the IHT segment, while the MS segment faced challenges in international markets, particularly the U.K. and Trinidad [8]. - Gross margin expansion was attributed to higher volumes and improved cost management, with SG&A expenses representing 18.9% of revenues, down from 19.8% last year [9]. Future Guidance - Management anticipates continued revenue and margin improvements in the second half of 2025, reaffirming a target of at least 15% growth in adjusted EBITDA for the year [10]. - The company is committed to driving margin expansion, cost discipline, and operational resilience to enhance shareholder value [10]. Organizational Developments - Team appointed Dan Dolson as executive vice president, chief strategy and transformation officer, to accelerate transformation initiatives focused on revenue growth and margin improvement [11].