Matrix Service pany(MTRX) - 2025 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company revised its fiscal 2025 revenue guidance from a range of $900 to$950 million to a range of $850 to$900 million, reflecting a 5% reduction at the midpoint [14] - Revenue for the second quarter was $187.2 million, an increase of 7$5.5 million or $0.20 per share compared to a net loss of$2.9 million or $0.10 per share in the prior year [33] Business Line Data and Key Metrics Changes - The storage and terminal solutions segment revenue increased 53$95.5 million in the second quarter compared to $62.4 million in the prior year, with gross margin improving to 7.6$61.1 million, benefiting from higher volumes of work associated with LNG peak shaving projects, with gross margin rising to 5.6% from 3.5% [36] - The process and industrial facilities segment revenue decreased to $30.6 million from$71.3 million in the prior year, with gross margin dropping to 1.2% from 9.4% [37] Market Data and Key Metrics Changes - The opportunity pipeline increased from $5.7 billion to over$7 billion, primarily driven by LNG peak shaving opportunities [15][23] - Domestic LNG export capacity is projected to grow by 85%, reaching more than 21 billion cubic feet per day by 2028 [18] - The company expects more than $2.3 trillion of domestic infrastructure investment between now and 2030, which could significantly boost demand for its services [22] Company Strategy and Development Direction - The company focuses on five strategic pillars: safety and performance excellence, evolving capabilities, bidding discipline, margin optimization, and returns-driven capital allocation [25] - The strategy is encapsulated in "win, execute, deliver," aiming to build a profitable growth platform within niche engineering and construction verticals [26] - The company plans to pursue both organic and complementary inorganic growth to enhance its position in high-value energy and industrial infrastructure markets [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving organic revenue growth in the second half of fiscal 2025, projecting growth greater than 40$211.7 million and zero debt [43] - SG&A expenses were 17.3 million, in line with normal run rates, and the company plans to manage costs conservatively [33] Q&A Session Summary Question: Which business segments does the 50 million revenue adjustment reflect? - The adjustment primarily reflects the storage and terminal solutions segment [47] Question: How confident is the company in reaching profitability in the second half of 2025? - Management feels confident about revenue growth supporting overhead absorption and a return to profitability [51] Question: What is the expected backlog growth moving into fiscal 2026? - Management indicated that the backlog remains strong at $1.3 billion, with a normal booking cadence expected to maintain and build backlog [59] Question: Can you provide insights into client conversations regarding opportunities? - Clients feel positive about the energy environment and are planning to invest capital, despite some concerns during the first half of the year [62] Question: What is the timeline for inorganic growth opportunities? - While specifics are not provided, management emphasizes a focus on return to profitability and strengthening the business to take advantage of infrastructure spending [84]