RCM Technologies’ Earnings Call Highlights Growth and Achievements

RCM (RCMT) ((RCMT)) has held its Q2 earnings call. Read on for the main highlights of the call.

RCM Technologies recently held its earnings call, revealing a generally positive sentiment with notable achievements in the Health Care and Aerospace sectors. The company celebrated its inclusion in a major growth index, reflecting its robust growth trajectory. While challenges such as weak operating cash flow and fluctuating engineering margins were acknowledged, the overall tone was optimistic, emphasizing the company’s strong performance and strategic advancements.

Inclusion in Russell 2000 Growth Index

RCM Technologies marked a significant milestone by being included in the Russell 2000 Growth Index for the first time in its 50-year history. This inclusion underscores the company’s growth and strength, positioning it as a formidable player in the market.

Strong Growth in Health Care Services Group

The Health Care Services Group exhibited impressive growth, closing the 2024/2025 school year with an expanded roster of school partners and successfully acquiring contracts from competitors. This growth highlights the group’s strategic success and market competitiveness.

Successful Aerospace and Defense Performance

The Aerospace and Defense Group surpassed its business plan goals by nearly $3 million in revenue, achieving a notable year-over-year increase in both gross margin and EBITDA. This performance underscores the group’s operational excellence and strategic execution.

Improved Financial Performance

RCM Technologies reported a consolidated gross profit of $22.3 million for Q2 2025, reflecting an 11.4% growth over Q2 2024. The adjusted EBITDA for the same period grew by 12.9% to $8.1 million, with adjusted EPS increasing by 21.1%, showcasing the company’s strong financial health.

Engineering Segment Achievements

The Engineering segment achieved a gross profit of $6.5 million for Q2 2025, marking an 8.8% increase and the best quarter in the company’s history. This achievement highlights the segment’s robust performance and strategic advancements.

Weak Operating Cash Flow

Despite the overall positive performance, RCM Technologies faced weak operating cash flow for the quarter, primarily due to a delay in receiving over $10 million from two major school clients, posing a challenge to the company’s cash management.

Volatile Engineering Gross Margins

The engineering gross margin for Q2 2025 was reported at 24.5%, down from 26.5% in Q2 2024, with expectations of continued volatility. This fluctuation presents a challenge for the segment’s financial stability.

Forward-Looking Guidance

RCM Technologies provided robust guidance for its operating segments, projecting continued growth and strategic advancements. The company anticipates at least low double-digit growth in adjusted EBITDA for the second half of fiscal 2025, with Q4 2025 expected to deliver the highest adjusted EBITDA for the year. This outlook reflects confidence in sustained financial and operational success.

In conclusion, RCM Technologies’ earnings call painted a picture of strong growth and strategic achievements, particularly in the Health Care and Aerospace sectors. Despite challenges like weak cash flow and volatile margins, the company’s inclusion in the Russell 2000 Growth Index and robust financial performance underscore its positive trajectory and market strength.