Shimmick Corporation ((SHIM)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Shimmick Corporation’s recent earnings call for the third quarter of 2025 presented a mixed sentiment, with a positive trajectory in core project revenue growth and strategic execution, yet challenges remain due to a decline in overall revenue from non-core projects and a net loss for the quarter.
Increased Revenue from Core Shimmick Projects
The third quarter saw Shimmick Corporation’s revenue from core projects rise to $107 million, marking a 6% increase year-over-year. This growth underscores the company’s strategic focus on its core operations, which are proving to be a robust revenue stream amidst broader challenges.
Significant Growth in Backlog
Shimmick’s backlog experienced a substantial increase, growing by over $100 million or 15% sequentially in the third quarter, reaching a total of $754 million. This growth highlights the company’s successful acquisition of new projects and its strong positioning in the market.
Expanded Gross Margin on Shimmick Projects
The gross margin on Shimmick projects saw a remarkable increase of 67% compared to the prior year’s third quarter. This expansion is a testament to the company’s effective cost management and strategic focus on high-margin projects.
Strong Bidding Pipeline
Shimmick achieved $1 billion in bidding volumes in September and October, with a promising 12-month bidding outlook exceeding $9 billion. This robust pipeline indicates the company’s proactive approach to securing future projects and sustaining growth.
Positive Adjusted EBITDA Achievement
For the first time this year, Shimmick reported a positive adjusted EBITDA of $4 million, a significant improvement since the same period in 2024. This achievement reflects the company’s operational efficiency and strategic focus on profitable projects.
Decrease in Total Revenue
Despite the positive developments, total revenue for the third quarter fell to $142 million, a 15% decrease from $166 million in the same quarter of 2024. This decline is primarily attributed to the reduced contribution from non-core projects.
Continued Impact of Non-Core Projects
Revenue from non-core projects decreased by 46%, continuing to negatively impact Shimmick’s overall gross margin. The company is actively working to reduce its reliance on these projects to improve financial performance.
Net Loss for the Quarter
Shimmick reported a net loss of $4 million for the quarter, compared to a net loss of $2 million in the third quarter of 2024. This loss highlights the ongoing challenges the company faces as it transitions its focus.
Forward-Looking Guidance
Looking ahead, Shimmick reaffirmed its 2025 guidance, projecting full-year revenue from core projects between $405 million and $415 million and adjusted EBITDA between $5 million and $15 million. The company is committed to reducing its reliance on non-core projects and focusing on higher-margin opportunities, particularly in the water and electrical sectors.
In summary, Shimmick Corporation’s third-quarter earnings call reflects a strategic pivot towards core projects, with notable growth in revenue and backlog. However, challenges persist with overall revenue decline and net losses. The company’s forward-looking guidance suggests a continued focus on high-margin projects and a reduction in non-core project reliance, indicating a positive outlook for the future.