Team Inc. ((TISI)) has held its Q3 earnings call. Read on for the main highlights of the call.
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In the recent earnings call, Team Inc. showcased a predominantly positive sentiment, highlighting significant revenue growth and improved margins. The company has made strategic financial maneuvers that have enhanced its financial position, despite facing challenges with free cash flow and adjusted net loss. Overall, the performance and strategic actions taken by the company have fostered a positive outlook.
Revenue Growth
Team Inc. reported a notable 7% increase in revenue, translating to approximately $14 million year-over-year. This growth was driven by strong performances in the inspection and heat treating, and mechanical services segments, indicating a robust demand in these areas.
Improved Gross Margin and EBITDA
The company achieved an 8.4% increase in gross margin, while adjusted EBITDA rose by 28.6%, marking the highest level for a third quarter since 2016. This improvement underscores the company’s operational efficiency and profitability.
International Operations Success
International operations, particularly in Canada, experienced an 8.9% growth. This marks multiple quarters of growth in Canadian operations, showcasing the company’s successful expansion and performance in international markets.
Cost Discipline and Margin Expansion
Team Inc. demonstrated effective cost management, with adjusted selling, general, and administrative expenses decreasing to 20.8% of consolidated revenue, down from 21.7% in 2024. This reflects the company’s commitment to maintaining a lean operational structure.
Strategic Partnership and Financial Flexibility
The completion of a $75 million private placement of preferred stock with Stellix Capital Management has enhanced Team Inc.’s financial flexibility and strengthened its balance sheet, positioning the company for future growth.
Debt Refinancing and Interest Rate Reduction
The company successfully refinanced its debt, lowering the blended interest rate by over 100 basis points and extending term loan maturities to 2030. This move is expected to reduce financial costs and improve long-term financial stability.
Liquidity Improvement
Team Inc. reported an increase in liquidity to $57.1 million, supported by unrestricted cash and undrawn availability under various credit facilities, providing the company with a solid financial cushion.
Negative Free Cash Flow Impacts
Despite the positive developments, the company faced challenges with free cash flow, which was negatively impacted by non-recurring refinancing and transaction fees, as well as negative working capital trends.
Adjusted Net Loss
The adjusted net loss for the first nine months of 2025 was down $7 million compared to the same period in 2024, indicating ongoing financial challenges that the company is working to address.
Forward-Looking Guidance
Looking ahead, Team Inc. anticipates a full-year 2025 revenue growth of around 5% and adjusted EBITDA growth of approximately 13%. The company remains focused on cost discipline, margin expansion, and cash flow generation, aiming to sustain its positive trajectory.
In summary, Team Inc.’s earnings call reflected a positive sentiment, driven by significant revenue growth and improved margins. The company’s strategic financial maneuvers, including partnerships and debt refinancing, have strengthened its financial position. While challenges remain, particularly with free cash flow and adjusted net loss, the forward-looking guidance suggests continued growth and improvement in the coming year.