Executive Summary
Matrix Service Company delivered a fiscally challenging yet strategically constructive Q3 2025. Revenue rose 21% year over year to $200.2 million, supported by stronger activity in Storage & Terminal Solutions and Utility & Power Infrastructure, while Process & Industrial Facilities lagged on a large renewable diesel project completion. Gross margin expanded to 6.4% from 3.4% a year ago, aided by improved construction overhead absorption, though the company continued to contend with under-recovery headwinds and a one-time labor productivity shortfall on a crude terminal project. Net income of -$3.4 million and an adjusted EBITDA of breakeven marked a meaningful narrowing of losses versus Q3 2024, signaling progress toward profitability as the revenue ramp broadens.
Key Performance Indicators
QoQ: 17.98% | YoY:130.37%
Key Insights
Quarterly results: Revenue $200.161M, YoY +20.6%, QoQ +6.9%; Gross Profit $12.85M, Gross Margin 6.42% (vs. 3.4% in Q3 2024); Operating Income -$4.88M; Net Income -$3.43M; EPS -$0.12; EBITDA -$4.88M; Adjusted EBITDA Breakeven. Backlog >$1.4B with Book-to-Bill 1.5 for the quarter and 1.0 year-to-date. Segment performance: Storage & Terminal Solutions revenue $96.1M (gross margin 3.9%), Utility & Power Infrastructure revenue $58.7M (gross margin 9.4%), Process & Industrial Facilities...
Financial Highlights
Quarterly results: Revenue $200.161M, YoY +20.6%, QoQ +6.9%; Gross Profit $12.85M, Gross Margin 6.42% (vs. 3.4% in Q3 2024); Operating Income -$4.88M; Net Income -$3.43M; EPS -$0.12; EBITDA -$4.88M; Adjusted EBITDA Breakeven. Backlog >$1.4B with Book-to-Bill 1.5 for the quarter and 1.0 year-to-date. Segment performance: Storage & Terminal Solutions revenue $96.1M (gross margin 3.9%), Utility & Power Infrastructure revenue $58.7M (gross margin 9.4%), Process & Industrial Facilities revenue $45.4M (gross margin 8.3%). Liquidity and cash flow: Net cash from operating activities $31.2M in Q3; YTD $76.8M; free cash flow $28.68M; cash at period-end $210.54M; available liquidity $247.1M (unrestricted cash $185.5M; revolver availability $61.5M; restricted cash $25M). Debt: Total debt $21.47M; Net debt $21.47M; no near-term liquidity pressure. Full-year guidance revised to $770–$800M, with anticipated mid-to-high single-digit to low-double-digit growth in 4Q and a path to annual growth >20% despite the T&D exit.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
200.16M |
20.57% |
6.94% |
| Gross Profit |
12.85M |
130.37% |
17.98% |
| Operating Income |
-4.88M |
66.07% |
23.74% |
| Net Income |
-3.43M |
76.45% |
37.94% |
| EPS |
-0.12 |
77.36% |
40.00% |
Key Financial Ratios
operatingProfitMargin
-2.44%
operatingCashFlowPerShare
$1.12
freeCashFlowPerShare
$1.03
priceEarningsRatio
-25.19
Management Commentary
Key takeaways from management commentary: Strategy and operations: John Hewitt outlined organizational improvements to drive efficiency and execution, including eliminating senior-level positions, promoting Shawn Payne to President of Engineering & Construction, and decentralizing business development to better align with P&L leaders. The Northeast transmission and distribution service line will be wound down due to scale and geographic constraints, allowing focus on higher-potential areas. Market conditions and policy risk: Management characterized tariff and regulatory uncertainty as temporary, noting that contract forms and proactive cost optimization will mitigate pricing risk. They cited a robust energy infrastructure demand backdrop and a $7B pipeline of project opportunities, supported by an expected 45% rise in LNG export demand. Guidance and timing: Management highlighted that some awards shifted into the back half of the year, with a major storage project contract signing occurring at the end of March, pushing revenue into fiscal 2026. They emphasized that several core clients intend to accelerate energy infrastructure spend over the next four years, underpinning confidence in a sustainable growth trajectory. Execution and backlog: The quarter featured backlog growth of nearly 8% sequentially to over $1.4B, with Storage & Terminal Solutions ending at $848M backlog—the highest in company history. The team remains focused on improving fixed-cost absorption and operating leverage to drive profitability. Long-term outlook: Kevin Cavanah reiterated that end-market demand remains favorable and that fourth-quarter momentum should support a return to profitability, aided by multiyear awards and ongoing cost-structure improvements.
“Finally, the company has begun the process of winding down our Northeast transmission and distribution service line.”
— John Hewitt
“Considering the current macroeconomic environment and our decision to exit the transmission and distribution business, we believe it's prudent to revise our fiscal 2025 revenue guidance by 10% to $770 million to $800 million.”
— John Hewitt
Forward Guidance
Guidance — The company reduced fiscal 2025 revenue guidance to $770M–$800M, reflecting the exit from the transmission and distribution business, which subtracts approximately $50M from revenue. Management expects second-half growth to outpace the first half by about 20%–25%, supported by continued backlog conversion and a push in 4Q activity. The near-term rationale centers on higher-value, multiyear projects and improving overhead recovery as revenue ramps. Risks include macroeconomic policy shifts, project timing and deferrals, and the pace of awards, though management believes pricing risk from tariffs is largely mitigated by contract discipline. Near-term indicators to monitor: (1) progress in 4Q revenue ramp, (2) sustainability of overhead absorption, (3) evolution of the backlog conversion rate, and (4) any acceleration in procurement for ongoing Storage & Terminal Solutions and Utility projects. assessment: The guidance appears achievable given a still-healthy project funnel, though execution and macro timing remain key watch items.