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Introduction & Market Context
Thermal Energy International Inc. (TSX-V:TMG, OTCQB: TMGEF) presented its third-quarter fiscal 2025 results on April 29, 2025, highlighting a mixed performance characterized by record year-to-date revenue despite softer quarterly figures. The company’s stock reacted negatively to the results, declining 8.33% to close at $0.11, reflecting investor concerns about the short-term profitability challenges.
The clean energy solutions provider emphasized that its $2.5 million in growth-oriented investments over the past two years are expected to yield benefits in fiscal 2026 and beyond, positioning the company for future expansion despite current headwinds.
Quarterly Performance Highlights
Thermal Energy reported Q3 2025 revenue of $5.8 million, representing a 4.9% decrease from $6.1 million in the same period last year. The company attributed this decline to lower margins on heat recovery projects, which significantly impacted profitability metrics.
As shown in the following quarterly revenue comparison:
The quarterly profitability figures showed a more concerning trend, with EBITDA turning negative at -$0.17 million in Q3 2025, compared to positive $0.32 million in Q3 2024. Similarly, net income declined to -$0.40 million from $0.04 million in the prior-year period.
The following chart illustrates the EBITDA performance over recent quarters:
Net income followed a similar pattern, reflecting the margin pressure and continued investments:
Detailed Financial Analysis
Despite the quarterly challenges, Thermal Energy’s trailing twelve-month (TTM) performance shows significant revenue growth, with TTM revenue reaching $30.5 million for the period ended February 28, 2025, representing a 76% increase compared to the TTM period ended February 28, 2023 ($17.3 million).
The company maintains a strong balance sheet with $5.1 million in cash and $2.4 million in working capital as of February 28, 2025. Bank debt stands at $1.4 million, having been reduced by approximately $2.1 million over the past two years, while net working capital increased by about $0.6 million from internally generated cash flow during the same period.
The company’s financial position is summarized in the following slide:
Looking ahead, Thermal Energy’s order intake and backlog figures suggest potential for revenue recovery. The company reported order intake of $17 million for the nine months ended February 28, 2025, with an order backlog of $14.8 million at quarter-end. Subsequent to quarter-end, additional orders of $2.3 million brought the total backlog to $17.1 million as of the reporting date.
The following slide details the company’s order intake and backlog:
Strategic Initiatives
Thermal Energy highlighted several strategic developments that underscore its growth potential. In February, the company secured its largest engineering contract to date, valued at $500,000, with a multinational pharmaceutical company. This customer had previously signed a project development agreement and requested more extensive engineering work, aligning with the UN’s Race to Zero carbon emission reduction targets.
The company also announced a $1 million heat recovery expansion project at one of its top customer’s American sites. To date, Thermal Energy has completed 11 heat recovery projects at 10 of this customer’s sites and installed 4,000 GEM traps across 60 sites, with potential for further expansion to more than 200 sites globally.
Thermal Energy’s diverse and adaptable supply chain strategy involves outsourcing most manufacturing to partners typically located in the same countries as their projects. This approach, combined with their established presence in the U.S. through BEI in Pennsylvania, provides flexibility and resilience in project execution.
Forward-Looking Statements
Management expressed confidence that the company’s investments in future growth will begin to yield results in fiscal 2026 and beyond. Despite the current profitability challenges, Thermal Energy emphasized that its business development pipeline remains very strong.
The company’s presentation concluded with this summary of its position and outlook:
While the quarterly results showed weakness, the combination of record year-to-date revenue, strong order backlog, and strategic investments suggests Thermal Energy is positioning itself for longer-term growth. Investors will be watching closely to see if the promised benefits of these investments materialize in the coming fiscal year as management expects.
The market’s immediate reaction, reflected in the 8.33% stock price decline, indicates skepticism about the short-term outlook, but the company’s strategic positioning and growing order book may provide support for future performance improvement if execution challenges can be overcome.
Full presentation:
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