Earnings call transcript: BluMetric Environmental Q2 2025 sees revenue surge

BluMetric Environmental reported a significant increase in revenue for Q2 2025, doubling its figures from the previous year. Despite this growth, the company faced challenges with a net loss and decreased gross margins. The stock experienced a decline following the earnings announcement, reflecting investor concerns over profitability. According to InvestingPro data, the company maintains a "GOOD" financial health score of 2.53, suggesting resilient fundamentals despite current challenges.

Key Takeaways

• Revenue doubled to $15.9 million compared to the previous year.
• Gross margin decreased from 43% to 27%.
• The company reported a net loss of $60,000, down from a net profit last year.
• Stock price fell by 5.29% following the earnings release.

Company Performance

BluMetric Environmental demonstrated robust revenue growth in Q2 2025, with a substantial increase from $7.1 million to $15.9 million year-over-year. This growth was driven by strong demand for the company’s water technology solutions and expansion into new markets. However, the company’s gross margin fell to 27%, indicating increased costs or pricing pressure. The net loss of $60,000 marks a downturn from net earnings of $117,000 in the previous year, highlighting profitability challenges.

Financial Highlights

• Revenue: $15.9 million, up from $7.1 million year-over-year
• Gross Margin: 27%, down from 43% year-over-year
• EBITDA: $600,000, up from $500,000 year-over-year
• Net Loss: $60,000, compared to net earnings of $117,000 year-over-year
• Net Cash Balance: $2.2 million, improved from net debt of $157,000

Market Reaction

Following the earnings announcement, BluMetric Environmental’s stock price dropped by 5.29%, closing at $1.61. The decline reflects investor concerns over the company’s reduced profitability and gross margin contraction, despite impressive revenue growth. InvestingPro analysis indicates the stock is currently trading above its Fair Value, with a notable YTD return of 95.4%. The stock’s current P/E ratio of 255.24x and EV/EBITDA multiple of 42.37x suggest rich valuations. For deeper insights into BluMetric’s valuation metrics and 15+ additional ProTips, consider exploring InvestingPro’s comprehensive research platform.

Outlook & Guidance

BluMetric Environmental is targeting a 10% EBITDA margin at $100 million in revenue and expects gross margins to stabilize around 35%. The company is focusing on expanding its operations and maintenance contracts, which are anticipated to contribute significantly to revenue. Additionally, BluMetric is optimistic about a recovery in its professional services segment in the coming quarters.

Executive Commentary

CEO Scott McVeigh emphasized the company’s commitment to environmental solutions, stating, "BlueMetrix creates a better environment for business." CFO Dan Hilton highlighted the importance of their services amid growing environmental concerns, noting, "Water is ever scarcer, and the environmental concerns of our clients continue to require our world-class assistance."

Risks and Challenges

• Gross Margin Pressure: Continued pressure on gross margins could impact profitability.
• Net Loss: The shift from net earnings to a net loss may concern investors.
• Government Contract Delays: Election-related delays in government contracts could affect future revenues.
• Market Competition: The company faces competition from larger firms in the water technology sector.
• Economic Environment: Broader economic conditions may impact demand for BluMetric’s solutions.

Q&A

During the earnings call, analysts inquired about the impact of government contract delays and the potential of operations and maintenance contracts, estimated to be 15% of equipment cost annually. Executives also discussed strategic partnerships and technology expansion plans, alongside their staffing strategy, which currently includes approximately 225 employees.

Full transcript - BluMetric Environmental Inc (BLM) Q2 2025:

Conference Operator: Good morning, ladies and gentlemen, and welcome to the BlueMetrics Environmental Inc. Second Quarter twenty twenty five Conference Call. At this time, all lines are in a listen only mode. In I would now like to turn the conference call over to Brandon Jeff, Investor Relations.

Please go ahead.

Brandon Jeff, Investor Relations, BlueMetrix Environmental: Thank you, operator, and welcome everyone to BlueMetrix Environmental’s quarterly earnings conference call. This call will cover BlueMetrix’s financial and operating results for the twenty twenty five second fiscal quarter ended 03/31/2025. Following our prepared remarks, we will open the conference call to a Q and A session. Our call today will be led by Scott McVeigh, BlueMetrix CEO and Dan Hilton, the company’s CFO. Before we begin with our formal remarks, I would like to remind everyone that some of the statements on this conference call may be forward looking statements.

Forward looking statements may include, but are not necessarily limited to, financial projections or other statements of the company’s plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties. The company’s actual results may differ significantly from those projected or suggested in any forward looking statements due to a variety of factors, which are discussed in detail in our regulatory filings. There may also be references to certain non IFRS measures such as EBITDA, backlog, working capital, free cash flow, and net cash. These non IFRS measures are not recognized measures under the International Financial Reporting Standards and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies.

Please hear disclosures for further information and reconciliations of these non IFRS measures. I will now hand over the call to Scott McBiggs. Please go ahead, Scott. Thank you, Brandon, for the introduction. Welcome, everybody, to our second quarter twenty twenty five earnings call for BlueMetric Environmental.

We appreciate all of you taking the time to join us on today’s conference call. And as per usual, I’ll start off by providing an overview of the quarter, and Dan will go over all of our financial details in more detail. Firstly, I’d like to start off by giving those who are new to the story a reminder of what we do. BlueMetrix creates a better environment for business. And what does that mean?

Well, BlueMetrix is a full service engineering water tech and environmental consulting firm focusing on agile water and wastewater systems and professional services. Through a track record that spans over forty five years, we’ve evolved into a full service integrator of environmental solutions in the fields of water and wastewater treatment and professional environmental services. We aspire to be the environmental solutions and water tech company of choice globally. Also, I’d like to provide a quick update on nomenclature as we concluded a reorganization of professional services and leadership summit within the fiscal quarter. Firstly, our two business segments are WaterTech and Professional Services, which is now being presented separately in the financial statements.

Within WaterTech, we have WaterTech Canada and WaterTech USA. WaterTech Canada encompasses our manufacturing in Carp, Ontario and builds the military mission ready water systems and services and supports for those products. For WaterTech USA, it encompasses Gemini Water, who has a manufacturing footprint in Gainesville, Florida, and sells and services stationary desalination and wastewater treatment systems to customers in The Caribbean and The USA. Now let’s discuss this quarter in a little more detail. The quarter saw significant increase in revenues due primarily to additional growth in revenues of WaterTech USA.

We continue to see strong demand for fixed base desal systems in the Caribbean region, which is where we continue to execute. There are other opportunities emerging and wastewater treatment as well. As we discussed in our last call, we’ve signed the lease for a new manufacturing facility in Gainesville, Florida. And as of today, we’re completely now operational and working to deliver products at the new location. This is a testament to the level of investment we’ve made into the business and its accelerated integration resulting in doubling of their scale.

We’re also working to potentially enter new markets and partnerships that we think will give us access to complementary technologies and applications that would otherwise be out of reach. At BlueMetrix, it all comes down to our people, and we’re excited to hit the ground running with our key hires for WaterTechUSA who work on augmenting sales, streamlining product delivery, and establish more significant operations and maintenance capabilities. We know that our WaterTech USA business has been getting a lot of attention lately, and we’re also seeing good progress in our military market. As you’ve seen, we’ve received the official notice to proceed with the Ride and the Tell Canada contract to start production for our new a SWAP systems, easy to support increasing production demand. In order to do so, we’ve signed a lease for a new 9,000 square foot facility in Carp, Ontario, just down the street from our existing 11,000 square foot site.

These investments will be important to ensure we can deliver on the partnership and give us more capacity to service contract renewals from the Canadian Department of National Defense. We continue to be patient with securing contracts with the military market as it has taken longer than expected to bring them in. There continues to be a strong emphasis for Canada and other countries to spend more on their military and hopefully this added pressure of expedite these developments. We believe that our success in this market will hinge on our continued ability to form key relationships within the main target markets in Canada, Europe, and The United States. These are all areas we feel relationships are deepening, and we’ve had activity recently submitted relative to proposals for our systems.

As for professional services, we saw project delays, mainly due to the procuration of the Canadian federal government and subsequent federal election. This had the most significant impact on our government government market, which was down 34% in our revenues from the same quarter in the prior year. This led to an increase in non billable labor and consequently lower utilization, lessening our profitability. Profitability. We believe that this will improve now that the election is over and the second half of the fiscal year is seasonally our strongest period for professional services.

We also are investing into infrastructure market and personnel gaps to drive future potential growth. Evidence for the quarter improved slightly, which was offset by the extra costs associated with the lower utilization in professional services. Our success in the coming quarters will be predicated on our ability to deliver on our record order book, strive for manufacturing excellence and improve the growth and profitability of professional services. In conclusion, the remaining half of fiscal twenty twenty five continues to be critical for execution and efforts to drive excellence in sales, business development and manufacturing as we’re supported by all these developments and partnerships. We believe demand is strong for our water tech and continue to make strategic investments in our capacity, service capabilities, and sales and business development efforts.

We’re a unique company with our combination of leading water tech, which is benefiting from the growing demand for resilient and decentralized water solutions that continue to build our position. I’d like now to hand it over to Dan for a more detailed overview of the financials. Dan, please go ahead. Thank you, Scott. Just as an aside, I’ve dropped off a couple of times.

We have a call or a storm coming through, Scott. So if I do drop off again, please continue on my behalf, you don’t mind. I will be presenting BlueMetrix twenty twenty five fiscal second quarter results in more detail. Revenue for the second fiscal quarter was $15,900,000 compared to $7,100,000 in the prior year. As Scott mentioned, the revenues increased primarily to the rapid growth of WaterTech USA, which has surpassed our original expectations.

The investments in additional and improved consolidated manufacturing space, coupled with key new hires, will allow this group to maintain growth capacity for its current product and enable the establishment of an operational and maintenance team to capitalize on the strength of our existing customer relationships in the region. Across the company’s key markets, the commercial and industrial market revenue increased year over year, mainly due to WaterTech USA. The government market, traditionally our strongest, saw a material decrease due to a pause in spending by the Canadian government’s prorogation and election cycle. 2025 revenues are $1,000,000 lighter than the same period in 2024. This has resulted in a temporary utilization gap with Q2 twenty twenty five utilization in the professional services practice sitting 6% lower than the same period in 2024.

Management believes that with the election behind us and the resumption of parliament, the contract will be awarded shortly and utilization will return to its historic level. This, coupled with the fact that we are heading into our traditionally busiest cycle, provides an expectation for a strong recovery in this business segment. May has already shown a 3% increase in utilization. And for every 1% utilization in this segment, we can expect approximately $120,000 impact to EBITDA. The military market increased due to the timing of the maintenance of the Roku units for the Canadian military.

It is important to note the production of the ASWAS systems with Ryan MacTel Canada have started in fiscal Q3 and will continue for approximately six quarters. Lastly, the mining sector has decreased slightly due to a general sector slowdown. We generally expect to see fluctuations in our core markets as we continue to execute, and some will make up for others depending on the quarter. Having a strong presence in our four markets helps to manage these natural fluctuations in the business. Our gross margin was 27% for the fiscal quarter compared to 43% in the prior year.

The decrease in gross margin is attributable to the change in sales mix, where there’s been a material increase in the relative sales of the water jack over professional services during the period. Operating expenses for the fiscal quarter came in at $4,300,000 compared to $2,900,000 in the prior year. The increase is due to the operating expenses attributable to Gemini, which are proportionally lower than the accretive revenue growth producing economies of scale. This is also combined with the increase in non billable labor in professional services due to the timing of contracts and a softening of the market caused by macroeconomic drivers related to recent changes in the government and Canada. EBITDA for the fiscal quarter increased to $600,000 compared to $500,000 in the prior year.

The increase in EBITDA is mainly due to the strengthening in the WaterTech segment as a result of higher revenue recognition associated with the delivery of hardware on larger Gemini projects with minimal associated increased operating expenses. This was offset by an increase in the overall operating costs related to underutilization of professional services, primarily tied to the delay in the awarding of government contracts related to the federal election. Early indicators are already suggesting an improvement in utilization in fiscal Q3. A net loss of $60,000 was recorded for the fiscal quarter compared to net earnings of $117,000 in the prior year. On 03/31/2025, BlueMetrix had a net cash balance of 2,200,000.0 compared to a net debt balance of 157,000 at September thirtieth of twenty twenty four.

As at 03/31/2025, the company had approximately 6,300,000.0 in cash availability between its operating line and cash balances and was not down by any debt covenants. Overall, 2025 is shaping up to be a transformative year for the company as we start to see some of our investments paying off. We need to continue our momentum in Watertech while not forgetting about professional services where strategic investments are needed and being made. Our production capacities in Canada and The United States are increasing nicely and can support new contracts for Watertech. Our new ERP system initiatives, along with others, are going well and are expected to be completed this calendar year.

These developments will help ensure that better decisions can be made by our frontline and strengthening our infrastructure for the long term for client success and an improved bottom line. We are world class environmental consulting and water technology delivered by world class people who do meaningful work every day. We continue to believe that 2025 is an inflection point for the business. Water is ever scarcer, and the environmental concerns of our clients continue to require our world class assistance. I’d like to thank everyone for taking the time to allow us to present our results today, and now I’ll hand it back over to Scott.

Thank you, Dan. That was a great update. And I echo the excitement surrounding around the opportunities that lie ahead of us this year. We’ll now take questions from call participants, and we’ll pass it back over to the operator.

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch tone phone. Should you wish to cancel your request, please press followed by the two. If you are using a speaker phone, please lift your handset before pressing any case.

Once again, that is star one, should you wish to ask a question. Your first question is from Steve Cameronia from Credit Suisse. Your line is now open.

Brandon Jeff, Investor Relations, BlueMetrix Environmental: Good morning, guys. Good morning, Steve. Good. I just wanted to explore the the EBITDA margins here. If I calculated right, the impact from the government was about a million in revenue, and then 1% is about a hundred and 20,000 impact to EBITDA.

Is it fair to say that you lost about $400,000 in EBITDA in the quarter due to the shutdown of the Canadian government? Yes. That’s correct. So what happens, you know, if you imagine a business like ours, professional services, obviously, and it has historically been core, and we’ve got a fantastic talented pool of people. So when we get into situations like this where there’s some fluctuation in demand for for whatever the reason, you know, decisions have to get made as to whether it’s better to, you know, carry those costs and ride out the storm.

And in this case, we’ve seen early indications now that the market is turning, the government its procurement system is starting to release contracts. So we’re excited to see that. May has already suggested a 3% improvement in utilization implying that we’re starting to see some of these contracts hit our books. And your math is correct. It’s about 400 to 4 hundred and 50 thousand dollars is the impact of carrying the additional cost during that quarter.

And we believe now the question is gonna be whether or not we can make up that difference over the balance of the year. Certainly Oh, sorry. It sound like the storm might have roam rolled through on Dan. Dan, you there? No?

Oh, I’m sorry if you can’t hear me. Did I cut it out? Yep. There you go. You’re back.

I’m sorry. I’m not sure where I cut it out, but I would agree with your math, Steve. It’s 400 to 450,000 type range for carrying those additional costs. And, you know, a business in our professional services space, a big investment is our people, and we don’t wanna lose those people. So we’re glad to see that the government mechanism for procurement is starting to release these contracts.

And so we’ll keep a close eye on that, but, hopefully, a temporary situation that’s now in recovery. Okay. No. That’s that’s very helpful. Thanks.

And then I I know you don’t give guidance here, but we’re looking at the Ryan Mattel contract ramping up here through your fiscal q three. The the Saint Kitts contract seems to be humming along as well. How do you see the back half of the year playing out margin wise? Obviously, they got a little bit depressed here in fiscal q two. I expect do you expect them to expand close to historical margins, I guess?

Yeah. Certainly, the sales mix impact the margin, and water detect does have a a good one in professional services. That being said, I would suggest that, overall, we do expect to see an increase in margin. The professional services now coming into our busiest cycle during the year, q three and q four are typically when we have the highest number of professionals deployed out in the field and doing work for our clients that will certainly boost margins. The same kits project, which is quite large, as you mentioned, all of the equipment has been procured and moved on-site.

So we’re now entering the phase that requires human intervention, the hookups, the fittings, the deployment of that system. And so those margins will be a little bit higher than the margins we get strictly on the retail of equipment. And then the Ryan Mattel project, it does have good margins baked into it. So I think we’ll see generally an improvement in margin. I’m not sure we’ll get back to the same level of margin that we had historically just because we have so much water tech, but certainly much higher than q two.

And our expectations are to achieve a 10% EBITDA at a hundred million top line. So that’s what we’re growing towards. We do think that the benefits of some of these economies of scale that we’re realizing as we grow will continue to fall to the bottom line, and that’s our target at a hundred million top line. Okay. No.

That’s that’s very helpful. Thank you. Maybe just one more if I can. Just on the Saint Kitts contract, you mentioned most of the equipment’s in place, and and we’re just sort of putting it together now and installing it. How much is left on that contract, both monetarily and time wise?

And then what’s the plan to replace that? Is there is there backlog already lined up to get in there, or do you need to to get some more contracts to replace them? Yeah. A couple interesting questions there. So, certainly, the recognition of revenue has been fairly consistent over the it’s out of earning at about $1,000,000 a month approximately that one specific project.

So we would anticipate still 3,000,000 to $4,000,000 to get recognized on that project over the coming months. It goes live at the August, early September. In terms of backfilling, we had historically, at Gemini, not had a strong sales and marketing arm. Most of the revenues, the contracts came in by word-of-mouth. That continues to be the case, and they’re getting regular calls.

We were at a run rate now from the backlog perspective about a million and a half US per month, which would see us consistently close to $20,000,000 for the year. We recently did invest in a couple two, I would say, hires within that organization, one on the sales side so that we are no longer dependent on the general manager to take advantage of his relationships and network as the full means for generating revenue. So we now have started just recently to have some outward marketing initiatives, and we think those will certainly pay off. There’s a number of islands in the region that have taken note of the work that we’ve done in Saint Kitts, and we’ve got a number of requests to bid on similar sized projects. So hopefully, some of those will materialize.

In addition, earlier this week, we had a new hire who is an individual that moved his family from Australia to help us develop an operations and maintenance program, which that organization’s never had. In Canada, in our water tech group, we do a lot of field service rep, maintenance type work. It’s good sticky revenue, high margin revenue. We’re just introducing that concept now into water tech in The States, and we have a leader for that group. And so there’s a number of projects that we’re looking to try and, I guess, capitalize on where we’ve got clients, existing customers who have asked us to take on a long term O and M contract.

And so we hope to be in a position to announce those shortly. You know, to the broader question, you know, can we replace the revenue from Saint Kitts? I I believe we absolutely can. I think we’re seeing some indicators suggesting there’s continued strong demand in the marketplace. And then in addition to that, you know, we plan on laying on top of an operations and maintenance practice that I think will be lucrative in the long term.

Okay. No. That’s great. Well well, I got you. Maybe just one more on that O and M.

What what’s opportunity there? Is there is there a contract? Is there a term limit? Or what do you expect the the revenue opportunity versus capital costs on that operations and maintenance business? Yeah.

We’ll have to see how it plays out. But, historically, if we use our Canadian experience, about 15% of the cost of the equipment, we have been able to roll into an o and m contract on an annual basis. So over the life of a piece of equipment, the o and m contract, it’s far more lucrative than the actual sale itself. But on an annual basis, as an example, just to make the numbers easy, if we had a main policy for equipment that was deployed, we would expect something in the order of a hundred and 50,000 per year as an operational maintenance contract to ensure that equipment runs smoothly. So as our bank of equipment that we’ve deployed becomes larger and larger, we’re constantly layering on that recurring revenue stream, and it does tend to be sticky.

None of our clients wanna be operating the equipment that we’re that we’re installing. That’s not the nature of their business. I’ll give you example. We have a very large cruise line in The US that has seven private islands. They’re in the, you know, the the business of creating experiences for people not managing water.

And so they’ve approached us with, an opportunity to take over the operations management of all seven islands. In that particular case, the contract value is a couple few million dollars. It’s quite large. It’s not negotiated the final price yet, but I wouldn’t wanna leave the market. But it’s material aspect to the business that I think will continue to grow over time and and it creates a very steady revenue flow.

Okay. That’s that’s great, guys. I appreciate the time. Thanks. That’s all I have.

Thanks, Steve.

Conference Operator: Thank you. Your next question is from Kurt Wilson from Beacon Securities. Your line is now open.

Brandon Jeff, Investor Relations, BlueMetrix Environmental: Good morning, gentlemen, and great to see, you know, continued upward trend in revenue in the quarter. So that was great. Thank you. Just quickly on the you guys ended the quarter with net cash of $2,200,000 You’re in a growth phase here, both in Canada and down in U. S.

At Gainesville. Do you need to use some of that cash to build out their facilities at Carp and down at Gainesville? Well, let me start with both of those locations, the increased capacity results in in increased revenue. So by and the necessity to invest is really to accommodate a higher run rate. So I would say they pay for themselves, but there is an element of initial investment certainly to get things started and and rolling.

And I think that’s part of our story with when you look at how things have evolved with Gemini, you know, they went from 10,000 square foot facility to 25,000 square feet. You know, we doubled the business in seven months, you know, staff wise, even more so on on footprint, and the footprint can accommodate a $30,000,000 run rate on an annual basis. And so we look at it as cost benefit, and and we’re pretty frugal with our investments. I mean, we understand that there’s a a necessary attention to to EBITDA. We’ve had the very same attention, but at the same time, we do have to along the way make some strategic investments.

But, you know, it’s a as we say, it’s one foot on the brake, one foot on the gas constantly to make sure that, you know, we’re driving this thing efficiently and and managing our cash available cash as well very strategically. Yeah. That that makes a lot of sense, Scott. Thanks for that. And then just one more on kind of along those similar lines, I guess.

The year in the past, you guys have talked about preordering some materials to try and stay ahead of the tariffs. Was that the case in Q2? Or are you kind of feeling good on that front? Yes. Certainly.

You want to update that one? Yeah. I’m I’m hoping you can hear me. I’m I’m never sure if I’m cutting you out here. I apologize.

The experience in q one, I think, was trying to get ahead of some uncertainty with the election. I think we’ve established now a a baseline for how we’re gonna operate going forward. So we no longer have that situation where we’re trying to, you know, buy anything in advance, and and that did not happen in in q two. We are fortunate that for sales into The Caribbean, we can bypass The US procurement system and sell directly from Canada. So that gives us a bit of a hedge with any potential uncertainty related to tariffs.

But for sales in The United States, whether that’s Texas or into Florida, it appears that the clients are willing to bear the additional cost, which we’ve estimated to be about 13% right now. So we don’t anticipate it’ll have any material impact on the business. Excellent. Okay. Thanks, Matt.

And that’s that’s I’ll leave it there for now, guys. K. Thanks, Greg.

Conference Operator: Thank you. Once again, please press 1 should you wish to ask a question. And your next question is from John Lewis. Your line is now open.

Brandon Jeff, Investor Relations, BlueMetrix Environmental: Gentlemen, good morning. Hi, John. Good morning, John. I think it’s mostly been covered, but I just wanted confirm the the gross margin was 27%. In the past, you have had, you know, higher numbers in mind.

Do you think this is the, you know, low watermark, so to speak? And do you have a percentage in mind going forward? Yes. So longer term, when we’ve modeled out at the hundred million mark, so we’ve got a few months still ahead of this before we get to that number, obviously. But the anticipated settling just based on the sales mix between the two groups on the gross margin side is 35%.

So we do anticipate that margin level to increase. On the EBITDA side, we believe it’s very achievable to get north of 10%. And I can maybe reference some of our historically public companies, competitors in our space have been able to get slightly better than 10%, closer to 15. So there are economies of scale to be had for sure. But in the next, you know, call it year to two, our ambition is to get our EBITDA north of 10 and to stay north of 35 on the gross margin.

Okay. Perfect. Thank you. Lots going on. So I’m just curious, how many employees do you have now?

And do you think you’re completely staffed up, or is there more to go? And are they all permanent? Or as far as, you know, Costco, of course, I’m thinking. But Well, I think the current number is around 225 in that range. We have some you know, we always bring a stable of co op students in.

They’re deeply deployed and quite quite financially positive. They end up being new hires. Right? That’s that’s how we we all like to groom bring in new talent. But, hopefully, we’ve demonstrated over the years, you know, strategic frugality.

We don’t we don’t look to to bring in more overhead and and and know immediately it’s going to affect our bottom line. I think the the the challenge we’ve got right here, especially Dan and I’ve and I’ve tried to point out, you can’t you can’t make up the revenue when you have stalled contracts if you let the people go. So that capacity is gone, and you really can’t drive that into sort of new efficiencies because the skill mix may not be necessary or the same. So from the technical services game, the last thing you wanna be known for too is a is a, you know, quick trigger, cut people, and then try to hire them all back in a month because then you just become that company that has no gravity to it, and we know our people are really important. So it is a bit of a a a challenge sometimes, and we have to cross over these bridges where we see things, you know, happen like new government.

But as Dan pointed out, I think our you know, the one foot on the brake, one foot on the gas analogy is never more true. Now we’re hitting the gas, and we’re starting to see that uptick, and we’re starting recover that that revenue that we had, you know, production or revenue delayed by those contracts. And and we and we, you know, move forward. We’re always reevaluating the, the skills mix, the market conditions. We benchmark with our competitors.

They’re feeling and seeing the very same things we are, which, you know, it’s like misery of the perhaps. But at the end of the day, you know, we have to be really strategic and almost surgical when it comes to staff reductions. And and, frankly, we have done some in the last quarter. You know, we we really cut down our hiring. We often don’t replace when we when someone retires.

So we’ve seen some of those things, but it’s it’s not like we’re gonna, you know, take out 10% of our our labor costs and then immediately see a jump commensurate in revenue. It doesn’t often work that way. Often what happens is you see more people leave and then you don’t get them back. Yeah. No.

Appreciate it. And you’ve got a great history of profitability. Last question, and just as a general question, it’s in the the PR. Gemini is also looking at strategic partnerships that could offer access to new customers, applications, technologies, and geographies. Can you flesh that out a little bit more?

Is there anything in particular or thanks. Yeah. Yeah. To the extent we can talk about it, John, you know, when we’re looking to really take advantage of what we have in hand and and what we could do on a broader basis to be a, you know, more full service water provider, There’s other aspects of the supply chain that come into the mix. You know?

What we currently have now, we pull together, you know, design systems. It’s a very, you know, consistent process and designs. We scale them up or down as needed. But things like, you know, tankage, different key aspects of of the of the designs, things like that come into play. And to the extent that now as we grow the company, specifically in The States, the gravity that’s coming to BlueMetrix are from a lot of the providers or auxiliary providers that wanna be part of it.

And and that’s a really interesting dynamic whereby, you know, you can we can grow different aspects of the business, not necessarily selling ours on that on that basis. And so looking at, you know, the future, we can collectively have, you know, consideration and discussions with those aspects of a design that we don’t typically, you know, produce, but we buy. So that’s an interesting development. And then also on the o and m side, as we’re we’re really excited about that because as Dan mentioned, you know, that’s the the long term sticky revenue. These clients, it’s not their core competency.

We would love to be able to design, you know, install, and operate, those systems for those clients. And then even those systems we didn’t design to operate for those clients because, again, that’s not what they really wanna to do. So how you build that business out and the tools that you need, the telemetry you might employ to make them even more efficient from in remote sites. That’s all part of the story. Okay.

Cheers, guys. I appreciate the great work, and look forward to next queue. Thank you. Thanks, John. Thank

Conference Operator: you. Your next question is from Ian Cassell from IFCM. Your line is now open.

Brandon Jeff, Investor Relations, BlueMetrix Environmental: Thanks. Congratulations on the the quarter and progress. The one question I had might tie in with your answer that you just gave, but I was curious if you could talk a little bit about repurposing some of the Gemini technology that is used in The Caribbean to sort of attack the the large opportunity in the small and midsized municipal opportunities market here in The United States. I’m just curious, you know, curious to talk a little bit about that. No.

That’s a great question, Ian. Great to hear your voice. One of the the, I would say, strengths of Gemini is they’re extremely efficient at delivering systems up to around, say, 5,000,000 gallons per day. Those systems are not necessarily the target market for the big, big competitors. It’s very difficult for them to deploy on an efficient basis.

We often now can, from signing a contract to turning the tap on, can be eight or nine months, which is just unattainable for those bigger companies. That is a bandwidth or a target market that is pretty fertile, and the clients are funded and the our ability to do that efficiently and reproduce that result makes us very competitive. And when you look at coastal coastal communities or island nations, that’s a pretty strong market. It’s a very strong market. The other side of it too is is we we talk about what we can do to improve the telemetry and integrate technology in remote areas that have a difficult time finding competent technologists to operate the equipment.

So you build out an o and m business that can support what you you design and install. You have telemetry to manage and and handle that from afar, and then you have key staff to support as needed on-site when necessary. And so it’s a bundled business that really, from the from the Gemini side and the USA side, hasn’t really been deployed yet. But it is it’s a natural adjacent that fits perfectly with what we’re doing and growing now. So, you know, I was mentioned we hired a good friend of mine who’s the you know, stepping down as the the control or not controller, but the a managing director at the Southern California Water District.

He’s the the person who’s responsible for all water districts from LA to San Diego, most of Mortata. So in his his role role as he’s stepping down, you know, as a water expert, we can sit down and say, what are the five key key water districts that we could really effectively compete in compared to perhaps what’s in in state or who can we team with who would benefit by our ability to execute the way we can with the systems we know. So it’s a it’s a pretty exciting way to grow. I think it’s a a natural extension in the business, and it doesn’t stretch us too far. It’s it’s just it’s it’s starting to all come together, so we’re pretty excited.

Thanks, Scott. Appreciate it.

Conference Operator: Thank you. There are no further questions at this time. Please proceed.

Brandon Jeff, Investor Relations, BlueMetrix Environmental: Excellent. Well, thank you, operator, and all of who joined the call. Definitely appreciate your time. We hope we’ve answered all of your questions. Most certainly, if you have any further consideration or questions, please send them to to Brandon Chow, our IR consultant, and we will look forward to responding post case.

So until our next call, we wish you all well, and we’ll continue to work hard to improve our business going forward. Thank you. Thank you.

Conference Operator: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.

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