DIRTT Environmental Solutions Ltd.

Second-quarter 2026 revenue was $40.3 million versus $38.9 million in the prior-year quarter, up about 4% year over year. Gross profit was $14.0 million versus $10.8 million, and gross margin expanded to 34.7% from 27.8%; adjusted gross profit was $14.9 million versus $11.8 million, with adjusted gross margin at 37.0% versus 30.4%. Operating income was $1.3 million versus an operating loss of $4.3 million, net income after tax was $1.1 million versus a net loss of $6.6 million, and adjusted EBITDA was $4.7 million, or 11.8% of revenue, versus an adjusted EBITDA loss of $2.0 million. For the first six months of 2026, revenue was $82.7 million versus $80.2 million, gross profit was $27.0 million versus $25.4 million, and adjusted EBITDA was $6.1 million versus approximately breakeven last year. Cash and cash equivalents ended the quarter at approximately $14.8 million, and operating cash flow was $900 thousand compared with cash used of $3.9 million a year ago. Management updated full-year 2026 revenue guidance to $175 million-$185 million and adjusted EBITDA guidance to $21 million-$25 million, citing project timing and revenue conversion.

Benjamin Urban said the company made meaningful progress in commercial execution, forecasting discipline, and operating efficiency, and emphasized that the quarter’s margin and EBITDA improvement reflected deliberate transformation work rather than just easy comparisons. He highlighted stronger commercial revenue, modest government growth, stable healthcare year to date, and the addition of a new vice president of commercial to improve go-to-market effectiveness. His tone was confident but candid: he said DIRTT is disappointed by the reduced outlook, yet remains focused on profitable growth and believes some of the transformation benefits may not show up fully until 2027.

Fareeha Khan laid out the key financial improvements: revenue of $40.3 million, gross margin of 34.7%, adjusted gross margin of 37.0%, operating expenses of $12.7 million, operating income of $1.3 million, and adjusted EBITDA of $4.7 million. She noted reorganization expense of approximately $1.1 million and said lower spend across SG&A, operations support, and tech drove the OpEx decline, while cash from operations was $900 thousand and cash on hand was approximately $14.8 million. On guidance, she said 2026 revenue is now expected at $175 million-$185 million and adjusted EBITDA at $21 million-$25 million, and stated the company still believes the OpEx reductions are sustainable though it will invest selectively, especially in commercial.

Analysts focused on why guidance was reduced again, what is driving better pipeline visibility, and whether lower OpEx is a new baseline. Management said visibility is better further out in healthcare and through construction services, but the revised outlook mainly reflects customer decision-making timelines and the timing of project awards and revenue conversion. On tariffs, management said internal and customs counsel are reviewing the issue and that they do not currently believe the newly discussed section 38 tariffs would materially affect DIRTT, though they were careful to say the details matter. They also said AI is already improving programming, coding, and efficiency internally, but they did not quantify margin impact.