Thermal Energy International Inc.

Fiscal 2025 revenue was a record $29.8 million, but down 9% year over year. Q4 gross margin improved to 53.9% and Q4 adjusted EBITDA margin improved to 5.8%; Q4 adjusted EBITDA was about $400,000, down 6% year over year. Full-year adjusted EBITDA was $1.05 million versus $2 million in the prior year. The CEO said Q4 and full-year net income were both positive, but did not give a net income figure. At year-end, cash and cash equivalents were $2.8 million and working capital was $2.4 million. Debt repayment totaled $2 million in fiscal 2025, including $1.1 million in Q4, with $329,000 remaining at year-end; management said that balance will be fully repaid by January 2026. Post-year-end order intake was $11.4 million from June 1 to September 22, backlog increased to $24.3 million as of September 22, and 2026 orders of $11.3 million were described as a record for the Q1 period and about four times last year’s first quarter. Management said fiscal 2026 revenue should be weighted more toward the back half of the year.

William Crossland framed the quarter as a mix of short-term lumpiness and longer-term positioning. He emphasized record full-year revenue, improved Q4 margins, strong post-year-end order intake, and a record backlog for this time of year, while stressing that the business is investing to scale. His tone was constructive and strategic, highlighting indirect sales channels, standardized equipment packages, European manufacturing for Heat Sponge, and the CREST tool as levers for sales growth and margin improvement.

The financial commentary centered on profitability pressure from growth investments and headcount expansion. Crossland said Q4 adjusted EBITDA was about $400,000, down 6%, with the decline driven by a $349,000 foreign exchange loss and $280,000 of higher general operating costs tied to team growth, partly offset by better gross margin and lower quarterly R&D expense. For the year, adjusted EBITDA fell to $1.05 million from $2 million, mainly because fiscal 2025 operating expenses included an additional $813,000 related to headcount growth, along with lower gross profit and inflation-related cost increases. He also highlighted a strong balance sheet with $2.8 million of cash, $2.4 million of working capital, and only $329,000 of debt remaining at year-end.

There was effectively no analyst Q&A; no qualified equity analysts asked questions on the call. As a result, management did not field additional follow-up on the margin outlook, backlog conversion, or the timing of 2026 revenue beyond the prepared remarks.