RCM Technologies (RCMT) Q3 2025 earnings summary

Executive summary

• Revenue for Q3 2025 was $70.3M, up 16.4% year-over-year, driven by strong growth in Engineering and Specialty Health Care, partially offset by a decline in Life Sciences, Data and Solutions revenue.

• Net income for Q3 2025 was $2.3M ($0.30/diluted share), down from $2.7M ($0.35/diluted share) in Q3 2024, primarily due to higher SGA expenses and a higher effective tax rate.

• Entered Q4 2025 with record 2026 Engineering backlog and continued Healthcare momentum.

• For the nine months ended Q3 2025, revenue rose 15.6% to $232.9M, with net income of $10.2M compared to $10.5M in the prior year.

• Despite $1.8M in excess medical costs YTD, financial results remain resilient, led by Healthcare and Engineering.

Financial highlights

• Q3 2025 consolidated gross profit was $19.4M (27.6% margin), up 8.8% year-over-year.

• Adjusted EBITDA for Q3 2025 was $5.5M, nearly flat year-over-year; adjusted EPS was $0.42 for both periods.

• Healthcare gross profit grew 8.5% to $9.0M; school revenue up 20.7% to $24.4M, non-school revenue down 11.3%.

• Engineering gross profit rose 17.3% to $6.9M, with a gross margin of 22.0%.

• Cash provided by operations for the nine months was $7.5M, with $1.4M used for investing and $9.5M used in financing activities.

Outlook and guidance

• Q4 2025 expected to deliver highest quarterly gross profit and Adjusted EBITDA of the year.

• Strong momentum anticipated into 2026, with a focus on expanding engineering backlog and healthcare pipeline.

• Management expects continued demand for advanced technology, engineering, and life sciences solutions, with a focus on AI, QbD, and automation.

• Excess medical costs likely to persist in Q4, with long-term mitigation measures expected to impact 2026.

• The company believes it can satisfy liquidity needs for at least the next twelve months and expects to maintain compliance with financial covenants.