Thermal Energy International (TMG) Q1 2027 earnings summary

Executive summary

• Q1 revenue fell 9.2% YoY to CAD 6.216m; Adjusted EBITDA was a loss of CAD 80k and net loss was CAD 272k, mainly due to delayed heat recovery projects.

• Trailing 12-month revenue increased 17%, Adjusted EBITDA rose 76% to CAD 1.5m, and net income increased CAD 889k YoY.

• Priorities include maximizing returns on recent investments and scaling through simplified HeatSponge projects, standardized packages, indirect channels, and European expansion.

Financial highlights

• Q1 gross profit declined 6.4% to CAD 2.985m; operating expenses increased CAD 283k to CAD 3.155m, including a CAD 122k unfavorable FX variance and inflationary costs.

• Adjusted EBITDA was a loss of CAD 80k versus CAD 350k positive a year earlier; net loss was CAD 272k versus net income of CAD 166k.

• Over four years, net income totaled CAD 3.4m and operating cash flow was almost CAD 8m; operating cash flow excluding working-capital changes was highlighted as a key measure.

Outlook and guidance

• Simplified turnkey HeatSponge projects have generated ~CAD 5m in orders since launch and are intended to shorten sales and delivery cycles while typically delivering stronger margins.

• Standardized equipment packages generated ~CAD 1.3m in FY2027 orders to date; indirect sales channels are expected to be established this fiscal year, with contributions anticipated next year.

• European HeatSponge orders are expected in FY2027 but are not expected to materially affect revenue or profit; manufacturing may shift from U.S. production to European contract manufacturing as demand grows.

• No imminent acquisition plans; the priority is leveraging existing investments and scaling, while remaining open to potential transactions.