Thermon Group's Q4 2025: Contradictions in LNG Market Resurgence, Tariff Impacts, and OpEx Strategies

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Revenue and Profitability Increase:
- Thermon Group Holdings reported $134.1 million in Q4 revenue, a 5% year-over-year increase.
- The company's adjusted EBITDA margin improved to 22.7% during Q4 2025, reflecting a 423 basis point increase compared to the same quarter last year.
- This growth was driven by strong operational execution, resulting in solid book-to-bill ratios and favorable revenue mix, along with continued cost discipline and operational efficiencies.

Strategic Initiatives and Bookings Growth:
- Thermon achieved a 29% increase in its backlog compared to the previous year, with a 20% increase in organic backlog.
- The increase in bookings was largely driven by momentum in diversified verticals, particularly in the LNG market, with five major project awards.
- The company's strategic focus on operational excellence and expanding its product portfolio in high-growth markets contributed to the strong bookings trends.

Operational Excellence and Cost Management:
- Thermon's OpEx revenues represented 83% of total revenues in Q4, highlighting the stability and predictability of maintenance and repair spending.
- This stability is attributed to the company's focus on growing its installed base and the profitability enhancements from operational excellence initiatives and revenue mix improvements.

Organic Growth and Market Resilience:
- Despite a challenging macroeconomic environment, Thermon achieved 3% organic growth in Q4, marking the first growth in over a year.
- This resilience was driven by a rebound in certain oil and gas markets, notably LNG, and an overall improvement in order trends across various verticals.
- The company's ability to capitalize on opportunities in these markets, particularly in the Gulf Coast and Middle East, contributed to its sustained growth trajectory.