Thermon Group 2025 Q4 Earnings Strong Performance as Net Income Rises 68%

Thermon Group (THR) announced its fiscal 2025 Q4 earnings on May 22nd, 2025, showcasing a robust financial performance. The company recorded a 5.0% increase in revenue to $134.08 million compared to $127.65 million in Q4 of 2024. In a notable achievement, Thermon Group's net income surged by 68.3%, reaching $16.97 million. Despite facing tariff-related challenges, Thermon Group provided guidance for fiscal 2026, forecasting revenue between $495 million to $535 million, with adjusted EBITDA projected at $104 million to $114 million. Overall, the earnings results beat expectations, and the guidance remained in line with previous forecasts.

Revenue

Thermon Group reported total revenue of $134.08 million for 2025 Q4, reflecting a 5.0% increase from the $127.65 million recorded in the same quarter of the previous year.

Earnings/Net Income

Thermon Group's earnings per share (EPS) soared by 68.5%, reaching $0.50 in 2025 Q4 from $0.30 in 2024 Q4. The company also posted a net income of $16.97 million, marking a substantial 68.3% growth compared to $10.08 million in Q4 of 2024, indicating strong earnings performance.

Price Action

Thermon Group's stock price saw a modest increase of 1.16% during the latest trading day, a decline of 4.75% over the past week, and a significant surge of 15.39% month-to-date.

Post-Earnings Price Action Review

The strategy of investing in Thermon Group's stock when revenue exceeds expectations and holding for 30 days has proved successful, delivering a remarkable 108.41% return, substantially surpassing the benchmark. Despite its impressive results, this strategy comes with a substantial risk, as evidenced by a maximum drawdown of -45.17%. The Sharpe ratio stands at 0.40, suggesting moderate risk and returns. Investors are advised to consider these factors when employing this strategy, as the potential for high returns is counterbalanced by the accompanying risks.

CEO Commentary

Bruce Thames, CEO of Thermon Group, emphasized the company's solid execution leading to a 3% organic growth in Q4, a first in over a year. Thames highlighted the positive order momentum, notably in the LNG market, which contributed to a 29% backlog increase. He praised the company's commitment to operational excellence, reflected in an improved EBITDA margin of 22.7%. Thames expressed optimism for future growth despite challenges posed by market conditions and tariffs.

Guidance

Thermon Group expects fiscal 2026 revenue to range between $495 million and $535 million, reflecting approximately 3.5% growth at the midpoint. Adjusted EBITDA is anticipated to be between $104 million and $114 million, indicating stability. The guidance accounts for margin headwinds due to tariffs in the first half and positive pricing impacts later in the year.

Additional News

Thermon Group has been proactive in its capital allocation strategy, investing $20 million in its share repurchase program during fiscal 2025 and increasing the authorization to $50 million. The company also successfully integrated its acquisitions of Vapor Power and F.A.T.I., strengthening its market position despite a challenging environment. With a strong free cash flow generation, Thermon Group managed to repay $15 million in net debt, resulting in a quarter-end net leverage ratio of 0.9x, down from 1.2x at the end of the previous year. Thermon Group is well-positioned to execute its capital allocation strategy with ample financial flexibility, supported by total cash and available liquidity of $137 million as of March 31, 2025.