TISI Stock Falls 8.4% Despite Narrower Q4 Loss, Y/Y Revenue Growth

Shares of Team, Inc. TISI have declined 8.4% since reporting fourth-quarter 2025 results, underperforming the S&P 500 index’s 2.1% fall over the same period. Over the past month, the stock has lost 6% compared with a 3.4% drop in the broader index, indicating relatively weaker investor sentiment following the earnings release.

Team reported fourth-quarter 2025 revenues of $224.8 million, up 5.4% from $213.3 million in the prior-year period. The company posted a net loss of $3.8 million, improving from a $7.2-million loss a year ago. The net loss attributable to common shareholders narrowed to $6.6 million, or $1.47 per share, from $1.61 per share in the year-ago quarter.

For 2025, revenues rose 5.2% to $896.5 million, while the net loss widened to $49.2 million from $38.3 million in 2024 due to a $13.1-million loss on debt extinguishment.

Team, Inc. Price, Consensus and EPS Surprise

Team, Inc. price-consensus-eps-surprise-chart | Team, Inc. Quote

Segment Performance & Key Metrics

Growth during the quarter was driven by both operating segments, though performance varied. Mechanical Services (MS) revenues increased 8.9% year over year to $116.3 million, supported by higher turnaround activity in U.S. oil and refining markets and project work in Canada. Inspection and Heat Treating (IHT) revenues rose 1.9% to $108.5 million, reflecting increased U.S. turnaround activity.

Profitability trends diverged across segments. MS operating income climbed 42.5% year over year, benefiting from improved pricing, job mix and cost reductions, while IHT operating income declined 17.3% due to the timing of labor and equipment costs. At the consolidated level, operating income rose sharply to $6.6 million from $2.2 million in the prior-year quarter.

Margins also showed improvement. The gross margin reached $58.3 million, or 25.9% of revenues, while adjusted EBITDA increased 12.1% to $16.4 million, representing 7.3% of revenues. Selling, general and administrative (SG&A) expenses declined 6.3% year over year, aided by lower insurance and legal costs, and adjusted SG&A improved by 150 basis points as a percentage of revenues.

Management Commentary

CEO Gary Hill, who joined the company in early February, emphasized operational momentum and outlined priorities centered on accelerating growth and improving profitability. Management highlighted opportunities to deepen customer relationships, expand into end markets, such as aerospace and power, and capture additional market share.

On the earnings call, Hill noted a focus on accelerating top-line growth, enhancing efficiency and reducing costs, while maintaining a strong safety culture and investing in workforce capabilities. CFO Nelson Haight added that the company’s recent performance reflects ongoing operational and commercial initiatives aimed at improving margins and cash flow generation.

Drivers of Performance

Revenue growth was primarily supported by increased turnaround activity in North America, particularly in oil, refining and industrial sectors, as well as higher project activity in Canada. Cost management initiatives also played a significant role in improving profitability, with reduced insurance and legal expenses contributing to lower SG&A costs.

Improved pricing discipline and job mix enhanced margins, particularly within the Mechanical Services segment. These operational improvements were partially offset by higher professional fees tied to refinancing activities during the year and by timing-related cost pressures in the IHT segment.

Cash flow generation remained a highlight in the quarter, with an operating cash flow of $16.8 million and a free cash flow of $14.6 million. However, for the full year, the operating cash flow turned negative, reflecting working capital changes and restructuring-related impacts.

Guidance & Outlook

The company indicated that it is reviewing strategic priorities and operational plans and expects to offer a more detailed outlook after the first quarter.

Despite the lack of formal guidance, management expressed optimism about continued revenue and adjusted EBITDA growth in 2026, supported by ongoing cost discipline and expansion into new markets. The company also acknowledged external uncertainties, including volatility in energy markets linked to geopolitical developments.

Other Developments

Team undertook significant capital structure actions in 2025. In March, the company completed a refinancing that extended debt maturities and reduced its blended interest rate by more than 100 basis points. In September, it raised $75 million through the issuance of preferred stock and warrants, using the proceeds to reduce debt and enhance financial flexibility.

These initiatives contributed to a reduction in total debt to $297.2 million at the end of 2025 from $325.1 million in 2024, while net debt declined to $279.1 million. Liquidity stood at $77.4 million, including cash and available credit facilities, positioning the company with improved balance sheet flexibility heading into 2026.

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