Mistras Group Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 8, 2025

There are 7 speakers on the call.

Operator

Good day, everyone. My name is Abigail, and I will be your conference operator today. At this time, I would like to welcome you to Mistras Group Inc q one twenty twenty five earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator

If you would like to ask a question during this time and if you have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application. At this time, I would like to turn the call over to Thomas Tobolski, Treasurer.

Speaker 1

Good morning, everyone, and welcome to MISTRAS Group's first quarter twenty twenty five earnings conference call. I'm joined today by Natalia Schumann, President and Chief Executive Officer and Ed Preisner, Senior Executive Vice President and Chief Financial Officer. Before we start, I want to remind everyone that remarks made during this conference call as well as supplemental information provided on our website contains certain forward looking statements and involve risks and uncertainties as described in Mistras' SEC filings. The company's actual factors that can cause actual results to differ are discussed in the company's most recent annual report on Form 10 ks and other reports filed with the SEC. The discussion in this conference call will also include certain non GAAP financial measures that we believe are useful to investors evaluating the company's performance, but that were not prepared in accordance with U.

Speaker 1

S. GAAP. Reconciliation of these non U. S. GAAP financial measures to the most directly comparable U.

Speaker 1

S. GAAP financial measures can be found in the tables contained in yesterday's press release and the company's related current report on Form eight ks. These results are available on the company's website in the Investors section and on the SEC's website. I will now turn the call over to Natalia Schumann.

Speaker 2

Thank you. Good morning, everyone. Thank you for joining us today. It is my pleasure to be providing you with an update on our progress. Despite the larger than anticipated year over year decline in revenue driven by overall market uncertainty, we were nevertheless able to rapidly calibrate costs and expenses down during the first quarter to the revenue level in order to preserve our bottom line operational metrics.

Speaker 2

Having said that, with our continued focus on cost and expense management, including a reduction in our administrative support functional costs and coupled with anticipated growth across all primary end markets, we are confident that these drivers will provide an improvement in key profitability measures over the remainder of the year. As shown on Slide three, during first quarter as a CEO of Mistras, I have been focused on three key initiatives for our business, which are first, leadership talent evaluation second, recalibration of our cost base to the current revenue levels and market conditions and third, developing growth strategies across all businesses and service delivery optimization. On the talent evaluation initiative, I'm very pleased to have on boarded various high caliber talent to our organization, including two senior executives focused on growth within our data solutions, a new leader for our aerospace and defense division, and new heads of our marketing, safety and compliance and IT functions. Each of these individuals have proven track records of success in their careers and bring strong industry expertise and critical thought leadership to continuously improve and enhance our organization. These individuals are quickly getting up to speed.

Speaker 2

These positions plus several strategic hires to our operations team have the entire leadership team excited for the current and long term future of the company. On the service delivery model optimization initiative, we are continuing to review all operational aspects of our current services portfolio in collaborative manner with our customers to ensure that we're achieving a fair and adequate ROI for the services we provide. We are adjusting our cost base according to current conditions, price pressures and other contract economics. On the growth strategies initiative, I am focused on accelerated expansion across core end markets like oil and gas and aerospace and defense with a particular emphasis on delivering integrated solutions that leverage the full depth of our offerings, including data analytics and monitoring technologies. As part of Mistras data solution strategy, we are accelerating growth by delivering tailored high value solutions that integrate our proprietary software, advanced analytics and trusted field services.

Speaker 2

A prime example of this is our Q1 twenty twenty five release of PCMS Mobile, our cloud based application purpose built to optimize real data data capture, quality and analysis in mechanical integrity programs. Delivered within one suite ecosystem, PCMS Mobile connects inspection planning in PCMS, mobile field execution and post inspection analytics into unified workflow, improving asset performance while reducing rework and administrative burden. This latest release introduces a new web based portal for smarter work assignment and pre submission data review, giving customers expanded control over data quality and enabling faster, more confident decision making. This proprietary and vertically integrated approach combining software, services, analytics and engineering under one platform is what sets Mistras apart from competition. We are not just enabling digital transformation for our clients, we are leading it, helping our customers unlock value through connected intelligence, end to end integrity management and scalable innovation built for the future of asset protection.

Speaker 2

Related to this initiative, we recently officially announced the launch of Mistras Data Solution brand, which consolidates our data centric services, software solutions and technologies under one umbrella. Mitra's data solutions strengthen our commitment to delivering smarter operations for asset intensive end markets, including energy, aerospace and defense, infrastructure and manufacturing. Let me now share some of my thoughts on our performance this quarter before Ed goes in more details behind the financials. Although revenue was down over 12% year over year, this low level of revenue was somewhat anticipated, because our first quarter of twenty twenty four was a tough comparison with a robust spring turnaround season in oil and gas and a strong aerospace and defense demand in the first quarter of twenty twenty four. The largest revenue decline of $16,600,000 was in oil and gas end market and was mostly prominently noted in the downstream sector due to timing of turnarounds and other projects.

Speaker 2

With regards to customer turnarounds, our first quarter twenty twenty five turnarounds were down $6,500,000 from the prior year as anticipated. But we expect to recover this gap and exceed the remaining 2025 total turnarounds revenue versus prior year by approximately $6,500,000 We have seen a reduction of customer spending and project push outs in upstream and midstream sub industries as our customers are dealing with market uncertainties and budgetary reduction initiatives. We experienced a decline of 1,700,000 in aerospace and defense end market, which was primarily due to macroeconomic uncertainty causing customer delays and deferrals. Delays in this market were also driven by supply chain disruption causing our large customers to temporarily slow down production, which in turn lead to less demand for non destructive testing and other lab services. Although we experienced a somewhat slower than anticipated start to 2025 in our two largest end markets, we did not experience any significant customer attrition or market share changes in the first quarter.

Speaker 2

And therefore, we are cautiously optimistic for the balance of the year. Specifically, within the aerospace and defense industry, Mistras in lab testing and services support OEMs and Tier one suppliers through a network of ISO 17,025 accredited laboratories with NatCap and regulatory certification. These core offerings including non destructive testing, chemical and mechanical analysis, dimensional measurements, machining and finishing services. These integrated services accelerate time to market for our customers and streamline quality assurance across manufacturing supply chain, which we believe will help provide growth over the remainder of the year and beyond. That being said, we are closely monitoring potential industry headwinds caused by global market uncertainty driven by our customers' reaction to tariffs and other market conditions and the potential impact that could have on our in lab services business.

Speaker 2

Again, we are well positioned to maintain market share in the primary industries we serve by leveraging our proprietary advanced technologies and testing methods. We're also focusing on our other existing end markets such as industrials, infrastructure and other industries where our testing and inspection services as well as our data analytics would enable us to drive growth in the near future. I'm pleased to highlight performance of PCMS offering within our Data Solutions Group, where we delivered revenue growth of 6% this quarter as compared to the prior year period. As I have already shared, data solutions, particularly PCMS, is a key area of focus for the company and one in which we are strategically investing time and capital to foster future growth via market share gains. Now, I'd like to turn the call over to Ed for an update on our actual financial results for the first quarter of twenty twenty five.

Speaker 3

Thank you, Natalia, and good morning, everyone. As we noted on our Q4 earnings call, as Natalia mentioned earlier, the spring turnaround season in 2024 was robust and the fall turnaround season in 'twenty four was relatively weaker. We stated that we expect the inverse trend in 2025 with a weaker spring and more robust fall turnaround season, and this trend materialized in our first quarter results. This is reflected on Slide eight. Additionally, our first quarter 'twenty four results benefited from low double digit growth rates in our two largest end markets, that being oil and gas and aerospace and defense, which provides for a challenging prior year quarter to compare with the current period.

Speaker 3

These trends, coupled with project delays and overall market uncertainty, caused first quarter revenue to lag our expectations. We have continued with our disciplined approach and commitment to only take on contracts that align with our profitability targets. Our International segment revenue was up for the first quarter, nearly 4% organic growth in local currency, which was offset by adverse FX translation. As noted in our press release and as shown on Slide nine, our results reflect certain overhead and personnel expenses, which have been reclassified in our consolidated statement of operations from SG and A to cost of revenue, as we determine this reclassification would be preferable as it provides greater transparency regarding the true cost of the company's revenue and aligns with how our business is managed. These overhead and personnel costs, which were determined to be directly related to the company's delivery of services, are generally variable to revenue being recognized and results in gross profit that fully encompasses all costs necessary to generate such revenue.

Speaker 3

The reclassification recorded within our financials was $6,000,000 and $4,900,000 for the three months ended March 31 and March '4, respectively. The impact of this reclassification for full year 'twenty four was approximately $20,900,000 from SG and A to cost of revenue. This redistribution of overhead and personnel expenses has no impact on operating income, net income or adjusted EBITDA comparability. Selling, general and administrative expenses were down $600,000 or 1.7% from the prior year comparable period despite adverse foreign exchange translation within our SG and A of 900,000.0 and strategic spending within our Data Solutions business. This overall decrease in SG and A reflects our continued cost discipline and focus on calibration of our overhead costs relative to revenue achieved.

Speaker 3

For the first quarter of twenty twenty five, the company recorded $3,100,000 of reorganization and other costs related to the continued calibration of the company's support overhead and other related costs. For the first quarter, we reported a GAAP net loss of $3,200,000 or $0.10 per share. Excluding special items, non GAAP net loss was $300,000 loss or $01 per share for the first quarter. Adjusted EBITDA was down $4,200,000 to $12,000,000 as compared to first quarter last year. Despite the tough comparable, our adjusted EBITDA for the first quarter of 'twenty five was the second highest first quarter adjusted EBITDA performance for the company over the last five years.

Speaker 3

As shown on Slide 10, our net cash provided by operating activities was $5,600,000 for the first quarter of 'twenty five, an increase of $5,000,000 compared to the first quarter of last year. Our slightly less than breakeven free cash flow of 200,000 is not unusual for the first quarter of any given year given seasonality, but our free cash flow was improved by just over $5,000,000 for the first quarter of 'twenty five compared to the prior year quarter. The company remains intently focused on working capital management and meaningful cash flow generation in the second quarter and for the remainder of 'twenty five. Interest expense was $3,300,000 for the first quarter, decreasing by $1,100,000 or 25% from the prior year due to a decrease in the average debt balance outstanding and the lower interest rate environment. Our trailing twelve month bank defined leverage ratio was just under 2.5 times as of 03/31/2025, which is up slightly from year end, but still well within our allowable permitted ratio of 3.75 times.

Speaker 3

We have articulated a strategy and continue to emphasize debt reduction as our priority use of free cash flow. However, based on current financial projections, we believe investments in capital expenditures and other resources that support our organic growth strategy, while providing solid returns, additionally represent an excellent use of our free cash flow. As our current leverage ratio is in line with our expectations, we do currently possess optionality as it relates to free cash flows. So we will be balancing these priorities to maximize shareholder value. Our effective tax rate, actually a tax benefit, was 26.9% for the first quarter, and we anticipate an effective tax rate of approximately 25% for the full year 2025.

Speaker 3

We sincerely appreciate your continued support and expect to reward your patients with significantly improved results throughout 2025. At this time, I would like to turn the call back over to Natalia for closing remarks before we move on to take your questions.

Speaker 2

Thank you, Ed. I have been intently focused on developing our five year group strategic plan and roadmap along our senior leadership team and Board of Directors. This roadmap is still in progress, but is expected to provide a meaningful path to build upon for continued profitable growth for the company. We are also working closely with our customers and focus on bringing our skilled workforce of technicians and advanced technologies to continue to create value add solutions, wherein we can expect higher margins with their ROI benefit generated for our customers. As a result of this assessment and strategic planning, I'm very optimistic about the future of the company and our plan for growing our business across our key end markets and geographies.

Speaker 2

Our currently addressable market of approximately $25,000,000,000 is large and highly fragmented market that rewards innovative companies who can effectively and expeditiously help their customers keep their assets safe, compliant and efficiently operating. For forty years, Mistras has been a key industry leader in non destructive testing and data analytics that solve these increasingly complex challenges. As we look forward with our long term strategy, we are striving to become a credible provider in the larger Sikh market and we are committed and focused on creating value for our customers by combining our software, services and products to provide our customers with the knowledge and insight to operate their critical assets. We will not provide full year guidance for fiscal twenty twenty five due to unprecedented market uncertainty and while we are still reviewing our entire portfolio of businesses. We are also assessing the impact of recently enacted tariffs on our business and the results for fiscal twenty twenty five.

Speaker 2

Having said that, as a result of our ongoing cost calibration discipline, we expect our 2025 adjusted EBITDA achievement at least meet or exceed the adjusted EBITDA level achieved in 2024. I'm very pleased to be leading Mistras into the future, and I'm extremely encouraged by the energy and enthusiasm of my nearly 5,000 dedicated colleagues who believe in our vision and are working tirelessly every day helping us achieve our goals by delivering on our mission for our customers. While we have made significant progress, we recognize that there's still much more to be done. Thank you for being part of this journey. We truly appreciate your continued support.

Speaker 2

And at this time, I would like to ask the operator to open the call for your questions.

Operator

We will now begin the Q and A. For today's session, we'll be utilizing the raise hand feature. If you'd like to ask a question, simply click on the raise hand button at the bottom of your screen. Once you've been called on, please unmute yourself and begin to ask your question. Thank you.

Operator

We will now pause a moment to assemble the queue. Your first question comes from the line of John Franzeb of Sidoti and Company. Please unmute and ask your question.

Speaker 4

Good morning, everyone, and thanks for taking the questions.

Speaker 5

Morning, John. Good morning, John.

Speaker 4

Okay.

Speaker 5

Just Yes.

Speaker 4

Just wanted say. Yes.

Speaker 2

Yes. Good morning.

Speaker 4

I'm kinda curious. Today versus, you know, three months ago, can you talk a little bit about the operating environment and what's changed either positively or negatively that wasn't expected going in?

Speaker 2

Sure, sure. I can address this question. So obviously, what we've seen and as we're working with customers, as we are discussing the customers' situation with the tariffs, and we see unprecedented uncertainty, right? So the project's being delayed. The customers are still evaluating their impact on of tariffs on their business.

Speaker 2

So and that's what we see is different from what, you know, what it has been in three months ago. So the operating environment is quite challenging at this time. And again, we're just, you know, using this time wisely, proactively talking to the customers proactively, working with them, and and, figuring out the ways, to help them.

Speaker 4

So, Natalia, are you actually seeing jobs being pushed to the right meaningfully? And it's and I guess, especially, I'm kinda curious about data analytics. We're seeing, any kind of projects being stalled or pushed pushed, you know, to into later in the year.

Speaker 2

Actually, data analytics, specifically PCMS segment in our data solution, did quite well. As I mentioned in our prepared remarks, they grew the business 6% in this quarter. So the what we've seen is actually more interest from our customers as they very intently focused on the savings and budgetary reductions. There there's more interest in our platform that provides more analytics for them to gain that insights to manage their businesses better. So we are very optimistic, John, on about our performance when it comes to data data, especially the PCMS platform.

Speaker 4

Okay. I just wanted to make sure nothing's been pushed to the right in general. One I guess, other question, I'll get back into queue. Can you talk a little bit about, your pricing initiatives? It sounded like in the prepared remarks that you're going back to customers and trying to get value for your your offerings and and what you do.

Speaker 4

How are those discussions working out right now? Can you kind of give us any kind of background?

Speaker 2

Yes. Thank you, John. The commercial discipline that we have instituted a while ago still remains very much of a focus area of for the company. We are reviewing the economics behind our larger customer contracts, and we're determining what levels, levers we can pull in addition to to ways to provide more, more services. And and basically, this includes working together with our customers to provide fair and adequate ROI for the services that we provide.

Speaker 2

So that's on pricing. We do see some price pressure at the moment as, again, there's some pressure from the macroeconomic situation. So we're working again with with the customers on that. But we believe that this commercial discipline that we have continue to serve us well.

Speaker 4

Okay. I'll let somebody ask ask some questions. I'll get back into queue. Thank you.

Operator

Our next question will come from Mitch Pinheiro with Sturdy, Vinton and Co. Please unmute and ask your question.

Speaker 5

Hello? Can you hear me? Yes, Mitch. Yes, Mitch. Good morning.

Speaker 5

Hey. Good morning. So I'm curious specifically what you know, where you see tariffs affecting the business or the your customers' decisions. You know, there is I mean, just everything's on hold or and and what's on hold? What kind of projects do you talk do you see being delayed?

Speaker 2

Thank you, Mitch. Given that the our business that provides essential services to our customers that what we see is direct impact to Mistras on tariffs is not very significant. But rather, we the impact is coming from our customers, right? And the we're experiencing that impact from tariffs, supply chain disruption, economic policies, those factors causing our customers to pause or delay their spending. And based upon our discussions with the customers, there is still robust demand for our services, but the current economic conditions are hard to predict with our customers to really convert that demand into the actual projects.

Speaker 2

So that's why we see that softer top line in Q1.

Speaker 5

So is this mostly energy market related? I mean, and I'm just sort of curious, you know, I mean, you know, global demand looks pretty good. I mean, it's it's it, you know, there's some uncertainty, but I don't really see, you know, a lot of things affected by the tariffs that probably, you know, will end up being for naught. And it makes it it it just doesn't make sense that that to me, that energy, you know, markets would be affected by tariffs other than, you know, demand here or there for global oil output or something. It's just a little

Speaker 2

Yeah. That that's right, Meg. And that that's that's what we see. Right? That this sort of overall demand is unchanged.

Speaker 2

So it is temporarily paused as our customers calibrating on the new environment, right? And in fact, we're thinking that tariffs in the long run will be beneficial to us, right? Because as the advanced manufacturing moves to The U. S, we believe that there will be a higher demand for our services overall. So we are quite optimistic about the long term prospects.

Speaker 2

But, again, right now, it's this is temporarily, temporary pause, that when our customers are evaluating their own situations.

Speaker 3

It's a short run uncertainty, Mitch. Our assets are largely North American based. They're not subjected to tariffs, but the consumables, the raw materials that run through those assets that our customers operate are potentially subjected to supply chain stops and starts. There's and energy is related. You know?

Speaker 3

A crude oil can be cracked and refined into all different byproducts going into lots of different industries, not just as a fuel source. So it does cause a lot of little ebb and flowing there as the supply chain thinks through demand, supply and tariff impacts. So it it does have this indirect effect, as Natalia said, not as much directly on us. Our in lab testing might bring in a source outside of North America. They have to think through that as well.

Speaker 3

So it's a temporary thing. They're thinking through how it affects them here and now, but longer term, could be a positive to us.

Speaker 5

What about the price of oil being just below $60 How does that affect your outlook?

Speaker 2

Well, obviously, we are depending on oil prices and the impact of declining crude prices is primary contained to our downstream business. And this business, our business model is predicated upon our customers' spending behaviors, which obviously, in turn, is potentially impacted by by future, you know, oil prices and the duration during of these prices changes. Right? So they're actually, when we look at the customers, their their models are built to flex up and down with the future oil prices. So that's that's what we see.

Speaker 2

You know, we we certainly have we we we see right now that the prices are more of a lower end of normal prices. Right? So where, you know, where it's beneficial for us. So and again, that's the impact of our to our downstream business.

Speaker 4

K.

Speaker 5

Yeah. And then the only thing that really caught my eye is, like, in midstream, you know, was weak again, and I kinda thought midstream was gonna be, you know, more of a steadier revenue picture. Can you talk a little bit about what's happening in the midstream business?

Speaker 2

Yes. Our midstream business, we had some some reduction in revenue. This is, again, mostly because there was some budget restrictions, and all the way, it's regulatory driven. Most of our business in midstream is regulatory driven. So we believe that we will catch up on that on that demand later in the year.

Speaker 2

It's just the temporary pause and temporary delay.

Speaker 5

Okay. And then I I think I heard you say that, like, as far as your guidance, you're not giving formal guidance, but you think that was it your adjusted EBITDA to be similar at a minimum to last year? Is that did I hear that correctly?

Speaker 2

That's right. That's right. We believe that we at least will meet or exceed our prior year EBITDA levels.

Speaker 5

So, I mean, so does that imply at all that revenue will be, you know, not too far off from last year or you know, because your margins are have improved nicely, but I don't know if they've you know, they could withstand a big revenue shock. So for a EBITDA to be, flattish to maybe up, would suggest that revenue is not going to be too far off from last year. Is that correct? Or is there other factors to consider?

Speaker 3

No, Mitch. I think you're interpreting that correctly. We can't control that end market demand and our customers' buying decisions and when. But we are definitely signaling a moderation there. However, with our disciplined cost calibrations focus, we can control the bottom line much more, and we fully intend to do that.

Speaker 3

We have been doing that. We will continue to do that. So that's why we have a lot more confidence in that EBITDA outlook for the full year.

Speaker 5

Okay. All right, great. Thank you. Thanks for taking the questions.

Speaker 3

Thank you, Mitch.

Operator

Thank you, Mitch. Your next question will come from the line of Chris Sakai with Singular Research. Please unmute and ask your question.

Speaker 6

Yes. Hi. Good morning.

Speaker 5

Hi, Christian.

Speaker 6

Can you talk about what's happening internationally? What what what growth is happening there, And and do you foresee more growth there?

Speaker 3

Yes, Chris. International was up about 4% organically, and FX unfavorable FX translation to US dollars does flatten that out. But international has a fairly diversified business model. They're a lot less oil and gas dependent than North America, much more diversified. They have some of the same macroeconomic challenges that we're dealing with in North America.

Speaker 3

But more diversified business model for them really probably reduces some of the variability going forward and that they had a really good year in 'twenty four on the top line and bottom line, and we see them having you know they're they're a little less volatile. It's really a function of their much more diverse end markets than we would have in North America.

Speaker 6

Okay. Great. Thanks for that. And looking at midstream and downstream, what sort of things are are we to to expect to to see an uptick there on a macro level?

Speaker 2

Well, on a macro level, demand we predict that demand will not change that much. So but again, because of the unknown situation currently and on a on a macro level, there is some uncertainty. So but this is for for oil and gas overall, whether it's downstream or or midstream, upstream. So we're seeing that softness currently. But, again, we believe that it will settle down as there's more clarity around the the around the tariffs, around the rules.

Speaker 2

Right?

Speaker 6

Okay. Great. Thanks for those the the answers.

Operator

Thank you, Chris. Your next your next question will come from John Franzreb with Sidoti and Company. Please unmute and ask your question.

Speaker 4

Yes. I actually got a question about the, how, April kind of played out. Can you kind of talk to the context of how that played out compared to the March? Is it down the same magnitude?

Speaker 2

Right. In April, we still impacted a bit of the turnarounds. The number of turnarounds is not as robust, right, as that we saw in H1 of twenty twenty four, but we do see some improvement in demand. So it's definitely we again, we're very closely working with the customers to see how we can help and, create that greater insight for them using our, PCMS mobile application. So, but we see there's a slight improvement in April already.

Speaker 4

So should we be thinking about the magnitude of the weakness in the second quarter being similar to down in what you saw in the first quarter at roughly 10%? How should we contextualize the relative weakness on a year over year basis?

Speaker 3

Yes. Good question, John. Q2 will be a much easier comparison. Q1 to Q1. Q1 last year was so strong that and we did expect a drop off in the Downstream.

Speaker 3

We had communicated that. Q2 does not have that variability built in there. It's an easier comparison. So you'll see less variability and we have in Q2 versus Q2. So different model.

Speaker 3

Q1 was just extraordinarily high last year. That's what's causing much of that comparison to variance. We expect it to be down, as we said in the prepared remarks, we were down a little more than we had thought in Q1. But Q2, you'll see a little less, actually a lot less volatility versus expectations. And, again, comparing to to last year, it's it's not as, you know, not as peaky.

Speaker 4

Got it. And did I hear it properly that you expect that $6,500,000 of revenue to be recovered in the balance of the year in the oil and gas sector. I don't think you said that it was downstream dependent, but I think it sounded like to me that you're gonna get it, you know, through all three end markets.

Speaker 2

That's correct, John. So what we expect is what I was talking about turnaround specifically. So as to we noticed several times the turnarounds were softer, so we didn't have as many turnarounds as we had in 2024. However, if we look at the total backlog that we already have for turnarounds planned in H2, we believe that we at least exceeded overall total number in in in dollars as well, you know, exceed the level of '24 by 6,500,000.0.

Speaker 4

Got it. Okay. Thank you for taking my follow ups. I appreciate it.

Speaker 5

Thank you. Thank you.

Operator

At this time, I see no callers in the queue, so I will hand the call back to Ms. Schumann for her closing remarks.

Speaker 2

Well, thank you very much 20. Very confident in our prospects for the future.

Speaker 2

And again, thank you to all my team members and my colleagues for their continuous efforts and hard work in the field. Thank you.

Operator

This ends today's conference call. You may disconnect at this time.

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Key Takeaways

  • Revenue down over 12% year-over-year in Q1 2025 driven by market uncertainty in oil & gas and aerospace & defense, but costs were swiftly calibrated to preserve profitability.
  • The company is executing three key strategic initiatives—leadership talent evaluation, cost base recalibration, and growth strategies/service delivery optimization—to drive operational efficiency and future growth.
  • Data Solutions, anchored by its PCMS platform and the new PCMS Mobile release, grew 6% in Q1 and represents a core focus for delivering integrated software, analytics, and field services.
  • Q1 financial results included a GAAP net loss of $3.2 million and a non-GAAP net loss of $0.3 million, with adjusted EBITDA of $12 million (the second highest Q1 in five years) and net cash from operations of $5.6 million.
  • While full-year guidance was withheld amid tariffs and market uncertainty, management expects 2025 adjusted EBITDA to at least meet or exceed 2024 levels and is finalizing a five-year strategic roadmap.
A.I. generated. May contain errors.
Earnings Conference Call
Mistras Group Q1 2025
00:00 / 00:00