Team Q1 2026 Earnings Results & Report

Team EPS Results

• Actual EPS: -$2.76
• Consensus EPS: -$5.94
• Beat/Miss: Beat by +$3.18
• One Year Ago EPS: N/A

Team Revenue Results

• Actual Revenue: $215.06 million
• Expected Revenue: $208.88 million
• Beat/Miss: Beat by +$6.18 million
• YoY Revenue Growth: N/A

Team (NYSE:TISI) is an industrial services company that provides inspection, maintenance, engineering and specialized technical services for critical infrastructure. Its customers include operators in the energy, petrochemical, refining, chemical processing, power generation and other industrial markets.

The company’s services are designed to help customers assess asset condition, improve reliability and maintain compliance with safety and operating requirements. Its offerings have included nondestructive testing and inspection, mechanical integrity services, heat treatment, turnaround and maintenance support, rope access, engineering and other field-based services for piping, pressure vessels, storage tanks and related equipment.

Founded in 1973, Team has served industrial customers through operations in North America and other international markets. The company has historically been headquartered in Sugar Land, Texas, and has operated through a network of technical personnel and service locations supporting facilities in the United States and abroad.

Team Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Team reported a strong first quarter, with revenue up 8.3% year over year to $215 million, its highest Q1 revenue since 2019.
• Positive Sentiment: Adjusted EBITDA rose 45.2% to $7.7 million, and margin improved by 90 basis points, both the best first-quarter levels since before 2019.
• Neutral Sentiment: Management sees stability in core refining and petrochem markets, while noting growth opportunities in LNG, midstream, data centers, power, and aerospace.
• Positive Sentiment: The company outlined a focus on margin-accretive growth and cost reductions, with adjusted SG&A down 150 basis points as a percentage of revenue in Q1.
• Positive Sentiment: Team reaffirmed 2026 guidance calling for about 4% revenue growth at the midpoint, along with 8% gross margin growth and 16% Adjusted EBITDA growth.

Presentation

[Operator]

Please note this event is being recorded. I would now like to turn the conference over to Nelson Haight, Chief Financial Officer. Please go ahead.

[Nelson Haight, CFO at TEAM]

Thank you, operator. Good morning, everyone, and welcome to TEAM, Inc.'s discussion about our first quarter 2026 operational and financial results. On the discussion today are Gary Hill, our Chief Executive Officer, and myself, Nelson Haight, Chief Financial Officer. I want to remind you that management's commentary today may include forward-looking statements, including without limitation those regarding revenue, gross margin, operating expense and other income and expense, taxes, Adjusted EBITDA, cash flow and future business outlook, which by their nature are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially.

[Nelson Haight, CFO at TEAM]

For a discussion of some of the risk factors that could cause actual results to differ, please refer to the Risk Factors section of TEAM, Inc.'s latest annual and quarterly filings filed with the Securities and Exchange Commission, along with our associated earnings release. TEAM assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates. With that, I will turn it over to Gary Hill, our Chief Executive Officer.

[Gary Hill, CEO at TEAM]

Thank you, Nelson. Welcome, everyone, and thank you for joining us on the call today. I am pleased with the solid start to 2026 that we were able to deliver from both an operational and financial perspective. First quarter 2026 revenue rose 8.3% year-over-year to $215 million, our highest Q1 revenue since 2019. These results drove meaningful profitability gains, including a 45.2% increase in Adjusted EBITDA to $7.7 million and a 90 basis point improvement in Adjusted EBITDA margin. Both are the best Q1 levels since prior to 2019. Our last call was my first with TEAM, and I've been here for about 100 days now.

[Gary Hill, CEO at TEAM]

In that time, I've been able to meet with many of our hardworking employees, visit some of our worldwide locations, and had in-depth discussions with the leadership team and board. I am going to share my observations with you and share the priorities, strategic vision, and guidance for 2026 that are the result of these meetings. I want to start by saying that following these discussions, I am even more excited by the financial and operational potential and the opportunity to lead TEAM. I believe that our strategic vision will help accelerate our delivery of progressively better operational and financial results. My first observation is about TEAM's most important asset, our people. Our workforce truly has an unparalleled set of skills and technical expertise to tackle any issue that may arise for our customers.

[Gary Hill, CEO at TEAM]

We have a dedicated service team that is customer focused and 100% committed to quality and safety. This is paramount to our success, which is why one of the key points of our strategic vision is deepening our commitment to our workforce. We want to improve our retention rate, which we believe is already industry leading, and we do that by protecting and investing in our people. For example, we believe TEAM is the first in our industry to develop a formal hire to retire career path program for our technicians that lays out the long-term benefits from working at TEAM and is a key differentiator from our peers.

[Gary Hill, CEO at TEAM]

Along with our leading benefit program focused on total health and long-term wellness, we also want to strengthen engagement with our employees by encouraging open and honest communication, which is why we conduct annual satisfaction surveys that provide actionable feedback on employee concerns. We know how important our people are, and we want to make TEAM the employer of choice by ensuring our employees return home safely every day and remain committed to helping TEAM achieve our collective goals. Another observation is that we have good stability in our core markets of refining and petrochem and some very encouraging long-term tailwinds in our targeted growth markets of LNG, midstream, data centers, power, and aerospace.

[Gary Hill, CEO at TEAM]

While the Middle East conflict has had minimal direct impact on TEAM, it is impacting the oil and gas industry, and there are some knock-on effect like increased refining runtimes, thus pushing some turnaround scopes out later into the year. Regardless of what we believe to be shorter-term headwind, long-term refining and petrochem remains a strong core opportunity given the age of refineries, their high utilization rates, and their commercial need to remain online. TEAM can help with monitoring, repair and maintenance, often with minimal or no impact on runtime. LNG and midstream have seen tremendous growth in the U.S. over the past decade, and geopolitical events are driving natural gas demand and opportunities for U.S. LNG to supply new areas around the world. Expansion of existing facilities and greenfield development drive growing inspection mechanical services demand.

[Gary Hill, CEO at TEAM]

Another relatively new area is the AI data center build-out that is occurring. The forecast demand for power related to AI-fueled data center construction is unprecedented, which should drive considerable inspection and mechanical services on the power side as well as the construction and maintenance side. We also believe that strong growth in commercial aerospace and increased defense spending provides significant opportunities for our highly accredited laboratory inspection services, which are key growth areas for TEAM going forward. On the last call, I spoke about opportunities to expand our wallet share with existing customers and accelerate our growth in core and targeted end markets. I also spoke of challenging our entire team to accelerate top line growth, enhance efficiency, and reduce costs to improve our operating leverage, which should drive margin and EBITDA growth.

[Gary Hill, CEO at TEAM]

I want our organization to be committed to improving the rate of progress in these key areas. First up is commercial. We want to prioritize healthy, sustainable growth that is margin accretive and less cyclical. With our strong customer focus, proven technical expertise, geographic footprint, and breadth of service offerings, we are focused on expanding our market share in the targeted end markets I previously mentioned. We see a large opportunity for TEAM and with a focused and disciplined effort expect to capture market share. We are also being more disciplined about the work we pursue, focusing on opportunities where our technical capabilities and quality of execution are most valued. We are prioritizing healthy growth over growth at any cost. Next is our ongoing focus on cost efficiency.

[Gary Hill, CEO at TEAM]

We have made meaningful progress in cost optimization over the past several years, but there is certainly an opportunity for further improvement, particularly in supply chain, better integrating how our teams and locations work together, further simplifying processes and investing in systems to lower costs, all of which is intended to improve our scalability and expand margins. We are defining the opportunity over and above the reductions previously announced, and believe that in the second quarter earnings release and conference call, we will have a better scope set of targeted cost reduction amounts to convey to the market. Finally is our workforce, which I discussed in detail, but I want to further outline how we can improve there. We are targeting strategic additions to our already experienced leadership team that I believe will enhance our capabilities and elevate accountability across the organization.

[Gary Hill, CEO at TEAM]

I want all our leaders to share that commitment and to work hand in hand with our workforce to deliver our strategic vision together. I want to enhance communication and our analytics to accelerate and improve our decision making. We need to be nimble and capable of meeting our customers' needs in a changing market so that we can realize first mover advantages. Before I turn the call over to Nelson to go into the quarterly results in detail, I want to give a high-level overview of our full year 2026 guidance. Our strategic vision and the priorities that I have discussed this morning should lead to a healthier growth in our revenue, margins, and Adjusted EBITDA.

[Gary Hill, CEO at TEAM]

We are off to a good start in 2026, and we believe our full year revenue can grow about 4% at the midpoint of our guidance range of between $920 million and $945 million as compared to 2025 actuals. This revenue growth, coupled with the margin expansion opportunities we are targeting, should help us substantially improve our free cash flow and Adjusted EBITDA over the prior year. We are forecasting our gross margin in 2026 to be between $240 million and $260 million, which is an 8% increase at the midpoint compared to 2025.

[Gary Hill, CEO at TEAM]

When you start compounding the top line growth with margin expansion and improved operating leverage, you see the impact with our 2026 Adjusted EBITDA guidance increasing 16% at the midpoint to between $68 million and $73 million. We have provided a framework of strategic priorities focused on our people, efficiency, leadership, and commercial results that we'll continue to refine and build upon. Expect more detail in the second quarter of 2026. With that, I would like to turn it over to Nelson to discuss our financial accomplishments.

[Nelson Haight, CFO at TEAM]

Thank you, Gary. As I mentioned on the last call, we have focused on simplifying the business, strengthening our capital structure and balance sheet, and improving our operating leverage and margins. While we still have work to do, we are now positioned to strategically grow our top line and expand our cash flow generation. The first quarter results for 2026 and our guidance for full year 2026 should accurately reflect the impact of our operational and commercial initiatives with year-over-year expansion in our revenue, margins, and Adjusted EBITDA driven by our ongoing focus on cost efficiency and margin accretive growth. Turning to the first quarter, we continued to deliver solid results, generating year-over-year improvements in revenue, operating income, and Adjusted EBITDA.

[Nelson Haight, CFO at TEAM]

As Gary mentioned, our first quarter revenue was up $16.4 million or 8.3% compared to the prior year period, which was the highest first quarter revenue since 2019. This increase was driven by a $9.8 million or 8.6% increase in our Inspection and Heat Treating segment revenues, which were boosted by increased project and call out activity in the U.S. and Canada. Additionally, we saw a $6.6 million or 7.8% increase in our Mechanical Services segment, which was supported by a higher project and turnaround activity with both new and existing customers. Operating income was up $2.6 million or 43.8% year-over-year, driven by stronger revenue in both the U.S. and Canada and lower corporate costs.

[Nelson Haight, CFO at TEAM]

As Gary mentioned, we are focused on winning higher margin opportunities in both segments that together with sustainable cost reductions should lead to continued improvement in operating income. Our progress and cost efficiency can be seen in our first quarter adjusted selling general and administrative expense, which excludes non-cash items and expenses not representative of ongoing operations. While the absolute amount was slightly higher, expressed as a percentage of revenue, Adjusted SG&A decreased by 150 basis points versus the prior year period, pointing to improving scalability and leverage. This helped drive our Adjusted EBITDA higher by nearly $2.4 million-$7.7 million. I believe that we are in a significantly improved financial position in 2026. As an organization, we are fixated on improving margins and growing Adjusted EBITDA.

[Nelson Haight, CFO at TEAM]

For 2026, we are prioritizing free cash flow generation through more efficient use of working capital and improved cash flow margins. We will target further deleveraging in the business and debt pay down. Both our net loss and free cash flow are steadily improving. I remain confident in our ability to successfully execute on the strategy and priorities that Gary outlined earlier. We look forward to continuing to build up these strong results that we expect will lead to growth and shareholder value. With that, let me turn it back over to Gary for some closing remarks.

[Gary Hill, CEO at TEAM]

Thanks, Nelson. As you heard today, TEAM has delivered strong operational and financial results in the first quarter of 2026, and we are refining and implementing a strategic vision that we expect will continue delivering healthier growth in the top line, margins, and Adjusted EBITDA. Over the past several years, TEAM has repositioned itself and made meaningful improvements in operations, safety, and its financial performance and balance sheet. TEAM has a unique culture, storied history, strong customer relationships, and numerous built-in strengths already in place. I want to reinforce open communication and collaboration with stakeholders, employees, shareholders, and customers to better drive progress and build on past successes. TEAM boasts a proud history and a workforce renowned industry-wide for delivering safe and technically superior customer service.

[Gary Hill, CEO at TEAM]

This has established an outstanding foundation, and my goal is to take this very strong company and make it even better through continuous improvement. We are implementing the steps necessary to accelerate that rate of improvement through focused initiatives and operational execution. I am very excited about our future because we have talented employees and differentiated offerings for our customers. We provided guidance for fiscal year 2026 that forecasts meaningful growth of 4%, 8%, and 16% in revenue, gross margin, and Adjusted EBITDA compared to 2025. As you have heard today, every employee here is committed to delivering these improving results that will continue to strategically grow TEAM and unlock substantial value for our shareholders. Thank you for joining us today and for your continued interest in TEAM.

Participants

Executives

• Gary Hill, CEO

Analysts

• Nelson Haight, CFO at TEAM