Thermal Energy Achieves Record Revenue of $29.8 Million in Fiscal 2025

Executive Summary

• Thermal Energy International Inc. reported its financial results for the fourth quarter and fiscal year ended May 31, 2025, highlighting a record full-year revenue of $29.8 million despite a quarterly revenue decline.
• The company achieved its highest-ever order backlog of $24.3 million as of September 22, 2025, driven by a record first-quarter fiscal 2026 intake of $11.3 million, which includes significant contracts from major pharmaceutical, food ingredients, and building materials clients.
• Financial performance showed improved gross margins (53.9% in Q4) and debt reduction, with $1.1 million in long-term debt repaid during the quarter, leaving a remaining balance of $0.3 million to be cleared by January 2026.

Key Details

• Q4 2025 Financials (vs Q4 2024):
  • Revenue: $6.8 million (decrease of 9.3%).
  • Gross Profit: $3.7 million (increase of 17.3%); Gross Margin improved to 53.9%.
  • Net Income: $224 thousand (decrease of 22.9%).
  • Adjusted EBITDA: $397 thousand (decrease of 6%); Adjusted EBITDA margin improved to 5.8%.
  • Operating Expenses: $3.3 million (increase of $630 thousand year-over-year, primarily due to $345k in foreign exchange losses and $285k in increased general operating costs from team expansion).
  • R&D Expense: Decreased by $85 thousand.
• Fiscal Year 2025 Financials (vs FY 2024):
  • Revenue: $29.8 million (record high, increase of ~15%).
  • Gross Profit: $12.3 million (decrease of 1%).
  • Net Income: $158 thousand (decrease from $982 thousand in prior year).
  • Adjusted EBITDA: $1.1 million (decrease from $2.0 million in prior year).
  • Operating Expenses: $11.5 million (increase of $715 thousand, driven by $813k in headcount growth and inflation, partially offset by $99k decrease in FX losses).
  • R&D Expense: Increased by $137 thousand.
• Balance Sheet & Cash Position:
  • Cash Position: $2.8 million.
  • Working Capital: $2.4 million.
  • Debt Repayment: Repaid $1.1 million in long-term debt in Q4; total $2.0 million repaid for the fiscal year. Total $3.6 million repaid over the last three years. Final balance of $329 thousand scheduled for repayment by January 2026.
• Orders & Backlog:
  • Q4 Orders Received: $4.8 million.
  • Order Backlog (May 31, 2025): $12.9 million (down 31% from $18.7 million prior year).
  • Post-Year-End Orders: $11.4 million received subsequent to year-end.
  • Current Order Backlog (Sept 22, 2025): $24.3 million (highest ever reported).
  • Q1 Fiscal 2026 Intake: $11.3 million (highest first-quarter intake in company history, 4x prior year).
• Strategic Initiatives & Future Outlook:
  • Revenue expected to be weighted toward the back half of fiscal 2026 as revenue from new orders is recognized.
  • Strategic growth opportunities identified:
    1. Developing higher-margin standardized equipment packages for smaller projects.
    2. Adding independent sales representatives to free up internal sales for larger opportunities.
    3. Expanding Boilerroom Equipment Inc. (BEI) into Europe.
  • Leveraging the "CREST" (Carbon Reduction & Efficiency Scoping Tool) for sales and scoping.
• Specific Major Orders Included in Recent Intake:
  • $5.1 million from one of the world's largest pharmaceutical companies.
  • $1.4 million turnkey heat recovery project from a European food ingredients company.
  • $1.0 million turnkey heat recovery contract from a leading multinational building materials manufacturer.

Notable Quotes

• William Crossland, CEO: "While our revenue was down in the fourth quarter, our quarterly gross profit and Adjusted EBITDA margins improved, and we still achieved our highest fiscal year revenue ever... But the big story for us is that, after suppressed levels of order intake throughout fiscal 2025, our order intake in the first quarter of fiscal 2026 reached $11.3 million — which is the highest first quarter intake in our history and four times what we had in the first quarter of last year."
• William Crossland, CEO: "We significantly reduced our bank debt, repaying $1.1 million in the quarter and $2 million in the fiscal year... This should not only help our bottom line going forward, but also give us more flexibility with our future growth."
• William Crossland, CEO: "While the significant reinvestments in our business over the last two plus years has impacted our profitability, those investments should now enable us to scale."