Matrix Service Company Q3 FY2026 earnings call

• Business returned to profitability in Q3 with adjusted earnings of 13 cents per fully diluted share despite revenue impact from client delays and weather. Revenue guidance midpoint reduced by 2.2% but expected to climb in Q4. - Resolved two legacy legal issues, increasing cash balance by nearly $20 million and reducing future legal spend. - Opportunity pipeline at $6.9 billion, including mining, power generation, and data center activities. - Awards in quarter below expectations but had key strategic wins like mining project notice to proceed and electrical awards for data centers. - Organizational realignment ongoing, with Sean Payne to succeed John Hewitt as CEO on July 1st, and CFO Kevin Cavanaugh and CAO Nancy Austin departing.

Storage and terminal solutions segment: Revenue increased 16% to $111.6 million in Q3 (highest quarterly revenue in six years), gross margin increased to 7% from 3.9% in Q3 2025. Utility and power infrastructure segment: Revenue was $60 million vs $58.7 million last year, gross margin 13.6% vs 9.4% last year. Process and industrial facility segment: Revenue decreased to $35.1 million vs $45.4 million last year, gross margin 2.5% vs 8.3% last year, expected to rebound in fiscal 2027 due to mining project.

• Revenue guidance midpoint reduced from $900 million to $880 million due to revenue movement, but Q4 revenue expected to climb and support continued profitability. - Expect awards in key sectors like mining, minerals, and LNG infrastructure to increase book-to-bill in fiscal 2027 and support profitability. - Sean Payne to share first 100-day roadmap as CEO on next earnings call.

• Client-related delays and weather can impact revenue. - Legacy legal issues if not resolved could affect financials. - Changes in organizational structure and leadership transitions could impact operations. - Macroeconomic and global issues affecting oil and gas market may have uncertainties for business.

Q: Walk through puts and takes in utilities segment with sequential revenue drop but gross margin increase.

A: Good performance throughout segment, power delivery and peak shaving outperformed margin expectations, revenue down due to manpower reduction on peak shaver project.

Q: What was restructuring charges for?

A: Related to CEO transition and lease impairment due to sublease market not as strong as planned.

Q: Confidence in new projects' profitability to maintain profitability through fiscal 2027?

A: Backlog still at billions with solid margin work, confident in opportunity pipeline and award momentum to maintain revenue and profitability.

Q: Thoughts on oil and gas market benefiting Matrix?

A: Global need for secure energy supplies drives investment in U.S. energy assets, which fits Matrix's wheelhouse.

Q: Impact of legal settlements on legal spend?

A: Reduced legal spend as settlements resolved, related to construction overhead which was a drag on overhead recovery.