Breaking Down Matrix Service Company (MTRX) Financial Health: Key Insights for Investors

Are you an investor keeping a close watch on the engineering and construction sectors? Have you been following Matrix Service Company (MTRX) and wondering about their financial stability and future prospects? In fiscal year 2024, the company's revenue reached $728.21 million, even with an 8.40% decrease compared to the previous year. While the company reported a net loss of $4.4 million, is Matrix Service Company (MTRX) poised for a turnaround, with a total backlog increased by 31% year-over-year to $1.4 billion and full-year project awards of $1.1 billion? Read on to explore key financial insights, challenges, and opportunities that could shape your investment decisions.

Matrix Service Company (MTRX) Revenue Analysis

Understanding Matrix Service Company's (MTRX) revenue streams is crucial for investors. A detailed analysis provides insights into the company's financial health and growth potential. For more information, you might find this link helpful: Exploring Matrix Service Company (MTRX) Investor Profile: Who’s Buying and Why?

Here's a breakdown of Matrix Service Company’s primary revenue sources, year-over-year growth, and segment contributions based on the most recent fiscal data.

Breakdown of Primary Revenue Sources:

Matrix Service Company operates through three key segments:

• Storage and Terminal Solutions: This segment focuses on engineering, procurement, fabrication, and construction services for cryogenic and other specialty tanks and terminals related to liquefied natural gas (LNG), natural gas liquids, hydrogen, ammonia, propane, butane, liquid nitrogen/liquid oxygen, and liquid petroleum.
• Utility and Power Infrastructure: This segment provides engineering, procurement, fabrication, and construction services to support the growing demand for LNG utility peak shaving facilities and power delivery.
• Process and Industrial Facilities: This segment is involved in plant maintenance, repair, and turnarounds in the downstream and midstream markets for energy clients, including refining and processing of crude oil, fractionating, and marketing of natural gas and natural gas liquids.

Year-over-Year Revenue Growth Rate:

For the fiscal year ending June 30, 2024, Matrix Service Company reported annual revenue of $728.21 million. This represents a decrease of -8.40% compared to the previous fiscal year.

Historical revenue trends show the following:

• Fiscal Year Ending June 30, 2024: $728.21M (-8.40%)
• Fiscal Year Ending June 30, 2023: $795.02M (12.33%)

In the quarter ending December 31, 2024, the company's revenue was $187.17 million, reflecting a 6.93% growth. However, the revenue for the last twelve months was $708.26 million, a -7.47% year-over-year decrease.

Contribution of Different Business Segments to Overall Revenue:

A look at the segment results for the second quarter of fiscal year 2025 (ended December 31, 2024) compared to the second quarter of fiscal year 2024 provides insights into segment contributions:

• Storage and Terminal Solutions: Revenue increased 53% to $95.5 million in Q2 2025 compared to $62.4 million in Q2 2024, driven by increased volume of work for specialty vessel and LNG storage projects.
• Utility and Power Infrastructure: Revenue increased 52% to $61.1 million in Q2 2025 compared to $40.1 million in Q2 2024, benefiting from a higher volume of work associated with LNG peak shaving projects, partially offset by decreases in power delivery work.
• Process and Industrial Facilities: Revenue decreased to $30.6 million in Q2 2025 compared to $71.3 million in Q2 2024, primarily due to lower revenue volumes resulting from the completion of a large renewable diesel project and lower revenue volumes for thermal vacuum chambers.

Analysis of Significant Changes in Revenue Streams:

Significant changes in revenue streams can be attributed to several factors. For example, in the fourth quarter of fiscal year 2024, revenue was $189.5 million, compared to $205.9 million in the same quarter of the previous year. The decline was due to lower revenues from refinery maintenance and turnarounds, as well as midstream gas processing projects. This was partially offset by increases in revenues from peak shaver projects and LNG storage projects.

The company is strategically focused on higher-margin specialty engineering and construction opportunities, which is expected to position Matrix for long-term value creation.

Matrix Service Company has issued fiscal year 2025 revenue guidance of $900 million to $950 million, indicating expected growth. This is supported by a strong backlog and a streamlined organization.

Matrix Service Company (MTRX) Profitability Metrics

Analyzing Matrix Service Company's financial health requires a close examination of its profitability metrics. Key indicators such as gross profit, operating profit, and net profit margins provide insights into the company's efficiency and overall financial performance. Additionally, comparing these ratios with industry averages and tracking their trends over time can reveal valuable information about Matrix Service Company's competitive positioning and operational effectiveness.

Here's an overview that will help to assess the company's financial performance:

• Gross Profit: Gross profit is the revenue left over after deducting the cost of goods sold (COGS). For the fourth quarter of fiscal year 2024, Matrix Service Company reported a gross margin of $12.4 million, which translates to 6.6% of revenue. This is a decrease compared to the fourth quarter of fiscal year 2023, which had a gross margin of $14.7 million, or 7.1%. For Q1 2025, gross profit was $7.813 million, a decrease of $4.0 million, or 34%, compared to Q1 2024.
• Operating Profit: Operating profit is calculated by deducting operating expenses from gross profit, indicating earnings before interest and taxes. According to CompaniesMarketCap, Matrix Service Company's current operating margin is -4.76%.
• Net Profit: Net profit is the income remaining after all expenses, including taxes and interest, have been deducted from revenue. For the full year fiscal 2024, Matrix Service Company had a net loss of $25.0 million, or $(0.91) per share, compared to a net loss of $52.4 million, or $(1.94) per share for fiscal year 2023. For the fourth quarter of fiscal 2024, the company had a net loss of $4.4 million, or $(0.16) per share, compared to a net loss of $0.3 million, or $(0.01) per share, in the fourth quarter of fiscal 2023.

To summarize key profitability metrics for fiscal year 2024:

• Gross Margin: 6.6% in Q4 2024, down from 7.1% in Q4 2023
• Operating Margin: -4.76%
• Net Loss: $25.0 million for the full year

Matrix Service Company's profitability ratios compared to industry averages reveal areas of concern. For instance, as of July 2024, Matrix Service Company's gross margin was 5.74%, while the Industrials sector median was 31.21%. The EBITDA margin was -2.09% compared to the sector median of 13.70%, and the net income margin was -2.81% versus 6.12%. The return on common equity was -12.11% compared to the sector median of 12.62%.

Here is a table summarizing Matrix Service Company's profitability margins versus the industry medians:

Several factors influence Matrix Service Company's operational efficiency. Cost management is a critical area, as highlighted by the under-recovery of construction overhead costs, which negatively impacted gross margins. According to the Q3 2024 report, gross margin was 3.4% due to under-recovery of construction overhead costs and reduced labor demand for turnaround and maintenance services. The gross margin decreased to 4.7% for the first quarter of fiscal 2025 compared to 6.0% for the first quarter of fiscal 2024 due to the under-recovery of construction overhead costs on lower revenues.

In Q4 2024, the Process and Industrial Facilities segment saw its gross margin increase to 15.4%, compared to 8.2% for Q4 2023, due to strong project execution across the portfolio.

For more in-depth information, you can read this comprehensive analysis: Breaking Down Matrix Service Company (MTRX) Financial Health: Key Insights for Investors

Matrix Service Company (MTRX) Debt vs. Equity Structure

Understanding how Matrix Service Company finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt and equity to fund its activities. Here’s a detailed look at Matrix Service Company's debt and equity structure:

As of the quarter ended January 31, 2024, Matrix Service Company's financial health reveals the following about its debt:

• Total debt outstanding: $73.29 million
• Total assets: $648.42 million

Overview of Debt Levels

Matrix Service Company maintains a mix of short-term and long-term debt to support its projects and operational needs. Recent data indicates:

• Short-term debt: $0.47 million
• Long-term debt: $72.82 million

Debt-to-Equity Ratio

The debt-to-equity ratio is a critical metric for assessing a company's financial leverage. For Matrix Service Company, the debt-to-equity ratio can be calculated using the available data. However, directly providing the calculated ratio requires specific equity figures from the balance sheet, which should be derived from the latest financial reports. As of January 31, 2024, the ratio is approximately 0.35, which is calculated based on total debt of $73.29 million and total equity of $208.94 million.

A debt-to-equity ratio of 0.35 suggests that Matrix Service Company uses a balanced approach to financing, with debt representing a reasonable proportion of equity. This indicates a moderate level of financial risk.

Recent Debt and Financing Activities

Keeping track of Matrix Service Company's recent financial activities provides insights into its strategic financial management:

• In Q3 2024, Matrix Service Company reported total liabilities of $439.48 million and total equity of $208.94 million.

Balancing Debt and Equity

Matrix Service Company strategically balances debt and equity to optimize its capital structure. While specific details on recent refinancing activities or credit ratings require real-time updates, the overall approach involves:

• Using debt to finance large projects and capital expenditures, taking advantage of low interest rates when available.
• Maintaining a reasonable debt-to-equity ratio to avoid excessive financial risk.
• Leveraging equity to fund long-term growth initiatives and provide a stable financial base.

Here is an overview of key financial data:

For further insights into Matrix Service Company's financial health, read more here: Breaking Down Matrix Service Company (MTRX) Financial Health: Key Insights for Investors

Matrix Service Company (MTRX) Liquidity and Solvency

Assessing the liquidity of Matrix Service Company (MTRX) involves examining several key financial metrics and trends. Liquidity refers to the company's ability to meet its short-term obligations as they come due.

Here's an overview of MTRX's liquidity position:

• Current Ratio: As of April 2025, MTRX's current ratio is approximately 1.14. A current ratio of greater than 1 indicates that a company has more current assets than current liabilities, suggesting it is generally well-positioned to cover its short-term obligations.
• Quick Ratio: The quick ratio, which excludes inventories from current assets, is about 1.10. This ratio provides a more conservative view of liquidity, as it only considers the most liquid assets.

These ratios suggest that Matrix Service Company has a reasonable ability to cover its short-term liabilities with its current assets. For additional context, you might find insights in the Mission Statement, Vision, & Core Values of Matrix Service Company (MTRX).

Analysis of Working Capital Trends:

Working capital is calculated as current assets minus current liabilities. A positive working capital balance indicates that a company has enough liquid assets to cover its short-term liabilities. MTRX's working capital was $42.6 million in 2023. Monitoring the trend of working capital helps to understand if the company's liquidity position is improving or deteriorating.

Cash Flow Statements Overview:

An examination of cash flow statements provides insights into the sources and uses of cash. There are three primary categories:

• Operating Activities: Net cash provided by operating activities during fiscal year 2024 was $72.6 million, compared to $10.2 million during fiscal 2023. This increase primarily reflects scheduled payments from customers associated with project awards in backlog. For the first half of fiscal 2025, net cash provided by operating activities was $45.5 million.
• Investing Activities: Reviewing cash flow from investing activities reveals how the company is deploying capital into assets.
• Financing Activities: Cash flow from financing activities shows how the company is raising capital and managing its debt and equity.

Here is a summary of Matrix Service Company's cash flow performance based on recent reports:

Liquidity Strengths and Potential Concerns:

As of June 30, 2024, Matrix Service Company had total liquidity of $169.6 million, which includes $115.6 million in unrestricted cash and cash equivalents, and $54.0 million of borrowing availability under a credit facility. By December 31, 2024, their liquidity had increased to $211.7 million, comprising $156.8 million in unrestricted cash and cash equivalents, plus $54.9 million of borrowing availability. The company had no outstanding borrowings under the facility as of June 30, 2024 and December 31, 2024.

Matrix Service Company (MTRX) Valuation Analysis

Determining whether Matrix Service Company (MTRX) is overvalued or undervalued requires a multifaceted approach, incorporating several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, alongside stock price trends, dividend information (if applicable), and analyst ratings.

As of April 21, 2025, here's a breakdown of factors influencing MTRX's valuation:

Valuation Ratios:

• Price-to-Earnings (P/E): Analyzing MTRX's P/E ratio relative to its industry peers and historical averages provides insights into whether the stock is trading at a premium or discount compared to its earnings.
• Price-to-Book (P/B): The P/B ratio compares MTRX's market capitalization to its book value of equity, indicating whether the stock is overvalued based on its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio assesses MTRX's total value (equity plus debt) against its earnings before interest, taxes, depreciation, and amortization (EBITDA), offering a valuation perspective independent of capital structure and accounting practices.

Stock Price Trends:

• Reviewing MTRX's stock price performance over the past 12 months (or longer) helps identify trends, volatility, and potential catalysts driving price movements.

Dividend Yield and Payout Ratios:

• If MTRX distributes dividends, examining the dividend yield (annual dividend per share divided by stock price) and payout ratio (percentage of earnings paid out as dividends) provides insights into the company's income-generating potential and dividend sustainability.

Analyst Consensus:

• Tracking analyst ratings (buy, hold, or sell) and price targets for MTRX offers a consensus view on the stock's valuation and potential upside or downside.

For a deeper dive into the investors of Matrix Service Company, check out: Exploring Matrix Service Company (MTRX) Investor Profile: Who’s Buying and Why?

Matrix Service Company (MTRX) Risk Factors

Several internal and external risk factors could influence the financial well-being of Matrix Service Company (MTRX). These risks span across industry competition, regulatory changes, and overall market conditions.

Here's a breakdown of key risks:

• Industry Competition: The industrial construction and maintenance sector is highly competitive. Matrix Service Company faces challenges in maintaining its strategic edge due to evolving industries and technological innovations.
• Regulatory Changes: Environmental Protection Agency (EPA) regulations can significantly impact industrial service operations. Changes in these regulations may require Matrix Service Company to invest in new technologies and processes to ensure compliance. For example, the EPA mandates a 50% reduction in industrial greenhouse gas emissions by 2030, requiring the company to implement advanced emission monitoring technologies and invest in low-carbon construction equipment.
• Market Conditions: Revenue growth and project progression are heavily reliant on market fundamentals, client decision-making, and the regulatory environment. These factors can influence the timing of project awards and start dates.

Operational, financial, and strategic risks highlighted in recent earnings reports and filings include:

• Gross Margin Pressures: Gross margins are currently below target due to under-recovered construction overheads. If these overheads are not addressed, short-term profitability could be negatively impacted. In the second quarter of fiscal year 2025, the gross margin was 5.8%, compared to 6.0% in the same quarter of the previous year, impacted by under-recovery of construction overhead costs.
• Project Execution: The company's ability to efficiently execute large-scale projects and improve profitability is critical for capitalizing on favorable market conditions and differentiating itself from competitors.
• Reliance on Software Applications: The company relies on internally and externally developed software applications and systems to support critical functions, including project management, estimating, scheduling, human resources, accounting, and financial reporting. Any sudden loss, disruption, or unexpected costs to maintain these systems could significantly increase operational expenses and disrupt business operations.
• Liquidity Risk: Borrowing capacity under the company's credit agreement is determined by the size of its borrowing base. If the borrowing base combined with unrestricted cash does not provide adequate liquidity, the company may need to raise additional capital, which may not be available on favorable terms. As of June 30, 2024, Matrix Service Company had total liquidity of $169.6 million.
• Supply Chain Disruptions: Potential supply chain disruptions in the energy and construction sectors can lead to increased procurement lead times and raw material price volatility.

Mitigation strategies and plans to address these risks may include:

• Sustainability Initiatives: Implementing sustainability initiatives to align with industry trends and regulatory pressures. For example, Matrix Service Company has set a target to reduce carbon emissions by 15%.
• Environmental Risk Management: Allocating resources for environmental risk mitigation in construction and maintenance operations. In 2024, the company allocated $18.6 million for environmental risk mitigation.
• Compliance Strategies: Developing strategies to comply with EPA regulations, including implementing advanced emission monitoring technologies and investing in low-carbon construction equipment.
• Operational Efficiencies: Focusing on operational excellence and financial performance to strengthen the balance sheet and support business strategy and objectives.

For more insights, explore Mission Statement, Vision, & Core Values of Matrix Service Company (MTRX).

Matrix Service Company (MTRX) Growth Opportunities

Matrix Service Company's future growth prospects are multifaceted, driven by strategic initiatives, market dynamics, and the company's positioning within its key sectors. The company operates primarily in the following segments:

• Utility and Power Infrastructure: This segment focuses on power delivery, new power generation, and renewable energy, including solar, wind, and energy storage.
• Process and Industrial Facilities: This involves providing engineering, construction, and maintenance services to the downstream petroleum and petrochemical industries.
• Storage and Terminal Solutions: This segment caters to the oil, gas, and chemical industries, offering services related to storage and terminal facilities.

Here's a breakdown of the key factors influencing Matrix Service Company's growth trajectory:

Analysis of Key Growth Drivers:

Matrix Service Company is poised to capitalize on several growth drivers, including:

• Renewable Energy Expansion: With the increasing global focus on renewable energy, particularly solar and wind, Matrix is well-positioned to benefit through its utility and power infrastructure segment.
• Infrastructure Modernization: Aging infrastructure in North America requires upgrades and expansions, presenting opportunities for Matrix in power delivery and storage solutions.
• Downstream and Industrial Projects: The company's expertise in downstream petroleum and petrochemical facilities, along with industrial projects, allows it to secure contracts for new construction, maintenance, and expansion projects.
• Strategic Acquisitions: While there's no recent acquisition activity to report for 2024, the company has a history of growing through strategic acquisitions and may pursue similar opportunities in the future to expand its service offerings or geographic reach.

Future Revenue Growth Projections and Earnings Estimates:

While specific revenue growth projections and earnings estimates for Matrix Service Company are subject to market conditions and company performance, several factors suggest a positive outlook:

• Increased Capital Spending: Expected increases in capital spending on infrastructure projects, particularly in the renewable energy sector, should drive revenue growth for Matrix.
• Project Backlog: The company's existing project backlog provides a degree of revenue visibility and supports future growth.

Strategic Initiatives or Partnerships:

Strategic initiatives and partnerships play a crucial role in Matrix Service Company's growth strategy:

• Technology Adoption: Embracing new technologies, such as advanced construction techniques and digital solutions, can improve project efficiency and attract new clients.
• Geographic Expansion: Expanding operations into new geographic regions can diversify revenue streams and reduce reliance on specific markets.
• Partnerships and Alliances: Forming strategic alliances with other companies can provide access to new markets, technologies, or expertise.

Competitive Advantages:

Matrix Service Company possesses several competitive advantages that position it for growth:

• Strong Reputation: A proven track record of delivering high-quality services and projects has earned Matrix a strong reputation in the industry.
• Technical Expertise: The company's deep technical expertise and skilled workforce provide a competitive edge in complex projects.
• Diversified Service Offerings: Offering a broad range of services across multiple segments reduces risk and allows Matrix to capitalize on opportunities in different markets.

For more insights into Matrix Service Company and its investors, check out: Exploring Matrix Service Company (MTRX) Investor Profile: Who’s Buying and Why?