Breaking Down Team, Inc. (TISI) Financial Health: Key Insights for Investors

You're looking at Team, Inc. (TISI) and trying to figure out if their operational turnaround is defintely translating into shareholder value, and honestly, the Q3 2025 financial results show a company walking a tightrope between growth and debt. On one side, the operational improvements are tangible: they posted revenue of $225.0 million for the quarter ended September 30, 2025, a solid 6.7% year-over-year jump, and their Adjusted EBITDA surged 28.6% to $14.5 million, which signals better operating efficiency. But still, the bottom line remains a concern; they reported a net loss of $11.4 million for the quarter, and while they've made a huge move to strengthen the balance sheet-net debt fell to $288.0 million as of September 30, 2025, after a strategic preferred investment-that debt load is the anchor you have to watch. The opportunity here is in the segment growth, but the risk is in the persistent net loss, so let's break down where the cash is really flowing.

Revenue Analysis

You need a clear picture of where Team, Inc. (TISI) is actually making its money, and the Q3 2025 results give us a solid, recent snapshot. The direct takeaway is that revenue is growing, up 6.7% year-over-year in the third quarter, driven almost equally by both core segments.

The company is on track for a full-year 2025 revenue growth of approximately 5%, which is a defintely positive sign, especially considering the industrial services sector's volatility. The trailing twelve months (TTM) revenue ending September 30, 2025, stood at $884.95 million, confirming the recent upward trend. Here's the quick math on their primary revenue streams, which are split into two major segments: Inspection and Heat-Treating (IHT) and Mechanical Services (MS).

Understanding Team, Inc.'s Primary Revenue Streams

Team, Inc.'s business model is built on providing specialty industrial services, essentially keeping critical infrastructure like refineries and power plants running. The revenue breakdown shows a near 50/50 split between their two segments, which is a good sign of diversification within their core competency.

In the third quarter of 2025, the company generated $225.0 million in total revenue. The Inspection and Heat-Treating segment is the slight revenue leader, but both segments are contributing to growth, which is a powerful combination for an investor to see.

• Inspection and Heat-Treating (IHT): Offers non-destructive examination (NDE), testing, and heat-treating services.
• Mechanical Services (MS): Provides conventional and proprietary mechanical services, like leak repair and bolt tensioning.

For Q3 2025, the IHT segment brought in $113.8 million, while the MS segment accounted for the remaining $111.2 million. The year-over-year growth rate for IHT was 5.7%, and MS saw even stronger growth at 7.8%. This indicates that the strategic focus on both maintenance (MS) and integrity services (IHT) is paying off.

Near-Term Revenue Catalysts and Shifts

The growth isn't just a generic uptick; it's driven by specific, actionable trends. The significant change in revenue streams is the pronounced strength in U.S. operations and the turnaround in Canada. The IHT segment's growth was fueled by strong nested and call-out activity in the U.S., plus an 8.9% growth internationally, including Canada. The MS segment's impressive 7.8% growth was led by increased turnaround demand in the U.S. and a major improvement in Canada's performance. This is a critical point: the company is successfully executing its initiatives to strengthen commercial and financial performance in challenging regions like Canada.

What this estimate hides is the sequential decline from Q2 to Q3, which management attributes to normal seasonality in their business. Still, the year-over-year growth remains the key metric here, and the full-year guidance of ~5% revenue growth suggests management is confident in a strong finish. You can dive deeper into the full financial picture in our comprehensive analysis: Breaking Down Team, Inc. (TISI) Financial Health: Key Insights for Investors.

Next step: Finance needs to model the Q4 revenue based on the 5% full-year guidance to confirm the implied Q4 revenue target by end of next week.

Profitability Metrics

You want to know if Team, Inc. (TISI) is actually making money, or if the recent revenue growth is just a vanity metric. The quick answer is that while gross profitability is solid and improving, the company is still struggling to translate that into operating and net profit due to high overhead costs and non-recurring expenses.

Looking at the 2025 fiscal year through the third quarter (Q3 2025), the trend shows strong operational efficiency gains at the service level, but a persistent drag from corporate expenses. This is a classic turnaround situation: the core business is getting healthier, but the balance sheet and corporate structure are still heavy. You need to watch the margin progression.

Gross, Operating, and Net Profit Margins (Q3 2025)

Team, Inc.'s (TISI) gross margin is the bright spot, showing the core service delivery is profitable. For the third quarter of 2025, the company reported revenue of $225.0 million and a gross profit of $58.0 million. This translates to a Gross Profit Margin of 25.8%. This is a healthy margin for an industrial services company, showing good pricing power and cost-of-service management.

However, the picture darkens as you move down the income statement. The Operating Income for Q3 2025 was only $1.3 million, which is a razor-thin Operating Profit Margin of just 0.58%. The Net Loss for the quarter was $11.4 million, resulting in a negative Net Profit Margin of -5.07%. Here's the quick math on the key Q3 2025 figures:

• Gross Profit Margin: 25.8% ($58.0M / $225.0M)
• Operating Profit Margin: 0.58% ($1.3M / $225.0M)
• Net Profit Margin: -5.07% (-$11.4M / $225.0M)

The gap between the Gross and Operating margins is your action point. That's where the high Selling, General, and Administrative (SG&A) costs live, and they are eating nearly all the gross profit.

Operational Efficiency and Cost Management

The trend in operational efficiency is defintely moving in the right direction, but corporate costs are masking the progress. Team, Inc.'s (TISI) gross margin has been expanding, growing 8.4% in Q3 2025, a rate that outpaced the 6.7% revenue growth. This suggests successful cost management within the core service delivery-better labor scheduling, better pricing, or a more favorable mix of higher-margin work.

The company is also showing discipline in its overhead, with Adjusted SG&A expenses improving to 20.8% of consolidated revenue in Q3 2025, down from 21.7% in the prior-year period. Still, consolidated operating income was compressed because Corporate and shared support services costs jumped by $4.9 million (a 43.6% increase) in Q3 2025, primarily due to non-recurring professional fees and legal reserves. This is why the operating margin is so low; a significant chunk of money is going to fix past problems and restructure the business, not to run the core operations.

Comparison with Industry Benchmarks

To put Team, Inc.'s (TISI) profitability in context, we can compare its performance to the broader industrial sectors. The company's business model-specialty industrial services-places it close to the Manufacturing and Construction sectors for margin profile.

The Q3 2025 Gross Profit Margin of 25.8% for Team, Inc. (TISI) is right at the low end of the 2025 average for the Manufacturing industry, which typically sees a Gross Profit Margin between 25% and 35%. This shows the company's core service execution is competitive. However, the negative Net Profit Margin of -5.07% is a significant underperformance compared to the all-industry average Net Profit Margin, which was around 2% in 2024, and certainly below the typical positive net margins seen in healthy industrial firms. The table below summarizes the key profitability metrics for the first three quarters of 2025, highlighting the seasonality and the net loss challenge.

The management's guidance for full-year 2025 Adjusted EBITDA growth of approximately 13% and a long-term target of ≥10% Adjusted EBITDA margin over time is the key indicator of their focus on improving the operating profit (Adjusted EBITDA is a good proxy for operating profit before non-cash charges and financing costs). For more on how this impacts the company's valuation, read the full post: Breaking Down Team, Inc. (TISI) Financial Health: Key Insights for Investors

Next Step: Track Q4 2025 results for a clear operating income figure, specifically watching if non-recurring corporate costs decline to allow the improved gross margin to flow through to a positive operating profit.

Debt vs. Equity Structure

For a company like Team, Inc. (TISI), which operates in the capital-intensive specialty industrial services sector, the debt-to-equity (D/E) ratio is always the first number I check. The short answer is that Team, Inc. remains highly leveraged, but its recent capital actions in 2025 were a critical, positive pivot toward stability.

As of September 30, 2025, Team, Inc.'s total debt stood at $302.8 million, a significant reduction from the $370.2 million reported at the end of the second quarter. This is a business that relies heavily on borrowed capital, which is common in industries requiring large equipment and long-term project financing. Still, the company's leverage ratio is a major flag.

The Debt-to-Equity ratio for Team, Inc. is exceptionally high, sitting at approximately 10.98 as of November 2025. Here's the quick math: this means the company is financing its assets with nearly 11 times more debt than shareholder equity. To be fair, this ratio is skewed by years of accumulated losses eroding the equity base, which is why the number looks so extreme. But even compared to its sub-sector peers in 'Oil and gas equipment and services,' where the average D/E ratio is closer to 0.52, Team, Inc. carries a vastly higher risk profile.

The good news for investors is that the company spent much of 2025 de-risking its debt maturity schedule and diversifying its capital base. This is a clear signal from management that they are prioritizing financial flexibility.

• March 2025 Refinancing: Closed a $225 million refinancing deal, including a $175.0 million funded First Lien Term Loan and a $97.4 million Second Lien Term Loan.
• Maturity Extension: This transaction pushed the term loan maturities out to 2030, buying the company five more years of runway.
• Cost Reduction: The new structure lowered the blended interest rate by over 100 basis points, directly improving future cash flow.

The most telling move was the strategic use of equity funding to pay down debt. In September 2025, Team, Inc. completed a $75 million private placement of preferred stock and warrants. They immediately used about $67 million of those proceeds to pay down portions of their existing ABL and Second Lien Term Loans. This shows a deliberate, near-term shift to balance the capital structure by bringing in new equity money-albeit preferred stock-to reduce the total debt load and improve liquidity, which stood at $57.1 million at the end of Q3 2025. This is a complex but necessary move to survive. You can read more about this in Breaking Down Team, Inc. (TISI) Financial Health: Key Insights for Investors.

What this estimate hides is the ongoing need for operational improvement to service this debt. The refinancing is a temporary fix; sustained profitability is the only long-term answer. The table below breaks down the major debt components.

Liquidity and Solvency

You need to know if Team, Inc. (TISI) can cover its near-term obligations, and the simple answer is yes, but with a significant caveat: their underlying cash generation is still a problem. The company's balance sheet, as of September 30, 2025, shows a solid buffer against immediate risk, but the cash flow statement reveals a reliance on external financing to manage operations.

The latest liquidity position looks healthy on paper. Team, Inc.'s most recent Current Ratio is approximately 1.95, and the Quick Ratio stands at about 1.31. A current ratio near 2.0 is defintely a good sign, meaning the company holds nearly two dollars in current assets (cash, receivables, inventory) for every dollar of current liabilities. The quick ratio, which strips out inventory, is also strong at over 1.0. This tells me they can cover their immediate bills even if they can't sell their inventory right away. The working capital (Current Assets minus Current Liabilities) is substantial, sitting at approximately $151.1 million as of Q3 2025, which gives them breathing room.

Still, you need to look beyond the ratios. The real story is in the cash flow. The company reported a negative operating cash flow (OCF) of approximately -$6.50 million over the last twelve months (LTM). That's a critical signal. It means the core business, even with growing revenue of $225.0 million in Q3 2025, isn't generating enough cash from its day-to-day services to fund itself.

• Operating Cash Flow: Negative -$6.50 million (LTM).
• Investing Cash Flow: Implied capital expenditures are around $9.17 million (LTM), contributing to a negative free cash flow of -$15.66 million.
• Financing Cash Flow: Positive, driven by a $75.0 million preferred stock private placement in September 2025, which was used to pay down existing loans, reducing total debt to $302.8 million.

Here's the quick math: negative OCF plus necessary capital expenditures equals negative Free Cash Flow (FCF) of -$15.66 million. This FCF deficit is why the company had to turn to the financing market, like the preferred stock issuance, to manage its debt and liquidity. The total liquidity, which includes cash and undrawn credit facilities, was $57.1 million as of September 30, 2025, which is a near-term strength, but it's a temporary fix. The Altman Z-Score, a measure of bankruptcy risk, is a low 0.95, which is a major red flag for solvency. You're relying on the credit line, not the business itself, for cash. For a deeper dive into the company's full financial picture, you can check out Breaking Down Team, Inc. (TISI) Financial Health: Key Insights for Investors.

What this estimate hides is the true cost of that debt, which is high, and the fact that the company still posted a net loss of $11.4 million in Q3 2025. The immediate action for you is to monitor the Q4 2025 OCF closely. It needs to turn positive, or the current healthy ratios will quickly erode as they burn through that working capital buffer.

Finance: Track the monthly OCF trend against the Q4 guidance to see if the cash burn is slowing by the end of the year.

Valuation Analysis

You are looking at Team, Inc. (TISI) and trying to figure out if the stock price of $14.77 (as of November 21, 2025) is a fair deal. The quick takeaway is that traditional valuation metrics are flashing a warning sign, but the company's near-term guidance suggests an operational turnaround is in progress, which complicates the picture.

Honestly, the stock has been a tough hold over the last year, dropping about 9.59%, even with a year-to-date return of 17.00% that shows some recent momentum. The 52-week trading range, from a low of $11.12 to a high of $24.25, tells you this is a volatile stock. It's definitely not one for the faint of heart.

Is Team, Inc. (TISI) Overvalued or Undervalued?

The valuation story for Team, Inc. (TISI) is complex because the company is not currently profitable. When a company is posting net losses, its Price-to-Earnings (P/E) ratio becomes negative, which makes it useless for comparison. The trailing twelve months (TTM) P/E ratio is currently around -1.30. This simply confirms the net loss reported in the third quarter of 2025, which was $11.4 million.

So, we shift to enterprise value-based metrics, which account for debt, a critical factor here. Here's the quick math on key valuation multiples:

• Price-to-Book (P/B) Ratio: At 2.09, the stock is trading at more than double its book value per share. This is a premium, suggesting investors are pricing in future asset value or an operational recovery.
• Enterprise Value-to-EBITDA (EV/EBITDA): The latest twelve months (LTM) EV/EBITDA is approximately 9.17. This multiple measures the value of the entire company (Enterprise Value) relative to its core operating profit (Earnings Before Interest, Taxes, Depreciation, and Amortization). For an industrial services company, this is not egregious, but it's also not cheap for a firm that is still restructuring.

The company does not pay a dividend, so the dividend yield is 0.00% and the payout ratio is not applicable (n/a). This isn't surprising for a company focused on a turnaround and debt reduction, as cash needs to be reinvested or used to strengthen the balance sheet.

Analyst Sentiment and Near-Term Outlook

Wall Street consensus on Team, Inc. (TISI) is mixed, which is often the case with turnaround stories. One analyst has a definitive 'Sell' rating, while a larger group of analysts has a 'Buy' consensus, though their average price target of $10.20 actually suggests a significant downside from the current price. This contradiction is why you need to look beyond the headline rating.

What matters more is the operational trajectory. Management's full-year 2025 guidance projects approximately +5% revenue growth and around +13% growth in Adjusted EBITDA. This focus on Adjusted EBITDA (a non-GAAP measure) signals that the core business is improving, even if the bottom line (Net Income) is still catching up. This is the opportunity: betting on the operational improvement overcoming the debt load.

To understand the forces driving this conflicting sentiment, you should read more about the institutional interest in the company. You can find a deeper dive here: Exploring Team, Inc. (TISI) Investor Profile: Who's Buying and Why?

Here is a summary of the key valuation metrics based on the latest available data:

The clear action here is to monitor the Q4 2025 earnings release for confirmation that the projected +13% Adjusted EBITDA growth materializes. If it does, the stock is likely undervalued; if not, the current price premium is defintely at risk.

Risk Factors

You're looking at Team, Inc. (TISI) and seeing a business with solid revenue growth in its core segments, but the balance sheet still carries significant risk. Honestly, the biggest threat to your investment isn't a lack of demand for their services-it's the financial structure itself.

The core financial risk is the heavy debt load and persistent negative earnings (net loss). For the first nine months of 2025, the company generated over $44 million in Adjusted EBITDA, which is positive, but they still reported a consolidated net loss of $11.4 million in Q3 2025 alone. The total debt as of June 30, 2025, stood at a substantial $370.2 million. Here's the quick math: the Debt-to-Equity ratio is an alarming 10.98, which is a massive leverage signal. A single, clean one-liner: That much debt makes the company highly sensitive to any economic wobble.

• Financial Leverage: Debt/Equity ratio of 10.98.
• Liquidity Warning: Altman Z-Score is 0.95, suggesting increased bankruptcy risk.
• Operational Volatility: Mechanical Services (MS) revenue declined in Q1 2025 due to weather and lower callout work, showing segment-level vulnerability.

External risks are also defintely in play. Team, Inc. operates in a highly fragmented industry, providing specialty industrial services to sectors like refining, petrochemical, and power. This means their revenue is cyclical, tied directly to capital expenditure (CapEx) and maintenance schedules of energy and industrial clients. Plus, management is actively monitoring external factors like U.S. tariff policy, which could raise supply chain and sourcing costs.

Mitigation and Strategic Actions

To be fair, management is taking clear, concrete steps to address these risks, primarily focusing on the balance sheet and cost structure. They know the debt is an issue, so they executed a major refinancing in March 2025. This move extended their term loan maturities out to 2030 and, crucially, lowered the blended interest rate by over 100 basis points. That's a good step to buy time and reduce interest expense.

On the operational side, they launched an optimization program expected to generate $10 million in annual cost savings. About $6 million of that is projected to flow through in 2025, which is a tangible improvement. This focus is already showing up in the numbers: Adjusted Selling, General, and Administrative (SG&A) expenses dropped to 20.8% of consolidated revenue in Q3 2025, down from 21.7% in the prior year. They are also strategically prioritizing the higher-margin Inspection and Heat Treating (IHT) segment, which saw 15.2% revenue growth in Q2 2025. You can find more details on the institutional interest in the company here: Exploring Team, Inc. (TISI) Investor Profile: Who's Buying and Why?

This table summarizes the key risks and the company's direct response:

The company is making progress, but the financial leverage remains the primary risk you need to monitor. If the economic cycle turns down, that high debt load will make the net losses much worse.

Growth Opportunities

You're looking at Team, Inc. (TISI) and trying to figure out if the recent operational improvements are a blip or a real trend. Honestly, the company has finally mapped a clear path to growth, but it's still a turnaround story. The near-term opportunity centers on two things: operational efficiency and strong demand in their core segments.

The company projects full-year 2025 revenue growth of approximately 5% and Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) growth of about 13%. That's a defintely solid step forward, driven by a renewed focus on their bread-and-butter services. Their ultimate goal is to hit an Adjusted EBITDA margin of at least 10% over time, showing they are serious about profitability.

Here's the quick math on what's driving that projected growth:

• Segment Strength: The Inspection and Heat Treating (IHT) segment is leading, with strong activity in the U.S. and a notable 8.9% growth internationally in Q3 2025.
• International Expansion: Canada is a bright spot. The Mechanical Services (MS) segment saw a substantial 66.4% revenue increase in Canada in Q3 2025, a sign that their commercial initiatives there are gaining traction.
• Higher-Margin Services: They are seeing a lift from their higher-margin heat treating services, which is a key lever for improving overall gross margin.

What this estimate hides is the power of their strategic initiatives, which are less about new product innovations and more about financial discipline and market positioning. This is a company focused on fixing its foundation first.

The most important strategic move this year was the financial restructuring, which provides a long runway for the growth plan. In September 2025, the company closed a private placement of preferred stock, netting $75 million in proceeds before expenses. They used this to pay down approximately $67 million of debt, which immediately strengthens the balance sheet. Plus, the debt refinancing extended term loan maturities out to 2030 and reduced their blended interest rate by over 100 basis points. That's a huge reduction in financial risk.

Beyond capital structure, their operational strategy is built on two pillars:

Their competitive advantage is their scale and integrated service offering. They are a global, leading provider of a full suite of conventional, specialized, and proprietary mechanical, heat-treating, and inspection services. In a fragmented industry, being one of the few large, sophisticated service providers that can offer a consolidated solution is a powerful moat. For a deeper dive into who is betting on this turnaround, you should check out Exploring Team, Inc. (TISI) Investor Profile: Who's Buying and Why?

The clear action for you is to monitor their progress on the $10 million in cost savings and watch for continued margin expansion in IHT and Canada. If onboarding takes 14+ days, churn risk rises, so they need to execute these operational improvements flawlessly.