The following is a summary of the Thermon Group Holdings Inc. (THR) Q1 2025 Earnings Call Transcript:

Financial Performance:

• Q1 2025 revenue reached $115 million, an 8% year-over-year increase, mainly driven by the inclusion of Vapor Power.

• Adjusted EBITDA for the quarter was $23.2 million, up from $22.1 million in the previous year, with a margin slightly decreased to 20.2%.

• Large project revenue declined 34% to $18 million, primarily affected by delays in decision-making in CapEx projects, particularly in the oil and gas sectors.

• OpEx revenues, which are less influenced by economic cycles, increased impressively by over 20% compared to last year, totaling $98 million.

• Thermon managed a strong free cash flow of $8.8 million, an improvement of nearly $11 million compared to the previous year.

Business Progress:

• Successful integration and realization of revenue synergies from the Vapor Power acquisition.

• Focused efforts on diversifying end market exposure and growing the installed customer base, achieving a recurrent revenue model.

• Implementation of operational excellence strategies like manufacturing rooftop consolidation, anticipating annualized savings of $5.7 million.

Opportunities:

• Strong performance in diverse end markets and robust sales pipeline with decarbonization projects, now valued at $320 million.

• Continued investment in growth areas like electrification, reflecting positively in Vapor Power's performance.

Risks:

• Continuing uncertainties in large project spending due to macroeconomic conditions and forthcoming elections, impacting decision-making timelines and potentially deferring revenue recognition.

• Regional sales declines, with U.S.-LAM and EMEA showing decreased sales by 14% and 19%, respectively.

More details: Thermon IR

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