DIRTT Reports Third Quarter 2025 Financial Results
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CALGARY, Alberta, Nov. 05, 2025 (GLOBE NEWSWIRE) -- DIRTT Environmental Solutions Ltd. (“DIRTT”, the “Company”, “we”, “our”, “us” or “ours”) (TSX: DRT; OTCQX: DRTTF), a leader in industrialized construction, today announced its financial results for the three and nine months ended September 30, 2025. All financial information in this news release is presented in U.S. dollars, unless otherwise stated.
Third Quarter 2025 Highlights and Recent Developments
- Revenue of
$37.7 million in the third quarter of 2025, a decrease of13% , from the third quarter of 2024. - Gross profit margin increased from
27.8% of revenue in the second quarter of 2025 to30.4% of revenue in the third quarter of 2025, as tariff mitigation actions began to take effect. Gross profit margin decreased from38.8% in the third quarter of 2024. - During the first nine months of 2025, various tariffs have been levied by the U.S. and Canadian governments. We incurred
$1.9 million (5.1% of total revenue) in tariffs and costs related to tariff mitigation actions for the three months ended September 30, 2025. DIRTT is most impacted by the50% tariff levied on Canadian aluminum exports to the U.S. - During the nine months ended September 30, 2025, the Company undertook activities associated with the deployment of its Transformation Office (as defined herein), in which
$2.6 million of associated costs were recognized as reorganization expenses in the three months ended September 30, 2025. - Net loss after tax and net loss margin for the third quarter of 2025 was
$3.5 million and9.2% of revenue, respectively, compared to a net income after tax and net income margin of$7.1 million and16.3% , respectively, in the third quarter of 2024. - Adjusted EBITDA(1) was
$1.2 million , or3.1% of revenue, in the third quarter of 2025, compared to$4.1 million , or9.4% of revenue, in the third quarter of 2024. - Liquidity, comprising of unrestricted cash and available borrowings, was
$32.3 million at September 30, 2025, compared to$39.3 million at December 31, 2024. - On August 26, 2025, the Company announced the renewal of the normal course issuer bid for the Debentures (as defined below) which had commenced on August 28, 2024 and expired on August 27, 2025 (the “Renewed Debentures NCIB”). The Renewed Debentures NCIB commenced on August 28, 2025 and permits DIRTT to acquire up to C
$1,656,900 principal amount of the Company’s issued and outstanding6.00% convertible unsecured subordinated debentures due January 31, 2026 (the “January Debentures”) and C$1,493,500 principal amount of the Company’s issued and outstanding6.25% convertible unsecured subordinated debentures due December 31, 2026 (the “December Debentures” and together with the January Debentures, the “Debentures”). - On October 28, 2025, we entered into a non-binding term sheet with the Business Development Bank of Canada (“BDC”) for proposed financing of up to C
$15.0 million . We expect to use the proceeds to partially settle the January Debentures. The remaining January Debentures (C$1.6 million ) will be settled through our cash balances. Advancement of funds remains subject to, among other things, completion of due diligence by BDC(2). - On November 4, 2025, the Company extended its credit facility with the Royal Bank of Canada (“RBC”) to November 30, 2026 (the “RBC Facility”).
(1) See “Non-GAAP Financial Measures”
(2) See “Outlook” and “Special Note Regarding Forward-Looking Statements”
Management Commentary
Benjamin Urban, chief executive officer, remarked “The third quarter of 2025 marked a shift back to normal business with improving margins and a return to positive Adjusted EBITDA. We are pleased with the progress being made in our Transformation Office and believe the actions will improve DIRTT as an organization as well as create value for our shareholders. Our 12-month forward pipeline has increased to
Fareeha Khan, chief financial officer, added “This quarter we increased cashflows by
Third Quarter 2025 Results
Third quarter 2025 revenue was
Gross profit and gross profit margin for the quarter ended September 30, 2025 were
Sales and marketing expenses decreased by
General and administrative expenses decreased by
Operations support is comprised primarily of project managers, order entry and other professionals that facilitate the integration of our Construction Partner (as defined herein) project execution, our manufacturing operations, and support staff for the Construction Services team. Operations support expenses decreased by
Technology and development expenses relate to non-capitalizable costs associated with our product and software development teams, and are primarily comprised of salaries and benefits of technical staff. Technology and development expenses decreased
Stock-based compensation expense for the three months ended September 30, 2025 was
Reorganization expenses for the three months ended September 30, 2025 were
Foreign exchange loss or gain increased from a loss of
Interest income for three months ended September 30, 2025 was
Interest expense decreased by
Net loss after tax was
For the three months ended September 30, 2025, Adjusted EBITDA decreased by
Outlook
Business is returning to normal and we returned to positive Adjusted EBITDA in the third quarter of 2025 as the effects of tariffs on gross profit have been substantially mitigated through price and other tariff mitigation actions taken by the Company earlier in the year. For the fourth quarter of 2025, we expect to report revenues between
Our twelve-month forward pipeline has grown
Construction Services opportunities are growing and we have almost doubled the number of persons on that team since the beginning of the year. Our manufacturing capacity is approximately
Our 8-week trial against Falkbuilt Ltd., Messrs. Smed and Loberg and several other former DIRTT employees alleging breaches of restrictive covenants, fiduciary duties, employment duties and confidentiality is due to start on February 2, 2026. DIRTT is pursuing damages and losses it suffered in Canada, the United States, and abroad in the Court of King’s Bench of Alberta.
Our balance sheet is strong, including
1Any advancement of funds is subject to, among other things, BDC’s due diligence and the negotiation and execution of binding definitive documentation. There can be no assurance that a definitive agreement will be reached or that the proposed financing will be completed on the terms in the non-binding term sheet or at all, and the Company may ultimately determine not to proceed with the financing or use any net proceeds of such financing for the repayment of the January Debentures.
Conference Call and Webcast Details
A conference call and webcast for the investment community is scheduled for November 6, 2025 at 08:00 a.m. MDT (10:00 a.m. EDT). The call and webcast will be hosted by Benjamin Urban, chief executive officer, and Fareeha Khan, chief financial officer.
The call is being webcast live on the Company’s website at dirtt.com.
A webcast replay of the call will be available on DIRTT’s website. Click here to listen to the live webcast of the call. Following the presentation, DIRTT will take questions from covering analysts. To participate in the question-and-answer session, register here.
Statement of Operations
(Unaudited - Stated in thousands of U.S. dollars)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| Product revenue | 36,677 | 42,475 | 114,764 | 121,690 | |||||||||||
| Service revenue | 1,039 | 900 | 3,169 | 3,733 | |||||||||||
| Total revenue | 37,716 | 43,375 | 117,933 | 125,423 | |||||||||||
| Product cost of sales | 25,794 | 26,208 | 79,512 | 76,589 | |||||||||||
| Service cost of sales | 455 | 354 | 1,594 | 1,998 | |||||||||||
| Total cost of sales | 26,249 | 26,562 | 81,106 | 78,587 | |||||||||||
| Gross profit | 11,467 | 16,813 | 36,827 | 46,836 | |||||||||||
| Expenses | |||||||||||||||
| Sales and marketing | 4,795 | 5,183 | 15,265 | 17,165 | |||||||||||
| General and administrative | 4,429 | 5,834 | 15,652 | 14,791 | |||||||||||
| Operations support | 1,801 | 1,915 | 5,703 | 5,531 | |||||||||||
| Technology and development | 805 | 1,294 | 3,513 | 3,981 | |||||||||||
| Stock-based compensation | 742 | 803 | 2,075 | 1,905 | |||||||||||
| Reorganization | 2,593 | 604 | 2,977 | 944 | |||||||||||
| Impairment charge on Rock Hill facility | - | - | - | 530 | |||||||||||
| Total operating expenses | 15,165 | 15,633 | 45,185 | 44,847 | |||||||||||
| Operating (loss) income | (3,698 | ) | 1,180 | (8,358 | ) | 1,989 | |||||||||
| Gain on extinguishment of convertible debentures | 8 | 7,478 | 22 | 10,409 | |||||||||||
| Foreign exchange gain (loss) | 602 | (360 | ) | (1,422 | ) | 917 | |||||||||
| Interest income | 226 | 341 | 720 | 1,312 | |||||||||||
| Interest expense | (465 | ) | (1,525 | ) | (1,401 | ) | (3,524 | ) | |||||||
| 371 | 5,934 | (2,081 | ) | 9,114 | |||||||||||
| Net (loss) income before tax | (3,327 | ) | 7,114 | (10,439 | ) | 11,103 | |||||||||
| Income taxes | |||||||||||||||
| Current and deferred income tax expense | 157 | 23 | 308 | 371 | |||||||||||
| Net (loss) income after tax | (3,484 | ) | 7,091 | (10,747 | ) | 10,732 | |||||||||
| Net (loss) income per share | |||||||||||||||
| Net (loss) income per share − basic | (0.02 | ) | 0.04 | (0.06 | ) | 0.06 | |||||||||
| Net (loss) income per share − diluted | (0.02 | ) | 0.03 | (0.06 | ) | 0.05 | |||||||||
| Weighted average number of shares outstanding (in thousands) | |||||||||||||||
| Basic | 190,981 | 193,020 | 190,693 | 189,585 | |||||||||||
| Diluted | 190,981 | 241,272 | 190,693 | 239,301 | |||||||||||
Non-GAAP Financial Measures
Our interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These GAAP financial statements include non-cash charges and other charges and benefits that we believe are unusual or infrequent in nature or that we believe may make comparisons to our prior or future performance difficult.
As a result, we also provide financial information in this news release that is not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. Management uses these non-GAAP financial measures in its review and evaluation of the financial performance of the Company. We believe that these non-GAAP financial measures also provide additional insight to investors and securities analysts as supplemental information to our GAAP results and as a basis to compare our financial performance period-over-period and to compare our financial performance with that of other companies. We believe that these non-GAAP financial measures facilitate comparisons of our core operating results from period to period and to other companies by removing the effects of our capital structure (net interest income on cash deposits, interest expense on outstanding debt and debt facilities, or foreign exchange movements), asset base (depreciation and amortization), tax consequences, reorganization expense, unusual or infrequent charges or gains (such as gain on extinguishment of debt, and impairment charges), stock-based compensation, and government subsidies. We remove the impact of foreign exchange gain (loss) from Adjusted EBITDA. Foreign exchange gains and losses can vary significantly period-to-period due to the impact of changes in the U.S. and Canadian dollar exchange rates on foreign currency denominated monetary items on the balance sheet and are not reflective of the underlying operations of the Company. In addition, management bases certain forward-looking estimates and budgets on non-GAAP financial measures, primarily Adjusted EBITDA. We have not reconciled forward-looking non-GAAP measures, including Adjusted EBITDA guidance, to its corresponding GAAP measures due to the high variability and difficulty in making accurate forecasts and projections, particularly with respect to non-operating income and expenditures, which are difficult to predict and subject to change.
Depreciation and amortization, stock-based compensation expense, reorganization expense, foreign exchange gains and losses, gain on extinguishment of debt, impairment charges, net interest income on cash deposits, interest expense on outstanding debt and debt facilities, and tax expense are excluded from our non-GAAP financial measures because management considers them to be outside of the Company’s core operating results, even though some of those receipts and expenses may recur, and because management believes that each of these items can distort the trends associated with the Company’s ongoing performance. We believe that excluding these receipts and expenses provides investors and management with greater visibility to the underlying performance of the business operations, enhances consistency and comparativeness with results in prior periods that do not, or future periods that may not, include such items, and facilitates comparison with the results of other companies in our industry.
The following non-GAAP financial measures are presented in this news release, and a description of the calculation for each measure is included.
| Adjusted Gross Profit | Gross profit before deductions for depreciation and amortization | |
| Adjusted Gross Profit Margin | Adjusted Gross Profit divided by revenue | |
| EBITDA | Net income before interest, taxes, depreciation, and amortization | |
| Adjusted EBITDA | EBITDA adjusted to remove foreign exchange gains or losses; impairment charges; reorganization expenses; stock-based compensation expense; unusual or infrequent charges (such as gain on extinguishment of debt); and any other non-core gains or losses | |
| Adjusted EBITDA Margin | Adjusted EBITDA divided by revenue | |
You should carefully evaluate these non-GAAP financial measures, the adjustments included in them, and the reasons we consider them appropriate for analysis supplemental to our GAAP information. Each of these non-GAAP financial measures has important limitations as an analytical tool due to exclusion of some but not all items that affect the most directly comparable GAAP financial measures. You should not consider any of these non-GAAP financial measures in isolation or as substitutes for an analysis of our results as reported under GAAP. You should also be aware that we may recognize income or incur expenses in the future that are the same as, or similar to, some of the adjustments in these non-GAAP financial measures. Because these non-GAAP financial measures may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
The following table presents a reconciliation for the results for the three and nine months ended September 30, 2025 and 2024 of EBITDA and Adjusted EBITDA to our net (loss) income after tax, and of Adjusted EBITDA Margin to net (loss) income margin, which are the most directly comparable GAAP measures for the periods presented:
(Unaudited - Stated in thousands of U.S. dollars)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| ($ in thousands) | ($ in thousands) | ||||||||||||||
| Net (loss) income after tax for the period | (3,484 | ) | 7,091 | (10,747 | ) | 10,732 | |||||||||
| Add back (deduct): | |||||||||||||||
| Interest expense | 465 | 1,525 | 1,401 | 3,524 | |||||||||||
| Interest income | (226 | ) | (341 | ) | (720 | ) | (1,312 | ) | |||||||
| Income tax expense | 157 | 23 | 308 | 371 | |||||||||||
| Depreciation and amortization | 1,534 | 1,487 | 4,561 | 4,542 | |||||||||||
| EBITDA | (1,554 | ) | 9,785 | (5,197 | ) | 17,857 | |||||||||
| Foreign exchange (gain) loss | (602 | ) | 360 | 1,422 | (917 | ) | |||||||||
| Stock-based compensation | 742 | 803 | 2,075 | 1,905 | |||||||||||
| Reorganization expense(2) | 2,593 | 604 | 2,977 | 944 | |||||||||||
| Gain on extinguishment of convertible debentures(2) | (8 | ) | (7,478 | ) | (22 | ) | (10,409 | ) | |||||||
| Impairment charge on Rock Hill facility(2) | - | - | - | 530 | |||||||||||
| Adjusted EBITDA | 1,171 | 4,074 | 1,255 | 9,910 | |||||||||||
| Net (Loss) Income Margin(1) | (9.2 | )% | 16.3 | % | (9.1 | )% | 8.6 | % | |||||||
| Adjusted EBITDA Margin | 3.1 | % | 9.4 | % | 1.1 | % | 7.9 | % | |||||||
| (1) | Net (loss) income after tax divided by revenue. | |
| (2) | Reorganization expenses, the gain on extinguishment of convertible debentures and the impairment charge on the Rock Hill facility (refer to Note 4 and Note 5 of the interim condensed consolidated financial statements) are not core to our business and are therefore excluded from the Adjusted EBITDA calculation. | |
The following table presents a reconciliation for the three and nine months ended September 30, 2025 and 2024 of Adjusted Gross Profit to our gross profit and Adjusted Gross Profit Margin to gross profit margin, which are the most directly comparable GAAP measures for the periods presented:
(Unaudited - Stated in thousands of U.S. dollars)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||
| ($ in thousands) | ($ in thousands) | ||||||||||||||
| Gross profit | 11,467 | 16,813 | 36,827 | 46,836 | |||||||||||
| Gross profit margin | 30.4 | % | 38.8 | % | 31.2 | % | 37.3 | % | |||||||
| Add: Depreciation and amortization expense | 1,013 | 823 | 2,977 | 2,512 | |||||||||||
| Adjusted Gross Profit | 12,480 | 17,636 | 39,804 | 49,348 | |||||||||||
| Adjusted Gross Profit Margin | 33.1 | % | 40.7 | % | 33.8 | % | 39.3 | % | |||||||
Special Note Regarding Forward-Looking Statements
Certain statements contained in this news release are “forward-looking statements” within the meaning of “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934 and “forward-looking information” within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact included in this news release, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this news release, the words “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project,” “outlook,” “may,” “will,” “should,” “would,” “could,” “can,” “continue,” the negatives thereof, variations thereon and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. In particular and without limitation, this news release contains forward-looking information pertaining to proposed financings and the terms, timing and use of proceeds thereof; the effect of our Transformation Office on our business and the timing thereof; the benefit of fixed cost leverage; the effect of our strategic priorities on increasing value creation; the impacts of macroeconomic conditions on the Company’s business; the Company’s pipeline; forecast operating and financial results and the impact of certain cost-saving measures; the competitiveness of the Company’s solutions; the liquidity and capital resources of the Company; the outcome and effects that current claims and litigation against the Company; financial condition, results of operations and growth prospects; the effect of tariffs and economic uncertainty on our business, including on our 2025 guidance, and our ability to mitigate any such effects and timing thereof; our beliefs about future revenue and Adjusted EBITDA, and the timing thereof; project delivery and the timing thereof; capital expenditures and allocation; general economic conditions; our ability to weather economic conditions; and DIRTT's ability to support its partners, grow its business and invest in long-term growth.
Forward-looking statements are based on certain estimates, beliefs, expectations, and assumptions made in light of management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that may be appropriate.
Forward-looking statements necessarily involve unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from those contained in, or expressed or implied by such statements. Due to the risks, uncertainties, and assumptions inherent in forward-looking information, you should not place undue reliance on forward-looking statements. Factors that could have a material adverse effect on our business, financial condition, results of operations and growth prospects include, but are not limited to, risks described under the sections titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the U.S. Securities and Exchange Commission and applicable securities commissions or similar regulatory authorities in Canada on February 26, 2025 as supplemented by the risks described under the sections titled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 filed with the SEC and applicable securities commissions or similar regulatory authorities in Canada on November 5, 2025.
Our past results of operations are not necessarily indicative of our future results. You should not place undue reliance on any forward-looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. We undertake no obligation to update these forward-looking statements, even though circumstances may change in the future, except as required under applicable securities laws. We qualify all of our forward-looking statements by these cautionary statements.
About DIRTT Environmental Solutions
DIRTT is a leader in industrialized construction. DIRTT’s system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the workplace, healthcare, education, and public sector markets, DIRTT’s system provides total design freedom, and greater certainty in cost, schedule, and outcomes. DIRTT’s interior construction solutions are designed to be highly flexible and adaptable, enabling organizations to easily reconfigure their spaces as their needs evolve. Headquartered in Calgary, AB Canada, DIRTT trades on the Toronto Stock Exchange under the symbol “DRT” and on the OTCQX under the symbol "DRTTF".
FOR FURTHER INFORMATION PLEASE CONTACT ir@dirtt.com
