Thermal Energy International Inc. reported record annual revenue of $21.9mn for the fiscal year ended May 31, 2025, marking a 15% increase compared with the previous year. This growth was driven by strong performance in heat recovery projects, despite lower revenues from GEM (energy efficiency condensate return systems). In the fourth quarter, revenue fell 9.3% to $5mn, but the gross margin improved to 53.9%, compared with 41% for the full year.
Margin resilience and debt reduction
Net income for the quarter was $164,000, down 22.9% from the previous year. For the full year, net income declined to $116,000, compared with $719,000 in 2024. Adjusted earnings before interest, taxes, depreciation and amortisation (Adjusted EBITDA) reached $770,000, almost half the level of 2024. Despite this, the company significantly reduced its bank debt, repaying $1.47mn during the year, leaving only $241,000 outstanding, scheduled to be fully repaid by January 2026.
Order recovery at the start of fiscal 2026
After a year marked by lower order volumes, the company experienced a sharp rebound at the beginning of fiscal 2026. Between June and September 2025, Thermal Energy secured $8.3mn in new orders, four times the volume recorded during the same period last year. This includes a $3.8mn contract with a global pharmaceutical company, as well as two key projects in Europe totalling $1.8mn.
Absorption capacity and operational outlook
Management noted that most of the revenue associated with these new orders will be recognised in the second half of fiscal 2026. The company also plans to strengthen its commercial efficiency through the standardisation of equipment, the development of a network of independent sales representatives and the expansion of its subsidiary Boilerroom Equipment Inc. into Europe.
Internal investment and maintaining capacity
Operating expenses rose to $8.4mn, an increase of $522,000, mainly due to higher staffing costs and inflation on general expenses. Research and development (R&D) activity also increased, with spending up $100,000 for the year.
As of September 22, 2025, the order backlog stood at $17.9mn, the highest level ever recorded by the company. Chief Executive Officer William Crossland said that this momentum, combined with enhanced execution capacity, positions the company for profitable growth in the medium term.
