DIRTT Environmental Solutions Ltd.

What they do

DIRTT designs and manufactures prefabricated interior construction products and sells them alongside its proprietary ICE design software, which translates architectural designs into 3D models that double as manufacturing instructions. ICE is licensed to construction partners and third parties, including Armstrong World Industries, which owns 50% of the IP rights in a portion of ICE it uses. DIRTT operates manufacturing and assembly capacity and has exited its Rock Hill, South Carolina facility lease. Products are sold into commercial interiors, primarily in the U.S. and Canada.

Revenue drivers

• Prefabricated interior construction products — The core business: manufactured wall, floor and ceiling systems sold by project into workplace, healthcare, education and public sector interiors. Fourth quarter 2025 revenue was $50.9 million, up 4% year over year.
• ICE software licensing — DIRTT licenses its ICE/Design Editor platform to construction partners and third parties; Armstrong World Industries owns a 50% interest in the IP rights for the portion it uses. No separate revenue figure is disclosed in the excerpts.
• Price increases and surcharges — A 5% price increase and 3.5% tariff surcharge were announced in the first quarter of 2025, and a 1% aluminum price surcharge was applied to orders placed after March 18, 2026.

Recent performance

Second quarter 2026 revenue was $40.3 million, up 4% from $38.9 million a year earlier. Gross margin rose to 34.7% ($14.0 million) from 27.8% ($10.8 million), helped by lower tariff and tariff mitigation costs of $0.3 million versus $2.0 million in the prior-year quarter. Net income was $1.1 million versus a $6.6 million net loss in the second quarter of 2025, and Adjusted EBITDA was $4.7 million (11.8% of revenue), up $6.8 million. Full-year 2025 revenue was $168.9 million with a net loss of $14.4 million, and operating cash flow was negative $0.2 million.

Strategy

Management is executing a transformation plan through a Transformation Office, with Scott Robinson as Executive Chairman and Adrian Zarate as Chief Transformation Officer; their terms were extended through December 31, 2026. Priorities cited include pipeline quality, forecasting discipline, commercial execution and a streamlined operating model. DIRTT exited its Rock Hill, South Carolina facility lease, recording roughly $2.9 million of related impairment charges in the fourth quarter of 2025. The company renewed its normal course issuer bid in December 2025 for up to 9,593,878 common shares and is litigating against Falkbuilt Ltd. over restrictive covenants and confidentiality.

Risks

• Tariffs on aluminum and steel — DIRTT was significantly affected by the 50% U.S. tariff on Canadian aluminum, and although it believes Section 232 tariffs no longer apply after April and June 2026 revisions, further trade policy changes could hit margins.
• Thin liquidity and cash burn — Liquidity fell to $21.5 million at June 30, 2026 from $32.1 million at December 31, 2025, and the company reported negative operating cash flow for full-year 2025.
• Leverage and near-term maturities — DIRTT amended its RBC facility in November 2025 with maturity on November 30, 2026, and entered a conditional C$15.0 million commitment from Business Development Bank of Canada with conditions amended in January and February 2026.
• Litigation with Falkbuilt — A 10-week trial against Falkbuilt Ltd., Messrs. Smed and Loberg and other former DIRTT employees began February 2, 2026, with an additional three weeks starting July 20, 2026; outcomes are uncertain and DIRTT is seeking damages.

Outlook

Management updated its 2026 outlook to revenue of $175.0 million to $185.0 million and Adjusted EBITDA of $21.0 million to $25.0 million. The CEO said the market backdrop is more constructive than a year ago, with active customer engagement and advancing project planning, while acknowledging uncertainty in certain construction segments. The CFO cited continued progress on transformation initiatives, strong liquidity and disciplined cost management.