Team, Inc.

What they do

Team Inc. provides inspection, heat-treating, and mechanical services to heavy industries including energy, manufacturing, midstream, infrastructure, and aerospace. Its Inspection and Heat-Treating (IHT) segment offers non-destructive testing, pipeline integrity, and field heat-treating. The Mechanical Services (MS) segment provides leak repair, hot tapping, line stopping, and specialty maintenance during outages and turnarounds.

Revenue drivers

• Inspection and Heat-Treating (IHT) — Offers non-destructive testing, pipeline integrity, and heat-treating services; reported encouraging growth from other markets in Q2 2026, helping offset weakness in turnaround activity.
• Mechanical Services (MS) — Provides leak repair, composites, hot tapping, line stopping, and specialty maintenance; revenue deferred in Q2 2026 as customers postponed turnaround and maintenance activity.
• Turnaround/project services — Large planned maintenance events; Q2 2026 saw deferrals in oil and gas and petrochemicals markets, down 51% year-to-date through June, pressuring margins.
• Geographic markets — Revenue changes in Q2 2026: -6.7% in the U.S., -21.4% in Canada, -4.1% in other international markets, with Middle East weakness due to conflict.

Recent performance

For Q2 2026 (quarter ended June 30, 2026), revenue was $228.7 million, down from $248.0 million in Q2 2025. Gross margin was $54.4 million (23.8% of revenue), down from $68.1 million. Net loss widened to $6.8 million from $4.3 million. Adjusted EBITDA was $12.8 million (5.6% of revenue), down from $24.5 million. Full-year 2025 revenue was $896.5 million with a net loss of $49.2 million; the company had negative shareholder equity of $-49.7 million and long-term debt of $317.6 million as of June 30, 2026.

Strategy

Management is pursuing a transformation focused on operational efficiency, commercial focus, and diversifying into high-value industrial end markets. They have set a structural cost improvement target of $8–$15 million for 2026, with a run-rate goal of $20–$35 million. They are strengthening leadership and advancing productivity initiatives to improve margins and cash flow generation.

Risks

• High leverage and debt covenants — The company has significant debt ($317.6 million long-term) and may fail to maintain compliance with financial covenants, limiting access to capital.
• Customer deferrals of turnaround activity — Planned maintenance deferrals in oil, gas, and petrochemicals were down 51% year-to-date through June, reducing revenue and pressuring margins.
• Geopolitical conflict in the Middle East — Ongoing conflict has directly impacted Middle East operations, contributing to weakness in international markets.
• Negative shareholder equity — Shareholder equity was $-49.7 million as of June 30, 2026, reflecting cumulative losses and raising going-concern uncertainty.

Outlook

Management expects a portion of deferred Mechanical Services activity to return in the second half of 2026, although timing depends on customer decisions. They provided full-year 2026 guidance with midpoints implying approximately 4% revenue growth, 8% gross margin growth, and 16% Adjusted EBITDA growth over 2025. They also expect continued benefits from structural cost improvements and commercial diversification.