8-K: Shimmick Q2 Revenue Soars 42%, Backlog Hits $652M

Shimmick Corporation reported a significant 42% year-over-year revenue increase in Q2 2025, driven by strong performance in its core infrastructure projects, alongside strategic expansion and improved gross margins.

Summary

• Reported Q2 2025 revenue of $128 million, a 42% increase from $91 million in Q2 2024.
• Achieved a gross margin of $8 million in Q2 2025, a substantial improvement from a $(31) million gross margin in Q2 2024.
• Shimmick Projects contributed $113 million in revenue and $15 million in gross margin for Q2 2025.
• Non-Core Projects revenue was $16 million with a gross margin of $(7) million in Q2 2025.
• Net loss decreased significantly to $8 million in Q2 2025 from $51 million in Q2 2024.
• Adjusted EBITDA was nearly flat at $(234) thousand in Q2 2025, a substantial improvement from $(40) million in Q2 2024.
• Liquidity stood at $73 million as of July 4, 2025, an increase of $2 million from Q1 2025.
• Backlog reached approximately $652 million as of July 4, 2025, with over 88% attributed to Shimmick Projects.
• Added $70 million in new awards to backlog in July 2025 and selected as preferred bidder on a $164 million Transit Center and River Pump Station project.
• Launched Axia Electric, a new subsidiary specializing in complex electrical and power distribution solutions for industrial, data center, advanced manufacturing, and water/wastewater markets.
• Full-year 2025 guidance updated: Shimmick Projects revenue expected between $405 million and $415 million, Non-Core Projects revenue between $80 million and $90 million, and Consolidated Adjusted EBITDA between $5 million and $15 million.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While Q2 results show significant year-over-year improvement and strategic initiatives are progressing well, the lowered full-year Adjusted EBITDA guidance and acknowledged delays temper the overall positive outlook. The company is clearly in a transitional phase, with strong performance in its core business offset by ongoing challenges from legacy Non-Core Projects.

Positives

• Revenue increased by 42% year-over-year to $128 million in Q2 2025.
• Gross margin improved significantly to $8 million in Q2 2025 from a negative $31 million in Q2 2024.
• Shimmick Projects demonstrated strong performance with $113 million in revenue and $15 million in gross margin, up from $84 million and $5 million respectively.
• Net loss substantially reduced to $8 million from $51 million year-over-year.
• Adjusted EBITDA improved dramatically to $(234) thousand from $(40) million.
• Liquidity increased to $73 million, up $2 million from the previous quarter.
• Backlog is strong at $652 million, with a high percentage (over 88%) from core Shimmick Projects.
• Secured new awards totaling $70 million in July 2025 and was selected as preferred bidder for a $164 million project.
• Successful implementation of the Transformation Plan led to a 20% reduction in selling, general and administrative expenses to $15 million.
• Strategic expansion with the launch of Axia Electric targets high-growth electrical and power distribution segments.

Negatives

• Despite overall improvements, the company still reported a net loss of $8 million and negative Adjusted EBITDA of $(234) thousand.
• Non-Core Projects continue to incur negative gross margins, impacting overall profitability.
• Full-year 2025 Consolidated Adjusted EBITDA guidance was lowered to $5 million $15 million from initial guidance of $15 million $25 million, primarily due to an unfavorable gross margin mix from increased Non-Core revenue.
• Backlog growth and operational improvements are occurring later in the year than initially expected due to slower bidding activity and challenges on remaining Non-Core Projects.

Risks

• Ability to accurately estimate risks, requirements, or costs when bidding on or negotiating contracts.
• Impact of fixed-price contracts on profitability.
• Challenges in qualifying as an eligible bidder for new contracts.
• Availability of qualified personnel, joint venture partners, and subcontractors.
• Inability to attract and retain qualified managers and skilled employees, and the impact of losing key management.
• Higher costs to lease, acquire, and maintain equipment, or a decline in the market value of owned equipment.
• Subcontractors failing to satisfy their obligations or inability to maintain subcontractor relationships.
• Intense marketplace competition.
• Inability to obtain necessary bonding for projects.
• Limited operating history as an independent company following separation from AECOM.
• Risks related to the relationship and transactions with prior owner, AECOM, including potential defaults on contractual obligations.
• Dependence on a limited number of customers.
• Dependence on subcontractors and suppliers of materials, and inability to secure sufficient aggregates.
• Inability to complete or successfully integrate mergers or acquisitions.
• Challenges in expanding capacity related to specialized, high-performance electrical and power distribution solutions.
• Potential adjustments in contract backlog due to cancellations, deferrals, or scope changes.
• Reliance on significant estimates in revenue and cost accounting, particularly for fixed-price contracts.
• Risk of material impairments.
• Failure to comply with covenants under current or future indebtedness.
• Adequacy of sources of liquidity.
• Outcome of any legal or regulatory proceedings.
• Cybersecurity attacks, disruptions, failures, or security breaches of information technology systems.
• Seasonality of the business.
• Impact of pandemics and public health emergencies.
• Commodity product price fluctuations, inflation, and elevated interest rates.
• Liabilities under environmental laws, compliance with immigration laws, and other regulatory matters, including changes in regulations and laws.
• Impact of climate change.
• Deterioration of the U.S. economy.
• Changes in state and federal laws, regulations, or policies, including trade policies, tariffs, tax legislation (e.g., One Big Beautiful Bill Act), and potential changes to funding under the Infrastructure Investment and Jobs Act.
• Geopolitical risks, including those related to the war between Russia and Ukraine and the conflict in the Gaza strip and Red Sea Region.

Future Outlook

The company expects continued strong backlog growth and improved margins in upcoming quarters, driven by its profitable core business in sustainable infrastructure, particularly electrical work. Full-year 2025 guidance for Shimmick Projects revenue has been increased to $405 million $415 million, and Non-Core Projects revenue to $80 million $90 million. However, consolidated Adjusted EBITDA guidance for the full year has been lowered to $5 million $15 million due to an unfavorable gross margin mix resulting from the increased percentage of Non-Core revenue. The 12-month bidding outlook stands at over $4.5 billion, indicating strong market opportunities.

Management Comments

• "We are continuing to implement our strategic plan and starting to see its positive results as we move through 2025. We have seen increased bidding activity every month this year and our 12-month bidding outlook stands at over $4.5 billion. Our recently announced project wins reflect the initial outcomes of our investments in estimating from earlier in the year. We expect to see strong backlog growth and improved margins over the upcoming quarters as we continue to develop our profitable core business in sustainable infrastructure with a focus on electrical work. While this backlog growth and operational improvements are occurring later in the year than we expected due to slower bidding activity related to previous macroeconomic uncertainties and challenges on remaining Non-Core Projects, we are encouraged by our progress so far and the rebound in the infrastructure market both with public and private clients." Ural Yal, Chief Executive Officer.
• "Due to stronger first-half revenue performance in both Shimmick and Non-Core Projects, we are increasing our full-year revenue guidance. Non-Core Projects revenue increase is driven by putting more non-core work in place due to increased efforts towards completing these projects. Shimmick Projects showed strong gross margins in the first half which we expect to continue into the second half, while Non-Core Projects' gross margin came in near the low end of guidance for the first half. While we expect higher revenue burn in both Shimmick Projects and Non-Core Projects for the full year, it creates an unfavorable gross margin mix impact as a result of the Non-Core revenue increase being a higher percentage of our total revenue for the year. We now expect Adjusted EBITDA for the full year of between $5 million and $15 million." Todd Yoder, Executive Vice President and Chief Financial Officer.

Industry Context

Shimmick Corporation operates within the critical infrastructure sector, focusing on water, climate resilience, energy transition, and sustainable transportation. The company's strategic shift towards these areas, coupled with the launch of Axia Electric, aligns with broader industry trends emphasizing sustainable and specialized infrastructure development, including the growing demand for electrical and power distribution solutions in industrial, data center, and advanced manufacturing sectors. The CEO's comment on a 'rebound in the infrastructure market' suggests a positive macro environment for both public and private clients, which could benefit Shimmick's core business growth.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to assess against global benchmarks. However, the company's focus on water, climate resilience, energy transition, and sustainable transportation aligns with key growth areas in the global infrastructure market, where companies like AECOM, Jacobs, and Fluor are also active. Shimmick's 42% revenue growth and significant gross margin improvement in its core Shimmick Projects suggest strong operational execution within its niche, though direct comparison without specific project details or peer metrics is limited.

Legal Proceedings

• The company incurred legal fees and other costs related to Non-Core Projects.
• A $1 million loss was recognized on the settlement of certain claims with AECOM.

Related Party Transactions

• The company's financial results and operations are impacted by its relationship and transactions with its prior owner, AECOM, including potential for AECOM defaulting on contractual obligations.

Stakeholder Impact

• Shareholders: Positive impact from significant revenue growth and improved gross margins in core business, but tempered by lowered full-year EBITDA guidance and ongoing Non-Core Project challenges. Strategic initiatives like Axia Electric could drive long-term value.
• Employees: Positive impact from company growth, increased bidding activity, and the launch of a new subsidiary (Axia Electric) which may create new opportunities.
• Customers: Benefit from the company's expanded capabilities in specialized electrical solutions and continued focus on critical infrastructure projects.
• Creditors: Improved liquidity and reduced net loss, along with a positive outlook for core business, may enhance creditworthiness, though ongoing Non-Core Project losses remain a consideration.

Next Steps

• Shimmick will host a video webcast conference call on Thursday, August 14, 2025, at 5:00 p.m. Eastern Time to discuss the results.
• A replay of the video webcast will be available through the company's Investor Relations website following the conference call.
• The company expects to see strong backlog growth and improved margins over the upcoming quarters.
• Continued efforts towards completing and winding down remaining Non-Core Projects during the remainder of the 2025 fiscal year.

Key Dates

Recommendation

While Shimmick's Q2 2025 results show substantial year-over-year improvements in revenue, gross margin, and net loss, indicating strong progress in its core Shimmick Projects and successful cost management, the lowered full-year Adjusted EBITDA guidance is a concern. The continued drag from Non-Core Projects and the acknowledged delays in operational improvements suggest that the company's transformation, while promising, still faces headwinds. Investors should hold to monitor the company's ability to fully wind down Non-Core Projects and realize the full potential of its strategic shift and new initiatives like Axia Electric, which could drive future profitability.

Keywords

Infrastructure, Water solutions, Climate resilience, Energy transition, Sustainable transportation, Construction, Electrical solutions, Data center infrastructure, Advanced manufacturing, Public works, SEC filing, Financial results, Backlog, Adjusted EBITDA