8-K: Shimmick Q3 2025: Backlog Surges, Adjusted EBITDA Turns Positive

Shimmick Corporation reports strong Q3 2025 operational momentum with a 15% backlog increase and positive Adjusted EBITDA, signaling progress in its strategic transformation.

Summary

• Reported consolidated revenue of $142 million for Q3 2025, a decrease from $166 million in Q3 2024.
• Shimmick Projects revenue increased 6% year-over-year to $107 million.
• Total revenue, excluding a one-time favorable Non-Core Project claim settlement of $31 million in Q3 2024, increased 5% year-over-year.
• Reported consolidated gross margin of $11 million for Q3 2025, down from $12 million in Q3 2024.
• Shimmick Projects gross margin increased 67% year-over-year to $10 million.
• Total gross margin, excluding a one-time favorable Non-Core Project claim settlement of $11 million in Q3 2024, increased $10 million year-over-year.
• Recognized a net loss of $4 million for Q3 2025, compared to a net loss of $2 million in Q3 2024, largely attributable to Non-Core Projects.
• Reported Adjusted EBITDA of $4 million for Q3 2025, marking the first positive Adjusted EBITDA in four quarters, compared to $30 million in Q3 2024.
• Backlog was approximately $754 million as of October 3, 2025, representing a 15% quarter-over-quarter increase.
• Achieved a book-to-burn ratio of 1.7x in Q3 2025, the first quarter with a ratio over 1.0x since 2023.
• Added $190 million in new work in Q3 2025, with Shimmick Projects representing over 86% of total backlog.
• Reported liquidity of $48 million as of October 3, 2025.
• Diluted loss per common share attributable to Shimmick Corporation was $(0.12) for Q3 2025, compared to $(0.05) for Q3 2024.
• Reaffirmed full year 2025 guidance, anticipating full year revenue in the higher end of the provided range and Adjusted EBITDA in the lower end of the provided range.

Sentiment

Score: 7

Explanation: While consolidated net loss increased and overall revenue decreased due to the absence of one-time gains from the prior year, the underlying 'Shimmick Projects' segment shows strong growth in revenue and gross margin. The significant increase in backlog and a book-to-burn ratio above 1.0x for the first time in a long period, coupled with positive Adjusted EBITDA, indicates a positive operational turnaround and strong future prospects, despite the drag from winding down 'Non-Core Projects.' The reaffirmation of guidance, with revenue at the higher end, supports a cautiously optimistic outlook on the company's strategic transformation.

Positives

• Shimmick Projects revenue increased 6% year-over-year to $107 million, demonstrating growth in core strategic areas.
• Shimmick Projects gross margin surged 67% year-over-year to $10 million, indicating improved profitability in new projects.
• Total revenue, excluding a one-time Q3 2024 settlement, increased 5% year-over-year, showing underlying growth.
• Total gross margin, excluding a one-time Q3 2024 settlement, increased $10 million year-over-year, reflecting better operational performance.
• Backlog grew 15% quarter-over-quarter to approximately $754 million as of October 3, 2025, providing strong revenue visibility into 2026.
• The book-to-burn ratio improved to 1.7x, marking the first time it exceeded 1.0x since 2023, indicating successful new project acquisition.
• Achieved positive Adjusted EBITDA of $4 million, the first positive result in four quarters, signaling a significant operational turnaround.
• Added $190 million in new work in Q3 2025, with Shimmick Projects comprising over 86% of the total backlog.
• Surpassed $1 billion in monthly bidding volume for the first time ever this quarter, indicating strong market engagement.
• Reported strong traction in California and Texas markets, aligning capabilities with growing water and electrical infrastructure demand.
• Bid volumes in the electrical business (Axia) continue to increase, especially across water, manufacturing, and data center markets, positioning for future success.
• Reaffirmed full year 2025 guidance, anticipating full year revenue in the higher end of the provided range.

Negatives

• Consolidated revenue decreased to $142 million in Q3 2025 from $166 million in Q3 2024, primarily due to the absence of a one-time favorable settlement in the prior year.
• Consolidated gross margin decreased to $11 million in Q3 2025 from $12 million in Q3 2024.
• Reported a net loss of $4 million in Q3 2025, an increase from a net loss of $2 million in Q3 2024, largely attributed to Non-Core Projects.
• Adjusted EBITDA of $4 million in Q3 2025 is significantly lower than $30 million in Q3 2024, primarily due to non-recurring gains in the prior year.
• Diluted loss per common share increased to $(0.12) in Q3 2025 from $(0.05) in Q3 2024.
• Non-Core Projects revenue decreased significantly from $65 million in Q3 2024 to $35 million in Q3 2025, mainly due to the non-recurrence of a $31 million settlement.
• Non-Core Projects gross margin decreased from $6 million in Q3 2024 to $1 million in Q3 2025.
• Selling, general and administrative expenses increased by $1 million due to increased legal costs.
• Equity in earnings of unconsolidated joint ventures decreased by $1 million due to increased costs from schedule extensions.
• Gain on sale of assets, net, decreased by $17 million due to a non-recurring sale-leaseback transaction in Q3 2024.
• Anticipates full year Adjusted EBITDA in the lower end of the provided range ($5 million to $15 million).
• Cash and cash equivalents decreased from $33,730 thousand on January 3, 2025, to $17,597 thousand on October 3, 2025.
• Long-term debt, net, increased significantly from $9,478 thousand on January 3, 2025, to $54,050 thousand on October 3, 2025.
• Total stockholders' deficit worsened from $(34,674) thousand on January 3, 2025, to $(52,656) thousand on October 3, 2025.

Risks

• Ability to accurately estimate risks, requirements, or costs when bidding on or negotiating a contract.
• Impact of fixed-price contracts on profitability.
• Qualifying as an eligible bidder for future contracts.
• Availability of qualified personnel, joint venture partners, and subcontractors.
• Inability to attract and retain qualified managers and skilled employees, and the impact of loss of 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 any inability to maintain subcontractor relationships.
• Marketplace competition affecting contract awards and pricing.
• Inability to obtain bonding for projects.
• Limited operating history as an independent company following separation from AECOM.
• Relationship and transactions with AECOM, including the risk of AECOM defaulting 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 a merger or acquisition or to integrate an acquired company's business.
• Ability to expand capacity related to specialized, high-performance electrical and power distribution solutions.
• Adjustments in contract backlog due to cancellations, deferrals, or scope changes.
• Significant estimates involved in accounting for revenue and costs, particularly with the input method of revenue recognition.
• Potential for material impairments of assets.
• Failure to comply with covenants under current or future indebtedness.
• Adequacy of sources of liquidity to meet operational needs.
• Outcome of any legal or regulatory proceedings to which the company is, or may become, a party.
• Cybersecurity attacks against, disruptions, failures, or security breaches of information technology systems.
• Seasonality of the business impacting financial results.
• Impact of pandemics and public health emergencies.
• Commodity products price fluctuations, inflation, and/or 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 on operations and projects.
• 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 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 reaffirms its full year 2025 fiscal year guidance, expecting Shimmick Projects revenue in the range of $405 million and $415 million with an overall gross margin between 9% and 12%. Non-Core Projects revenue is anticipated to be between $80 million and $90 million with an overall gross margin between (15%) and (5%). Consolidated Adjusted EBITDA is projected to be between $5 million and $15 million. Management now anticipates full year revenue to be at the higher end of the provided range and Adjusted EBITDA at the lower end of the provided range. Strong growth in the electrical backlog is expected in the next two quarters due to new bids and pending awards.

Management Comments

• "Our transformation is clearly gaining momentum, supported by strong execution and solid operating performance." Ural Yal, Chief Executive Officer.
• "We surpassed $1 billion in monthly bidding volume for the first time ever this quarter, delivered consistent win rates, and grew our Shimmick Projects revenue and gross margin in the third quarter compared to the prior year quarter." Ural Yal, Chief Executive Officer.
• "Our book-to-burn ratio improved to 1.7x, resulting in backlog growth for the first time in over eight quarters, providing strong visibility into 2026." Ural Yal, Chief Executive Officer.
• "We are seeing particularly strong traction in California and Texas markets, where our capabilities align well with growing water and electrical infrastructure demand." Ural Yal, Chief Executive Officer.
• "Bid volumes in our electrical business, Axia, continue to increase, especially across water, manufacturing and data center markets, positioning us well for future success." Ural Yal, Chief Executive Officer.
• "With new bids and pending awards, we expect to see strong growth in our electrical backlog in the next two quarters." Ural Yal, Chief Executive Officer.
• "The progress we are seeing across our business reflects the strength of our strategy we implemented at the beginning of 2025, disciplined execution, and momentum building for sustained growth." Ural Yal, Chief Executive Officer.
• "With strong overall bidding activity, consistent execution and positive market conditions, we continue to be optimistic about 2026." Ural Yal, Chief Executive Officer.
• "Shimmick's third quarter performance reflects our continued progress in executing our transition strategy and winning the right way." Todd Yoder, Executive Vice President and Chief Financial Officer.
• "Notably, this marks the first quarter since early 2023 where our book-to-burn ratio exceeded 1.0x, fueled by $190 million in new project awards." Todd Yoder, Executive Vice President and Chief Financial Officer.
• "We also delivered positive adjusted EBITDA of $4 million, for the first time in four quarters, demonstrating meaningful operational momentum." Todd Yoder, Executive Vice President and Chief Financial Officer.
• "As we close out 2025 and look ahead to 2026, our third quarter performance reinforces our confidence in our trajectory." Todd Yoder, Executive Vice President and Chief Financial Officer.
• "We are pleased to reaffirm our full year 2025 guidance and now anticipate full year revenue in the higher end of the provided range and adjusted EBITDA in the lower end of the provided range." Todd Yoder, Executive Vice President and Chief Financial Officer.

Industry Context

The company operates in the critical infrastructure sector, focusing on water, electrical, climate resilience, and sustainable transportation. The report highlights strong demand in California and Texas for water and electrical infrastructure, which aligns with broader industry trends of increasing investment in aging infrastructure, renewable energy integration, and data center expansion. The strategic shift towards 'Shimmick Projects' (post-AECOM sale) and away from 'Non-Core Projects' (legacy and foundation drilling) positions the company to capitalize on these growth areas, while divesting from segments that have historically faced cost overruns and lower margins.

Comparison to Industry Standards

• No specific comparable companies, projects, or global benchmarks are mentioned in the filing for direct comparison.

Legal Proceedings

• Legal fees and other costs for Non-Core Projects are incurred, indicating ongoing legal matters related to these legacy projects.
• The company faces risks related to the outcome of any legal or regulatory proceedings to which it is, or may become, a party.

Related Party Transactions

• The company has ongoing transaction-related costs and changes in fair value of contingent consideration remaining after the impact of transactions with its prior owner (AECOM).
• Risks include AECOM defaulting on its contractual obligations to the company or under agreements in which the company is a beneficiary.

Stakeholder Impact

• Shareholders: Potential for increased long-term value due to strategic transformation, backlog growth, and positive Adjusted EBITDA in core segments, but current diluted loss per share increased and total stockholders' deficit worsened.
• Employees: Continued focus on 'Shimmick Projects' in growth markets (water, electrical) may offer stability and opportunities, while the winding down of 'Non-Core Projects' might imply workforce adjustments in those legacy areas.
• Customers: Continued project wins and focus on critical infrastructure solutions in high-demand markets suggest reliable service and expanded capabilities.
• Suppliers/Subcontractors: Continued dependence on them, with risks if they fail to satisfy obligations, but increased new awards suggest ongoing business opportunities.
• Creditors: Reduced average long-term debt balances in Q3 2025 compared to Q3 2024, but overall long-term debt increased significantly from January 3, 2025, to October 3, 2025, which could impact credit risk perception. Liquidity of $48 million provides some operational flexibility.

Next Steps

• Continue winding down remaining work on foundation drilling Non-Core Projects during the remainder of the 2025 fiscal year.
• Expect strong growth in electrical backlog in the next two quarters due to new bids and pending awards.
• Host a video webcast conference call on Thursday, November 13, 2025, at 5:00 p.m. Eastern Time to discuss results and outlook.

Key Dates

Recommendation

While Shimmick Corporation demonstrates clear operational improvements in its core 'Shimmick Projects' segment, evidenced by strong revenue and gross margin growth, a significant backlog increase, and positive Adjusted EBITDA, the overall consolidated results are still impacted by the winding down of 'Non-Core Projects' and the absence of one-time gains from the prior year. The increase in net loss and diluted loss per share, coupled with the anticipated Adjusted EBITDA at the lower end of guidance, suggests that the turnaround is in progress but not yet fully realized. The substantial increase in long-term debt also warrants caution. Investors should hold to observe sustained positive trends and a clearer path to consolidated profitability as the legacy issues are fully resolved and the strategic transformation fully matures.

Keywords

Infrastructure, Construction, Water Infrastructure, Electrical Infrastructure, Climate Resilience, Energy Transition, Sustainable Transportation, Shimmick Projects, Non-Core Projects, Backlog, Adjusted EBITDA, Q3 2025, Financial Results, NASDAQ: SHIM, California, Texas