8-K: Team, Inc. Reports Q2 2026 Results, Faces Revenue Decline

Team, Inc. announced its second quarter 2026 financial results, reporting a decrease in revenue and an increase in net loss, while also establishing cost reduction targets and providing full-year guidance.

Summary

• Team, Inc. reported second quarter 2026 revenue of $228.7 million, a decrease from $248.0 million in the second quarter of 2025.
• Gross margin for the quarter was $54.4 million, down from $68.1 million in the prior-year period.
• The company reported a net loss of $6.8 million for Q2 2026, compared to a net loss of $4.3 million in Q2 2025.
• Adjusted EBITDA was $12.8 million (5.6% of revenue), a decrease from $24.5 million (9.9% of revenue) in the prior-year period.
• Full-year 2026 guidance projects increases of approximately 4% in revenue, 8% in gross margin, and 16% in Adjusted EBITDA at the midpoint, compared to 2025 results.
• Structural cost improvement targets for full-year 2026 are set between $8 million and $15 million, with a full annual run-rate goal of $20 million to $35 million.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to declining revenues, increased net loss, and reduced Adjusted EBITDA, despite forward-looking guidance.

Positives

• Provided full-year 2026 guidance with projected increases at the midpoint: approximately 4% in revenues, 8% in gross margin, and 16% in Adjusted EBITDA over 2025 results.
• Established structural cost improvement targets for full-year 2026 ranging between $8 million and $15 million, with a goal of $20 million to $35 million at full annual run-rate.
• Reduced Adjusted Selling, General and Administrative Expense by $2.1 million, or 4.5%, to $44.7 million from the prior-year period.
• Inspection and Heat-Treating (IHT) segment revenue saw a slight increase of $2.8 million, or 1.1%, for the six months ended June 30, 2026, compared to the prior-year period.

Negatives

• Reported revenue of $228.7 million for Q2 2026, down from $248.0 million in Q2 2025.
• Gross margin decreased to $54.4 million in Q2 2026 from $68.1 million in Q2 2025.
• Net loss widened to $6.8 million in Q2 2026 from $4.3 million in Q2 2025.
• Adjusted EBITDA significantly decreased to $12.8 million (5.6% of revenue) in Q2 2026 from $24.5 million (9.9% of revenue) in Q2 2025.
• Operating income for Q2 2026 was $2.2 million, a substantial decrease from $12.1 million in Q2 2025.
• Net loss attributable to common shareholders was $9.8 million ($2.15 per share) in Q2 2026, compared to $4.3 million ($0.95 per share) in Q2 2025.
• Total debt increased to $326.3 million as of June 30, 2026, from $297.2 million at fiscal year-end 2025.

Risks

• Deferral of planned turnaround and maintenance activity across core oil and gas, and petrochemicals markets, down 51% year-to-date through June, impacting revenue and margins.
• Interim weakness in the business centered geographically in the Middle East due to ongoing conflict.
• The precise timing of the return of deferred Mechanical Services activity in the second half of 2026 remains dependent on customer operating decisions.
• Potential for negative market conditions, including domestic and global inflationary pressures, changes in global trade policies and tariffs, and future economic uncertainties.
• Risks related to liquidity and the ability to obtain additional financing.
• Impact of new or changes to existing governmental laws and regulations and their application, including tariffs.
• Outcome of tax examinations, changes in tax laws, and other tax matters.
• Foreign currency exchange rate and interest rate fluctuations.

Future Outlook

Full-year 2026 guidance projects revenue between $920 million and $945 million (approx. 4% increase at midpoint), gross margin between $240 million and $260 million (approx. 8% increase at midpoint), and Adjusted EBITDA between $68 million and $73 million (approx. 16% increase at midpoint). Capital expenditures are expected to be between $13 million to $14 million. Structural cost improvements are targeted at $8 million to $15 million for 2026, with a full annual run-rate goal of $20 million to $35 million. The company expects results to come in towards the bottom half of guidance ranges due to uncertainty in deferred turnaround activity.

Management Comments

• "Over the past several months, we have strengthened the leadership team, advanced initiatives on the ground to improve operational efficiency and execution, and continued to broaden our commercial focus."
• "Together we expect these steps to improve our margins, support stronger performance in the second half, and strengthen TEAM's underlying earnings power and cash flow generation over time."
• "Second-quarter results reflected the deferral of planned turnaround and maintenance activity across our core oil and gas, and petrochemicals markets... While TEAMs overall revenue base remained resilient, particularly in our Inspection and Heat-Treating segment... the lower overall level of turnaround activity resulted in a less favorable mix of sales, temporarily pressuring margins and Adjusted EBITDA."
• "We expect a portion of this deferred Mechanical Services activity to begin returning during the second half of 2026, although the precise timing remains dependent on customer operating decisions."
• "In the meantime, we remain focused on the areas within our control. We have established a clear goal for our structural cost improvement program in full-year 2026 which we expect to range between $8 $15 million, with a goal of $20 $35 million at full annual run-rate."
• "Our year-to-date results have remained resilient in the face of the transient softness to our top-line, driven by the deferred turnaround and maintenance activity in our core markets."
• "We are balancing the impact of the softer top-line with our structural cost improvement program to protect underlying profitability."

Industry Context

StockSavvy.ai notes that the reported decline in revenue and profitability for Team, Inc. appears linked to broader industry trends in the oil and gas and petrochemical sectors, specifically the deferral of maintenance and turnaround activities by customers seeking to capitalize on favorable market conditions (crack spreads and margins). The geopolitical situation in the Middle East also presents a localized risk impacting operations. The company's strategy to diversify into high-value industrial end markets and implement cost reductions is a common response to cyclical downturns and margin pressures within the industrial services sector.

Stakeholder Impact

• Shareholders: Potential negative impact due to decreased profitability, increased net loss, and reduced Adjusted EBITDA. Guidance suggests a path to recovery, but near-term results are weaker.
• Employees: Potential impact from structural cost reduction programs, though specific details are not provided.
• Customers: Benefit from deferred maintenance activity allowing for extended operating runs and favorable market conditions.
• Creditors: Increased total debt may raise concerns, although liquidity remains at $51.2 million.

Next Steps

• Continue to advance key pillars of operational and commercial transformation.
• Strengthen leadership team and improve operational efficiency and execution.
• Broaden commercial focus and extend specialized capabilities into a more diversified set of high-value industrial end markets.
• Recapture deferred Mechanical Services activity during the second half of 2026.
• Implement structural cost improvement program targeting $8 million to $15 million in 2026.
• Hold conference call on August 11, 2026, to discuss Q2 2026 results.

Key Dates

Recommendation

The company is experiencing significant headwinds with declining revenues and profitability, driven by industry-specific factors like deferred maintenance. While management has provided guidance for improvement and is implementing cost controls, the near-term results are substantially worse than the prior year. The uncertainty surrounding the timing of deferred activity returning and the increase in debt warrant a cautious 'hold' stance until clearer signs of sustained recovery emerge.

Keywords

specialty industrial services, inspection services, heat-treating services, mechanical services, oil and gas, petrochemicals, turnaround services, cost reduction