Shares of Team, Inc. (TISI Quick QuoteTISI - Free Report) have gained 4.9% since reporting first-quarter 2026 results, outperforming the S&P 500 index’s 0.6% decline. However, the stock remains under pressure, declining 6.1% over the past month against the S&P 500’s 3.7% return.

Team reported first-quarter 2026 revenues of $215.1 million, up 8.3% from $198.7 million in the year-ago quarter, marking the company’s highest first-quarter revenues since 2019. The gross margin increased 6.1% year over year to $50.2 million.

Net loss narrowed significantly to $11.3 million from $29.7 million a year earlier. Net loss attributable to common shareholders improved to $14.2 million, or $3.12 per share, from $29.7 million, or $6.61 per share, in the prior-year period. Adjusted EBITDA rose 45.2% year over year to $7.7 million from $5.3 million, with the adjusted EBITDA margin improving to 3.6% from 2.7%.

Team, Inc. Price, Consensus and EPS Surprise

 

Team, Inc. price-consensus-eps-surprise-chart | Team, Inc. Quote

Segment Performance & Operating Trends

The company’s Inspection and Heat Treating segment generated revenues of $123.4 million, an 8.6% increase from the prior-year quarter. Growth was driven by stronger turnaround services and capital project activity in the United States, along with higher contributions from Canada and other international markets. Operating income for the segment rose modestly to $10.9 million from $10.7 million.

Mechanical Services revenues increased 7.8% year over year to $91.7 million, supported by higher turnaround and callout activity from new and existing customers. The segment’s operating loss improved to $1.5 million from $3.1 million in the prior-year period, aided by stronger project activity in the United States and Canada.

Geographically, consolidated revenue growth reflected a 5.7% increase in the United States, a 35.6% rise in Canada and a 10.7% improvement in other international markets.

Adjusted selling, general and administrative expenses accounted for 21.2% of revenues compared with 22.7% a year earlier, reflecting improved operating leverage and cost discipline. The consolidated operating loss improved 43.8% year over year to $3.4 million.

Management Commentary & Strategic Priorities

Chief executive officer Gary Hill described the quarter as a solid start to 2026 and emphasized the company’s focus on accelerating operational improvements. Hill, who recently completed his first 100 days as CEO, said the company intends to sharpen commercial execution, pursue additional cost-efficiency measures and strengthen leadership capabilities through targeted hires.

Management highlighted several long-term growth markets, including liquefied natural gas, midstream infrastructure, power, aerospace and AI-driven data center construction. Hill noted that increased power demand tied to artificial intelligence data centers could create meaningful inspection and mechanical services opportunities.

The company also cited ongoing stability in refining and petrochemical markets despite some near-term turnaround projects shifting later into the year because of increased refinery run times linked to global geopolitical developments.

Executives stressed that Team is prioritizing “healthy, sustainable growth” and focusing on higher-margin opportunities rather than pursuing volume growth at any cost. Management also pointed to continued efforts to simplify operations, improve supply-chain efficiency and enhance scalability.

Balance Sheet & Cash Flow

As of March 31, 2026, Team reported total liquidity of $49.2 million, including $8.7 million in cash and cash equivalents, excluding restricted cash, and $40.5 million in available borrowing capacity. Total debt stood at $306.5 million compared with $297.2 million at the end of 2025, primarily because of higher borrowings under the company’s asset-based lending facility.

Net cash used in operating activities improved to $9.1 million from $28.7 million in the prior-year quarter. The free cash flow of negative $11.5 million improved substantially from negative $30.1 million a year earlier.

2026 Outlook

Team provided its 2026 guidance, calling for revenues between $920 million and $945 million, indicating 4% year-over-year growth at the mid-point. The company expects the gross margin between $240 million and $260 million, implying 8% growth at the mid-point, while adjusted EBITDA is projected between $68 million and $73 million, suggesting 16% growth at the mid-point. Capital expenditure is forecast between $13 million and $14 million.

Management expects stronger performance in the second half of 2026, supported by continued U.S. demand, improving international markets and additional margin expansion initiatives.

Other Developments

In the first quarter, Team reclassified its Emission Control Services business from the Mechanical Services segment to the Inspection and Heat Treating segment to better align with how management evaluates performance. The change did not affect consolidated revenues or adjusted EBITDA results.