DIRTT Environmental Solutions Ltd. reported its financial results for the third quarter and nine months ended September 30, 2024, reflecting significant changes in revenue, profitability, and strategic developments compared to the previous fiscal period.
For Q3 2024, DIRTT generated total revenue of $43.4 million, a decrease of 12.4% from $49.5 million in Q3 2023. Product revenue also declined, from $48.1 million in Q3 2023 to $42.5 million in Q3 2024. For the nine months ended September 30, 2024, total revenue was $125.4 million, down from $131.0 million in the same period of 2023. The decline in revenue was attributed to reduced sales across various verticals, particularly in the U.S. market, which saw a drop from $43.9 million to $35.5 million year-over-year.
Despite the revenue decline, DIRTT reported a net income of $7.1 million for Q3 2024, a significant turnaround from a net loss of $6.3 million in Q3 2023. This improvement was driven by a $7.5 million gain on the extinguishment of convertible debt and a substantial reduction in operating expenses, which fell by 33% to $15.6 million from $23.2 million in the prior year. For the nine months ended September 30, 2024, net income was $10.7 million, compared to a net loss of $15.5 million in the same period of 2023.
The company’s gross profit for Q3 2024 was $16.8 million, slightly down from $17.1 million in Q3 2023, but gross profit for the nine months increased to $46.8 million from $40.3 million year-over-year. The gross profit margin improved to 38.8% in Q3 2024, up from 34.4% in Q3 2023.
Strategically, DIRTT undertook significant debt management actions, including the repurchase of C$18.9 million of January Debentures and C$13.6 million of December Debentures in August 2024. This contributed to a reduction in long-term debt from $56.1 million at the end of 2023 to $23.9 million as of September 30, 2024. The company also initiated a Normal Course Issuer Bid (NCIB) for its debentures, which may affect liquidity and price volatility.
Additionally, DIRTT closed its Rock Hill Facility permanently in September 2023, incurring costs related to the idle facility. The company is exploring options to sublease this facility to mitigate costs. As of September 30, 2024, DIRTT had cash and cash equivalents of $23.6 million, with total liquidity of $34.3 million, indicating a stable financial position despite the operational challenges faced during the year.