DIRTT Environmental Solutions Ltd. reported a revenue of $42.4 million for the first quarter of 2026, marking a 3% increase from $41.3 million in the same period of 2025. The growth was driven by a rise in service revenue, which increased to $1.6 million from $949,000 year-over-year. However, the company experienced a decline in gross profit, which fell to $13.0 million, or 30.6% of revenue, compared to $14.5 million, or 35.2% of revenue, in the prior year. The decrease in gross profit margin was attributed to rising aluminum costs, lower margins on installation projects, and increased tariff costs, which amounted to $2.0 million in the first quarter of 2026, up from $0.6 million in the same quarter of 2025.
In terms of operational changes, DIRTT's customer base saw a slight contraction, with 60 Construction Partners as of March 31, 2026, down from 69 a year earlier. The company is actively working to develop its Construction Services channel, which is expected to enhance revenue visibility and conversion rates. The twelve-month forward pipeline increased by 16% year-over-year, reaching approximately $338 million, indicating a positive outlook for future revenue generation. The company also reported a net loss of $3.3 million for the quarter, compared to a loss of $661,000 in the same period last year, primarily due to increased reorganization expenses and a decrease in gross profit.
DIRTT has been undergoing a strategic transformation, which included the establishment of a Transformation Office aimed at streamlining processes and improving productivity. The company incurred $2.4 million in reorganization expenses during the first quarter, primarily related to termination benefits and consulting costs. Additionally, the company appointed Aaron Merkin as Chief Technology Officer following the departure of Richard Hunter, the former President and COO.
On the financial front, DIRTT's cash position decreased to $15.0 million as of March 31, 2026, down from $20.3 million at the end of 2025. The decline was largely due to the repayment of $12.1 million in convertible debentures and capital expenditures. The company also secured a loan from the Business Development Bank of Canada, which provided $10 million in funding to support its operations. Looking ahead, DIRTT remains focused on executing its transformation initiatives and improving its operational efficiency, with an optimistic outlook for revenue growth driven by a strengthening pipeline and market conditions.
About DIRTT ENVIRONMENTAL SOLUTIONS LTD
DIRTT designs and manufactures customizable, sustainable interior construction solutions using advanced digital tools and off-site manufacturing. Its core offerings include modular walls, doors, casework, and integrated systems for commercial spaces across North America. Combining speed, quality, and adaptability, DIRTT serves diverse industries with a focus on environmentally conscious, reconfigurable spaces that meet evolving client needs.
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