DIRTT Environmental Solutions Reports 1% Revenue Growth to $41.3 Million in Q1 2025

DIRTT Environmental Solutions Ltd. reported a modest increase in revenue for the first quarter of 2025, reaching $41.3 million, up from $40.8 million in the same period of 2024. This 1% growth was primarily driven by a higher volume of large projects in the education and healthcare sectors, although it was partially offset by a decline in smaller commercial and government projects. The company's gross profit for the quarter was $14.5 million, representing a gross profit margin of 35.2%, slightly down from 35.9% in the previous year. The decrease in gross profit margin was attributed to tariffs imposed in 2025, which added approximately $0.6 million in costs.

In terms of profitability, DIRTT reported a net loss of $0.7 million for the quarter, a significant decline from a net income of $3.0 million in the first quarter of 2024. This shift was largely due to a $2.9 million decrease in gains from the extinguishment of debt, as well as reduced foreign exchange gains and interest income. The company’s operating loss was $0.3 million, compared to a loss of $0.2 million in the prior year, indicating ongoing challenges in managing operational costs amidst fluctuating market conditions.

Operationally, DIRTT's customer base saw a slight decrease, with 69 construction partners as of March 31, 2025, down from 74 a year earlier. The company continues to focus on expanding its market presence, particularly in the healthcare sector, which saw a 136% increase in revenue year-over-year. However, commercial sales decreased by 7%, reflecting fewer large projects in that segment. Geographically, revenue from Canada increased significantly to $6.9 million, accounting for 17% of total revenue, compared to 8% in the same quarter of 2024.

Looking ahead, DIRTT has expressed caution regarding its outlook due to increasing business uncertainties stemming from macroeconomic conditions and the impact of tariffs. The company has decided to withdraw its full-year revenue and Adjusted EBITDA guidance, citing delays in project decision-making and a softening revenue pipeline. Despite these challenges, DIRTT remains optimistic about its strategic priorities and expects to generate positive Adjusted EBITDA in 2025, supported by cost controls and operational efficiencies. The company ended the quarter with $28.4 million in cash and $7.6 million in available borrowings, indicating a solid liquidity position to navigate the upcoming fiscal challenges.