Shimmick (SHIM -3.65%), a leading contractor in water, climate resilience, and infrastructure projects, reported results for Q2 FY2025 on August 14, 2025. The company reported GAAP revenue of $128 million, Revenue rose 42% year over year and beating analyst expectations by $14.8 million. Non-GAAP diluted loss per share came in at $(0.14), in line with consensus. Gross margin (GAAP) reversed from negative territory last year and finished at $8 million. Overall, these results mark a period of strong top line and margin recovery, yet profitability remains elusive and full-year earnings expectations have been revised downward due to continued weakness in legacy non-core business segments.
| Metric | Q2 2025 | Q2 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $(0.14) | $(0.14) | $(1.60) | N/A |
| Revenue | $128 million | $113.2 million | $90.6 million | 41.3 % |
| Gross Margin | $8 million | $(31) million | 125.8 % | |
| Adjusted EBITDA | $(0.2) million | $(40) million | 99.5 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Priorities
Shimmick is a specialty contractor focused on building, maintaining, and upgrading water, transportation, and critical infrastructure systems. Its expertise spans water treatment plants, reservoirs, mass transit facilities, and climate resilience projects across the United States.
Recently, it has concentrated on expanding its main business—dubbed Shimmick Projects—centered around sustainable water management, infrastructure modernization, and climate preparedness. The company’s current success hinges on building a healthy project backlog, selectively bidding on higher-margin contracts, and reducing exposure to legacy foundation drilling projects, which continue to operate at a loss. Key drivers for Shimmick’s growth include industry-wide demand for updated water and transit solutions, successful execution of its transformation plan, and cost control initiatives.
Quarterly Performance and Operational Highlights
Shimmick recorded substantial revenue growth and margin improvement in Q2 FY2025. GAAP revenue of $128 million represented a significant increase from the prior-year quarter, $113 million came from Shimmick Projects. This core business benefited from the ramp-up of new water and infrastructure contracts, including $18 million contributed by a California Palisades fire clean-up job and $18 million from fresh project wins, partially offset by a $7 million decline from lower activity on older projects.
Gross margin (GAAP) showed a strong recovery, swinging to a positive $8 million from a $(31) million loss a year ago. For Shimmick Projects specifically, margins climbed to $15 million, or 13%, compared to $5 million or 5% last year. Claims settlements were less of a drag this quarter, especially outside of core operations, helping the bottom-line numbers. Selling, general and administrative costs (GAAP) also fell by 20% year over year, reflecting ongoing progress under the company’s transformation plan. Selling, general and administrative expenses decreased by $4 million during the three months ended July 4, 2025, primarily as a result of the continued implementation of the Transformation Plan.
Adjusted EBITDA—a measure of earnings before interest, taxes, depreciation, and amortization that excludes certain one-time or non-cash items—improved sharply, landing just below breakeven at $(0.2) million, up from a $(40) million loss a year ago. Net loss attributable to Shimmick Corporation (GAAP) narrowed to $(9) million compared to $(51) million a year ago. Despite these advances, Non-Core projects, mainly older foundation drilling jobs, continued to weigh heavily on overall company margins, finishing with a negative gross margin of $(7) million.
Backlog at quarter’s end stood at $652 million, with over 88% from Shimmick Projects. Additional awards of $70 million in July 2025 and preferred status on a $164 million transit center job point to further backlog growth. The period also saw the launch of a new subsidiary, Axia Electric, which targets complex electrical and power distribution work in growth industries such as data centers and advanced manufacturing.
Products, Segments, and Segment Trends
The company’s Shimmick Projects encompass water treatment plant construction, mass transit infrastructure, and climate resilience efforts. For the three months ended July 4, 2025, Shimmick Projects gross margin was 13%, and management raised its full-year FY2025 revenue target for these projects to $405–415 million, up from prior guidance.
Non-Core Projects consist mainly of legacy and foundation drilling services, where activity has decreased over time as part of Shimmick’s ongoing business realignment. Although revenue for these projects increased to $16 million due to timing and absence of prior-year settlement impacts, margins stayed deeply negative at $(7) million. This presents a less favorable mix for overall company profitability and remains a key issue for management’s future plans. Management now expects Non-Core revenue at $80–90 million for FY2025, above the previous outlook but with continued operating losses. The company’s gross margin guidance for Non-Core remains between (15%) and (5%) for FY2025.
Other notable trends included a 20% drop in selling, general and administrative costs compared to Q2 FY2024 and a 34% fall in the recordable incident rate in calendar year 2024 compared to 2023, signaling ongoing focus on operational safety and internal process improvements. Collaborative bidding remains a company focus; management reported monthly increases in bid activity and a 12-month bidding pipeline topping $4.5 billion.
There were no dividends declared or mentioned, in line with Shimmick’s past practice.
Looking Ahead: Guidance and Investor Considerations
Shimmick raised total expected revenue guidance for FY2025, revising core Shimmick Projects revenue guidance upward to $405–415 million and Non-Core Projects revenue to $80–90 million. Gross margin guidance for Shimmick Projects was held steady at 9%–12%. However, Full-year FY2025 Adjusted EBITDA guidance was lowered to $5–15 million from $15–25 million Management attributed this outlook adjustment to higher-than-anticipated Non-Core losses and a less favorable project mix, even with an uptick in revenue. Liquidity stood at $73 million at quarter end, up $2 million sequentially, but the company continues to operate at a stockholders’ deficit of $49.5 million—meaning that liabilities exceed total assets.
Investors should continue to watch several metrics in the coming quarters: the pace of core revenue and margin improvement, the speed of Non-Core project wind-down, and progress in large project bidding and contract wins. Another priority will be managing working capital and liquidity needs as Shimmick’s backlog expansion and major wins support future revenue potential, but sustained improvements in bottom-line performance and further reduction of legacy project drag will be essential for long-term financial health.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
