Industrial construction and maintenance company Matrix Service (NASDAQ: MTRX) missed Wall Street’s revenue expectations in Q4 CY2025, but sales rose 12.5% year on year to $210.5 million. The company’s full-year revenue guidance of $900 million at the midpoint came in 0.9% below analysts’ estimates. Its non-GAAP loss of $0.02 per share was significantly below analysts’ consensus estimates.
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Matrix Service (MTRX) Q4 CY2025 Highlights:
- Revenue: $210.5 million vs analyst estimates of $215.4 million (12.5% year-on-year growth, 2.3% miss)
- Adjusted EPS: -$0.02 vs analyst estimates of $0.04 (significant miss)
- Adjusted EBITDA: $2.42 million vs analyst estimates of $2.80 million (1.1% margin, relatively in line)
- The company reconfirmed its revenue guidance for the full year of $900 million at the midpoint
- Operating Margin: -1%, up from -3.4% in the same quarter last year
- Free Cash Flow Margin: 3%, down from 17.5% in the same quarter last year
- Backlog: $1.13 billion at quarter end
- Market Capitalization: $402.7 million
Company Overview
Founded in Oklahoma, Matrix Service (NASDAQ: MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.
Revenue Growth
A company’s long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Matrix Service grew its sales at a weak 1.1% compounded annual growth rate. This was below our standards and is a poor baseline for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Matrix Service’s annualized revenue growth of 4.7% over the last two years is above its five-year trend, but we were still disappointed by the results. 
This quarter, Matrix Service’s revenue grew by 12.5% year on year to $210.5 million but fell short of Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 17% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and implies its newer products and services will fuel better top-line performance.
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Operating Margin
Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.
Matrix Service’s high expenses have contributed to an average operating margin of negative 5.4% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.
On the plus side, Matrix Service’s operating margin rose by 7.7 percentage points over the last five years, as its sales growth gave it operating leverage. Still, it will take much more for the company to reach long-term profitability.
Matrix Service’s operating margin was negative 1% this quarter. The company's consistent lack of profits raise a flag.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Matrix Service’s earnings losses deepened over the last five years as its EPS dropped 21.4% annually. However, it’s bucked its trend as of late, increasing its EPS over the last three years. We’ll see if it can maintain its growth.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Matrix Service, its two-year annual EPS growth of 28% was higher than its five-year trend. Its improving earnings is an encouraging data point, but a caveat is that its EPS is still in the red.
In Q4, Matrix Service reported adjusted EPS of negative $0.02, up from negative $0.20 in the same quarter last year. Despite growing year on year, this print missed analysts’ estimates. Over the next 12 months, Wall Street is optimistic. Analysts forecast Matrix Service’s full-year EPS of negative $0.43 will flip to positive $0.70.
Key Takeaways from Matrix Service’s Q4 Results
We struggled to find many positives in these results. Its revenue missed and its EBITDA fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock remained flat at $13.48 immediately following the results.
Matrix Service may have had a tough quarter, but does that actually create an opportunity to invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
