Ottawa-based heat recovery equipment designer and manufacturer Thermal Energy International Inc. (TMG-X) is reporting improvements in revenue and net income from the year prior, according to its latest financial results.

Its Q1 2025 period ending Aug. 31, 2024 saw revenue rise 63 per cent from the previous year to $8.5 million, with net income of $0.3 million, a rise of 91 per cent from its Q1 2024 report.

The company reported its strongest turnkey project revenue since before the COVID pandemic, William Crossland, CEO of Thermal Energy, said in an investor call.

"We exited the quarter with a strong balance sheet, and we are well positioned for growth, and we continue to have a very favourable outlook with strong market fundamentals," he summarized.

The company made a gross profit of $3.5 million in Q1 2025, which he said was its highest figure since a record-setting $3.8 million in Q4 2023.

An order backlog of $13.5 million capped off the quarter, compared to $18.7 million in Q4 2024. The figure has also increased between the closing of the period and the investor call, he said.

Thermal Energy’s products such as steam traps and heat recovery systems are designed to improve energy efficiency and reduce greenhouse gas emissions for industrial customers. Millions of tonnes of carbon emissions and hundreds of millions of dollars have been saved in energy bills, the company says.

Thermal Energy’s trailing 12 months and investments

Over the trailing 12 months (TTM) that ended Aug. 31, called TTM 2025, Thermal Energy said it generated order intakes of $29 million, up almost eight per cent from the year before.

A net income of $1.13 million was recorded for the period, which was below the year prior by $0.26 million but higher than two years ago by $3.32 million.

Operating expenses rose by $2.3 million to $11.4 million in TTM 2025, with investments into staff, technology and a larger U.K. facility accounting for the increase.

Crossland said Thermal Energy’s U.K. operations were transferred to a “much larger” site on the outskirts of Bristol that has more than double the production capacity and approximately triple the space of the previous location.

Announced in November 2023, the move was made because of high demand for the company’s GEM steam trap product.

Additional revenue from the U.K. should not be expected due to the expansion, the CEO explained, but it does stage the company for further growth.

On the staffing side, nine people were added. Two-thirds were on its engineering and production side. Crossland said one or two more hires may be added, but he believes Thermal Energy is “in pretty good shape” for the next 12 months on headcount, in response to an analyst question.

Complementing its emphasis on technology is development of a mobile app named CREST (Carbon Reduction and Efficiency Scoping Tool), a global accounting program and enterprise resource planning software.

“We remain quite bullish on our outlook as this is a very exciting time for Thermal Energy,” Crossland said. “The significant reinvestments we made in our business strongly position us for our next stage of growth.”

Backlog increased

After concluding Q1 2025, repeat orders boosted its backlog from $13.5 million to $18.4 million as of Oct. 28.

Examples include an order for a heat recovery and heat pump project valued at around $2.2 million for a multinational pharmaceutical company and supplying the equipment for a $1.5-million project of a multinational confectionery company in Canada.

Preliminary discussions for mergers and acquisitions are being held, activity Crossland said Thermal Energy would like to do in the next 12 months. He stressed, however, the talks are in early stages.