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Thermal Energy International Inc. (TMG-X) reported record revenue and gross profit in its Q2 financial results, capping off an “excellent quarter,” president and CEO Bill Crossland said on an investor call.
For the quarter ended Nov. 30, 2025, the Ottawa-based company recorded $10.2 million in revenue, its highest quarterly revenue to date. An all-time record was also set for gross profit at $4 million. Net income in Q2 was approximately $618,000, a major leap from the approximately $28,000 it reported the year prior.
Thermal Energy also made significant progress on a bank term loan by repaying approximately $130,000 in the latest quarter, bringing it down to “negligible” levels. The firm is “essentially free” of bank debt after paying down $3.8 million since May 2022, Crossland said.
“We had a great second quarter with record revenue and improved profitability. We have a strong balance sheet with virtually no bank debt (remaining),” he said on the Tuesday morning call.
Crossland voiced excitement about the traction for its heat recovery product named HeatSponge. It is manufactured by its subsidiary Boilerroom Equipment, Inc.
Thermal Energy’s products are geared toward improving energy efficiency and reducing carbon emissions in the industrial and institutional sectors. Those include GEM steam traps, the FLU-ACE heat recovery system, and biomass drying equipment called Dry Rex.
Thermal Energy’s strong Q2
Thermal Energy’s Q2 revenue increased by 17 per cent year-over-year, attributed to increased revenues from heat recovery projects and GEM. Quarterly revenue from turnkey heat recovery projects was the highest to date in Q2, Crossland said.
With the exception of Q3 2025, Thermal Energy has been profitable for the past 12 quarters, he added.
Thermal Energy’s order intake at the end of Q2 was $5.9 million, with an order backlog of almost $15 million. The backlog is up 16 per cent from $12.9 million the year prior.
There has been strong demand for HeatSponge, Crossland said, with the product driving the company’s order intake growth. Thermal Energy is targeting larger, more strategic HeatSponge orders on a turnkey basis for clients looking for “a simpler, quicker heat recovery project,” he explained.
The heat recovery product is easy to install, with no controls and simpler heat sources and heat sinks to manage, Crossland said. Its simplicity translates into a shorter sales cycle and quicker project completion for Thermal Energy, and thus faster revenue generation.
The company’s operating expenses were $3.25 million in Q2, a 23 per cent increase from the year prior. It connected the jump in expenses to one-time costs in the quarter such as salary and benefit costs and a group incentive accrual.
As of the end of Q2, Thermal Energy had cash and working capital balances of approximately $2 million and $3.4 million, respectively.
'Still looking' for acquisitions
When asked by an analyst about the company’s thoughts on mergers and acquisitions opportunities after a strong quarter and debt reduction, Crossland said Thermal Energy is “still looking” and “keen.”
On acquisitions, Thermal Energy is not far along any material opportunity, he said.
“Usually we’re looking for pretty unique companies, and we are a fairly unique partner for them.”
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