Team (NYSE:TISI) reported a stronger first quarter of fiscal 2026, with management pointing to higher activity across both of its operating segments, improved profitability and a more focused strategy under new Chief Executive Officer Gary Hill.
Hill, who said he has been with the company for about 100 days, told investors that TEAM delivered a “solid start to 2026” from both an operational and financial perspective. First-quarter revenue increased 8.3% year over year to $215 million, which Hill said was the company’s highest first-quarter revenue since 2019.
Segment Growth Drives First-Quarter Improvement
Chief Financial Officer Nelson Haight said the revenue increase was driven by growth in both of TEAM’s business segments.
- Inspection and Heat Treating: Revenue increased $9.8 million, or 8.6%, from the prior-year period, supported by higher project and call-out activity in the U.S. and Canada.
- Mechanical Services: Revenue increased $6.6 million, or 7.8%, due to higher project and turnaround activity with both new and existing customers.
Haight said operating income increased $2.6 million, or 43.8%, year over year, helped by stronger revenue in the U.S. and Canada and lower corporate costs. Adjusted selling, general and administrative expense was slightly higher in dollar terms, but as a percentage of revenue it declined by 150 basis points from the prior-year period, which Haight said indicated improving scalability and operating leverage.
“As an organization, we are fixated on improving margins and growing Adjusted EBITDA,” Haight said. He added that the company is prioritizing free cash flow generation in 2026 through more efficient working capital use and improved cash flow margins, while also targeting further deleveraging and debt reduction.
CEO Outlines Strategic Priorities
Hill used the call to outline his early observations and strategic priorities after meeting with employees, visiting company locations and holding discussions with leadership and the board. He emphasized TEAM’s workforce as the company’s “most important asset,” describing employees as having deep technical expertise and a strong commitment to safety and customer service.
Hill said TEAM is seeking to strengthen retention and employee engagement. He pointed to a formal “hire to retire” career path program for technicians, which he said the company believes is the first of its kind in its industry. He also cited employee benefits focused on health and wellness, along with annual satisfaction surveys designed to provide feedback on employee concerns.
Management also plans to make targeted additions to TEAM’s leadership team and improve communication, analytics and decision-making across the business. Hill said the goal is to make the company more nimble in responding to customer needs and market changes.
Target Markets Include LNG, Data Centers and Aerospace
Hill said TEAM continues to see stability in its core refining and petrochemical markets, while also identifying long-term opportunities in LNG, midstream, data centers, power and aerospace.
He said the conflict in the Middle East has had “minimal direct impact” on TEAM but has affected the oil and gas industry, including higher refinery runtimes that have pushed some turnaround work later in the year. Still, Hill said refining and petrochemicals remain a strong long-term opportunity because of aging refineries, high utilization rates and the need for facilities to remain online.
In LNG and midstream, Hill said U.S. growth over the past decade and global demand for natural gas are creating opportunities for inspection and mechanical services tied to facility expansions and greenfield development. He also cited the build-out of AI-related data centers, which he said is expected to drive significant power demand and related service opportunities.
Hill said commercial aerospace growth and increased defense spending also create opportunities for TEAM’s laboratory inspection services.
Management Focuses on Margin-Accretive Growth
Hill said TEAM is prioritizing “healthy, sustainable growth” that is margin accretive and less cyclical. He said the company is being more disciplined about the work it pursues, focusing on opportunities where its technical capabilities and execution quality are most valued.
The company is also continuing to evaluate cost efficiency initiatives. Hill said TEAM has made meaningful progress in cost optimization in recent years but sees further opportunity in supply chain, process simplification, systems investment and better integration across teams and locations. He said management expects to provide more detail on additional targeted cost reductions during the second-quarter earnings release and conference call.
TEAM Issues 2026 Guidance
For fiscal 2026, TEAM projected revenue between $920 million and $945 million, representing about 4% growth at the midpoint compared with 2025 actual results. The company forecast gross margin of $240 million to $260 million, an 8% increase at the midpoint, and Adjusted EBITDA of $68 million to $73 million, up 16% at the midpoint.
Hill said the guidance reflects the company’s focus on revenue growth, margin expansion and improved operating leverage. He said TEAM’s strategic priorities around employees, efficiency, leadership and commercial execution are intended to support continued improvement in financial performance.
“We are off to a good start in 2026,” Hill said, adding that management expects the company’s priorities to lead to healthier growth in revenue, margins and Adjusted EBITDA.
About Team (NYSE:TISI)
Team, Inc (NYSE:TISI) designs, engineers and manufactures industrial screen printing and digital printing equipment for a variety of end markets. The company’s solutions are used primarily in textile decorating, apparel, signage and graphics, and specialty industrial applications. By combining precision mechanical design with automated controls, Team delivers systems that enhance production speed, print quality and repeatability for its customers.
Team’s product portfolio includes manual and automatic screen presses, inkjet UV LED curing systems, digital direct-to-garment printers and hybrid platforms that integrate multiple printing technologies.
