DMC Global (BOOM) Q2 Revenue Beats Views

Globe and Mail

16 hours ago

Key Points
DMC Global (NASDAQ:BOOM) exceeded analyst expectations for both non-GAAP earnings per share and GAAP revenue in Q2 2025.
Year-over-year, the company saw significant declines in sales, profitability, and gross margins at Arcadia and DynaEnergetics, while NobelClad's sales increased but its gross margin declined.
Management's guidance signals further revenue and adjusted EBITDA contraction due to ongoing market uncertainty and weaker demand.
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DMC Global (NASDAQ:BOOM), a diversified manufacturing holding company with businesses in building products, energy, and industrial sectors, reported its results for the second quarter of fiscal 2025 on August 5, 2025. The most important takeaway from this release was the company's ability to outperform consensus estimates for both GAAP revenue and non-GAAP EPS, despite ongoing end-market weakness. DMC Global posted non-GAAP earnings per share of $0.12, surpassing analyst expectations of $0.02. Revenue (GAAP) reached $155.5 million, ahead of the estimated $151.4 million. Although results topped muted expectations, the quarter saw broad declines compared to the same period last year, with drops in revenue, adjusted EBITDA (non-GAAP), and net income. Overall, the period showed prudent cost management, but continued headwinds in construction, energy, and industrial markets weighed on the business.
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Business Priorities
DMC Global operates through three main business segments: Arcadia Products, which produces building components for the construction sector; DynaEnergetics, which makes perforating systems for the energy industry; and NobelClad, a manufacturer of composite metals used in chemical processing and industrial applications. The company's diversified approach allows it to engage in industries with differing growth cycles and risk profiles.
In recent periods, DMC Global has focused on aligning operations with prevailing market realities. For Arcadia, this meant shifting attention from a shrinking high-end residential market to more stable commercial construction. DynaEnergetics has pursued product innovation and cost reduction in response to variable demand in U.S. oil and gas, while NobelClad has concentrated on maintaining order flow amid global trade policy uncertainty. Supply chain management and strategic decision-making remain key factors for ongoing performance.
Quarter Highlights and Segment Performance
DMC Global's consolidated revenue (GAAP) exceeded internal and external forecasts, but still fell 9% short compared to the prior year. Adjusted earnings per share (non-GAAP) beat consensus by $0.10.
Arcadia, which makes windows and doors for commercial and high-end residential projects, posted GAAP sales of $62.0 million—a decrease of 11% from the same period last year. Segment profitability saw even steeper declines, with adjusted EBITDA attributable to DMC down 28% sequentially and 46% year-over-year. Adjusted EBITDA in Arcadia dropped to $4.0 million, down 46% year over year. Gross margins compressed from 33.2% in Q2 2024 to 26.2% in Q2 2025 for Arcadia, due to lower absorption of fixed manufacturing overhead on decreased sales. Management acted to reduce costs in the residential business and sharpened the commercial focus in response to these trends.
DynaEnergetics, the manufacturer of perforating systems such as the DynaStage and DS Infinity series for oil and gas well completion, generated GAAP sales of $66.9 million, down 12% year over year. Despite lower top-line results, segment profitability improved as adjusted EBITDA rose by 3% year-over-year, reflecting cost reduction and efficiency measures. The segment's gross margin increased to 20.9% in Q2 2025 from 19.9% in Q2 2024, helped by lower material costs relative to the prior year.
NobelClad, which produces composite metal plates for use in pressure vessels and other industrial infrastructure, achieved sales of $26.6 million, a 6% rise from Q2 2024. However, the order backlog declined to $37 million at the end of Q2 2025, 9.8% below the end of Q1 2025, signaling weaker forward demand due to uncertainty surrounding U.S. tariff policies. Adjusted EBITDA in this segment dropped 23% year over year, while gross margin fell sharply from 32.6% to 24.7%, attributed to less favorable project mix.
Looking Ahead: Outlook and Investor Considerations
For Q3 2025, DMC Global's management issued guidance for consolidated sales in the range of $142 million to $150 million, representing a sequential decline from the period just reported. Adjusted EBITDA attributable to DMC is expected between $8 million and $12 million, reflecting heightened uncertainty in end markets, especially those sensitive to macroeconomic factors and trade policy shifts.
Management did not provide annual guidance for fiscal 2025 beyond the immediate quarter. The company drew attention to ongoing risks including weak demand in construction, variable activity in the oil and gas market, and unresolved tariff policies. Order visibility remains low, with particular note given to the reduction in NobelClad's backlog (from $41 million at the end of Q1 2025 to $37 million at the end of Q2 2025) and fixed cost absorption risk in Arcadia.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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