SPAR Group reported third‑quarter 2025 revenue of $41.4 million, a 28.2% year‑over‑year increase driven by a 30% rise in U.S. and Canada net revenue to $38.6 million and a 20% rise in other regions to $2.8 million. The company’s consolidated gross margin fell to 18.6% of sales from 22.3% in the year‑ago quarter, a decline largely attributable to a higher proportion of lower‑margin retailer remodeling work that pushed the mix toward services with thinner margins.
The quarter ended with a GAAP net loss of $8.8 million, or $0.37 per diluted share, compared with a $0.20 million loss ($0.01 per diluted share) in the prior year quarter. Adjusted diluted loss per share was $0.10, missing the consensus estimate of $0.03 by $0.13. One‑time restructuring and severance costs of $4.0 million and other non‑recurring expenses of $1.6 million contributed to the loss, underscoring the company’s ongoing transition costs.
Liquidity remained solid, with total liquidity of $10.4 million at September 30, comprising $8.2 million in cash and cash equivalents and $2.2 million of unused credit facility availability. Operating cash usage for the nine months ended September 30 was $16.0 million, leaving a net working‑capital balance of $8.5 million, a slight improvement over the prior year quarter’s $7.9 million.
Chief Executive Officer William Linnane said the company is “building a structurally leaner and more profitable business” and that the mix shift toward higher‑margin merchandising services in the second half of 2025 should lift gross margins. Chief Financial Officer Antonio Calisto Pato added that disciplined management of selling, general, and administrative expenses—targeted at $6.5 million per quarter—will help offset the margin pressure from remodeling work. Both executives highlighted the company’s focus on cash generation and working‑capital discipline as key to sustaining growth.
On October 8, 2025, SPAR Group appointed Josh Jewett as Chief Technology Officer, a move that signals a renewed emphasis on technology and artificial‑intelligence initiatives to drive operational efficiency and create a competitive moat. Jewett’s background in AI‑driven supply‑chain optimization is expected to support the company’s goal of higher‑margin merchandising services and improve cost control across the organization.
Market reaction to the results was negative, with the company’s shares slipping 4.8% after the release. Investors cited the miss on both EPS and revenue, the decline in gross margin, and the significant restructuring and one‑time costs as primary concerns, indicating that the market weighed the company’s top‑line momentum against its profitability challenges and transition expenses.
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