Mistras Group Lifts Full-Year Guidance as Profit More Than Doubles
The infrastructure-testing company raised its full-year revenue outlook to as much as $755 million after second-quarter net income more than doubled to $7.6 million.
Mistras Group (MG), an infrastructure-testing and inspection company, reported second-quarter net income that more than doubled from a year earlier and raised its full-year revenue and profit guidance, even as top-line growth decelerated for a third straight quarter.
Revenue for the quarter ended June 30 reached $193.1 million, up 4.2% from the year-earlier period. The pace marked a continued cooling from 4.6% growth in the first quarter and 5.1% in the fourth quarter of 2024, though it extended the company's streak of mid-single-digit gains to four consecutive quarters. The slowdown came as weakness in the company's largest end market, Oil & Gas, weighed on results.
Oil & Gas revenue fell roughly 8% to $94.3 million, a decline of about $8.5 million attributed to lower activity tied to macroeconomic and oil-price conditions. The drag was more than offset by gains elsewhere. Infrastructure, Research & Engineering revenue surged 76.5% to $14.2 million, accelerating sharply from the prior quarter. Aerospace & Defense revenue rose 13.2% to $27.2 million, though the pace slowed from the first quarter's 35.5% jump. Power Generation & Transmission revenue climbed 26.4% to $14.9 million.
Profitability improved on several measures. Gross profit margin widened 10 basis points year over year to 29.2%, a more modest expansion than the 120-basis-point gain recorded in the first quarter. Adjusted EBITDA rose 7.0% to $25.8 million, a second-quarter record, though the growth rate slowed from 18.7% in the prior quarter. GAAP net income reached $7.6 million, or $0.23 a share, compared with $3.0 million, or $0.10 a share, a year ago; on a non-GAAP basis, earnings were $0.28 a share versus $0.19.
The company also showed progress on its balance sheet. Free cash flow swung to positive $3.7 million in the first half of 2025 from negative $15.9 million a year earlier, a $19.7 million improvement. Gross debt fell to $172.1 million as of June 30 from $181.4 million at the end of the first quarter, and the trailing 12-month leverage ratio dropped to 2.2 times, the lowest since 2018. Restructuring costs continued to wind down, falling to $1.5 million from $3.0 million a year earlier, while SG&A expenses declined 2.7% to $38.7 million.
Mistras raised its full-year guidance to revenue of $740 million to $755 million and Adjusted EBITDA of $92 million to $95 million, citing continued strength in strategic growth markets partially offset by lower Oil & Gas activity. The updated outlook implies second-half revenue of roughly $354 million to $369 million, compared with $389 million in the second half of 2024, suggesting the company expects the Oil & Gas headwind to persist.
North America revenue grew 5.8% to $156.6 million while International revenue declined 2.7% to $38.0 million, reversing a pattern of stronger overseas growth seen in the first quarter. In-Laboratory Services continued to outpace the broader business, with revenue up 7.1% to $28.9 million compared with 3.7% growth in Integrated Field Solutions.