Thermon delivered Q4 results that surpassed Wall Street’s revenue and profit expectations, with the market reacting positively following the announcement. Management attributed the strong quarter to robust growth in large-scale project activity, particularly in liquefied natural gas (LNG), midstream gas processing, and sustainable aviation fuels. CEO Bruce Thames pointed to a 14% year-over-year increase in orders and highlighted momentum in both the company’s core and emerging markets as key contributors to the quarter’s performance.
Is now the time to buy THR? Find out in our full research report (it’s free for active Edge members).
Thermon (THR) Q4 CY2025 Highlights:
- Revenue: $147.3 million vs analyst estimates of $138.3 million (9.6% year-on-year growth, 6.5% beat)
- Adjusted EPS: $0.66 vs analyst estimates of $0.58 (13.4% beat)
- Adjusted EBITDA: $35.6 million vs analyst estimates of $32.07 million (24.2% margin, 11% beat)
- The company slightly lifted its revenue guidance for the full year to $521 million at the midpoint from $516.5 million
- Management raised its full-year Adjusted EPS guidance to $2.12 at the midpoint, a 2.2% increase
- EBITDA guidance for the full year is $117 million at the midpoint, above analyst estimates of $115.7 million
- Operating Margin: 18.1%, in line with the same quarter last year
- Market Capitalization: $1.73 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Thermon’s Q4 Earnings Call
- Brian Drab (William Blair) asked about the sustainability of gross margins, particularly given the higher mix of large project revenue. CEO Bruce Thames explained that improved margins are being driven by operating leverage, pricing, and a shift toward design and supply projects, while noting some seasonality in margin trends.
- Brian Drab (William Blair) also queried whether the shift toward design and supply was intentional or market-driven. Thames clarified it was a combination of deliberate focus and broader market trends, notably as contractors bring more field labor in-house.
- Brian Drab (William Blair) probed customer engagement in the data center market, asking about Thermon’s relationships with construction contractors and hyperscalers. COO Thomas Cerovski responded that the company is building relationships across rental, commissioning, and end-user channels.
- Justin Ages (CJS Securities) inquired about the competitive landscape and market size for liquid load banks. Cerovski stated the market remains robust, with quote activity doubling, while management held to prior market size estimates.
- Arun Spychala (Craig Hallum Capital Group) asked about the outlook and scaling for medium voltage heaters. Cerovski described the opportunity as early-stage but large and multiyear, with significant barriers to entry and investment underway to expand manufacturing.
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will be monitoring (1) the pace of order conversion and revenue recognition in the data center and medium voltage heater segments, (2) Thermon’s ability to sustain margin performance amid changing project mix and potential tariff impacts, and (3) continued expansion in Europe and Asia, especially through the Fati acquisition. Execution of capacity investments and visibility into backlog conversion will be critical markers for ongoing growth.
Thermon currently trades at $52.65, up from $46.19 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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