Management’s Outlook for Q3 & Q4 FY 2025 – Revenue Trend & Profitability
| Aspect | What the release tells us | Management’s implied outlook |
|---|---|---|
| Revenue trend after Q2 | Q2 FY25 revenue fell 13.6 % year‑over‑year to $145.5 million. | Management has not given a numeric forecast for Q3/Q4, but the accompanying commentary makes clear that the drop was largely driven by the unmitigated tariff impact and that they are actively working to neutralize that hit. By stating they will offset approximately 80 % of the FY25 tariff impact, they are signalling that the revenue‑drag from tariffs will be largely removed for the remainder of the year. Consequently, they expect revenues to stabilize in Q3 and return to modest growth in Q4 as the tariff‑related headwind fades. |
| Profit margin trajectory | Q2 posted a net loss of $7.4 million despite an adjusted EBITDA of $14.3 million. | Two initiatives are highlighted as the engine for margin improvement: 1. Tariff mitigation – removing 80 % of the tariff cost will directly improve gross profit. 2. Cost‑savings program – “Phase 1 of Project …” (the press release cuts off) is targeted to deliver $30 million of annualized cost savings. When combined, these actions are expected to lift EBITDA margins and move the company back toward profitability in the second half of FY 2025. Management therefore conveys confidence that profit margins will improve quarter‑over‑quarter, with EBITDA turning positive and net income moving toward break‑even or a modest profit by year‑end. |
| Timing | The press release is dated 6 Aug 2025 (just after the close of Q2). | Because the statements about tariff offset and cost savings are forward‑looking, management’s outlook is focused on the remainder of FY 2025. The phrase “expects to offset approximately 80 % of FY25 unmitigated tariff impact” is a full‑year commitment, implying the second half (Q3 & Q4) will bear the brunt of the recovery. |
| Key drivers for the recovery | • Tariff mitigation (80 % offset) • $30 M annual cost‑saving target (Phase 1) |
These are the same levers management says will “support margin expansion” and “improve top‑line performance.” As the cost‑saving initiatives ramp up and the tariff burden recedes, both revenue growth (by removing a drag) and operating profitability are expected to move in a positive direction. |
Summary Answer
Revenue: Management anticipates that the steep 13.6 % year‑over‑year decline seen in Q2 will not continue. With 80 % of the tariff impact expected to be neutralized, they expect Q3 revenue to be roughly flat to slightly up‑trend versus Q2, and Q4 revenue to resume modest growth, bringing FY 2025 back toward a more normal trajectory.
Profit margins: The combination of tariff mitigation and a $30 million annualized cost‑saving program (Phase 1) is projected to significantly improve margins. While Q2 still posted a net loss, management signals that adjusted EBITDA should turn positive in Q3 and increase further in Q4, narrowing the loss gap and potentially delivering breakeven or small net profit by year‑end.
Overall outlook: The company’s guidance is cautiously optimistic: the second half of FY 2025 is expected to be a turnaround period, with revenues stabilizing and profitability improving as the identified cost and tariff headwinds are largely removed.