Perma-Pipe Q3 Earnings Jump Y/Y on Middle East, U.S. Demand

Shares of Perma-Pipe International Holdings, Inc. PPIH have gained 9.9% since the company reported its earnings for the quarter ended Oct. 31, 2025. In contrast, the S&P 500 index has declined 1.4% during the same period. Over the past month, Perma-Pipe’s stock has surged by an impressive 38.1%, significantly outperforming the broader market, which rose just 2.6%.

For the third quarter of 2025, Perma-Pipe reported diluted earnings per share (EPS) of 77 cents, more than doubling from 31 cents a year earlier. 

The company’s net sales of $61.1 million denoted a 46.9% increase compared to $41.6 million in the same period last year. The company attributed the revenue growth to higher sales volumes in both the Middle East and North America.

Gross profit rose by $6.9 million to $21 million, representing a 49% increase over the prior-year period.

Net income attributable to common stock soared to $6.3 million, up 152% from $2.5 million in the year-ago quarter.

Perma-Pipe International Holdings, Inc. Price, Consensus and EPS Surprise

Perma-Pipe International Holdings, Inc. price-consensus-eps-surprise-chart | Perma-Pipe International Holdings, Inc. Quote

Business Metrics Reflect Broad-Based Strength

Perma-Pipe reported a backlog of $148.9 million as of Oct. 31, 2025, up from $138.1 million at the beginning of the fiscal year. This represents a 7.8% increase year to date and a more than 30% jump from the same point in the prior year, demonstrating robust demand across both North America and the MENA region.

Operating income for the quarter was $11.4 million, up from $5.6 million in the third quarter of 2024. The company maintained steady interest expense at $0.5 million and reduced its effective tax rate to 27% from 32% in the prior-year quarter, benefiting from a favorable jurisdictional mix.

Operating expenses rose to $9.6 million, driven primarily by higher payroll and professional services expenses.

Management Commentary Emphasizes Strategic Execution

President and CEO Saleh Sagr highlighted the company's operational progress, noting that year-to-date revenues nearly match the full-year total for fiscal 2024. Sagr described the earnings as “the highest level of earnings since the Company’s transition from MFRI to Perma-Pipe in 2017,” underscoring a significant milestone in profitability.

He attributed the strong performance to continued growth in core markets, improved operating leverage and successful project execution. Sagr also pointed to the company’s ongoing strategic investments, particularly in the new Qatar facility, which has already secured more than $5 million in project awards expected to be executed in the remainder of the year.

Factors Influencing Headline Numbers

The significant uptick in revenues and net income was primarily driven by higher sales volumes and project execution in both the Middle East and North America. Operating leverage was evident as gross profit growth outpaced the increase in operating expenses. The effective tax rate also contributed favorably to net income during the quarter.

That said, the company did absorb higher general and administrative costs, including approximately $0.5 million in quarterly Sarbanes-Oxley compliance-related fees and a one-time $2 million charge related to executive transition costs over the nine-month period.

Other Developments

During the quarter, Perma-Pipe advanced its strategic investment in Qatar, a move that aligns with its long-term growth objectives. The facility has already generated over $5 million in confirmed orders slated for execution before the end of the fiscal year, signaling early success in the region and a promising expansion in the MENA market.

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