DIRTT Environmental Solutions Ltd. (“DIRTT”, the “Company”, “we”, “our”, “us” or “ours”) (TSX: DRT; OTCQX: DRTTF), a leader in industrialized construction, today announced its financial results for the three months ended March 31, 2026. All financial information in this news release is presented in U.S. dollars, unless otherwise stated.
First Quarter 2026 Highlights and Recent Developments
Revenue of $42.4 million in the first quarter of 2026, an increase of 3% from the first quarter of 2025.
Gross profit and gross profit margin for the first quarter of 2026 was $13.0 million or 30.6% of revenue, a decrease from $14.5 million or 35.2% of revenue for the same period of 2025.
Net loss after tax for the first quarter of 2026 was $3.3 million compared to net loss after tax of $0.7 million for the same period of 2025.
Adjusted EBITDA1 for the first quarter of 2026 was $1.4 million, or 3.3% of revenue, a decrease of $0.7 million from $2.1 million or 5.1% of revenue for the first quarter of 2025. Lower Adjusted EBITDA was mainly driven by a $1.6 million decrease in Adjusted Gross Profit offset by a $0.9 million decrease in operating expenses (excluding reorganization costs and stock-based compensation).
Liquidity, comprising unrestricted cash and available borrowings, was $25.1 million at March 31, 2026, compared to $32.1 million at December 31, 2025.
On January 5, 2026, the Company announced that it entered into an agreement for an early termination of the lease at its former Rock Hill, South Carolina manufacturing facility, effective December 30, 2025.
On January 12, 2026, the Company announced that Richard Hunter, President and Chief Operating Officer, departed from the Company and Aaron Merkin joined the Company as the Chief Technology Officer, both effective January 12, 2026.
On January 31, 2026, the Company repaid the C$16.6 million ($12.1 million) principal amount of the Company’s issued and outstanding 6.00% convertible unsecured subordinated debentures (the “January Debentures”).
On February 2, 2026, the Company’s 10-week trial against Falkbuilt Ltd., Messrs. Smed and Loberg and several other former DIRTT employees alleging breaches of restrictive covenants, fiduciary duties, employment duties and confidentiality commenced. DIRTT is pursuing damages and losses it suffered in Canada, the United States, and abroad in the Court of King’s Bench of Alberta. The trial is in progress and additional dates have been reserved in July 2026.
On February 11, 2026, in connection with the financing from Business Development Bank of Canada (“BDC”), the Company entered into a priority agreement with Royal Bank of Canada (“RBC”) and BDC, and amended its existing credit facility with RBC.
During the first quarter of 2026, the Company received net proceeds of $6.9 million from BDC to further strengthen our balance sheet and refinance the January Debentures. Subject to certain conditions, we expect that BDC will make a third disbursement of C$5.0 million in the second half of 20262.
On February 17, 2026, the Company announced that it had entered into a support and standstill agreement (the “2026 Support Agreement”), effective February 13, 2026, with 22NW Fund, L.P. (“22NW”), DIRTT’s largest shareholder, and 726 BF LLC and 726 BC LLC (collectively, the “726 Entities”), who collectively own approximately 15% of the Company’s outstanding common shares. Under the 2026 Support Agreement, each of 22NW and the 726 Entities is subject to certain standstill and voting obligations, including voting in favor of the management nominees at the Company’s 2026 annual general meeting (the “2026 Meeting”), and, provided certain minimum shareholdings are maintained, each of 22NW and the 726 Entities has the right to designate a director nominee at the 2026 Meeting. The Support Agreement terminates on the date which is 90 days following the 2026 Meeting.
On February 17, 2026, the Company also announced that Jeremy Gold, a Managing Director at the Briger Family Office, was appointed to the Board of Directors effective February 13, 2026, under the terms of the 2026 Support Agreement.
Management Commentary
Benjamin Urban, chief executive officer, remarked “Despite macroeconomic challenges, including rising raw material prices and evolving tariff policies, our twelve-month forward looking pipeline entering the second quarter of 2026 has grown 16% year over year. We remain focused on expanding the pipeline, improving conversion trends, and continuing to advance a streamlined operating model through our Transformation Office, with the objective of creating long-term value for shareholders, partners, and employees.”
Fareeha Khan, chief financial officer, added “During the first quarter, we received C$10.0 million in funding from BDC, which was used to partially refinance our January Debentures that were repaid on January 31, 2026. We ended the quarter with total liquidity of $25.1 million. For the remainder of the year, we are maintaining our previously announced 2026 guidance of revenue between $194.0 and $209.0 million and Adjusted EBITDA between $26.0 and $31.0 million. We continue to closely monitor raw material pricing trends and are implementing actions to mitigate the impact their impact.”
Outlook
As we progress further into 2026, DIRTT is building on the momentum engendered in the second half of 2025. While macroeconomic and industry-related headwinds persist - including trade policy-related volatility, uncertainty around project timing, and delayed capital expenditure decisions - their impact on our business has diminished materially as mitigation actions have been implemented and industry participants have adjusted to the revised trade environment.
The tariff response initiated in early 2025 is now fully implemented. What began as a defensive measure has been embedded into our operating model, evolving into a structural advantage and providing manufacturing flexibility on both sides of the border that few competitors in industrialized construction possess.
Our pipeline reflects these improving dynamics. The twelve‑month forward‑looking pipeline is approximately $338 million, representing an increase of 16% compared to the first quarter of 2025. The scheduling delays and suppressed award activity we identified early last year have continued to normalize. We are seeing renewed alignment between partners and clients around defined project schedules, while cancellations and losses remain de minimis – consistent with demand having been deferred rather than foregone.
Construction Services continues to develop as a revenue channel, accounting for approximately $55 million of the pipeline. In contrast to traditional product-led opportunities, Construction Services engagements are typically governed by contractual arrangements that provide greater commercial visibility once awarded and tend to convert to revenue more consistently. As this channel evolves, it supports broader sales coverage and should improve pipeline-to-revenue conversion. These results reflect continued execution of the Company’s transformation initiatives, including operating model-driven process standardization, cost optimization, partner enablement, and enhanced go-to-market coverage. Collectively, these efforts strengthen DIRTT’s ability to convert pipeline into revenue and earnings. As a result, the Company is better positioned to translate demand into execution and profitability than at any point in its recent history.
With ample liquidity, a growing pipeline, improving conversion trends, and a streamlined operating model, DIRTT remains focused on disciplined execution and long-term value creation for shareholders, partners, and employees.
Financial Guidance
We are maintaining the initial 2026 guidance communicated earlier this year of:
2026 Revenue: $194.0 - $209.0 million
2026 Adjusted EBITDA: $26.0 - $31.0 million
This guidance reflects management’s current assessment of macroeconomic conditions and underlying business fundamentals and incorporates tariff impacts and recent increases in raw material and oil prices arising from geopolitical developments, including the Iran war. Changes in trade policy, tariffs, input costs, or demand and project timing may impact future results. The Company will update guidance if and when such impacts become quantifiable.
Conference Call and Webcast Details
A conference call and webcast for the investment community is scheduled for May 7, 2026 at 08:00 a.m. MDT (10:00 a.m. EDT). The call and webcast will be hosted by Benjamin Urban, chief executive officer, and Fareeha Khan, chief financial officer.
The call is being webcast live on the Company’s website at dirtt.com.
A webcast replay of the call will be available on DIRTT’s website. Click here to listen to the live webcast of the call. Following the presentation, DIRTT will take questions from covering analysts. To participate in the question-and-answer session, register here.
Special Note Regarding Forward-Looking Statements
Certain statements contained in this news release are “forward-looking statements” within the meaning of “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934 and “forward-looking information” within the meaning of applicable Canadian securities laws. All statements, other than statements of historical fact included in this news release, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this news release, the words “anticipate,” “believe,” “expect,” “estimate,” “intend,” “plan,” “project,” “outlook,” “may,” “will,” “should,” “would,” “could,” “can,” “continue,” the negatives thereof, variations thereon and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. In particular and without limitation, this news release contains forward-looking information pertaining to proposed financings and the terms, timing and use of proceeds thereof; the effect of our Transformation Office on our business and the timing thereof; the benefit of fixed cost leverage; the effect of our strategic priorities on increasing value creation; the impacts of macroeconomic conditions on the Company’s business; the Company’s pipeline; forecast operating and financial results and the impact of certain cost-saving measures; the competitiveness of the Company’s solutions; the liquidity and capital resources of the Company; the outcome and effects that current claims and litigation against the Company; financial condition, results of operations and growth prospects; the effect of tariffs and economic uncertainty on our business, including on our 2026 guidance, and our ability to mitigate any such effects and timing thereof; our 2026 guidance including with respect to revenue and Adjusted EBITDA, and the timing thereof; project demand and delivery and the timing thereof; capital expenditures and allocation; general economic conditions; our ability to weather economic conditions; the effects and benefits of DIRTT’s tariff response; DIRTT’s ability to convert its pipeline into revenue; and DIRTT’s ability to support its partners, grow its business and invest in long-term growth. Forward-looking statements are based on certain estimates, beliefs, expectations, and assumptions made in light of management’s experience and perception of historical trends, current conditions and expected future developments, as well as other factors that may be appropriate. Forward-looking statements necessarily involve unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from those contained in, or expressed or implied by such statements. Due to the risks, uncertainties, and assumptions inherent in forward-looking information, you should not place undue reliance on forward-looking statements. Factors that could have a material adverse effect on our business, financial condition, results of operations and growth prospects include, but are not limited to, risks described under the sections titled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the U.S. Securities and Exchange Commission and applicable securities commissions or similar regulatory authorities in Canada on February 25, 2026 (our “2025 Annual Report”). Information in this news release regarding the Company’s financial performance targets may also constitute a financial outlook within the meaning of applicable securities laws and provides information as to management's expectation as to DIRTT’s financial performance. Readers are cautioned that the financial outlook may not be appropriate for other purposes. Our past results of operations are not necessarily indicative of our future results. You should not place undue reliance on any forward-looking statements, which represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. We undertake no obligation to update these forward-looking statements, even though circumstances may change in the future, except as required under applicable securities laws. We qualify all of our forward-looking statements by these cautionary statements.
About DIRTT
DIRTT is a leader in industrialized construction. DIRTT’s system of physical products and digital tools empowers organizations, together with construction and design leaders, to build high-performing, adaptable, interior environments. Operating in the workplace, healthcare, education, and public sector markets, DIRTT’s system provides total design freedom, and greater certainty in cost, schedule, and outcomes. DIRTT’s interior construction solutions are designed to be highly flexible and adaptable, enabling organizations to easily reconfigure their spaces as their needs evolve. Headquartered in Calgary, AB Canada, DIRTT trades on the Toronto Stock Exchange under the symbol “DRT” and on the OTCQX under the symbol “DRTTF”.
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