What the changes say
- Customer concentration increased: three customers represented 20.1%, 17.5%, and 10.0% of fiscal 2026 revenue.
- Supply-chain risk now specifically includes geopolitical conflicts, shipping disruptions, energy-market volatility, and trade restrictions.
- Backlog may include long-term maintenance estimates that customers are not obligated to purchase or release.
- Climate-related regulation and evolving sustainability expectations could raise costs, alter project demand, or affect capital access.
What changed since the prior 10-K
New
- New
We operate in highly competitive markets, and our failure to compete successfully for new awards on acceptable terms could adversely affect our results
Competition could force lower margins or greater contractual risk, while failure to win acceptable awards could reduce backlog, earnings, and cash flow.
- New
Delays or failures in obtaining required regulatory approvals, permits, interconnection agreements or right-of-way access could delay or prevent projects and adversely affect our results
Delayed or denied permits, interconnection agreements, pipeline approvals, or rights-of-way could postpone, cancel, or increase the cost of energy and infrastructure projects.
- New
We hire or lay off craft workers periodically based on the expected level of work on our projects; however, there can be no assurances that the timing of these employment decisions will correspond directly with actual work on our projects, potentially causing under or over-utilization
Mismatched hiring and layoffs could underutilize workers or overburden crews, harming margins, safety, employee satisfaction, and project execution.
- New
Our projects are conducted at a variety of sites including construction sites and industrial facilities that can place our employees and others near large equipment, dangerous processes or substances or highly regulated materials
Accidents involving dangerous equipment, processes, substances, or regulated materials could cause fatalities, litigation, fines, insurance increases, and lost awards.
- New
Our collective bargaining agreements and multiemployer plan obligations could result in higher costs, work stoppages, or liabilities
Collective bargaining changes, union disputes, work stoppages, wage increases, or multiemployer-plan withdrawal liabilities could raise costs and delay projects.
- New
A failure or outage in our operational systems, including cybersecurity incidents and disruptions involving third-party software or AI tools , may adversely affect our business and financial results
Outages, cyberattacks, vendor failures, or disruptions involving third-party software and AI tools could interrupt project, financial, and administrative systems.
- New
Our business may be negatively impacted if we are unable to adequately protect our intellectual property rights
Inadequate protection of proprietary technology, know-how, or licensed third-party technology could weaken service differentiation and harm operations.
- NewLegal, Insurance, Regulatory and Compliance Risks
Regulatory uncertainty regarding climate-related matters and evolving sustainability expectations could affect our business
Changing climate rules and inconsistent sustainability expectations could increase compliance costs, alter customer projects, and reduce investor interest or capital access.
Dropped
- Dropped
Our profitability could be negatively impacted if we are not able to maintain appropriate utilization of our workforce
- Dropped
Unsatisfactory safety performance may subject us to penalties, affect customer relationships, result in higher operating costs, negatively impact employee morale and result in higher employee turnover
- Dropped
We contribute to multiemployer plans that could result in liabilities to us if those plans are terminated or if we withdraw from those plans
Workforce underutilization or overutilization could reduce profitability and harm safety, morale, and project execution.
- Dropped
A failure or outage in our operational systems or cyber security attacks on any of our systems, or those of third parties, may adversely affect our financial results
- DroppedFinancial Risks
additional capital in the future for working capital, letters of credit, capital expenditures and/or acquisitions, and we may not be able to do so on favorable terms or at all, which would impair our ability to operate our business or achieve our strategic plan
- DroppedFinancial Risks
and adjustments related to these incentives and penalties are recorded on a percentage of completion basis in the period when estimable and probable
- DroppedLegal, Insurance, Regulatory and Compliance Risks
Climate change legislation or regulations restricting emissions of “greenhouse gases” could result in reduced demand for certain services and products we provide
Reworded
- 55% rewritten
Our business has been affected by inflation, supply chain disruptions, shortages of materials, labor or equipment, and performance issues involving suppliers and subcontractors
The risk now adds geopolitical conflicts, global energy-market disruptions, trade restrictions, higher oil prices, and shipping-route disruptions to inflation and supply-chain pressures.
Was: Our business has been affected by inflation, supply chain disruptions and shortages of materials and labor
- 53% rewritten
An inability to attract and retain qualified personnel, and in particular, engineers, project estimators, project managers, and skilled craft workers, could impact our ability to perform on our contracts, which could harm our business and impair our future revenue and profitability
No substantive change; the risk still centers on attracting and retaining engineers, estimators, managers, craft workers, and other experienced personnel.
Was: An inability to attract and retain qualified personnel, and in particular, engineers, project managers, and skilled craft workers, could impact our ability to perform on our contracts, which could harm our business and impair our future revenue and profitability
- 50% rewrittenFinancial Risks
Our use of percentage-of-completion accounting for fixed-price contracts could result in a reduction or elimination of previously reported profits
Only the accounting-policy reference changed, from Note 1—Basis of Presentation and Significant Accounting Policies to Note 1—Business, Basis of Presentation and Significant Accounting Policies.
- 49% rewritten
Our backlog is subject to unexpected fluctuations, adjustments and cancellations and does not include the full value of our long-term maintenance contracts, and therefore, may not be a reliable indicator of our future earnings
The revised risk adds that long-term maintenance, master service, and similar backlog may represent work customers are not obligated to purchase or release.
- 47% rewrittenFinancial Risks
Earnings for future periods may be affected by impairment charges
Goodwill decreased from $29.0 million at June 30, 2025 to $28.9 million at June 30, 2026, while the impairment reference changed to long-lived asset groupings.
- 43% rewritten
The loss of one or more of our significant customers could adversely affect us
Customer concentration rose to three customers at 20.1%, 17.5%, and 10.0% of fiscal 2026 revenue, versus two customers at 17.4% and 10.5% previously.
- 36% rewritten
Demand for our products and services is cyclical and is vulnerable to the level of capital and maintenance spending of our customers and to downturns in the industries and markets we serve, as well as conditions in the general economy
The revised text removes specific references to industry outlooks for renewable energy, hydrogen, natural gas, oil, petrochemical, industrial, and power markets.
- 27% rewritten
Our business may be affected by difficult work sites and environments, which may adversely affect our overall business
The revised text adds remote locations to the difficult work environments that can disrupt deliveries, labor availability, schedules, and costs.
- 24% rewrittenFinancial Risks
Our ABL Facility imposes restrictions that may limit business alternatives
Was: Our Credit Agreement imposes restrictions that may limit business alternatives
All 31 risk factors
Headings as the filing states them, in filing order.
Other
- 01Our results of operations depend upon the award of new contracts, the timing of those awards, and the progress of work for those contracts
- 02We operate in highly competitive markets, and our failure to compete successfully for new awards on acceptable terms could adversely affect our resultsNew
- 03Delays or failures in obtaining required regulatory approvals, permits, interconnection agreements or right-of-way access could delay or prevent projects and adversely affect our resultsNew
- 04Demand for our products and services is cyclical and is vulnerable to the level of capital and maintenance spending of our customers and to downturns in the industries and markets we serve, as well as conditions in the general economy36% rewritten
- 05We hire or lay off craft workers periodically based on the expected level of work on our projects; however, there can be no assurances that the timing of these employment decisions will correspond directly with actual work on our projects, potentially causing under or over-utilizationNew
- 06An inability to attract and retain qualified personnel, and in particular, engineers, project estimators, project managers, and skilled craft workers, could impact our ability to perform on our contracts, which could harm our business and impair our future revenue and profitability53% rewritten
- 07The loss of one or more of our significant customers could adversely affect us43% rewritten
- 08Our backlog is subject to unexpected fluctuations, adjustments and cancellations and does not include the full value of our long-term maintenance contracts, and therefore, may not be a reliable indicator of our future earnings49% rewritten
- 09The terms of our contracts could expose us to unforeseen costs and costs not within our control, which may not be recoverable and could adversely affect our results of operations and financial condition
- 10We may incur significant costs in providing services in excess of original project scope without having an approved change order
- 11Our business may be affected by difficult work sites and environments, which may adversely affect our overall business27% rewritten
- 12We are susceptible to severe weather conditions, including those caused by climate change or otherwise, which may harm our business and financial results
- 13Our business has been affected by inflation, supply chain disruptions, shortages of materials, labor or equipment, and performance issues involving suppliers and subcontractors55% rewritten
- 14Changes in global trade policy and the impact on tariffs may have a material adverse effect on business operations and financial performance
- 15Our projects are conducted at a variety of sites including construction sites and industrial facilities that can place our employees and others near large equipment, dangerous processes or substances or highly regulated materialsNew
- 16We are exposed to credit risk from customers. If we experience delays and/or defaults in customer payments, we could suffer liquidity problems or we could be unable to recover amounts owed to us
- 17Our collective bargaining agreements and multiemployer plan obligations could result in higher costs, work stoppages, or liabilitiesNew
- 18A failure or outage in our operational systems, including cybersecurity incidents and disruptions involving third-party software or AI tools , may adversely affect our business and financial resultsNew
- 19Our business may be negatively impacted if we are unable to adequately protect our intellectual property rightsNew
Financial Risks
- 20Our ABL Facility imposes restrictions that may limit business alternatives24% rewritten
- 21We may be unable to compete for projects if we are not able to obtain surety bonds or letters of credit
- 22Our use of percentage-of-completion accounting for fixed-price contracts could result in a reduction or elimination of previously reported profits50% rewritten
- 23Actual results could differ from the estimates and assumptions that we use to prepare our financial statements
- 24Earnings for future periods may be affected by impairment charges47% rewritten
Legal, Insurance, Regulatory and Compliance Risks
- 25We are involved, and are likely to continue to be involved in legal proceedings, which will increase our costs and, if adversely determined, could have a material effect on our financial condition, results of operations, cash flows and liquidity
- 26Our projects expose us to potential professional liability, product liability, pollution liability, warranty and other claims, which could be expensive, damage our reputation and harm our business. We may not be able to obtain or maintain adequate insurance to cover these claims
- 27Employee, subcontractor or partner misconduct or our overall failure to comply with laws or regulations could harm our reputation, damage our relationships with customers, reduce our revenue and profits, and subject us to criminal and civil enforcement actions
- 28Regulatory uncertainty regarding climate-related matters and evolving sustainability expectations could affect our businessNew
- 29Our operations are subject to environmental laws and regulations, including those concerning emissions into the air; discharges into waterways; generation, storage, handling, treatment and disposal of hazardous material and wastes; and health and safety
- 30We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws
- 31Economic, political and other risks associated with international operations could adversely affect our business
Other Matrix Service 10-Ks
- FY2025 10-K risk factors30 risks3 new1 dropped6 reworded
The filing highlights new vulnerabilities regarding global trade tariffs, borrowing base liquidity constraints, and performance security capacity. Customer concentration is newly quantified with two major clients representing 17.4% and 10.5% of revenue.
Filed Sep 10, 2025 - FY2024 10-K risk factors28 risks
Matrix Service operates as a project-based contractor heavily exposed to the cyclical energy markets, including LNG and petroleum.
Filed Sep 10, 2024
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.