Financial Performance and Risks - The company incurred long-lived asset write-downs of $3.4 million during the year ended December 31, 2025, reflecting impairment of long-lived assets in its financial statements [149]. - Brent crude oil prices averaged approximately $69 per barrel in 2025, with a forecasted decline to approximately $56 per barrel in 2026 and $54 per barrel in 2027, indicating potential challenges in revenue generation [150]. - The company’s debt agreements require mandatory prepayments of term loans with a certain percentage of excess cash flow each year, which may reduce cash available for business investments [134]. - An increase in interest rates could materially reduce the company's profitability and cash flows, impacting its ability to service existing debt [135]. - The company’s operations are subject to risks from unforeseen interruptions and hazards inherent in the oil and natural gas industry, which could lead to substantial revenue loss [137]. - The company may face challenges in obtaining adequate insurance coverage, which could adversely affect its financial condition if significant liabilities arise [138]. - The company’s estimates of market opportunity and growth may prove inaccurate, potentially leading to a decline in business performance [147]. - Seasonal weather conditions and natural disasters could disrupt operations, adversely impacting financial results [145]. - The company’s level of debt may impair its ability to obtain additional financing on favorable terms for working capital or acquisitions [136]. - The company’s financial performance may be negatively impacted by geopolitical instability and fluctuations in global oil supply and demand [150]. Regulatory and Environmental Challenges - The company faces significant risks related to environmental, health, and safety laws, which could adversely affect its financial position and cash flows [152]. - Compliance costs with environmental regulations are expected to be substantial, requiring ongoing financial and managerial resources [153]. - Future climate-related regulations may impose additional costs and operational challenges, potentially reducing demand for oil and natural gas products [154]. - The Inflation Reduction Act includes billions in incentives for renewable energy and clean technologies, which could shift demand away from fossil fuels [155]. - Regulatory changes, such as the methane emissions charge, could increase operating costs for customers, adversely impacting the company's business [157]. - Increased competition from alternative energy sources may reduce demand for hydrocarbons and negatively affect revenue [163]. - Legislative and regulatory initiatives aimed at reducing greenhouse gas emissions could significantly curtail oil and gas production, affecting future demand for the company's products [167]. - The company must navigate increasing public sentiment and regulatory scrutiny regarding fossil fuel usage, which may impact its financial performance [167]. Technological and Intellectual Property Considerations - Technological advancements are crucial for the company to remain competitive, necessitating significant investments in research and development [168]. - The company may face challenges in introducing new products due to resource constraints and technical barriers, impacting its market position [169]. - As of December 31, 2025, the company holds approximately 769 U.S. and international patent properties, which are crucial for its competitive business strategy [170]. - The company is currently involved in patent infringement litigation, which could impact its operations and financial condition [175]. - The company acknowledges that patent rights have territorial limits, and enforcement may be challenging in foreign jurisdictions [170]. - The company may face significant costs and resource allocation issues due to potential intellectual property litigation [178]. - The company relies on confidentiality agreements to protect its trade secrets, but these may not fully prevent third parties from independently developing similar technologies [171]. - The company’s ability to secure patents and licenses is critical for its success, and failure to do so could adversely affect its operating results [173]. - The lifespan of patents is limited to generally 20 years from the earliest U.S. non-provisional filing date, which may not provide sufficient competitive protection [174]. Cybersecurity and Data Privacy - Cybersecurity risks are a concern, with potential incidents leading to information theft, operational disruption, and financial loss [185]. - The company has experienced IT system disruptions and cyber attacks in the past, which could adversely impact future operations [186]. - Unauthorized access to customer data due to cyber incidents could significantly damage the company's reputation and disrupt services [187]. - The regulatory environment surrounding data privacy and protection is evolving, posing compliance challenges and potential cost increases for the company [188]. - The company is in the early stages of integrating AI tools into its systems, which may enhance productivity but also presents risks related to privacy and security incidents [189]. Corporate Governance and Financial Strategy - The company does not anticipate declaring or paying any cash dividends to holders of its common stock in the foreseeable future, as it intends to retain future earnings for business growth [202]. - Amberjack and its affiliates currently own approximately 42% of the company's outstanding common stock, giving them significant influence over corporate actions [194]. - The company may issue preferred stock that could adversely affect the voting power or value of its common stock [204]. - The company does not engage in material hedging transactions to mitigate market risks related to foreign currency exchange and interest rates [301]. - The complex landscape around AI may expose the company to legal liabilities and reputational harm due to evolving regulations [192]. - The company faces potential volatility in its common stock price due to various factors, including ownership changes and market conditions [193].

Financial Data and Key Metrics Changes - For Q4 2025, revenue was $274 million, a 14% sequential increase and a 9% increase compared to Q4 2024 [14] - Adjusted EBITDA for Q4 totaled $52 million, resulting in an Adjusted EBITDA margin of 19% [14] - Free cash flow for Q4 was $43 million, with full year 2025 free cash flow at $156 million, converting approximately 83% of adjusted EBITDA into free cash flow [18][19] Business Line Data and Key Metrics Changes - The subsea business was a primary driver of strong Q4 performance, with significant revenue synergies from recent acquisitions [14][16] - NAM Land revenue increased sequentially by 5% to a record level of $139 million, outperforming underlying activity levels [15] - International and offshore revenues increased sequentially by 25%, benefiting from higher subsea deliveries [15] Market Data and Key Metrics Changes - Market share grew across US land, offshore, and international markets despite a softer macro environment [7] - The company experienced strong project execution in Mexico and Saudi Arabia, with increased revenue and local content position [11] Company Strategy and Development Direction - The company emphasizes a "No Barriers" culture to drive collaboration and innovation across product lines and geographies [4][5] - Focus on disciplined M&A, customer-led innovation, and shareholder returns, with a capital allocation priority on high-return acquisitions [20][21] - Plans to enhance customer experience, capture additional market share, and drive sustained margin expansion toward a long-term target of 25% [23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the subsea business with new orders and significant projects awarded in Q4 and early Q1 [11][12] - Anticipated revenue for Q1 2026 is projected to be between $225 million and $235 million, with expected sequential decline due to seasonality and delivery timing [22] - Management remains optimistic about organic and M&A growth opportunities despite some near-term margin pressures [15][22] Other Important Information - Selling, general, and administrative expenses for the full year 2025 were $129 million, a decrease from 18% of revenue in 2024 to 13% in 2025 [17] - Capital expenditures in Q4 totaled $9 million, representing approximately 3.3% of revenue, with full year 2025 capital expenditures at $35 million [17][18] Q&A Session Summary Question: Can you unpack the first quarter margin guide further? - Management noted that Q1 margins will be impacted by low-margin subsea deliveries and the exit costs associated with the Eldridge facility, but they remain optimistic about long-term margin progression [26][27] Question: Can you provide examples of cross-selling opportunities from recent acquisitions? - Management highlighted successful cross-selling in the drilling enhancement product line from the DWS acquisition and noted strong relationships with larger independents in North America and the Middle East [30][31] Question: What is the current M&A landscape? - Management indicated that the M&A pipeline is active, focusing on add-on acquisitions that can enhance the product portfolio and leverage the global distribution network [50][51] Question: How confident are you in supporting increased subsea product demand with a reduced footprint? - Management expressed confidence in sustaining market demand despite the reduced footprint, emphasizing the ability to serve the subsea market effectively [63] Question: What is the outlook for subsea product bookings in 2025? - Management indicated that subsea orders in 2025 were slightly down compared to 2024, but they expect a significant increase in order volume for 2026 [60][61]

Financial Data and Key Metrics Changes - Q4 2025 revenue totaled $274 million, representing a 14% sequential increase and a 9% increase compared to Q4 2024 [6][13] - Adjusted EBITDA for Q4 was $52 million, resulting in an adjusted EBITDA margin of 19% [14] - Free cash flow for Q4 was $43 million, with full-year 2025 free cash flow totaling $156 million, converting approximately 83% of adjusted EBITDA into free cash flow [18][19] Business Line Data and Key Metrics Changes - The subsea business was a primary driver of strong Q4 performance, with significant revenue contributions from higher-than-expected subsea deliveries [6][14] - NAM Land revenue increased sequentially by 5% to a record level of $139 million, outperforming underlying activity levels [15] - International and offshore revenues increased sequentially by 25%, benefiting from higher subsea deliveries [15] Market Data and Key Metrics Changes - Market share grew across U.S. land, offshore, and international markets despite a softer macro environment [7] - The company experienced strong project execution in Mexico and Saudi Arabia, with increased revenue and local content position [11] Company Strategy and Development Direction - The company emphasizes a "No Barriers" culture to enhance collaboration and drive customer and shareholder value [4][5] - Focus on disciplined M&A, customer-led innovation, and shareholder returns, with a strong pipeline of potential acquisitions [20] - The company aims for long-term margin expansion towards a target of 25% [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate a challenging macro environment and highlighted strong operational execution [12] - The outlook for Q1 2026 anticipates revenue in the range of $225 million to $235 million, with expected sequential decline due to seasonality and delivery timing [21] - Management remains optimistic about growth opportunities in U.S. Land, Saudi Arabia, and Mexico, as well as new subsea projects [21] Other Important Information - Selling, general, and administrative expenses for full-year 2025 were $129 million, a decrease from 18% of revenue in 2024 to 13% [17] - Capital expenditures for Q4 totaled $9 million, representing approximately 3.3% of revenue, with full-year 2025 capital expenditures at $35 million [17][18] Q&A Session Summary Question: Can you elaborate on the Q1 margin guidance and the impact of low-margin projects? - Management acknowledged that Q1 margins would be impacted by low-margin subsea deliveries and ongoing exit costs associated with the Eldridge facility, but they remain optimistic about long-term margin progression [24][25] Question: What tangible examples can you provide regarding cross-selling opportunities from recent acquisitions? - Management highlighted successful cross-selling in the drilling enhancement product line and noted strong relationships with larger independents in U.S. land and the Middle East [27][28] Question: Can you provide an update on the Far East manufacturing expansion? - Management indicated that they are in the mid-stages of moving subsea manufacturing to Singapore and ramping up operations in Vietnam, with continued capital expenditures expected [38][39] Question: How do you see the subsea product bookings trending for 2025? - Management noted that subsea orders in 2025 were slightly down compared to 2024, but they expect a significant increase in order volume for 2026 [57][58] Question: How confident are you that the reduced manufacturing footprint will support increased subsea product demand? - Management expressed confidence in their ability to meet market demands despite the reduced footprint, emphasizing the efficiency of their operations [60][61]

Financial Data and Key Metrics Changes - Fourth quarter revenue totaled $274 million, representing a 14% sequential increase and a 9% increase compared to Q4 2024 [6][13] - Adjusted EBITDA for Q4 was $52 million, resulting in an Adjusted EBITDA margin of 19% [13] - Free cash flow for Q4 was $43 million, with a full year free cash flow of $156 million, reflecting a conversion of approximately 83% of adjusted EBITDA into free cash flow [18][19] Business Line Data and Key Metrics Changes - The subsea business was a primary driver of strong Q4 performance, with significant revenue synergies from recent acquisitions [6][13] - NAM Land revenue increased sequentially by 5% to a record level of $139 million, outperforming underlying activity levels [14] - International and offshore revenues increased sequentially by 25%, benefiting from higher subsea deliveries [15] Market Data and Key Metrics Changes - Market share grew across US land, offshore, and international markets despite a softer macro environment [6] - The company experienced strong project execution in Mexico and Saudi Arabia, with increased revenue and local content position [11] Company Strategy and Development Direction - The company aims to enhance customer experience, capture additional market share, and drive sustained margin expansion toward a long-term target of 25% [22] - Focus on disciplined M&A, customer-led innovation, and shareholder returns, with a strong pipeline of potential acquisitions [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the subsea business, with new orders and significant projects awarded in Q4 and early Q1 [11][12] - The exit of the Eldridge facility is expected to improve margins and operational efficiency in the long term [16][19] Other Important Information - Selling, general, and administrative expenses for the full year 2025 were $129 million, a decrease from 18% of revenue in 2024 to 13% in 2025 [17] - Capital expenditures in Q4 totaled $9 million, representing approximately 3.3% of revenue, with full year 2025 capital expenditures at $35 million [17][18] Q&A Session Summary Question: Can you unpack the first quarter margin guide further? - Management noted that Q1 margins will be impacted by low-margin subsea deliveries and the exit costs associated with the Eldridge facility, but they remain optimistic about long-term margin progression [24][25] Question: Can you provide examples of cross-selling opportunities from recent acquisitions? - Management highlighted successful cross-selling in U.S. land and international markets, particularly with products from the DWS and Citadel acquisitions [27][28] Question: What is the current M&A landscape and what areas could be improved? - Management indicated an active M&A pipeline with a focus on add-on acquisitions that can enhance the product portfolio and leverage the global distribution network [49][50] Question: How do you expect subsea product bookings to trend in 2026? - Management anticipates an increase in subsea orders for 2026 compared to 2025, driven by new project awards and a recovering market [57][58]

Innovex International Q4 2025 Earnings Presentation 1 Disclaimer Important Information and Disclaimers This disclaimer applies to this document and the verbal or written comments of any person presenting it. This document, taken together with any such verbal or written comments, is referred to herein as the "Presentation." Historical financial results presented in this Presentation as averages or annualized forms are not necessarily indicative of results that may be expected for any future period. Cautionar ...

Financial Performance - Revenue for Q4 2025 was $274 million, representing a 14% increase quarter over quarter[4] - Net Income for Q4 2025 was $14 million, with a Net Income Margin of 5%[4] - Adjusted EBITDA for Q4 2025 was $52 million, yielding an Adjusted EBITDA Margin of 19%[4] - Free Cash Flow for Q4 2025 was $43 million, and $156 million for the full year 2025[4] - Revenues for the three months ended December 31, 2025, were $273,602 thousand, a 14% increase from $240,000 thousand in the previous quarter[19] - Net income for the twelve months ended December 31, 2025, was $83,298 thousand, compared to $140,325 thousand in the previous year, reflecting a decrease of 40.6%[19] - Adjusted EBITDA for the twelve months ended December 31, 2025, was $188,285,000, compared to $138,501,000 in the previous year, indicating a 36% increase[41] - Free Cash Flow for the twelve months ended December 31, 2025, was $155,780,000, significantly higher than $79,845,000 in the previous year, marking a 95% increase[40] Cash and Assets - The company ended 2025 with approximately $203 million in cash and no bank debt, providing significant financial flexibility[4] - Cash and cash equivalents increased to $203,407 thousand as of December 31, 2025, up from $163,374 thousand at the end of the previous quarter, representing a 24.5% increase[21] - Total assets reached $1,268,307 thousand as of December 31, 2025, compared to $1,253,910 thousand at the end of the previous quarter, indicating a growth of 1.1%[21] - Total liabilities decreased to $210,608 thousand as of December 31, 2025, from $214,956 thousand at the end of the previous quarter, a reduction of 2.0%[21] Operational Highlights - The company successfully completed its tenth XPak installation in Brazil's pre-salt fields, indicating strong operational momentum[4] - Innovex is focused on expanding its addressable market through new product introductions and international market growth[6] - The company is actively pursuing M&A opportunities to enhance its capital allocation strategy[8] Future Projections - Innovex expects Q1 2026 revenue to be between $225 million and $235 million, with Adjusted EBITDA projected at $38 million to $42 million[10] - Adjusted EBITDA is utilized to assess profitability, but specific guidance for future periods is not provided due to the unpredictability of certain reconciling items[30] Earnings and Equity - The company reported a comprehensive income of $96,245 thousand for the twelve months ended December 31, 2025, compared to $129,356 thousand in the previous year, a decrease of 25.6%[19] - The company’s basic earnings per share for the three months ended December 31, 2025, was $0.20, down from $0.57 in the previous quarter, reflecting a decline of 64.9%[19] - The company reported an adjusted income from operations after tax of $104,912,000 for the twelve months ended December 31, 2025, compared to $79,888,000 in the previous year, a 31% increase[38] - The ending equity for the twelve months ended December 31, 2025, was $1,057,699,000, an increase from $958,156,000 in the previous year, reflecting a 10.4% growth[38] Revenue Breakdown - North America Onshore revenue for the three months ended December 31, 2025, was $138,743,000, up from $131,929,000 in the previous quarter, a 5.7% increase[41] - International & Offshore revenue for the three months ended December 31, 2025, was $134,859,000, compared to $108,071,000 in the previous quarter, a 24.8% increase[41] Costs and Expenses - The company incurred acquisition and integration costs of $17,518,000 for the twelve months ended December 31, 2025, compared to $33,300,000 in the previous year[38] - Net cash provided by operating activities for the twelve months ended December 31, 2025, was $190,912 thousand, significantly higher than $93,439 thousand in the previous year, marking a 104.5% increase[24] - The net income as a percentage of revenue for the three months ended December 31, 2025, was 5%, down from 16% in the previous quarter[41]

Financial Performance - For the nine months ended September 30, 2025, Innovex reported revenues of $704.6 million, a 72% increase from $410.1 million in the same period of 2024[121] - The net income for the nine months ended September 30, 2025, was $69.3 million, a decrease of 36% compared to $108.5 million for the same period in 2024[121] - Innovex's income from operations for the nine months ended September 30, 2025, was approximately $106.8 million, compared to $22.2 million in the same period of 2024, reflecting an increase of 382%[121] - Total revenue for the nine months ended September 30, 2025 was $704.6 million, an increase of $294.4 million or 72.2% from the same period in 2024, driven by acquisitions and increased market share[134] - The company reported a net income decrease of $39.2 million for the three months ended September 30, 2025, compared to $82.6 million for the same period in 2024, representing a 53% decline[156] - The company’s net income as a percentage of revenue decreased to 10% for the nine months ended September 30, 2025, down from 26% in the same period of 2024[164] Market and Revenue Breakdown - The North American market accounted for approximately 53% of total revenue, while international and offshore markets contributed 47% for the nine months ended September 30, 2025[109] - Innovex's revenues from the International and Offshore market for the three months ended September 30, 2025, were $108.1 million, an increase of 102% from the previous year[123] Expenses and Costs - Cost of revenues for the nine months ended September 30, 2025 was $480.5 million, an increase of $218.1 million or 83.1% from the same period in 2024, primarily due to increased personnel expenses and product costs[135] - Selling, general and administrative expenses for the nine months ended September 30, 2025 were $96.8 million, an increase of $18.9 million or 24.3% from the same period in 2024, driven by higher salaries, IT, and R&D costs[136] - Income tax expense for the nine months ended September 30, 2025 was $32.2 million, an increase of $25.3 million or 367.1% from the same period in 2024, due to changes in income mix and non-deductible expenses[144] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2025 was $138.7 million, an increase of $81.6 million or 143% from the same period in 2024[150] - Net cash used in investing activities for the nine months ended September 30, 2025 was $8.8 million, a decrease of $159.2 million from the prior year, primarily due to cash used for acquisitions[151] - Free Cash Flow for the nine months ended September 30, 2025 was $112.5 million, an increase of $61.3 million (120%) from the same period in 2024[170] - Net cash provided by operating activities increased to $138.7 million, up $81.6 million (143%) compared to $57.1 million in 2024[170] Acquisitions and Strategic Initiatives - The company completed the acquisition of Citadel Casing Solutions for $69.7 million on May 30, 2025, enhancing its portfolio of downhole technologies[115] - Innovex's disciplined acquisition strategy aims to identify high-quality opportunities that meet stringent investment criteria, contributing to organic growth[111] - Acquisition and integration costs for the nine months ended September 30, 2025 were $13.1 million, a decrease of $12.4 million or 48.6% from the same period in 2024, due to reduced merger-related expenses[140] Capital Expenditures and Financial Ratios - Capital expenditures for the nine months ended September 30, 2025, accounted for 4% of revenue, compared to 1% in the same period of 2024[113] - The company’s Return on Capital Employed (ROCE) for the twelve months ended September 30, 2025, was 13%, up from 9% in the previous year[168] Debt and Credit Facilities - The company had $12.7 million of borrowings outstanding under the Term Loan as of September 30, 2024, and no borrowings under the revolving credit facility as of September 30, 2025[162] - The revolving credit facility was increased from $110 million to $200 million, with the potential to increase to $250 million, and the maturity extended to February 27, 2030[157] - Total interest expense for the nine months ended September 30, 2025 was $1.9 million, a decrease from $2.1 million in the same period in 2024, reflecting stable debt levels[141] Operational Performance - The company operates in one reportable segment, with performance assessed at a consolidated level[171] - The financial information indicates strong operational performance and cash flow generation capabilities[170] - The increase in Free Cash Flow reflects improved operational efficiency and resource allocation[170] Compliance and Risk Management - The company is required to maintain a fixed charge coverage ratio of not less than 1.10 to 1.00 if Excess Availability is less than 20%[160] - The company is subject to various covenants under the Credit Agreement, including limitations on incurring debt and asset sales[160] - The company continues to monitor market risks and accounting standards to ensure compliance and accuracy[175] - There have been no material changes affecting market risk disclosures from the Annual Report[175] - Recent accounting pronouncements are discussed in the Summary of Significant Accounting Policies[173] - No significant changes to critical accounting estimates have occurred since the Annual Report[172]

Financial Data and Key Metrics Changes - The company's revenue for Q3 2025 was $240 million, representing a sequential increase of $16 million and a year-over-year increase of 58% [5][12] - Adjusted EBITDA for Q3 was $44 million, a decrease of $3 million sequentially, with an adjusted EBITDA margin of 18%, down from 21% sequentially [12][13] - Free cash flow for Q3 was $37 million, a sequential decrease of $15 million, with a year-to-date free cash flow of $112 million, reflecting a conversion rate of approximately 83% from adjusted EBITDA [16][17] Business Line Data and Key Metrics Changes - North America land business grew approximately 10% sequentially, driven by market share gains in drilling enhancement and well construction portfolios, and the full quarter contribution from Citadel [6][14] - International and offshore revenue grew 4% sequentially, despite softness in key markets like Mexico and Saudi Arabia [7][15] - The subsea services-related revenue in the U.S. offshore market reached a record high in Q3, indicating strong operational execution [7] Market Data and Key Metrics Changes - The company experienced growth in the Latin American market, particularly in Argentina, where sales of dissolvable plug technology increased [9] - In the Middle East, the company participated in the longest well ever drilled, showcasing its technology capabilities [8] - The Asia-Pacific market showed momentum with significant orders for subsea equipment scheduled for delivery in 2026 and 2027 [9] Company Strategy and Development Direction - The company aims to achieve adjusted EBITDA margins of 25% in the long term, with ongoing integration efforts and operational improvements expected to drive margin expansion [11][19] - The successful integration of Citadel is a key strategic initiative, enhancing market share and operational reliability [11][68] - The partnership with OneSubsea is expected to open new market opportunities and enhance competitiveness in the subsea space [10][29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging market environment but expressed confidence in the company's ability to execute its strategy and drive growth [4][21] - The exit from the Eldridge facility is anticipated to unlock significant margin improvements in 2026 [13][19] - Management expects adjusted EBITDA for Q4 to be between $42 million and $47 million, with revenues projected at $235 million to $245 million [19] Other Important Information - The company has a strong balance sheet with cash and equivalents totaling $163 million and no drawn amounts on its revolving credit facility [18] - Capital expenditures in Q3 were $12 million, representing approximately 5% of revenue, with expectations for CapEx to remain slightly above historical levels through the end of the year [17][18] Q&A Session Summary Question: Inquiry about downhole operational issues - Management confirmed robust improvements have been made to address previous operational issues, with plans to run jobs with the improved tool soon [24][25] Question: Details on the OneSubsea agreement - Management expressed excitement about the OneSubsea partnership, indicating that initial orders may come in late this year or early next year, with revenue recognition expected to begin in 2027 [27][29] Question: Impact of facility consolidations on margins - Management indicated that exiting the Eldridge facility will unlock significant savings and improve margins, with further consolidation efforts expected to enhance operational efficiency [34][35] Question: Market conditions in Saudi Arabia - Management noted positive signs for increased activity in Saudi Arabia, with expectations for a return to growth in the market [40][41] Question: Preference for M&A versus share buybacks - Management indicated a preference for pursuing accretive M&A opportunities while balancing shareholder returns, with a strong pipeline of potential acquisitions under review [41][42] Question: Timing for mid-20% margin target - Management expects to reach low-20s EBITDA margins by mid-next year, with potential for improvement depending on market conditions [45][48] Question: Update on integration with Citadel - Management reported successful integration with Citadel, highlighting the growth of niche technologies and cross-selling opportunities [66][68] Question: Impact of tariffs on business - Management discussed the challenges posed by tariffs but emphasized the company's flexible business model to manage costs effectively [70][72]

Q3 2025 Performance - Revenue reached $240 million, a 7% sequential increase[22] - Adjusted EBITDA stood at $44 million with an Adjusted EBITDA Margin of 18%[28] - Free Cash Flow was $37 million[28] Q4 2025 Guidance - Projected revenue is between $235 million and $245 million[28] - Anticipated Adjusted EBITDA ranges from $42 million to $47 million[28] Strategic Initiatives - Innovex closed the sale of the Eldridge Facility for $90 million[29, 38] with net proceeds of $87 million[31, 38] - The Eldridge Facility sale resulted in an 80% footprint reduction[31] Financial Health & Returns - Historically, only 2-3% of revenue is reinvested into capex[11] - 84% of Adjusted EBITDA was converted into Free Cash Flow in Q3[38] - The company has approximately $90.7 million remaining under its buyback authorization[38] Growth & Market Position - Legacy Innovex has a disciplined revenue growth with a 27% CAGR since inception[18] - On-Time Delivery for subsea operations improved to 76% in Q3 2025 from below 50% in Q3 2024[38]

Financial Performance - Revenue for Q3 2025 was $240 million, representing a 7% increase quarter over quarter[4] - Net income for the quarter was $39 million, with a net income margin of 16%[4] - Adjusted EBITDA was $44 million, yielding an adjusted EBITDA margin of 18%[4] - Total revenue for the three months ended September 30, 2025, was $240,000,000, representing a 7.8% increase from $224,234,000 in the previous quarter and a 58.1% increase from $151,817,000 in the same quarter last year[30] - Net income for the three months ended September 30, 2025, was $39,228,000, compared to $15,345,000 in the previous quarter and $82,586,000 in the same quarter last year, indicating a significant year-over-year decline[30] - Adjusted EBITDA for the three months ended September 30, 2025, was $43,613,000, down from $46,642,000 in the previous quarter but up from $27,411,000 in the same quarter last year[30] - Free Cash Flow for the three months ended September 30, 2025, was $36,522,000, compared to $51,913,000 in the previous quarter and $20,051,000 in the same quarter last year[36] Cash Flow and Capital Expenditures - Free cash flow generated during the quarter was $37 million, with net cash provided by operating activities amounting to $48 million[4][10] - The company reported a net cash provided by operating activities of $48,374,000 for the three months ended September 30, 2025, down from $59,210,000 in the previous quarter[36] - The company incurred capital expenditures of $11,852,000 during the three months ended September 30, 2025[36] Assets and Liabilities - Total assets as of September 30, 2025, were $1,253,910,000, an increase from $1,227,081,000 as of June 30, 2025[21] - Total liabilities decreased to $214,956,000 as of September 30, 2025, from $231,528,000 as of June 30, 2025[21] - Total stockholders' equity increased to $1,038,954,000 as of September 30, 2025, compared to $995,553,000 as of June 30, 2025[21] Market Position and Future Outlook - Innovex expects Q4 2025 revenue to be between $235 million and $245 million, with adjusted EBITDA projected at $42 million to $47 million[12] - The company signed an agreement to become the exclusive subsea wellhead provider for OneSubsea, aiming to enhance its market position[4] - The company continues to focus on expanding its market presence and enhancing product offerings to drive future growth[38] Operational Performance - On-time delivery for the subsea business improved to 76% during the quarter[3] - Return on Capital Employed (ROCE) for the twelve months ended September 30, 2025, was 13%[11] - The Return on Capital Employed (ROCE) for the twelve months ended September 30, 2025, was 13%, up from 12% for the previous twelve months[34] Revenue Breakdown - North America Onshore total revenue reached $131,929,000, up from $119,967,000 in the previous quarter, representing a 15.9% increase[38] - International & Offshore total revenue was $108,071,000, slightly up from $104,267,000 in the previous quarter, marking a 3.5% increase[38] - Product revenues in North America Onshore increased to $86,597,000 from $77,368,000, a rise of 11.9%[38] - Rental revenues in North America Onshore grew to $28,114,000, up from $26,698,000, indicating a 5.3% increase[38] - Service revenues in North America Onshore rose to $17,218,000, compared to $15,901,000 in the previous quarter, a growth of 8.3%[38] - International & Offshore product revenues increased to $79,205,000 from $72,081,000, a growth of 9.8%[38] - Rental revenues in International & Offshore decreased to $14,274,000 from $17,305,000, a decline of 17.5%[38] - Service revenues in International & Offshore remained stable at $14,592,000, slightly down from $14,881,000[38]