Enerflex (EFXT) could be a solid choice for investors given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.The power ...

Core Appointment - Enerflex Ltd. announced the appointment of Paul E. Mahoney as President and CEO, effective September 29, 2025, following a global search process [1][2] Leadership Experience - Paul E. Mahoney brings over 30 years of experience in the industrial and energy sectors, with a proven track record in strategy development and execution [2][7] Strategic Priorities - Enerflex's near-term priorities include enhancing profitability of core operations, leveraging its position in core operating countries to capitalize on expected increases in natural gas and produced water volumes, and maximizing free cash flow for shareholder returns and growth investments [3][4] Company Vision - Mahoney expressed enthusiasm about joining Enerflex, highlighting the company's strong position to benefit from growing global natural gas demand [4][6] Interim Leadership Transition - Preet S. Dhindsa, who served as interim CEO, will continue as Senior Vice President and CFO, while Joe Ladouceur remains as Vice President Treasury, Tax, and Insurance [5][6] Company Overview - Enerflex is a global provider of energy infrastructure and transition solutions, focusing on natural gas and sustainability efforts [13][14]

Core Insights - Enerflex (EFXT) is currently outperforming its peers in the Oils-Energy sector, with a year-to-date gain of 5.4% compared to the sector's average return of 4.8% [4] - The Zacks Rank for Enerflex is 2 (Buy), indicating a positive earnings outlook, with the consensus estimate for full-year earnings having increased by 15.6% in the past quarter [3] - Enerflex belongs to the Oil and Gas - Exploration and Production - Canadian industry, which has an average year-to-date gain of 1.5%, further highlighting Enerflex's strong performance [6] Industry Performance - The Oils-Energy sector includes 240 companies and is currently ranked 11 in the Zacks Sector Rank, reflecting the overall strength of the sector [2] - Another notable company in the sector, Repsol SA (REPYY), has achieved a year-to-date return of 40.8% and has a Zacks Rank of 1 (Strong Buy) [4][5] - The Oil and Gas - Integrated - International industry, where Repsol SA operates, has a lower ranking (170) and has gained 5.9% since the beginning of the year [7]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Enerflex (EFXT) - Enerflex currently holds a Momentum Style Score of B, indicating potential for solid momentum [3] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for outperformance in the market [4] Performance Metrics - Over the past week, EFXT shares increased by 2.23%, outperforming the Zacks Oil and Gas - Exploration and Production - Canadian industry, which rose by 1.3% [6] - In the last month, EFXT's price change was 25.64%, significantly higher than the industry's 1.27% [6] - Over the past quarter, EFXT shares have risen by 32.64%, and over the last year, they have gained 81.24%, while the S&P 500 only increased by 8.34% and 14.94%, respectively [7] Trading Volume - EFXT's average 20-day trading volume is 622,689 shares, which serves as a baseline for price-to-volume analysis [8] Earnings Outlook - In the last two months, 2 earnings estimates for EFXT have been revised upwards, while 1 estimate was revised downwards, leading to an increase in the consensus estimate from $0.71 to $0.98 [10] - For the next fiscal year, 3 estimates have moved upwards with no downward revisions [10] Conclusion - Given the positive performance metrics and earnings outlook, EFXT is identified as a promising stock for near-term investment [12]

Core Viewpoint - Enerflex Ltd. (EFXT) is showing potential for a bullish breakout due to a recent "golden cross" in its moving averages, indicating a key level of support has been reached [1]. Technical Indicators - EFXT's 50-day simple moving average has crossed above its 200-day simple moving average, forming a "golden cross," which is a bullish technical chart pattern [1]. - A successful golden cross event consists of three stages: a price decline bottoming out, the shorter moving average crossing above the longer moving average, and the stock maintaining upward momentum [2]. Performance Metrics - Over the past four weeks, EFXT has gained 20%, indicating strong performance [3]. - The stock currently holds a 2 (Buy) rating on the Zacks Rank, suggesting it may be poised for further breakout [3]. Earnings Outlook - EFXT's earnings outlook is positive, with no earnings estimates cut for the current quarter and two revisions higher in the past 60 days [3]. - The Zacks Consensus Estimate for EFXT has also increased, reinforcing the bullish sentiment [3]. Investment Consideration - Given the technical indicators and positive earnings estimates, investors are encouraged to consider adding EFXT to their watchlist [5].

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Enerflex (EFXT) - Enerflex currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 2 (Buy), suggesting it is positioned for potential outperformance in the market [3] Price Performance - EFXT shares have increased by 16.94% over the past week, while the Zacks Oil and Gas - Exploration and Production - Canadian industry has decreased by 1.43% during the same period [5] - Over the past month, EFXT's price has risen by 22.69%, significantly outperforming the industry's 0.23% [5] - In the last quarter, EFXT shares rose by 40.7%, and over the past year, they have increased by 63.79%, compared to the S&P 500's gains of 10.18% and 20.38%, respectively [6] Trading Volume - EFXT's average 20-day trading volume is 433,252 shares, which serves as a baseline for price-to-volume analysis [7] Earnings Outlook - In the past two months, 2 earnings estimates for EFXT have been revised upwards, while 1 has been revised downwards, leading to an increase in the consensus estimate from $0.84 to $0.98 [9] - For the next fiscal year, 3 estimates have moved upwards with no downward revisions [9] Conclusion - Considering the strong price performance, positive earnings outlook, and high momentum score, EFXT is recommended as a solid pick for near-term investment [11]

Core Viewpoint - Enerflex (EFXT) shows potential as a strong investment opportunity due to significant upward revisions in earnings estimates, indicating an improving earnings outlook [1][2] Earnings Estimate Revisions - Analysts have expressed growing optimism regarding Enerflex's earnings prospects, which is expected to positively influence its stock price [2] - The earnings estimate for the current quarter is $0.18 per share, reflecting a year-over-year increase of +100.0% [6] - The Zacks Consensus Estimate for the current quarter has risen by 89.47% over the last 30 days, with one estimate increasing and no negative revisions [6] - For the full year, Enerflex is projected to earn $0.98 per share, representing a substantial year-over-year change of +790.9% [7] - The consensus estimate for the full year has increased by 37.81%, supported by two upward revisions compared to one negative revision [7][8] Zacks Rank and Performance - Enerflex has achieved a Zacks Rank 2 (Buy), indicating favorable conditions for investment based on the positive estimate revisions [9] - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500, suggesting a strong potential for Enerflex [9] Market Performance - The stock has appreciated by 13.9% over the past four weeks, driven by strong estimate revisions and increased investor interest [10] - There may still be further upside potential for the stock, making it a candidate for portfolio addition [10]

Core Viewpoint - Enerflex (EFXT) has shown a significant price increase of 13.9% over the past four weeks, with a mean price target of $11.81 indicating a potential upside of 28.8% from its current price of $9.17 [1] Price Targets and Analyst Consensus - The average price target consists of eight estimates ranging from a low of $9.25 to a high of $13.81, with a standard deviation of $1.58, indicating variability among analysts [2] - The lowest estimate suggests a modest increase of 0.9%, while the highest estimate indicates a substantial upside of 50.6% [2] - A low standard deviation signifies strong agreement among analysts regarding the stock's price movement direction, although it does not guarantee reaching the average target [9] Earnings Estimates and Analyst Optimism - Analysts exhibit strong agreement in revising earnings estimates higher for EFXT, which correlates with potential stock price increases [11] - Over the past 30 days, two earnings estimates have increased while one has decreased, leading to a 37.8% rise in the Zacks Consensus Estimate for the current year [12] - EFXT holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, suggesting a solid potential upside [13] Caution on Price Targets - While price targets are commonly referenced, they can mislead investors, as empirical research indicates they often do not accurately predict stock price movements [7][10] - Analysts may set overly optimistic price targets due to business incentives, which can inflate expectations [8]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential [1] - A safer approach involves investing in bargain stocks that exhibit recent price momentum, identified through the Zacks Momentum Style Score [2] Group 2: Enerflex (EFXT) Stock Analysis - Enerflex (EFXT) has shown a price increase of 13.9% over the past four weeks, indicating growing investor interest [3] - EFXT has gained 27.7% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 2, suggesting it moves 100% higher than the market in either direction, indicating fast-paced momentum [4] Group 3: Valuation and Earnings Estimates - EFXT has a Momentum Score of A, suggesting it is an opportune time to invest in the stock [5] - The stock has a Zacks Rank 2 (Buy) due to upward trends in earnings estimate revisions, which attract more investors [6] - EFXT is trading at a Price-to-Sales ratio of 0.48, indicating it is relatively cheap at 48 cents for each dollar of sales [6] Group 4: Additional Investment Opportunities - Besides EFXT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, presenting further investment opportunities [7] - Zacks offers over 45 Premium Screens tailored to different investing styles, aiding in stock selection [8]

[Interim Condensed Consolidated Financial Statements](index=1&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statements of Financial Position](index=1&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Financial%20Position%20(unaudited)) The company's financial position as of June 30, 2025, shows an increase in total assets and shareholders' equity compared to December 31, 2024, driven by growth in current assets and retained earnings | ($ United States millions) | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------- | :------------ | :---------------- | :--------- | :--------- | | Total assets | 2,884 | 2,791 | 93 | 3.33% | | Total liabilities | 1,757 | 1,742 | 15 | 0.86% | | Total shareholders' equity | 1,127 | 1,049 | 78 | 7.44% | | Cash and cash equivalents | 71 | 92 | (21) | -22.83% | | Accounts receivable | 417 | 398 | 19 | 4.77% | | Inventories | 304 | 258 | 46 | 17.83% | | Retained earnings | 157 | 80 | 77 | 96.25% | - Current assets increased by **$107 million** to **$1,148 million**, primarily due to increases in accounts receivable, inventories, and work-in-progress related to EI assets[1](index=1&type=chunk) - Total liabilities saw a modest increase of **$15 million**, with accounts payable and accrued liabilities rising by **$57 million**, while long-term debt decreased by **$29 million**[1](index=1&type=chunk) [Interim Condensed Consolidated Statements of Earnings (Loss) and Other Comprehensive Income (Loss)](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Earnings%20(Loss)%20and%20Other%20Comprehensive%20Income%20(Loss)%20(unaudited)) The company reported significant improvements in net earnings and operating income for both the three and six months ended June 30, 2025, compared to the prior year, despite a slight decrease in revenue for the six-month period | ($ United States millions, except per share amounts) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change ($) | Change (%) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | Change (%) | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Revenue | 615 | 614 | 1 | 0.16% | 1,167 | 1,252 | (85) | -6.79% | | Gross margin | 139 | 136 | 3 | 2.21% | 267 | 223 | 44 | 19.73% | | Operating income | 76 | 58 | 18 | 31.03% | 147 | 66 | 81 | 122.73% | | Net earnings (loss) | 60 | 5 | 55 | 1100.00% | 84 | (13) | 97 | 746.15% | | Earnings (loss) per share – basic | 0.49 | 0.04 | 0.45 | 1125.00% | 0.68 | (0.10) | 0.78 | 780.00% | - Net finance costs decreased for both periods, contributing to higher earnings before income taxes[3](index=3&type=chunk) - Total comprehensive income significantly improved, reaching **$69 million** for the three months and **$98 million** for the six months ended June 30, 2025, compared to losses or break-even in the prior year[3](index=3&type=chunk) [Interim Condensed Consolidated Statements of Cash Flows](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(unaudited)) Cash flow from operating activities for the six months ended June 30, 2025, decreased compared to the prior year, while cash used in investing activities increased. Financing activities shifted from providing cash to using cash, primarily due to net repayment of the Revolving Credit Facility and share repurchases | ($ United States millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change ($) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | | :------------------------- | :------------------------------- | :------------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Operating Activities | (4) | 12 | (16) | 92 | 113 | (21) | | Investing Activities | (10) | (17) | 7 | (36) | (24) | (12) | | Financing Activities | 10 | 23 | (13) | (76) | (55) | (21) | | Net change in cash | (4) | 16 | (20) | (21) | 31 | (52) | | Cash, end of period | 71 | 126 | (55) | 71 | 126 | (55) | - Cash used in operating activities for the three months ended June 30, 2025, was **$4 million**, a decrease from **$12 million** provided in the same period last year, largely due to a net change in working capital and other[5](index=5&type=chunk) - Investing activities used **$36 million** for the six months ended June 30, 2025, an increase from **$24 million** used in the prior year, primarily due to higher additions to EI assets - operating leases[5](index=5&type=chunk) - Financing activities resulted in a net cash outflow of **$76 million** for the six months ended June 30, 2025, compared to an outflow of **$55 million** in the prior year, driven by net repayment of the Revolving Credit Facility and shares repurchased under NCIB[5](index=5&type=chunk) [Interim Condensed Consolidated Statements of Changes in Equity](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20(unaudited)) Total shareholders' equity increased to **$1,127 million** as of June 30, 2025, from **$1,049 million** at January 1, 2025, primarily due to net earnings and other comprehensive income, partially offset by share repurchases and dividends | ($ United States millions) | At January 1, 2025 | Net earnings | Other comprehensive income | Effect of stock option plans | Shares repurchased - NCIB | Dividends | At June 30, 2025 | | :------------------------- | :----------------- | :----------- | :------------------------- | :--------------------------- | :------------------------ | :-------- | :--------------- | | Share capital | 505 | - | - | 2 | (6) | - | 501 | | Contributed surplus | 678 | - | - | (1) | (8) | - | 669 | | Retained earnings | 80 | 84 | - | - | - | (7) | 157 | | Accumulated other comprehensive losses | (214) | - | 14 | - | - | - | (200) | | Total | 1,049 | 84 | 14 | 1 | (14) | (7) | 1,127 | - Net earnings of **$84 million** and other comprehensive income of **$14 million** contributed positively to equity during the six months ended June 30, 2025[6](index=6&type=chunk) - Share repurchases under the NCIB reduced share capital by **$6 million** and contributed surplus by **$8 million**, totaling **$14 million**[6](index=6&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) [Note 1. Summary of Material Accounting Policies](index=5&type=section&id=Note%201.%20Summary%20of%20Material%20Accounting%20Policies) This section outlines the basis of preparation for the interim financial statements, confirming compliance with IFRS and IAS 34, and details a recent amendment to IAS 21 regarding foreign exchange rates, which had no material adjustment upon adoption - The financial statements are prepared in accordance with IFRS as issued by the IASB, specifically IAS 34 for interim financial reporting[8](index=8&type=chunk)[9](index=9&type=chunk) - A new amendment to IAS 21, effective January 1, 2025, specifies how to assess currency exchangeability and estimate spot exchange rates when a currency is not exchangeable. The company adopted this amendment with no resulting adjustment[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk) - Management's estimates and assumptions, particularly concerning geopolitical events like tariffs, could impact financial results, though known facts have been incorporated[10](index=10&type=chunk) [Note 2. Accounts Receivable and Unbilled Revenue](index=6&type=section&id=Note%202.%20Accounts%20Receivable%20and%20Unbilled%20Revenue) Accounts receivable increased by **$19 million** to **$417 million** as of June 30, 2025, with a notable rise in current to 90-day trade receivables. Unbilled revenue also increased, reflecting revenue recognized but not yet billed | Accounts Receivable | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------ | :------------ | :---------------- | :--------- | :--------- | | Trade receivables | 413 | 400 | 13 | 3.25% | | Other receivables | 15 | 9 | 6 | 66.67% | | Total | 417 | 398 | 19 | 4.77% | | Aging of Trade Receivables | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :------------------------- | :------------ | :---------------- | :--------- | :--------- | | Current to 90 days | 330 | 308 | 22 | 7.14% | | Over 90 days | 83 | 92 | (9) | -9.78% | | Unbilled Revenue Movement (Six months ended) | June 30, 2025 | December 31, 2024 | | :------------------------------------------- | :------------ | :---------------- | | Opening balance | 159 | 309 | | Unbilled revenue recognized | 366 | 766 | | Amounts billed | (351) | (753) | | Closing balance | 176 | 159 | [Note 3. Energy Infrastructure Assets](index=7&type=section&id=Note%203.%20Energy%20Infrastructure%20Assets) The company's Energy Infrastructure (EI) assets are classified as either operating or finance leases. Operating lease assets saw a slight decrease in net book value, while finance lease receivables also decreased, primarily in the greater than five-year category - EI assets include Build-Own-Operate-Maintain (BOOM) assets and contract compression assets, classified as operating or finance leases at inception[17](index=17&type=chunk) | EI Assets – Operating Leases (Net book value) | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------------------------------- | :------------ | :---------------- | :--------- | :--------- | | NAM | 295 | 286 | 9 | 3.15% | | LATAM | 175 | 185 | (10) | -5.41% | | EH | 225 | 242 | (17) | -7.02% | | Total | 695 | 713 | (18) | -2.52% | | EI Assets – Finance Leases Receivable (Present value) | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :---------------------------------------------------- | :------------ | :---------------- | :--------- | :--------- | | Less than one year | 48 | 49 | (1) | -2.04% | | Between one and five years | 148 | 145 | 3 | 2.07% | | Greater than five years | 26 | 44 | (18) | -40.91% | | Total | 222 | 238 | (16) | -6.72% | [Note 4. Inventories](index=9&type=section&id=Note%204.%20Inventories) Total inventories increased by **$46 million** to **$304 million** as of June 30, 2025, primarily driven by an increase in direct materials and work-in-progress. Work-in-progress related to EI assets – finance leases receivable also significantly increased | Inventories | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :---------- | :------------ | :---------------- | :--------- | :--------- | | Direct materials | 115 | 85 | 30 | 35.29% | | Repair and distribution parts | 97 | 94 | 3 | 3.19% | | Work-in-progress | 75 | 62 | 13 | 20.97% | | Equipment | 17 | 17 | 0 | 0.00% | | Total inventories | 304 | 258 | 46 | 17.83% | - WIP related to EI assets - finance leases receivable increased from **$35 million** to **$91 million**, indicating ongoing construction for finance lease projects[26](index=26&type=chunk) - Net change in inventory reserves charged to COGS for obsolescence and aging was **$2 million** for the six months ended June 30, 2025, up from **$1 million** in the prior year[26](index=26&type=chunk) [Note 5. Other Assets](index=9&type=section&id=Note%205.%20Other%20Assets) Other assets increased by **$16 million** to **$225 million** as of June 30, 2025, primarily due to an increase in redemption options and investments in associates and joint ventures | Other Assets | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :----------- | :------------ | :---------------- | :--------- | :--------- | | Project asset | 161 | 161 | 0 | 0.00% | | Investment in associates and joint ventures | 28 | 26 | 2 | 7.69% | | Redemption option | 29 | 17 | 12 | 70.59% | | Prepaid deposits | 7 | 5 | 2 | 40.00% | | Total | 225 | 209 | 16 | 7.66% | [Note 6. Deferred Revenue](index=9&type=section&id=Note%206.%20Deferred%20Revenue) Deferred revenue increased to **$406 million** as of June 30, 2025, from **$386 million** at December 31, 2024. This increase is attributed to cash received in advance of revenue recognition exceeding revenue subsequently recognized during the six-month period | Deferred Revenue Movement (Six months ended) | June 30, 2025 | December 31, 2024 | | :------------------------------------------- | :------------ | :---------------- | | Opening balance | 386 | 319 | | Cash received in advance of revenue recognition | 274 | 1,067 | | Revenue subsequently recognized | (256) | (996) | | Closing balance | 406 | 386 | - Current deferred revenue increased by **$20 million** to **$395 million**, while non-current deferred revenue remained stable at **$11 million**[29](index=29&type=chunk) [Note 7. Long-Term Debt](index=10&type=section&id=Note%207.%20Long-Term%20Debt) Long-term debt decreased to **$679 million** as of June 30, 2025, from **$708 million** at December 31, 2024, primarily due to a reduction in drawings on the Revolving Credit Facility (RCF). The RCF maturity date has been extended to July 11, 2028, and the company remains in compliance with its debt covenants | Long-Term Debt | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :--------------- | :------------ | :---------------- | :--------- | :--------- | | Notes | 563 | 563 | 0 | 0.00% | | Drawings on RCF | 154 | 191 | (37) | -19.37% | | Total borrowings | 717 | 754 | (37) | -4.91% | | Long-term debt | 679 | 708 | (29) | -4.10% | - Subsequent to June 30, 2025, Enerflex extended the maturity date of its **$800 million** RCF by three years to July 11, 2028[33](index=33&type=chunk) | Covenant (Maximum) | Requirement | Performance (June 30, 2025) | Performance (June 30, 2024) | | :----------------- | :---------- | :---------------------------- | :---------------------------- | | Senior secured net funded debt to EBITDA ratio | 2.5x | 0.2x | 0.5x | | Bank-adjusted net debt to EBITDA ratio | 4.0x | 1.3x | 2.2x | | Interest coverage ratio (Minimum) | 2.5x | 5.4x | 3.9x | [Note 8. Share Capital](index=11&type=section&id=Note%208.%20Share%20Capital) Share capital decreased to **$501 million** as of June 30, 2025, from **$505 million** at December 31, 2024, primarily due to shares repurchased and cancelled under the Normal Course Issuer Bid (NCIB) | Share Capital Changes (Six months ended) | Number of common shares | Common share capital ($) | | :--------------------------------------- | :---------------------- | :----------------------- | | Opening balance (Jan 1, 2025) | 124,143,179 | 505 | | Exercise of stock options | 309,849 | 2 | | Shares repurchased - NCIB | (1,875,000) | (6) | | Closing balance (June 30, 2025) | 122,578,028 | 501 | - The company commenced an NCIB on April 1, 2025, authorizing the repurchase of up to **6,159,695 common shares** (approximately **5%** of its public float) for cancellation[38](index=38&type=chunk) - During the three months ended June 30, 2025, **1,875,000 common shares** were repurchased and cancelled for a total of **$14 million**, with **$6 million** impacting share capital and **$8 million** reducing contributed surplus[41](index=41&type=chunk) [Note 9. Contributed Surplus](index=11&type=section&id=Note%209.%20Contributed%20Surplus) Contributed surplus decreased to **$669 million** as of June 30, 2025, from **$678 million** at December 31, 2024, primarily due to the impact of shares repurchased under the NCIB | Contributed Surplus Changes | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Opening balance | 678 | 678 | | Exercise of stock options | (1) | - | | Shares repurchased - NCIB | (8) | - | | Closing balance | 669 | 678 | - Contributed surplus consists of accumulated stock options less the fair value of exercised options reclassified to share capital, and repurchases through the NCIB[42](index=42&type=chunk) [Note 10. Revenue](index=12&type=section&id=Note%2010.%20Revenue) Total revenue remained stable at **$615 million** for the three months ended June 30, 2025, but decreased by **6.79%** to **$1,167 million** for the six-month period compared to the prior year. Revenue from Energy Infrastructure (EI) increased for the three-month period, while Engineered Systems (ES) and After-Market Services (AMS) saw slight declines | Revenue by Product Line ($ United States millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change ($) | Change (%) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | Change (%) | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Energy Infrastructure ("EI") | 147 | 141 | 6 | 4.26% | 300 | 370 | (70) | -18.92% | | After-Market Services ("AMS") | 124 | 127 | (3) | -2.36% | 244 | 248 | (4) | -1.61% | | Engineered Systems ("ES") | 344 | 346 | (2) | -0.58% | 623 | 634 | (11) | -1.73% | | Total revenue | 615 | 614 | 1 | 0.16% | 1,167 | 1,252 | (85) | -6.79% | | Revenue by Geographic Location ($ United States millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | United States | 523 | 537 | (14) | -2.61% | | Canada | 164 | 151 | 13 | 8.61% | | Argentina | 103 | 76 | 27 | 35.53% | | Oman | 63 | 157 | (94) | -59.87% | | Nigeria | 61 | 58 | 3 | 5.17% | | Mozambique | 21 | - | 21 | N/A | | Unsatisfied Performance Obligations (June 30, 2025) | Less than one year | One to two years | Greater than two years | Total | | :-------------------------------------------------- | :----------------- | :--------------- | :--------------------- | :---- | | EI | 447 | 324 | 691 | 1,462 | | AMS | 89 | 33 | 67 | 189 | | ES | 1,181 | 39 | 7 | 1,227 | | Total | 1,717 | 396 | 765 | 2,878 | [Note 11. Selling, General and Administrative Expenses](index=12&type=section&id=Note%2011.%20Selling,%20General%20and%20Administrative%20Expenses) Selling, General and Administrative (SG&A) expenses decreased for both the three and six months ended June 30, 2025, compared to the prior year, primarily due to reductions in core SG&A and depreciation and amortization | SG&A Expenses ($ United States millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change ($) | Change (%) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Core SG&A | 52 | 62 | (10) | -16.13% | 106 | 120 | (14) | -11.67% | | Share-based compensation | 3 | 2 | 1 | 50.00% | - | 8 | (8) | -100.00% | | Depreciation and amortization | 6 | 11 | (5) | -45.45% | 12 | 23 | (11) | -47.83% | | Total SG&A | 61 | 75 | (14) | -18.67% | 118 | 153 | (35) | -22.88% | - Core SG&A, which includes compensation, third-party services, and IT expenses, decreased by **$14 million** for the six-month period[47](index=47&type=chunk) [Note 12. Segmented Information](index=13&type=section&id=Note%2012.%20Segmented%20Information) Operating income significantly improved across all segments for the six months ended June 30, 2025, with North America (NAM) and Latin America (LATAM) showing strong growth, and Eastern Hemisphere (EH) recovering from a prior-year loss. Total operating income more than doubled year-over-year | Operating Income (Loss) by Segment ($ United States millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change ($) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | | :---------------------------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | NAM | 50 | 50 | 0 | 88 | 83 | 5 | | LATAM | 20 | 3 | 17 | 41 | 13 | 28 | | EH | 6 | 5 | 1 | 18 | (30) | 48 | | Total Operating income | 76 | 58 | 18 | 147 | 66 | 81 | | Revenue by Segment ($ United States millions) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | NAM | 795 | 788 | 7 | 0.89% | | LATAM | 191 | 184 | 7 | 3.80% | | EH | 181 | 280 | (99) | -35.36% | | Total Revenue | 1,167 | 1,252 | (85) | -6.79% | - Gross Margin for the six months ended June 30, 2025, increased by **$44 million** to **$267 million**, with significant improvements in LATAM and EH[52](index=52&type=chunk) [Note 13. Finance Costs and Income](index=14&type=section&id=Note%2013.%20Finance%20Costs%20and%20Income) Net finance costs decreased for both the three and six months ended June 30, 2025, primarily due to lower interest on debt | Net Finance Costs ($ United States millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change ($) | Change (%) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | Change (%) | | :------------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Interest on debt | 16 | 22 | (6) | -27.27% | 32 | 45 | (13) | -28.89% | | Total finance costs | 19 | 25 | (6) | -24.00% | 43 | 52 | (9) | -17.31% | | Net finance costs | 18 | 23 | (5) | -21.74% | 41 | 49 | (8) | -16.33% | - Interest income slightly decreased for both periods[55](index=55&type=chunk) [Note 14. Financial Instruments](index=14&type=section&id=Note%2014.%20Financial%20Instruments) The fair value of the company's long-term debt was **$774 million** at June 30, 2025, higher than its carrying value of **$679 million**. The company uses foreign exchange contracts to hedge currency exposure and designates USD borrowings as a net investment hedge against CAD fluctuations | Long-Term Debt ($ United States millions) | June 30, 2025 | December 31, 2024 | | :---------------------------------------- | :------------ | :---------------- | | Carrying value | 679 | 708 | | Estimated fair value | 774 | 804 | - The fair value of the Notes was determined using a discounted cash flow basis with a weighted average discount rate of **5.2%** at June 30, 2025 (down from **6.3%** at December 31, 2024)[58](index=58&type=chunk) - The company hedges its net investment in USD functional subsidiaries against CAD fluctuations by designating a portion of USD borrowings as a hedging instrument, resulting in foreign exchange gains and losses included in accumulated other comprehensive losses[60](index=60&type=chunk) [Note 15. Supplemental Cash Flow Information](index=15&type=section&id=Note%2015.%20Supplemental%20Cash%20Flow%20Information) Changes in working capital and other items resulted in a cash outflow of **$59 million** for the six months ended June 30, 2025, a significant shift from a **$32 million** inflow in the prior year. Cash interest paid decreased, while income taxes paid increased substantially | Net Change in Working Capital and Other ($ United States millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change ($) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | | :----------------------------------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Accounts receivable | (37) | 18 | (55) | (17) | 8 | (25) | | Unbilled revenue | (11) | (58) | 47 | (17) | (67) | 50 | | Inventories | (35) | (1) | (34) | (46) | (5) | (41) | | Accounts payable and accrued liabilities and provisions | 40 | (4) | 44 | 53 | 20 | 33 | | Net change in working capital and other | (93) | (51) | (42) | (59) | 32 | (91) | | Cash Interest and Taxes Paid/Received ($ United States millions) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Change ($) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change ($) | | :--------------------------------------------------------------- | :------------------------------- | :------------------------------- | :--------- | :----------------------------- | :----------------------------- | :--------- | | Total interest paid | 30 | 37 | (7) | 35 | 47 | (12) | | Income taxes paid | 35 | 14 | 21 | 63 | 21 | 42 | [Note 16. Guarantees, Commitments, and Contingencies](index=15&type=section&id=Note%2016.%20Guarantees,%20Commitments,%20and%20Contingencies) The company has **$116 million** in outstanding letters of credit and significant purchase obligations over the next three years. It is currently involved in an arbitration proceeding related to a terminated Eastern Hemisphere (EH) project, disputing claims and pursuing counterclaims - Outstanding letters of credit totaled **$116 million** as of June 30, 2025, with **$87 million** funded from the RCF and **$29 million** from an additional LC Facility[65](index=65&type=chunk) | Purchase Obligations ($ United States millions) | Amount | | :---------------------------------------------- | :----- | | 2025 | 417 | | 2026 | 129 | | 2027 | 22 | - The company is vigorously defending itself in an arbitration proceeding where a customer alleges breach of contract for an EH project, following Enerflex's termination of the contract due to Force Majeure. Enerflex has a counterclaim for amounts owing[70](index=70&type=chunk)[71](index=71&type=chunk) [Note 17. Seasonality](index=16&type=section&id=Note%2017.%20Seasonality) The company's revenue in Canada and parts of the U.S. is subject to seasonal trends, typically higher in the fourth quarter due to weather conditions and drilling patterns. Latin America and Eastern Hemisphere segments are less impacted by seasonality - The energy sector in Canada and parts of the U.S. experiences seasonal trends, leading to generally higher revenue in the fourth quarter[72](index=72&type=chunk) - Revenue is also influenced by capital investment decisions of both the company and its customers[72](index=72&type=chunk) - LATAM and EH segments are not significantly affected by seasonal variations[72](index=72&type=chunk) [Note 18. Subsequent Events](index=16&type=section&id=Note%2018.%20Subsequent%20Events) Subsequent to the reporting period, Enerflex declared a quarterly dividend of **CAD $0.0375 per share**, payable on September 2, 2025 - A quarterly dividend of **CAD $0.0375 per share** was declared, payable on September 2, 2025, to shareholders of record on August 18, 2025[73](index=73&type=chunk) - The Board will continue to evaluate dividend payments quarterly based on cash flow, market conditions, and business needs[73](index=73&type=chunk)