Executive Summary [Q2 2025 Financial Highlights](index=1&type=section&id=Q2%202025%20Financial%20Highlights) Helix reported a net loss of $2.6 million in Q2 2025, a significant decline from prior periods, with Adjusted EBITDA, revenues, and gross profit margins also decreasing Summary of Key Financial Results (Q2 2025 vs. Q1 2025 & Q2 2024) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :----------------------------- | :---------- | :---------- | :---------- | | Net Income (Loss) (in millions) | $(2.6) | $3.1 | $32.3 | | Diluted EPS | $(0.02) | $0.02 | $0.21 | | Adjusted EBITDA (in millions) | $42.4 | $52.0 | $96.9 | | Revenues (in thousands) | $302,288 | $278,064 | $364,797 | | Gross Profit (in thousands) | $14,948 | $27,538 | $75,486 | | Gross Profit Margin | 5% | 10% | 21% | [CEO's Business Outlook and Strategic Actions](index=1&type=section&id=CEO%27s%20Business%20Outlook%20and%20Strategic%20Actions) Q2 results were impacted by vessel maintenance and geopolitical volatility, leading to a risk-assessed 2025 outlook, despite new contract wins and share repurchases - Q2 2025 results reflected marginal seasonal activity increases in the North Sea and Gulf of America shelf, and full Q7000 operations in Brazil, but these were offset by planned regulatory docking of the Q5000 and return transit of the Q4000[4](index=4&type=chunk) - Macro and geopolitical volatility created significant market uncertainties, leading customers to scale back spending and push work into 2026 and beyond[4](index=4&type=chunk) - Helix expects significant improvements in Q3 financial performance but has risk-assessed its 2025 outlook due to a lack of visibility in Q4 as projects are delayed[4](index=4&type=chunk) - The company repurchased approximately **4.6 million shares** for approximately **$30.0 million** during the second quarter 2025[4](index=4&type=chunk)[16](index=16&type=chunk) - Positive market signs include securing North Sea well intervention work for 2026, a multi-year MSA with Exxon for the Shallow Water segment, and a multi-year **800-day minimum commitment** trenching contract in the North Sea for the Robotics segment[4](index=4&type=chunk) Segment Performance Analysis [Well Intervention](index=3&type=section&id=Well%20Intervention) Well Intervention revenues and operating income declined significantly in Q2 2025 due to planned vessel maintenance and lower utilization, despite some regional improvements Well Intervention Segment Financials (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------- | :---------- | :---------- | :---------- | | Revenues | $156,786 | $198,374 | $217,761 | | Income (Loss) from Operations | $(16,430) | $19,970 | $29,299 | - QoQ revenue decreased by **$41.6 million (21%)** due to lower utilization and integrated project revenues in the Gulf of America, despite higher utilization on the Q7000 in Brazil and seasonal increases in the North Sea[7](index=7&type=chunk) - Key operational impacts included the Q4000's **45-day transit/demobilization** and the Q5000's **57-day planned regulatory docking**. Overall vessel utilization increased QoQ to **72%** from **67%**, but decreased YoY from **94%**[7](index=7&type=chunk)[8](index=8&type=chunk) - YoY revenue decreased by **$61.0 million (28%)** primarily due to the Seawell being warm-stacked (vs. fully utilized in Q2 2024) and lower Gulf of America vessel utilization, partially offset by higher contractual rates for Siem Helix 1 and 2 in Brazil[8](index=8&type=chunk) [Robotics](index=4&type=section&id=Robotics) Robotics segment saw significant QoQ revenue growth from higher utilization and a new IROV boulder grab, but YoY operating income declined due to higher costs Robotics Segment Financials (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------- | :---------- | :---------- | :---------- | | Revenues | $85,572 | $51,042 | $81,249 | | Income (Loss) from Operations | $19,044 | $5,347 | $28,400 | - QoQ revenues increased by **$34.5 million (68%)** due to seasonally higher chartered vessel activity (**537 days, 95% utilization** vs. 244 days, 67%) and ROV/trencher utilization (**62%** vs. 51%)[9](index=9&type=chunk) - The segment launched its third IROV boulder grab, generating **190 days of utilization** in Q2 2025, significantly up from 21 days in Q1 2025[9](index=9&type=chunk) - YoY revenues increased by **$4.3 million (5%)** due to increased chartered vessel and site clearance activities, including **190 days** using three IROV boulder grabs (vs. 78 days using two in Q2 2024), but operating income decreased by **$9.4 million** due to higher vessel costs and lower margins[10](index=10&type=chunk)[15](index=15&type=chunk) [Shallow Water Abandonment](index=4&type=section&id=Shallow%20Water%20Abandonment) Shallow Water Abandonment saw substantial QoQ revenue growth and improved operating loss from higher utilization, but YoY revenues were flat with slightly increased losses Shallow Water Abandonment Segment Financials (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------- | :---------- | :---------- | :---------- | | Revenues | $50,618 | $16,818 | $50,841 | | Income (Loss) from Operations | $(357) | $(13,441) | $(281) | - QoQ revenues increased by **$33.8 million (201%)** due to seasonally higher activity and utilization across all asset classes. Vessel utilization (excluding heavy lift) rose to **61%** from 31%, and P&A/CT systems activity increased to **798 days (34% utilization)** from 264 days (11%)[11](index=11&type=chunk) - The Epic Hedron heavy lift barge had **38% utilization** in Q2 2025, compared to being idle in Q1 2025[11](index=11&type=chunk) - YoY revenues decreased marginally by **$0.2 million**, primarily due to lower day rates and heavy lift utilization (Epic Hedron at **38%** vs. 46% in Q2 2024), largely offset by higher P&A/CT systems and vessel utilization[12](index=12&type=chunk) [Production Facilities](index=4&type=section&id=Production%20Facilities) Production Facilities revenues and operating income decreased QoQ and YoY due to lower oil and gas production from field shutdowns and reduced oil prices Production Facilities Segment Financials (in thousands) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------- | :---------- | :---------- | :---------- | | Revenues | $17,081 | $19,837 | $25,400 | | Income (Loss) from Operations | $4,425 | $6,944 | $9,097 | - QoQ revenues decreased by **$2.8 million (14%)** due to lower oil and gas production and prices from the Droshky field, which was shut in for approximately one month in Q2 2025, and the Thunder Hawk field remaining shut in[13](index=13&type=chunk) - YoY revenues decreased by **$8.3 million (33%)** primarily due to lower oil and gas production and prices, as both Droshky and Thunder Hawk fields had full production in Q2 2024 but faced shutdowns in Q2 2025. Oil prices were approximately **$15 per barrel lower** YoY[14](index=14&type=chunk) Financial Review [Selling, General and Administrative Expenses](index=6&type=section&id=Selling%2C%20General%20and%20Administrative) SG&A expenses decreased QoQ and YoY in Q2 2025, primarily due to lower compensation costs, also improving slightly as a percentage of revenue Selling, General and Administrative Expenses (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------- | :---------- | :---------- | :---------- | | SG&A Expenses | $18.1 | $19.4 | $22.3 | | SG&A as % of Revenue | 6.0% | 7.0% | 6.1% | - The decrease in SG&A expenses during Q2 2025 was primarily due to lower compensation costs compared to the prior quarter and prior year[17](index=17&type=chunk) [Other Income and Expense](index=6&type=section&id=Other%20Income%20and%20Expense) Helix reported net other income in Q2 2025, a positive shift from prior periods, primarily driven by net foreign currency gains on the British pound Other Income (Expense), Net (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------- | :---------- | :---------- | :---------- | | Other Income (Expense), Net | $0.4 | $(0.4) | $(0.4) | - Other income and expense, net primarily includes net foreign currency gains and losses, respectively, related to the British pound on U.K. subsidiaries' foreign currency positions[18](index=18&type=chunk) [Cash Flow and Liquidity](index=6&type=section&id=Cash%20Flows) Helix reported negative operating and free cash flow in Q2 2025 due to lower earnings, yet maintained strong liquidity and a negative Net Debt position [Operating Cash Flows](index=6&type=section&id=Operating%20cash%20flows) Operating cash flows turned negative in Q2 2025, significantly decreasing QoQ and YoY, primarily due to lower earnings and higher working capital outflows Operating Cash Flows (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------- | :---------- | :---------- | :---------- | | Operating Cash Flows | $(17.1) | $16.4 | $(12.2) | - QoQ decrease in operating cash flows was primarily due to lower earnings and higher working capital outflows[19](index=19&type=chunk) - YoY decrease was due to lower earnings and higher regulatory certification costs (**$16.1 million** in Q2 2025 vs. $10.7 million in Q2 2024), partially offset by a **$58.3 million Alliance earn-out payment** and higher working capital outflows in Q2 2024[19](index=19&type=chunk) [Capital Expenditures](index=6&type=section&id=Capital%20expenditures) Capital expenditures remained consistent QoQ in Q2 2025 and experienced a slight increase YoY Capital Expenditures (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------- | :---------- | :---------- | :---------- | | Capital Expenditures | $4.5 | $4.5 | $4.0 | [Free Cash Flow](index=6&type=section&id=Free%20Cash%20Flow) Free Cash Flow was negative in Q2 2025, significantly decreasing from the prior quarter and remaining negative YoY, primarily due to lower operating cash flows Free Cash Flow (in millions) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :---------------------- | :---------- | :---------- | :---------- | | Free Cash Flow | $(21.6) | $12.0 | $(16.2) | - The decrease in Free Cash Flow in Q2 2025 compared to both the prior quarter and Q2 2024 was primarily due to lower operating cash flows[21](index=21&type=chunk) [Financial Condition and Liquidity](index=6&type=section&id=Financial%20Condition%20and%20Liquidity) As of June 30, 2025, Helix maintained a strong cash position and significant ABL capacity, resulting in robust total liquidity and a negative Net Debt Financial Condition and Liquidity (as of June 30, 2025, in millions) | Metric | Amount | | :-------------------------------- | :---------- | | Cash and Cash Equivalents | $319.7 | | Available ABL Facility Capacity | $70.5 | | Total Liquidity (excluding pledged) | $374.9 | | Consolidated Long-Term Debt | $311.6 | | Net Debt | $(8.1) | [Share Repurchases](index=6&type=section&id=Share%20Repurchases) Helix continued its share repurchase program in Q2 2025, repurchasing a significant number of common shares - Helix repurchased approximately **4.6 million shares** of common stock for approximately **$30.0 million** during the second quarter 2025[16](index=16&type=chunk) Company Overview [About Helix](index=7&type=section&id=About%20Helix) Helix Energy Solutions Group, Inc. is a Houston-based international offshore energy services company specializing in well intervention, robotics, and decommissioning - Helix Energy Solutions Group, Inc. is an international offshore energy services company headquartered in Houston, Texas[23](index=23&type=chunk) - The company provides specialty services to the offshore energy industry, focusing on well intervention, robotics, and decommissioning operations[23](index=23&type=chunk) - Helix's services support the global energy transition by maximizing production of existing oil and gas reserves, decommissioning end-of-life fields, and supporting renewable energy developments[23](index=23&type=chunk) Non-GAAP Financial Measures [Definitions and Rationale](index=7&type=section&id=Definitions%20and%20Rationale) Management uses non-GAAP measures like EBITDA, Adjusted EBITDA, Free Cash Flow, and Net Debt to evaluate performance and inform strategic decisions - Management evaluates operating performance and financial condition using non-GAAP measures: EBITDA, Adjusted EBITDA, Free Cash Flow, and Net Debt[24](index=24&type=chunk) - EBITDA is defined as earnings before income taxes, net interest expense, net other income/expense, and depreciation/amortization, with non-cash impairment losses added back[24](index=24&type=chunk) - Adjusted EBITDA further excludes gains/losses on asset disposition, acquisition/integration costs, convertible senior note related gains/losses, fair value changes of contingent consideration, and credit loss provisions[24](index=24&type=chunk) - Free Cash Flow is operating cash flows less capital expenditures, net of asset sales proceeds and insurance recoveries. Net Debt is long-term debt (including current maturities) less cash, cash equivalents, and restricted cash[24](index=24&type=chunk) - These measures are used for internal evaluation, external comparison, strategic planning, budgeting, and debt covenant reporting, providing useful information to investors as supplemental to GAAP measures[25](index=25&type=chunk) Forward-Looking Statements [Risks and Uncertainties](index=7&type=section&id=Risks%20and%20Uncertainties) Forward-looking statements are subject to known and unknown risks, including market conditions, oil price volatility, geopolitical developments, and operational hazards - The press release contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause results to differ materially from those expressed or implied[26](index=26&type=chunk) - Key risks include market conditions and demand for services, volatility of oil and natural gas prices, complexities of global political and economic developments, results from mergers/acquisitions, ability to secure backlog, and performance of contracts[26](index=26&type=chunk) - Other factors include actions by governmental/regulatory authorities, operating hazards and delays, effectiveness of sustainability initiatives, human capital management issues, and geologic risks[26](index=26&type=chunk) Consolidated Financial Statements [Comparative Condensed Consolidated Statements of Operations](index=9&type=section&id=Comparative%20Condensed%20Consolidated%20Statements%20of%20Operations) This section presents comparative condensed consolidated statements of operations, detailing revenues, gross profit, net income (loss), and EPS for Q2 and YTD 2025 and 2024 Comparative Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :----------------------------- | :---------- | :---------- | :---------- | :---------- | | Net revenues | $302,288 | $364,797 | $580,352 | $661,008 | | Cost of sales | $287,340 | $289,311 | $537,866 | $565,968 | | Gross profit | $14,948 | $75,486 | $42,486 | $95,040 | | Income (loss) from operations | $(3,152) | $53,193 | $5,020 | $51,917 | | Net income (loss) | $(2,598) | $32,289 | $474 | $6,002 | | Diluted Earnings (Loss) Per Share | $(0.02) | $0.21 | $0.00 | $0.04 | [Comparative Condensed Consolidated Balance Sheets](index=10&type=section&id=Comparative%20Condensed%20Consolidated%20Balance%20Sheets) This section provides comparative condensed consolidated balance sheets, outlining assets, liabilities, and shareholders' equity as of June 30, 2025, and December 31, 2024 Comparative Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | Dec. 31, 2024 | | :----------------------------- | :---------- | :---------- | | Cash and cash equivalents | $319,743 | $368,030 | | Total Current Assets | $760,399 | $709,682 | | Total Assets | $2,672,561 | $2,597,080 | | Total Current Liabilities | $347,964 | $304,416 | | Long-term debt | $302,200 | $305,971 | | Shareholders' equity | $1,568,776 | $1,519,765 | | Total Liabilities and Equity | $2,672,561 | $2,597,080 | [Comparative Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Comparative%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents comparative condensed consolidated statements of cash flows, detailing cash from operating, investing, and financing activities for YTD 2025 and 2024 Comparative Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | YTD 2025 | YTD 2024 | | :-------------------------------------- | :---------- | :---------- | | Net cash provided by (used in) operating activities | $(691) | $52,320 | | Net cash used in investing activities | $(8,958) | $(7,231) | | Net cash used in financing activities | $(40,780) | $(101,526) | | Cash and cash equivalents, end of period | $319,743 | $275,066 | Reconciliation of Non-GAAP Measures [Adjusted EBITDA Reconciliation](index=12&type=section&id=Reconciliation%20from%20Net%20Income%20%28loss%29%20to%20Adjusted%20EBITDA) This section reconciles Net Income (loss) to Adjusted EBITDA, detailing adjustments for income tax, interest, other income/expense, depreciation, and other non-GAAP exclusions Reconciliation from Net Income (Loss) to Adjusted EBITDA (in thousands) | Metric | Q2 2025 | Q2 2024 | Q1 2025 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Net income (loss) | $(2,598) | $32,289 | $3,072 | $474 | $6,002 | | Income tax provision (benefit) | $(5,997) | $14,725 | $453 | $(5,544) | $13,027 | | Net interest expense | $5,875 | $5,891 | $5,706 | $11,581 | $11,368 | | Depreciation and amortization | $45,389 | $43,471 | $42,482 | $87,871 | $89,824 | | EBITDA | $42,232 | $96,758 | $52,070 | $94,302 | $122,819 | | Adjusted EBITDA | $42,430 | $96,895 | $51,985 | $94,415 | $143,885 | [Free Cash Flow Reconciliation](index=12&type=section&id=Free%20Cash%20Flow) This section reconciles cash flows from operating activities to Free Cash Flow by subtracting capital expenditures, net of asset sales and insurance recoveries Free Cash Flow Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | Q1 2025 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Cash flows from operating activities | $(17,133) | $(12,164) | $16,442 | $(691) | $52,320 | | Less: Capital expenditures, net of proceeds from asset sales and insurance recoveries | $(4,470) | $(3,989) | $(4,488) | $(8,958) | $(7,231) | | Free Cash Flow | $(21,603) | $(16,153) | $11,954 | $(9,649) | $45,089 | [Net Debt Reconciliation](index=12&type=section&id=Net%20Debt) This section reconciles Net Debt, calculated by subtracting cash and cash equivalents from long-term debt, including current maturities Net Debt Reconciliation (in thousands) | Metric | June 30, 2025 | June 30, 2024 | March 31, 2025 | | :-------------------------------------- | :---------- | :---------- | :---------- | | Long-term debt including current maturities | $311,612 | $318,629 | $311,109 | | Less: Cash and cash equivalents | $(319,743) | $(275,066) | $(369,987) | | Net Debt | $(8,131) | $43,563 | $(58,878) |

Core Viewpoint - Helix Energy (HLX) is anticipated to report a significant year-over-year decline in earnings due to lower revenues, with the upcoming earnings report expected to be released on July 23, 2025 [1][2]. Financial Performance Expectations - The consensus estimate for Helix Energy's quarterly earnings is $0.01 per share, reflecting a year-over-year decrease of 95.2% [3]. - Expected revenues for the quarter are $326.27 million, which is a decline of 10.6% compared to the same quarter last year [3]. Estimate Revisions and Predictions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4]. - Helix Energy has an Earnings ESP of 0%, as the Most Accurate Estimate aligns with the Zacks Consensus Estimate, suggesting no recent differing analyst views [12]. Historical Performance - In the last reported quarter, Helix Energy was expected to incur a loss of $0.05 per share but instead reported earnings of $0.02, resulting in a positive surprise of 140% [13]. - Over the past four quarters, Helix Energy has exceeded consensus EPS estimates three times [14]. Industry Context - In comparison, Baker Hughes (BKR), another player in the oil and gas field services industry, is expected to report earnings of $0.55 per share, indicating a year-over-year decline of 3.5% [18]. - Baker Hughes' revenues are projected to be $6.63 billion, down 7.1% from the previous year, with a slight revision of the consensus EPS estimate down by 0.4% over the last 30 days [19].

Core Insights - Exxon Mobil Corporation (XOM) has signed a multi-year agreement with Helix Energy Solutions Group, Inc. (HLX) for plug and abandonment operations in the U.S. Gulf of Mexico, addressing aging infrastructure and decommissioning needs [1][10] - The partnership enhances Helix's capabilities in decommissioning and underscores ExxonMobil's commitment to managing its offshore legacy assets responsibly [2][6] Industry Context - Over 2,000 wells in the Gulf of Mexico are abandoned, with operators facing stricter regulations for well plugging and platform removal, indicating a growing focus on environmental compliance [3][7] - Helix Energy Solutions is expanding its technical capabilities in both decommissioning and subsea services, positioning itself as a full-cycle offshore service provider [4][5] Strategic Alignment - ExxonMobil's agreement with Helix aligns with its broader strategy to reduce Scope 1 and 2 emissions intensity by 40-50% by 2030 compared to 2016 levels, with proper management of offshore well closures being a key component [6][10] - The deal reflects the evolving priorities of the energy sector, particularly in response to aging infrastructure and increasing environmental standards [7]

Company Overview - Helix Energy Solutions is an international offshore energy services company focused on well intervention, robotics, and full-field decommissioning operations[9] - The company operates through four business segments: Well Intervention, Robotics, Shallow Water Abandonment, and Production Facilities[11] - Helix's services support the global energy transition by maximizing existing oil and gas reserves, decommissioning end-of-life fields, and supporting renewable energy developments[9] Financial Performance and Outlook - Helix reported revenue of $129 billion in 2023, compared to $873 million in 2022[13] - Adjusted EBITDA for 2023 was $273 million[58] - Free cash flow for 2023 was $134 million[58] - The company forecasts revenue between $12 billion and $14 billion for 2024[68] - Adjusted EBITDA is projected to be between $270 million and $330 million in 2024[68] - Free cash flow is forecasted between $65 million and $115 million for 2024, including $58 million related to the Alliance acquisition earnout[68] Market Trends and Opportunities - The global offshore deepwater oil and gas operating expenditure is projected to increase from $71 billion in 2022 to $98 billion in 2027[95] - The decommissioning market presents a $403 billion opportunity globally from 2024-2028[109] - North America's decommissioning commitments are estimated at $73 billion for 2024-2028[106] - Cumulative offshore wind cable installations are expected to reach 997 kilometers by 2030[112]

Company Overview - Helix Energy Solutions Group is a specialized offshore services company focused on well intervention, subsea robotics, and decommissioning [1] Investment Thesis - The share price of Helix Energy Solutions is significantly below its fair value, indicating a potential buying opportunity [1] - The company is positioned to benefit from its specialized services in the offshore sector, which may lead to future growth [1] Analyst Perspective - The investment strategy emphasizes value investing, aiming to acquire assets at a discount, which aligns with the current valuation of Helix Energy Solutions [1]

Core Viewpoint - The first batch of 16 new floating rate funds has been launched, with significant expectations from the management for these innovative products [2][5]. Group 1: Fund Manager Selection - The fund managers for these new funds are primarily mid-career professionals, with 10 out of 17 having 5-10 years of experience [2][3]. - There is a notable absence of previously popular star managers or those heavily invested in trending stocks, indicating a focus on experienced managers [2][3]. Group 2: Fund Manager Performance - Among the 17 fund managers, 5 have achieved an annualized return exceeding 10%, while only 1 has a negative performance [5][6]. - The overall performance of these fund managers has outperformed the annualized return of the CSI 300 index, with specific returns of 13.33% for Wang Mingxu from GF Fund and 13.04% for Wang Junzheng from Huaxia Fund [6][7]. Group 3: Fund Management Scale - The current management scale of these fund managers varies, with 3 managing over 10 billion yuan, while 4 manage less than 1 billion yuan [4][6]. - The majority of fund managers have a management scale between 2 billion and 10 billion yuan, indicating a balanced distribution [4]. Group 4: Investment Style - The fund managers exhibit diverse investment styles, with 10 favoring value investing and 7 specializing in growth stocks [9][11]. - Different fund companies offer various styles, allowing investors to choose funds that align with their investment preferences [12].

Group 1 - The focus has shifted towards offshore drilling, supply industry, and shipping, including tankers, containers, and dry bulk [1] - The fuel cell industry is being monitored as it is still in its early stages of development [1] Group 2 - The individual has extensive experience in navigating significant market events such as the dotcom bubble, the aftermath of the World Trade Center attacks, and the subprime crisis [2] - The individual has a background in auditing with PricewaterhouseCoopers before transitioning to day trading [2]

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Helix Energy Solutions reported a **$3.1 million net income** in Q1 2025, a significant turnaround from a **$26.3 million net loss** in Q1 2024 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were **$2.635 billion**, a slight increase from **$2.597 billion** at year-end 2024, with shareholders' equity growing to **$1.545 billion** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $369,987 | $368,030 | | Total current assets | $736,207 | $709,682 | | Property and equipment, net | $1,434,365 | $1,437,853 | | **Total assets** | **$2,635,023** | **$2,597,080** | | **Liabilities & Equity** | | | | Total current liabilities | $323,395 | $304,416 | | Long-term debt | $301,697 | $305,971 | | **Total liabilities** | **$1,089,758** | **$1,077,315** | | **Total shareholders' equity** | **$1,545,265** | **$1,519,765** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, net revenues decreased **6%** to **$278.1 million**, yet gross profit increased **41%** to **$27.5 million**, resulting in a net income of **$3.1 million** compared to a **$26.3 million net loss** in Q1 2024 Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenues | $278,064 | $296,211 | | Gross profit | $27,538 | $19,554 | | Income (loss) from operations | $8,172 | $(1,276) | | Losses related to convertible senior notes | $0 | $(20,922) | | **Net income (loss)** | **$3,072** | **$(26,287)** | | Diluted EPS | $0.02 | $(0.17) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income for Q1 2025 was **$30.3 million**, driven by **$3.1 million** net income and a **$27.2 million** foreign currency translation gain, contrasting with a **$33.0 million** comprehensive loss in Q1 2024 Comprehensive Income (Loss) (in thousands) | Component | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $3,072 | $(26,287) | | Foreign currency translation gain (loss) | $27,185 | $(6,683) | | **Comprehensive income (loss)** | **$30,257** | **$(32,970)** | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly decreased to **$16.4 million** in Q1 2025 from **$64.5 million** in Q1 2024, primarily due to higher recertification costs and working capital changes Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,442 | $64,484 | | Net cash used in investing activities | $(4,488) | $(3,242) | | Net cash used in financing activities | $(11,075) | $(69,304) | | **Net increase (decrease) in cash** | **$1,957** | **$(8,342)** | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes detail accounting policies, business segments, debt structure, and revenue recognition, highlighting **$311.1 million** in total debt and a **$1.4 billion** contract backlog as of March 31, 2025 - The company operates through four reportable business segments: Well Intervention, Robotics, Shallow Water Abandonment, and Production Facilities, providing services to oil and gas and renewable energy markets[22](index=22&type=chunk) - As of March 31, 2025, total long-term debt, including current maturities, was **$311.1 million**, primarily consisting of MARAD Debt and 9.75% Senior Notes due 2029[33](index=33&type=chunk) - As of March 31, 2025, the company had **$1.4 billion** in unsatisfied performance obligations (backlog), with **$592.1 million** expected to be recognized as revenue in the remainder of 2025[60](index=60&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2025 performance, highlighting a **6% revenue decline**, **41% gross profit increase**, and return to profitability [Executive Summary](index=30&type=section&id=Executive%20Summary) The company provides specialty services in a volatile market influenced by commodity prices and tariffs, supported by a strong **$1.4 billion** backlog as of March 31, 2025 - The current market environment is characterized by **volatile commodity prices**, influenced by OPEC+ production increases and U.S. tariffs, which is expected to create a more challenging spot market in 2025[101](index=101&type=chunk)[102](index=102&type=chunk)[104](index=104&type=chunk) - Consolidated backlog totaled approximately **$1.4 billion** as of March 31, 2025, with **$592 million** expected to be performed in the remainder of 2025[105](index=105&type=chunk) - The international wind market remains robust, but U.S. windfarm activity is expected to decline following the 2025 Wind Energy Ban memorandum[103](index=103&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Consolidated net revenues for Q1 2025 decreased **6%** to **$278.1 million**, while gross profit increased **41%** to **$27.5 million**, with varied segment performance and Adjusted EBITDA reaching **$52.0 million** Segment Revenue and Gross Profit (in thousands) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | Q1 2025 Gross Profit | Q1 2024 Gross Profit | | :--- | :--- | :--- | :--- | :--- | | Well Intervention | $198,374 | $211,300 | $24,322 | $23,144 | | Robotics | $51,042 | $50,309 | $8,016 | $8,183 | | Shallow Water Abandonment | $16,818 | $26,853 | $(11,582) | $(9,763) | | Production Facilities | $19,837 | $24,152 | $7,460 | $(1,306) | Vessel/Asset Utilization | Asset Category | Q1 2025 Utilization | Q1 2024 Utilization | | :--- | :--- | :--- | | Well Intervention vessels | 67% | 90% | | Robotics assets | 51% | 58% | | Chartered Robotics vessels | 67% | 74% | | Shallow Water Abandonment vessels | 30% | 41% | Non-GAAP Reconciliation: Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $3,072 | $(26,287) | | EBITDA | $52,070 | $26,061 | | **Adjusted EBITDA** | **$51,985** | **$46,990** | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company's liquidity was **$404.7 million**, a decrease from year-end 2024, with operating cash flow down to **$16.4 million** Financial Condition (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net working capital | $412,812 | $405,266 | | Long-term debt (excluding current) | $301,697 | $305,971 | | Liquidity | $404,673 | $429,586 | - The decrease in operating cash flow in Q1 2025 compared to Q1 2024 was primarily due to higher regulatory recertification spending (**$17.9 million** vs. **$9.6 million**) and lower working capital inflows[134](index=134&type=chunk) - Total material cash requirements, including debt, interest, and operating leases, amount to **$1.288 billion**, with **$212.2 million** due in the short-term (less than one year)[139](index=139&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from foreign currency exchange rates, interest rates, and volatile commodity prices, recording a **$27.2 million** foreign currency translation gain in Q1 2025 - The company is exposed to foreign currency exchange rate risk. For Q1 2025, it recorded a foreign currency translation gain of **$27.2 million** in other comprehensive income and a net foreign currency loss of **$0.4 million** in the statement of operations[147](index=147&type=chunk)[148](index=148&type=chunk) - Interest rate risk is managed by primarily borrowing at fixed rates. The company currently has no outstanding amounts under its variable-rate Amended ABL Facility[149](index=149&type=chunk) - The company faces commodity price risk related to oil and natural gas production in its Production Facilities business, with prices being volatile and unpredictable[150](index=150&type=chunk) [Controls and Procedures](index=41&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during Q1 2025 - Based on an evaluation as of March 31, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[151](index=151&type=chunk) - No changes occurred during Q1 2025 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[152](index=152&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings but does not currently expect them to have a material adverse impact on its financial statements - The company is involved in various legal proceedings but does not currently expect them to have a material adverse impact on its financial statements[82](index=82&type=chunk)[154](index=154&type=chunk) [Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There were no material changes in the company's risk factors during the period ended March 31, 2025[155](index=155&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q1 2025, the company acquired **779,519 shares** at an average price of **$9.32** per share for tax obligations, with **$158.4 million** remaining authorized for repurchase Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid | Value Remaining in Program | | :--- | :--- | :--- | :--- | | Jan 2025 | 394,215 | $9.32 | $158,392,000 | | Feb 2025 | 385,304 | $9.32 | $158,392,000 | | Mar 2025 | 0 | - | $158,392,000 | | **Total** | **779,519** | **$9.32** | | - The shares purchased were forfeited to satisfy tax obligations from share-based awards and were not part of the publicly announced repurchase plan[157](index=157&type=chunk) [Other Information](index=42&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, no director or officer of Helix adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025[161](index=161&type=chunk) [Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amended articles of incorporation, bylaws, an amendment to a strategic alliance agreement, and certifications by the CEO and CFO

Financial Data and Key Metrics Changes - Revenues for Q1 2025 were reported at $278 million, with a gross profit of $28 million and a net income of $3 million [10] - Adjusted EBITDA was $52 million for the quarter, with positive operating cash flow of $16 million, resulting in free cash flow of $12 million [10] - Cash and cash equivalents stood at $370 million, with total liquidity of $405 million, indicating a strong balance sheet [11][29] Business Line Data and Key Metrics Changes - The well intervention segment showed strong utilization in West Africa, the Gulf of America, and Brazil, while North Sea vessels faced lower utilization due to seasonal factors [21][22] - Robotics had a strong quarter, operating six vessels with good seasonal vessel utilization across trenching and ROV support projects [25] - The shallow water abandonment business is expected to see improved utilization in Q2 and Q3 as seasonal activity levels increase [27] Market Data and Key Metrics Changes - The company reported a backlog of approximately $1.4 billion at the end of the quarter [13] - The UK North Sea market is facing significant challenges due to regulatory issues, low oil prices, and M&A activity, leading to a pause in operator work [31][55] - The overall market environment is described as dynamic and uncertain, with oil prices dropping to the low $60s due to tariff hikes and increased OPEC production [12][32] Company Strategy and Development Direction - The company is taking steps to lower costs by stacking several vessels and adjusting capital spending in response to market conditions [14] - Helix aims to maintain resilience in its operations, focusing on long-term contracts and the value proposition provided to customers [15][54] - The company is open to M&A opportunities but is prioritizing share repurchases in the current market environment [70] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertainty in the sector and the impact of geopolitical factors on the energy market [31][32] - The outlook for 2025 has been adjusted, with revenue expectations set at approximately $1.3 billion, reflecting the challenges in the North Sea market [33][34] - The company anticipates generating $100 million to $160 million in free cash flow for 2025 despite current market challenges [13][34] Other Important Information - The company has a strong balance sheet with negative net debt and no significant maturities until 2029 [13][29] - Seasonal factors historically impact quarterly results, with expectations for a more active summer and slower winter months [36] Q&A Session Summary Question: Confirmation of revenue change in well intervention - The revenue change in well intervention is primarily attributed to the North Sea market [63][64] Question: Long-term outlook for North Sea market - There are large P&A project tenders expected to start in 2026, but the timeline may shift [66] Question: Impact of market uncertainty on free cash flow - The focus is on share repurchases rather than M&A due to market uncertainty [70] Question: Breakdown of lowered EBITDA guidance - The primary driver for the guidance change is the North Sea market, particularly the stacking of the Seawell [72][75] Question: Outlook for UK North Sea operations - The work has been paused due to various factors, but significant tenders are still expected [84] Question: Pricing pressure in the U.S. Gulf market - Currently, there is no pricing pressure observed in the U.S. Gulf heavy well intervention market [105]

Financial Data and Key Metrics Changes - Revenues for Q1 2025 were $278 million, with a gross profit of $28 million and a net income of $3 million. Adjusted EBITDA was $52 million, and free cash flow was $12 million [6][8][18] - The company reported strong cash and liquidity with cash and cash equivalents of $370 million and total liquidity of $405 million [6][18] Business Line Data and Key Metrics Changes - The Well Intervention segment saw strong utilization in West Africa, the Gulf of America, and Brazil, while North Sea vessels experienced lower utilization due to seasonal factors [11][12] - Robotics had a strong quarter with high operational standards, working on trenching, ROV support, and site survey projects globally [15][16] - The shallow water abandonment business is expected to improve in Q2 and Q3 as seasonal activity levels increase [17] Market Data and Key Metrics Changes - The company faced challenges due to geopolitical factors, including tariff hikes and OPEC production increases, leading to oil prices dropping to the low $60s [7][20] - The UK North Sea market is experiencing a downturn due to regulatory issues, low oil prices, and M&A activity, impacting the company's outlook [20][36] Company Strategy and Development Direction - The company is focusing on cost reduction measures, including stacking several vessels and adjusting capital spending in response to market conditions [8][30] - Long-term demand for services remains strong, with multi-year contracts in place providing resilience against near-term volatility [35][39] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the current dynamic and uncertain market environment but expressed confidence in the company's ability to navigate these challenges [7][9] - The outlook for 2025 has been adjusted, with expected revenues of approximately $1.3 billion, reflecting a decrease due to the stacking of the Seawell and overall negative market conditions [21][37] Other Important Information - The company has a backlog of approximately $1.4 billion and a strong balance sheet with negative net debt [8][18] - The capital expenditure forecast for 2025 is between $65 million and $75 million, primarily for regulatory maintenance and fleet renewal [22][31] Q&A Session Summary Question: Confirmation on revenue change in Well Intervention - The revenue change in Well Intervention is primarily attributed to the North Sea market [42][43] Question: Long-term view on North Sea market - There are large P&A project tenders expected to start in 2026, with ongoing engineering and tendering processes [43] Question: Free cash flow options - The priority is on share repurchase due to market uncertainty, with M&A opportunities being more challenging to close [45] Question: Breakdown of lowered EBITDA guidance - The primary driver for the guidance reduction is the North Sea market, particularly the stacking of the Seawell [50][52] Question: Outlook for North Sea operations - The work has been paused rather than lost, with significant tenders expected in the future [59] Question: Opportunities for North Sea vessels in other regions - Redeployment of vessels like the Seawell would require capital upgrades due to depth limitations [72] Question: Pricing pressure in the US Gulf market - Currently, there is no significant pricing pressure in the US Gulf market, with stable pricing observed [75][76] Question: Impact of UK market on robotics and shallow water abandonment - The negative macro backdrop has slightly impacted robotics and shallow water abandonment, but the North Sea remains the primary concern [81][82]