Helix Energy Solutions(HLX) - 2025 Q1 - Quarterly Results

Financial and Operational Highlights Helix reported a net income of $3.1 million in Q1 2025, a decrease from the prior quarter but a recovery from the prior year, impacted by seasonal slowdowns and market uncertainty Q1 2025 Financial Summary (in thousands) | | 3/31/2025 | 3/31/2024 | 12/31/2024 | | :--- | :--- | :--- | :--- | | Revenues | $278,064 | $296,211 | $355,133 | | Gross Profit | $27,538 | $19,554 | $58,859 | | Net Income (loss) | $3,072 | $(26,287) | $20,121 | | Diluted EPS | $0.02 | $(0.17) | $0.13 | | Adjusted EBITDA | $51,985 | $46,990 | $71,641 | | Free Cash Flow | $11,954 | $61,242 | $65,454 | - The first quarter was impacted by a seasonal slowdown in the North Sea and Gulf of America, planned regulatory dockings for Robotics fleet vessels, and the mobilization of the Q7000 for a project in Brazil[4] - Market uncertainty has been created by OPEC+ production increases, U.S. tariffs, and challenges in the North Sea oil and gas market, causing some operators to pause work[4] - In response to the new market environment, Helix is adjusting operations to align with decreased activity but expects to generate meaningful free cash flow in 2025 due to a strong balance sheet and contracted backlog[4] Segment Performance Analysis Q1 2025 segment performance was mixed, with Well Intervention and Robotics revenues declining QoQ due to seasonality, while Production Facilities increased Segment Revenues and Operating Income (in thousands) | | Three Months Ended 3/31/2025 | Three Months Ended 3/31/2024 | Three Months Ended 12/31/2024 | | :--- | :--- | :--- | :--- | | Revenues: | | | | | Well Intervention | $198,374 | $211,300 | $226,188 | | Robotics | $51,042 | $50,309 | $81,594 | | Shallow Water Abandonment | $16,818 | $26,853 | $37,690 | | Production Facilities | $19,837 | $24,152 | $18,462 | | Income (Loss) from Operations: | | | | | Well Intervention | $19,970 | $18,679 | $29,118 | | Robotics | $5,347 | $5,450 | $19,335 | | Shallow Water Abandonment | $(13,441) | $(12,428) | $(5,422) | | Production Facilities | $6,944 | $(1,543) | $5,498 | Well Intervention Well Intervention revenue decreased QoQ and YoY due to lower utilization and vessel docking, despite a YoY increase in operating income - QoQ revenue decreased by $27.8 million (12%) due to seasonally lower utilization in the North Sea and docking days for the Q7000, partially offset by higher rates in Brazil for the Siem Helix 1 and Siem Helix 2[7] - YoY revenue decreased by $12.9 million (6%) due to lower utilization on the Seawell (idle) and Q7000, offset by higher rates on the Q5000 and Siem Helix vessels, while operating income increased by $1.3 million YoY[8] Robotics Robotics revenue significantly decreased QoQ due to seasonal declines in vessel utilization, while YoY revenue remained relatively flat - QoQ revenue decreased by $30.6 million (37%) due to seasonally lower vessel days and utilization, with chartered vessel activity falling to 244 days from 508 days in the prior quarter[9] - YoY revenue increased slightly by $0.7 million (1%) due to a rise in trenching activities (225 total days vs 85 days in Q1 2024), partially offset by lower overall ROV and vessel utilization[10] Shallow Water Abandonment Shallow Water Abandonment revenue fell significantly QoQ and YoY, widening operating losses due to lower utilization - QoQ revenue decreased by $20.9 million (55%) reflecting seasonally lower vessel utilization (31% vs 65% in Q4 2024) and P&A/CT systems activity, with the operating loss increasing by $8.0 million[11] - YoY revenue decreased by $10.0 million (37%) due to lower system and vessel utilization, as the Epic Hedron heavy lift barge was idle in both Q1 2025 and Q1 2024[12] Production Facilities Production Facilities revenue increased QoQ from Droshky wells, while YoY revenue decreased, but operating income improved - QoQ revenue increased by $1.4 million (7%) due to higher oil and gas production from the Droshky wells, which had a full quarter of production[13] - YoY revenue decreased by $4.3 million (18%) due to lower production and prices, as production did not include the shut-in Thunder Hawk wells, however, operating income increased by $8.5 million due to well workover costs incurred in Q1 2024[14] Other Financial Details SG&A expenses decreased in Q1 2025 due to lower compensation, with other expenses minimal from foreign currency losses - SG&A expenses were $19.4 million (7.0% of revenue) in Q1 2025, down from $27.6 million (7.8% of revenue) in Q4 2024, mainly due to lower compensation costs[15] - Other expense, net was $0.4 million in Q1 2025, primarily due to net foreign currency losses from the appreciation of the British pound on U.S. dollar cash balances in U.K. subsidiaries[16] Cash Flow and Financial Condition Operating cash flow significantly decreased in Q1 2025 due to lower earnings and higher costs, despite strong liquidity and negative net debt - Operating cash flows were $16.4 million in Q1 2025, a decrease from $78.0 million in Q4 2024 and $64.5 million in Q1 2024, primarily due to lower earnings and higher regulatory certification costs ($17.9 million in Q1 2025)[17] - Free Cash Flow was $12.0 million in Q1 2025, down from $65.5 million in Q4 2024 and $61.2 million in Q1 2024, mainly due to lower operating cash flows[19] - At March 31, 2025, the company had cash and cash equivalents of $370.0 million, total liquidity of $404.7 million, and negative Net Debt of $58.9 million[19] Consolidated Financial Statements This section provides unaudited consolidated financial statements, including Statements of Operations, Balance Sheets, and Cash Flows Consolidated Statements of Operations Q1 2025 saw a net income of $3.1 million on $278.1 million in revenues, a significant improvement from the prior year's net loss Consolidated Statements of Operations (in thousands) | | Three Months Ended Mar. 31, 2025 | Three Months Ended Mar. 31, 2024 | | :--- | :--- | :--- | | Net revenues | $278,064 | $296,211 | | Gross profit | $27,538 | $19,554 | | Income (loss) from operations | $8,172 | $(1,276) | | Net income (loss) | $3,072 | $(26,287) | | Diluted EPS | $0.02 | $(0.17) | Consolidated Balance Sheets As of March 31, 2025, total assets increased slightly to $2.635 billion, with stable cash and growing shareholders' equity Consolidated Balance Sheet Highlights (in thousands) | | Mar. 31, 2025 | Dec. 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $369,987 | $368,030 | | Total Current Assets | $736,207 | $709,682 | | Total Assets | $2,635,023 | $2,597,080 | | Total Current Liabilities | $323,395 | $304,416 | | Long-term debt | $301,697 | $305,971 | | Total Liabilities | $1,089,758 | $1,077,315 | | Shareholders' equity | $1,545,265 | $1,519,765 | Consolidated Statements of Cash Flows Net cash provided by operating activities significantly decreased to $16.4 million in Q1 2025, resulting in a net increase in cash of $2.0 million Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended 3/31/2025 | Three Months Ended 3/31/2024 | | :--- | :--- | :--- | | 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) | Non-GAAP Financial Measures Reconciliation This section reconciles non-GAAP measures like Adjusted EBITDA, Free Cash Flow, and Net Debt to GAAP for performance evaluation - Management uses non-GAAP measures such as EBITDA, Adjusted EBITDA, Free Cash Flow, and Net Debt to monitor performance, compare results with industry peers, and make strategic financial decisions[23] Non-GAAP Reconciliations (in thousands) | | 3/31/2025 | 3/31/2024 | 12/31/2024 | | :--- | :--- | :--- | :--- | | Net income (loss) | $3,072 | $(26,287) | $20,121 | | Adjusted EBITDA | $51,985 | $46,990 | $71,641 | | Cash flows from operating activities | $16,442 | $64,484 | $77,977 | | Free Cash Flow | $11,954 | $61,242 | $65,454 | | Net Debt | $(58,878) | $(5,685) | $(52,873) |