Workflow
Expro(XPRO) - 2025 Q1 - Quarterly Report

markdown [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited condensed consolidated financial statements for Q1 2025 and 2024 are presented, covering operations, balance sheets, cash flows, and related notes Condensed Consolidated Statements of Operations (Unaudited) | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total revenue** | $390,872 | $383,489 | | **Operating income** | $10,323 | $8,420 | | **Net income (loss)** | $13,948 | $(2,677) | | **Basic EPS** | $0.12 | $(0.02) | | **Diluted EPS** | $0.12 | $(0.02) | Condensed Consolidated Balance Sheet Highlights (Unaudited) | | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Total current assets** | $948,605 | $964,046 | | **Total assets** | $2,293,086 | $2,333,541 | | **Total current liabilities** | $450,643 | $484,430 | | **Total liabilities** | $793,341 | $842,057 | | **Total stockholders' equity** | $1,499,745 | $1,491,484 | Condensed Consolidated Statements of Cash Flows (Unaudited) | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $41,509 | $29,938 | | **Net cash used in investing activities** | $(33,112) | $(30,739) | | **Net cash (used in) provided by financing activities** | $(15,104) | $14,891 | - The company acquired Coretrax on May 15, 2024, for an estimated fair value consideration of **$186.7 million**, including cash, equity, and contingent consideration. This acquisition is intended to expand the company's Well Construction and Well Intervention & Integrity solutions[43](index=43&type=chunk)[44](index=44&type=chunk) - During Q1 2025, the company repurchased approximately **1.0 million shares** for about **$10.0 million** under its extended stock repurchase program[24](index=24&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2025 financial condition and results, highlighting sequential revenue decline, year-over-year net income improvement, liquidity, capital, and Adjusted EBITDA reconciliation [Overview of Business and Market Conditions](index=29&type=section&id=Overview%20of%20Business%20and%20Market%20Conditions) Expro operates as a global energy services provider, anticipating modest growth despite near-term volatility, driven by resilient global demand and continued upstream investment - Expro's business is organized into four main service lines: Well Construction, Well Flow Management, Subsea Well Access, and Well Intervention and Integrity[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk) - The market faces near-term uncertainty from tariffs and OPEC+ production announcements, causing commodity price volatility. Brent crude averaged **$73/bbl** in March 2025[114](index=114&type=chunk)[115](index=115&type=chunk)[119](index=119&type=chunk) - The U.S. Energy Information Administration (EIA) predicts global liquids fuels demand will average **103.6 million b/d** in 2025, an increase of **0.9 million b/d** over 2024[120](index=120&type=chunk) - The company anticipates modest growth, assuming oil prices remain above a profitable level for operators (**$60-$65/bbl**), supported by energy security needs and continued investment in international and offshore activities[126](index=126&type=chunk)[127](index=127&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) Q1 2025 revenue was $390.9 million with $13.9 million net income, showing sequential declines due to seasonality but year-over-year growth and a shift from net loss to income Q1 2025 vs. Q4 2024 (Sequential) Performance | Metric | Q1 2025 (in millions) | Q4 2024 (in millions) | Change (in millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $390.9M | $436.8M | $(46.0)M | (10.5)% | | Net Income | $13.9M | $23.0M | $(9.1)M | (39.4)% | | Adjusted EBITDA | $76.2M | $100.4M | $(24.1)M | (24.0)% | Q1 2025 vs. Q1 2024 (Year-over-Year) Performance | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change (in millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $390.9M | $383.5M | $7.4M | 2.0% | | Net Income (Loss) | $13.9M | $(2.7)M | $16.6M | N/A | | Adjusted EBITDA | $76.2M | $67.5M | $8.7M | 12.9% | - MENA segment revenue increased by **$22.1 million**, or **30.9%**, year-over-year, driven by the Coretrax acquisition and increased well flow management activity in Algeria, the UAE, and Iraq[156](index=156&type=chunk) - ESSA segment EBITDA margin improved to **26.0%** from **20.7%** year-over-year, despite a **7.7%** revenue decrease, due to a more favorable mix of higher-margin services[154](index=154&type=chunk)[155](index=155&type=chunk) [Non-GAAP Financial Measures](index=36&type=section&id=Non-GAAP%20Financial%20Measures) The company uses Adjusted EBITDA and Adjusted EBITDA margin as key non-GAAP metrics, with Q1 2025 Adjusted EBITDA at $76.2 million and a 20% margin - Adjusted EBITDA is defined as net income (loss) adjusted for items including income tax, depreciation & amortization, severance, stock-based compensation, merger & integration expenses, interest, and foreign exchange gains/losses[135](index=135&type=chunk) Adjusted EBITDA Reconciliation Summary (in thousands) | | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Net income (loss)** | $13,948 | $(2,677) | | **Adjustments** | $62,280 | $70,137 | | **Adjusted EBITDA** | $76,228 | $67,460 | | **Adjusted EBITDA margin** | 20% | 18% | [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, Expro maintained a strong liquidity position of $315.8 million, sufficient for operations, with capital used for expenditures, acquisitions, and stock repurchases - Total available liquidity was **$315.8 million** as of March 31, 2025[162](index=162&type=chunk) - The company plans to spend between **$90.0 million and $100.0 million** on capital expenditures for the remainder of 2025[163](index=163&type=chunk) - In Q1 2025, the company used **$10.0 million** to repurchase **1.0 million shares** of its common stock[164](index=164&type=chunk) - Net cash from operating activities increased to **$41.5 million** in Q1 2025 from **$29.9 million** in Q1 2024, driven by higher Adjusted EBITDA and favorable working capital movements[169](index=169&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure has not materially changed since its Annual Report for the fiscal year ended December 31, 2024 - There has been no material change in the company's market risk exposure since December 31, 2024[178](index=178&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during Q1 2025 - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2025[179](index=179&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[180](index=180&type=chunk) [PART II. OTHER INFORMATION](index=47&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company had no material accruals for loss contingencies from legal proceedings as of March 31, 2025, as detailed in Note 17 of the financial statements - The company had no material accruals for loss contingencies from legal proceedings as of March 31, 2025[92](index=92&type=chunk)[182](index=182&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) This section directs readers to the company's Annual Report for a comprehensive discussion of risk factors that could materially affect business and financial results - The report refers readers to the 'Risk Factors' section in the company's Annual Report for a comprehensive discussion of potential risks[183](index=183&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details Q1 2025 stock repurchase activities, including 993,761 shares bought back in March at $10.08, with $65.8 million remaining for future repurchases Stock Repurchases in Q1 2025 | Period | Total Shares Purchased (shares) | Average Price Paid per Share ($) | | :--- | :--- | :--- | | Jan 2025 | - | - | | Feb 2025 | - | - | | Mar 2025 | 993,761 | $10.08 | - As of March 31, 2025, approximately **$65.8 million** remained authorized for repurchases under the company's stock buyback program[186](index=186&type=chunk) [Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q1 2025 - No director or officer of the Company adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during Q1 2025[187](index=187&type=chunk) [Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with Form 10-Q, including CEO and CFO certifications and iXBRL formatted financial statements - The Exhibit Index lists required filings, including CEO and CFO certifications pursuant to Rule 13a-14(a) and Section 1350, and iXBRL data files[188](index=188&type=chunk)[190](index=190&type=chunk)