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Helix Energy Solutions(HLX) - 2025 Q2 - Quarterly Results

Executive Summary Q2 2025 Financial Highlights 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 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 Q40004 - Macro and geopolitical volatility created significant market uncertainties, leading customers to scale back spending and push work into 2026 and beyond4 - 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 delayed4 - The company repurchased approximately 4.6 million shares for approximately $30.0 million during the second quarter 2025416 - 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 segment4 Segment Performance Analysis Well Intervention 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 Sea7 - 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%78 - 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 Brazil8 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 - The segment launched its third IROV boulder grab, generating 190 days of utilization in Q2 2025, significantly up from 21 days in Q1 20259 - 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 margins1015 Shallow Water Abandonment 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 - The Epic Hedron heavy lift barge had 38% utilization in Q2 2025, compared to being idle in Q1 202511 - 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 utilization12 Production Facilities 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 in13 - 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 YoY14 Financial Review Selling, General and Administrative Expenses 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 year17 Other Income and Expense 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 positions18 Cash Flow and Liquidity 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 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 outflows19 - 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 202419 Capital Expenditures 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 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 flows21 Financial Condition and Liquidity 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 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 202516 Company Overview About Helix 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, Texas23 - The company provides specialty services to the offshore energy industry, focusing on well intervention, robotics, and decommissioning operations23 - 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 developments23 Non-GAAP Financial Measures Definitions and Rationale 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 Debt24 - EBITDA is defined as earnings before income taxes, net interest expense, net other income/expense, and depreciation/amortization, with non-cash impairment losses added back24 - 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 provisions24 - 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 cash24 - 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 measures25 Forward-Looking Statements Risks and Uncertainties 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 implied26 - 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 contracts26 - Other factors include actions by governmental/regulatory authorities, operating hazards and delays, effectiveness of sustainability initiatives, human capital management issues, and geologic risks26 Consolidated Financial Statements Comparative Condensed Consolidated Statements of Operations 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 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 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 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 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 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) |