Q2 2025 Performance Overview Management Commentary The CEO highlighted strong Q2 2025 results, record margins, and significant new orders driven by strategic execution - Achieved the best second quarter performance ever with an Adjusted EBITDA margin of 22%, marking the third consecutive quarter of record-high margins4 - The company's strategy focuses on organic and inorganic investments, structural cost savings (Drive25), and capitalizing on its diverse geographic footprint in key offshore and international growth markets5 - Recorded the second-highest new order awards in the company's history, reflecting strong customer trust and momentum in regional activity7 - Remains committed to returning approximately one-third of adjusted free cash flow, or about $40 million, to shareholders annually48 Second Quarter 2025 Highlights The company exceeded revenue and Adjusted EBITDA guidance, achieving a record 22% margin and a $2.3 billion order backlog Q2 2025 Financial Performance Summary | Metric | Value | Note | | :--- | :--- | :--- | | Revenue | $423 million | Exceeded guidance of $410 million | | Net Income | $18 million | 4% margin | | Adjusted EBITDA | $94 million | Exceeded guidance of $90 million | | Adjusted EBITDA Margin | 22% | Third consecutive record high | | Cash Flow from Operations | $48 million | 11% of revenues | | Adjusted Free Cash Flow | $36 million | 9% margin | | Total Order Backlog | $2.3 billion | Includes $595 million in new awards | Full-Year 2025 Guidance The company reaffirmed its full-year 2025 financial guidance for revenue, Adjusted EBITDA, and adjusted free cash flow Reaffirmed Full-Year 2025 Guidance | Metric | Guidance | | :--- | :--- | | Revenue | circa $1.7 billion | | Adjusted EBITDA | at least $350 million | | Adjusted Free Cash Flow | ~$110 million (~7% of revenues) | Operational and Strategic Developments Notable Awards and Achievements The company introduced three industry-first technologies and secured significant multi-year contracts across key global regions - Technological Innovations (Industry Firsts): - BRUTE® Armor Packer: A new technology to enhance deepwater well integrity, already deployed by two super majors in the Gulf of America - Remote Clamp Installation System (RCIS): A fully automated, hands-free system developed with a super major that improves safety and reduces installation time by ~50% - Remote Five-Plug Cementing Operation: The world's first fully remote operation using Generation-X™ and SkyHook™ technology, enhancing safety and expanding cementing services in the Middle East1117 - Key Contract Awards: - Guyana: A multi-year, multi-rig contract with revenues exceeding $120 million for completion and TRS services - Mexico: A three-year contract with Woodside Energy for the country's first deepwater oil production facility - Brazil: Over $50 million in new contracts for production optimization and well decommissioning - MENA: A seven-year production contract for approximately $100 million and a six-month extension worth approximately $60 million121315 Financial Condition and Shareholder Returns Free Cash Flow Analysis The company focuses on margin expansion and capital efficiency to drive free cash flow, generating $36 million in adjusted FCF in Q2 2025 - The company has redefined its adjusted free cash flow measure to align with market participants and peers, adjusting for one-time items to provide a clearer view of 'steady state' performance1819 Free Cash Flow Reconciliation (in thousands) | | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net cash provided by operating activities | $48,413 | $89,922 | | Less: Capital expenditures | $(21,204) | $(54,316) | | Free cash flow | $27,209 | $35,606 | | Add: Merger and integration expense | $2,267 | $4,007 | | Add: Severance and other expense | $6,711 | $12,793 | | Adjusted free cash flow | $36,187 | $52,406 | | Adjusted free cash flow margin | 9% | 6% | Share Repurchases and Capital Structure The company repurchased $5 million in shares, maintained total liquidity of $343 million, and enhanced financial flexibility with a new credit facility - During Q2 2025, the company repurchased approximately 637,000 shares for a total cost of about $5 million26 - As of June 30, 2025, total liquidity stood at $343 million, including $136 million available under its revolving credit facility; total long-term borrowings were $121 million24 - On July 23, 2025, the company entered into a new senior secured revolving credit facility, increasing available commitments to up to $400 million27 Segment Performance Analysis (Q2 2025 vs Q1 2025) North and Latin America (NLA) NLA segment revenue grew 6% sequentially to $143 million, with the EBITDA margin expanding to 24% due to higher-margin project activity NLA Segment Performance (QoQ) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Revenue | $143 million | $134 million | +6% | | Segment EBITDA | $34 million | $30 million | +12% | | Segment EBITDA Margin | 24% | 23% | +1 ppt | Europe and Sub-Saharan Africa (ESSA) ESSA segment revenue surged 18% to $132 million, driving a significant EBITDA margin improvement to 30% from a favorable product mix ESSA Segment Performance (QoQ) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Revenue | $132 million | $112 million | +18% | | Segment EBITDA | $40 million | $29 million | +36% | | Segment EBITDA Margin | 30% | 26% | +4 ppts | Middle East and North Africa (MENA) MENA segment revenue decreased slightly by 3% to $91 million while maintaining a strong EBITDA margin of 36% MENA Segment Performance (QoQ) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Revenue | $91 million | $94 million | -3% | | Segment EBITDA | $33 million | $34 million | -5% | | Segment EBITDA Margin | 36% | 37% | -1 ppt | Asia Pacific (APAC) APAC segment revenue increased 12% to $57 million, with the EBITDA margin expanding to 26% due to higher activity and favorable mix APAC Segment Performance (QoQ) | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Revenue | $57 million | $51 million | +12% | | Segment EBITDA | $15 million | $11 million | +36% | | Segment EBITDA Margin | 26% | 21% | +5 ppts | Financial Statements and Reconciliations Condensed Consolidated Statements of Operations The company reported Q2 2025 total revenue of $422.7 million and net income of $18.0 million Statement of Operations Summary (in thousands) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenue | $422,740 | $469,642 | | Operating income | $32,566 | $27,697 | | Net income | $18,003 | $15,286 | | Diluted EPS | $0.16 | $0.13 | Condensed Consolidated Balance Sheets As of June 30, 2025, the company reported total assets of $2.34 billion and total stockholders' equity of $1.52 billion Balance Sheet Summary (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $206,831 | $183,036 | | Total current assets | $1,002,171 | $964,046 | | Total assets | $2,338,222 | $2,333,541 | | Total current liabilities | $468,370 | $484,430 | | Total liabilities | $818,234 | $842,057 | | Total stockholders' equity | $1,519,988 | $1,491,484 | Condensed Consolidated Statements of Cash Flows For the first half of 2025, net cash from operations was $89.9 million, ending the period with a cash balance of $207.5 million Statement of Cash Flows Summary (in thousands) | | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $89,922 | $16,765 | | Net cash used in investing activities | $(49,316) | $(96,665) | | Net cash (used in) provided by financing activities | $(23,878) | $64,878 | | Net increase (decrease) in cash | $22,823 | $(17,713) | | Cash at end of period | $207,486 | $135,453 | Non-GAAP Reconciliations This section provides detailed reconciliations of non-GAAP measures, including Adjusted EBITDA and Adjusted Free Cash Flow, to their GAAP equivalents Adjusted EBITDA Reconciliation - Q2 2025 (in thousands) | | Three Months Ended June 30, 2025 | | :--- | :--- | | Net income | $18,003 | | Income tax expense | $13,959 | | Depreciation and amortization expense | $46,716 | | Severance and other expense | $6,711 | | Merger and integration expense | $2,267 | | Other income, net | $(280) | | Stock-based compensation expense | $7,314 | | Foreign exchange (gain) loss | $(4,518) | | Interest and finance expense, net | $4,279 | | Adjusted EBITDA | $94,451 |
Expro(XPRO) - 2025 Q2 - Quarterly Results