Dril-Quip(US:DRQ)2025-08-06 20:40Financial Performance - For the six months ended June 30, 2025, Innovex's revenue was approximately $222.5 million, with net income at about $13.3 million, representing 6% of revenue[113]. - Revenues for the three months ended June 30, 2025, were $224.2 million, a 72% increase from $130.3 million in the same period of 2024[137]. - Net income for the three months ended June 30, 2025, was $15.3 million, a 61% increase from $9.5 million in the same period of 2024[150]. - Net income for the six months ended June 30, 2025, was $30.1 million, an increase of $4.1 million from the same period in 2024[162]. - Free Cash Flow for the six months ended June 30, 2025, was $75.9 million, an increase of 144% compared to $31.1 million in 2024[186]. - Adjusted EBITDA for the six months ended June 30, 2025, reached $92.6 million, up 49% from $62.0 million in the same period of 2024[182]. - Adjusted EBITDA for the six months ended June 30, 2025, was approximately 20% of revenue, down from 24% in the same period of 2024[113]. - Adjusted EBITDA Margin decreased to 20% for the six months ended June 30, 2025, from 24% in the same period of 2024[180]. - ROCE for the twelve months ended June 30, 2025, was 13%, down from 17% in 2024[184]. Market and Revenue Breakdown - The U.S. and Canadian onshore market accounted for approximately 52% of total revenue, while international and offshore markets contributed 48%[109]. - The company’s NAM market revenue for the six months ended June 30, 2025, was $240.5 million, an increase of $80.4 million from the same period in 2024[151]. - The company anticipates global upstream energy spending to remain flat through 2027, with approximately 32,000 wells expected to be drilled annually[123]. Costs and Expenses - Cost of revenues for the three months ended June 30, 2025, was $152.5 million, an 81% increase from $84.3 million in the same period of 2024[137]. - Selling, general and administrative expenses for the three months ended June 30, 2025, were $28.8 million, a 55% increase from $18.6 million in the same period of 2024[141]. - Acquisition and integration costs for the three months ended June 30, 2025, were $5.1 million, a 16% increase from $4.4 million in the same period of 2024[145]. - Total depreciation and amortization expense for the six months ended June 30, 2025, was $29.9 million, an increase of 163% from $11.4 million in the same period of 2024[155]. - Income tax expense for the three months ended June 30, 2025, was $6.9 million, a 59% increase from $4.3 million in the same period of 2024[149]. - Income tax expense for the six months ended June 30, 2025, was $13.5 million, an increase of $4.1 million from the same period in 2024[161]. - Long-lived asset impairment expense for the six months ended June 30, 2025, was $3.4 million, a decrease of $0.1 million from the same period in 2024[156]. - Acquisition and integration costs for the six months ended June 30, 2025, totaled $9.4 million, an 81% increase from $5.2 million in 2024[181]. Cash Flow and Capital Management - Net cash provided by operating activities for the six months ended June 30, 2025, was $90.3 million, an increase of 155% from the same period in 2024[167]. - Net cash used in investing activities for the six months ended June 30, 2025, was $86.3 million, an increase of 2503% from the same period in 2024[168]. - Total indebtedness was $40.7 million as of June 30, 2025[163]. - As of June 30, 2025, cash and restricted cash amounted to $68.8 million, with availability under the Revolver of $110.4 million[163]. - The effective interest rate on the Revolver for the six months ended June 30, 2025, was approximately 6.94%[165]. - Interest expense decreased by 6% to $1.3 million for the six months ended June 30, 2025, compared to $1.3 million in 2024[180]. - Innovex's capital expenditures for the six months ended June 30, 2025, were only 3% of revenue, indicating efficient capital allocation[113]. Acquisitions and Mergers - The company completed the acquisition of Citadel Casing Solutions for $69.7 million in cash, enhancing its portfolio of downhole technologies[118]. - Innovex's recent acquisition of SCF Machining Corporation for $17.7 million aims to strengthen its low-cost supply chain capabilities[117]. - The company has a disciplined acquisition strategy, having identified numerous high-quality acquisition targets to enhance growth[111]. - Innovex's recent merger with Legacy Innovex was completed on September 6, 2024, resulting in a new company structure and the ticker symbol "INVX" on the NYSE[115]. - The company acquired the remaining 80% equity interest in DWS on November 29, 2024, and has fully consolidated DWS's earnings thereafter[134].