Financial Performance - For the nine months ended September 30, 2025, Innovex reported revenues of $704.6 million, a 72% increase from $410.1 million in the same period of 2024[121] - The net income for the nine months ended September 30, 2025, was $69.3 million, down 36% from $108.5 million in the prior year[121] - Innovex's income from operations for the nine months ended September 30, 2025, was $106.8 million, compared to $22.2 million in the same period of 2024, representing an increase of 382%[121] - Innovex's total costs and expenses for the nine months ended September 30, 2025, were $597.8 million, a 54% increase from $388.0 million in the same period of 2024[121] - Total revenue for the nine months ended September 30, 2025 was $704.6 million, an increase of $294.4 million or 72.2% from the same period in 2024, driven by acquisitions and increased market share[134] - Cost of revenues for the nine months ended September 30, 2025 was $480.5 million, an increase of $218.1 million or 83.1% from the same period in 2024, primarily due to increased personnel expenses and product costs[135] - Selling, general and administrative expenses for the nine months ended September 30, 2025 were $96.8 million, an increase of $18.9 million or 24.3% from the same period in 2024, driven by higher salaries, IT, and R&D costs[136] - Net income for the nine months ended September 30, 2025 was $69.3 million, a decrease of $39.2 million or 36.1% from the same period in 2024, impacted by prior gains on bargain purchases[145] - Adjusted EBITDA for the nine months ended September 30, 2025, was $136.2 million, an increase of $46.8 million or 52% from $89.4 million in the same period of 2024[166] Market Segmentation - The North American market accounted for approximately 53% of total revenue, while international and offshore markets contributed 47%[109] - Innovex's international and offshore market revenue for the three months ended September 30, 2025, was $108.1 million, an increase of 102% from the previous year[123] - The company aims to increase revenue from international and offshore markets, which are less cyclical compared to the North American market[109] Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2025 was $138.7 million, an increase of $81.6 million or 143% from the same period in 2024[150] - Net cash used in investing activities for the nine months ended September 30, 2025 was $8.8 million, a decrease of $159.2 million from the previous year, primarily due to acquisitions[151] - Free Cash Flow for the nine months ended September 30, 2025 was $112.5 million, an increase of $61.3 million (120%) from the same period in 2024[170] - The increase in Free Cash Flow indicates improved operational efficiency and cash generation capabilities[170] - The substantial rise in capital expenditures may suggest ongoing investments in growth initiatives[170] Capital Expenditures and Costs - Capital expenditures for the nine months ended September 30, 2025, accounted for 4% of revenue, compared to 1% in the same period of 2024[113] - The company reported a significant increase in depreciation and amortization expenses, which rose by 136% to $45.3 million for the nine months ended September 30, 2025[121] - Capital expenditures rose significantly to $26.2 million, an increase of $20.2 million (339%) from $6.0 million in 2024[170] Acquisitions and Integration - The company acquired Citadel Casing Solutions for $69.7 million in cash on May 30, 2025, enhancing its downhole technology offerings[115] - Acquisition and integration costs for the nine months ended September 30, 2025 were $13.1 million, a decrease of $12.4 million or 48.6% from the same period in 2024[140] - The company incurred acquisition and integration costs of $20.9 million for the twelve months ended September 30, 2025, a decrease of 19% from $25.8 million in 2024[168] Debt and Financing - The company had $12.7 million of borrowings outstanding under the Term Loan as of September 30, 2024, and no borrowings under the revolving credit facility as of September 30, 2025[162] - The company entered into a new Credit Agreement on February 27, 2025, increasing the revolving credit facility from $110 million to $200 million, with a potential increase to $250 million[157] - The company is required to maintain a fixed charge coverage ratio of not less than 1.10 to 1.00 if Excess Availability is less than 20%[160] - The company is subject to various covenants under the Credit Agreement, including limitations on incurring debt and asset sales[160] Other Financial Metrics - As of September 30, 2025, the company had cash and restricted cash of $163.4 million and availability under the Revolver of $132.8 million[146] - Total interest expense for the nine months ended September 30, 2025 was $1.9 million, a slight decrease from $2.1 million in the same period in 2024[141] - Income tax expense for the nine months ended September 30, 2025 was $32.2 million, an increase of $25.3 million or 367.1% from the same period in 2024, due to changes in income mix and non-deductible expenses[144] - The company’s Return on Capital Employed (ROCE) for the twelve months ended September 30, 2025, was 13%, up from 9% for the same period in 2024[168] - The company’s net income as a percentage of revenue was 10% for the nine months ended September 30, 2025, down from 26% in 2024[164] Operational Insights - The company operates in one reportable segment, with performance assessed at a consolidated level[171] - The company continues to focus on financial information at a consolidated level for resource allocation[171] - No significant changes to critical accounting estimates have occurred since the Annual Report[172] - There have been no material changes affecting market risk disclosures since the last Annual Report[175] - Recent accounting pronouncements are discussed in the Summary of Significant Accounting Policies section of the Quarterly Report[173]
Innovex International, Inc.(INVX) - 2025 Q3 - Quarterly Report