HMH Holding, Inc. Q1 FY2026 earnings call

• Thanked HMH employees for their hard work behind the successful IPO and building the business. - Discussed financial results showing resilience, with orders $218 million, revenue $171 million, adjusted EBITDA margins 17.6%. - Acknowledged Middle East geopolitical tension but viewed impact as manageable with exposure to offshore markets. - Offshore drilling market outlook improved with increased contracts, backlog, and utilization, especially in floater segment. - Land market activity impacted by Middle East but showing resilience. - IPO strengthened capital structure, with $101 million cash and cash equivalents and $175 million total liquidity. - Investments in CapEx expected to be 2% of revenue for 2026

Total revenue for the quarter was $171 million. Spare parts revenue was $67 million, increasing 11% year-over-year, representing a revenue contribution. Service revenue was $72 million. Product revenue was $33 million. Adjusted EBITDA margins grew year-over-year to 17.6%. Orders for the quarter were $218 million, resulting in a book-to-bill ratio of 1.3 times. Aftermarket services revenue was $72 million, down 14% year-over-year and 30% quarter-on-quarter. Spares revenue was $67 million, up 11% year-over-year and 23% quarter-over-quarter. Projects, products, and other revenue was $33 million, down 40% year-over-year and 30% quarter-over-quarter

• Expect second-half revenue to be meaningfully stronger than first half. - Full-year adjusted EBITDA expected in range of $157 million to $177 million, weighted towards back half. - Q2 expected to have higher order rate with book-to-bill above 1 times. - IPO materially strengthened balance sheet and liquidity

• Geopolitical developments in the Middle East could have broader implications on supply, demand, and capital allocation

Q: Could provide flavor of inbound orders and full-year outlook.

A: Inbound orders combination of product/project lightness and spares/digital/repair in advance of work. Full-year outlook with second half stronger, EBITDA range due to potential reactivations and larger equipment orders.

Q: Talk on pricing and spare part order flow interplay.

A: No specific pricing details seen, spare order flow and aftermarket work together directionally over longer term.

Q: Color on deepwater restart and onshore market.

A: Deepwater restart has spread of rigs, some MPD and digital upgrades. Onshore market showing green shoots with cautious optimism.

Q: Margins and free cashflow.

A: Margins due to mix and cost structure, free cashflow with AR reverse and IPO expense noise, on track for targets over year.

Q: Potential bolt-on M&A and mining business expansion.

A: Active M&A pipeline, stick to core, mining expansion through acquisitions and partnerships.

Q: Visibility on rigs and growth outlook.

A: High visibility on rigs working with equipment through end of 2026 and into first half of 2027, more than 75% of 2025 contracts awarded in first quarter of 2026