EXPRO GROUP HOLDINGS N.V. Q1 FY2025 earnings call

Financial Results Review: Q1 2025 revenue was $391 million, adjusted EBITDA was $76 million (20% of revenue), the highest first quarter adjusted EBITDA and margin since merging with Frank in Oct 2021. ### Market Environment: Despite near-term upstream investment moderation, the long-term outlook for international and offshore markets is positive. Tariff announcements and OPEC+ production changes introduced near-term uncertainty. ### Commercial Activity: Secured $272 million in new contract awards in Q1, including contracts across the well lifecycle in various regions. ### Regional Operations: MENA region had strong performance with $94 million revenue, 37% EBITDA margin. APAC region saw successful deployments of CENTRI-FI systems. ESSA region had a decrease in subsea activity but increased production solutions revenue in Congo. NLA region had lower activity in some areas but higher subsea and well intervention integrity activity in others. Operational highlights included successful contract awards using advanced technologies like CENTRI-FI and iCAM, and successful M&A integration like PRT Offshore.

Expro's Q1 2025 revenue was $391 million with an adjusted EBITDA of $76 million or 20% of revenue. For the NLA region, Q1 revenue was $134 million, segment EBITDA margin was 23%. In ESSA, Q1 revenue was $112 million, segment EBITDA margin was 26%. MENA region had Q1 revenue of $94 million, segment EBITDA margin of 37%. APAC region had Q1 revenue of $51 million, segment EBITDA margin of 21%.

Full Year 2025: Expected revenue to be generally flat relative to 2024, adjusted EBITDA to meet or exceed 2024 results. Free cash flow margin expected to be in the 7% area, approximately $120 million. ### Q2 2025: Expected revenue of $400 million to $410 million (up about 4% sequentially), adjusted EBITDA of $80 million to $90 million, adjusted EBITDA margin expected to be up sequentially and year-over-year by about 100 basis points. Anticipate further uptick in H2 based on planned project startups.

Potential risks include a potentially protracted trade war between the U.S. and China posing a risk to China's long-term oil demand. Supply risk remains high due to uncertainty surrounding sanctions on Russia, Iran and Venezuelan exports. Market uncertainty could result in delayed project approvals and activity slowdowns.

Q: Arun Jayaram asked about the MENA geographical segment's strong growth, margin sustainability, and Coretrax contribution.

A: Mike Jardon responded that MENA is a strong growth engine with stable customers, strong anchor contracts in Saudi and Algeria, and Coretrax integration is going well with good market penetration.

Q: Atidrip Modak inquired about activity expectations in various geographies and well management/construction businesses.

A: Mike Jardon discussed Latin America's strong activity, Middle East's resilience, Europe's some suppression but Norway's strength, and Asia-Pacific's softness in Australia but activity in other regions, and views on well management/construction businesses.

Q: Eddie Kim asked about offshore FID timing and tariff impact.

A: Mike Jardon said offshore FIDs may be delayed due to customer caution, and Quinn Fanning stated Expro is less impacted by tariffs as it's a services company with 80% revenue outside US, but potential small cost impact from tariffs.

Q: Blake McLean asked about M&A market and its impact.

A: Mike Jardon said Expro continues to look for M&A opportunities that fit well, retain management teams, and Quinn Fanning added the current balance sheet provides flexibility for M&A and share buybacks