Expro Group Holdings (XPRO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $423 million, up 14% year-over-year but down 10% sequentially, driven by higher activity and the Coretrax acquisition, with net income of $16 million versus a net loss of $14 million a year ago.

• Adjusted EBITDA was $85 million, down 10% sequentially but up 69% year-over-year, with a margin of 20% aided by favorable activity mix and absence of prior year LWI-related costs.

• Order backlog stood at $2.3 billion as of September 30, 2024, with $354 million in new contract awards during the quarter.

• The company maintains strong liquidity, with 80% of revenue from international markets and 70% from offshore services.

• Integration of Coretrax and PRT Offshore is progressing, contributing to revenue and operational synergies.

Financial highlights

• Q3 2024 revenue: $423 million (down 10% sequentially, up 14% year-over-year); Adjusted EBITDA: $85 million (down 10% sequentially, up 69% year-over-year); margin at 20%.

• Q3 net income was $16 million ($0.14 per diluted share), compared to a net loss of $14 million in Q3 2023; adjusted net income was $28 million ($0.23 per diluted share).

• Free cash flow margin for 2024 expected at ~5% of revenue.

• Cash and equivalents stood at $167 million, with total liquidity of $303 million and long-term borrowings of $121 million.

• Capital expenditures totaled $32 million in Q3, with 90% supporting customer activities.

Outlook and guidance

• Full-year 2024 revenue guidance refined to $1.72–$1.75 billion, with Adjusted EBITDA expected between $335–$350 million and a margin of ~20%.

• Q4 2024 revenue expected at $440–$470 million, with Adjusted EBITDA of $90–$105 million and margin of 20–22%.

• Medium-term targets of $2 billion run-rate revenue and mid-20s Adjusted EBITDA margin now expected by 2026, delayed from prior expectations due to market headwinds.

• 2025 is anticipated to start slow, with a stronger second half as activity and pricing recover, and mid-single digit growth in international and offshore markets.

• Capital expenditures for the remainder of 2024 are estimated at $30–$40 million.