Subsea 7 (SUBC) Q3 2024 earnings summary

Executive summary

• Q3 2024 Adjusted EBITDA reached $321 million, up 59% year-over-year, with an 18% margin and robust free cash flow of $138 million; full-year EBITDA guidance was revised upwards for the second time in 2024.

• Q3 revenue was $1.83 billion, a 16% year-over-year increase, driven by strong project execution in both subsea and renewables; nine-month revenue reached $5.0 billion, up 14%.

• The backlog at the start of Q3 was $11.3 billion, providing 75% visibility on 2025 revenue and supporting robust growth and margin expansion targets.

• Management reaffirmed guidance for 2025 and 2026, projecting continued EBITDA growth and higher margins, especially in offshore wind.

• At least $1 billion is committed to shareholder returns from 2024 to 2027, with $250 million already returned in 2024.

Financial highlights

• Q3 Adjusted EBITDA was $321 million, up 59% year-over-year, with margin increasing to 18%; net income for Q3 was $98 million, up from $36 million in the prior year period.

• Q3 2024 revenue was $1.83 billion, a 16% increase year-over-year; nine-month revenue was $5.0 billion, up 14%.

• Free cash flow in Q3 was $138 million; cash and cash equivalents at quarter-end were $440 million.

• Net debt stood at $857 million (including leases), with liquidity of $1.1 billion at quarter-end.

• Book-to-bill ratio for Q3 was 0.3x; nine-month book-to-bill was 1.2x; order intake for Q3 was $0.6 billion, with nine-month intake totaling $5.9 billion.

Outlook and guidance

• 2024 revenue expected at the upper end of $6.5–$6.8 billion, with Adjusted EBITDA of $1,025–$1,075 million.

• 2025 revenue guidance is $6.8–$7.2 billion, with EBITDA margin of 18–20%.

• 2026 EBITDA margin expected to exceed 20%, supported by high-quality backlog and favorable project mix.

• Renewables segment EBITDA margin projected at 14–16% for 2025 and beyond.

• Free cash flow expected to increase significantly in 2025 and beyond.