HELIX ENERGY SOLUTIONS GROUP INC (HLX)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 revenue was $278.064M and diluted EPS was $0.02; EPS beat consensus (-$0.037*) while revenue missed ($285.059M*), driven by seasonal North Sea slowdown and lower Robotics vessel days; adjusted EBITDA was $52.0M .
• Management cut FY 2025 guidance midpoints by ~$100M revenue and ~$75M adjusted EBITDA, primarily due to stacking Seawell and uncertainty in U.K. North Sea activity; FY free cash flow midpoint reduced by ~$70M .
• Positive offsets: higher rates in Brazil Well Intervention (Siem Helix 1, Siem Helix 2) and Q vessels; liquidity remained strong with $370.0M cash and $405.0M total liquidity; net debt stayed negative at -$58.9M .
• Near-term stock narrative catalysts: guidance reset, North Sea regulatory headwinds and operator M&A pauses, alongside a more active share repurchase plan targeting ≥25% of FCF .

What Went Well and What Went Wrong

What Went Well

• Brazil Well Intervention rates and utilization improved: SH2 began 3-year Petrobras contract at higher rates; SH1 operated at higher rates on Trident extension; Q7000 commenced 400-day Shell campaign in Brazil late March .
• Q4000 and Q5000 utilization strong with contracted work (Nigeria and Gulf of America); management noted “strong first quarter results supported by higher rates...on our Q vessels” .
• Balance sheet/FCF resilience: cash $370.0M, liquidity $404.7M–$405.0M, negative net debt -$58.9M; Q1 free cash flow $12.0M despite elevated regulatory certification costs .

What Went Wrong

• Seasonal North Sea slowdown and operator pauses (windfall tax, M&A, weak oil) drove reduced Well Intervention utilization (67% vs 79% prior quarter, 90% prior year) and stacking of Seawell, prompting guidance cuts .
• Robotics revenue down -37% vs prior quarter on lower vessel days; ROV/trencher utilization fell to 51% vs 64% in Q4; operating income -$14.0M QoQ .
• Shallow Water Abandonment sharply weaker (revenues -55% QoQ; vessel utilization 31%; systems 11%); segment operating loss widened (-$13.4M) .

Financial Results

Headline Results vs Prior Periods

Performance vs Estimates

Values retrieved from S&P Global.*

Segment Revenue and Operating Income

KPIs and Utilization

Guidance Changes

Management attributed the downgrade primarily to stacking Seawell and weaker U.K. North Sea activity, with broader macro uncertainty (OPEC+ supply, U.S. tariffs) increasing risk across segments .

Earnings Call Themes & Trends

Management Commentary

• “As expected, our first quarter was impacted by the seasonal slowdown in the North Sea...Nonetheless, we delivered strong first quarter results with higher rates in our Well Intervention segment in Brazil and on our Q vessels.” – Owen Kratz, CEO .
• “We are adjusting our outlook...revenue approximately $1.3 billion...EBITDA approximately $275 million...Free cash flow approximately $130 million...The decision to stack the Seawell...is the primary driver for the adjustment.” – Erik Staffeldt, CFO .
• “We’re operating in a dynamic...uncertain market...At quarter end, we had approximately $1.4 billion of backlog...we nevertheless expect to generate meaningful free cash flow in 2025.” – Owen Kratz .
• “Robotics had a strong quarter considering seasonal winter conditions...we signed one of our largest trenching contracts to date for over 300 days in 2026 on Hornsea 3.” – Scott Sparks, COO .

Q&A Highlights

• Bridge for EBITDA guide-down: Predominantly U.K. North Sea (Seawell stacking); small negative undertone elsewhere but not material; prior North Sea peak EBITDA ~$80–$90M across two vessels; warm-stack costs “below $30,000/day” for Seawell .
• Rate environment: Well Intervention rates holding; North Sea pressure is utilization, not pricing; Shallow Water Abandonment pricing under pressure amid competition .
• Q4000 trajectory: Completed Nigeria campaign; returning to U.S. Gulf with contracted work; potential future Africa work; no immediate pricing pressure in U.S. Gulf heavy intervention .
• Robotics margins and capacity: Trenching day rates up 20–30% from 2023 baseline; considering acquisition/build of new trencher (approx. $25M, ~18 months) given multi-year award visibility .
• Capital returns: Emphasis on share repurchases (≥25% of FCF) given valuation; M&A difficult to close amid uncertainty but still on radar (esp. wind/robotics) .

Estimates Context

• EPS beat: Actual $0.0197 vs consensus -$0.0367*; revenue miss: $278.064M vs $285.059M*; estimates based on 3 EPS and 4 revenue contributors*.
• Implication: Consensus likely revises down FY revenue/EBITDA and segments (U.K. North Sea, SWA) while maintaining stronger Brazil and Q-vessel assumptions; buyback pacing supports per-share metrics .

Values retrieved from S&P Global.*

Key Takeaways for Investors

• Guidance reset reflects structural U.K. North Sea uncertainty; core contracted assets (Q7000, Q5000, SH1/SH2) mitigate earnings risk and support baseline EBITDA/FCF .
• Expect seasonality and vessel maintenance to keep Q2 close to Q1; FCF skewed to H2 as mobilizations normalize and rates/activities seasonally peak .
• Long-term trenching/renewables visibility is strong (contract wins and bids through 2029–2030), creating optionality to add trencher capacity and expand margins as rates step up .
• Balance sheet remains a strategic asset (negative net debt, >$400M liquidity), enabling opportunistic buybacks (≥25% of FCF) and selective M&A without leverage risk .
• Near-term narrative hinges on U.K. policy outcomes and operator M&A timing; any acceleration of P&A tenders into 2026 could be a positive multi-year catalyst .
• SWA outlook is flat/marginally better vs 2024 with cost actions improving profitability; monitor pricing pressure and contracting cadence on U.S. Gulf shelf .
• Brazil remains the growth/visibility anchor with higher-rate contracts; execution on Q7000/SH1/SH2 should underpin segment margins despite North Sea softness .

Notes:  
- All non-GAAP metrics per company definitions; see reconciliations in press materials **[866829_45ec075faddf4933b5e7ebd6c07196d2_12]** **[866829_0000866829-25-000007_hlx-20250423xex99d1.htm:10]**.  
- Conference call slides (Ex. 99.2) provide detailed 2025 outlook and segment assumptions **[866829_0000866829-25-000007_hlx-20250423xex99d2.htm:0]**–**[866829_0000866829-25-000007_hlx-20250423xex99d2.htm:8]**.