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EXPRO GROUP HOLDINGS N.V. (XPRO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue was $437M, up 3% q/q and 7% y/y, with Adjusted EBITDA of $100M and a record 23% margin since the Expro/Frank’s merger; GAAP EPS was $0.19 and Adjusted EPS was $0.36 .
  • Revenue modestly under-shot prior Q4 guidance ($440–$470M) while EBITDA landed within guidance ($90–$105M), driven by strong subsea deliveries in Angola, MENA well flow activity, and the non-repeat of Congo project losses from Q3 .
  • Congo project variation orders were resolved; Expro transitioned from construction/commissioning to O&M with improved economics via higher O&M rates and additional services, removing a prior earnings headwind .
  • 2025 outlook: revenue stable to modestly up to $1.7–$1.75B, Adjusted EBITDA margin +100+ bps y/y (implying $350–$370M EBITDA), FCF margin ~7%, with Q1 2025 seasonally lower revenue of $370–$380M and EBITDA of $65–$75M before an activity rebound in Q2 .
  • Capital allocation: $100M buyback program extended; 1.2M shares repurchased in Q4 (~1% of shares) for ~$14M, alongside year-end liquidity of ~$320M (cash ~$185M, RCF availability ~$136M) and debt of ~$121M .

What Went Well and What Went Wrong

What Went Well

  • Record profitability since the merger: “Fourth quarter Adjusted EBITDA and Adjusted EBITDA margin of $100 million and 23%…our best quarterly performance since we completed the Expro/Frank’s merger in Q4 2021” .
  • Subsea strength and regional execution: ESSA revenue rose 9% q/q to $143M with segment EBITDA margin up to 37% on Angola subsea deliveries and Congo variations resolution; MENA revenue rose 7% q/q with 35% margins .
  • Operating cash flow inflection: Q4 operating cash flow increased to $97M vs $55M in Q3, supported by EBITDA growth and working capital/tax timing, positioning for FY25 FCF margin ~7% .

What Went Wrong

  • Revenue missed prior guidance midpoint: Q4 revenue of $437M trailed the earlier $440–$470M range, with NLA a bit below expectations due to lower well construction/tubular sales and Coretrax delivery delays, and softer APAC well flow management .
  • Q1 seasonality and deepwater “whitespace”: Management guided Q1 revenue down ~15% q/q and EBITDA margin down ~400 bps sequentially on typical Northern Hemisphere seasonality and non-repeat of Q4 subsea project deliveries .
  • Congo headwind lingered into H2 before resolution: Q3 incurred a $7M negative impact; only a modest Q4 lump-sum tailwind realized, though O&M phase now margin-accretive going forward .

Financial Results

Headline metrics (sequential trend)

MetricQ2 2024Q3 2024Q4 2024
Revenue ($M)469.6 422.8 436.8
Adjusted EBITDA ($M)94.6 85.0 100.4
Adjusted EBITDA Margin (%)20% 20% 23%
Net Income ($M)15.3 16.3 23.0
Diluted EPS ($)0.13 0.14 0.19
Adjusted EPS ($)0.27 0.23 0.36

YoY (Q4 vs Q4)

MetricQ4 2023Q4 2024
Revenue ($M)406.8 436.8
Net Income ($M)(12.4) 23.0
Diluted EPS ($)(0.11) 0.19
Adjusted EBITDA ($M)85.1 100.4
Adjusted EBITDA Margin (%)21% 23%

Segment breakdown (Revenue)

Segment Revenue ($M)Q4 2023Q3 2024Q4 2024
NLA145.5 139.4 139.3
ESSA133.8 131.5 142.8
MENA65.4 86.7 92.6
APAC62.1 65.2 62.2
Total406.8 422.8 436.8

Segment margins (Segment EBITDA Margin %)

SegmentQ4 2023Q3 2024Q4 2024
NLA30% 24% 22%
ESSA31% 24% 37%
MENA33% 35% 35%
APAC9% 25% 25%

Revenue by capability

Capability Revenue ($M)Q4 2023Q3 2024Q4 2024
Well Construction145.3 159.3 145.2
Well Management (WFM/SWA/WII)261.5 263.6 291.6
Total406.8 422.8 436.8

Notes: WFM = well flow management; SWA = subsea well access; WII = well intervention & integrity .

Guidance Changes

New FY25/Q1-25 guidance

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($B)FY 2025—1.70–1.75 New
Adjusted EBITDA ($M)FY 2025—350–370 New
Adj. EBITDA marginFY 2025—>100 bps y/y improvement New
Free Cash Flow MarginFY 2025—~7% New
Support costs (% rev)FY 2025—19–20% New
Cash taxes (% rev)FY 2025—~4% New
Capex ($M)FY 2025—120–130 New
Revenue ($M)Q1 2025—370–380 New
Adjusted EBITDA ($M)Q1 2025—65–75 New

Q4-24 guidance vs actuals

MetricQ4 2024 Guidance (prior)Q4 2024 ActualResult
Revenue ($M)440–470 436.8 Slight miss vs range
Adjusted EBITDA ($M)90–105 100.4 In-line

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
Technology/automationDeltaTek SeaCure hit 100th job; rig-time savings at rising dayrates Emphasis on CENTRI-FI, iTONG; deepwater efficiency case iTONG first deployment in West Africa; AI-enabled automation; Petrobras non-intrusive flowmeter partnership Improving
Macro/OPEC+/EIAStable prices above $70 support long-cycle investment Cautious near-term tone; potential slow start 2025; EIA/Brent path EIA forecasts 2025 demand +1.3 Mbpd; supply growth; OPEC+ path; deepwater remains advantaged Stable
Regional trends (Saudi/ESSA/MENA)MENA growth; subsea in Angola; Congo commissioning UK P&A building; Angola subsea; KSA offshore suspension noted, but onshore gas exposure ESSA Subsea strength; KSA wireless cement head/SKYHOOK success; onshore KSA gas largely insulated Mixed
Congo projectTransition to O&M expected, construction margin dilutive Q3 loss ($7M) pending variations; resolution expected Variation orders resolved; O&M rates higher; modest Q4 lump-sum benefit Improving
Cost disciplineSupport costs ~18–20% of revenue; operating leverage focus Announced cost initiatives; targets to come Drive25 to cut support costs 7–8% run-rate over 12–18 months (~$25M), ~50% captured in 2025 Improving
M&A/PortfolioCoretrax closed; synergy and internationalization strategy Continued focus on industrial logic; revenue synergy pipeline Appetite for accretive M&A; balanced with buybacks (1–2% TSO p.a.) Stable

Management Commentary

  • “Fourth quarter Adjusted EBITDA and Adjusted EBITDA margin of $100 million and 23%, respectively, represent our best quarterly performance since we completed the Expro/Frank’s merger in the fourth quarter of 2021.” — CEO Mike Jardon .
  • “Drive25…identified a 7% to 8% reduction in run-rate support costs…about half…captured in 2025 results.” — CEO/CFO .
  • “We recently resolved outstanding variation orders related to our Congo production solutions project…customer…approved an adjustment to the contract rate for the multi-year O&M phase…to incentivize higher through-put…and our provision of additional services.” — CEO .
  • “For 2025, we currently anticipate full-year revenues to be stable to up modestly…Adjusted EBITDA margin is expected to improve over 100 bps…Q1 revenue…$370–$380M…Adjusted EBITDA…$65–$75M.” — Management .
  • “Our backlog remains healthy at approximately $2.3 billion at the end of the fourth quarter.” — CEO .

Q&A Highlights

  • FY25 guide drivers: stable-to-modest growth reflects Expro’s exposure mix (limited U.S. onshore/Mexico), Coretrax pull-through, and tech deployment; not heavily impacted by Saudi offshore jack-up cuts given onshore gas tilt .
  • Q1 sequential step-down steeper than usual due to non-repeat of Q4 subsea deliveries and Congo y/y comp; rebound confidence based on bottoms-up project timing into Q2 .
  • Congo resolution specifics: modest Q4 lump-sum benefit; higher O&M rate, added services; original 10-year economics intact; losses won’t repeat .
  • Margin bridge: 2025 improvement driven primarily by activity mix and cost savings; net pricing gains not embedded in guidance given cautious market tone .
  • Capital allocation/M&A: Balanced between capex (~7% of revenue), opportunistic M&A with strict industrial logic, and buybacks (targeting 1–2% of TSO annually) .

Estimates Context

  • S&P Global (Capital IQ) consensus estimates for Q4 2024 could not be retrieved at this time due to a temporary request limit; as such, we cannot assess Street beats/misses in this report (we anchor comparisons to company guidance and reported actuals) [GetEstimates error].
  • Relative to prior guidance issued on the Q3 call, revenue modestly under-shot ($436.8M vs $440–$470M), while Adjusted EBITDA was in-line ($100.4M vs $90–$105M), suggesting limited model revisions on margin trajectory but potential near-term revenue cadence adjustments .

Key Takeaways for Investors

  • Profitability inflection: Q4 delivered the highest quarterly Adjusted EBITDA margin since the merger (23%), aided by subsea mix and Congo headwind removal; FY25 guide implies further margin accretion from Drive25 and O&M transition leverage .
  • Near-term set-up: Expect a seasonally soft Q1 (rev $370–$380M, EBITDA $65–$75M), then activity recovery into Q2 and H2 as international/offshore momentum builds; traders should anticipate a “dip-and-rip” cadence .
  • Congo risk de-risked: Variation orders resolved; improved O&M economics remove a key drag and should support ESSA margins despite lower subsea project deliveries versus Q4 .
  • MENA/Coretrax synergy: Full-year Coretrax contribution plus expandables rollout (Kuwait, Australia, Argentina/Colombia opportunities) position MENA and select APAC/LatAm markets for high-margin growth .
  • Cash discipline: FY25 capex trimmed to $120–$130M with support costs at 19–20% of revenue and FCF margin ~7%, preserving balance sheet flexibility and optionality for buybacks/M&A .
  • Technology differentiation: iTONG automation, DeltaTek cementation, and Petrobras flowmeter initiative underscore sustainable efficiency/safety advantages that support pricing power as markets tighten .
  • Watch catalysts: Q2 rebound execution, subsea award timing, ESSA/APAC activity ramps, and incremental Drive25 savings conversion are likely stock narrative drivers in 2025 .

Additional Relevant Q4 Press Releases

  • Petrobras partnership for non-intrusive flowmeter development (first prototype by Q3 2027) enhances production optimization toolkit .
  • 52-well P&A campaign award (>$10M) reinforces Expro’s subsea safety and well test capabilities within decommissioning markets .

Appendix: Cash, Debt, Liquidity, and Buybacks

  • Q4 capex $44M; FY24 capex ~$144M; FY25 capex plan $120–$130M .
  • Year-end cash (incl. restricted) ~$185M; debt ~$121M; total liquidity ~$320M (incl. $136M RCF availability) .
  • Buyback: Program extended to Nov 24, 2025; repurchased ~1.2M shares in 2024 (~1% outstanding) for ~$14.2M .