On July 25, 2024, Expro Group Holdings NV (XPRO, Financial) released its 8-K filing announcing robust financial results for the second quarter of 2024. The company, which provides comprehensive well lifecycle services, reported significant growth in revenue and net income, surpassing analyst estimates.
Company Overview
Expro Group Holdings NV (XPRO, Financial) offers products and services that span the well life cycle, including well construction, well flow management, well intervention and integrity, and subsea well access. The company operates globally, with a strong focus on offshore production solutions, bolstered by its 2021 merger with Frank's International. Expro's business is predominantly international and offshore, contributing approximately 80% and 70% of its annual revenue, respectively.
Q2 2024 Financial Highlights
Expro reported a revenue of $470 million for Q2 2024, marking a 22% sequential increase and an 18% year-over-year rise. This figure significantly exceeded the analyst estimate of $412.91 million. The net income for the quarter was $15 million, or $0.13 per diluted share, compared to a net loss of $3 million in Q1 2024 and net income of $9 million in Q2 2023. The adjusted net income was $31 million, or $0.27 per diluted share, slightly below the analyst estimate of $0.28 per share.
Segment Performance
Revenue growth was observed across all operating segments, with notable contributions from North and Latin America (NLA) and Europe and Sub-Saharan Africa (ESSA). The NLA segment reported a 20% increase in revenue to $157 million, driven by higher well construction and well flow management activities. The ESSA segment saw a 38% rise in revenue to $168 million, primarily due to increased subsea well access and well flow management activities.
Financial Metrics and Achievements
Adjusted EBITDA for Q2 2024 was $95 million, a 40% sequential increase and a 32% year-over-year rise, resulting in an adjusted EBITDA margin of 20%. This improvement was attributed to higher revenue, a better activity mix, and contributions from the Coretrax acquisition.
Michael Jardon, Chief Executive Officer, noted, "We are pleased to report another quarter of strong financial performance, with revenue and Adjusted EBITDA exceeding guidance, including the impact of the early closing of the Coretrax acquisition. Our results reflect our commitment to deliver excellence and innovation across our operations, and positions us for sustained, through-cycle growth."
Balance Sheet and Cash Flow
As of June 30, 2024, Expro's consolidated cash and cash equivalents totaled $135 million, with outstanding long-term borrowings of $121 million. The company's total liquidity stood at $271 million. Net cash used in operating activities for Q2 2024 was $13 million, primarily due to an increase in net working capital and cash paid for merger and integration expenses.
Updated Full-Year Guidance
Expro has increased its full-year 2024 revenue guidance to a range of $1.70 to $1.75 billion, up from the previous range of $1.60 to $1.70 billion. The company also refined its full-year 2024 Adjusted EBITDA guidance to a range of $350 to $375 million, supported by strong first-half performance and a positive market outlook.
Conclusion
Expro Group Holdings NV (XPRO, Financial) has demonstrated strong financial performance in Q2 2024, exceeding analyst estimates and raising its full-year guidance. The company's strategic position in international and offshore markets, coupled with its recent acquisition of Coretrax, positions it well for sustained growth. Investors and stakeholders can look forward to continued improvements in profitability and shareholder returns.
Explore the complete 8-K earnings release (here) from Expro Group Holdings NV for further details.
