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Expro — Third Quarter 2026 Earnings Summary

XPRO

  • Financial Performance:

    • Total revenue for the three months ended September 30, 2026, was $440 million (specifically $439,943 thousand), compared to $393 million in the second quarter of 2026 and $411 million in the third quarter of 2025.
    • Net loss for the quarter was $5 million (specifically $5,201 thousand), resulting in a net loss margin of 1.2%.
    • Adjusted EBITDA was $91 million (specifically $91,211 thousand), with an Adjusted EBITDA margin of 20.7% (specifically 21%).
    • Cash flow from operations was $65 million (specifically $64,979 thousand), representing 15% of revenues.
    • Adjusted free cash flow was $52 million (specifically $52,290 thousand).
    • Capital expenditures for the quarter were $31 million (specifically $31,452 thousand).
    • Total liquidity at the end of the quarter was $260 million, including $173 million in consolidated cash and cash equivalents (including restricted cash) and $87 million available for drawdowns under the revolving credit facility.
    • Outstanding long-term borrowings totaled $259 million (specifically $259,065 thousand) as of September 30, 2026.
    • Year-to-date revenue (nine months ended September 30, 2026) was $1.2 billion ($1,200,698 thousand), down from $1.22 billion in the same period of 2025.
    • Year-to-date Adjusted free cash flow was $112 million ($111,808 thousand).

  • Guidance and Future Outlook:

    • Full-year 2026 Adjusted free cash flow guidance was raised to $140–$150 million (previously $135–$145 million).
    • Q4 2026 revenue guidance is $465–$485 million.
    • Full-year 2026 Adjusted EBITDA guidance is $330–$340 million (previously $355–$365 million), reflecting a reduction of approximately $20 million due to high-margin activities shifting to 2027.
    • Full-year 2026 capital expenditure guidance is $110–$115 million.
    • Preliminary expectations for 2027 include mid-teens growth in Adjusted EBITDA and more than 20% growth in Adjusted free cash flow compared to 2026.
    • The outlook includes a full year of contribution from the Enhanced Drilling acquisition.
    • Middle East operations outlook remains unchanged for the balance of 2026 and full-year 2027.
    • Management expects another sizeable sequential increase in results for the fourth quarter.

  • Business Segments and Product Lines:

    • North and Latin America (NLA): Revenue was $155 million (up 20% sequentially), driven by the Enhanced Drilling acquisition, higher well construction revenue in the U.S., Brazil, and Suriname, and increased subsea well access activities. Segment EBITDA was $36 million (23% margin).
    • Europe and Sub-Saharan Africa (ESSA): Revenue was $149 million (up 17% sequentially), driven by the Enhanced Drilling acquisition, higher well construction management in Ivory Coast, Norway, and Azerbaijan, and increased subsea well access in Ghana. Segment EBITDA was $38 million (26% margin).
    • AMENA (Asia, Middle East, and North Africa): Revenue was $136 million (down 1% sequentially), resulting from the combination of MENA and APAC regions. Revenue was impacted by lower well flow management in Saudi Arabia and reduced subsea access in Malaysia, offset by higher revenue in India and well construction in Saudi Arabia. Segment EBITDA was $41 million (30% margin).
    • New Acquisitions: The Enhanced Drilling acquisition closed in late July 2026. First operations utilizing Enhanced Drilling technologies (EC Drill® Dual MPD system) commenced in West Africa.
    • New Product Launches: Launched Maestro®, a modular well-test platform designed to reduce red-zone exposure by up to 67%.
    • Contract Awards:
      • Alaska: Awarded a two-year contract for two project-specific flowback packages expected to exceed 200 wells.
      • Canada: Renewed a tubular running services contract for approximately 30 offshore wells with options for over a decade.
      • Mozambique: Secured a three-year tubular running service contract deploying Auton™ and iTONG technologies.
      • Nigeria: Received contract awards in subsea landing string business and the first deployment of the 14-inch BRUTE Packer.
      • Algeria: Secured an agreement expanding the scope of production solutions work.
      • Australia: Secured a three-year contract to deploy the Through Blowout Preventer Intervention Riser System (TBIRS).

  • Market and Competitive Landscape:

    • Operators have deferred subsea activity in the U.S. Gulf following inclement weather in the late third and fourth quarters.
    • Well intervention and integrity work in Colombia moved from Q4 2026 to 2027 due to a change in the operator's schedule.
    • Expro secured eight finalist nominations at the 2026 Gulf Energy Information Excellence Awards, winning the "Best Controls, Instrumentation, Automation Technology-Upstream" category for iTONG™.
    • Articulock® technology gained traction in the North Sea for water depths exceeding 1,000 meters, enabling operations beyond conventional weather limits.

  • Risks and Challenges:

    • High-margin activities have shifted into 2027, reducing fourth-quarter Adjusted EBITDA expectations.
    • Ongoing conflict in the Middle East is factored into guidance.
    • Forward-looking statements note risks including volatility of oil and gas prices, political and regulatory uncertainties in international operations, and the ability to recover or repair seabed equipment.
    • Specific project delays (U.S. Gulf subsea activity, Colombia well intervention) affect timing but not the value of results.

  • Management Commentary and Tone:

    • CEO Michael Jardon stated that third-quarter results reflected a "sizeable sequential increase" and expected another "sizeable increase" in the fourth quarter.
    • Management highlighted the execution of the capital allocation strategy, including $31 million in capex for high-return projects and returning cash to shareholders.
    • The company exceeded its goal of returning at least one-third of annual Adjusted free cash flow to shareholders in 2026.
    • Management noted that the combination of MENA and APAC regions into AMENA is a direct result of efforts to optimize organizational efficiency and leverage economies of scale.
    • Management expressed excitement about the growth potential of the Enhanced Drilling technology, noting robust customer inquiries.

  • Other Key Points:

    • Share repurchases in the quarter totaled approximately $9 million (0.6 million shares at an average of $16.14 per share).
    • Year-to-date share repurchases totaled approximately 3.2 million shares, with approximately $12 million repurchased since June 30, 2026.
    • On October 26, 2026, the Board authorized a new $100 million share repurchase plan valid through December 31, 2027.
    • Total cash returned to shareholders in 2026 exceeded $50 million.
    • The company has approximately 7,000 employees operating in more than 60 countries.
    • The AMENA region abbreviation reflects the new combined geographic region covering Asia, the Middle East, and North Africa.