EXPRO GROUP HOLDINGS N.V. ANNOUNCES SECOND QUARTER 2024 RESULTS

Revenue of $470 million, up 22% sequentially and up 18% year-over-year. 
 
Net income of $15 million, as compared to net loss of $3 million for the first quarter of 2024 and net income of $9 million for the second quarter of 2023. Net income margin was 3% for the second quarter of 2024, compared to (1)% for the first quarter of 2024.
 
Adjusted EBITDA1 of $95 million, up 40% sequentially and up 32% year-over-year. Adjusted EBITDA margin1 of 20%, compared to 18% for the first quarter of 2024.
 
Increasing full-year 2024 revenue guidance range to $1.70 to $1.75 billion, and refining full-year 2024 Adjusted EBITDA range to $350 to $375 million, supported by strong first half of the year performance, positive market outlook, and the successful early closing of the previously announced Coretrax acquisition.

 
HOUSTON - July 25, 2024 – Expro Group Holdings N.V. (NYSE: XPRO) (the “Company” or “Expro”) today reported financial and operational results for the three and six months ended June 30, 2024.
 
Second Quarter 2024 Highlights
 
     •    Revenue was $470 million compared to revenue of $383 million in the first quarter of 2024, an increase of $86 million, or 22%. Revenue sequentially increased across all operating segments, with the largest contributions from North and Latin America (“NLA”) and Europe and Sub-Saharan Africa (“ESSA”) segments. Second quarter operating results include $21 million of revenue attributable to Coretrax.
           
     •    Net income for the second quarter of 2024 was $15 million, or $0.13 per diluted share, compared to net loss of $3 million, or $0.02 per diluted share, for the first quarter of 2024. Net income (loss) margin (defined as net income (loss) as a percentage of revenue) was 3% for the three months ended June 30, 2024 compared to (1)% for the three months ended March 31, 2024. Adjusted net income1 for the second quarter of 2024 was $31 million, or $0.27 per diluted share, compared to adjusted net income for the first quarter of 2024 of $10 million, or $0.09 per diluted share. 
           
     •    Adjusted EBITDA for the second quarter was $95 million, a sequential increase of $27 million, or 40%, primarily attributable to higher revenue, better activity mix across all operating segments and contributions from the Coretrax acquisition. Adjusted EBITDA margin for the second quarter of 2024 and the first quarter of 2024 was 20% and 18%, respectively.
           
     •    Net cash used in operating activities for the second quarter of 2024 was $13 million, a decrease compared to net cash provided by operating activities of $30 million for the first quarter of 2024, primarily driven by an increase in net working capital, cash paid for merger and integration expense, and cash paid for severance and other expense compared to the prior quarter, partially offset by the increase in Adjusted EBITDA. Consistent with historical seasonal patterns, the increase in net working capital is expected to reverse in the second half of 2024, resulting in an improvement in net cash provided by operating activities.
 
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.
 
“Our strategic position in the international and offshore markets continues to anchor the business, with increased activity in mission critical, high value adding services. We continue to maintain a positive outlook based on the fundamental backdrop and increased global demand for services and solutions that support lower-cost, carbon-advantaged incremental production. We believe activity will continue to increase across geo-markets, with long-cycle development providing good business momentum, particularly for our drilling and completions-levered businesses. In the second quarter, we captured $196 million of contract wins and our backlog, while modestly down quarter-over-quarter, remains strong at approximately $2 billion.
 
1.     A non-GAAP measure. 
 
“In the second quarter, we completed the previously announced acquisition of Coretrax, a technology leader in performance drilling tools and wellbore cleanup, well integrity, and production optimization solutions. Coretrax has a complementary offering to Expro with little overlap and broadens the services and solutions we offer through our Well Construction and Well Intervention & Integrity product lines, adding significant value to our clients from innovative technologies that reduce risk and cost, improve drilling efficiency, extend the life of existing well stock, and optimize production.
 
“We are continuing to leverage existing capabilities to grow our Sustainable Energy Solutions business. Expro’s team in Australia successfully executed well intervention services for recompletion of a CO2 injector well for a leading carbon capture, utilization and storage (CCUS) research organization. This is but one example of where we are advancing clean energy solutions.
 
“In April, we also published our third sustainability report, highlighting Expro’s achievements in 2023, the progress we have made in working toward our environmental, social and governance (ESG) objectives, and our commitment to being a citizen of the world. These efforts resulted in MSCI increasing Expro’s rating from an “A” to “AA” – the second highest rating.
 
“Expro remains focused on achieving excellent results for our customers and is well positioned for continued improvement in profitability, free cash flow and shareholder returns during what we expect will be a multi-year growth phase for energy services. We remain positive on the outlook for the international and offshore energy markets and we are comfortable increasing full-year 2024 guidance range for expected revenues to between $1,700 million and $1,750 million (versus prior guidance of between $1,600 million and $1,700 million) and refining full-year 2024 guidance range for Adjusted EBITDA to between $350 million and $375 million (versus prior guidance of between $325 million and $375 million). Third quarter revenue is expected to be between $410 million and $430 million, implying sequential and year-on-year revenue growth of (11)% and 14%, respectively, with Adjusted EBITDA margin expected to be in a range of 21% to 22%. Our expectation for a sequential decrease in revenue followed by a fourth quarter rebound largely reflects our strong second quarter results, commencing the operations and maintenance phase of our Congo production solutions project, and the expected start-up and completion of other projects.”
 
Notable Awards and Achievements
 
In the NLA region, we have seen further success in commercializing our SeaCure® technology, which is designed to provide optimal cement placement during the slurry pumping process when the cementing unit shut down, preventing fluid contamination that could have occurred without the SeaCure® solution. 
 
Good business momentum is continuing in the ESSA region. Our team in Ghana completed a 21 well development campaign using Expro’s subsea landing strings. This job has run for 3 ½ years and was completed with no injuries, no service quality events, no high potential safety incidents, along with sustained operational uptime of 99.7% across the entire campaign.
 
In the MENA region, Expro commenced operations for a major well test contract onshore Middle East. The five-year contract requires the mobilization of four trailer mounted conventional testing units and four trailer mounted multi-phase meters, along with 150 incremental personnel.
 
Lastly, in APAC, we successfully completed our 100th job globally with SeaCure®, marking a significant milestone. The job was completed as part of a project in Australia consisting of a five-well subsea batch campaign, highlighting Expro's expertise in providing comprehensive solutions for complex offshore operations. The technology was originally developed by DeltaTek, which Expro acquired in February 2023.

Segment Results 
 
Unless otherwise noted, the following discussion compares the quarterly results for the second quarter of 2024 to the results for the first quarter of 2024.
 
North and Latin America (NLA) 
 
Revenue for the NLA segment was $157 million for the three months ended June 30, 2024, an increase of $27 million, or 20%, compared to $130 million for the three months ended March 31, 2024. The increase was primarily due to higher revenue from all product lines, in particular from higher well construction activity in the U.S., Guyana and Trinidad and higher well flow management activity in the U.S. and Argentina. The increase was supplemented by $5 million of additional revenue as a result of the Coretrax acquisition.
 
Segment EBITDA for the NLA segment was $44 million, or 28% of revenues, during the three months ended June 30, 2024, an increase of $10 million, or 29%, compared to $34 million, or 26% of revenues, during the three months ended March 31, 2024. The increase in Segment EBITDA and Segment EBITDA margin was attributable to higher activity and more favorable activity mix during the three months ended June 30, 2024.
 
Europe and Sub-Saharan Africa (ESSA) 
 
Revenue for the ESSA segment was $168 million for the three months ended June 30, 2024, an increase of $47 million, or 38%, compared to $122 million for the three months ended March 31, 2024. The increase in revenues was primarily driven by increased subsea well access revenue in Angola and higher well flow management revenue in Congo. The increase was supplemented by $4 million of additional revenue as a result of the Coretrax acquisition.
 
Segment EBITDA for the ESSA segment was $35 million, or 21% of revenues, for the three months ended June 30, 2024, an increase of $10 million, or 39%, compared to $25 million, or 21% of revenues, for the three months ended March 31, 2024. The increase in Segment EBITDA and Segment EBITDA margin was attributable to a combination of a more favorable activity mix and increased activities on higher margin services during the three months ended June 30, 2024.
 
Middle East and North Africa (MENA) 
 
Revenue for the MENA segment was $81 million for the three months ended June 30, 2024, an increase of $10 million, or 14%, compared to $71 million for the three months ended March 31, 2024. The increase in revenue was driven by $10 million of Coretrax revenue, partially offset by a slight decline in revenue across other product lines. 
 
Segment EBITDA for the MENA segment was $29 million, or 35% of revenues, for the three months ended June 30, 2024, an increase of $4 million, or 17%, compared to $25 million, or 34% of revenues, for the three months ended March 31, 2024. The increase in Segment EBITDA and Segment EBITDA margin was primarily due to increased activity on higher-margin projects and more favorable activity mix during the three months ended June 30, 2024, including impacts of the Coretrax acquisition.
 
Asia Pacific (APAC)
 
Revenue for the APAC segment was $63 million for the three months ended June 30, 2024, an increase of $3 million, or 5%, compared to $60 million for the three months ended March 31, 2024. The increase in revenue was due to increased well construction activity in Malaysia and Australia and well flow management activity in Thailand supplemented by $2 million of additional revenue as a result of the Coretrax acquisition, partially offset by lower subsea well access activity in China and Australia.
 
Segment EBITDA for the APAC segment was $15 million, or 24% of revenues, for the three months ended June 30, 2024, an increase of $4 million compared to $11 million, or 18% of revenues, for the three months ended March 31, 2024. The increase in Segment EBITDA is attributable primarily to higher activity.
 
Other Financial Information
 
The Company’s capital expenditures totaled $36 million in the second quarter of 2024, of which approximately 90% were used for the purchase and manufacture of equipment to directly support customer-related activities and approximately 10% for other property, plant and equipment, inclusive of software costs. Expro plans for capital expenditures in the range of approximately $65 million to $75 million for the remainder of 2024.
 
As of June 30, 2024, Expro’s consolidated cash and cash equivalents, including restricted cash, totaled $135 million. The Company had outstanding long-term borrowings of $121 million as of June 30, 2024. The Company’s total liquidity as of June 30, 2024 was $271 million. Total liquidity includes $136 million available for drawdowns as loans under the Company’s revolving credit facility.
 
Expro’s provision for income taxes for both the second quarter of 2024 and the first quarter of 2024 was approximately $14 million and $12 million. The Company’s effective tax rate on a U.S. generally accepted accounting principles (“GAAP”) basis for the three months ended June 30, 2024 also reflects liability for taxes in certain jurisdictions that tax on an other than pre-tax profits basis, including so-called “deemed profits” regimes.
 
On May 15, 2024, the Company established an incremental facility under its Amended and Restated Facility Agreement, in order to increase its existing $250 million revolving credit facility by an additional $90 million in commitments, to a total of $340 million. The incremental facility has the same terms and conditions as the existing facility provided under the Amended and Restated Facility Agreement. The incremental facility is available for the same general corporate purposes as the existing facility provided under the Amended and Restated Facility Agreement, including acquisitions. On May 15, 2024, the Company drew down on the new facility in the amount of approximately $76 million to partially finance the Coretrax acquisition.
 
The financial measures provided that are not presented in accordance with GAAP are defined and reconciled to their most directly comparable GAAP measures. Please see “Use of Non-GAAP Financial Measures” and the reconciliations to the nearest comparable GAAP measures.
 
Additionally, downloadable financials are available on the Investor section of www.expro.com.
 
Conference Call
 
The Company will host a conference call to discuss second quarter 2024 results on Thursday, July 25, 2024, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time).
 
Participants may also join the conference call by dialing:
 
U.S.: +1 (833) 470-1428
International: +1 (404) 975-4839
Access ID: 661580
 
To listen via live webcast, please visit the Investor section of www.expro.com.
 
The second quarter 2024 Investor Presentation is available on the Investor section of www.expro.com.
 
An audio replay of the webcast will be available on the Investor section of the Company’s website approximately three hours after the conclusion of the call and will remain available for a period of two weeks.
 
To access the audio replay telephonically:
 
Dial-In: U.S. +1 (866) 813-9403 or +1 (929) 458-6194 
Access ID: 302382
Start Date: July 25, 2024, 1:00 p.m. CT
End Date: August 8, 2024, 10:59 p.m. CT
 
A transcript of the conference call will be posted to the Investor relations section of the Company’s website as soon as practicable after the conclusion of the call.
 
ABOUT EXPRO
 
Working for clients across the entire well life cycle, Expro is a leading provider of energy services, offering cost-effective, innovative solutions and what the Company considers to be best-in-class safety and service quality. The Company’s extensive portfolio of capabilities spans well construction, well flow management, subsea well access, and well intervention and integrity solutions.
 
With roots dating to 1938, Expro has more than 8,000 employees and provides services and solutions to leading exploration and production companies in both onshore and offshore environments in approximately 60 countries.
 
For more information, please visit: www.expro.com and connect with Expro on X @ExproGroup and LinkedIn @Expro.
 
Contact: 
 
Chad Stephenson – Director Investor Relations
+1 (713) 463-9776
[email protected]