Expro Group Holdings NV (XPRO) Q1 2024 Earnings: Mixed Results Amidst Strategic Acquisitions

• Revenue: Reported at $383 million, up 13% year-over-year but down 6% sequentially, exceeding the estimated $369.62 million.

• Net Loss: Recorded a net loss of $3 million, an improvement from a $12 million loss in the previous quarter and a $6 million loss year-over-year.

• Earnings Per Share (EPS): Reported a loss of $0.02 per diluted share, falling short of the estimated earnings of $0.12 per share.

• Adjusted EBITDA: Amounted to $67 million, down 20% sequentially but up 61% year-over-year, with an Adjusted EBITDA margin of 18%.

• Operating Cash Flow: Net cash provided by operating activities was $30 million, a slight decrease from $33 million in the previous quarter.

• Guidance Reaffirmed: Full-year 2024 revenue guidance maintained at $1.6 to $1.7 billion and Adjusted EBITDA expected between $325 million and $375 million.

• Capital Expenditures: Totalled $31 million in the quarter, with plans for $100 to $110 million for the remainder of 2024.

On April 25, 2024, Expro Group Holdings NV (NYSE:XPRO) disclosed its financial outcomes for the first quarter of 2024 through its 8-K filing. The company reported a revenue of $383 million, which represents a 13% increase year-over-year but a 6% decrease sequentially. Despite the revenue surpassing the quarterly estimate of $369.62 million, the company experienced a net loss of $3 million, contrasting with an estimated net income of $11.76 million.

Company Overview

Expro Group, a prominent player in the oil and gas industry, offers extensive services across the well life cycle including well construction, flow management, intervention, and subsea access. The company, known for its production optimization solutions for both onshore and offshore applications, operates predominantly in international and offshore markets which constitute about 80% and 70% of its annual revenue, respectively.

Financial and Operational Challenges

The reported net loss of $3 million this quarter, which improved from a $6 million loss in the same quarter the previous year, reflects ongoing challenges in the industry. The net loss margin improved slightly to (1)% from (3)% in the previous quarter. These figures underline the volatile nature of the oil and gas market, affected by seasonal trends and budget cycles of national oil company customers.

Strategic Acquisitions and Market Positioning

Expro's strategic maneuvers, including the acquisition of PRT Offshore and the pending acquisition of Coretrax, are pivotal in its expansion and enhancement of service offerings. These acquisitions are expected to integrate seamlessly and contribute to the company's robust portfolio in well construction and intervention solutions.

Detailed Financial Performance

The company's Adjusted EBITDA stood at $67 million, down 20% sequentially but up 61% from the previous year, reflecting a mixed impact from varying segment performances and cost management strategies. The Adjusted EBITDA margin also saw a reduction to 18% from 21% in the last quarter. This financial metric is crucial as it provides insights into the company's operational effectiveness and underlying profitability excluding non-recurring costs.

Segment Performance Insights

Performance across geographical segments was mixed. The North and Latin America (NLA) segment saw a revenue decline of 10%, primarily due to decreased well construction activities. Conversely, the Middle East and North Africa (MENA) segment reported a revenue increase of 9%, driven by higher well flow management activities, showcasing the regional variances in market conditions.

Outlook and Forward Guidance

CEO Michael Jardon expressed confidence in the company's trajectory, citing strong order intake and stable backlog which supports the reaffirmed full-year 2024 guidance expecting revenues between $1.6 billion and $1.7 billion, and Adjusted EBITDA between $325 million and $375 million. This outlook is bolstered by strategic expansions and an anticipated recovery in international and offshore markets.

Expro Group Holdings NV (NYSE:XPRO) continues to navigate a challenging market environment with strategic acquisitions and operational adjustments aimed at long-term growth and market leadership in the oil and gas industry.

For detailed financials and further information, please refer to the full 8-K filing.

Explore the complete 8-K earnings release (here) from Expro Group Holdings NV for further details.

This article first appeared on GuruFocus.