Helix Energy Solutions Group Q2 2025 Earnings Report

Helix Energy Solutions Group EPS Results

• Actual EPS: -$0.02
• Consensus EPS: $0.01
• Beat/Miss: Missed by -$0.03
• One Year Ago EPS: N/A

Helix Energy Solutions Group Revenue Results

• Actual Revenue: $302.29 million
• Expected Revenue: $326.62 million
• Beat/Miss: Missed by -$24.33 million
• YoY Revenue Growth: N/A

Helix Energy Solutions Group Announcement Details

• Quarter: Q2 2025
• Date: 7/23/2025
• Time: After Market Closes
• Conference Call Date: Thursday, July 24, 2025
• Conference Call Time: 10:00AM ET

Helix Energy Solutions Group (NYSE:HLX), together with its subsidiaries, an offshore energy services company, provides specialty services to the offshore energy industry in Brazil, the Gulf of Mexico, the East Coast of the United States, North Sea, the Asia Pacific, and West Africa regions. The company operates through four segments: Well Intervention, Robotics, Production Facilities, and Shallow Water Abandonment segments. It engages in the installation of flowlines, control umbilicals, and manifold assemblies and risers; trenching and burial of pipelines; installation and tie-in of riser and manifold assembly; commissioning, testing, and inspection activities; and provision of cable and umbilical lay, and connection services. The company also provides well intervention, intervention engineering, and production enhancement services; coiled tubing operations; inspection, repair, and maintenance of production structures, trees, jumpers, risers, pipelines, and subsea equipment; and related support services. In addition, it offers reclamation and remediation services; well plug and abandonment services; pipeline, cable and umbilical abandonment services; and site inspections. Additionally, the company offers oil and natural gas processing facilities and services; and fast response system, as well as site clearance and subsea support services. Further, it provides offshore oilfield decommissioning and reclamation, project management, engineered solutions, intervention, maintenance, repair, heavy lift, and commercial diving services. It serves independent oil and gas producers and suppliers, pipeline transmission companies, renewable energy companies, and offshore engineering and construction firms. The company was formerly known as Cal Dive International, Inc. and changed its name to Helix Energy Solutions Group, Inc. in March 2006. Helix Energy Solutions Group, Inc. was incorporated in 1979 and is headquartered in Houston, Texas.

Helix Energy Solutions Group Q2 2025 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Our Q2 results included $302 M revenue, $15 M gross profit and a $3 M net loss, with negative operating and free cash flow.
• Negative Sentiment: We cut full-year 2025 guidance to $1.2–1.3 B in revenue and $225–265 M in adjusted EBITDA, reflecting softer Gulf and North Sea markets.
• Positive Sentiment: Balance sheet remains strong with $320 M cash, $375 M total liquidity and a $8 M net cash position.
• Positive Sentiment: Secured a 3-year framework agreement with Exxon for Gulf of America decommissioning and an 800-day North Sea trenching contract starting in 2027.
• Neutral Sentiment: Responding to downtime and weak demand by accelerating the Q4000 drydock into Q3 2025 and stacking vessels to preserve availability for 2026.

Presentation

[Operator]

Thank you for standing by. My name is Gail, and I will be your operator for today. At this time, I would like to welcome each and every one of you to the Q2 twenty twenty five Helix Energy Solutions Group, Inc. Earnings Conference Call. All lines have been placed on mute to prevent any background noise.

[Operator]

After the speakers' remarks, there will be a question and answer session. It is now my pleasure to turn today's call over to Brent Arriaga, Vice President of Finance and Accounting. Please go ahead.

[Brent Arriaga, VP - Finance & Accounting and Chief Accounting Officer at Helix Energy Solutions Group]

Good morning, everyone, and thanks for joining us today on our conference call where we will be reviewing our second quarter twenty twenty five earnings release. Participating on this call for Helix today are Owen Kratz, our CEO Scotty Sparks, our COO Eric Staffelt, our CFO Ken Neikirk, our General Counsel Daniel Stewart, our Vice President of Commercial and myself. Hopefully, you've had an opportunity to review our press release and the related slide presentation released last night. If you do not have a copy of these materials, both can be accessed through the Investor Relations page on our website at ww.helixesg.com. The press release and slides can be accessed in the News and Events tab.

[Brent Arriaga, VP - Finance & Accounting and Chief Accounting Officer at Helix Energy Solutions Group]

Before we begin our prepared remarks, Ken Neikirk will make a statement regarding forward looking information. Ken?

[Ken Neikirk, EVP, General Counsel & Secretary at Helix Energy Solutions Group]

During this conference call, we anticipate making certain projections and forward looking statements based on our current expectations and assumptions as of today. Such forward looking statements may include projections and estimates of future events, business or industry trends or business or financial results. All statements in this conference call or in the associated presentation other than statements of historical fact are forward looking statements and are made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Our actual future results may differ materially from our projections and forward looking statements due to a number and variety of risks, uncertainties, assumptions and factors, including those set forth in Slide two of our presentation and our most recently filed annual report on Form 10 ks, our quarterly reports on Form 10 Q and in our other filings with the SEC. You should not place undue reliance on forward looking statements, and we do not undertake any duty to update any forward looking statement.

[Ken Neikirk, EVP, General Counsel & Secretary at Helix Energy Solutions Group]

We disclaim any written or oral statements made by any third party regarding the subject matter of this conference call. Also during this call, certain non GAAP financial disclosures may be made. In accordance with SEC rules, the final slides of our presentation provide reconciliations of certain non GAAP measures to comparable GAAP financial These reconciliations, along with this presentation, the earnings press release, our annual report on Form 10 ks and a replay of this broadcast will be available under the For the Investors section of our website at www.helixesg.com. Please remember that information on this conference call speaks only as of today, 07/24/2025, and therefore, you are advised that any time sensitive information may no longer be accurate as of any replay of this call. Scotty?

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

Thanks, Ken, and good morning, everyone. Thank you for joining our call today. We hope everybody is doing well. This morning, we will review our second quarter highlights, financial performance and operations. We'll provide our view of the current markets and update our guidance for 2025. Teams offshore and onshore safely delivered another well executed quarter. Our current safety statistics are among our best on record. Moving on to the presentation, slides six and seven provide a high level summary of our results, and key highlights for the quarter. As expected, our second quarter results were negatively impacted by the regulatory docking of the Q5000, the transit and demobilization of the Q4000 from Nigeria, and the market conditions in The UK, leading to the continued warm stacking of the Seawell.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

In addition to these factors, we also experienced a later start to a Gulf Of America shelf season, And we incurred a high number of deferred mobilization days at the end of the second quarter, on the Q5000, Q4000, and Well Enhancer, that have shifted revenues into the next quarter. Revenues for the second quarter were $3.00 2,000,000, with a gross profit of 15,000,000 and a net loss of 3,000,000, compared to $278,000,000 in revenue, 28,000,000 in gross profit, and a net income of 3,000,000 in Q1. Adjusted EBITDA was 42,000,000 for the quarter, and had a negative operating cash flow of 17,000,000, resulting in negative free cash flow of 22,000,000. Year to date, we have generated revenues of $518,000,000, gross profits of 42,000,000, and a breakeven net income, with adjusted EBITDA of $94,000,000 Our cash and liquidity remained strong, with cash and cash equivalents of $320,000,000 and liquidity of $375,000,000 at the quarter end. Highlights for the quarter include, Brazil operating three vessels on longer term contracts, successful completion of operations for the Q4000 in Nigeria, and safe passage back to the Gulf Of America, deployments of our third boulder grab and utilization in the quarter for all three boulder grabs, deployments of the JD Assista and the iPlayer on the Baltic Sea, execution of a three year framework agreement with Exxon for shallow water decommissioning in the Gulf Of America, and in July, we signed a multi year minimum eight hundred days trenching contract for the North Sea, commencing in 2027, securing trenching work well into 02/1930.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

Over to Slide nine. Slide nine provides a more detailed review of our segment results and segment utilization. In the second quarter, we continued to operate globally with minimal operational disruption, with operations in Europe, Asia Pacific, Brazil, Africa, The Gulf Of America and The U. S. East Coast.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

Our second quarter results were supported by strong seasonal improvements in robotics activity, free well intervention vessels operating in Brazil, and the marginal improvements in shallow water abandonment. These were offset by the regulatory docking of the Q5000, the demobilization of the Q4000, and the stacking of the Seawell. Slide 10 provides further detail of our Well Intervention segment. The Q4000 completed operations in Nigeria, and a safe transit back to the Gulf Of America during the quarter. The vessel then performed a brief shipyard visit for planned repairs, after which it commenced work on a free well decommissioning project.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

Due to some gaps in its schedule, on completion of the works, we plan to pull forward the 2026 planned regulatory docking into 2025, to facilitate a clean runway in 2026. The Q5000 worked on one well in the Gulf Of America in Q2, prior to undertaking planned regulatory five year class maintenance and inspection. The vessel is currently working on a multi well program for one client, prior to its scheduled return to work for Shell. In the North Sea, the well enhancer had 100% utilization during the quarter, working on four wells for three customers. Due to the well known market turmoil in The U.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

The C well remained warm stacked and is expected to remain warm stacked at a low cost base for the remainder of 2025. In Q2, the Q7000 completed work on five wells per shell on the four hundred day decommissioning campaign in Brazil. The SH1 had 94% utilization working for Trident. And in late Q3, early Q4, the vessel is expected to transfer to the three year Petrobras contract, with a gap in operations, whilst undergoing vessel acceptance. ESH2 had a very strong quarter, with 100% utilization for Petrobras.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

Moving to slide 11. Slide 11 provides further detail of our Robotics business. Robotics had a strong quarter. The business performed at high standards, operating seven vessels during the quarter, working between trenching, ROV support and site survey work, on renewables and oil and gas related projects globally. Robotics worked six vessels on renewables related projects within the quarter, and had strong vessel utilization overall, with three vessels working on trenching projects.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

We operated three vessel trenching spreads in Europe, including the GC3 and the North Sea Enabler with jet trenches, and the JD Assisted with the I Plow. The Glomar Wave and the Trim Support vessels are working on renewable site clearance utilising the IROP Boulder Grabs in Europe. And the Shirela board along completed a small project in the Gulf Of America, prior to transiting to The US East Coast for renewables works. Also in renewables, we have the T-fourteen oh one trencher working on a longer term contract, from a third party vessel of Taiwan. In July, we are mobilizing the T14002 on a third party vessel for a longer term contract in the Mediterranean.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

The GC2 in the Asia Pacific region performed all the gas support work offshore Malaysia during the quarter. Our renewables and trenching outlook remain very robust, with numerous contracted works in 2025 through to 02/1930. We are extremely pleased to recently announce that we executed a multi year, eight hundred day minimum trenching spread contract in the North Sea. The contract commences in 2027, for an initial four year period plus options. And the long term outlook for global renewables market is very strong, with a solid pipeline of tender activity as far out as 02/1932.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

Slide 12 provides detail of our shallow water abandonment business. In Q2, activity there was increased as the season commenced, led by the start of the season for the Hedron heavy lift barge, and an increase in utilization, with a high number of P and A spreads working offshore. We expect similar or improved activity into Q3. Whilst 2025 continues to be a soft year, we continue to believe in the long term outlook of this segment, as well as age and customers look to reduce their decommission obligations. This is further supported by a recent award of a three year agreement for decommissioning services with Exxon.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

In summary, whilst we have seen a softer than expected UK intervention market, and some potential gaps possible later in the year for the Q4000, due to work being pushed back into 2026, we are encouraged by our strong robotics in Brazil segments, We are pleased to see improved tender activity, with some quite sizable tenders in The UK globally. We're expecting Q3 to be a very strong quarter. I'd like to thank our employees for their efforts, delivering again at a high level of execution, and for securing backlog and long term contracts. I will now turn the call over to Brent.

[Brent Arriaga, VP - Finance & Accounting and Chief Accounting Officer at Helix Energy Solutions Group]

Thanks, Scotty. Moving to Slide 14, it outlines our debt instruments and key balance sheet metrics as of June 30. At quarter end, we had $320,000,000 of cash and availability under the ABL facility of $70,000,000 with resulting liquidity of $375,000,000 Our funded debt was $319,000,000 and we had negative net debt of $8,000,000 at quarter end. Our balance sheet is strong and is expected to strengthen further as we anticipate generating meaningful free cash flow in the 2025 and beyond and have minimal debt obligations between now and 2029. I'll now turn the call over to Eric for a discussion on our outlook.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

Thanks, Brent. As we provide an outlook for the second half of twenty twenty five, our customers are reacting to the uncertainties created by the current geopolitical environment and the financial impact of lower oil prices. Our customers are deferring work in the North Sea and Gulf Of America impacting our Well Intervention and Shallow Water Abandonment segments. We are taking steps to mitigate the impacts of the slower market. As discussed last quarter, in the North Sea, we have stacked the Sea well.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

In the Shallow Water Abandonment segment, we have stacked five of our vessels. This quarter, in response to the slowing Gulf Of America well intervention market, we have accelerated the regulatory maintenance on the Q4000 into 2025 from 2026. The maintenance period is expected to take approximately thirty days and be performed in the third quarter. This will limit the utilization on the Q4000 during 2025 during this period of slower demand, but is designed to provide greater availability in 2026. In our outlook, we have endeavored to account for the increased uncertainty and risk in our markets.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

We are adjusting our outlook as follows: revenue to a range of 1,200,000,000.0 to $1,300,000,000 and EBITDA to a range of $225,000,000 to $265,000,000 both revenue and EBITDA decreasing with the softer Gulf Of America Well Intervention market Free cash flow, a range of 90,000,000 to $140,000,000 variability driven by EBITDA changes as well as the ultimate working capital movements. Capital of 70,000,000 to $80,000,000 slight increase in CapEx due to the acceleration of the regulatory maintenance period on the Q4000 into 2025. These ranges include some key assumptions and estimates adjusting for the current market environment with any significant variation from these assumptions and estimates causing results that could fall outside our estimates and ranges provided. Our quarterly results typically follow a seasonal pacing with more active summer months and slower winter months. For the second half of twenty twenty five, we expect the third quarter to be our strongest 2025 with good contract coverage.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

The timing of our expected free cash flow generation is concentrated to the latter half of the year. Providing our key assumptions by segment. First with our Well Intervention segment, the Q4000 is currently completing a project and scheduled to commence regulatory docking by the July. Vessel is expected to be available in September. We are pursuing opportunities but do expect gaps in the schedules.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

Q5000 has strong contract coverage and expected to have high utilization into 2026. As discussed, The UK North Sea is weak and we have stacked the Seawell and are focusing work on the well enhancer. The well enhancer is expected to have good utilization into Q4. The Q7000 is operating for Shell in Brazil on a firm four hundred day project. The Siem Helix two is on contract for Petrobras.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

The Siem Helix one is currently performing well abandonment for Trident with contracted work to extend to the end of Q3 followed by a three year contract with Petrobras. The vessel is expected to have an approximate thirty day off hire period as it transitions for vessel acceptance between contracts. Moving to the Robotics segment, it continues to generate positive returns. Bidding activity has been and continues to be extremely active. We recently announced a significant trenching contract in the North Sea representing over eight hundred days of trenching beginning in 2027.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

In the North Sea, the Grand Canyon 3 is expected to have an active trenching season with overall strong utilization. The North Sea neighbor has contracted trenching projects into Q4. The Glomar Wave and Trim are forecast to have good utilization performing site clearance operations. T-fourteen hundred-two is contracted for its first work in the Mediterranean in the second half of twenty twenty five. The APAC region, the Grand Canyon II has contracted work through Q4.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

The T-fourteen hundred-one trencher is working on client provided vessel and is expected to remain in Taiwan through the end of twenty twenty five. The U. S, the Shalea Bordelon has contracted work in Gulf Of America and The U. S. East Coast into Q3 then is scheduled to transition back to the Gulf Coast with good utilization expected into Q4.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

Moving to production facilities, the HP1 is on contract, balance of 25% recently extended to June of 26% with no current expected change. We do have expected variability with production as the Droshky Field continues to deplete and Thunder Hawk Field is shut in. Continuing our shallow water abandonment segment, we had a strong third quarter before being impacted by the normal seasonal slow down during the fourth quarter. We expect the offshore marine business to maintain good utilization on five to seven lift boats with some variable seasonality on the OSVs and crew boats. The energy services should have seasonal utilization for up to 10 P and A spreads and up to two coal tubing units and 25.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

There is seasonality in the diving and heavy lift business where the epihedron and diving vessels are expected to have good utilization during Q3, but slow down during Q4. Moving to Slide 18, our CapEx forecast for 2025 is heavily impacted by the dry docks and maintenance periods on our vessels. The Seawell Q7000, Q5000 completed their dry docks in the first half of twenty twenty five. The Q4000 is now planned to enter dry dock in the third quarter with forecasted completion at the August. We are increasing our CapEx range for 2025 to 70,000,000 to $80,000,000 to account for the acceleration of the Q4000 docking into 2025.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

The majority of our CapEx forecast continues to be maintenance and project related, which primarily falls into operating cash flows. Reviewing our balance sheet, our funded debt of $319,000,000 at June 30 is expected to decrease further by $4,000,000 in 2025 with scheduled principal payments on our merit debt. We repurchased $30,000,000 worth of our shares during the second quarter. At this time, I'll turn the call back to Owen for a discussion on our current outlook for 2025 and beyond and for closing comments.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

Thanks, Eric. Well, I've never been one to gloss over the challenges we're facing or have faced in the past and what we tell investors. Last year going into the year with higher rates and major contract awards, it was easy to think we were in a sustainable up cycle. Many companies including Helix are disappointed in the 2025 market. While the long term fundamentals are solid and cash flow outlook is still strong, the market is more nuanced than the expectations for continuing improvements would suggest.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

The markets for 2025 can best be described as impacted by uncertainty and indecision on the part of the producers. We have three primary markets that have disappointed and negatively impacted our expected results. You notice in this that these are areas where we're most exposed to the spot market nature of the market. First, The UK North Sea market has come to a temporary standstill coming into the year to some degree we expected this as a result of government policy uncertainty, continuation of the excess profit tax and merger activity with resulting integration periods as producers with profitable outlooks merge with producers with net loss tax positions. But I'm not sure anyone anticipated the true weakness of this market this year.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

We know several major producers have announced their intentions to leave The UK North Sea. This should generate meaningful levels of abandonment work with most of it being forecasted to occur starting in 2027. At this time, planning and engineering is occurring. We do see at least two significant larger projects for 2026, but the competition for them is expected to be stiff, affecting potential margins. Our expectations for 2025 remain low with improvement in 2026 and recovery by 2027.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

In the Gulf Of America intervention market, the intervention market is also looking soft for the second half of the year. The Q5000 backlog looks solid. Depending on demand, the Q4000 may be able to find more consistent opportunities deployed elsewhere. To position for this flexibility, we're bringing the regulatory drydocking forward into 2025. This will have ramifications in 2025, but sets up for more available days in 2026 and flexibility on regional deployment.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

Third area to mention is the shallow water abandonment. There continues to be a significant backlog of regulatory required abandonment work in the Gulf Of America shelf. The abandonment orders are being given out, but 2025 has proven to be a year of planning, engineering and permitting. As a result, the volume demand has been low with competitive pressures depressing margins and increasing labor costs as all contractors struggle to find skilled people. We believe we've rightsized the business for 2025, but lower margins and higher labor costs will result in a second year of less than satisfactory results.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

We expect 2026 to improve with further improvement in 2027. Elsewhere, Helix is operating as expected with a strong three vessel market in Brazil for intervention and the offshore trenching and site clearance market demand remaining strong globally despite the challenges of The U. S. Wind farm market. In production facilities, our Droshky field continues to produce well beyond the original expected end of production.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

The Thunder Hawk field remains shut in while planning and long lead items are prepared for an intervention. At this time, we're planning for production to be restored in early twenty twenty six. Again, I've never been one to shy away from challenges we face and whether it's good or bad, we're open with our shareholders. There's no doubt that 2025 has not gone as well as we'd expected, but the overarching themes are macro instability and market uncertainty, lower oil prices and resulting lower cash flows. The customers are facing their own challenges and it's pushing out their spend and impacting our business.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

In spite of these unexpected hiccups for 2025, Helix remains financially very strong. Even in this down market, we're anticipating free cash flow generation that's likely greater than 100,000,000 with a strong balance sheet and good long term backlog. With signs of renewed activity in the North Sea well intervention market, we still have expectations for a meaningful improvement in 2026 and a return to full strength results by 2027. So thanks, Eric, and thank everybody for joining us today. We very much appreciate your interest and participation and look forward to having you on our third quarter twenty five call in October.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

Operator, at this time, we'll go ahead and take any questions.

[Operator]

Okay. So your first question comes from the line of Greg Lewis with BTIG. Please go ahead.

[Gregory Lewis, Managing Director at BTIG]

Yes. Hey, thank you and good morning and thanks for taking my questions everybody. I want to appreciate the comments and clearly as we look at a shallower abandonment, it's kind of been it's kind of just been there, not maybe not as good, definitely kind of hanging in there. I guess my question is, as you think about that market, there's always this give and take around, well, there's a lot of wells that need to be plug and abandoned, the regulatory backdrop around that and then of course the oil price also seems to matter. As you kind of think about what we should be looking at for potential signs of shallow water in Like what do you think we should be focused on just thinking that it looks like we might be finding a bottom here?

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

I think we are at a bottom right now. When the Fieldwood and the Cox bankruptcies occurred, I think it became apparent to the industry that the model was sort of broken and this is the first time we've seen massive boomerang properties going back to the majors. That's been a relatively new thing for the government and the producers to deal with. And I think what you're seeing right now is a little indecision on the part of both. The government basically came out and allowed the producers a three year period to come up with a plan.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

Some producers are going ahead and getting ahead of that curve. But when that happened and the Cox bankruptcy was delayed, that basically means that right now all the producers are sort of trying to figure out what are they going to do, what are their plans and then doing the engineering and permitting all takes time. I think by 2027, that period expires. So what I would look at is the bidding activity between now and 2027. Are you going to see producers getting ahead of the curve and coming out with major bids?

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

I think we just announced that we won a major contract with Exxon three years, it's what 195 wells or thereabouts. So that was a major bid that came out. I think you'll see follow on bids coming out. So I would watch the bid activity over the next twelve months to judge as to when the market returns to normalcy.

[Gregory Lewis, Managing Director at BTIG]

Okay, great. And then just on the well intervention in the Gulf Of Mexico and the Gulf Of America, yes, when we think about that with the Q5 and the Q4, clearly, the Q5 is good for the remainder 2025. And I know we don't necessarily comment on pricing. But maybe could you talk a little bit about maybe the difference in how we should think about if we're able to secure like multi quarter work versus versus spot work. And I'm kind of curious on your view, I know one of the Globetrotter rigs that had previously kind of competed in Well Intervention is leaving the Gulf, right?

[Gregory Lewis, Managing Director at BTIG]

It's heading over to, I believe, the Black Sea. So just kind of curious how that positions your assets in the Gulf Of America just sometimes things benefit from a little less competition.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

That's true. I don't really see the competition as being the hurdle for us. That's not the challenge for us. I think we're very competitive and our efficiency can outcompete rigs. I don't see that as the issue.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

I think what happened this year is we were anticipating a little bit of a softness, which is why we took the work in Nigeria with the Q4000. That work unfortunately ended a little bit short because a couple of the wells that they were planning to do got eliminated from the schedule by the client and that cut our time in West Africa short, which was not a major issue because we were looking and in discussions with a lot of clients about work that originally at the beginning of the year, they had planned to do for the second half of the year. By the time we got back to The Gulf though, most of these producers decided not to spend the money and the work all pushed out into 2026, which has left us with a gaping hole in the second half of the year for the Q4000, which was unanticipated and it wasn't even visible until we got back here. So we're scrambling right now. I wouldn't say that it's a fate to complete, but we did decide that we would move the dry docking forward into this year, so that we would have the vessel fully available for what we would expect as an increase in demand for 2026.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

So we'd have more available days. And Scotty, you may have a little more insight.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

Yes. I think we should add that the Q5000 is very well contracted at good rates the remainder of 2025 and has a good backlog going into 2026 with Shell and options with other clients, plus options into 2027. So Q5000 is in very good shape at good rates. Q4000, one of the reasons we've moved the regulatory docking forward into 2025 is we're also looking at works out with the Gulf Of Mexico again, Southern America, back in Africa, whereas we wouldn't be able to undertake the regulatory planning and docking for that asset. We're seeing a lot of work go from 2025 into 2026.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

There's some good discussions with clients, but Q5000 is looking good. And international opportunities are in discussion for the Q4000 again.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

I think I'll just add a little bit more because if you're looking for a bridge from last year to this year and what happened, I think as I mentioned earlier, you don't need to look farther than the exposure to the spot market, which segments of ours are exposed mostly to the spot market. The areas that we are having that exposure is the Well Ops UK, the shallow water abandonment and the fourth quarter here for the Gulf Of America for the Q4000. Those are the three areas where we it's typically a spot market. It's not a matter of the competition or the rigs, white space or anything else. It's simply a matter that the clients we can suffer a slowdown in one area, maybe two, but when all three areas slow down in the same year, that results in the impact that you're seeing on our results for this year.

[Gregory Lewis, Managing Director at BTIG]

Okay. Super helpful. Thanks for the color.

[Operator]

Your next question comes from the line of Jim Shum with TD Cowen. Please go ahead.

[James Schumm, Senior Analyst at TD Cowen]

Hey, good morning guys.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

Good morning,

[James Schumm, Senior Analyst at TD Cowen]

Jim. Maybe just starting in robotics. If I look at the Subsea Robotics revenue this quarter year over year, the revenues are up a little bit, but EBIT was way down. So what's driving that? Is that I mean, I see some lower integrated trenching work, but is that it? Or is there something else?

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

The main reason for that is that last year we had the T1401 and the vessel and the full package operating in Taiwan. This year, the client has provided the vessel and the survey. So we just have the trencher on contract to the client in Taiwan. So there's quite a big difference. Think year over year, it results in about $10,000,000 worth of difference of not providing the full trenching spread and just providing the trencher.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

So I think, Jim, yes, think there is a little bit of a margin difference in our contract makeup. I think we have a bit more vessel days as our contracts are primarily day rate contracts. Last year, we had some lump sum contracts that were completed at the end of the second quarter at very good margins. And so I think that's where you see probably an increase in cost is higher asset activity, so to speak, on day rates as opposed to some of the lump sum benefit from last year.

[James Schumm, Senior Analyst at TD Cowen]

Okay. Thank you. On the shallow water, you said you've rightsized the business, but it is Q2. It's a seasonally strong quarter typically and you're EBIT neutral. So I mean, what's the I would think that maybe you'd want to go after more cost cuts here, but you said you're right sized.

[James Schumm, Senior Analyst at TD Cowen]

So how should we how are you thinking about that?

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

So I think the second quarter in shallow water was a bit disappointing. I think the biggest driver from our standpoint was the later start on our heavy lift. That is a season that's usually between one hundred and fifty and one hundred and eighty days. We had expected to be able to start in early May. And due to weather patterns in The Gulf, we weren't able to, I think mobilize that asset until the, you could say, June.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

And so I think that had a significant impact on our expectations there, obviously increased the cost ready to mobilize that asset and were hampered by the weather patterns there. So that was a big driver of that. I think Owen, you can speak to perhaps the P and A side of things, but that was a big driver of some of the, I guess, poor performance in the second quarter.

[Daniel Stuart, VP - Commercial at Helix Energy Solutions Group]

I think in addition, we're seeing downward pressure on lift boat rates The market utilization at the moment is fairly low. So our larger lift boats are having to compete with the smaller lift boats that command a lower rate in the marketplace. So that coupled with the Heathen Lake start has really led to the lower than expected Q2 results. But we do expect improvement on a go forward basis.

[Daniel Stuart, VP - Commercial at Helix Energy Solutions Group]

I think very telling and as Owen sort of mentioned previously is the bid activity and the recent three year Exxon framework agreements. On a go forward basis, we expect that to provide roughly one thousand days of overall utilization in the P and A spreads over that three year period with pull through for other assets. So we do want to ensure that we can meet demand on a go forward basis as well.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

And I think on just an overview, we did right size the business. We cut roughly $15,000,000 worth of cost out of the business, but we had sufficient personnel and equipment on the ready to be able to deal with the peak of the market. The problem is with the dearth of work out there, all of the competitors are seeking utilization. So the competitive rates have been reduced greatly, margins have been reduced greatly. And in order to provide for that utilization, there's been a real competition on personnel.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

When we rightsized the business, we did let people go. We've stacked five vessels and that started sort of an exodus of people. And due to the competitive pressures, we then responded by increasing our labor costs. So that sort of gives you a picture of we did cut costs, had to add back and we're carrying capacity to meet the peak demand during the middle of the season so that we can maintain market share.

[James Schumm, Senior Analyst at TD Cowen]

Understood. Thank you. And then what about the so I understand the rationale for the Q4000 accelerating the regulatory maintenance here. But why not remediate the Thunder Hawk well this year while you have this downtime? Like why wait till early twenty twenty six when potentially you could be doing customer work at that time? To Why not pull that

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

do the intervention on the Thunder Hawk well, first of all, it took a lot of time to try and diagnose what was going on. And then we work with partners. So in order to bring them along, one of the potentials is that the downhole safety valve could be faulty among other things. But we that required a long lead order time in order to have the insert valve manufactured and to make sure that we had the right SOPs in place to be able to carry that out. Beyond that, the partners would there's different methodologies for clearing the blockage and the partners both partners are strongly in favor of exhausting all possibilities prior to doing an intervention.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

And I don't know, Daniel, you have a little more clarity on that?

[Daniel Stuart, VP - Commercial at Helix Energy Solutions Group]

I think that's accurate. We're expecting the delivery of long lead items towards the back end of Q3 going into the beginning of Q4. And also the partners have a preference for the intervention to carry it out at a slightly later date. So early 2026 is also their preference.

[James Schumm, Senior Analyst at TD Cowen]

Okay, great. Thank you. I'll get back in queue.

[Operator]

Your next question comes from the line of Jim Rollison with Raymond James. Please go ahead.

[Jim Rollyson, Director & Equity Research Analyst at Raymond James Financial]

Hey, good morning, guys. Owen, you kind of covered this a little bit, but maybe just to dive in a little bit more on intervention and the decisions from some of your customers to push work. Just curious when you have these conversations, what's the main challenges that they're looking at that's kind of driven incremental pushes from ninety days ago to now? Is it the tariff uncertainty? Is it the oil price?

[Jim Rollyson, Director & Equity Research Analyst at Raymond James Financial]

I'm just kind of curious as we set up for what you're kind of describing as a maybe better '26 and heading into an even better '27, maybe just so we understand the drivers better so you can kind of think about how realistic those time frames are when that work comes back, if that makes sense.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

Joe, I think it's a matter of all of the above. I think you have a weaker oil prices, you have the regulatory uncertainty in the fiscal regime in the North Sea. It's just a plethora of reasons. What happens is that the producers basically, because of all the uncertainty, just decide that they're going to sit on the sidelines right now and everything just gets pushed to the right. Now how far it gets pushed to the right, that's the question that we're trying to figure out probably the industry as well.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

I've seen some people coming out saying second half of twenty twenty six, we think it's going to be more, it's not a light switch that turns on at some point in time. I think what we're expecting is that some of the activity can't be pushed out to the right forever and some of the producers are going to get back into the game a little early. So that's why we're seeing a gradual ramp up during 2026. And who knows, but I'm hoping that a lot of the uncertainty or the pent up demand allows us to get back to a more normalized market by 2027. We're certainly seeing the green shoots in, for instance, The UK, where producers even the producers that say they're going to get out that then trips the clock on when they do their P and A.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

And everything that I've seen right now would indicate that that's going to become pretty heavy between '27 and 3031.

[Jim Rollyson, Director & Equity Research Analyst at Raymond James Financial]

Got it. That's helpful.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

We're in discussion with some large tenders in the North Sea that would take us back hopefully in 2026 to a two vessel market. And the feedback from the customers in the Gulf Of Mexico, they've seen two sizable drops in oil price, and they're just pushing decommissioning work out into 2026.

[Jim Rollyson, Director & Equity Research Analyst at Raymond James Financial]

For that Owen and Scotty. Yes, that was why I was asking because obviously tariff uncertainty is probably more clarified. The UK, who knows? And there's a lot of speculation that oil prices may get worse before they get better. So that was kind of the context of the question.

[Jim Rollyson, Director & Equity Research Analyst at Raymond James Financial]

When you look at 3Q specifically, when you think about the guidance adjustment lower, is most of that reduction coming in 4Q, like you mentioned 3Q being your best quarter seasonally stronger, etcetera. But I'm just kind of curious as we think about the magnitude of improvement in 3Q versus maybe what we were expecting ninety days ago.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

Yes. No, I think thinking about it from a perspective of impacting our fourth quarter is the right way to visualize it. We do have a very strong contracted backlog. Probably have a little bit of weakness on the Q4000 towards the end of the quarter. But the driver of, you could say, our adjustment to guidance and the uncertainty that we see is really in the fourth quarter.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

It's always a challenge with the normal seasonal downturn, how quickly operators are going to shut down activity. But then, of course, on top of that is the general reluctance to spend and the impact that that's having on our Well Intervention market in the Gulf Of Mexico. So it is concentrated in the fourth quarter.

[Jim Rollyson, Director & Equity Research Analyst at Raymond James Financial]

Got it. And Eric, just one last thing on the free cash flow, obviously, mentioned second half ramp versus first half. Looks like DSOs ticked up a decent amount this quarter. Maybe just a little color on kind of what's going on there? And I presume unwinding some of that is part of what helps drive the second half improvement.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

Yes, think our DSO did jump up quite a bit here in the second quarter. I think we have a couple of larger blue chip customers that are pushing out payments and making that a little bit challenging. But I think that's something that we'll be able to address obviously before the end of the year.

[Jim Rollyson, Director & Equity Research Analyst at Raymond James Financial]

Got it. Thank you, guys.

[Operator]

Your next question comes from the line of David Smith with Pickering Energy Partners. Please go ahead.

[David Smith, Director at Pickering Energy Partners]

Hey, good morning. And I apologize in advance if my question's been touched on. It's been a busy morning in OFS land. And I understand there can be quarter to quarter volatility and well intervention, right? Things like contract transitions, regulatory downtime, accounting for mobilizations.

[David Smith, Director at Pickering Energy Partners]

I'm just struggling a little bit to reconcile the Q2 segment results with Q1. Based on disclosed utilization, it looks like operating days were actually a little higher in Q2. The revenue and profitability came down pretty sharply. Can you walk us through the main drivers of that step down? And was there anything in the Q2 segment result that was much different than what you expected ninety days ago?

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

So from that standpoint, David, we don't give annual guidance, but we did, I think, say that we expected our Q2 results to be more in line with Q1 because of the regulatory drivers. Q1 was about $52,000,000 We came in about $42,000,000 of EBITDA in the second quarter. Two big drivers there. Number one, I think the shallow water, obviously, slower start to the season that impacted us a bit. And then of course, we mentioned before the number of mobilization days where we had deferred revenue cost and margins associated with Well Intervention that got pushed into the third quarter.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

That was approximately about twenty days. And so those were probably the two biggest drivers that did not allow us to achieve sort of results in line with the first quarter. As far as the revenue, I think what we'll say is, I think the utilization numbers include forty five days of transit on the Q4000, which were not revenue days, but were cost incurred days. So I think that is possibly skewing the numbers. And then the rates on the Q4000 working overseas in Nigeria, where there's a significant amount of pass throughs also definitely skews the revenue and per day rate that you see in Q1.

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

I don't know Brent if there's anything you'd like to add.

[Brent Arriaga, VP - Finance & Accounting and Chief Accounting Officer at Helix Energy Solutions Group]

No, think Eric, I think you've covered all the main points there.

[David Smith, Director at Pickering Energy Partners]

I do appreciate it. Just a quick housekeeping question. Were the mobilization days sorry, I did exclude the forty five days for the Q4. Were the mobilization days for the Q7 and the first quarter contributing to the Q1 revenue?

[Erik Staffeldt, Executive VP & CFO at Helix Energy Solutions Group]

So the Q1 revenue on the Q7000, we only had about five or six days of revenue in Q1 on the Q7000. And so obviously, second quarter, we had the vessel working. I think other than downtime, the vessel was working in the second quarter.

[David Smith, Director at Pickering Energy Partners]

Perfect. And six days.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

The mobilization days Eric's talking about is relating to Q5000, Q4000 and the Well Enhancer. Those mobilization days, twenty days he's talking about are going into Q3.

[David Smith, Director at Pickering Energy Partners]

Appreciate it. We'll follow-up later. Thank you.

[Gregory Lewis, Managing Director at BTIG]

Thank you.

[Operator]

Your next question comes from the line of Josh Jain with Daniel Energy Partners. Please go ahead.

[Josh Jayne, Managing Director at Daniel Energy Partners]

Thanks. First one, I just wanted to go back to the three year agreement you signed with Exxon on the shallow water abandonment side. I think Owen, in your commentary, you said close 200 wells. Maybe could you frame the number of other opportunities that are out there that are being bid on today just so we can sort of think about how that could progress over the next couple of years?

[Daniel Stuart, VP - Commercial at Helix Energy Solutions Group]

We are seeing similar, although probably slightly less utilization or sorry utilization opportunities in the marketplace. There is bidding activity ongoing through Q3 and Q4 of this year for work on a go forward basis. Generally what we're seeing is that framework agreements are discussion rather than firmly contracted work. However, we are getting better visibility on the marketplace, but we do continue to expect properties to bring back for the demand to increase in 2026.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

Just a little clarity around the Exxon contract, contract was for the well work. There's a separate contract that was led that's ongoing right now, which is for the make safe work. Our work really starts once that completes. But then our contract is for the well work and then there is additional work for the subsea architecture and the provision of heavy lift and lift boats and everything that will be forthcoming. So this award puts us in good position to expand our offering to what Exxon could contract us for later on.

[Josh Jayne, Managing Director at Daniel Energy Partners]

Okay. Thanks. And then one on the intervention side, I think you had mentioned the potential for the North Sea to be a two vessel market again in 2026. Any thought because I assume the timing of figuring that out will factor into your how to handle the Seawell from a cost standpoint. Could you speak to when you might anticipate knowing if it's going to be a one vessel or two vessel market in 2026 and how you could also see regardless of what happens in 2026, do you think that it will be a two vessel market in 2027? Thanks.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

So right now, we're concentrating all the work onto the Well Enhancer. The SeaWorld is stacked at a very low cost base, reduced the crew down to minimum safe manning, that sort of thing. We're in discussions with a couple of clients on larger decommissioning tenders. If those tenders are awarded to us, then we would expect to go back to a two vessel market in 2026. I think to be fair, the timing of the award of those tenders will be late to Q3, probably Q4, and then they'll go into a planning stage.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

So those tenders are looking very good. What I will say, they're very competitive. But I'm also of the mindset that they could easily shift that work into 2027. So based on the awards and the timing and when the work happens, we should know around Q4 whether we go back to a two vessel market or whether we stay in stack mode with the SeaWorld. There's certainly enough activity out there to keep the well enhancer busy for next year.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

But those tenders coming to fruition, we'll decide on whether or not we take a go back to a two vessel market.

[Josh Jayne, Managing Director at Daniel Energy Partners]

Great. Thank you. I'll turn it back.

[Operator]

Next question will come from the line again of Mr. Gene Shomp, TD Cowen. Please go ahead.

[James Schumm, Senior Analyst at TD Cowen]

Yeah. Thank you. And I'm gonna hit on The UK North Sea again. And you you addressed it a little bit, but why not why not take this opportunity with the sea well stacked? Why not upgrade the vessel to be able to mobilize it out of The UK North Sea?

[James Schumm, Senior Analyst at TD Cowen]

I mean, I think, Owen, what you were saying is if the customers decide that they're not gonna do work, then that'll trip the, the need to do a lot of, P and A work, but they can just they can just delay that. Right? Like, can just not do work and just buy their time. I mean, we, you know, the P and A market as you know has been a great opportunity forever, but it always gets pushed to the right. So why is that not gonna happen again?

[James Schumm, Senior Analyst at TD Cowen]

Why not take this opportunity? You've got a vessel stacked. Why not take the opportunity? You have plenty of cash. Give yourself some optionality and be able to serve another region because The UK North Sea seems like very challenged going forward.

[James Schumm, Senior Analyst at TD Cowen]

Is it because you would rather upgrade the well enhancer and the well enhancer is working? Just help me understand that.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

I think it boils down to capital deployment and return on capital. If the forecast and all the indicators right now are for a strong market from '27 to '31, we're going to need both vessels. So you're looking at an upgrade in order to redeploy the vessel for 2026. The cost of that upgrade is not cheap. There's no way that it would be cost effective to do it for a one year deployment and then have to return it to the North Sea by 2027.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

So I think it's a little early to make that decision. I'm not saying that that's not the right long term decision. And we are in discussions with producers in other regions about what their needs are, but there's no concrete definitive demand for a riser less vessel. There's a whole in other regions right now. There's a lot of talk and hypothetical.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

So it'd be a little bit of a risk to spend that much capital on upgrading the Seawell at this time. We've decided that we're going to see how these two large projects play out for 2026. If we're successful on both of them, then there's a high probability that we return to a two vessel market in The UK for 2026 without the large capital expenditure.

[James Schumm, Senior Analyst at TD Cowen]

Okay, understood. Thank you.

[Scotty Sparks, EVP & COO at Helix Energy Solutions Group]

I'll just add to that. We are finally seeing that the government in the North Sea is putting pressure for decommission to happen. So these projects are planned for 2026 with government pressure finally.

[Owen Kratz, President & CEO at Helix Energy Solutions Group]

And given the uncertainty of the North Sea, if one of these clients we're talking to in other regions wants a riser less vessel with better terms and more certainty of duration of the contracts, then we would certainly price it to them and make that decision. And if the North Sea returned to a two vessel market, then we'd have we crossed that bridge when we came to it, but we'll we would take the more certain long term future.

[James Schumm, Senior Analyst at TD Cowen]

Got it. Thank you very much.

[Operator]

Thank you so much, everyone. And that concludes our Q and A session for today. I will now turn the call back over to Mr. Brent Arriaga for the closing remarks. Please go ahead.

[Brent Arriaga, VP - Finance & Accounting and Chief Accounting Officer at Helix Energy Solutions Group]

Thanks for joining us today. We very much appreciate your interest and participation, and we look forward to having you on our third quarter call 2025 in October. Thank you.

[Operator]

Ladies and gentlemen, that concludes Thank you all for joining. You may now disconnect. Have a nice day ahead.

Participants

Executives

• Brent Arriaga, VP - Finance & Accounting and Chief Accounting Officer
• Ken Neikirk, EVP, General Counsel & Secretary
• Scotty Sparks, EVP & COO
• Erik Staffeldt, Executive VP & CFO
• Owen Kratz, President & CEO
• Daniel Stuart, VP - Commercial

Analysts

• Gregory Lewis, Managing Director at BTIG
• James Schumm, Senior Analyst at TD Cowen
• Jim Rollyson, Director & Equity Research Analyst at Raymond James Financial
• David Smith, Director at Pickering Energy Partners
• Josh Jayne, Managing Director at Daniel Energy Partners