Enerflex NYSE: EFXT reported higher first-quarter 2026 revenue, improved profitability and continued momentum across its Engineered Systems, Energy Infrastructure and After-Market Services businesses, while management highlighted growing opportunities tied to natural gas demand and electric power generation.
On the company’s earnings call, President and CEO Paul Mahoney said Enerflex delivered “another strong quarter of operational and financial performance,” citing disciplined execution across its global footprint and continued efforts to optimize and streamline the business. Mahoney said Energy Infrastructure and After-Market Services accounted for 65% of adjusted gross margin before depreciation and amortization during the quarter.
Revenue and Earnings Rise Year Over Year
Senior Vice President and CFO Preet Dhindsa said Enerflex generated revenue of CAD 584 million in the first quarter, up from CAD 552 million in the same period of 2025 but down from CAD 627 million in the fourth quarter of 2025. The year-over-year increase reflected strong execution and elevated activity in the Engineered Systems product line, while the sequential decline was primarily tied to lower parts sales and service utilization in After-Market Services.
Gross margin before depreciation and amortization was CAD 179 million, or 31% of revenue, compared with CAD 161 million, or 29% of revenue, in the prior-year quarter. Adjusted EBITDA rose to CAD 137 million from CAD 113 million a year earlier and CAD 123 million in the fourth quarter.
Net earnings were CAD 43 million, or CAD 0.35 per share, compared with CAD 24 million, or CAD 0.19 per share, in the first quarter of 2025. Enerflex reported a loss of CAD 57 million, or CAD 0.47 per share, in the fourth quarter of 2025. Dhindsa said profitability benefited from higher gross margin and lower net finance costs, partially offset by higher selling, general and administrative expense.
Return on capital employed reached 17.3%, which Dhindsa described as a new company record, compared with 14.2% in the prior-year quarter and 16.9% in the fourth quarter.
Engineered Systems Backlog and Power Opportunities Grow
Mahoney said the Engineered Systems business continued to show “strong execution and commercial momentum,” supported by healthy backlog levels and active bidding in key markets, particularly North America. Engineered Systems bookings totaled CAD 483 million in the quarter, compared with a trailing eight-quarter average of CAD 344 million. The book-to-bill ratio was 1.5 times in the quarter and one times on a trailing eight-quarter basis.
Management said the outlook for Engineered Systems remains attractive due to expected growth in natural gas, associated liquids and electric power generation across Enerflex’s core operating countries. During the quarter, Enerflex was awarded a behind-the-meter power generation project for a data center using reciprocating engine generator sets and secured additional projects supporting island power applications.
Mahoney said Enerflex’s current scope of opportunities now exceeds 5 gigawatts, including opportunities for After-Market Services support. In response to an analyst question, he said the power generation opportunity remains early-stage and is evolving quickly, adding that Enerflex is prepared to participate as opportunities close.
Energy Infrastructure Supported by Contracted Revenue
Enerflex’s Energy Infrastructure business continued to perform solidly, supported by approximately CAD 1.3 billion of contracted revenue. Mahoney said the company’s U.S. contract compression business is performing well, driven by rising natural gas production in the Permian Basin. Fleet utilization remained stable at 94% across 486,000 horsepower.
Enerflex expanded its U.S. contract compression market fleet by 13% in 2025, and Mahoney said the company continues to expect growth capital expenditures to deliver growth at a similar pace or greater in 2026. He also said Enerflex is securing long-lead-time components to support further growth in 2027.
The international Energy Infrastructure portfolio has a weighted average remaining contract term of approximately five years, which management said provides durable and predictable cash flow.
Middle East Operations Continue Uninterrupted
Mahoney opened the call by acknowledging Enerflex’s employees, client partners and stakeholders in the Middle East amid the ongoing conflict. He said Enerflex is closely monitoring the situation and that the company’s operations in the region have continued uninterrupted to date.
Enerflex operates 17 natural gas and produced water projects in Bahrain and Oman. Mahoney said local teams are using established response processes and contingency planning to support employee safety and operational reliability.
Once the conflict is resolved, Mahoney said Enerflex sees potential opportunities across its business lines, including aftermarket services to support operational recovery, engineered systems for replacement and debottlenecking, and capital deployment toward rebuilding energy infrastructure.
Balance Sheet, Capital Spending and Productivity Initiatives
Enerflex ended the quarter with net debt of CAD 505 million, including CAD 47 million in cash and cash equivalents. Dhindsa said net debt was down CAD 59 million from the prior-year quarter, and the company has repaid approximately CAD 550 million of long-term debt since the beginning of 2023. Enerflex’s bank-adjusted net debt-to-EBITDA ratio was approximately 0.9 times at quarter-end.
The company invested CAD 16 million in the business during the quarter, including CAD 7 million for growth, primarily to expand the U.S. contract compression fleet, and CAD 9 million for maintenance and property, plant and equipment. Despite a slower start to the year, Enerflex continues to target organic capital expenditures of CAD 175 million to CAD 195 million in 2026.
Dhindsa said the 2026 capital plan includes:
- CAD 90 million to CAD 100 million for growth capital;
- CAD 70 million to CAD 80 million for maintenance capital;
- Approximately CAD 15 million for property, plant, equipment and infrastructure investments supporting Engineered Systems and adjacent markets, including electric power generation.
Enerflex returned CAD 4 million to shareholders through dividends during the quarter and made no repurchases under its normal course issuer bid.
Mahoney also discussed the company’s enterprise-wide productivity system, which he said is focused on leveraging Enerflex’s scale, lean and continuous improvement, structural cost competitiveness, faster execution, and modernization of IT and automation. He said the company has already seen early wins and expects to provide further updates.
Enerflex plans to share more detail on its strategy, capabilities and market opportunities at a virtual investor update scheduled for May 27.
About Enerflex NYSE: EFXT
Enerflex Ltd is a Calgary‐headquartered energy infrastructure company specializing in the design, fabrication, installation and aftermarket support of natural gas compression, processing, refrigeration and treatment equipment. Its product portfolio includes reciprocating and centrifugal compression systems, gas treating and refrigeration packages, fuel gas conditioning and liquid separation solutions. In addition to equipment sales, Enerflex delivers field services such as commissioning, maintenance, monitoring and parts supply to optimize asset performance throughout the lifecycle.
The company supports upstream, midstream and downstream energy customers through an integrated offering that spans engineering, procurement and construction (EPC) as well as modular fabrication.
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