Expro Group Q3 Earnings Call Highlights

Key Points

• Q3 results improved: Revenue rose 12% sequentially to $440 million and adjusted EBITDA increased 20% to $91 million, with adjusted free cash flow of $52 million.
• Expro raised its 2026 adjusted free cash flow outlook to $140 million–$150 million, but cut expected Q4 adjusted EBITDA by about $20 million as high-margin subsea and well-intervention work shifted into 2027.
• Management’s preliminary 2027 outlook calls for mid-teens adjusted EBITDA growth and over 20% growth in adjusted free cash flow, supported by base-business expansion and a full-year contribution from Enhanced Drilling.

Expro Group NYSE: XPRO reported higher sequential revenue and adjusted EBITDA for the third quarter of 2026, supported by increased activity across its underlying business lines and the inclusion of Enhanced Drilling operations. The company also raised its full-year adjusted free cash flow outlook, although it tempered fourth-quarter EBITDA expectations because certain high-margin subsea and well-intervention work has shifted into 2027.

Chief Executive Officer Mike Jardon said the company generated third-quarter revenue of $440 million, up 12% sequentially, and adjusted EBITDA of $91 million, up 20% from the prior quarter. Adjusted EBITDA margin was 21%, while adjusted free cash flow totaled $52 million, near a company record, according to Jardon.

“We continue to observe a market that is particularly supportive of offshore and international investments,” Jardon said, citing project final investment decisions, subsea tree orders and floating-rig utilization as favorable industry indicators.

Cash Flow Outlook Raised Despite Fourth-Quarter Timing Delays

Expro increased its 2026 adjusted free cash flow guidance to a range of $140 million to $150 million. CFO Sergio Maiworm said the company expects improved free cash flow compared with 2025 despite adjusting some near-term expectations.

The company said fourth-quarter adjusted EBITDA expectations have been reduced by approximately $20 million because activity has been pushed to the right. The affected work includes high-margin subsea operations in North and Latin America, where loop currents and a recent hurricane in the U.S. Gulf temporarily disrupted operations, as well as delayed well intervention and integrity work in Colombia.

Jardon said the delayed work is not expected to be lost. Instead, the timing of execution remains uncertain as the company works through its 2027 budgeting process. He said the deferred activity is expected to occur next year, though the company has not yet determined whether it will be completed early or later in 2027.

Maiworm said several other fourth-quarter contributors remain on track, including a production solutions project in North Africa, tubular sales in North and Latin America, and equipment sales in the Middle East and Asia. Despite the timing headwinds, he said Expro’s updated fourth-quarter outlook would still represent a record quarter for the company.

For 2027, Expro said early indications point to mid-teens percentage growth in adjusted EBITDA and more than 20% year-over-year growth in adjusted free cash flow. Maiworm characterized those views as preliminary and conservative, noting that the budgeting process remains underway. He added that the outlook includes expected growth in the company’s base business as well as a full-year contribution from Enhanced Drilling.

Offshore and International Markets Remain Central to Strategy

Jardon said Expro expects offshore and international markets to remain healthy as producers prioritize recovery optimization, production enhancement and faster execution rather than rig-led expansion. He described deepwater as an attractive area for incremental upstream investment and said Expro believes the offshore market remains in the early stages of a developing upcycle.

Geopolitical conflicts and related uncertainty have reinforced the importance of energy security and dependable supply sources, Jardon said. In the Middle East and North Africa, Expro said its operations have remained resilient, though activity growth initially budgeted for 2026 did not materialize as expected because of regional disruptions. The company expects combined 2026 financial results from the Middle East and North Africa regions to be similar to the prior year.

Management said it is maintaining a “status quo” view of the Middle East for the rest of 2026 and into 2027.

Technology and Enhanced Drilling Expansion

During the quarter, Expro introduced Maestro, a modular well-test platform designed to combine automation, remote control, real-time visibility and decision support while maintaining human oversight of critical decisions. Jardon said full deployment of Maestro has demonstrated the potential to reduce red-zone exposure by up to 67%.

The company also highlighted adoption of its ArticuLock technology in North Sea well construction, intervention and subsea recovery work. Expro said the technology has been used at water depths greater than 3,300 feet and can reduce fatigue and bending loads. In one campaign, Jardon said ArticuLock enabled operations during harsh weather conditions and avoided several days of delays.

Expro also began its first West African operations using Enhanced Drilling technologies, extending the offering beyond the North Sea and U.S. Gulf. Jardon said the managed pressure drilling technology can help customers access reserves previously considered inaccessible, improve drilling efficiency and reduce total project costs.

The company received eight finalist nominations at the 2026 Gulf Energy Information Excellence Awards, while its iTONG offering won the Best Controls Instrumentation Automation Technology for Upstream award.

Regional Reporting Change and Capital Allocation

Expro merged its Asia-Pacific region into its Middle East and North Africa region, creating an AMENA reporting segment. Maiworm said the change is intended to improve operational efficiency and customer support rather than serve as a major cost-cutting initiative. The combined regions have similar service offerings, customer characteristics and deepwater exposure, he said.

At the end of the third quarter, Expro had total liquidity of $260 million, including $172 million of cash. The company had $259 million outstanding under its revolving credit facility, reflecting use of the facility to fund the Enhanced Drilling acquisition, partially offset by repayments. Net debt stood at $87 million, which Maiworm said represented less than half a turn of net leverage.

Expro repurchased approximately 3.2 million shares for roughly $52 million year to date in 2026. Management said the company has already exceeded its commitment to return at least one-third of adjusted free cash flow to shareholders and will remain opportunistic on repurchases through the balance of the year.

Looking ahead, Jardon said Expro continues to evaluate acquisition opportunities ranging from bolt-on technologies to more transformative transactions, with industrial logic and customer relevance guiding its approach.

About Expro Group (NYSE:XPRO)

Expro Group, Inc provides energy services and technologies that support the exploration, development, and production of oil and natural gas wells. The company helps operators manage wells throughout their life cycles, from drilling and completion through production, intervention, and abandonment.

Its offerings include well construction and well management services, well flow management, subsea services, and well intervention and integrity solutions. These services are designed to improve operational efficiency, safety, well performance, and reservoir recovery in both offshore and onshore environments.

Headquartered in Houston, Texas, Expro serves energy companies across major oil and gas producing regions worldwide, including North America, the North Sea, the Middle East, Africa, Asia-Pacific, and Latin America.

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