Innovex International Reports Strong Q4 and Full-Year 2025 Results

Key Highlights and Investor-Relevant Details

• Q4 Revenue of \$274 Million: Up 14% quarter-over-quarter, exceeding guidance due to higher subsea product deliveries, revenue synergies from acquisitions, and new product launches.
• Net Income of \$14 Million: Achieved a 5% net income margin for Q4.
• Adjusted EBITDA: \$52 million in Q4 with a 19% margin. For the full year, Adjusted EBITDA reached \$188 million (19% margin).
• Free Cash Flow: \$43 million in Q4, \$156 million for full year 2025. 83% of Adjusted EBITDA converted to Free Cash Flow.
• Strong Balance Sheet: \$203 million in cash and cash equivalents and no bank debt at year-end, providing significant financial flexibility.
• Return on Capital Employed (ROCE): 10% for the full year 2025.
• Operational Milestones:
  • First subsea wellhead products delivered under the global Innovex-OneSubsea alliance.
  • Tenth successful XPak installation in Brazil’s pre-salt fields.
  • Significant progress in exiting the legacy Eldridge facility, with full completion expected by end of Q2 2026.
  • XPak expandable liner adapted and deployed for Permian Basin onshore operations, enabling drilling of technically complex wells.
• International Expansion:
  • Inaugurated manufacturing facility in Saudi Arabia, strengthening partnership with the Kingdom.
  • Completed major subsea wellhead and tubular deliveries for a major offshore project in Mexico.
  • Secured new significant subsea contracts in Asia and the Mediterranean, including a landmark contract in Brazil with an IOC (first in over a decade).
• Capital Allocation Strategy: Focused on M&A opportunities aligned with ‘small ticket, big impact’ strategy. All investments are evaluated against share repurchase authorization to maximize shareholder returns.
• Q1 2026 Guidance:
  • Revenue expected between \$225 – \$235 million.
  • Adjusted EBITDA between \$38 – \$42 million.
  • Sequential revenue decrease due to lower subsea deliveries, reflecting seasonality and accelerated deliveries in Q4.
• Conference Call: Management will host a webcast on February 24, 2026 at 8:00 a.m. Central Time to discuss results and outlook. Replay will be available.

Detailed Financial Summary

Important Price-Sensitive and Shareholder Information

• Revenue Outperformance and Guidance Beat: Q4 revenue exceeded guidance, largely due to accelerated subsea deliveries and acquisition synergies. This may positively influence share price given the surprise upside.
• Strong Cash Position and No Bank Debt: The company’s financial flexibility could enable further investments, share repurchases, or dividends, potentially supporting share price.
• Capital-Light Model and Free Cash Flow Conversion: Innovex converted 83% of Adjusted EBITDA into Free Cash Flow, indicating high cash efficiency and robust capital management.
• Operational Progress in Subsea and International Markets: Successful contract wins, facility expansions, and new product deployments signal expanding addressable markets and potential future revenue streams.
• Margin Pressures and Strategic Facility Exit: Corporate margins were weighed down by low-margin subsea projects. The expected exit from the Eldridge facility in Q2 2026 is a key strategic move to improve margins by year-end, potentially impacting future profitability and share price.
• Share Repurchase Authorization: All investment opportunities are evaluated against share repurchase authorization, highlighting commitment to maximizing returns for shareholders.
• Q1 2026 Guidance: Anticipated sequential revenue decline due to seasonality and accelerated deliveries may require investor attention, but margin improvement plans and operational momentum are positive offsets.
• Ongoing M&A Focus: Continued focus on inorganic growth with disciplined capital allocation could drive further expansion and shareholder value.
• Risks and Forward-Looking Statements: The company highlights risks related to M&A integration, margin pressures, and external factors such as geopolitical risks and macroeconomic conditions, all of which investors should monitor.

Strategic and Operational Updates

• Innovex is broadening its product suite and international footprint, with strong execution in Saudi Arabia, Mexico, Asia, and Brazil.
• The Innovex-OneSubsea alliance is expanding the addressable market for subsea products.
• Strong project execution and global supply chain coordination have resulted in major contract wins and successful product deployments.
• The company expects margin improvement after the Eldridge facility exit and through optimized bidding practices and manufacturing footprint reduction.

Upcoming Events

• Conference call and webcast scheduled for February 24, 2026 at 8:00 a.m. Central Time. Replay will be available for those unable to attend live.
• Investors may contact Eric Wells, Chief of Staff, at [email protected] or (346) 398-0000 for further information.

Conclusion

Innovex International’s Q4 and FY2025 results demonstrate robust financial performance,
strong cash generation, successful operational execution in subsea and international markets,
and a clear focus on capital efficiency and shareholder returns. The company’s guidance beat,
cash position, and strategic facility exit, alongside new contract wins and international expansion,
are all potentially price-sensitive and could impact share values. Investors should monitor
ongoing margin improvement efforts, M&A activity, and management’s commitment to maximizing
returns via share repurchases.

Disclaimer: This article is based on public financial disclosures from Innovex International, Inc. and is intended for informational purposes only. It does not constitute investment advice or a recommendation to buy or sell securities. Investors should conduct their own due diligence and consult with professional advisors before making any investment decisions. The information may contain forward-looking statements subject to risks and uncertainties, and actual results may differ materially from stated expectations.

View Innovex International, Inc. Historical chart here