XPRO

Expro Ltd 2026 Q2 10-Q Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2026, for Expro Ltd (formerly Expro Group Holdings N.V.). On July 13, 2026, the company completed a "Redomicile" transaction, becoming a Cayman Islands exempted company while continuing to trade on the NYSE under the ticker "XPRO." Expro is a global provider of energy services, including well construction, well flow management, subsea well access, and well intervention, operating in over 60 countries.

Key Financial Metrics

Note: Adjusted EBITDA is a non-GAAP measure. Segment EBITDA for Q2 2025 was $120.9 million, while Adjusted EBITDA for Q2 2026 was $76.0 million.

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased 6.5% year-over-year (YTD) to $760.8 million, driven by lower activity in North and Latin America (NLA) and Asia-Pacific (APAC) segments. However, Q2 2026 revenue increased 7.0% sequentially from Q1 2026.
• Profitability Compression: Net income dropped 96.9% YTD to $1.0 million. Adjusted EBITDA margin declined to 18.3% YTD from 21.0% in the prior year, attributed to lower revenue and a less favorable activity mix.
• Segment Performance:
  • NLA: Revenue down 7.0% YTD; EBITDA margin down to 20.2%.
  • ESSA: Revenue down 1.7% YTD; EBITDA margin down to 27.3%.
  • MENA: Revenue down 6.9% YTD; EBITDA margin down to 32.8%.
  • APAC: Revenue down 15.4% YTD; EBITDA margin down to 17.3%.
• Expense Trends: Severance and other expenses decreased 54.7% YTD to $5.8 million due to reduced restructuring. Stock-based compensation increased 17.9% YTD to $16.8 million due to annual LTIP grants.

Outlook, Risks, and Unusual Items

• Acquisitions: On July 23, 2026, Expro closed the acquisition of Enhanced Drilling (Norway-based managed pressure drilling leader) for approximately $215 million. Financial results for this acquisition are not included in the Q2 2026 period.
• Market Conditions: The quarter was marked by volatility due to conflict in the Persian Gulf and the closure/reopening of the Strait of Hormuz. Brent crude prices averaged $85/bbl in June after peaking at $138/bbl in April. Management expects continued focus on offshore and international markets, LNG, and brownfield enhancement.
• Capital Allocation: The company repurchased approximately 2.5 million shares for $40.0 million during the first six months of 2026. Approximately $60.0 million remains authorized under the stock repurchase program.
• Liquidity: Total available liquidity is $491.9 million, comprising cash and $292.3 million available under the New Credit Facility (maturity July 2029).
• Risks: Key risks include geopolitical instability affecting oil prices, supply chain cost pressures, and the transition to lower-carbon energy sources.

Investor Verification Checklist

• Redomicile Impact: Verify the tax and legal implications of the July 2026 Redomicile to the Cayman Islands.
• Enhanced Drilling Integration: Monitor the integration progress and financial contribution of the newly acquired Enhanced Drilling business in upcoming filings.
• Geopolitical Exposure: Assess the sensitivity of MENA and ESSA segment revenues to ongoing Middle East conflicts and oil price volatility.
• Capital Discipline: Review the balance between aggressive share buybacks ($40M YTD) and capital expenditures ($56.9M YTD) against cash flow generation.
• Effective Tax Rate: Note the high effective tax rate (153.4% YTD) driven by jurisdictional mix and discrete items; verify sustainability of future tax rates.