Expro Group Holdings Aktie

Hello, everyone, and welcome to the Expro 2026 Annual General Meeting of Shareholders.

I will now turn the call over to Robert Drummond, Chairman of the Board to begin. Please go ahead.

Thank you, Claire, and good afternoon. My name is Robert Drummond, and I'm Chairman of the Board of Directors of Expro Group Holdings N.V. Thank you for attending the company's 2026 Annual General Meeting.

In accordance with Article 33 of the company's Articles of Association, I will be the Chairman of this meeting. This meeting is formally held at the offices of our Dutch Legal Counsel, Van Campen Liem of which Mr. Edwin Liem and Mr. Giti Navabi, our President and person. Joining our Dutch legal counsel on the office are Mr. Mike Jardon, the Chief Executive Officer of the company and Board member; and Mr. John McAlister, General Counsel and Secretary of the company. We've encouraged our shareholders to exercise their voting rights through an electronic or written proxy and if a shareholder is unable to attend the meeting to follow along through a listen-only telephone conference or audio webcast. We thank our shareholders who have exercised their voting rights in advance of the meeting.

The other persons who have dialed in and are present at this meeting in addition to myself are the other Board members of the company, which include Eitan Arbeter, Lisa L. Troe, Brian Truelove, Frances Vallejo, and Eileen Whelley. Other attendees that are present in person, Mr. Josh Hancock, Senior Counsel and Assistant Corporate Secretary of the company. Mrs. Joyce Leemrijse of A&O Shearman, Dutch Legal Counsel for the redomicilization; Mr. Jonathan van Doornum and Ms. Tina Lombard of Deloitte Accountants B.V. Dutch Independent Auditor of the company; Mr. [indiscernible], Managing Director B of the company's subsidiaries of the company. Other attendees that are present telephonically. Mr. Hogan Miller and Greg Hurst of Deloitte & Touche LLP, independent registered public accounting firm of the company.

In addition, a number of shareholders and others are participating by teleconference through the listen-only conference or audio webcast, which dial-in details were provided in the convocation notice. Mr. McAllister shall act as Secretary of the meeting and will record the minutes. As the cross-border merger with Expro Luxembourg S.A. is on the agenda of this annual meeting, Dutch law requires that the minutes of this meeting are adopted in the form of a notarial record Joyce Leemrijse hereby requested to draw up such material record.

I now give the floor to Mr. McAllister, who will lead us through the agenda items of this meeting, including the voting procedures and results.

Thank you, Robert. Good afternoon, everyone. This meeting was called on the initiative of the Board of Directors of the company by means of an announcement, which appeared in the Dutch national newspaper Trouw on May 13, 2026. The convening notice, including the agenda, the proxy statement and prospectus and the U.S. GAAP annual report, including the Form 10-K, were filed with the SEC and posted on the company's website on May 13, 2026, April 21, 2026, and February 19, 2026, respectively.

In addition, I have been informed that the required documents have been made available for inspection in the prescribed places. All legal requirements to call this meeting have been met, and the meeting is therefore authorized to take decisions with respect to the items stated in the agenda.

So we now come to the discussion of the items that have been included in the agenda. Holders of in total 105,980,844 shares of the company, approximately 93.46% of the shares outstanding that are entitled to vote are represented at the meeting or have cast their votes in advance of the meeting. Unless explained otherwise, each agenda item requires the affirmative vote of a majority of the votes cast.

Mr. McAllister, has the company received any shareholder proposals by the last day allowed by law April 11, 2026?

No, Mr. Drummond. The company has not received any proposals from shareholders to include additional items in the notice of the meeting. I have received the exact details of the votes in respect of each agenda item as cast in advance of the meeting. These voting results will be published via a report on Form 8-K that will be filed with the SEC.

We will now proceed with all of the agenda items of this meeting, and I will inform the meeting of the voting results accordingly. Agenda Items 1 to 3 related to the proposed redomiciliation of Expro Group Holdings N.V. here and after Expro N.V. from the Netherlands via Luxembourg to the Cayman Islands. Under Item 3, it is proposed to the general meeting to approve a series of joint transactions which will include a downstream cross-border merger of Expro N.V. with and into Expro Luxembourg S.A., a public limited liability company, incorporated under the laws of Luxembourg with Expro Luxembourg surviving. Here and after the Luxembourg merger, followed by a downstream cross-border merger of Expro Luxembourg S.A. with and into Expro Limited, Cayman Islands exempted company with Expro Cayman continuing as the surviving company. here and after the Cayman merger and together with the Luxembourg merger, the transaction.

Before we can vote on the transaction, the Article of Association of Expro need to be amended first. Agenda Item 1, to approve the amendment of the Article of Association of Expro N.V. in the form attached as Exhibited A to the proxy statement and prospectus to include a formula in the Articles of Association on the basis of which cash compensation to Expro N.V. shareholders who exercised their withdrawal right in connection with the Luxembourg merger, as referred to in Section 2:333h (1) of the Dutch Civil Code, can be readily determined and to authorize each Deputy Civil Law Notary and/or notarial employee of A&O Shearman, Amsterdam office, and each of them separately to execute and sign the Deed of Amendment to the Article of Association in connection therewith. The verbatim text of the Deed of Amendment to the Articles of Association, forms part of the cross-border merger proposal as posted on Expro's website and at Expro's offices.

Agenda Item 1 received the affirmative vote of a majority of the votes cast. I now ask A&O Shearman to execute the deed of amendment to incorporate the formula for cash compensation into the Articles of Association of Expro N.V.

Agenda Item 2. To approve a second amendment to the Articles of Association of Expro N.V. in the form attached as Exhibit B of the proxy statement to provide to the conversion of shares of common stock, nominal value EUR 0.06 per share of Expro N.V. into shares of Class B common stock, nominal value EUR 0.06 per share of N.V. if and to the extent Expro N.V. shareholders exercise their withdrawal rights in connection with the Luxembourg merger. And to authorize each deputy civil law notary and/or notarial employee of A&O Shearman, Amsterdam office, and each of them separately to execute and sign the Deed of Amendment to the Articles of Associations in connection therewith. The verbatim text of the Deed of Amendment to the Articles of Association, forms part of the cross-border merger proposal as posted on Expro's website and the Expro offices. Agenda Item 2 received the affirmative vote of a majority of the votes cast.

Agenda item 3, to approve the transaction, which will include the Luxembourg merger and the Cayman merger. I refer to the proxy statement and prospectus for a detailed explanation. Regarding the Luxembourg merger, the company has advised that since the joint Luxembourg merger proposal was prepared, no significant changes have occurred in the assets and liabilities of the company, which have influenced the information contained in the merger proposal or the explanatory statement to the merger proposal.

The proposed resolution is made in accordance with the joint Luxembourg merger proposal taking into account the explanatory statement thereto and all other documents in relation to the Luxembourg merger that were put on the website of Expro N.V. as of April 21, 2026. It is furthermore noted that those shareholders who have voted against the transaction may exercise their statutory withdrawal right by submitting a withdrawal application form within a month of this annual meeting as further set out in the proxy statement and prospectus. Agenda Item 3 received the affirmative vote of more than a 2/3 majority of the votes cast.

Agenda Item 4, to elect 7 director nominees named in the proxy statement to serve until Expro Annual Meeting of Shareholders in 2027. The direct nominees are: Robert W. Drummond, Mike Jardon, Eitan Arbeter, Lisa L. Troe, Brian Truelove, Frances Vallejo and Eileen G. Whelley. All Board Director nominees received the affirmative vote of a majority of the votes cast. Agenda Item 5, to approve on a nonbinding advisory basis, the compensation of the company's named executive officers for the year ended December 31, 2025.

The compensation paid to the company's named executive officers is described in the Compensation Discussion and Analysis section of the proxy statement. This agenda item is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officers and the philosophy, policies and practices described in the proxy statement. As an advisory vote, the outcome of the votes on this agenda item is not binding on the Board will not overrule any decisions made by the Board or require the Board to take any specific action.

Although the vote is nonbinding, the Board and the members thereof responsible for setting executive compensation value the opinions of the company's shareholders and will carefully consider the outcome of the vote when making future compensation decisions for the company's named executive officers. Agenda Item 5 received the affirmative vote of a majority of the votes cast.

Agenda Item 6, to review the annual report for the fiscal year ended December 31, 2025, including the paragraph relating to corporate governance to confirm and ratify the preparation of Expro's statutory annual accounts and annual report in the English language and to confirm and adopt the annual accounts for the fiscal year ended December 31, 2025.

The company's annual accounts are prepared in accordance with the statutory provisions of the Dutch Civil Code and IFRS. Mr. Van Doornum and Ms. Lombrad, Deloitte Accountants B.V., who have audited the company's annual accounts are present at the meeting to respond to appropriate questions in relation to the auditor statement. Agenda Item 6 received the affirmative vote of a majority of the votes cast.

Agenda Item 7, to discharge the members of the Board from liability in respect of the exercise of their duties during the fiscal year ended December 31, 2025. Under Dutch law, at the annual meeting, shareholders may discharge the members of the Board from liability in respect to the exercise of their duties during the financial year concerned. The discharge is without prejudice to the provisions of the law of the Netherlands relating to liability upon bankruptcy and does not extend to matters not disclosed to shareholders. Agenda item 7 received the affirmative vote of a majority of the votes cast.

Agenda Item 8, to appoint Deloitte Accountants B.V. as Expro's auditor, who will audit the Dutch statutory annual accounts of Expro for the fiscal year ended December 31, 2026, as required by Dutch law. In accordance with Dutch law and the company's articles, the company shall have its Dutch statutory annual accounts prepared in accordance with the IFRS, audited by a Dutch auditor. Agenda Item 8 received the affirmative vote of a majority of the votes cast.

Agenda Item 9, to ratify the appointment of Deloitte & Touche LLP as Expro's independent registered public accounting firm to audit to Expro's U.S. GAAP financial statements for the fiscal year ending December 31, 2026. The Audit Committee of the Board has selected and the Board has approved the selection of Deloitte & Touche LLP as the international independent registered public accounting firm of the company for the year ending December 31, 2026. Agenda Item 9 received the affirmative vote of the majority of the votes cast.

Agenda Item 10, to authorize the Board to repurchase shares up to 10% of the issued share capital for any legal purpose through the stock exchange or in a private purchase transaction at a price between $0.01 and 105% of the market price on the New York Stock Exchange and during a period of 18 months starting from the date of the annual meeting. In accordance with Dutch law and the company's articles, the company may only acquire its own fully paid up shares with consideration if and insofar as the general meeting has authorized the Board in that respect. Agenda Item 10 received the affirmative vote of a majority of the votes cast.

Agenda Item 11, to authorize the Board to issue shares up to 20% of the issued share capital as of the date of the annual meeting for any legal purpose at the stock exchange or in a private purchase transaction and during a period of 18 months starting from the date of the annual meeting. The authorization also includes the authority to restrict or exclude preemptive rights on an issue of shares. Shareholders have been asked to authorize the Board to issue shares for any legal purpose under the above-mentioned conditions. Agenda Item 11 received the affirmative vote of a majority of the votes cast.

We hereby come to the last agenda item of this meeting, agenda item 12, to transact such other business as may properly come before the annual meeting or any adjournment thereof. I note that no further resolutions can be validly adopted since no other matters were timely or properly requested to be placed on the agenda by shareholders. I therefore establish that the general meeting has resolved to adopt all the proposals.

I hereby declare the Annual Meeting of Expro Group Holdings N.V. closed and I would like to thank everyone for attending.

Thank you. This now concludes today's call. Thank you all for joining, and you may now disconnect your lines.

Hello, and welcome to the Expro Q1 2026 Earnings Call. My name is Alex, and I'll be coordinating today's call.

[Operator Instructions] I'll now hand it over to Dave Wilson, Vice President of Investor Relations. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Expro's First Quarter 2026 Earnings Call. I'm joined today by Mike Jardon, CEO; and Sergio Maiworm, CFO. Both Mike and Sergio will have some prepared remarks, after which we'll open the call for questions.

In association with today's call, we have an accompanying presentation and supplemental financial information on our first quarter results. Both of these are posted on the Expro website, expro.com, under the Investors section.

Before we begin today's call, I'll remind everyone that some of today's comments may refer to or contain forward-looking statements. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. These statements speak only as of today's date, and the company assumes no responsibility to update such forward-looking statements. The company has included in its SEC filings, cautionary language identifying important risk factors that could cause actual results to be materially different from those set forth in any forward-looking statements. A more complete discussion of these risks is included in the company's SEC filings, which can be obtained on the SEC's website, sec.gov, or on our website, again, expro.com. Please note that any non-GAAP financial measures discussed during this call are defined and reconciled to the most directly comparable GAAP financial measures in our first quarter 2026 earnings release, which was issued this morning and can also be found on our website.

With that said, I'll turn the call over to Mike.

Thanks, Dave. Good morning, good afternoon, everyone, and welcome to Expro's first quarter 2026 earnings call.

I'll begin by reviewing the first quarter of 2026 financial results from today's press release. I'll then comment on the overall macro environment, provide some insight into our Middle East and North Africa region, talk a bit about our exciting news today with our Enhanced Drilling acquisition announcement, then revisit our outlook for the year ahead. And finally, I will then conclude with some operational highlights for the quarter. Sergio will then provide some further details on our financial performance by geographic region and address the company's ongoing capital allocation framework.

Let's begin on Slide 3. During the quarter, the company experienced the usual first quarter seasonality we have in our business. And as a reminder, this seasonality is a result of winter weather in the Northern Hemisphere, which slows offshore activity due to ongoing winter storms and rougher than normal season. Additionally, the seasonal dip is also a result of our customers' CapEx and operational spend cycle that tend to be lower at the start of their annual budget cycles. This is generally more typical with our NOC customers. Additionally, our first quarter results were only marginally impacted by the conflict in the Middle East.

I'm pleased to report that local emergency response plans were implemented quickly and the efficiency in which these actions were taken, and that all of our employees still in the region remain safe. I will go into more detail regarding our MENA region in a moment. But from an overall perspective, the disruptions to our Middle East business late in the quarter only had a minor impact on our operational and financial results during the quarter.

For the quarter, the company generated $368 million of revenue and $63 million of adjusted EBITDA, representing a 17% margin. Adjusted free cash flow for the quarter was $3 million and was affected by changes in working capital, which Sergio will comment more on later in the call.

Now taking an assessment of the current environment, we, like others, see a global energy market that is increasingly influenced by the heightened geopolitical tensions, commodity price volatility and an expanding focus on long-term energy security. At some point, the uncertainties will subside with the expectations that oil prices will reset and begin to stabilize once these disruptions ease. However, there is still a significant amount of disruption that will continue to have global implications in terms of not only near-term supply and demand dynamics, but also over the medium- and longer-term as countries and companies around the world look to prioritize energy security and what will be needed to achieve that.

There has been intensified interest in strengthening supply resilience and geographic diversification, trends that could develop and will likely shape industry behavior longer-term. It is our fundamental view that the new normal will look different than it did before the Middle East conflict. Many believe it will still take some time before the industry returns to a more normalized state of operations, and we believe that it will be the end of the second quarter before we have a sense of complete clarity. We remain optimistic that resolution of the situation could begin sooner than that, but we'll adapt our operations appropriately.

One industry behavior that we are confident with that we do not believe will change is that of capital discipline. In this light, we see offshore and deepwater developments remaining attractive, not only by providing stable, lower-risk growth pathways, but also from an energy security standpoint as well. We expect such projects will continue to drive demand for Expro's well construction and well management businesses. Additionally, brownfield optimization continues to see a growing focus as operators look to enhance production from existing assets to reduce capital risk. We believe this industry trend also presents an opportunity for Expro's technologies and services as well.

We still expect activity to strengthen in the second half of the year, and with Expro's strong offshore and international positioning, along with its production optimization capabilities, believe the company is well positioned to manage near-term uncertainty and benefit from increased activity in the coming quarters and years.

To summarize, Expro maintains a constructive outlook for 2026 and beyond, allowing us to continue supporting customers throughout the full life cycle of their assets.

Moving to Slide 4, which reflects our MENA region. Oftentimes, when the MENA region is discussed, the focus is heavily on the Middle East portion, which is certainly understandable, and we have received our fair share of questions related to our exposure to countries in that region. Having lived and worked in that part of the world earlier in my career, I think it's helpful to give our stakeholders some more clarity on how Expro is exposed in the region.

I'll look to address that really in 3 fundamental ways. First, for Expro, there's more of a balance between our Middle East and North Africa operations in terms of financial contribution, and there has been no disruption to our operations in North Africa. Second, to the countries in the Middle East, while we do have some exposure to countries like Qatar, Kuwait and Iraq, they do not carry as large of a contribution to our revenue or EBITDA generation. The biggest contributor in those regards is Saudi Arabia and to a lesser extent, the Emirates. And while there were some interruptions in those countries' operations, we have continued to have more normal operational cadence. Third, given the timing of the commencement of the conflict in the Middle East, there was only 1 month affected during the first quarter, so that too lessen the overall impact.

Now moving to Slide 5. We're very excited to announce Expro's acquisition of Enhanced Drilling. Enhanced Drilling is an industry and technological leader in managed pressure drilling, or MPD, really focused in the deepwater offshore operations. For Expro, this acquisition adds a critical technology solution that is proven and is increasingly gaining traction within the industry. As structured, this acquisition will be immediately accretive to cash flows and EBITDA margins, and it adds over $275 million of order backlog.

We see a lot of growth opportunities in the service line going forward, especially as part of the Expro platform. Due to our size and breadth, we are able to bring services and technologies acquired into new markets around the world.

We have a proven track record of doing this with our most recent example of Coretrax acquisition that we completed back in 2024. Currently, Enhanced Drilling is operating primarily in offshore Norway and in the Gulf of America. And we see opportunities in the Caribbean, West Africa, Brazil and Australia, where this technology could benefit customers tremendously.

Turning to Slide 6. Here's a quick summary of the transaction from a financial perspective. The purchase price is NOK 2 billion, which is currently equating to roughly USD 215 million. We expect some final adjustments to the purchase price based upon customary and working capital adjustments as the transaction is finalized and closed.

Expro will utilize a combination of cash on hand and borrowings under the revolving credit facility to fund the acquisition. Current projections are for Enhanced Drilling to add more than $50 million to our annual run rate adjusted EBITDA. Additionally, with adjusted EBITDA margins over 30%, this acquisition will contribute to further EBITDA margin expansion.

Finally, we anticipate that the transaction will close in the third quarter and based upon our understanding at this point, will likely be some time in the early part of the quarter. The next few slides provide a little bit more detail on Enhanced Drilling and some of its services and offerings along its riser-based and riserless solutions. We have provided these slides for informational purposes.

Now let's jump ahead to Slide #10. On Slide 10, we're providing our 2026 financial guidance based upon what we currently see in the global market. In essence, this means no change to our previously established annual guidance for 2026. With the continued global conflicts, uncertainty still exists, which adds to the complexity of providing forward guidance. That said, however, we believe that current industry optimism is tangible, particularly towards the back end of 2026 and especially as we go into 2027 and beyond. We remain constructive and confident in our second half of 2026, and the associated ramp in revenue and adjusted EBITDA, seeing sequential improvements in each subsequent quarter.

With regards to the impact of the Middle East conflict on our future results, assuming a resolution to the Middle East conflict by the end of the second quarter, we would expect the impact on our second quarter results to be in the $10 million to $15 million revenue range. Including the first quarter and projected second quarter, impact of the Middle East conflict would equate to approximately 1% of total company revenues for the year. It is also worth noting for the second quarter, those revenue impacts carry elevated decrementals for EBITDA calculations. In other words, the impacts are disproportionate on the revenue versus the costs.

Regarding our confidence and the ramp-up for the back half of the year, there are a few aspects I'd like to highlight. We see opportunities in our North and Latin America region with subsea well access and well flow management projects in the Gulf of America, tubular sales and well intervention and integrity work in Colombia, all of which should contribute a healthy amount to the projected increases.

In our Middle East and North Africa region, besides assuming a resolution in the Middle East by the end of the second quarter and a return to more normalized activity, we still expect increasing contributions from our North Africa operations, particularly around a sizable production solutions project. For the back half of the year, in our Asia Pacific region, we see our well construction and well management businesses in Southeast Asia contributing incrementally more, along with some subsea equipment sales in China. Additionally, we expect incremental contributions from our Coretrax product line across our geographic regions. In Europe and Sub-Saharan Africa, while we do not expect much incremental growth in the back half of the year, we still expect operations there to be steady and be a sizable contributor to overall revenue and EBITDA.

Finally, as we have mentioned before, we intend to expand our margins this year with the full year benefiting from our Drive 25 initiative and to improve our capital efficiency and wallet share with existing customers.

Before moving on to our customer and technology highlights, I want to revisit a few attributes that we believe set Expro apart. These are included on Slide #11. Due to our breadth of services and technologies across the well lifecycle, we see opportunities to expand our wallet share with existing customers. Expro can leverage our installed base to provide additional services and technologies to customers, which adds value to their operations, while at the same time, helping to expand our underlying margins.

Another thing that we see as distinct is our innovation and technology offerings. They are emblematic of how we see the industry evolving. Our technologies and our ability to address unique customer challenges place Expro as the vendor of choice for many of our customers and adds to the company's relevancy and longevity with those same customers.

In addition to our service and technology breadth, we also have geographic breadth. Our global footprint enables us to leverage services and technologies, whether those are developed internally or acquired through M&A to be deployed in multi geographies where we operate. For example, as we've mentioned before, our acquisition of Coretrax in 2024. That business was operating in circa 15 countries at the time of the acquisition, but now we are deploying those technologies across over 31 countries. We plan to use a similar blueprint with the Enhanced Drilling acquisition, both in terms of integration, but also in terms of market expansion.

Now moving on to our customer technology highlights for the quarter on Slide #12. During the first quarter, Expro continued to demonstrate its innovative technological capabilities with additional deployments and introduction of new technologies into the market. Similar to last quarter, we had several examples to choose from, but only a few to quickly highlight.

In Norway, Expro successfully delivered a world-first fully remote completion joint makeup with a downhole control line and clamp without a single person in the red zone. The combination of these disruptive technologies enhances safety, increases execution and operational efficiency, and delivers consistent and repeatable outcomes.

Another achievement during the quarter was Expro's iTONG offering, reaching a significant industry milestone. We have now successfully run and pulled over 1.2 million feet of casing and tubing in field operations since the technology was first deployed. This achievement underscores the iTONG growing momentum in the market with an increasing number of clients adopting the technology and experiencing its operational safety and performance advantages.

Also during the first quarter, we launched Solus, a single shear-and-seal valve that replaces conventional 2-valve subsea well access systems. This technology reduces the complexity, operational risk, time and cost during subsea intervention and decommissioning operations.

The last example I want to highlight is the successful deployment of our MultiTrace gas tracing technology for a customer that enabled accurate flow measurement on a large diameter flare system. This technology overcomes significant process challenges caused by the highly transient conditions surrounding the flow of gas and fluctuating gas consumption. MultiTrace allows accurate measurement of the flare gas in complex conditions, helping operators understand emissions and improve compliance without disrupting operations. At the heart of all these innovation examples and a common thread with all of them was the value creation for our customers.

Before turning the call over to Sergio, I'd like to briefly revisit Expro's long-term strategic pillars, those we focus on to drive value for our shareholders. These are included on Slide #13.

Expro's long-term strategy is to build a large diversified company that has increasing relevancy to our stakeholders, particularly our customers and our shareholders. Our relevancy to customers is built upon our service offering, including our innovative technologies, execution capabilities and market leadership positions. For shareholders, we continue to move forward, building a company that is able to generate healthy levels of free cash flow, which will be used to achieve our various capital allocation goals, all of which Sergio will expand on in his following comments.

One of the pillars of the strategy that we have talked a lot about is our commitment to improve the company's financial profile. We have seen evidence of this over the last several years with EBITDA margin expansion and increasing free cash flow generation. These will remain in focus moving forward, and we expect to achieve further improvement through cost efficiencies and reducing our capital intensity.

Another pillar and an important component of our strategy is our technology and innovation and how those are deployed into the market. We continue to develop and deploy new technologies into the market across our global footprint. Our expansive footprint also enables us to internationalize or globalize technologies, particularly those that we acquire through acquisitions that have limited geographic exposure, which leads to another component of our strategy, and that is to grow the company through scalable acquisitions like today's Enhanced Drilling announcement.

The company has a strong track record of execution with acquisitions that we have made over the last several years. For these acquisitions and potential ones in the future, Expro looks to add to its services and technology offerings.

In general, we seek opportunities with international and offshore exposure that have adjacent product offerings and are accretive to the company's financial position, again, very characteristic of today's announcement of Enhanced Drilling. Due to the slate of service offerings across the full well lifecycle, we have multiple avenues to pursue when looking at potential acquisitions. Our focus will continue to be on pursuing those that we believe will increase relevancy with our customers and shareholders.

With that, I'll turn the call over to Sergio, to review our first quarter results in detail.

Thank you, Mike, and good morning to everyone on the call. As we reiterated on our last call, Expro's quarterly results reflect the normal seasonality we experienced during the first quarter of the calendar year, caused primarily by -- as Mike mentioned -- the winter weather in the Northern Hemisphere and a slow start to customer spending. Again, this is normal seasonality and expected every year during the first quarter.

With this backdrop, the company executed well on its operational and financial results. Both revenue and adjusted EBITDA reflected the relative midpoints of the ranges we previously provided. Specifically to Q1, our adjusted EBITDA was $63 million with a margin of 17.1%, which is a decline from the previous quarter, but again, reflects the seasonality of the first quarter, and we expect sequential improvement for the remaining quarters of the year.

Slide 14 illustrates our annual margin growth for the past few years.

Even with these results and noting the ongoing situation in the Middle East and the modest headwinds those have created for us, we remain focused on expanding our margins in 2026, and the drivers of margin expansion for us remain the same. In the near term, those are reflected on Slide 15, and they are the full year impact of our Drive 25 cost efficiency initiative, increasing customer wallet share at higher margins and to continue to internationalize services and technologies acquired in previous acquisitions, spreading those into new geographic areas.

The Enhanced Drilling acquisition we announced today will further help expand our margins. Not only is the margin in that business already greater than 30%, but the internationalization of that technology will expand our margins even further. In the medium term, we expect to increase our top line revenue, continue to gain customer wallet share and more fully utilize services and technologies acquired across our geographic areas in order to achieve the next milestone goal of adjusted EBITDA margins greater than 25%. Also acknowledging that possible future M&A may play a factor as well, which we have executed on with today's announcement regarding the Enhanced Drilling acquisition.

We're also keenly focused on cash flow generation. And in Q1, Expro reported quarterly free cash flow generation of $3 million on an adjusted basis. This was admittedly light based on our own expectations, but was really driven by working capital changes that worked against us this quarter. Those changes were roughly $20 million more than what we had expected and was primarily driven by the increase in our accounts receivable balance and prepaid amounts included in our other asset balances.

This phenomenon is just timing-related. And in fact, subsequent to the quarter end, we have already seen most of Q1 related collections being received, and we already experienced a significant improvement in our working capital balances. I personally expect the second quarter to be a very good collections quarter.

Considering the already seen improvements in our working capital, our operational outlook and anticipated CapEx for the year, we still believe we'll generate a good level of adjusted free cash flow this year, in line with our annual guidance.

Now quickly turning to the liquidity position. We have included this on Slide 16. The company closed the quarter with $517 million in total liquidity. That includes $171 million in cash on the balance sheet. At quarter end, we had $79 million outstanding on our revolving credit facility, which was consistent from the previous quarter and put the company's net cash position at approximately $92 million. Now obviously, with the Enhanced Drilling acquisition, those numbers will change as we are funding the acquisition through a combination of cash on hand and borrowings under the credit facility. At the end of the day, we're still in a very strong financial position with substantially less than 1x net debt to adjusted EBITDA.

Having and maintaining a strong balance sheet positions the company well to execute on its other capital allocation priorities. These are highlighted again on Slide 17.

Our capital allocation framework is designed to maximize long-term value creation. As we have mentioned before, there are 4 equally important capital deployment priorities: invest in the business with CapEx, providing organic growth that enhances our core capabilities, improves efficiencies and/or supports technological innovation across our service offerings. As a reminder, the vast majority of our capital expenditures are geared towards specific projects with known return profiles that meet or exceed our standards. I would reiterate, these are not speculative investments.

Another capital allocation priority is to deploy capital to inorganic growth. Just like today's announcement, through M&A, Expro can and has completed acquisitions that add to the company's complement of services across the well lifecycle. Our M&A strategy is focused on opportunities that offer clear industrial logic, scalable technologies and synergies and the potential to expand our presence in attractive markets. We maintain a highly selective approach when looking at M&A to ensure only the value-accretive opportunities are pursued and pursued at the right price.

Another key aspect of our capital allocation framework is a commitment to return cash to shareholders. As we have already stated, during the first quarter, we repurchased approximately 1.2 million shares for roughly $20 million. This puts us on a really good path to meet or exceed our current year target of returning at least 1/3 of free cash flow to shareholders.

On the final leg of the stool in terms of capital allocation is something that I have already covered, and that is maintaining a strong balance sheet. In doing so, we have the financial flexibility and resilience to act on our other capital allocation priorities. For example, even with an unexpected subpar free cash flow generation during the quarter, we were still able to make significant process on our share repurchase target for the year and still maintain the company in a healthy net cash position.

This last example also reflects our ability to manage our capital allocation priorities dynamically with one not dominating the ranking. Along those lines, it's important to note that even in a seasonally weak quarter, we were able to execute across all of these capital allocation priorities recently. We invested organically in our business through CapEx. We returned cash to shareholders. We executed on accretive M&A, and we maintained a strong balance sheet.

Before turning to our segment performance, I do want to reiterate and summarize our financial outlook for 2026, as Mike previously addressed in Slide 10. Overall, we remain very optimistic with the industry outlook for the second half of 2026 and beyond. Our current projections assume the adverse impacts of the Middle East conflict we seen in the second quarter with no lasting impacts for the third and fourth quarters. And Mike alluded to several real and live opportunities across the regions that we see providing tangible sequential increases in the back half of the year, which when combined with the more favorable working capital changes will result in more significant free cash flow generation.

Now I'd like to quickly address our segment performance this quarter. These are covered in Slides 18 through 21 in the accompanying presentation.

Turning to regional results. For North and Latin America or NLA, first quarter revenue was $128 million, down just $2 million quarter-over-quarter, reflecting various puts and takes comprised of lower well flow management revenue in Guyana and reduced well construction revenue in the U.S. and Brazil, partially offset by higher subsea well access revenues in the U.S. and increased well flow management revenue in Mexico. Segment EBITDA margin at 20% was down compared to prior quarter at 24%. This decrease was primarily attributable to a less favorable activity mix in the region due to normal seasonality during the quarter.

For Europe and Sub-Saharan Africa or ESSA, first quarter revenue was $114 million, also down just $2 million on a sequential basis due to lower well flow management revenues in Angola and Bulgaria and lower subsea well access and well construction revenue in Ghana, partially offset by higher well construction revenue in Ivory Coast. Segment EBITDA margin at 28%, was down sequentially, also reflecting an unfavorable product mix relating to a reduction of higher-margin projects given the normal 1Q seasonality.

The Middle East and North Africa region, or MENA, though impacted to some extent by the Middle East conflict that began late in the quarter, still delivered a fairly solid quarter. Revenues of $82 million were down sequentially from the previous quarter of $93 million. The decrease in revenue was primarily driven by lower well flow management revenue in Algeria, Saudi Arabia and Iraq, together with reduced well intervention activity in Qatar due to the ongoing conflicts in the Middle East. MENA segment EBITDA margin was 29% of revenues, decreasing from 39% in the prior quarter. The decrease in the segment EBITDA margin is consistent with the decrease in revenues and change in activity mix experienced during the quarter.

Finally, in Asia Pacific or APAC, first quarter revenue was $44 million, a modest increase of $1 million sequentially. Here, the increase was a result of the puts and takes relating to higher subsea well access activity in Malaysia and increased Coretrax-related activity, partially offset by lower well flow management and subsea well access activity in Australia. Asia Pacific segment EBITDA margin at 16% of revenues was consistent with the prior quarter.

With that reviewed, I'll turn the call back to Mike for a few closing comments.

Thanks, Sergio. As we conclude our prepared remarks and before opening the call for questions, I'd like to conclude with the following comments. We share the industry's increased optimism over the medium and long-term, though recognizing it has come at a cost, both from a financial perspective, but also at a human level.

I remain confident in the company and that our employees will continue to provide value-added services to our customers, which we intend to translate into value for our shareholders. As part of that, we continue to demonstrate our ability to execute across multiple capital allocation priorities and we'll continue to do so in the future.

We thank our employees, customers and shareholders for their continued support and look forward to building on our momentum in the quarters and years ahead. Finally, I look forward to welcoming all the folks at Enhanced Drilling into the Expro family. We are very excited about the opportunities that we can jointly pursue.

With that, we can open up the call for questions.

[Operator Instructions] Our first question for today comes from Caitlin Donohue of Goldman Sachs.

Can you walk us through your anticipated growth prospects with the acquisition of Enhanced Drilling, just the strategy of how you anticipate to further expand Expro's wallet share in certain geographies of existing services with the portfolio expansion with MPD?

No, Caitlin, thank you for the question. And we're -- first off, we are so excited about the Enhanced Drilling acquisition. I mean, this is one we've been looking at and we've been working on for a while, and we've been able to get this closed out here over the last few weeks. And this is -- this really is beyond wallet share expansion for us. This really is a market share expansion opportunity.

The technology has tremendous application. It's only in offshore, particularly deepwater, allows operators to drill more complex casing strings and those type of things because it's a dual gradient technology. So the predominant deepwater basins are really where this is going to have application. And as we talked about in the earlier and we've highlighted in the press release, today, it's really -- on the market penetration really has been in Norway and in some here in the U.S. Gulf. So places like Guyana has tremendous application. Brazil, especially with the sub-salt new applications, you start to move into West Africa, the Ghana, the Angola, Australia, I mean, this is a tremendously positive advancement for us that really allows us to expand our service offering into much more of the managed pressure drilling services.

So the good thing for us is it's a very similar playbook to how we rolled out the technology from Coretrax. And so our ability, both from an integration standpoint as well as from a market penetration standpoint, we think we'll be able to do that. But I think over the course of the coming few months, we'll be able to get some good penetration into some of those key geographies and in particular, Guyana, to be frank.

Just one more on my end. For the Drive 25 initiatives, bringing down costs over the long-term is a continued goal. Can you give some color on the progress there, particularly as now you have this Enhanced Drilling acquisition, some growth that you might now see from the expanded portfolio?

Caitlin, this is Sergio. I'm happy to address that. So I mean, we are continuing with our cost outs, and we're continuing to make sure that we're getting as efficient as we can as a company. So this is a bit of an ongoing process, the efficiency gains, et cetera.

I would say from a Drive 25, we've achieved way more than what we had set out to achieve initially. If you remember, at the beginning, we said that we wanted to take out about $25 million of costs per year. Then we actually increased that to $30 million per year. I think we're close to $40 million now, and a lot of those projects have already been completed. So you should see the full impact of that Drive 25 in our 2026 numbers and beyond.

So all of those increased efficiencies, which means that we're taking some of these structural costs out of the system. This is not just we removed a number of people, given the level of activity that we have, but then we will have to bring those costs back into the system if the activity increases. These are sticky cost removals or meaning these are structural cost reductions that will give us a lot of operational leverage as we continue to see the market picking up in the second half of '26 and into '27. That will allow us to grow the top line without actually any meaningful increases in our -- or any increases to be frank, to our support cost structure. So that gives us a lot of incremental torque in the business and cash flow generation with that.

Our next question comes from Eddie Kim with Barclays.

So obviously, the world has changed since your last earnings call. Are you seeing any noticeable change in your customer conversations? And if so, any specific products or business lines where you are seeing or where you expect activity to pick up meaningfully as a result of what's taken place over the past 2 months that's different from your expectations at the very beginning of the year?

No, Eddie, and thanks for the question. Thanks for joining. I guess so. I was just in Asia here recently. And the Asia market is really -- there was an awful lot of customer conversation and dialogue around more production type projects, more OpEx-related type things, kind of incremental oil. So I think that's -- I think we're going to see that start to strengthen up. But also, quite frankly, both in Asia as well as other customer conversations I've had, there is much more of a situational awareness today around energy security.

I think it's going to go well beyond the kind of phenomenon we saw in Europe to begin with, with the Russia-Ukraine conflict. I think there's just a lot more situational awareness around that. So I think that's going to translate into especially some of the deepwater basins, those have got very efficient breakeven costs at this point in time, I think can help add to energy security. And frankly, that means what we're going to see is more drilling and completions type activity. And that's really kind of a sweet spot for us today with our well construction product line, with our subsea product line. And that's one of the reasons that I'm so excited about Enhanced Drilling, because I think you've even heard commentary from the drilling guys here over the course of the last couple of weeks.

The second half of 2026, I think if 60 days ago, we thought it was going to be at x level. I think what we see now globally, it's going to be x plus some margin in the second half of the year. I think it's going to kind of step up and ramp up. More drilling activity means more well construction activity means more completion activity. And I think we're really well positioned for that. I think it just sets up 2027 and beyond to be even more robust.

Great. My follow-up is just on the Enhanced Drilling acquisition. Adoption of MPD has picked up a lot over the past several years. Do you have a sense of what the overall market penetration is of MPD globally? Just of the -- I don't know -- 130 deepwater rigs today, how many rigs are utilizing MPD today? And for this Enhanced Drilling acquisition specifically, is it more about market penetration into rigs that don't have MPD currently? Or is it more about replacing incumbents?

Yes. No, Eddie, it's a really good question. I can say it's part of what we spend an awful lot of time trying to make sure we had a good understanding of as we went into the acquisition. So of those kind of 130-ish floating assets today, there's probably roughly 100 of those have MPD on them today. And with Enhanced Drilling, we've probably got less than a 10% market share today.

All 130 of those rigs have an application, have an opportunity for Enhanced Drilling. The difference with this technology is because it's a dual gradient, it allows the operators to drill more complex geology, more complex reservoir pore pressures, also allows them to have different casing designs. They can run larger casing designs to much deeper in the well. So it's going to help them enhance them from a safety, from an operational type standpoint.

So we really see of those 130 rigs, you could run this dual gradient technology on all 130 of them, probably not required on all 130 of them, but it's required on an awful lot more than a 10% market share we have today. So long answer, but it's more around displacement of current MPD techniques with this particular technology.

Our next question comes from Keith Beckmann of Pickering Energy Partners.

I want to say congrats on the acquisition. Obviously, MPD is not bad to get into if the floater market plays out like we all hope it does. But I wanted to kind of think about the technology side of things, given it's tech day. So I was wondering if maybe given maybe improved 2027 thoughts, maybe how are you thinking about the timing of potentially rolling out technologies? And if you could just kind of talk through how you plan to capture the value and the deployment of those technologies.

No. Keith, thank you. It's really so much of our innovation focus and our engineering efforts really today is on creating additional operational efficiency. I mean, the things we've done around Drive 25 and really trying to make sure we have sticky cost efficiency, cost-out efforts, we're trying to do the same thing from an operational standpoint. We're trying to reduce the number of personnel that are required. We're trying to make things more autonomous, to make things more repeatable and more -- just more efficient. And so some of the technologies I highlighted earlier around our remote clamp installation system, it really does that, reduces personnel, makes things more efficient.

Our iTONG technology allows us to reduce the number of personnel, reduce personnel in the red zone. And we're trying to do the same thing with our well flow management, our well testing operations as well. We're moving to more automation.

You're talking about a technology that's been in the industry for 70 years. We've been doing it for 50 plus, and we're actually bringing some efficiency to it. We're reducing the number of personnel that are required, and that brings more efficient operations, but frankly, also helps us with being able to redeploy those personnel to other operations. So it's really kind of that same mantra of efficiency, both from a cost standpoint, but also from an innovation, engineering, technology deployment standpoint as well.

Awesome. The second question that I wanted to ask was just around slight Middle East headwinds in 1Q, 2Q. But really, the thing that I wanted to hit on was, how do you expect that you guys could potentially participate in a recovery once the conflict is essentially over? Are there ways that you've identified or you think in particular, you could try to capitalize on potentially in the event that the Middle East needs to start producing a lot more?

Yes. I mean, it's -- we've had a lot of conversations around the Middle East. Several of us internally have lived and worked in the Middle East earlier in our careers. And I think what we're going to see is we're probably going to observe a different customer and operating dynamic in the Middle East than what we have historically. I think we saw that starting with the Emirates now announcing that they're going to exit from OPEC. They've already been kind of not staying consistent with their production quotas and those kind of things.

I think we're going to see much more of a drive for enhanced production and enhanced operations out of the Middle East. So I think that's going to allow us to participate because an awful lot of that is going to be around drilling and completions. And especially on the drilling side for our well construction portfolio, we think that's something we can continue to expand in that marketplace.

I just -- philosophically, I mean, right now, our assumptions are that we've come back to kind of more of a normalcy in terms of security and those kind of things in the Middle East here in the second quarter. I think we're going to have to see how that plays out. It seems to be we get one message in the morning and then we get a different message in the afternoon with how things are progressing from a geopolitical standpoint from the Middle East. So we'll continue to be flexible and adaptable with our business and our operations.

Short-term, we'll see how that plays out. I do think medium and long-term, the reservoirs are so prolific in the Middle East. They're going to have to play a really strong role in future global production. So I think it will be tremendous in the medium and long-term. We'll just have to kind of see with this choppiness, how that plays out here in the coming weeks and months. And hopefully, we're not talking quarters.

Our next question comes from Josh Jayne of Daniel Energy Partners.

You highlighted no logistical issues today as a result of the conflict, but maybe you could just go into a bit more detail on how you're positioning yourself to not be impacted in the event that this goes longer than we all think it may.

Yes, Josh, thanks for joining us. I think it's -- today, especially for our activity in the Middle East, the vast majority of our revenue and our service intensity comes from services. It doesn't come from product sales. So we're less dependent upon the ability to transport equipment and gear into the region. So in the short-term, it hasn't had a significant effect on us. But frankly, we go beyond weeks and months and we start talking about quarters of conflict, it will become a little bit more of a constraint for us just because we actually have to be able to ship in M&S supplies for maintenance and those type of things. Those tend to be smaller volumes, smaller items that can come in via land, they can come in via air.

So right now, we just don't see a significant impact in it. But if this goes on for an extended period of time, and frankly, I personally don't see anything that makes me think that this is going to go on for an extended period of time, we could get to the point where we would have an impact. But today, it's just not because of the makeup of our business and our activity in the Middle East, much more service related, just not having a tremendous influence today.

Okay. And then I just wanted to touch on the acquisition one more time. You talked about expanding it geographically as it's obviously relatively well concentrated today. You mentioned Guyana as an opportunity, for example. Maybe just could you go into a bit more detail on how long -- how long it may take once you're fully on board? Do you think it takes to really start to see diversification in the business and just how you're thinking through that a bit more would be great.

No. I mean, Josh, it's another -- it's a good question. I appreciate you following up. I mean, this is one where the playbook that we've gone through for Coretrax is we've been very intentional on we're going to go to country A first. We're going to go to country B, second. We're going to go to country C, third. We did it in a very specific order because we wanted to maximize the market penetration.

We want to maximize the pricing, and we'll go through that same type of process with Enhanced Drilling. The good thing here is, from a technology standpoint, this is so critical and really brings so much value to the operators that it almost sells itself. I think part of the challenge and part of why that management team is so excited to be part of a bigger platform is we've got more channels. We've got more customer engagements. We've got more opportunities to do that.

So I think one of our -- and I don't want to call it limitation, but I think one of our throttling mechanisms here is going to be really our ability to -- from a CapEx standpoint to deliver additional incremental systems. We've got a certain number in flight right now, and we'll have to go through and reevaluate which markets we think we can get penetration in. So it's going to be the deepwater basins. We're going to focus on those. It brings efficiency. It brings additional safety. And frankly, I think brings -- could potentially bring an overall cost reduction element to the operators as they can start to change some of their casing designs, I think that brings some tremendous flexibility.

So long answer, lots of things to say there, but I think it's part of what you'll really be able to hear from us over the course of the next few months as we start to move that thing forward, get it closed and then being able to really start to action and implement it. You'll hear a lot more about our plans on some of those things.

Our next question comes from Derek Podhaizer of Piper Sandler.

Sorry if I missed this before, I jumped on a little late here, but hoping to get some more color around the 2Q guidance. Just trying to think through it. We obviously, get the seasonal rebound, some margin expansion, but then trying to interplay of the $10 million to $15 million impact from the current Middle East conflict. You said that's going to come with fairly high decrementals, but just also just trying to think of the shape of the recovery as you maintain the full year guide and the big -- the sharp step-up in the second half of the year. So maybe just some help on second quarter would be great.

Derek, this is Sergio. Happy to answer those. So I mean, as we've mentioned before, even before the conflict began and now it's even more so, this is going to be a stair step type of results, right? So second quarter results are going to be higher than first, and third is going to be higher than second and et cetera. So that is the shape of kind of how we should think about kind of revenues and EBITDA and cash flow generation throughout the year.

So just kind of just using that as a starting point, as we talked about second quarter will have about $10 million or $15 million impact on our revenue generation in the Middle East because of the conflict. That comes with pretty high decrementals. So you shouldn't assume that there is a pretty significant EBITDA deficiency on that as well. So if you think more about a little bit of the third quarter is a bit of the fulcrum here. So if you think there's so much kind of EBITDA and cash flow that we need to generate throughout the rest of the year and assuming that second quarter is going to be better than first, but not quite as high as the third. So that kind of gives you a little bit of that shape of the recovery there, if that helps you.

It does. Maybe just a bit of a holistic question, just given the Enhanced Drilling acquisition, which was pretty accretive. But just thinking about consolidation in the offshore space, we've seen it on the floater side. We've seen it with support vessels, decommissioning, P&A, obviously, Enhanced Drilling with you guys more through a technology lens. But just given we're entering this what appears like a multiyear up cycle in offshore, what else could we expect from the markets from a consolidation lens to keep up with the demand of these upstream customers that are about to deploy multiyear development projects? Just maybe some thoughts around what you could see when we look out over the next few years from a consolidation standpoint.

Yes. Derek, it's Mike, and thanks for the question. I think it's -- you're asking the really key important element there. And it's -- for us, we're more relevant today post the Enhanced Drilling acquisition than we were yesterday. We need to continue to become more relevant to our customers. And if we're more relevant to our customers, I know we can be more relevant to investors. I think we need to continue to have consolidation in the market. I think especially offshore, international type areas, I think we need to continue to start to try to see that. We're active in it every day of the week. This is another acquisition.

I think some of you heard me refer before that I really like the -- my 7-year-old grandson math. This is another one of those. My 7-year-old grandson can do the math to figure out this one is accretive. So we continue to look for those kind of opportunities. We continue to try to do things that help us be more relevant for our customers. I'm going to be particularly excited to talk to customers about Enhanced Drilling, because I think it's going to be like some of the other acquisitions we've made, it's going to make perfect sense to them why that brand under the Expro umbrella is really going to make a lot of sense.

So we continue to be active in it. We continue to -- we're not just trying to become big for bigger sake, but we're trying to become more relevant to our customers. And I think that's where we'll continue to have our efforts. Some of it's going to be technology focused. Some of it's going to be market expansion focused. Some of it's going to be geographic expansion. It's all those kind of things that we continue to really put a lot of emphasis on internally.

At this time, we currently have no further questions. Therefore, that concludes today's conference call. Thank you all for joining. You may now disconnect your lines.

Good morning or good afternoon all. Thank you for joining us for the Expro Q4 2025 Earnings Conference Call. My name is Car Lee, I'll be your conference call coordinator for today. [Operator Instructions] I'll now hand over to our host -- Investor Relations, the floor is yours.

Thank you, operator. Good morning, everyone, and welcome to Expro's fourth quarter call for the year ended 2025. I'm joined today by Mike Jardon, CEO; and Sergio Maiworm, CFO. Both Mike and Sergio will have sure remarks, after which we'll open the call for questions. As part of today's call, we have an accompanying presentation and supplemental financial information on our fourth quarter and full year results. Both of these are posted on the Expro website, expro.com, under the Investors section. Before we begin today's call, I'll remind everyone that some of today's comments may refer to or contain forward-looking statements. Such statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

These statements speak only as of today's date, and the company assumes no responsibility to make such forward-looking statements. The company has included in its SEC filing cautionary language identifying important risk factors that could cause actual results to be materially different from those set forth in any forward-looking statements. A more complete discussion of these risks is included in the company's SEC filings, which can be found on the SEC website, sec.gov, or on our website, again, expro.com.

Please note that any non-GAAP financial measures discussed during this call are defined and reconciled to the most directly comparable GAAP financial measures in our fourth quarter and full year 2025 earnings release, which was issued this morning and can also be found on our website. With that said, I'd like to turn the call over to Mike.

Good morning, everyone, and welcome to Expro's fourth quarter call. I'll begin by reviewing the fourth quarter and full year 2025 financial results from today's press release. Next, I'll cover Expro's strong backlog, the macro environment and our current outlook for the year ahead as well as give some input on some guidance. We will conclude with operational highlights for the quarter. Sergio will then provide some further details on our financial performance and address the company's ongoing capital allocation framework. So let's begin on Slide #3.

For the year, 2025 marked another year with several successes for the company. We delivered on expanding margins, cost efficiencies, higher free cash flow generation, a strong balance sheet, technology deployments and not least of all, returning cash to shareholders. The company generated just over $1.6 billion of revenue and $353 million of adjusted EBITDA, representing a 22% margin. This financial performance was within the guidance ranges previously provided. Additionally, it represents the progress we have made in expanding our margins, moving us closer to our longer-term goal of EBITDA margins at 25%. A key metric that registered above the guidance range was adjusted free cash flow, which came in at $127 million for the year, more than doubling the amount generated in 2024.

Going forward into 2026, we expect another sequential increase in the amount of free cash flow that the company can generate. For the quarter, the company reported quarterly revenue of $382 million and adjusted EBITDA of $88 million, representing a 23% margin in the quarter. Adjusted free cash flow for the quarter was $28 million or 7% of revenue. These quarterly and annual financial results reflect the ongoing operational efficiency gains, technological product advancements and their impact on margins and cash flow and the continued impact of our globalization strategy. Moving to Slide 4. Expro's $2.5 billion backlog reflects a $196 million increase during the fourth quarter. Our current backlog provides robust revenue visibility heading into 2026 and reinforces the strength of our diverse portfolio and operations across our geographic regions.

Within our backlog, our long-term contracts, which provide a solid base and some stability in our revenue generation. One such recent example was a 4-year $380 million contract for a customer in North Africa. This achievement represents one of Expro's largest single customer awards, and I'll address this in a little bit more detail in some of my comments later on. Now as we've mentioned before, this level of backlog is encouraging and supports our strategic planning and visibility on revenue, but it does not represent a guarantee of future outcomes. Rather, we view our backlog as a reasonableness test at health check for our business one that offers insight into the business going forward. As we look to the year ahead, we consider the evolving market landscape, which continues to shape demand, investment and opportunity across the sector.

Global demand for oil and gas remains resilient, supporting long-term investment, particularly in the international and offshore markets to which Expro is well positioned. We believe the current macro environment will result in a modest recovery in upstream investment with growth concentrated in international and offshore projects, particularly deepwater developments. This will be supportive of demand for Expro's well construction, well flow management, subsea and digital solutions. While brownfield optimization and production enhancement requirements from our customers continue to provide prospects for our well intervention, production optimization and digital offerings. Expro's diverse service portfolio, strong international footprint, technology differentiation and operational efficiency position us to capture opportunities across our geographic segments.

To summarize, Expro maintains a cautiously constructive outlook for 2026 and beyond allowing us to continue supporting customers throughout the full well life cycle of their assets. Turning to Slide 5. We are providing our 2026 financial guidance based upon what we currently see in the global market. For the year, projected revenue for 2026 look to be at similar levels to 2025. And although revenue expectations remain relatively flat this year, Expro remains strongly committed to further expanding EBITDA margins and free cash flow generation. We plan to achieve this with the full year benefiting from our DRIVE 25 initiative, our increased capital efficiency and further improving our wallet share with existing customers.

To that end, we expect our 2026 CapEx to be similar to that of the 2025 level. Looking more near term and specifically at our first quarter guidance, you will notice that we expect our first quarter results to be impacted by the normal seasonal factors that we experienced almost every year in our business. The U.S. activity and revenue levels for the first quarter are projected to decline from fourth quarter due to the winter season in the Northern Hemisphere, where the U.K. or Norwegian North Sea as well as the U.S. Gulf activity tends to be lower due to ongoing winter storms and rougher than normal seas, which makes it harder to operate in the offshore environment.

Additionally, the seasonal dip is due to some customers' CapEx and operational spend that tend to be lower at the start of their annual budget cycles, which tends to be the case with most of our NOC customers. To be clear, the lower level of projected revenue and margins for the quarter is due to the normal seasonality of our business and not representative of our overall expectations for the year. Overall, based on our activity outlook and our position today, I'm confident in our ability to achieve these 2026 objectives. Before turning to our customer and technology highlights, I want to revisit a few things that sets Expro apart and that we think are important attributes for investors to consider. You see these on Slide #6.

Due to our exposure to across the well life cycle, we see opportunities to expand our wallet share with existing customers. We can do this by providing additional or enhanced services to customers leveraging our installed base to help expand margins, especially with the deployment of new technologies. Another theme central to Expro is our commitment to technology and innovation. While the rate of technology adoption varies greatly among customers, geographic regions and the different parts of the well life cycle, it's important cannot be overstated. Without technology and innovation, we think it is very difficult to remain competitive or relevant in this industry. We put a lot of emphasis on this as we know it creates value for both our customers as well as our shareholders.

Additionally, our global footprint enables us to leverage technologies internally developed or acquired through M&A and one geographically to then deploy them to another geography where we operate. For example, our acquisition of Coretrax in 2024. That business was primarily in roughly 18 countries at the time of the acquisition, but now we are deploying those technologies that we've acquired across roughly 31 countries. Moving to our customer and technology highlights for the quarter on Slide 7. During the fourth quarter, Expro continued to deliver safe and reliable performance to our customers across our global portfolio. We secured several major contract wins, advanced key technology deployments and demonstrated our commitment to safety for both our employees as well as our customers. While there have been several notable operational achievements and customer successes for the quarter, I will just quickly highlight 4.

This quarter, Expro secured one of the company's largest single customer awards, a 4-year $380 million contract across multiple fields in North Africa for production optimization and well management services. Also during the quarter, the company successfully deployed its proprietary extended range drilling or XRD Spider is the first and only 1,250-ton spider of its kind. This innovative technology supports drilling, tripping and landing string operations, significantly reducing tool change outs. Consequently, it saves substantial rig time and minimize red zone exposure, thereby enhancing both operational efficiency and safety. Expro plans to deploy the XRD Spider to more customer operations and expand the fleet in accordance with customer demand. In Australia, Expro successfully supported a major operator in delivering one of the region's largest offshore campaigns completing multiple subsea wells with 0 QHSC incidents.

The campaign involved integrating subsea, well testing and sampling capabilities, resulting in over 2,200 man days of activity in which we received job performance review scores of 100%. In Indonesia, our CATS ATX system enabled real-time wireless downhole data and remote valve control during drill stem testing. This product offering again demonstrates Expro's commitment to innovation and risk reduction in well operations. Before moving on, I would like to address another geography that has been topical as of late, and that is Venezuela.

Having lived and worked earlier in my career in Venezuela, I'm intimately aware of the geological reservoir and production challenges in the country. These high technology and challenging conditions are where the Expro solutions approach really shines. While we don't currently see any near-term opportunities in the country, we do believe we are well positioned should opportunities arise in the future. Expro has operated in Venezuela for many years previously, still having a facility and some stranded equipment in the country related to both our tubular running services as well as our wealth flow management product lines. For now, we will stay engaged with our customers that may have opportunities there to develop, but also realize that this will take time and a significant amount of industry investment in order to mature these opportunities.

Before turning over to Sergio, I'd like to remind everyone of Expro's long-term strategic pillars. These that we adhere to, to drive value for our shareholders, we see on Slide #8. Expro's long-term strategy is to build a large diversified company with a compelling business and product mix and market leadership positions. We are striving to build a company that is able to generate healthy levels of free cash flow, which will be used to achieve our various capital allocation goals, which Sergio will expand on in his comments later on. One of these strategic pillars is our commitment to continually improving the company's financial profile. The avenues used to achieve this goal are our relentless focus on margin expansion and free cash flow generation, our ability to drive cost efficiencies and reduce capital intensity and our ability to return cash to shareholders all backed by a strong balance sheet. Another pillar is our technical leadership and innovation. We continually develop and deploy new technologies into the market across our global footprint.

This footprint also enables us to globalize technologies that we have acquired through acquisitions and then implementing those technologies in one geography location to another. Finally, Expro looks to grow through inorganic scalable acquisitions. We seek opportunities to target international and offshore opportunities that have adjacent product offerings and are accretive to the company's financial position. We have made several successful and accretive acquisitions and have developed a proven blueprint for integrating acquired businesses in an efficient and cost-effective manner. With that, I'll turn the call over to Sergio to review our financial results in detail.

Thank you, Mike, and good morning to everyone on the call. As Mike noted, Expro executed well on its financial results for both the quarter and full year. While annual revenue was at the lower end of guidance, the free cash flow generated surpassed expectations and exceeded the high end of guidance. Specifically to Q4, our adjusted EBITDA was $88 million with a margin of 23.1% up about 30 basis points from last quarter and 10 basis points year-over-year. For the year 2025, adjusted EBITDA was $353 million with a margin of 22%, up 170 basis points year-over-year. Slide 9 illustrates our annual margin growth for the past few years. We remain confident that we will experience further margin expansion in 2026 driven by a full year impact of our DRIVE 25 cost efficiency initiative, increased customer wallet share at higher margins and continued international growth resulting from previous acquisitions like Coretrax.

Moving to Slide 10. Longer term, EBITDA margin expansion is not the goal in and of itself, but rather a means of increasing free cash flow generation. And in Q4, Expro posted its quarterly free cash flow generation of $28 million on an adjusted basis, bringing full year 2025 free cash flow generated to $127 million. which, again, was above the high end of the $110 million and $120 million guidance and more than double the amount generated in the prior year. Along those lines, we expect even stronger free cash flow in 2026, both as a percentage of revenue and in absolute terms as we plan to further reduce the capital intensity of the business, holding 2026 projected CapEx relatively flat.

Turning to liquidity. The company closed the quarter with $551 million in total liquidity. That includes $198 million in cash in the balance sheet after accounting for the voluntary prepayment on the revolving credit facility, which totaled $20 million during the quarter. This voluntary repayment reduced the outstanding drawn balance on the revolving credit facility from $99 million to $79 million as of December 31, 2025, further enhancing the company's net cash position. Before turning to our segment performance, I do want to reiterate and summarize our financial outlook for 2026, as Mike previously addressed in Slide 5. Overall, we're cautiously optimistic with our 2026 outlook, recognizing the seasonal impacts on our projected first quarter results with noticeable improvement in the subsequent quarters with a stronger back half leading to a good start for 2027.

Any anxiety over the flattish revenue guidance should be viewed in conjunction with projected sequential increases in adjusted EBITDA and EBITDA margins and free cash flow generation. The achievements will continue us on the path of one of the strategic pillars that Mike just mentioned, that of continued financial improvements which we believe will ultimately translate into increased shareholder value. Now I'd like to quickly address our segment performance this quarter before finally addressing our capital allocation framework. A reminder that details around our segment performances can also be found in the appendix of this presentation. Turning to regional results for North and Latin America or NLA. Fourth quarter revenue was $130 million or down $21 million quarter-over-quarter, reflecting lower subsea well access and well construction revenue in the U.S. where projects have shifted into 2026 offset by higher well intervention and integrity revenue in Argentina.

Segment EBITDA margin at 24% was flat as compared to prior quarter. For Europe and Sub-Saharan Africa or ESSA, Fourth quarter revenue decreased $10 million to $116 million sequentially, primarily driven by lower subsea well access and well construction revenue in Angola and Central and West Africa. -- partially offset by higher well flow management revenues in Bulgaria. Segment EBITDA margin at 34% was up approximately 120 basis points sequentially, reflecting a favorable product mix. The Middle East and North Africa or MENA delivered another solid quarter, sequentially higher as compared to Q3 with revenues at $93 million driven by an increase in well flow management revenue in Algeria and Saudi Arabia. MENA segment EBITDA was 39% of revenues, an increase of 400 basis points from the prior quarter reflecting the higher well flow management activity and more favorable activity mix.

Finally, in Asia Pacific, or APAC, fourth quarter revenue was $43 million, a decrease of $6 million relative to the third quarter, primarily reflecting the lower well flow management activity in Indonesia and India, lower well construction revenue in Australia, and offset by higher subsea well access activity also in Australia. Asia Pacific segment EBITDA margin at 16% of revenues decreased approximately 400 basis points from the prior quarter, reflecting decreased activity and mix. Now I'd like to briefly revisit Expro's capital allocation framework on Slide 11. Expro's capital allocation framework is designed to maximize long-term value creation by maintaining a disciplined and balanced approach across 4 equally important capital deployment priorities. Our philosophy is that every dollar of capital must be deployed where it can generate the highest risk-adjusted returns. And as such, each of these 4 areas continuously compete for capital on an ongoing basis.

As a consequence, it may appear the priority shift and they are, but only to those that we believe will generate the highest risk-adjusted return. One of our capital priorities is to continue to invest in our business to drive organic growth with superior return profiles. This includes funding projects and initiatives through CapEx deployments that enhance our core capabilities, improve efficiency and support technology innovation across our service lines. Every organic investment is rigorously evaluated to ensure it meets our standards for superior returns throughout the business cycle. As a reminder, the vast majority of our capital expenditures are geared towards specific projects with known return profiles that meet our standards.

I would reiterate these are not speculative investments. Another area where we can deploy capital is inorganic growth opportunities. We pursue selective, highly accretive mergers and acquisitions that complement our existing capabilities and customer relationships. Our M&A strategy is focused on opportunities that offer clear industrial logic, scalable technologies and synergies and the potential to expand our presence in attractive markets. We applied the same disciplined capital allocation criteria to acquisitions as we do to organic investments, ensuring that only the most compelling opportunities receive funding. The company has a successful track record of executing on this strategy. We're also committed to returning capital to shareholders. Our framework targets the return of at least 1/3 of free cash flow to shareholders annually, primarily through share repurchases.

This commitment reflects our confidence in the company's ability to generate sustainable free cash flow and our focus on delivering direct value to our investors, particularly over the long term. During the fourth quarter, we were unable to repurchase as many shares as we intended, causing the total percentage of free cash flow return to shareholders for the year to come just short of 32%. Finally, maintaining a strong fortress balance sheet ensures that we have the financial flexibility and resilience to act on our other capital allocation priorities. Additionally, preserving a strong balance sheet enables us to navigate market cycles, invest in growth opportunities as they arise and protect the company's long-term stability. Importantly, these 4 priorities constitute our capital allocation framework, organic investments, M&A, shareholder returns and balance sheet strength, and again, are not ranked in a set order of priority.

Instead, they're managed dynamically with each area continuously competing for capital based on the quality of the opportunities available. This disciplined, balanced approach ensures that Expro remains agile, resilience and focused on maximizing value for all shareholders. And with that, I'll turn the call back to Mike for a few closing comments.

Thank you, Sergio. As we conclude our prepared remarks and before opening for questions, I'd like to conclude with the following comments. I'm excited about what was achieved by Expro's employees in 2025. I'll reiterate, we collectively implemented cost efficiencies as part of our DRIVE25 initiative, increased our EBITDA margins moving closer to our long-term goal, successfully deployed new and innovative technologies, generated a high level of free cash flow and return of cash to shareholders and improve the company's net cash position. We executed on multiple priorities that Sergio just referred to in our capital allocation framework. Looking ahead, I'm also excited about what the company plans to achieve in 2026 even in a macro environment where we are cautiously optimistic. We acknowledge a somewhat softer start to the year related to the normal seasonal factors that impact both the industry and Expro.

But we expect sequential improvements in the latter quarters, especially as we head into 2027 and beyond. We do expect to generate improved EBITDA margins and free cash flow in 2026 and anticipate executing again across our strategic pillars. I remain confident in Expro's resilience and ability to continue to deliver on operational and financial performance. Finally, we thank our employees, our customers and our shareholders for their continued support and look forward to building on our momentum in the quarters and years ahead. With that, we can open up the call for questions.

[Operator Instructions] Our first question comes from Ati Modak from Goldman Sachs.

Mike, can you talk more about the increase in wallet share comment? It sounded like there's some inherent cross-selling opportunities? What exactly are those opportunities? And is this a little bit more geographical expansion? Any color you can provide around it?

No, Ati, thanks for joining us and appreciate the question. This really is especially in some of our well construction operations, where we're providing TRS services, and we're also providing cementation services. We're adding additional services in there. Some of our cure technologies is a great example where we're already on the rig. We're already running TRS operations. We run our cementation operations significantly reduces the weighting on cement cure time. And we use the same personnel that are out there running our TRS services. So it's -- when I say expanding the wallet, it's we're already on the rig. We're already providing services. We provide some incremental services or products to our customers that help drive efficiency for them, and we're utilizing the same what we call installed base, but really the same personnel on the ground.

So it's something that we can do across geographies. We're doing similar things in well construction. We're also doing that across our well flow management product lines as well.

That's very helpful. And then as you think about the EBITDA range you provided for '26, what are the puts and takes that you're focused on, whether it's activity-wise or idiosyncratic for you as you think about the bottom and the high end of the range?

Yes. I mean, I guess how I would frame it Ati is, the market's going to do what the market is going to do this year. We're going to maintain our market share. We're going to expand our customer wallet exactly how many offshore floating assets are going to be operational in Q3 and Q4, that can always ebb and flow. We're just really focused on -- laser focused on making sure that even if we're in a flattish climate, we can still expand our margins. And that's really kind of what our guidance is framed up to give. It's not that we look at a massive step-up in activity in the second half of the year. It's more around the visibility we see today, and that's why we've given the guidance range that we have in there. .

Our next question comes from Eddie Kim from Barclays. Eddie.

Just staying on the full year 2026 guidance, EBITDA of $365 million at the midpoint, which reflects a modest improvement year-on-year. Just wanted to understand better understand the market assumptions behind that guide. Is the guidance sort of, I guess, valid at Brent in this kind of $60 to $70 range for the year? And could there even be further upside if commodity prices firm up from here. And on the flip side, if market conditions were to deteriorate, is there an oil price at which you expect operators might maybe push back or delay some programs? I know there was lot in there, but any color that would be great.

No, Eddie, thanks for joining us and really, really good question. It's one that we talk a lot about internally. I guess how I would try to frame it up for you is our activity set is really based on what we're seeing with current commodity prices. I still think we've got a range here where even if commodity prices were to be compressed a little bit more, I don't know that we're so active in offshore deepwater projects that have a long investment cycle. And our customers are not going to throttle that down significantly here in the short term. I do think that we're cautious on how we're viewing the total activity set this year. I do quite frankly, think that there could be some potential things are going to ramp up more. We've heard some positive commentary from the drilling guys and those kind of things.

It really depends on how that some activity translate into turning to the right, so to speak. So I think there could be some upside in the back end of the year. We're not going to rely on that. We're going to get our fair share. We're going to stay focused on technology rollouts and those kind of things. We'll kind of look at that as upside potentially, I guess, is how I'd frame it up. But we are laser-focused on even if we're in a situation in 2026, and I hope I'm wrong, but even if we're in a situation in 2026, where we're in a flattish revenue climate to even slightly down meaning the market is flat to slightly down. We're still going to be able to expand our margins modestly, and we're going to expand our cash generation as well. That's what we're really focused on.

Got it. Got it. That's very helpful color. And just wanted to touch on the offshore activity inflection. As you mentioned, there's kind of growing maybe consensus or optimism about an activity and collection back half of this year into 2027. Just from a regional perspective, could you talk about which regions you expect will sort of drive the recovery in which you expect or remain flattish or maybe take longer to ramp up.

Sure. No, it's -- so I think one of the -- and this is something we've been consistent about talking about for a number of quarters. I think the subsea tree outlook has continued to be very positive and very strong and very robust. You look at the order backlog that some of our peers are adding in, that's been quite positive. That's a good leading indicator of what's to come. But those are things when they add backlog today, they're not -- those aren't trees that are going to be installed tomorrow. Those are trees that are going to be installed 9, 12, 18 months down the road. So I think that's been a good set of breadcrumbs that's been laid out there. And it's one of the reasons why we've been consistent. We think the second half of this year is more robust, especially going into 2027.

And I think you're going to see this -- the U.S. Gulf is probably going to be a flattish year in 2026. I think good potential as we go into 2027 for some expanded investments. South America is going to be strong. West Africa is always the one that -- it's going to take a little bit more time to ramp up, but that's the one that will really kind of help start to move the needle when that happens. So I think West Africa in particular is why we're going to start to see the '27 and beyond, that's when we're going to start to see more of that real inflection point. And those are bigger projects. Those are multi-rig campaigns, those are significant drilling and completion -- drilling complete operations.

[Operator Instructions] Our next question comes from Colby Sasso from Daniel Energy Partners.

I just wanted to ask, given the current administration has been favorable to pushing deals through, have you got other meaningful deals announced in the offshore space a few weeks ago. I'm curious seeing the increased transactions go through. Has that changed your strategy at all? Or maybe could you update on the surrounding thoughts given M&A that you've done, and they haven't done anything in a while.

Sure. No, Colby, it's a great question. I mean I think it's -- yes, the current administration is probably more amenable to M&A and those types of things. Quite frankly, our -- the things that we have an appetite in and we have an interest in arch. They're going to have a global nature. They're going to have a global presence and we don't have a significant concern around our ability to for those that go through antitrust or those kind of things. So for us as a company, the type of things we're interested in looking at aren't really being influenced heavily by whether the administration is more or less amenable. I think there continues to be -- they're still over the last 5, 6 years, there still has only been a handful of consolidations of size in the services space, whether that was hours back in 2021 or what Patterson has done, it was nice to see the rig and the Valaris transaction here. I think that's a good move for the industry. I think we'll continue to see those type of things happen. .

And we are working on those kind of things every day of the week because it really is about helping us become more relevant to our customers, helping them more solutions and more efficiencies and those type of things. And we're absolutely convinced if we're more relevant to our customers that we're going to become more relevant to our shareholders as well. So it fits in, but it's something we continue to work really, really hard on because we have a great platform. We're offshore, we're international, we have touch points with our customers all the way from exploration through appraisal, through development, through production all through P&A. So we have a lot of flexibility in latitude on a type of things that would fit into our portfolio and that we could help drive value with.

And just another follow-up. One of the themes over the last 2 quarters of large operator calls has been increased need for exploration offshore. Any thoughts on what you're seeing in the areas geographically that could surprise the upside over the next couple of years? And how do you see yourself taking advantage of what you're seeing and hearing?

No. Colby, it's a great question. It's a really perceptive question. So kudos for you for picking up on that. Our customers, yes, we're having more and more exploration project discussions. Part of that's because they need to add more and more into their portfolio for future production and future reserves. We provide a lot of services in the exploration activity set. So whether it's well construction or it's well flow management, when we start flowing as well back to evaluate the reservoirs or it's being able to help provide the connectivity in a subsea application from the rig to the sea floor. So it's a great opportunity for us. We play a lot of those kind of services.

And I think as we see more and more of that translate into activity, I think we'll continue to see more exploration opportunities, and that means more exploration revenue in dollars for us. So it's -- we've been really over the course of the last really since 2012, there hasn't been a lot of meaningful exploration activity going on globally. So I'm excited to see that potential. We'll see how much of it translates into 2026. I think more of what we're going to see in 2027.

Our next question comes from Derek Podhaizer from Piper Sandler.

I just want to go back to the conversations around the 2026 guidance. So just going up to the top line revenue here. I know the prior guide was for '26 to be flat, but down now the new guidance is flat to up. So I was hoping you could help us understand some of the puts and takes there. why our outlook has improved maybe from a regional standpoint? And then just thinking about how the guidance ties to the implied sequential growth on the top line, the second, third, fourth quarter because it looks pretty meaningful.

Yes. And Derek, thanks for joining. I guess what I would -- we're more -- and I kind of alluded to it in one of the earlier questions, we are laser-focused on if the market grows, 2% or 5% or 10%, we will absolutely get our fair share of projects. We have a very high bid win rate. we have great customer relationships. So what the market does, we're going to benefit from that as well as anybody else. And I don't want to say we don't have any control over that, but we the timing of somebody adding a rig in Angola or the timing of additional rigs and activity in the U.S. Gulf, we're not going to have an influence over that, but we're going to be able to provide those services. So it's not so much that our view has become more positive or more negative. What I have the organization focused on is execution, service delivery, HSE performance, continuing to win our fair share of activity and fundamentally driving more efficient operations.

We expanded margins in 2025, and we expanded cash flow generation significantly in 2025 because we were focused on the things we could control, and we're going to do that again in 2026 and even if the market is flat to slightly down, that's not to say I think it's going to be slightly down. My message is even if the market is under a little bit more pressure, we will still expand our margins and expand our cash flow generation. So that's -- really that's a little bit of a subtle difference, but it's much more around I want my team and myself to focus on what we can control. And if the market grows, that's fantastic. We'll have some upside potential to what our forecast looks like going forward.

Yes. That makes sense. And I appreciate the color. Maybe just follow-up there is, could you maybe break down the geographies, where do you see maybe the points of strength as we work second, third, fourth quarter, maybe you can rank order them just your geographic regions?

Sure. So I do think that for us, Middle East, North Africa is going to be solid this year. We're going to have some projects that will deliver in the fourth quarter that we're already actively engaged in. So I think that's going to give us some -- that's part of the reason why we see -- anticipate a solid Q4. South America, we've got some similar just projects and activity that's going to happen there as well. I suspect that when we do a look back on 2026, I would be very surprised if there's not some surprise to the upside in the U.S. Gulf. I think for operators access to those reservoirs, the carbon advantage nature of it, the ability to get access to rigs that are working for one operator today, and they come to another operator tomorrow. So I think that's going to be another one that could be strong potential. .

I would probably put Asia Pacific is continuing to be just because of the cycle time and some of the -- where they're at in the sequence of activity in places like Australia, I think that's going to be more of a 2027 phenomenon. I kind of view A Pacific in that same kind of context. It's going to be a little bit more -- it's going to be a little bit more of a laggard than the others. And then West Africa is one in which I think by the time we're talking in 2027, it's going to be quite robust, and it's really, for me, it's the transition of does that start to happen in the third quarter of 2026 or the middle of the fourth quarter, the end of the fourth quarter, I think that's just a little bit more of a timing for when they take delivery of rigs and when they really kind of start solid drilling and completions activity.

[Operator Instructions] Our next question comes from Josh Jayne from Daniel Energy Partners.

I apologize if you covered this earlier. I just wanted to hit on pricing quickly. So we've been in this period, I guess, over the last 24 months where we saw a pretty sharp acceleration in rig rates. And then things have come off, but I would say, stabilized over the last 6 months. How does potentially a tightening rig rate environment frame your pricing conversations and allow customers to see some more value in a lot of the things that you offer. Maybe you could just elaborate that on that a little bit.

Sure. No, Josh, thanks and appreciate that. I guess, how I would frame it up is I think it's been a -- I think the pricing climate we have had, although we're not getting, we don't have a lot of ability to raise prices right now. I think there's not been downward pressure on pricing. And I think a lot of it has been the rig guys and the rig rates and those kind of things, they really kind of they kind of set the tone, so to speak, they kind of set expectations for customers. And so the fact that those guys have been extremely disciplined. They've demonstrated a willingness, they're going to stack rigs or they're going to retire rigs or those kind of things before they're going to move rates down materially.

I think that's been helpful and constructive, our prices aren't indexed or directly correlated to the rigs, but I think it kind of sets an expectation or a tone within the space and in the sector. So I think as we're seeing consolidation with those guys and we're seeing more demand for those rigs hopefully go back to a climate which there's actually some discussions around rising rig rates. And I think that kind of conversely starts to set some of the -- starts to set some of the opportunities there as well.

I think the other flip side for us is really around as we expand and roll out new technology, our new technology, especially the ones that help us -- that allow us to expand our wallet share. Those typically come at more of a premium because we're generally out there servicing it with the same crews we have who are already running services. So when you add incremental services, that's what helps us expand the wallet share and also really kind of helps us expand the margins. So -- at the same time, we're very disciplined on we're going to roll out technology at the right rate.

We have pricing expectations, we have value creation expectations. When you run cure technologies in an offshore application, you say almost 24 hours of rig time not waiting on cement, we have a value expectation of the time savings and we're not going to try to increase the technology adoption rate by lowering our prices. We're going to stay disciplined. We'll take a longer period of time because over the course of the next couple of years, rig rates will rise, things will tighten and you get an opportunity to price things only once. So we're going to be disciplined about that.

And then just one, if I may. And again, if you covered this already, apologies, understanding that offshore Venezuela is projected to be something massive. I'm just curious as things calm down geopolitically within that country. How does that potentially open up areas like Colombia or Trinidad or Guyana, just given the geographical proximity to those areas? Any thoughts there.

Yes. No. It's -- and Josh, thanks for bringing it up. I commented in the prepared remarks earlier that for myself, having lived and worked in Venezuela, my kid spent a number of years growing up and going to school in Venezuela, it is -- I'm really, really excited to see the opportunities that are going to happen in country. It's going to be interesting. It's going to be unique because you're going to have land opportunities. You're going to have shallow water like Maracaibo opportunities. You're going to have potentially deepwater offshore, there's FPSOs, there's infrastructure that already exists with Guyana and what's going to have it Suriname.

I mean I think it's tremendously positive. I'm really excited about it. and especially for us as a company because we're really, really good at the high technology component, the things that are difficult producing environments or difficult drilling environments. That's where we really can shine. So I'm super excited about it for us. The question is, when is that going to happen? It's not the question of if there's an opportunity, it's when is it going to materialize? So no, I think it's fantastic. I think it will really provide a real growth engine for the industry because of the close linkage between Guyana, Suriname, Trinidad even into French Guyana, I think it's just -- it's a great opportunity. So I'm super excited about it as you can probably pick up.

We currently have no further questions. So I'd like to hand back to the management team for any closing remarks. .

Okay, everybody, thanks for joining us today. This is Dave Wilson. If you have any follow-up calls, please reach out to me. Again, I appreciate your participation. Thank you.

As we conclude today's call, we'd like to thank everyone for joining. You may disconnect your lines.

Good morning all, and thank you for joining us for the Expro Q3 2025 Earnings Presentation. My name is Carly, and I'll be coordinating the call today. [Operator Instructions]

I'd now like to hand over to our host, Sergio Maiworm, Chief Financial Officer. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Expro's Third Quarter 2025 Call. I'm joined today by Expro's CEO, Mike Jardon. First, Mike and I will have some prepared remarks, then we will open it up for questions. We have an accompanying presentation on the third quarter results that is posted on the Expro website, expro.com, under the Investors section. In addition, supplemental financial information for the third quarter results is downloadable on Expro website, likewise under the Investors section.

I'd like to remind everyone that some of today's comments may refer to or contain forward-looking statements. Such remarks are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such statements speak only as of today's date, and the company assumes no responsibility to update forward-looking statements as of any future date. The company has included in its SEC filings cautionary language identifying important factors that could cause actual results to be materially different from those set forth in any forward-looking statements. A more complete discussion of these risks is included in the company's SEC filings, which may be accessed on the SEC website, sec.gov, or on our website, again at expro.com.

Please note that any non-GAAP financial measures discussed during this call are defined and reconciled to the most directly comparable GAAP financial measure in our third quarter 2025 earnings release, which can also be found on our website.

With that, I'd like to turn the call over to Mike.

Thank you, Sergio. Good morning, everyone, and welcome to Expro's third quarter call. I'll begin by reviewing the third quarter 2025 financial results from today's press release. Expro achieved its highest quarterly free cash flow ever and continued to improve its EBITDA margin. We expect a strong fourth quarter and have raised our annual guidance. Next, I'll cover operational highlights, macro trends, a preliminary 2026 outlook and key strategic themes. Sergio will provide further details on financials, updated 2025 guidance and our overall capital allocation framework.

Let's begin on Slide 1. Expro reported quarterly revenue of $411 million and EBITDA of $94 million, representing a 22.8% margin. Adjusted free cash flow was $46 million or 11% of revenue, which was the highest recorded by the company to date. The financial results reflect ongoing operational efficiency gains relating to margins and free cash flow. This record-breaking free cash flow generation marks a significant milestone for Expro, highlighting the company's successful strategy in improving operational efficiency and maximizing cash conversion. Achieving the highest adjusted free cash flow in the company's history underscores our commitment to financial discipline, creating and returning value to shareholders. Such performance sets a new benchmark and demonstrates our focus on increasing performance amidst dynamic market conditions.

In the third quarter, Expro also repurchased around 2 million shares for roughly $25 million, achieving our annual target of $40 million ahead of schedule. We are also raising the 2025 annual guidance for EBITDA and free cash flow to reflect anticipated performance to date and for the rest of the year. Further details will be provided by Sergio later in the call.

Moving to Slide 2. Expro's $2.3 billion backlog provides solid revenue visibility and demonstrates the company's diverse portfolio and operations across regions. Securing long-term contracts and delivering cost-effective solutions strengthens customer trust and underpins ongoing growth. Maintaining safety, service quality and performance highlights Expro's strengths. As we look to the future, the strong backlog and steady customer relationships help guide our planning for 2026.

It's also important to note that while the backlog is encouraging and supports our strategic planning and visibility on revenue, it isn't a guarantee of future outcomes. Primarily, the backlog acts as a valuable health check for our business, offering insight into its current strength and helping guide informed decisions amid changing market conditions. As we look ahead, it's important to consider the broader market context shaping our industry and our outlook. Despite the current softer commodity price environment, the outlook for Expro's core markets remains constructive. We fundamentally believe that oil and gas investments will remain resilient with continued investment in offshore and international projects, supporting demand for our services in Expro's core regions.

Long-term demand for hydrocarbons remains resilient, particularly in non-OECD markets and offshore developments. Upstream investment is expected to remain largely flat globally in 2026. We do, however, see pockets of growth in some international markets. We expect upstream investments to recover later in 2026 and into 2027 and beyond, with growth led by offshore projects in Latin America, the Middle East and West Africa, regions where Expro is very well positioned.

Natural gas fundamentals have temporarily softened, but gas remains critical to the global energy mix, and therefore, supporting long-term demand for Expro's services and technology. As operators prioritize capital discipline and production optimization, we see sustained demand for our brownfield-focused offerings and digital solutions. The ongoing shift towards decarbonization and increased investment in geothermal and carbon capture, or CCS projects, particularly in Asia Pacific, ESSA and North America, positions Expro's sustainable energy business for continued growth.

While macroeconomic risks persist, Expro's diversified portfolio, strategic offshore and international exposure enables us to navigate near-term headwinds and capitalize on emerging opportunities across the full asset life cycle.

Turning to Slide 3. At this stage, it is a bit too soon to provide definitive guidance for 2026. However, our current outlook for Expro suggests that activity levels in 2026 will be largely consistent, if not slightly lower than those anticipated than those projected in 2025. Preliminary assessments indicate that operational activity will likely increase in the second half of the year following a slower start during the first quarter where we will have the typical winter season effect from operations in the Northern Hemisphere and the NOC planning effect early in the year.

Although revenue expectations remain relatively flat to slightly down for next year, Expro remains strongly committed to further expanding EBITDA margins and free cash flow generation. Based on our activity outlook and our position today, I am confident in our ability to achieve these objectives. It should be noted that this outlook is informed by initial discussions with our customers and our historical experience across various market cycles. As we are in the early stages of developing the 2026 budget, numerous factors, including continued customer engagement and geopolitical developments could influence our perspective prior to releasing formal guidance in February alongside our fourth quarter earnings report.

Before turning to our operational update, I wanted to discuss a few things that make Expro unique and we think are important attributes for investors to consider beyond the broader macro dynamics. That is also on Slide 4. We believe Expro's future stock performance will also be driven by several company-specific factors that set us apart from peers and position us for sustained value creation. One of our most powerful differentiators is our ability to expand our wallet share with existing customers. By providing additional or enhanced services to customers we already serve, while leveraging the existing cost base, we are able to significantly expand our margins with new technology deployments. This approach, not only deepens our customer relationships, but also drives incremental profitability and efficiency without the need for increased personnel on board.

Another unique driver is the transformation of our production solutions business. Historically, as a consumer of capital, this segment is maturing into a generator of free cash flow. This evolution reflects both operational discipline and the successful execution of our strategy to optimize asset utilization and drive higher returns from our installed base. As production solutions continues to scale, we expect it to be a meaningful contributor to our overall financial strength and flexibility.

In addition, Expro's commitment to technology leadership remains a core pillar of our differentiation. Our ongoing investments in technologies, digitalization and artificial intelligence enable us to deliver innovative, high-value solutions to our customers. This, not only enhances our competitive positioning, but also supports margin expansion and operational efficiency enhancements across our portfolio.

Finally, our disciplined approach to margin expansion and free cash flow generation, combined with a track record of integrating value-accretive acquisitions further distinguishes Expro. By focusing on international and offshore markets and executing on cost efficiency programs like our Drive 25 initiative and others, we can deliver superior returns and create long-term shareholder value independent of broader market dynamics.

Moving to our operational performance on Slide 5. During this quarter, Expro has consistently demonstrated strong operational performance. We continue to secure new business and remain dedicated to delivering our services safely and efficiently in the field, a commitment validated by our customers and recognized within the industry. Expro was recently honored with ENI's Best Contractor HSE Performance award for our contributions to the Congo OPT project. This accolade coincided with the first anniversary of our OPT plant operating without a single lost time incident with over 2 million man hours of activity, underscoring our team's success and highlighting our exemplary standards in safety and operational excellence.

We received the OTC Brasil Spotlight on New Technology award for both the QPulse multiphase flow meter and the ELITE Composition solution with the official presentation scheduled at next week's OTC Brasil event.

At the Gulf Energy Awards here in Houston, Expro was shortlisted for a record 10 technologies across 7 categories, further affirming our leadership and innovative capabilities in the sector. Notably, Expro earned the Best Health, Safety and Environmental Contribution and Upstream award for our VIGILANCE intelligence safety and surveillance solution. Our purposeful approach to innovation ensures we address client requirements directly, contributing to industry progress and delivering measurable value.

In addition to these achievements, Expro successfully completed the inaugural deployment of Velonix, an optimized pipeline pig control technology for a U.S. midstream client. This implementation results in a reduction of approximately 7 million pounds of carbon dioxide emissions, generated cost savings for the customer and improved data quality to support accelerated decision-making, further exemplifying Expro's commitment to operational excellence and sustainability.

As detailed in our September 8 press release, Expro has established a new offshore world record for the heaviest casing string deployment, utilizing the advanced Blackhawk Gen 3 wireless top drive cement head with SKYHOOK technology. Conducted in the Gulf of America, this milestone sets a benchmark for safe and reliable offshore cementing operations in ultra-deep high-pressure environments. These achievements demonstrate how Expro's technology portfolio delivers a competitive edge, unlocks future revenue opportunities and supports margin expansion through scalable, differentiated solutions.

Building on these technology milestones, our regional performance this quarter further underscores our commitment to efficient, effective innovation across our global operations.

This quarter, we secured a 5-year extension with Chevron for subsea services in the Gulf of America. This long-term contract reflects the trust Chevron places in Expro and reinforces our reputation for high-quality service.

In Alaska, we won a significant contract with ConocoPhillips, expanding our well testing leadership and creating new opportunities to deploy our multiphase flow meters and fluid analysis services.

In Congo, we secured a multiyear slickline services contract with Perenco. This contract significantly strengthens our intervention services in West Africa and demonstrates our technical expertise.

In the Middle East and North Africa, we secured key well flow management contracts for ADNOC and PETRONAS. The first contract is for well test services for 4 packages over 2 years, while the second contract involves 6 well test packages and a multiphase pump that will be used as a zero flaring solution for the well test activities. These wins enhance our reputation as a trusted partner in unconventional well development and reinforces our commitment to innovative sustainable solutions.

Turning to the Asia Pacific region. In the second quarter, we reported that Expro completed the first rigless conductor driving operation on a client's platform in over a decade, delivered ahead of schedule, demonstrating our commitment to innovative solutions in the region.

I'm also pleased to share that in the third quarter, the Bass Straight campaign received highly positive feedback from NOPSEMA, Australia's offshore safety regulator and was formally recognized for achieving ALARP, As Low As Reasonably Practicable, safety standards. This recognition reaffirms our dedication to operational excellence and the highest safety protocols. Across every phase, we champion safety through best practices, strict procedures and continuous improvement, underscoring our robust safety culture and commitment to protecting our workforce and partners.

Across all regions, Expro's operational and technology achievements this quarter demonstrate our ability to deliver value-driven innovation and maintain the highest standards for safety and efficiency. These results position us strongly for continued growth and margin expansion in the quarters ahead.

Before turning over to Sergio, I'd like to remind everyone of Expro's value proposition that we've highlighted on Slide 6. Expro's long-term strategy is anchored in building a large, diversified and compelling business mix company with clear market leadership positions. Our overarching goal is to maximize and sustainably generate free cash flow through industry cycles, ensuring resilience and value creation for our shareholders.

First, we are committed to continuously improving our financial results. This means, driving margin expansion and robust free cash flow generation, underpinned by disciplined cost efficiencies through initiatives like our Drive 25 campaign. We are also focused on reducing the capital intensity of the business and consistently delivering top quartile performance across our operations.

Second, we see significant opportunity to grow Expro through inorganic, scalable acquisitions. Our approach is to target international and offshore opportunities with adjacent offerings that present strong industrial logic and accretive financial profiles. We have developed a proven blueprint for integrating businesses efficiently and in a timely manner, and our track record demonstrates our ability to create shareholder value through disciplined M&A.

Third, we are high-grading our business by leveraging technical leadership. We continue to invest in technologies across our core business segments and are actively scaling our digital capabilities, including artificial intelligence and digitalization. Importantly, we are globalizing the technology platforms acquired through recent M&A, ensuring that innovation and technical excellence remain at the heart of our value proposition.

In summary, Expro's strategy is designed to deliver sustainable growth, operational excellence and superior returns. By maintaining a disciplined focus on financial performance, pursuing targeted acquisitions and investing in technology leadership, we are well positioned to lead our industry and deliver long-term value for our shareholders.

With that, I'd like to turn the call over to Sergio to review our financial results in detail.

Thank you, Mike, and good morning again to everybody on the call. As Mike noted, Expro continues to deliver consistent and above expectations financial results. In the third quarter, we reported revenue of $411 million. EBITDA for Q3 reached $94 million with a margin of 22.8%, up about 50 basis points from last quarter and 270 basis points year-over-year.

Slide 7 illustrates our quarterly and annual margin growth. We are confident in further margin expansions in 2025 and 2026, with the latter being driven by the full impact of Drive 25, increased customer wallet share at higher margins, international growth from acquisitions like Coretrax and ongoing cost optimization and efficiency improvements.

EBITDA margin expansion is not the goal in itself on Slide 8, but a means to increase free cash flow generation. And in the third quarter, Expro posted its highest quarterly free cash flow in the company's history, generating over $46 million on an adjusted basis. We aim to further reduce the capital intensity of the business and expect even stronger free cash flow in 2026, both as a percentage of revenue and in absolute terms.

We have increased our 2025 guidance for free cash flow, though we're cautious about Q4 due to potential working capital effects. The Q4 guidance is conservative and already accounts for these factors. Expro also bought back $25 million in shares in the third quarter, achieving our $40 million goal ahead of time, and we still have another $36 million available under the current $100 million repurchase plan.

Turning to liquidity. The company closed the quarter with $532 million in total liquidity. That includes $199 million in cash on the balance sheet after accounting for the revolving credit facility repayments and the share repurchases during the quarter. During the third quarter, the company completed a $22 million voluntary prepayment of its revolving credit facility. The voluntary prepayment reduced the outstanding draw balance on the RCF from $121 million to $99 million as of September 30.

As mentioned before, we're raising our EBITDA and free cash flow guidance for 2025. The details are on Slide 9. We now expect our adjusted EBITDA to be between $350 million and $360 million compared to a notional $350 million plus before. We're lowering our CapEx guidance. We now expect our capital expenditures for the year to be between $110 million and $120 million, whereas before, we had approximately $120 million.

Lastly, we're also increasing our free cash flow guidance. We now expect our adjusted free cash flow to be between $110 million and $120 million compared to the approximately $110 million we were estimating before. As mentioned, the free cash flow guidance is somewhat conservative given the possibility of working capital use in the quarter. We certainly have some upside potential from here.

Now, I'd like to quickly address our segment performance this quarter before finalizing with our capital allocation framework. A reminder that details around our segment's performance can also be found in the appendix of the presentation.

Turning to regional results. The North and Latin America, or NLA, third quarter revenue was $151 million or up $8 million quarter-over-quarter, reflecting higher well construction and well flow management revenue in the Gulf of America, partially offset by lower well intervention and integrity revenue in Argentina.

For Europe and Sub-Saharan Africa, or ESSA, third quarter revenue decreased $7 million to $126 million sequentially, primarily driven by lower well flow management and subsea well access revenue in the U.K. and Norway. Segment EBITDA margin at 32% was up 200 basis points sequentially, reflecting higher activity and a favorable product mix.

The Middle East and North Africa, or MENA, delivered another solid quarter, but slightly lower compared to Q2 with revenues at $86 million, driven by lower well construction and well intervention and integrity revenue in the Kingdom of Saudi Arabia, the UAE and Qatar. MENA segment EBITDA margin was 35% of revenues, a decrease of about 100 basis points from the prior quarter, reflecting the lower well construction activity.

Finally, in Asia Pacific, or APAC, third quarter revenue was $49 million, a decrease of $8 million relative to the second quarter, primarily reflecting the lower well flow management, well intervention and integrity and well construction revenue in Malaysia and lower well construction and subsea well access revenue in Australia, partially offset by higher well construction and well flow management revenue in Indonesia. Asia Pacific segment EBITDA margin at 21% of revenues decreased about 500 basis points from the prior quarter, reflecting decreased activity and mix.

Now I'd like to briefly discuss our capital allocation framework on Slide 10. Expro's capital allocation framework is designed to maximize long-term value creation by maintaining a disciplined and balanced approach across 4 equally important priorities. Our philosophy is that, every dollar of capital must be deployed where it can generate the highest risk-adjusted returns. And as such, each of these 4 areas continuously competes for capital on an ongoing basis.

First, we're committed to investing in our business to drive organic growth with superior return profiles. This includes funding projects and initiatives that enhance our core capabilities, improve efficiency and support innovation across our service lines. Every investment is rigorously evaluated to ensure it meets our standards for superior returns throughout the business cycle. As a reminder, the vast majority of our capital expenditures are geared towards specific projects with known return profiles. These are not speculative investments.

Second, we pursue selective, highly accretive mergers and acquisitions that complement our existing capabilities and customer relationships. Our M&A strategy is focused on opportunities that offer clear industrial logic, scalable technologies and synergies and the potential to expand our presence in attractive markets. We apply the same disciplined capital allocation criteria to acquisitions as we do to organic investments, ensuring that only the most compelling opportunities receive funding.

Third, we're committing to returning capital to shareholders. Our framework targets the return of at least 1/3 of free cash flow to shareholders annually, primarily through share repurchases. This commitment reflects our confidence in the company's ability to generate sustainable free cash flow and our focus on delivering direct value to our investors.

Finally, we maintain a fortress balance sheet to ensure financial flexibility and resilience. Preserving a strong balance sheet enables us to navigate market cycles, invest in growth opportunities as they arise and protect the company's long-term stability. Importantly, these 4 pillars, organic investments, M&A, shareholder returns and balance sheet strength are not ranked in order of priority. Instead, they are managed dynamically with each area continuously competing for capital based on the quality of opportunities available. This disciplined balanced approach ensures that Expro remains agile, resilient and focused on maximizing value for all shareholders.

With that, I'll turn the call back to Mike for a few closing comments.

Sergio, thank you. As we conclude our prepared remarks and before opening up for questions, I'd like to conclude with the following thoughts. Despite the softer commodity market backdrop in the near-term, we continue to see resilient, if not robust, investment in upstream oil and gas in the international markets. We also expect the offshore sector to further recover starting in the second half of 2026 and into 2027 and beyond.

Looking ahead, we remain confident in Expro's ability to deliver resilient performance even as we navigate softer market backdrops. Our diversified business mix, disciplined capital allocation and relentless focus on operational excellence position us to weather industry cycles and continue creating value for our stakeholders. We expect to finish 2025 on a strong note with a robust fourth quarter that reflects both the strength of our customer relationships and the successful execution of our strategic initiatives.

As we move into 2026, we are well positioned to further expand our EBITDA margin driven by ongoing cost efficiencies, margin-accretive growth and the maturation of our production solutions business into a significant free cash flow generator. Moreover, we anticipate continued growth in our free cash flow generation in 2026, supported by our balanced approach to capital allocation and our commitment to maximizing returns across all areas of the business. We believe these strengths will enable Expro to deliver sustainable long-term value for our shareholders regardless of the broader market environment.

We thank our employees, customers and shareholders for their continued support and look forward to building on our momentum in the quarters and years ahead.

With that, I'd like to open up the call for questions.

[Operator Instructions] Our first question comes from Ati Modak from Goldman Sachs.

Just a quick question on the margin expansion comment for '26 on flat to slightly lower revenue. Can you help us understand what the drivers there are? Is it largely the Drive 25 initiative? Are there other factors that are driving that expectation?

So, Ati, thanks for the question. Thanks for joining us today. I guess a couple of things I try to highlight is, yes, it will be the full year effect of our Drive 25 initiative. If you recall, although we've changed the total target throughout the year as we've expanded and increased it, we've really targeted taking out about 50% of that benefit in 2025. So we'll have the natural margin expansion from that in 2026, which will help us offset some of the inflationary cost pressures and those kind of things. Additionally, we'll continue to internationalize some of the M&As that we've made, Coretrax in particular.

And then the third element really is, as we continue to roll out new technologies, and I think I've highlighted this to you and to others before, but just keep an eye on the number of new technologies you see us continue to roll out. We'll continue to get market uptake that helps us expand our wallet share, really helps us position ourselves. It's really a combination of all those. And frankly, what we have the organization focused on today is, we can't control the activity, the overall activity. We're going to continue to get our fair share. We're going to continue to position ourselves with customers globally. But we're going to stay focused on the things that we can really affect, which is operational efficiency, execution, rolling out new technology, those type of things.

And then on the comment that offshore activity could pick up in the second half, what are you keeping an eye on? And can you give us any additional sort of regional color in terms of how you're seeing activity play out at the moment?

Sure. And I'll start with the one that I think is going to be the laggard. And I think the laggard is probably going to be Asia Pacific. I think it's the one in 2026 that is -- we're seeing some softness here in Q3 and even in Q4 in Asia Pacific. So I think it's going to be the one that's going to be a little bit of a laggard. That's not altogether different than how we foresaw 2025 overall. We kind of highlighted early in the year that we felt like Australia was going to be a bit soft overall. But I do think going into '26, and I think we'll start to see some activity ramp up in the second half is really it's going to be the Golden Triangle. It's going to be West Africa. It's going to be Gulf of Mexico, those type areas.

I also think that 2 others to keep in mind is, we're starting to see some positive sentiments and some positive commentary in Saudi, in particular, with the jack-up activity. Although we don't generate a lot of activity in the jack-up market in Saudi, I think it kind of goes to the tone and the tenor that's going on in the Kingdom, I think that's going to be more constructive. And then I think some of the things we're starting to see out of Mexico is going to be helpful for us as an industry overall. So those are the ones I would really highlight.

Sergio, anything I missed?

No, Mike, I think that's it.

Maybe if I can squeeze in one more. The share repurchases, you mentioned you reached ahead of schedule. What does that mean for repurchase for the rest of the year? Will you not do anything? And then what's reasonable to think for '26?

Yes, Ati, that's a great question. We'll continue to evaluate, as we always do in line with the capital allocation framework that we laid out on this call as well. We'll continue to look for opportunities to return more capital to shareholders. We adjusted our free cash flow guidance to $110 million to $120 million. So the $40 million that we've already repurchased represent at least 1/3 of that already. So as we continue to see more free cash flow generation, we will continue to evaluate opportunities to repurchase shares. So that is a continuous effort for us. So we'll continue to do that.

And we still have plenty of room in the -- still have plenty of headroom in the preauthorized amount. So we'll continue to be thoughtful about that here just as we kind of see what are the market dynamics and how we see things playing out for Q4.

Our next question comes from Eddie Kim from Barclays.

Just wanted to circle back on your comments on '26 activity levels being consistent, if not slightly lower than '25 levels. You mentioned activity is likely going to increase in the second half of next year, which implies that first half of next year could be a little softer than normal, even considering typical seasonality. So could you talk about maybe what's driving that softness in the first half of next year? Is it all being driven by Asia Pac? Or is there something else going on there?

Sure. No, Eddie, thanks for joining us. I appreciate the question. I guess how I would frame it up is, this is -- we're just now in the early stages. We're kind of in the first, maybe the -- if not the top, maybe the bottom of the first inning right now in terms of our budget preparation process. So we're going out to kind of start that bottoms-up exercise with our customers and literally look at kind of project by project.

Fundamentally, this is my sense from customer conversations and customer discussions that I've had with kind of trying to understand how do they see their spend for the rest of '25 and how it goes into 2026. I think they are thoughtful and mindful of some of the things going on today, commodity pricing, what's happening in the geopolitical sphere, does the peace agreement in the Middle East hold? Something happen more meaningfully with Russia and Ukraine. All those kind of things, I think, are kind of causing a little bit of a cautious sentiment for them to kind of wait and see how this is.

And then fundamentally, how we see kind of going into next year, yes, you're right, there's some softness in Asia Pacific. And we -- as much as I would like to wish it away, we always have a Q1 effect. Northern Hemisphere is slow because of the winter season. Our NOC customers are always historically over the last 30-plus years in my career, they're always a little bit slow getting out of the gate in Q1. That's really kind of what we're seeing. But as we -- we'll get a better sense here over the next 8 weeks or so as we go through the budget process. But my sense is, we're probably talking about a flattish to slightly down 2026.

And fundamentally, as I said in the earlier question, what we've got the organization focused on is, we're going to control what we can control, and we can't control how much activity there is, but we can control our service delivery, our agency performance, the rollout of our technology, continue to enhance efficiencies. That's what I want the team really focused on. And if we see a ramp-up in activity in the middle of Q2, we'll take it and we'll be ready to be positioned. If it's more like the end of Q2, then we'll deal with it that way as well.

Understood. My follow-up, just tailing on those comments. I understand you'll provide more detailed guidance during the fourth quarter earnings call. But yes, you mentioned activity levels flat or slightly lower next year. At the same time, you said you expect continued margin expansion. So just putting those 2 things together, is it fair to assume that EBITDA for next year should be at least similar to '25 levels? Or how should we think about that just directionally?

Yes, I think that's a good way to think about it directionally. We will -- I will be very disappointed if we don't expand EBITDA margins in 2026. And what is the overall activity set look like to determine an absolute number, but kind of in the range where I think flat to slightly down going into next year, I would think we'd see similar EBITDA numbers. And quite frankly, what we're -- I would say, we're more focused on, but what we have a real sense of urgency around is better conversion of that into cash generation.

[Operator Instructions] Our next question comes from Derek Podhaizer from Piper Sandler.

I just have a couple of education questions. Maybe we could first start on the production solutions opportunity that you mentioned a number of times on the call. Can you help us understand what types of services you're talking about the technologies and maybe which regions are best suited for production solutions?

Sure. Derek, thanks for joining us, and thanks for the question. So it is -- fundamentally, these are -- a great example of it is the early pretreatment facility that we put together that we collaborated with ENI on in the Congo. And that really was a facility that helped treat gas to ensure it met the export spec, which meant they could actually load it on an FLNG vessel. So that was an enhancement to an existing facility. We can also have production optimization or production enhancement where we're actually providing some places like Algeria, where we're providing gas recompression, gas reinjection, helping to reduce the flaring opportunities that those things have. So really it is existing infrastructure. It can be production facility type things.

We don't pursue the big massive [ epic ] type projects. What we're really focused on is smaller modular kind of accelerated monetization of existing assets. And those are predominantly for us, very strong presence in the Middle East, strong opportunities for us in in West Africa and then also some that we see here in South America as well. So a good geographic spread that's more brownfield-type activity than it is greenfield activity.

And then I know you mentioned those were big consumers of cash, but now you believe this is going to flip to cash generation. So can you maybe help us frame the magnitude of these projects that were consuming cash, but now what it can be when it's generating cash?

Yes, Derek. No, that's a good question. So we actually embarked on a bunch of these projects over the last few years. So this is just the construction of those facilities, as Mike pointed out, and the investments that we had to make, and we had a few of those projects back to back. So we consumed a bit of capital. But now that a lot of these projects are already online, like the OPT project for ENI and the Congo, basically, that just becomes an annuity for us. There's a very low operating cost to continue to operate those facilities. And there's just a consistent stream of cash. It's very visible. It's very predictable for us.

So as we stack up some of these projects that have been concluded and as those projects go from the construction phase into the operations and maintain phase of that, it just becomes an annuity and you just start stacking one on top of the other. So that actually contributes a lot for the free cash flow generation of the business.

Does that make sense?

No, it does. That's very helpful. And then just kind of a follow-up to the follow-up. Back to 2026, what Ati and Eddie were talking about on the margin expansion story, maybe could you help us provide a little bit more color on where we'll see the most impact, whether that's from a region line perspective or a product line perspective? Just want to start thinking about kind of the shape of '26 from either the product lines or the regions how you report it.

Yes. I mean it's -- and again, it's kind of early for me to give too much granularity on what 2026 is going to look like. I think we're going to -- Gulf of Mexico, Gulf of America, I guess, I'm supposed to call it now, is probably going to be similar, flattish kind of year-on-year. We don't see a massive change and kind of what's going to happen with the rig count, those type of things. I think they'll continue to move from magically on Wednesday, the rig frees up, it's going to move to another operator on Thursday, so to speak. So I think the Gulf is going to be pretty consistent.

I think South America will have some -- can have some particular strength. I think MENA is going to, again, be solid and probably have a little bit of upside in there. There has been some softness here for us in the last couple of months just because of some of the Saudi activity. They had some operational issues with a vendor that created some slowness there. So I think it will be solid. And I think West Africa will be kind of consistent year-on-year. I don't think we'll start to see some of the impact of some of the new FIDs, that's what we'll start to see in kind of the second half of 2026. That's kind of how I would frame it up.

And then Asia Pacific is the one in which I think it's going to continue to be a little bit softer than what we would like to see it, but I think that's just kind of how the customer activity sets are going to be really until Australia, in particular, kind of gets kicked back off into more of a drilling phase.

Our next question comes from Joshua Jayne from Daniel Energy Partners.

I just wanted to dig into the margin question that Derek just asked a little bit incrementally. So when I think about looking into '26, one of the regions you highlighted is for potential strength is the Middle East. And just when we think about the margin difference between that region and something like Asia Pac, for example, which you expect to be, I guess, a bit on the softer side in '26. Is that part of what's ultimately driving the margin uplift? Or could that -- or if you have a higher contribution there moving into '26, is that -- could that lead margins to expand further than what you're projecting outside of Drive 25?

No, Josh, it's a really good question. It's a perceptive question. It really is going to be -- so for us, a lot of the driver is going to be the mix. And the mix can be what's the geographic mix. If we actually see a -- what's the impact of the Middle East? Is it flat year-on-year? Is there -- historically, we've kind of had some single-digit growth in the Middle East. And obviously, when there's growth in the Middle East for us, it really moves the needle because it has such a high margin profile. But also what's the impact of -- as we roll out new technologies or we continue to expand our customer wallet, those generally come with higher margins or more accretive. It really is the mix that has an impact on us that it is a little bit more difficult for us at this point in time to really kind of predict what's going to happen there.

And then the other element, I know we've kind of been cautious on Mexico activity because we don't have a massive amount of Mexico activity. With Pemex, we're actually going to see some -- we'll start to see some activity in 2026 with non-Pemex operations, and that will be a positive as well.

So long answer to say, it depends -- a lot of it depends on the mix, and we'll try to continue to accelerate technology rollout and those types of things, and we'll try to continue to expand our presence in places like the Middle East.

Okay. And then one technology question, one release that I thought was pretty interesting over the course of Q3. You highlighted the launch of your Remote Clamp Installation System. So it was deployed in Q4 of last year and then deployed again in Q2 of '25. Maybe just use that as an example of like when I think about a technology like that, how ultimately scalable do you see something like that and when you could really see acceleration of a product like that taking hold in the market? Is that something that happens in '26, more in '27? Maybe just a time line when we see announcements of successful deployment once and then a second one and just moving forward.

And again, Josh, it's a good perception question. The Remote Clamp Installation simplistically, this allows us to robotically install clamps on completions. When you're running completion stream, you don't -- you have no hands on. You have no personnel, nobody is in the red zone, no hands are in there. And as we have moved from concept to field trials to commercial installations, our operators are extremely pleased with this. We increase the speed at which we can run completions and install control lines and [ install ] clamps on those.

More importantly, if you don't have people with their hands in the red zone or their physically in the red zone, it reduces or almost completely eliminates the risk of having an HSE incident. So I think this is one that we'll continue to get more and more uptake from customers on it. We've had really, really good support in the North Sea. I think it's one we'll be able to continue to accelerate. So we'll start to see that more installations in 2026 and really ramp up as we go into 2027.

Thank you very much. We currently have no further questions, and this will conclude the Q&A, and this will conclude today's call. We'd like to thank everyone for joining. You may now disconnect your lines.

Hello, everybody, and welcome to the Expro Q2 2025 Earnings Presentation. My name is Elliot, and I will be your coordinator for today. [Operator Instructions]

I would now like to hand over to Chad Stephenson, Director of Investor Relations. Please go ahead.

Welcome to Expro's Second Quarter 2025 Conference Call. I am joined today by Expro's CEO, Mike Jardon; and Expro's CFO, Sergio Maiworm. First, Mike and Sergio will have some prepared remarks. Then we will open up for questions.

We have an accompanied presentation on our second quarter results that is posted on the Expro website, expro.com, under the Investors section. In addition, supplemental financial information for the second quarter results is downloadable on the Expro website, likewise under the Investors section.

I'd like to remind everyone that some of today's comments may refer to, or contain, forward-looking statements. Such remarks are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statements. Such statements speak only as of today's date, and the company assumes no responsibility to update forward-looking statements as of any future date.

The company has included in its SEC filings, cautionary language identifying important factors that could cause actual results to be materially different from those set forth in any forward-looking statements. A more complete discussion of these risks included in the SEC filings, which may be accessed on the SEC's website, sec.gov, or on our website, again at expro.com. Please note that any non-GAAP financial measures discussed during this call are defined and reconciled to the most directly comparable GAAP financial measure in our second quarter 2025 earnings release, which can also be found on our website.

With that, I'd like to turn the call over to Mike.

Good morning, everyone. I'm happy to welcome Sergio Maiworm, Expro's new Chief Financial Officer, to discuss our financial results today. Sergio has more than 2 decades of experience in financial roles in the energy industry, and brings a proven track record of driving financial performance and operational excellence. I look forward to working closely with Sergio as we continue to advance our strategic initiatives and build on our strong financial foundation.

Now I'd like to start off by reviewing the second quarter 2025 financial results as summarized in today's earnings press release. I am proud to announce very strong quarterly results. This marks the third sequential record-setting quarterly EBITDA margin and robust free cash flow generation. I will then discuss the broader revolving macro environment, which we believe the underinvestment in traditional hydrocarbons in both the international and offshore markets supports a positive multiyear outlook for energy services companies like Expro, who have technology-enabled services supporting the long-cycle development projects.

We will move on to our operational highlights for the second quarter, discuss our outlook, and then turn the call over to Sergio to share additional financial information. For a recap of consolidated results, and quarterly results by region, I'll direct you to Slides 2 through 9 of the presentation that we posted to expro.com.

On Slide 2, Expro reported an excellent quarter, reporting increased revenue to $423 million. EBITDA growth to $94 million and expanded EBITDA margin, representing 22% of revenue. Expro also generated a robust $36 million in free cash flow on an adjusted basis, or 9% of revenue. This marks the third consecutive quarter of financial results above expectations. In fact, Expro has reported financial results above expectations in 6 of the last 7 quarters, evidencing the Expro's continued focus on operational execution despite market headwinds.

Our second quarter financial results also represent a record-setting second quarter EBITDA margin. Our EBITDA margin ranks among the top in our peer group and is a continuation of a multiyear trend of margin improvement. Our results demonstrate we're on the right track to deliver the robust free cash flow generation to our shareholders and the success of the organic and inorganic investments that we have made to drive growth and expand margins.

It's also the result of permanent structural cost savings through our Drive 25 initiatives, improved business activity mix and operational leverage. Additionally, we are capitalizing and continue to see meaningful benefits on our diverse geographic footprint, which is mainly focused on the international and offshore markets. As discussed in other calls, Expro has very limited exposure in regions such as U.S. land, Mexico and offshore Saudi. Markets that will continue to be soft in 2025.

Commercial activity and tenders remain robust in our main markets with new order awards of $595 million in the second quarter, marking at the second highest quarter of new order intakes in our company's history. These awards were spread across key markets and product lines, highlighting the diversity of our portfolio, and setting a new benchmark for our core business performance. Our results and success in the marketplace reflect the confidence our customers have in us and our focus on safety, service quality and delivering cost-effective technology-driven solutions across the [ well ] life cycle.

To highlight the more significant awards, we had contract wins in [ Guyana ], covering well construction services with revenues in excess of $120 million, and two contracts in North Africa for gas compression services and Production Solutions, with revenues of approximately $100 million and $60 million, respectively. Our backlog has increased to approximately $2.3 billion at the end of the second quarter, remaining both healthy and in line with our expectations. All in all, this quarter presented a challenging market backdrop, yet we continue to deliver operationally and financially.

From a continuous innovation point, we deployed three new industry-first technologies. Those innovations at industry first are a direct result of Expro understanding the challenges that our customers face, and their operations day in and day out, and finding new creative solutions to address those challenges. This is what we refer to as innovation with a purpose. That is how we continue to provide differentiated services to our customers, and that is why we continue to get repeat business from our customer base. With that, we continue to drive efficient and safe operations to our customers in every single one of our global operations.

Turning to the market outlook. The second quarter of 2025, presented a dynamic operating environment marked by commodity price fluctuations, driven by ongoing trade negotiations, OPEC+ production increases and geopolitical conflicts. As a result, [ Brent crude ] traded within a $20 per barrel range over this period, peaking at $80 per barrel in June.

As geopolitical tensions recede in certain areas, the market's focus has returned to fundamentals particularly on supply dynamics and seasonal demand. OPEC+ has accelerated the phaseout of production cuts and a strategy pivot from output constraint to regain market share. Although ongoing increases in production may exert downward pressure on commodity prices, the elimination of OPEC+ voluntary cuts provides more clarity and is anticipated to support longer-term market stability. Barring any significant shifts in the current commodity price range, the industry is expected to demonstrate continued resilience.

Though the market has experienced challenges in the recent quarters, the oil and gas industry demonstrated fortitude and set operational expectations with limited impact on upstream spending in our key geomarkets year-to-date, which highlights the positive within the cycle for Expro. Despite current customer caution, new project approvals are expected to return to growth in 2026 with offshore approvals accounting for 80% of all 2025 and 2026 sanctioning. This provides plenty of opportunity for growth in Expro's well construction, well flow management and subsea product lines.

With subdued greenfield activity and the current volatility operators are focusing on optimizing production from existing assets to generate revenue, driving sustained OpEx spending and subsequent brownfield activity. The strategic focus aligns with Expro strengths, and well intervention production optimization and digital services. Overall, in the current market environment, we will continue to focus on maintaining cost and capital discipline and otherwise controlling what we can control. With disciplined execution, a strong international and offshore presence and a focus on operational efficiency, Expro remains well positioned to navigate the current market. We expect our differentiated service lines and resilient business model will allow us to continue to expand margins year-over-year.

Stabilizing commodity prices at current levels, steady demand growth and continued project sanctioning will drive demand for Expro services and solutions. We maintained a positive multiyear perspective on the overall opportunity set and Expro's relative market position.

Moving to our operational performance for the quarter. Safety and innovation with the purpose are both central to who we are as a company. Just as safety is embedded in everything we do, so too is our drive to innovate with purpose. In the second quarter, we achieved industry first through the deployment of our innovative technologies each designed to reduce the operational risk and increase efficiencies for our customers with artificial intelligence, machine learning, automation and digitalization playing key roles.

First, we introduced the [indiscernible] Armor Packer, our most advanced high-pressure, high [ tensile packer ] system. It's built for the extreme conditions of deepwater wells with a leading differential rating and retrievability that ensures sealing integrity in harsh environments. This allows operators to work more efficiently, and with more confidence in the extreme conditions of deepwater wells. We expect customers to rapidly deploy this technology as two super majors have already successfully deployed the system in the Gulf of America.

Second, we completed the first full deployment of Expro's Remote Plant Insulation System, or RCIS. This technology was developed with and partially sponsored by a super major, with a focus to provide a unique industry solution that fully automates the installation of control line [ clamps ] on the tubing during the completions operations. It eliminates manual steps, speeds up the process, and most importantly, removes people from the red zone.

The RCIS technology was deployed in the North Sea where Expro successfully ran a fully hands-free upper completion, and reduced each clamp insulation time by approximately 2 minutes, or 50% per [ clamp ]. Based on the success of the operation, the customer has awarded additional work scopes for future deployments of the technology. And finally, we delivered the world's first fully remote [ 5 plug ] cementing operation using Expro's Generation X, remote plug launcher and [ Skyhook ], Cement line makeup device. It's designed for safety, control and field adaptability, removing the need for anyone to enter the red zone, while giving operators more operational control.

The deployment marks a major step forward in the company's expansion of cementing services in the Middle East offshore and reflects the progress of the strategic initiatives for the region. These are not just technical wins. They are real-world examples of how we bring innovation, efficiency and safety together to move the industry forward. Further, these technologies give Expro competitive advantages, and highly specialized service offerings and create future revenue opportunities by enabling scalable technology applications with improved margins.

We are also demonstrating that innovation can be both effective and efficient, and that focus is evident in our regional activity this quarter. Beginning with the North and Latin America region, as we anticipated in the first quarter, activity in Brazil and [ Guyana ] has remained stable due to the development plans stemming from high volumes of FIDs in recent years. We capitalize on this improving environment as we secured a 5-year multi-rig contract with revenue in excess of $120 million to provide completion and tubular running services in Guyana.

We similarly continue to drive activity in Brazil, securing contracts with revenue of more than $50 million across production optimization and well decommissioning-related activities, highlighting the breadth of capability across the life cycle of the well. As referenced in our July 14 press release, Expro secured a significant 3-year contract award with [ Woodside Energy ] to support the [indiscernible] deepwater, oil and gas development in offshore Mexico. This project marks Mexico's first deepwater field development and underscores our long-standing partnership with Woodside, and the trust they have placed in Expro. We will provide TRS and cementing services, with a focus to optimize well performance, drive cost efficiencies and enhance operational reliability throughout the project life cycle.

Moving to Europe and Sub-Saharan Africa. We successfully completed a multi-well campaign for a major operator in Angola, conducting 11 cleanup and 12 well intervention operations, of over approximately 5,000 man hours, with a 98% job performance rating. In the U.K. and North Sea, our 30-year partnership with a major operator remains strong as we recently secured a 3-year contract extension with revenue of approximately $30 million for well intervention, well services and well testing operations. This is a testament to our exceptional service delivery and strong client relationships.

In North Africa, we have further expanded our production optimization business. We secured a significant 7-year, approximately $100 million contract, to deliver a gas compression system on low-pressure gas wells in order to maintain throughput at the processing facility. Additionally, as a result of the high service quality delivered to the customer, the team has secured a 6-month contract extension with revenue of approximately $60 million for early production facilities and gas compression services.

Shifting focus to Asia Pacific, particularly Indonesia, we won four contracts from a single customer with revenue totaling approximately $15 million. This covers well intervention and integrity services, which plays a critical role in brownfield production optimization by enhancing reservoir access, restoring well integrity and maximizing hydrocarbon recovery. These new awards demonstrate the ongoing strategic focus on production optimization in these mature basins.

And finally, in Australia, within TRS, Expro performed the first rigless conductor driving operation on a customer's platform in over a decade, underscoring our commitment to reintroducing and delivering solutions to the region. The team successfully completed a 6-slot conductor installation safely and ahead of schedule.

Before we move to our financial performance, I'll comment on the guidance for the full year 2025 that was included in our press release. The macro environment has created challenges for the entire industry, and we also see that several pockets in the market are softening, and will remain challenging for the next 12 to 18 months. We are still assessing what that means to Expro in 2026, however, we firmly believe the international and offshore segments of the market will generally perform better than other segments. Those are markets with longer duration development plans and primarily dominated by the super majors, large IOCs and the NOCs. Those customers tend to be less susceptible to short-term market volatility and tend to focus more on the longer-term fundamentals of their business.

If we combine our presence weighted to the international and offshore markets, with our strong relationships with customers, leading market positions and key services, we still see relative stability and a relatively constructive outlook for the business.

In the near term, for 2025, we are reaffirming our full year outlook. And as stated during the Q1 earnings call, we continue to expect at least mid-single-digit revenue growth in the second half of 2025, compared to the first half of the year. This is supported by our line of sight and the customer scheduled activities, and delivery of products and services for the next 2 quarters. More specifically, we are not relying on binary outcomes of large individual projects to meet our guidance.

Our anticipated annual revenue is circa $1.7 billion and EBITDA of at least $350 million. We continue to anticipate our free cash flow on an adjusted basis to be approximately 7% of revenue for the full year 2025. Despite the definitional change we announced this morning in the earnings release. Sergio will go into more detail on that shortly.

Consistent with historical trends, we expect the free cash flow generation to be more weighted to the second half of the year. Overall, we have seen customers prioritize key projects and it is expected that our customers' upstream investments will be largely unaffected by short-term commodity price movements through 2025, and several of our geo markets are proving to be more resilient in the current market's perception.

In our NLA region, activity should be stable in Brazil and Guyana as a result of a continuation of existing development plans. In the Gulf of America, we anticipate steady to slightly increasing activity in the second half of 2025. Similarly, we see growth from LatAm countries such as Brazil and Colombia. Overall, for the second half of the year, we anticipate NLA revenue to demonstrate growth over the first half of the year.

In ESSA, the outlook is constructive for the North Sea and parts of Europe, with a stable outlook on revenue and improving margins based on activity mix in the region for the remainder of the year. In the Middle East and North Africa, we are anticipating stability between Saudi Arabia and Algeria, two of our largest markets in the region. And as a reminder, in Saudi, our business is levered to onshore and unconventional gas, more so than offshore oil.

In Algeria, our business is levered to production optimization activity, which provides more predictability. In Asia Pacific, the remainder of 2025, we are expecting an increase in activity for Southeast Asia, specifically in Indonesia, [ Bruni ] and Thailand related to well construction and well intervention services. Additionally, in Australia, we see incremental activity in subsea well access related to project timing and the onshore Coretrax expandables business. For these reasons, we believe the region will see revenue growth with improved margins in the second half of 2025, compared to the first half of the year.

With that, I'll turn the call to Sergio to review our financial results in detail.

Thank you, Mike, and good morning to everyone on the call. First of all, it's a great pleasure to be here. I'm very excited to have joined Expro and I wanted to take a brief moment to thank every Expro team member for the warm welcome that I've received from all parts of the organization, and from every region and product line. Tomorrow marks my first 30 days with Expro and I wanted to share some initial observations.

As Mike noted, we reported very strong financial results in the second quarter. And this wasn't an isolated occurrence. The team has been consistently delivering results above expectations. That is due to the talent and dedication of our almost 9,000 coworkers in all parts of the globe. And that is my first observation, the quality and passion of the team to solve our customers' most complex challenges.

My second observation is the depth of our conversations with our customers. That understanding of our customers' needs, and our passion to provide solutions that lead to our innovation with a purpose DNA. And that innovation mindset materializes in every way possible. From the new AI-driven tool, to utilizing day-to-day creativity to improve our own processes. These are my own initial observations, but they were somewhat confirmed by many of my former peers and colleagues and upstream companies that reached out to me to [indiscernible] Expo and the team.

Now moving on to the quarterly results. We reported revenue of $423 million for the second quarter, as compared to guidance range of $400 million to $410 million. Revenue was up $32 million, or about 8%, relative to the first quarter of 2025, reflecting a seasonal recovery in the Northern Hemisphere and increased activity globally, more specifically in ESSA.

EBITDA for the second quarter was $94 million, where guidance was between $80 million and $90 million. This quarter's EBITDA represents a sequential increase of approximately $18 million, or 24%, relative to the first quarter. EBITDA margin for the second quarter was 22%, and was up about 200 basis points quarter-over-quarter. Similarly, as compared to Q2 of last year, EBITDA margin increased about 200 basis points as well.

As Mike noted, Q2 2025 was the best EBITDA margin quarterly results in the company's history, and builds on Expro's established track record of margin expansion. We also generated over $36 million of free cash flow on an adjusted basis in the second quarter and repurchased $5 million in shares in the open market. We're extremely proud of the cash flow performance of the company for the quarter, and we will remain focused on improving the capital efficiency of the business.

To expand on this morning's earnings release, I'd like to take a moment to discuss free cash flow and share buybacks. Generating significant free cash flow and growing our free cash flow is of the utmost importance to us. Therefore, we have taken another look at our own free cash flow definition, and decided to make it more aligned with industry peers.

Beginning in the current period, or second quarter of 2025, and going forward, free cash flow will be our reported CFFO minus CapEx, both numbers straight from our statement of cash flows. We also intend to further adjust it for truly onetime items, either positive or negative, to come up with an adjusted free cash flow that is more reflective of the steady state business performance, and therefore, better aligned with corporate finance principles. Those adjustments will also be very transparent and sourced straight from the income statement on a quarterly and year-to-date basis. We intend to report both free cash flow and adjusted free cash flow with their respective reconciliations. With that said, we will mainly refer to the adjusted number as we believe it better represents the operational performance of the company.

On share buybacks, we remain committed to repurchasing the same 1/3 of free cash flow, or circa $40 million, as previously guided. The previous guidance was framed in the form of percentages. But given the changes in the definition of free cash flow, we concluded that it will be clear to guide the dollar amount, but nothing has changed in that regard. Year-to-date, Expro has repurchased $15 million in stock, with $5 million of that in the second quarter. We still have approximately $61 million available under our current $100 million authorization and expect to catch up on our annual repurchases in the second half of the year.

As Mike mentioned before, we are reaffirming our annual financial guidance with revenues of circa $1.7 billion and EBITDA of at least $350 million. Our general expectation of the revenue progression is that third quarter will be flattish relative to the second quarter with expected revenue growth in the fourth quarter. We expect free cash flow as adjusted to be plus or minus $110 million for the full year.

We acknowledge there's an element of market uncertainty, but based on the team's ongoing dialogue with customers we expect the demand for Expro services to continue as guided, with line of sight on projects in 2025, particularly in international and offshore markets. In other words, our guidance numbers represent our best view of the business performance today, but to be sure the numbers have both downside risks and upside opportunities.

As it relates to the second half of the year, we expect our results to reflect a moderate increase in activity across NLA and APAC, while the MENA and ESSA regions are expected to be relatively stable. As we've highlighted, we continue to optimize costs and streamline processes through our Drive 25 operating efficiency campaign. With that, if operators plans change, we expect to adjust cost and CapEx accordingly to preserve our ability to generate and maximize free cash flow, and maintain our commitments to share buybacks.

My general philosophy around guidance is that no one benefits from aggressive targets. It often leads to future disappointments. But I'm not a [ sandbagger ] either. Neither one of those two extremes create credibility in my opinion. My belief is that credibility is built around having a honest view of the business, the associated downsides and upsides, and ultimately working tirelessly to execute on the operational front to meet or exceed those expectations, and do that consistently. I believe our guidance this year reflects our philosophy.

Turning to our regional results. For North and Latin America, or NLA, second quarter revenue was $143 million, or up $8 million quarter-over-quarter, reflecting higher activity in well construction, while well flow management activity was down in Mexico and Brazil. Note that revenue generated from U.S. land and Mexico markets was about 4%, and 2% of consolidated 2024 annual revenue respectively, and continues to be a very small part of the global Expro business.

For Europe and Sub-Saharan Africa, or ESSA, second quarter revenue increased $20 million to $132 million sequentially, primarily driven by activity in the North Sea from well flow management and subsea well access. An activity in Angola from wealth management and well construction product lines. Segment EBITDA margin of 30% was up 400 basis points sequentially, reflecting higher activity and a favorable product mix.

The Middle East and North Africa, or MENA, delivered another solid quarter, but slightly lower as compared to Q1 with revenue at $91 million, driven by lower well construction revenue in Saudi Arabia and the UAE, partially offset by well flow management revenue in North Africa. MENA segment EBITDA margin was 36% of revenues, a decrease of 70 basis points from the prior quarter, reflecting the lower well construction activity.

Finally, in Asia Pacific, or APAC, second quarter revenue was $57 million, an increase of $6 million relative to the first quarter, primarily reflecting the higher well flow management activity in Malaysia, Indonesia and [indiscernible]. Asia Pacific segment's EBITDA margin was 26% of revenues, increased about 500 basis points from the prior quarter, reflecting increased activity and mix.

To provide an update on the Drive 25 initiative, Expro is well into the implementation phase of this cost optimization program. On the first quarter earnings conference call, Expro announced an updated target of $30 million in run rate cost savings. We continue to anticipate capturing at least 50% of that run rate target during the current year.

Turning to liquidity. Expro has a total available liquidity at the end of Q2 of approximately $343 million, with available cash and cash equivalents of approximately $207 million, and availability under our revolving credit facility of approximately $136 million. Subsequent to the June 30 quarter end, Expro entered into an amended credit facility to, among other things, extend the maturity and increase the bank commitments. The new facility has a 4-year maturity and matures in July of 2029.

Additionally, it increases the total [ RCF ] commitments from $340 million to $400 million. Concurrently, we entered into a $100 million 364-day bridge facility. In aggregate, these facilities provide up to $500 million in available liquidity, further strengthening our balance sheet and providing plenty of flexibility to execute on future M&A opportunities, while continuing to return capital to shareholders.

With that, I'll turn the call back to Mike for a few closing comments.

Thank you, Sergio. We believe Expro is well positioned with our market-leading core product lines and good exposure to international and offshore markets that will support the ongoing activity, not only for the remainder of 2025, but for a multiyear growth cycle, expected to start in the back half of 2026. We will continue to focus on free cash flow generation by continuing to expand our EBITDA margins, and looking for ways of reducing the capital intensity of our business. We work hard every day to continue to earn our customers' trust, create value for our shareholders and deliver solid financial results every quarter.

Despite the uncertain market backdrop, we continue to focus on what we can control while being ready for every scenario. That being said, we remain confident that our main international and offshore markets will perform better than other sectors. With our strong balance sheet and liquidity positions, Expro is equipped to manage anticipated market fluctuations and deliver sustained free cash flow and value to its stakeholders.

With that, we can open up the call for questions.

[Operator Instructions] First question comes from David Smith with [ Pickering ] Energy Partners.

Congratulations on a very strong quarter. I wanted to say also just really impressive Q2 orders. I wanted to ask if that was mostly timing, just large multiyear projects coincidentally booking in the quarter are good commercial discussions suggest 2025 orders that could be up 20% or more versus '24?

Yes. I mean, David, it really -- it's really kind of all of the above. I mean, a number of those were contract awards we had in places like [ Guyana ] or in North Africa, that were more contract renewals, contract extensions, those type of things. It really was just kind of the timing of it. We continue to see a robust level of bidding and tendering activity. And that just kind of translated into a strong quarter of order intakes.

Great. I appreciate that. And I know it's early to talk about 2026, but conceptually -- and just following on from Sergio's prepared remarks.

If activity growth were to flatten first all, can you talk about opportunities you're seeing maybe for improved free cash flow conversion compared to historical the last few years? Maybe if there's flexibility for the CapEx spend? Potential thoughts on working capital improvement? Maybe fewer margin integration and severance charges?

Yes. No, I mean, it's a really good question. It's -- I guess, how I would kind of decouple that is, number one, I think we've continued to demonstrate, as we've been saying all year, even if 2025 is in a flattish kind of year-on-year top line, we're still going to expand margins here in 2025. That's a combination of our own internal engineering efforts. We've launched a number of new technologies that we're starting to get good market penetration. We've continued to realize the synergies both from a cost standpoint as well as from the revenue standpoint of some of the recent acquisitions we've made.

And then fundamentally, we kicked off a cost efficiency exercise last summer, in the summer of 2024, that is -- really was timely. I wish I could say that we anticipated we were going to see things like Liberation Day in April of this year and those type of things, but obviously, we didn't. But it really was kind of our focus on continuous improvement and really focusing on taking costs out, driving efficiency. So we're seeing some benefits from that.

We've said here that we'll exit this year with $30 million of run rate cost savings, about half of that we'll see in the 2025 numbers. So it's really is kind of all of the above those type things. We can and will flex CapEx spend to some degree. We -- as a reminder, we don't spend CapEx dollars speculatively. We spend CapEx dollars based upon projects. So all those things will kind of help flex us into that. But fundamentally, our continued focus on margin expansion is paramount to us, at the same time, expanding our free cash flow generation.

So these things kind of all -- they all line up together and they're all being [indiscernible] very intentionally and very purposefully. So Sergio, you want to comment anything that I missed? Feel free.

No, Mike, that's it. I think the -- Dave, as you mentioned, the focus is generating an increase in the free cash flow generation of the business. I think there are many levers, and Mike already touched on all of them, but expanding the margins further and perhaps flexing on the capital intensity of the business, those are the main drivers that we see at this point.

We now turn to Ati Modak with Goldman Sachs.

I guess, Sergio and [indiscernible] on the quarterly EBITDA margin cadence, is there anything that you can provide us in terms of how to think about the segments for the remainder of the year?

Yes. So Ati, thanks for joining us. I mean, it's we always kind of start off. Q1 of the year is always -- that's always going to be our lightest quarter. We're were particularly affected by the Northern Hemisphere kind of winter season. That's always -- especially in the North Sea. That's always going to be a little bit of -- is going to provide a little bit of softness. And historically, our NOC customers tend to be kind of slower out of the gate. So Q1 is always kind of like that.

We did have a -- we had a solid revenue quarter here in the second quarter, and we're able to translate that through to a really good fall through. Fundamentally, we're -- we still anticipate, and I'd be very disappointed if we don't expand margins in 2025 versus 2024. And we don't see anything right now that would give us a particular pause for that. So Q2 is just a solid execution quarter. It wasn't like we had some particular one-offs or those kind of things that help prop up margins. It was just a really solid execution quarter and based on a tremendous, tremendous amount of customer dialogue that we've had here, we still see the second half of the year playing out as we've anticipated. That's why we try to give a roughly $1.7 billion outlook for the second half of -- or for the total year. That's really based on that customer feedback.

So right now, I wouldn't anticipate anything changing from a margin standpoint beyond that.

That's very helpful, Mike. And then it seems like M&A in the market is heating up. I know we've spoken about this a few times before, but I'm just curious if you're seeing anything that is -- that will suggest increased opportunities or any thoughts you can provide there?

Yes. I mean we continue to be very, very active out there to look at M&A opportunities. We are -- obviously, we've had good success in looking at things that are accretive, and looking at things that help us improve our relevancy and help us expand our portfolio.

We've got a really, really good playbook of how to conduct diligence and how to execute on M&A, and how to bring them in. And more importantly, how to do proper integration. And it's really key to be able to drive synergies and those type of things. So yes, there are things that we continue to look at out there that make sense. And quite frankly, there's a lot of what I refer to as dislocated assets, so to speak, that don't have a really good home. And I think we've been able to demonstrate a good track record of being able to bring those in-house and really leverage it from a synergy standpoint, leverage it from a customer relationship standpoint. So it's something we continue to be able to focus on and hope to continue to be able to execute on some of those.

Our next question comes from Eddie Kim with Barclays.

I apologize in advance, but I have to ask the offshore rig white space question. It's been a theme, as you well know, for over a year now. But the reason I ask is more recently, we started to hear more mentions of it from the larger service companies, and actually another offshore company recently lowered their ROV utilization expectations for the full year. So it seems like we're starting to see some expected impact of this in the second half of the year from companies that are not offshore drillers.

So all that to ask, is there any part of your business where you expect to see some impact from offshore rig white space in the second half? Just any thoughts around that would be great.

No. Eddie, it's a good question. I can say it's something we continue to -- and as I alluded to when I was responding to an earlier question, we've had a tremendous amount of customer engagement to really look at how the rest of the year is going to shape up, and literally down to the point where we're sitting down with customers, we're looking at what are their drilling programs? What their completion programs? And we're going to drill a well X, and then when are we going to complete it kind of translate that into next activity set for us.

So yes, there's some -- there's some puts and takes of rigs going on maintenance or those type of things. We've really tried to layer that into what our forecast looks like in the second half of the year. And that's why we've been able to stand up and say with the best information we have today is we still think we're going to be in that [ $1.6 billion ] ZIP code, and $350 million plus EBITDA range.

The area that I'm seeing more, it's a bit of an interesting phenomenon that we're seeing right now, is really around the more of the short cycle activity. More of the intervention activity, more of the OpEx-related activity. That's one that in my 30-plus years, that normally is the one that gets flexed up. And right now, we're seeing customers be, I think, particularly cautious around that. So that's one that we're kind of continuing to monitor that and trying to better understand kind of what the customer plans are there.

But Fundamentally, Eddie, our forecasting and our outlook [ for it ] has really been based upon a very detailed customer engagement, almost a bottoms up rig by rig, completion by completion type of analysis.

Got it. That's very helpful. There was one blemish in the quarter. And obviously, you guys posted very strong results, but if there's one [ blemish ] it was in the subsea well access segment where your revenue declined 16% sequentially after kind of a similar double-digit decline in the first quarter.

In your release, you mentioned lower [indiscernible] revenue in Malaysia. But could you provide some more color on the recent softness in this segment? And is that likely to sort of remain stable at these levels in the back half of the year? Or should we expect a rebound from second quarter levels?

Yes. I mean it's a -- I wouldn't say it's a one-off, but it's not something we anticipate to be sustained. We think that fourth quarter will be particularly strong in that aspect.

We did have in 2024, we did have some subsea projects that delivered more from an equipment standpoint. And you saw we referred to some of the activity in Angola. We had a lot of of operational execution that was strong revenue generation at this point in time. So not something that gives me a particular pause. It was just really kind of project timing and those type of things right now, Eddie.

We now turn to Derek Podhaizer with Piper Sandler.

Just -- maybe I want to ask a question on the Middle East segment. Obviously, revenues came down a little bit. Margins down a touch, to [indiscernible] though margins are still up, historically at a nice level here.

But maybe just help me understand some of the puts and takes in the region? Maybe some of the soft spots versus the strong spot? Why we see a 60% decremental here. Just maybe further help and color around what are the moving pieces within the middle -- your MENA region?

Yes. I mean it was -- let's remind ourselves that MENA is the most profitable geography we have. It's got very strong levels of activity. So really strong, good -- very strong margin delivery there. Up just slightly because of project timing in there. We're really driven by Saudi and by Algeria. And just to reiterate what I said in my prepared remarks, it's -- Saudi for us really is unconventional gas on land and that continues to be robust. I think especially in Saudi if you go back to the administration's visit into the Middle East a couple of months ago, an awful lot of discussion around data centers and AI and those type things. And natural gas is going to be the feedstock for power generation in the Middle East and in Saudi in particular.

That's why there's such a strong focus from Aramco on continuing to expand their gas production capabilities, and we're really well positioned to be able to capitalize on that. And then, of course, activity in Algeria, which is very robust for us is much more around production optimization, compression, those type things and just really, really solid projects. So MENA is one that it just continues to deliver at a really, really high level and being off very slightly on a quarter-on-quarter margin standpoint is not something that we're particularly concerned about at all.

Yes. And [indiscernible] was curious. And then just my second question, it was nice to see 3 quarters of shareholder returns here on the buyback. Maybe just your latest thoughts on how we should think about cadence, or percentage of free cash flow, or even potentially a dividend coming into the picture?

Derek, this is Sergio. Yes, so I think we communicated that through our press release and in our prepared remarks. We expect to repurchase roughly $40 million in stock this year. We've done already $15 million in the first half of the year. Mike alluded to some of this in his prepared remarks and saying that free cash flow generation tends to be kind of weighted towards the back half of the year. And as that being the case, we expect to accelerate those repurchases in the second half here.

So I think to us, a strong free cash flow generation and returning capital to shareholders. These are things that are very important to us, and we're going to continue to do that. So that should be a feature of Expro in 2025 and beyond.

Also on the dividend?

I mean, as of now, we still think that share repurchases are the best avenue to return capital to shareholders, but we're continuously evaluating what that means. And if things change in the future, will pivot as well. But as of now, share repurchase, we still think it's the best avenue for us to return capital to shareholders.

And I think it's really -- and Derek, it's an ongoing discussion we have with the Board. That's clearly a board-level type decision. But what I will say is that I think this is -- as a company, I think anybody generally needs to get to the point where they're not roughly 1/3 of free cash flow return. They're getting into that 40%, 50%, 60% range. I think when you can get to that and you have visibility for an extended period of time, that's when it starts to make good sense strategically to look at dividends.

So very much is -- I think it's why we have so much focus on free cash flow generation is for us to get to that point where we can start to expand that percentage, and we're going to return and then start to change what the mix of that is, whether it's continues to be share repurchases or it's a balance between that and dividends. That's very much what we're focused on. And that's why free cash flow generation becomes such a key driver for that.

[Operator Instructions] We now turn to Josh Jayne with Daniel Energy Partners.

First question, Mike, in your prepared remarks, you highlighted a lot of the volatility that we've seen in crude over the course of Q2.

Could you just speak to the -- how would you characterize the overall sense of urgency of your customer base today? Obviously, some nice contract wins and backlog adds this quarter. But maybe just given the volatility that we've seen, conversations today versus where we were 90 days ago, do customers have, I guess, more comfort with where we sit today just from a macro standpoint?

No. It's -- Josh, and thanks for joining. It's a great question. I can tell you that my -- so my view today is, I think, especially for the deepwater and the ultra-deepwater projects. And frankly, that's we're very heavily tied to that type of activity. Our customers are very much -- they're in execution, implementation phase. They're focused on those type things. So that sentiment hasn't changed.

We're going to have to start kind of translating that into what's it going to look like from an activity set for 2026. I think the ongoing projects we have will continue to be executed and implemented. We've all observed that the pace of new FID approval for deepwater and ultra-deepwater has moderated a little bit here. But I think we'll continue to start to see how that plays out.

And it's more -- I alluded to it earlier, it's more the kind of some of the short-cycle activity right now that I'm just seeing more caution from customers. They're not going out and pursuing some of those incremental oil production opportunities today that we normally would observe. I think part of it is because they too are trying to understand what's going to happen with commodity prices. What's the continued behavior going to be from OPEC+? What's the geopolitical situation going to be?

So I think there's just caution on anything new, but kind of a conviction on continuing to execute on things that are more existing is how I would frame it.

Okay. And then one for Sergio. First conference call in the seat. Maybe you could just maybe just give you the opportunity to expand on how you see the world from a financing perspective? You guys just closed a new credit agreement.

And also just broadly, how you see Expro's opportunity set to maximize shareholder value over the next couple of years? I know you answered questions about the buyback and the dividend, but maybe just talk through your -- just how you view the importance of free cash flow conversion and it's used going forward?

Yes. I appreciate that, and thanks for that. So you're absolutely right. I think the focus of the organization is to continue to increase that free cash flow conversion. There are obviously several avenues to get there, and we intend to attack all of them. And that, as Mike said before, that has continued to expand on our EBITDA margins. That is continue to look for opportunities to be more effective on our capital deployment. There are ways of actually collecting from our customers a little faster. So there's a lot of ways, and I'm going to be heavily focused on doing all of those things.

Look, Expro is a fantastic organization, right? So in the spirit of great companies wanting to be even better kind of that's part of kind of what I'm going to try to help the organization kind of turn under every rock, looking for things with a fresh perspective, looking for ways for us to continue to fine-tune our strategic objectives, looking for accretive acquisitions and so on.

So I think the company is in great shape. The execution -- the operational execution of the business is fantastic. So I'm just going to be looking to help the company get even better than what it is already today.

Ladies and gentlemen, we have no further questions. So this concludes our Q&A and today's conference call. We'd like to thank you for your participation. You may now disconnect your lines.

All right. We're going to keep things moving. Excited to welcome our next speaker, Mike Jardon from Expro. For those who don't know the Expro story, it's really interesting SMID-cap OFS provider of offshore equipment and services. And one of the key themes, I think, from the conference thus far is kind of some of the resiliency, frankly, some of the growth opportunities offshore, which is I think is a little bit unique within what we're seeing within OFS, where we're seeing obviously some headwinds in terms of overall spending trends kind of globally. Mike, I don't know if you maybe start with just some introductory comments, and we'll dig into our fireside chat.

Sure. No. And Arun, thank you very much, and I appreciate you guys putting on the conference. It's been great to be here, see industry colleagues and obviously had a chance to meet with a lot of investors. I guess really 4 things I'd like everybody to take away from us. Number one, we are an offshore internationally focused company. 70% of our revenue is offshore, 80% of our revenue comes from international, and here I want to talk about North America pressure pumping. We are not right onto be talking to that's now something we are focused on.

We have minimal exposure to U.S. So offshore international is a first point. The second one is we have continued to invest heavily in engineering and engineering developments and really focused around things like safety and efficiency in service [indiscernible] and well integrity. So we've only been able to continue to accelerate those things. The third element is we [indiscernible] the company with an original public and reverse public company merger into Frank's International and we continue to lean into [indiscernible] been help us to build our portfolio, give us better balance, give us more scale and more diversity.

And then the fourth element, which I think is really important and you kind of touched on to begin with, it's -- I think 2025 year is a transition year in [indiscernible] and we are going to have the ability to actually expand our margins in 2025 [indiscernible] flat to down revenue here this year. So it's notably exciting time for us. It's a great time for really balance to graph actually 1/3 of our revenue comes from North and Latin America, 1/3 of our revenue comes from Europe and Sub-Saharan Africa and then [indiscernible] comes from Middle East, North Africa and the final [indiscernible] kind of comes from Asia Pacific. So really balanced business and something we're really excited to have that focus on.

Yes, Mike, before kind of going into the nuts and bolts of the fireside chat, I really wanted to see if you could start with a brief update with your 4 key segments. And maybe just for investor education, talk about the key things that you do within well construction, subsea well access, well flow management and intervention because that's one of the things I want people to know a lot of the value-added things you do in the oilfield.

No, it's a great question. So really, yes, so kind of the 4 key segments. The first 3 cross well construction, subsea well access and well flow management, those are more principally focused around customers' CapEx spend. So when we're in a cycle where we're drilling and completing wells, we're going to be very active with those businesses. The fourth one being intervention integrity is going to be much more around customers' OpEx spend, those types of things. But fundamentally, well construction is the real anchor when we did the reverse merger with Frank's International, very much focused on offshore, deepwater, ultra-deepwater type services around tubing and tubular running services and those type of things.

We've done some additional add-on technology developments and some add-on acquisitions to really expand that portfolio. But that's a really, really key business for us. We have a really strong market share in the deepwater and ultra-deepwater. It's really kind of a 2-horse race between ourselves and Weatherford. Moving into the subsea well access, those are safety critical elements when you're running subsea completions and deepwater. This is what gives you that emergency disconnect. If you have a weather event or you have a drive off from dynamically positioning or those type of things, it really gives you that safety critical element.

Again, really high technology elements, and it's an area where it's principally ourselves and Schlumberger that provide services in that. Then we kind of move into the well flow management business. This is really kind of the core legacy history of Expro around well testing, how you evaluate reservoirs, how you evaluate production potential and those type things. And we've got a 75-year legacy in that service. And when it comes to challenging high gas rate, difficult solid management and those type of things, those type of services, we have an exceptionally good reputation.

We're kind of focused around a number of those things. And then the last element being intervention integrity. This is a more traditional intervention business, Slick-E-Line capabilities. We have one of the largest independent service company fleets of units out there. And what we've really been focused on the last couple of years is really how do we continue to add measurements, digital things, how do we improve the ability to do diagnostics on reservoir and production issues and those type of things. So that kind of gives you a little bit of a feel of the scale and the breadth. And again, we do those things all around the world. We operate in about 60 countries. So it gives us some good flexibility there.

Yes. Well, let's talk a little bit about the macro. 2025, Mike, is going to be a year where global upstream spend is down on a year-over-year basis after following several years of very, very strong growth post COVID. So what is the company's playbook in the current environment to protect the resiliency of your margins?

Yes. It's -- we have really been able to -- and I'll go back to one of the 4 points I made to begin with, we will expand margins in 2025 despite the fact that we're probably going to see a flat to slightly down revenue year. The reason we're able to do that is really a number of levers that we're working on. We've worked really hard to be focused on efficiency, on how do we drive removing clutter from the organization, removing the need for personnel, trying to drive internal efficiencies, those types of things.

We've also been able to expand our margins through our technology efforts, rollout of our technology. We're frankly being very patient. We've developed technology, something like our Cure technology that will save an operator anywhere from 18 to 24 hours of rig time. And we have an expectation of we want to share in the value, we want to share in those cost savings that we have there. And so that -- we've set ourselves up to make sure that we get our proportion of that, and we're going to stay patient.

We're not going to lower our expectations on value creation just to get the technology out there sooner. we'll be patient. It will come around. It's unique things. It really helps drive operating efficiency. And probably more importantly, it really increases wellbore integrity as well.

Yes. That's a great segue. I want to talk about some of the key technology offerings at Expro.

Yes. So whether it's the things that the engineering efforts we've really been focused on have really been principally to help drive safety improvements, service delivery improvements, efficiencies and ultimately, wellbore integrity. So our ability with things like our ITO and CENTRI-FI technology, we can actually go out on a rig, we automate things more. We reduce the number of personnel on board. CENTRI-FI will reduce the crew size from about 9 personnel down to 2 personnel.

And for offshore deepwater rigs, one of the things that is never a premium is bed space. And so any time you can tell an operator that you're going to reduce the number of personnel required on board is tremendously advantageous for them. It also means that through technology, we've got guys that are operating equipment from an iPad. So they don't have their hands in the red zone. There's no opportunity for them to have a safety incident.

And what's important for us is we reduced the personnel from 9 down to 2. We now can redeploy those other 7 personnel to 3.5 other rigs of activity. So we've really been focused on that efficiency, HSE performance and integrity. That's something we've really been focused on with the engineering efforts that we've made over the course of the last couple of years. and a number of the technologies that we've brought in-house with some of the acquisitions have really helped us enhance that and improve that as well.

Yes. What strikes us is there's a lot of kind of core technology offerings where the barrier to entry is not low, right?

There is. And that's for us, we have a high barrier to entry. We have -- our reputation with our customers from a service delivery standpoint or [indiscernible] performance is very, very, very high. We're very focused on that. Frankly, it's one of the reasons why we have almost no footprint in U.S. land today. There's no barriers to entry. There's no -- it's a commoditized service. And when you're in the Permian and you're a TRS provider and you have 34 competitors, pricing isn't always -- it's hard to get pricing traction. So that's why we're focused on deepwater, ultra-deepwater, continue to develop technology that drives efficiency for our customers and ultimately makes us more unique and helps us keep that barrier where we need it to be.

Yes. You've done some really interesting acquisitions over the last couple of years. Talk just about DeltaTech, PRT and Coretrax. And what we really appreciated about this is you've really enhanced your scale technology yet you maintain one of the best balance sheets in OFS with a net cash balance sheet.

Yes. I mean it's very much been a focus for us to be able to do that. It's a -- it's in part of this, if we kind of go back to when we did the original merger of equals with Frank's, we intentionally developed the integration playbook. And we developed an integration playbook because we felt like -- I felt like it was something we were going to -- that was the only acquisition we were going to do. It was the only merger we were going to do. And so we developed that playbook. And we've been able to use that playbook as we've done other acquisitions.

And it makes us more efficient. It makes us better at how we do it. And a great example is with the Frank's transaction, we went to the same ERP platform in 3 quarters. When we do integration, when we do mergers, we're very much going to drive efficiencies, and we're going to do those kind of things. And I think one of the really telling aspects is whether it's DeltaTech or it's PRT or it's Coretrax, which adds more scale, adds more technology, one of the key elements of that is those management teams, those operations teams are still with us.

And that's because this is a really good platform, a really good home for us to bring those technologies in. And quite frankly, our playbook with Coretrax is to internationalize that business. Broader Expro, we operate in about 50 or 60 countries. When we did the Coretrax acquisition, they operated in about 8. So our playbook is to internationalize that business. We're not going to go to 50 countries overnight. We've got kind of a prioritization of the countries we're going to go to. So that by the end of '25, we're operating in 14 or 15. By the end of '26, we're in 20 or 22 to kind of roll those things out and really kind of gain the technology from it.

All of this is really about how do we increase our relevancy to our customers? How do we provide more services? How do we make it easier for them to execute. And frankly, I think we're more relevant to our customers, then we're going to be more relevant to investors as well. So those things fit in really kind of hand-in-hand, but it's all driven by the industrial logic. That's really what we focus on.

What does the M&A pipeline look like kind of today? Is there any things as you think about the portfolio that may intrigue you?

We continue to be very active in evaluation around M&A kind of things. We look at -- in 2023 and 2024, we looked at between 35 and 45 potential M&A transactions from really small ones to really big ones. We continue to be inquisitive. We continue to be active out there. And -- but we're also going to be patient. We have -- your question a minute ago that these were accretive transactions we've done already. We went in, we identified what we thought was the right valuation for those businesses, and we stayed patient. It took us about 2 years to get PRT or Coretrax done. We could have gotten those completed sooner if we would have been willing to change our view on valuation. So we're going to be patient on those kind of things.

And I think also what's interesting and unique is because we have those 4 product lines that I laid out earlier, we've made acquisitions that strengthen our Subsea well Access business. We've made acquisitions that strengthen our Intervention Integrity business. We make acquisitions that have strengthened our well construction. We have a lot of latitude, a lot of flexibility. We're not a -- if we were just a pressure pumping company, gosh, if that's all you do, you're kind of narrow in opportunity sets. We have product line diversity we can focus on. We also have geographic things that we can do to try to expand our footprint as well. So it just gives us more flexibility and more latitude, more options, more opportunities.

I want to talk a little bit about maybe getting an operating update from you and how things are maybe trending in the field. Expro guided to 2Q revenue of $45 million at the midpoint, $80 million to $90 million of EBITDA, 21% EBITDA margin. Just some general thoughts on how things are progressing in the field?

Yes. I mean it's -- I still have a very good level of confidence that we'll be able to -- that we will deliver within the guidance ranges we gave. Obviously, it helps when we're what are we 6 days before the end of June. But activity has been -- has continued to be strong here in the second quarter. And we're not seeing a material number of projects move to the right or slide or delay. There have been some geographic things, whether it's Mexico, unfortunately, we don't have a lot of exposure to Mexico. And obviously, there's been some uncertainty created here with what's been going on more broadly in the Middle East and of course, here over the course of the last handful of days, what's been going on with Iran. But we still have a good level of confidence on our ability to deliver within the guidance we gave for Q2.

And just broadly for the full year, we're modeling $350 million of EBITDA, which I think is around kind of consensus. Does that still feel okay to you?

Yes. I mean right now, it does with the information we have today, it doesn't tell me -- now if anybody wants to articulate what's going to happen with the Straight of 4 moves, what's going to happen with OPEC+. But right now, my view is I don't think we're going to see something significant happen with Iran with the Straight of 4 moves, but that's a variable that we just have to see how it plays out. But right now, it looks like that's kind of where we'll be for both EBITDA and kind of in that flat to potentially down just a little bit year-on-year in terms of revenue.

Okay. Let's talk a little bit about some of the self-help initiatives that you're working on. Obviously, you and the team have highlighted an ambition to grow your EBITDA margins to 25% over time. One aspect of that is to continue to reduce your support costs to 19% of revenue, which is like a $30 million kind of annualized target. Where are you with your Drive 25 initiative?

Yes. So we kicked off really about this time last summer, we kicked off an initiative that we call Drive 25, and it really is around creating operational efficiencies. It's looking at clutter, it's looking at internal processes, how do we become more efficient. It's not about just going out and firing 100 people and taking out costs. It's really about how do we make these things sustainable. How do we -- we did a really good job when we brought Expro and Frank's together. We took some really good synergies out, but we were much more focused on it was a little bit more of a blunt instrument.

We're trying to be more precise with this. So we brought in some outside consultants that gave us some assistance at the end of 2024 to really lay out a program, look for areas we could drive some efficiency that really is going to create operating leverage that's going to be sustainable. We're not looking for things that are just one quarter impact. We're looking at things that can have a long-term impact. And we originally identified what we stated was we want to have $25 million of run rate cost synergies at the end of 2025, about half of which we would actually see in the P&L in 2025.

We've since been able to revise that. We're up to above $30 million today for run rate synergies. And again, about half of which will come out in 2025. And it really is about how do we make this a more sustainable. And one of the things that we've done that nobody else talks about is we've talked about our total support cost bucket. We don't just talk about our SG&A is as good as anybody. It's 3.3%, 3.4%. When we talk about support costs, we look at everything, all the way from my cost, all the way down to the technician who's -- she's operating a well construction TRS job in Guyana, what's all the support levels that are in there because that's the size of the price, so to speak.

So we've talked about that. And what we really want to do is when we get to that $2 billion or $2.2 billion or $2.5 billion run rate revenue, we want to be at a point where our support costs have really started to flatten out. We're not at 19%. We're at 17.8% or whatever the number ends up being. We want to drive that efficiency, and it doesn't happen and those kind of things don't happen overnight. You have to be very purposeful. And whether it's technology introduction or it's how you change the things you're doing or prioritize the things you're doing, that's what we've really been focused on.

Before getting into some of the geographical segments, you announced a leadership change in the C-suite with your CFO with Quinn Fanning departing and you added Sergio Maiworm, who's at Talo and I actually covered Talo, but didn't get to know Sergio that well. But why did you and the Board think that Sergio was the best choice to lead the finance organization going forward?

Sure. No, it's a really good question. It's something I've been contemplating for a while is do we need to make some changes? Do we need to make some -- do we need to kind of change some voices in the room, some of those kind of things. And although it may appear these kind of things happen very abruptly, I can assure you, when you put out an announcement that says somebody is departing and somebody is coming in, when you do that simultaneously, there was a lot of choreography that went in there to make that happen.

We went through a very, very -- we created a subcommittee from the Board to go through a search process with me to make sure we had a variety of eyes on it. We ran a really good search process. It took us a number of months to complete. We had really, really good quality candidates. We ended up with kind of 3 finalists, and Sergio was the one who was clearly at the top. He's got a great background. He was part of the M&A team at Shell at one point in time. He was at Transocean at one point in time. He is an international guy. I mean, he's a Brazilian. He understands international businesses, and we're an international business. And he's got a good background.

And I think, quite honestly, he's not an oilfield services expert. And being an oilfield services expert was not something we had to have. My executive team, the average tenure is 30 years of experience in the industry. I don't need -- and I've got 33 years. I don't need for somebody to explain to me how our services fit in with a customer, how our services fit in with an operator. It's much more how do we have a geographically dispersed business. We have a product line dispersed business. And I think we have to do a better job of how we simplify and explain to the average generalist investor, who are we, what do we do. And so that really was a big reason why we wanted to make a change there.

Okay. And just is there any early thoughts on Sergio? Is he going to take a different approach to guidance? Or we'll give them some time to get comfortable in his role.

I mean, TBD, he's going to show up on Monday. So I'll give you that answer on Monday. No, it's -- our overall strategy, who we are, what we're trying to do, having a really pristine balance sheet, all those kind of things are going to stay in play. As I said a little bit ago, we need to continue to increase and expand our relevancy to our customers, our relevancy to operators to investors. And I think for us to -- he's going to commit and help be a continued part of that. And I think he's going to have a different perspective than maybe what we've had at this point in time.

I mean, Quinn was a great asset. He's a great resource. He and I have done a lot of things over the course of the last 6 years. So frankly, it was not an easy decision to make a change. But I really kind of look at it like any professional sports team. We didn't make it out of the first round of playoffs in the last couple of years. And I felt like it was time for us to kind of change some leadership, change some voices to really kind of help step that up. And so really over the course of the next handful of months, Sergio will be kind of trying to get up to speed on the business.

But fundamentally, our approach to things is going to stay consistent. But yes, how we -- maybe how we give guidance or do we give quarterly guidance or just annual guidance, those are the kind of things that he'll have a different perspective that we'll have some debates and some conversations around.

Okay. As a lifelong Houston Rockets family, is that a Durant and maybe Sergio could be a...

Absolutely.

All right. Let's talk a little bit about MENA. Mike, one of the takeaways from the conference is probably a softer spending outlook from industry in Saudi Arabia. Obviously, we had a pre-announcement from one of the large diversified companies largely driven by Saudi. Can you elaborate on what you're seeing in the Middle East?

Yes. It is -- and having lived and worked in the Middle East in a fair bit of my career, it's an area that I have a real passion for. And it's a growth engine, I think, for the industry. I think in the short term, we may see some choppiness and variability. We saw it at the end of last year, early this year with Saudi announcing some of the jack-up rig reductions offshore. didn't have much of an effect on us as a company because we didn't have a lot of exposure to their offshore activity.

A lot of our exposure in the Kingdom has really been unconventional gas, and that activity will stay strong. You saw the rig count actually step up in 2024. I think we'll see the rig count, if not step up here in 2025, at least maintain where it's at. I think one of the things that's key is if we think back to the administration's visit to the Middle East a couple of months ago, lots of discussion in Saudi, in particular, about AI, about the need for data centers, about the need for those type of things. So the focus on gas production in -- within the Kingdom is really around how do they -- its energy and power and cooling capacity needs for those type of services, which is really got to kind of bifurcate the gas market versus the liquids, OPEC+ kind of things because that's going to be for in-Kingdom consumption.

So I think Saudi is going to be one that we may see a little bit of softness here in 2025. For us, we're continuing to introduce. We don't need the rig count to necessarily grow for us to maintain at least a flat activity set because we're introducing technology there. We're really kind of growing our footprint with the Coretrax acquisition, those kind of things. So to me, this just really sets up what does 2026 look like and what does 2027 look like and the Middle East in particular.

Yes. Historically, our activity has largely been weighted towards well flow management. And so you're maybe a little bit less exposed to D&C?

So the opportunity for us around well construction because really, it's well construction, our well management business. Well construction really is -- which is kind of the legacy Frank's business, very, very strong in the Americas, where we've had an opportunity to grow that well construction business is really internationally. I mean, frankly, the very first revenue synergy we had after we made the -- after we closed the transaction was in Saudi.

We actually won a well construction TRS contract in Saudi. So for us to -- we're already active in Saudi with the legacy Expro business. We're active in Australia with the legacy Expro well management business. So it's really how do we kind of leverage and grow those things and have a better operating footprint and really bring well construction technologies that can drive efficiency, drive wellbore integrity improvements, drive safety improvements, those type of things.

Okay. Let's switch gears, talk a little bit about NLA. What type of activity trends are you observing in the U.S. Gulf? Mexico, which you mentioned is a small part of your overall business, which is good in this kind of environment in Guyana?

Yes. So I mean I'll start with Mexico. I think Mexico is -- I mean, today, frankly, we have a fairly minimal, about 2% of our revenue exposure in Mexico and largely to Pemex. And that, quite frankly, is about the level of exposure we want to have to Pemex because they're a little bit tardy in how they pay their invoices. So we have the right level of exposure there. But I think one of the things we're going to start to see in Mexico, in particular, is I think it's likely to go on a path similar to Brazil.

I think you're going to start to see more IOCs and more non-Pemex activity driven in Mexico. And that's kind of what we've -- and we've announced some contract wins here recently for both Woodside Trion as well as E&I. So I think Mexico is going to have some growth opportunities. The other area that I think is going to have tremendous growth opportunities really is Argentina. I was down there just a couple of weeks ago, and I had the opportunity to meet with folks from the Economic Ministry and folks from the Energy Ministry.

They are really laying out good programs to encourage investment in the country, reducing some issues and challenges around currency, improving the ability to get hard currency dollars out of the country, encouraging investment in the country. It's easier to import goods into Argentina today. They're really doing things really, really well in Argentina. So I think that will continue to be a strong area. Obviously, Petrobras and the deepwater activity they have there is going to continue to be strong and robust. So that's an area that I think can be some growth engines.

And yes, Guyana continues to be really, really strong. We've been successful in some retendering exercises in Guyana, in particular. We've had a great relationship there. We've had a great kind of run there. We have a very, very high Guyanese content, which has been something that's been very much been a tactical and technical advantage for us to really have boots on the ground that are Guyanese. We think that's been helpful. And then, of course, you've got [indiscernible] next door, which is continuing to start to ramp up, which we think will provide good run rate for future activity.

It feels like you'd be in a good position there just given your...

Yes, absolutely. I mean we had a footprint. One of the early companies and actually it was Frank's who had an early actual footprint in Georgetown in Guyana. A lot of folks tried to operate in Guyana from doing it remotely out of Trinidad. And we felt like it was something that was a big advantage for us, and we'll continue to lean into that, both in Guyana and as activity moves to [indiscernible], we'll look at the same type of approach there.

Maybe last question is we've been surprised that the valuation of the stock trading less than 3x EBITDA. We talked about technology, bulletproof balance sheet. What are some of the things that you hear from investors would explain we think the multiple is just wrong.

It is, and I wish I had a good answer. I think it's -- I think part of it is how we frame ourselves up, how we explain and articulate who we are and what we do and what we bring to the table. I think it also is being a SMID today in a market that has choppiness becomes a little bit challenging. Frankly, it's one of the reasons why we're so focused on really growing and really growing into our mid-20s EBITDA percentages because at that point in time, we actually start with the bottom, which the bottom is being free cash flow margin, free cash flow as a percentage of revenue.

At 25%, that's going to let us be at double digits. And that's what we're really focused on. And we'll be able to get there with that. And I think that is when you can have a more assertive capital return policy, our return policy today is 1/3 of free cash flow. When you can move that to 40%, 50% beyond, then I think you're viewed a much more positive, and that's what we have to continue to kind of grow into.

Great. Thanks, Mike.