Summary of Innovex (INVX) Q2 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $245 million, up 2% sequentially and 9% year-over-year.

Adjusted EBITDA: $48 million, resulting in a margin of 20% (down from 21% in Q1 2026 and Q2 2025).

NAM Land Revenue: $131 million, down 4% sequentially.

International and Offshore Revenue: $113 million, up 11% sequentially.

Free Cash Flow: $30 million, representing 63% of adjusted EBITDA.

Cash Position: Approximately $222 million in cash and no bank debt.

Acquisition: Completed the acquisition of TCO Group for $95 million.

2Strategic Updates and Business Highlights

Acquisition of TCO Group: Enhances Innovex's product offerings with laminated glass plugs for downhole barriers, expected to drive growth in Norway and UAE.

Subsea Business Growth: Secured a $20 million subsea tension riser package in Malaysia and completed a successful trial of the XPak system.

International Market Expansion: Increased activity in Mexico, with completion activity exceeding 2025 totals; strong growth potential in Venezuela and Saudi Arabia.

Operational Efficiency: Continued integration of Dril-Quip is nearing completion, expected to enhance margins and operational performance.

3Forward Guidance and Outlook

Q3 2026 Revenue Guidance: Expected in the range of $260 million to $270 million.

Adjusted EBITDA Guidance: Expected between $51 million and $57 million.

TCO Contribution: Anticipated revenue contribution of $15 million and EBITDA of $3 million from TCO in Q3.

Long-term Goals: Focus on achieving high-teens return on capital employed (ROCE) through margin expansion and disciplined capital allocation.

4Bad News, Challenges, or Points of Concern

NAM Land Revenue Decline: The 4% sequential decline in NAM land revenue due to seasonally lower activity in Canada.

Logistics Costs: Increased logistics costs due to Middle East conflicts are expected to weigh on margins.

Market Uncertainty: Ongoing geopolitical tensions could impact operational efficiency and growth in the Middle East.

Variable Project Timing: Revenue from international and offshore segments may experience variability based on project timing.

5Notable Q&A Insights

U.S. Land Market: There is cautious optimism about growth in the U.S. land market, with some rig additions noted among major and independent operators.

TCO Cross-Selling Opportunities: Potential for cross-selling TCO products in Brazil, leveraging existing subsea wellhead business.

Saudi Arabia Market: Growth in expandable liner hangers and potential in the Jafurah unconventional gas field, with a strong market position despite regional conflicts.

Integration Capacity: The team expressed confidence in their ability to integrate future acquisitions effectively, as they near completion of the Dril-Quip integration. This summary encapsulates the key points discussed during the earnings call, highlighting Innovex's financial performance, strategic initiatives, and outlook while also addressing challenges and insights from the Q&A session.