Business Overview and History
Expro Group Holdings N.V. (XPRO) is a leading provider of energy services with a diverse portfolio of capabilities spanning well construction, well flow management, subsea well access, and well intervention and integrity solutions. The company's global footprint and continued focus on technological innovation have positioned it as a trusted partner for exploration and production companies across the world.
Expro's roots can be traced back to 1938, when the company was founded in the United Kingdom. Over the decades, Expro has evolved from a regional player to a global energy services powerhouse, expanding its geographic reach and service offerings through organic growth and strategic acquisitions.
In March 2021, Franks International N.V. and New Eagle Holdings Limited, a subsidiary of Franks, entered into an agreement to merge with Expro Group Holdings International Limited. The merger closed in October 2021, with Franks being renamed Expro Group Holdings N.V. This transformative merger combined the capabilities of the two companies, creating a leading global energy services provider with a workforce of approximately 8,500 employees across more than 50 countries.
Prior to the merger, Expro Group Holdings International Limited had developed an extensive portfolio of cost-effective, technology-enabled solutions and built a reputation for safety and service quality. Franks also had a history of innovation, particularly in areas such as tubular running services. The merger allowed the combined company to leverage the strengths of both businesses to offer a broader range of products and services to its global customer base.
One of the key challenges Expro Group Holdings N.V. has faced is maintaining its strong safety and quality performance as it has grown and expanded its global footprint. The company has implemented comprehensive compliance policies, programs, and training that are applied globally to its entire workforce. Expro has also standardized its global training processes to ensure all jobs are executed to high standards. This focus on safety and quality has been critical to the company's success in securing and retaining business with its major oil and gas customers.
Expro's comprehensive portfolio of products and services caters to the full life cycle of a well, from construction and completion to production optimization and abandonment. The company's innovative solutions, such as its proprietary iTong tubular running system and SeaCure cementing technology, have helped clients improve operational efficiency, enhance safety, and reduce environmental impact.
Financial Performance and Outlook
Expro's financial performance has been resilient, with the company delivering solid results even in the face of challenging market conditions. In 2024, the company reported revenue of $1.71 billion, up 13% year-over-year, and adjusted EBITDA of $347 million, reflecting a 40% increase compared to 2023. This strong performance was driven by increased activity and revenue across all of Expro's geographic segments, particularly in North and Latin America (NLA), Europe and Sub-Saharan Africa (ESSA), and the Middle East and North Africa (MENA) regions.
Looking ahead, Expro has provided guidance for 2025, forecasting revenue to be within the range of $1.7 billion to $1.75 billion and adjusted EBITDA to be between $350 million and $370 million. This outlook reflects the company's expectations of stable to modest growth in the international and offshore markets, as well as the benefits of its recent acquisitions and ongoing operational efficiency initiatives. For the first quarter of 2025, Expro anticipates revenue in the range of $370 to $380 million and adjusted EBITDA between $65 and $75 million.
Financials
Expro's financial position remains robust, with a strong balance sheet and ample liquidity. As of December 31, 2024, the company had total available liquidity of $320 million, including $185 million in cash and cash equivalents and $136 million in available borrowing capacity under its revolving credit facility.
For the fiscal year 2024, Expro reported annual revenue of $1.71 billion, net income of $51.92 million, annual operating cash flow of $169.48 million, and annual free cash flow of $25.90 million. In the most recent quarter, the company generated revenue of $436.84 million and net income of $23.03 million, representing a 7% year-over-year increase in revenue. This growth was primarily driven by higher subsea well access revenue in Angola and increased well flow management services in Algeria, Iraq, and Saudi Arabia, partially offset by lower revenue from the Congo production solutions project.
Expro operates globally, with revenue primarily generated outside the United States (82% in 2024). Approximately 67% of revenue was derived from offshore oil and gas operations. The company maintains a diverse and relatively stable customer base, including national oil companies (NOCs), international oil companies (IOCs), and independent exploration and production companies.
Liquidity
Expro's liquidity position is strong, providing the company with financial flexibility to pursue growth opportunities and navigate market uncertainties. As of December 31, 2024, the company reported a debt-to-equity ratio of 0.055, cash and cash equivalents including restricted cash of $184.66 million, and $136 million available under its $340 million revolving credit facility. Expro's current ratio stood at 1.99, with a quick ratio of 1.66, further underlining its solid financial position.
Competitive Landscape and Technological Differentiation
The energy services industry is highly competitive, with Expro facing a diverse set of players ranging from large, diversified oilfield service providers to smaller, specialized companies. However, Expro's focus on developing innovative, cost-effective solutions and its global presence have been key differentiators in the market.
Expro's commitment to technological innovation is evident in its portfolio of proprietary products and services. The company's iTong system, for example, has gained widespread acceptance among customers for its ability to improve rig floor efficiency and enhance safety by reducing the number of personnel in the "red zone." Similarly, Expro's SeaCure and QuikCure cementing solutions have been instrumental in helping clients optimize their offshore operations.
In addition to its technological edge, Expro's global footprint and strong relationships with blue-chip customers have been crucial in maintaining its competitive position. The company's diverse customer base, which includes many of the world's largest NOCs and IOCs, has provided a stable source of revenue and opportunities for cross-selling its comprehensive range of services.
Product Segments and Services
Expro's well construction products and services support customers' new wellbore drilling, wellbore completion and recompletion, and wellbore plug and abandonment requirements. The company offers advanced technology solutions in tubular running services, tubular products, cementing, drilling, and wellbore cleanup. Expro is recognized as a market leader in deepwater tubular running services and solutions, and has recently added a range of lower-risk, open water cementing solutions, including the proprietary SeaCure and QuikCure technologies.
In well management, Expro provides comprehensive well flow management systems, early production facilities, production enhancement packages, and metering and well surveillance technologies. The company's subsea well access solutions include an extensive portfolio of Subsea Test Tree Assemblies (STTA) and surface handling equipment, as well as capabilities for vessel-deployed light well intervention services.
Expro's well intervention and integrity solutions focus on acquiring and interpreting well data, maintaining and restoring wellbore integrity, and improving production. The company has introduced innovative services such as CoilHose, Octopoda, Galea, and expandable casing patches, complementing its extensive fleet of mechanical and cased hole wireline units.
Risks and Challenges
Like any energy services company, Expro is exposed to various risks and challenges that could impact its performance. These include:
1. Commodity price volatility: Fluctuations in oil and gas prices can significantly influence the level of exploration, development, and production activities, which directly affects the demand for Expro's services and products.
2. Regulatory and geopolitical risks: Expro's global operations expose the company to a range of regulatory and geopolitical risks, including changes in environmental regulations, trade policies, and political instability in certain regions.
3. Competition and pricing pressure: The highly competitive nature of the energy services industry can lead to pricing pressure, which could adversely affect Expro's profit margins.
4. Supply chain disruptions: Disruptions in the supply of critical components or raw materials could impair Expro's ability to deliver its services and products on time and within budget.
5. Technological obsolescence: Failure to keep pace with technological advancements in the industry could erode Expro's competitive edge and lead to a loss of market share.
To mitigate these risks, Expro has implemented robust risk management strategies, diversified its geographic footprint, and continued to invest in research and development to maintain its technological edge.
Industry Trends and Outlook
The global oil and gas industry is expected to see a compound annual growth rate (CAGR) of around 3-5% over the next 5 years, driven by increasing energy demand and investment in offshore and international markets. Expro is well-positioned to capitalize on these trends, with its strong presence in key growth regions and its focus on innovative, cost-effective solutions.
For 2025, Expro expects its adjusted EBITDA margin to improve by more than 100 basis points compared to 2024, with free cash flow margin projected to be around 7%. Capital expenditures for 2025 are anticipated to be in the range of $120 to $130 million, or approximately 7% of revenue.
Conclusion
Expro Group Holdings N.V. (XPRO) is a well-established player in the energy services industry, renowned for its innovative solutions, global reach, and long-standing relationships with major industry players. The company's strong financial performance, solid balance sheet, and strategic focus on operational efficiency and technological differentiation position it well to navigate the challenges of the dynamic energy market. As the industry transitions towards more sustainable energy sources, Expro's focus on cost-effective and environmentally friendly solutions could further enhance its value proposition to customers, positioning the company for continued success in the years ahead.