Expro Group (XPRO 33.44%), a global energy services provider known for its advanced well construction and well management technologies, reported GAAP results for Q2 2025 that exceeded analyst forecasts. Announced on July 29, 2025, for the quarter ending June 30, the company delivered revenue above expectations. GAAP revenue was $422.7 million in Q2 2025, exceeding consensus estimates by $23.52 million, while adjusted (non-GAAP) EPS was $0.30. Adjusted EBITDA margin improved from 18% in Q1 2024 to 20% in Q1 2025, and free cash flow returned to positive territory, supported by cost controls and operational execution. Overall, the quarter reflected strong operational execution, margin expansion, and solid cash generation, tempered by some one-time costs and regional softness.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.30 | $0.22 | $0.27 | 11.1% |
| Revenue | $422.7 million | $399.5 million | $469.6 million | (10.0%) |
| Adjusted EBITDA | $94.5 million | $94.6 million | (0.1%) | |
| Free Cash Flow | $27.2 million | $(49.5) million | $77.2 million | |
| Adjusted Free Cash Flow | $36.2 million | $(41.0) million | $77.7 million |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Focus
The company provides technology-driven services and equipment to the oil and gas industry, specializing in well construction, well flow management, subsea well access, and intervention services. Its customers include leading exploration and production companies in both onshore and offshore environments.
Recently, the company has been investing in technological differentiation to improve efficiency and safety, such as introducing automated well construction tools and advanced digital systems. These innovations, along with a focus on operational safety and environmental compliance, enable the company to win contracts in high-growth energy markets. Success relies heavily on continued technology innovation, strong client relationships, global reach, and a disciplined approach to workforce and cost management.
Second Quarter 2025 Highlights and Performance Review
The quarter marked the company's third consecutive period of outperformance, with GAAP revenue up sequentially but down 10.0% compared to the same period in 2024, reflecting the absence of large prior-year subsea projects. The GAAP revenue figure of $423 million exceeded both the top end of management's guidance and analyst consensus. Adjusted EBITDA came in at $94.5 million, flat versus the same quarter in 2024, but the adjusted EBITDA margin climbed to a record 22% (non-GAAP). This margin expansion was credited to ongoing cost discipline initiatives, operational efficiencies, and favorable mix of higher-margin international projects.
Technological innovation contributed to the company's performance. The BRUTE Armor Packer, a tool used for maintaining well integrity in deepwater drilling, and the fully automated Remote Clamp Installation System both saw successful field deployments. In the Middle East, a world-first remote plug cementing operation was completed, reducing offshore rig time and improving safety. These solutions promoted the company's reputation and the company secured awards in Guyana exceeding $120 million, as well as major deals in Brazil, the UK North Sea, and Indonesia.
Contract backlog grew to $2.3 billion as of quarter end, with $595 million in new orders during the quarter, the second-highest in company history for a second quarter. Regional performance was mixed. Europe and Sub-Saharan Africa (ESSA) experienced an 18% sequential revenue increase, while North and Latin America revenue rose 6%. The Middle East and North Africa segment saw a 3% sequential decline in revenue, attributed to lower well construction revenue in Saudi Arabia and the United Arab Emirates. Asia Pacific posted a 12% sequential rise in revenue, driven by well flow management and intervention activity in Malaysia, Indonesia, and Brunei.
Non-GAAP free cash flow swung to $27.2 million from a negative $49.5 million a year ago, reflecting improved profitability and capital efficiency. After adjusting for one-time merger, integration, and severance costs, adjusted free cash flow reached $36.2 million. Share repurchases amounted to $5 million during the quarter, reaffirming management's intent to return about one-third of adjusted free cash flow to shareholders this year. Total liquidity stood at $343 million as of June 30, 2025, supporting flexibility for further investments or acquisitions.
The company highlighted the importance of ongoing cost control under its “Drive25” efficiency program, which targets run-rate support cost savings and improved margins. It continues to monitor regional volatility, particularly in the MENA segment, and the persistence of one-time costs that affect headline profitability.
Looking Ahead
Leadership reaffirmed its guidance for FY2025, targeting revenue near $1.7 billion, adjusted EBITDA of at least $350 million, and adjusted free cash flow at around 7% of revenue, or roughly $110 million. Capital expenditures for the second half of 2025 are projected at $65 million to $75 million, primarily to support customer projects. Management signaled confidence based on contract backlog and customer project pipelines but noted that ongoing macroeconomic and commodity price fluctuations remain external risks.
In the months ahead, investors may want to watch for sustained positive free cash flow as one-time costs diminish, further clarity in regional market trends—particularly in MENA and Asia Pacific—and the cadence of new contract awards. No changes in dividend policy were announced. Management did not provide new or specific forward guidance beyond these headline targets.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
