Innovex Announces First Quarter 2026 Results

Published: 2026-05-04 16:21:04 ET INVX

Published on 05/04/2026 at 04:21 pm EDT

Innovex International, Inc. (NYSE: INVX) (“Innovex,” the “Company” or “we”) today announced financial and operating results for the first quarter of 2026.

First Quarter Highlights

(1)

Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Return on Capital Employed (“ROCE”) are non-GAAP measures. Reconciliations of Adjusted EBITDA to net income, Free Cash Flow to net cash provided by operating activities, and ROCE to income from operations, the most directly comparable financial measures presented in accordance with GAAP, are outlined in the reconciliation tables accompanying this release.

Adam Anderson, CEO, commented, “We delivered a strong start to 2026, with revenue and Adjusted EBITDA both exceeding the high end of our guidance range. Revenue benefited from strong operational execution, new product introductions, and cross-selling across our global platform. Adjusted EBITDA benefited from favorable mix and earlier than anticipated benefits from the exit of the legacy Eldridge facility. These strong results reinforce our view that our subsea businesses can generate margins in excess of 20% when we apply our proven, capital-light business model. As we look forward, we continue to focus on both organic and inorganic investment opportunities, as well as generating strong free cash flow and exceptional shareholder returns. We believe the quarter demonstrates that our strategy is working. During the quarter, we completed the acquisition of DIS, which adds differentiated production technologies that complement our existing portfolio, strengthen our position in the U.S. offshore market, and create additional opportunities for organic growth. We continue to gain share across multiple markets through innovation, service quality, and the breadth of our integrated platform. We believe this combination of innovation, execution, and capital discipline continues to differentiate Innovex and supports our ability to deliver durable and profitable growth.”

Kendal Reed, CFO, continued, “Our first quarter results reflect the strength of our capital-light, returns-focused business model. Adjusted EBITDA and margins benefited from favorable mix, as well as earlier-than-expected benefits from the transition out of the legacy Eldridge facility, which reduced the manufacturing footprint of our subsea businesses by approximately 85%. We generated strong Free Cash Flow in the quarter, converting approximately 28% of Adjusted EBITDA into free cash flow, and ended the quarter with approximately $201 million of cash and no bank debt, providing significant financial flexibility. The acquisition of DIS exemplifies our focus on returns. We believe we can grow this business significantly through our global distribution, further strengthening the attractive returns on this acquisition, which was purchased approximately at 4x TTM EBITDA. We also repurchased $14.1 million of our shares in the quarter for a price of $24.59 per share, underscoring our confidence in the intrinsic value of Innovex and our commitment to thoughtful capital allocation.”

Financial Summary

Three months ended

(in thousands)

March 31,

2026

December 31,

2025

March 31,

2025

Revenue

239,031

273,602

240,415

Net income (loss)

(16,671

)

13,968

14,757

Net income (loss) % revenue

Adjusted EBITDA (1)

49,286

52,108

45,921

Adjusted EBITDA Margin (1)

Net cash provided by operating activities

19,840

52,238

31,090

Free Cash Flow (1)

14,013

43,311

24,034

Income (loss) from operations

(21,832

)

25,796

21,850

Twelve Months Ended

March 31,

2026

December 31,

2025

March 31,

2025

ROCE (1)

(1)

Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and Return on Capital Employed (“ROCE”) are non-GAAP financial measures. See definition of these measures and the reconciliation of GAAP to non-GAAP financial measures in the Supplemental Information tables below.

Operational & Financial Results Kendal Reed, CFO commented, “We made progress against our margin goals in the first quarter, while also benefiting from favorable product mix. Strength in NAM Land and a meaningful increase in activity in Mexico helped offset softer activity in other international markets, which we view as timing-related and consistent with historical variability. We also saw modest operational impact from conflict-related disruptions in the Middle East, which partially offset the strength in NAM Land and Mexico during the quarter. From a capital allocation perspective, we remain focused on balancing organic investment with disciplined M&A. Our M&A pipeline remains robust, including a mix of smaller, bolt-on opportunities like DIS, as well as larger opportunities. We will only execute against this playbook if the opportunity aligns with our ‘big impact, small ticket’ proposition, can generate high gross margins with low capital expenditures, and can be acquired at a reasonable multiple.” Adam Anderson, CEO, concluded, “We are off to a strong start to 2026. I am particularly excited by the momentum in our subsea business. Not only are our margins improving, but we are also gaining share organically by focusing on customer pain points. In the quarter, we secured two major subsea awards in Asia, each exceeding $20 million in value. We also delivered the first subsea wellhead order under the OneSubsea alliance for a customer in Southeast Asia. In the Middle East, softer first quarter activity was driven primarily by timing-related factors. We remain encouraged by recent commercial progress in the region, including an offshore gas award in the Kingdom of Saudi Arabia, as well as a contract extension for off-bottom liner systems and lower completions technologies. We continue to view the Middle East as an important long-term growth market. We continue to evaluate a number of inorganic growth opportunities but will only execute on these opportunities if they fit our unique value proposition, generate strong free cash flow, and are priced at a reasonable multiple. We look forward to discussing these should we decide to execute on them.”

Balance Sheet, Debt, Cash Flow & Other Net cash provided by operating activities was $20 million for the first quarter of 2026, while capital expenditures totaled $6 million (approximately 2.4% of revenue) for the first quarter of 2026.

Innovex generated Free Cash Flow of $14 million during the first quarter of 2026 and ended the quarter with approximately $201 million of cash and cash equivalents and no bank debt.

Innovex maintains a strong liquidity position and disciplined balance sheet to preserve flexibility and support high-return capital allocation opportunities. We continue to focus on M&A opportunities with strong quantitative and qualitative characteristics.

Return on Capital Employed (“ROCE”) Innovex’s efficient capital allocation and capital-light business model enable the Company to generate strong returns on our invested capital. Income from operations for the twelve months ended March 31, 2026 was $89 million. Return on Capital Employed (“ROCE”) for the twelve months ended March 31, 2026 was 12%. We remain focused on capital efficiency, which we believe is a key driver of sustainable value creation for our stockholders.

Q2 2026 Guidance Looking to the second quarter of 2026, Innovex expects to generate $235 - $245 million in total revenue and Adjusted EBITDA of $43 - $48 million. Our guidance reflects our expectation for a marginally less favorable product mix in Q2, as well as the potential for sales disruptions and higher costs associated with the ongoing conflict in the Middle East.

Conference Call Details Management will host a conference call and a webcast to discuss the financial results on May 5, 2026, at 9:00 a.m. Eastern Time / 8:00 a.m. Central Time. The call will be open to all interested parties and may include forward-looking statements. To access the call, please dial in approximately ten minutes prior to the start time.

Date / Time: May 5, 2026 - 8:00 a.m. Central Time Webcast: https://events.q4inc.com/attendee/364412720 U.S. Toll-Free Dial-In: (800) 715-9871 International Dial-In: +1 (646) 307-1963 Conference ID: 1801745

For those unable to participate in the live call, an audio replay will be available following the call through midnight Wednesday, May 13, 2026. To access the replay, please call (800) 770-2030 or +1 (609) 800-9909 (International) and enter playback ID 1801745 followed by the # key. A replay of the webcast will also be archived shortly after the call and can be accessed on the Company’s website.

About Innovex International, Inc. Innovex International, Inc. (NYSE: INVX) is a Houston-based company established in 2024 following the merger of Dril-Quip, Inc. and Innovex Downhole Solutions, Inc.

Innovex’s comprehensive portfolio extends throughout the lifecycle of the well, and innovative product integration ensures seamless transitions from one well phase to the next, driving efficiency, lowering costs, and reducing the rig site service footprint for the customer.

With locations throughout North America, Latin America, Europe, the Middle East, and Asia, no matter where you need us, our team is readily available with technical expertise, conventional and innovative technologies, and ever-present customer service.

Forward-Looking Statements Certain statements contained in this press release and oral statements made regarding the matters addressed in this release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Innovex’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements.

Forward-looking statements can be identified by the use of forward-looking terminology including “may,” “believe,” “expect,” “intend,” “anticipate,” “plan,” “should,” “estimate,” “continue,” “potential,” “will,” “hope” or other similar words and include the Company’s expectation of future performance contained herein. These statements discuss future expectations, contain projections of results of operations or of financial condition, or state other “forward-looking” information. You are cautioned not to place undue reliance on any forward-looking statements, which can be affected by assumptions used or by risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risks related to the Company’s merger and acquisition activities, including the ultimate outcome and results of integrating operations, the effects of the Company’s merger and acquisition activities (including the Company’s future financial condition, results of operations, strategy and plans), potential adverse reactions or changes to business relationships resulting from the completion of mergers and acquisitions, expected benefits from mergers and acquisitions and the ability of the Company to realize those benefits, the significant costs required to integrate operations, whether merger or acquisition-related litigation will occur and, if so, the results of any litigation, settlements and investigations, operating hazards, natural disasters, weather-related delays, casualty losses and other matters beyond our control; acts of terrorism, war or political or civil unrest in the United States or elsewhere; loss or corruption of our information or a cyberattack on our computer systems; uncertainties pertaining to the Impulse litigation; the risks related to economic conditions and other factors noted in the Company’s Annual Report on Form 10-K, any Quarterly Reports on Form 10-Q and the other documents that the Company files with the Securities and Exchange Commission. The risk factors and other factors noted therein could cause actual results to differ materially from those contained in any forward-looking statement. Innovex disclaims any duty to update and does not intend to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release, except as may be required by law.

Innovex International, Inc. Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)

Three months ended

(in thousands, except share and per share amounts)

March 31,

2026

December 31,

2025

March 31,

2025

Revenues

239,031

273,602

240,415

Cost of revenues

154,522

194,488

163,911

Selling, general and administrative expenses

41,748

32,035

32,349

(Gain) loss on sale of assets

(2,020

)

1,364

148

Depreciation and amortization

16,222

15,461

14,945

Impairment of long-lived assets

—

2,924

Acquisition and integration costs

1,588

4,458

4,288

Provision for legal settlement

48,803

—

Income (loss) from operations

(21,832

)

25,796

21,850

Interest (income) expense, net

(388

)

654

700

Other (income) expense, net

150

(1,825

)

(214

)

Income (loss) before income taxes

(21,594

)

26,967

21,364

Income tax expense (benefit), net

(4,923

)

12,999

6,607

Net income (loss)

(16,671

)

13,968

14,757

Earnings (loss) per common share

Basic

(0.24

)

0.20

0.21

Diluted

(0.24

)

0.20

0.21

Weighted average common shares outstanding

Basic

68,940,260

68,994,818

69,290,100

Diluted

68,940,260

69,641,691

69,477,519

Other comprehensive income (loss)

Net income (loss)

(16,671

)

13,968

14,757

Foreign currency translation adjustment

1,750

289

4,616

Comprehensive income (loss)

(14,921

)

14,257

19,373

Innovex International, Inc. Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share and par value amounts)

March 31,

2026

December 31,

2025

March 31,

2025

ASSETS

Current assets

Cash and cash equivalents

200,707

203,407

68,116

Trade receivable, net

245,633

237,774

236,020

Inventories, net

252,987

248,433

269,251

Other current assets

53,564

38,433

59,251

Total current assets

752,891

728,047

632,638

Noncurrent assets

Property and equipment, net

163,328

158,874

188,426

Goodwill and net intangibles

211,738

215,950

180,314

Right of use leases - operating, net

51,213

52,204

56,960

Deferred tax asset, net

98,226

102,375

128,992

Other long-term assets

10,281

10,857

8,673

Total noncurrent assets

534,786

540,260

563,365

Total assets

1,287,677

1,268,307

1,196,003

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

74,888

60,711

76,391

Accrued expenses

35,232

49,148

37,116

Operating lease liabilities

12,643

12,670

11,535

Contract liabilities

11,144

11,986

11,128

Other current liabilities

7,685

6,940

4,093

Current portion of long-term debt and finance lease obligations

6,170

6,709

5,556

Total current liabilities

147,762

148,164

145,819

Noncurrent liabilities

Long-term debt and finance lease obligations

18,042

18,922

19,679

Operating lease liabilities

39,349

40,986

45,962

Legal settlement accrual

48,803

—

Other long-term liabilities

2,816

2,536

6,167

Total noncurrent liabilities

109,010

62,444

71,808

Total liabilities

256,772

210,608

217,627

Total stockholders’ equity

1,030,905

1,057,699

978,376

Total liabilities and stockholders’ equity

1,287,677

1,268,307

1,196,003

Innovex International, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited)

Three months ended

(in thousands)

March 31,

2026

December 31,

2025

March 31,

2025

Cash flows from operating activities

Net Income

(16,671

)

13,968

14,757

Adjustments to reconcile net income to net cash provided by operating activities

73,676

28,065

29,045

Changes in operating assets and liabilities, net of amounts related to acquisitions

(37,165

)

10,205

(12,712

)

Net cash provided by operating activities

19,840

52,238

31,090

Cash flows used in investing activities

Payments on acquisitions, net of cash acquired

—

(2,499

)

(17,413

)

Capital expenditures

(5,827

)

(8,927

)

(7,056

)

Proceeds from sale of property and equipment

202

1,468

1,003

Cash acquired in stock based business combination

—

Net cash used in investing activities

(5,625

)

(9,958

)

(23,466

)

Cash flows provided by financing activities

Net borrowings (repayments) on line of credit

—

1,600

Net repayments on term loan

—

(11,429

)

Payments on finance leases

(2,070

)

(2,243

)

(1,630

)

Other financing

(14,840

)

(542

)

(1,940

)

Net cash provided by (used in) financing activities

(16,910

)

(2,785

)

(13,399

)

Effect of exchange rate changes on cash and cash equivalents

)

538

613

Net change in cash and cash equivalents

(2,700

)

40,033

(5,162

)

Non-GAAP Measures

Adjusted EBITDA and Adjusted EBITDA Margin

We define Adjusted EBITDA (a non-GAAP measure) as net income (loss) before interest (income) expense, income tax expense (benefit), net, depreciation and amortization, (gain) loss on sale of assets and other expense, net, further adjusted to exclude certain items which we believe are not reflective of our ongoing performance or which are non-cash in nature. Management uses Adjusted EBITDA to assess the profitability of our business operations and to compare our operating performance to our competitors without regard to the impact of financing methods and capital structure and excluding costs that management believes do not reflect our ongoing operating performance. We track Adjusted EBITDA on an absolute dollar basis and as a percentage of revenue, which we refer to as Adjusted EBITDA Margin.

Free Cash Flow

We also utilize Free Cash Flow (a non-GAAP measure) to evaluate the cash generated by our operations and results of operations. We define Free Cash Flow as net cash provided by operating activities less capital expenditures, as presented in our Consolidated Statements of Cash Flows. Management believes Free Cash Flow is useful because it demonstrates the cash that was available in the period that was in excess of our needs to fund our capital expenditures. We track Free Cash Flow both on an absolute dollar basis and as a percentage of revenue. Free Cash Flow does not represent our residual cash flow available for discretionary expenditures, as we have non-discretionary expenditures, including, but not limited to, any principal payments required under the terms of our credit facility, which are not deducted in calculating Free Cash Flow.

Return on Capital Employed (ROCE)

We utilize Return on Capital Employed (“ROCE”) (a non-GAAP measure) to assess the effectiveness of our capital allocation over time and to compare our capital efficiency to our competitors. We define ROCE as income from operations excluding acquisition and integration costs, litigation related expenses not reflective of our ongoing operating performance, and income tax expense (resulting in Adjusted Income from Operations, after tax) divided by average capital employed. Capital employed is defined as the combined values of debt and stockholders’ equity. We revised our definition of ROCE and Adjusted Income from Operations, after tax to exclude litigation related expenses not reflective of our ongoing operating performance, which for the twelve months ended March 31, 2026 is reflective of the costs related to the Impulse Litigation. In particular, we believe that the exclusion of the aforementioned litigation related expenses eliminated in calculating Adjusted Income from Operations, after tax and ROCE provides useful measures for period-to-period comparisons of our business. We did not revise prior years’ Adjusted Income from Operations, after tax or ROCE because there were no other charges similar in nature to these costs.

Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and ROCE do not represent and should not be considered alternatives to, or more meaningful than, net income and net cash provided by operating activities, or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Our computation of Adjusted EBITDA, Free Cash Flow and ROCE may differ from computations of similarly titled measures of other companies. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure, see tables below.

Management has provided outlook regarding Adjusted EBITDA, which is a non-GAAP financial measure and excludes certain charges. A reconciliation of this non-GAAP financial measure to the corresponding GAAP financial measure has not been provided because guidance for the various reconciling items is not provided. The Company is unable to provide guidance for these reconciling items because they cannot determine their probable significance, as certain items are outside of the Company’s control and cannot be reasonably predicted since these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measures are not available without unreasonable effort.

Innovex International, Inc. Reconciliation of Net Income (Loss) to Adjusted EBITDA (Unaudited)

Three months ended

(in thousands)

March 31,

2026

December 31,

2025

March 31,

2025

Revenue

239,031

273,602

240,415

Net income (loss)

(16,671

)

13,968

14,757

Interest (income) expense, net

(388

)

654

700

Income tax expense (benefit), net

(4,923

)

12,999

6,607

Depreciation and amortization

16,222

15,461

14,945

EBITDA

(5,760

)

43,082

37,009

Other non-operating expense (income), net (1)

150

(1,825

)

(214

)

(Gain) loss on sale of assets

(2,020

)

1,364

148

Impairment of long-lived assets

—

2,924

Acquisition and integration costs (2)

1,588

4,458

4,288

Provision for legal settlement (3)

48,803

—

Legal defense costs (4)

2,430

—

Transaction costs (5)

1,128

—

Stock based compensation

2,967

5,029

1,766

Adjusted EBITDA

49,286

52,108

45,921

Net income (loss) % revenue

Adjusted EBITDA Margin

(1)

Primarily represents foreign currency exchange (gain) loss, (gain) loss on lease terminations, and other non-operating items.

(2)

Consists of legal, accounting, advisory fees, move, severance and other integration costs associated with acquisitions, primarily related to Dril-Quip, DWS, SCF and Citadel. These costs are one-time in nature and represent expenses that we do not view as normal operating expenses necessary to operate our business.

(3)

Includes monetary damages awarded by a jury and estimated future awards related to the Impulse Litigation, which is not reflective of our ongoing operating performance.

(4)

Reflects legal defense costs associated with the Impulse Litigation, which is not reflective of our ongoing operating performance. These costs are recorded in Selling, general and administrative expenses in our Condensed Consolidated Statements of Operations and Comprehensive Income.

(5)

Reflects transaction costs associated with the secondary offering in February 2026.

Innovex International, Inc. Reconciliation of Income from Operations to ROCE (Unaudited)

Twelve Months Ended

(in thousands)

March 31,

2026

December 31,

2025

March 31,

2025

Income from operations

88,943

132,625

48,614

Plus: Acquisition and integration costs

14,818

17,518

36,815

Plus: Provision for legal settlement (1)

48,803

—

Plus: Legal defense costs (1)

2,430

—

Less: Income tax expense

(33,701

)

(45,231

)

(3,971

)

Adjusted income from operations, after tax

121,293

104,912

81,458

Beginning debt

25,235

35,368

43,242

Beginning equity

978,376

958,156

344,305

Ending debt

24,212

25,631

25,235

Ending equity

1,030,905

1,057,699

978,376

Average capital employed

1,029,364

1,038,427

695,579

ROCE

(1)

As defined in our Reconciliation of Net Income (Loss) Adjusted EBITDA above.

Innovex International, Inc. Reconciliation of Net Cash from Operations to Free Cash Flow (Unaudited)

Three months ended

(in thousands)

March 31,

2026

December 31,

2025

March 31,

2025

Net cash provided by operating activities

19,840

52,238

31,090

Capital expenditures

(5,827

)

(8,927

)

(7,056

)

Free Cash Flow

14,013

43,311

24,034

Innovex International, Inc. Geographic Revenue Details (Unaudited)

Three months ended

(in thousands)

March 31,

2026

December 31,

2025

March 31,

2025

North America Onshore ("NAM")

Products

89,522

93,767

75,255

Services

17,020

15,981

16,749

Rental

30,164

28,995

28,513

Revenue - North America Onshore

136,706

138,743

120,517

International & Offshore

Products

73,373

108,926

92,095

Services

14,121

12,629

18,312

Rental

14,831

13,304

9,491

Revenue - International & Offshore

102,325

134,859

119,898

Total Revenue

239,031

273,602

240,415

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