Enerflex (EFX) Q2 2025 earnings summary

Executive summary

• Achieved record adjusted EBITDA of $130 million in Q2 2025, driven by higher gross margin, cost-saving initiatives, and strong operational performance across all geographies and business lines.

• Revenue for Q2 2025 was $615 million, nearly flat year-over-year, with net earnings rising to $60 million from $5 million in Q2 2024.

• Engineered Systems backlog steady at $1.2 billion; Energy Infrastructure contract backlog strong at $1.5 billion, supporting revenue visibility.

• Leadership transition underway, with interim CEO and CFO in place and a search for a permanent CEO ongoing.

• Emphasis on recurring revenue streams, stable infrastructure platform, and disciplined financial management.

Financial highlights

• Consolidated revenues were $615 million, up from $614 million in Q2 2024 and $552 million in Q1 2025.

• Gross margin before depreciation and amortization was $175 million (29% of revenue), up from $173 million (28%) in Q2 2024.

• Adjusted EBITDA reached a record $130 million, up from $122 million in Q2 2024 and $113 million in Q1 2025.

• Free cash flow was a use of $39 million in Q2, mainly due to increased capital spending and working capital build.

• Shareholder returns of $18 million in Q2 2025 through dividends and share repurchases.

Outlook and guidance

• U.S. contract compression fleet expected to exceed 475,000 hp by year-end, with additions weighted to Q4.

• Full-year 2025 capital spending expected to be ~$120 million, with $60 million for growth initiatives.

• ES revenue anticipated to remain steady near-term, with gross margin aligning to historical averages due to product mix.

• Highly contracted Energy Infrastructure and recurring After-Market Services expected to account for about 65% of gross margin before depreciation and amortization in 2025.

• Book-to-bill ratio targeted at around 1.0x for upcoming quarters, supporting stable demand.