Enerflex (EFX) Q2 2025 earnings summary

Executive summary

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

• Maintained a $1.2 billion backlog in Engineered Systems and a $1.5 billion Energy Infrastructure contract backlog, providing strong revenue visibility.

• Returned $18 million to shareholders in Q2 2025 via dividends and share repurchases.

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

• Market leader in modular energy solutions with a diversified customer base across 7 core countries and a focus on energy transition and sustainability.

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), compared to $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.

• SG&A expenses dropped to $61 million, down $14 million year-over-year due to cost savings and absence of one-time integration costs.

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

Outlook and guidance

• U.S. contract compression fleet expected to exceed 475,000 hp by year-end 2025, with additions weighted to Q4.

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

• Recurring sources, including Energy Infrastructure and After-Market Services, expected to contribute about 65% of gross margin before depreciation and amortization.

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

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