Subsea 7 (SUBC) Q1 2025 earnings summary

Executive summary

• Adjusted EBITDA for Q1 2025 reached $236 million, up 46% year-on-year, with a 15% margin, reflecting strong operational and financial performance across Subsea, Conventional, and Renewables segments.

• Revenue for Q1 2025 was $1.53 billion, a 10% increase compared to the same quarter last year, driven by robust activity in all business units.

• Backlog at quarter-end stood at $10.8 billion, providing over 80% revenue visibility for the remainder of 2025.

• Full-year 2025 guidance remains unchanged, with the company on track to meet expectations, supported by positive momentum and high activity levels.

• Major projects and new alliances, including with BP, are progressing well and supporting growth.

Financial highlights

• Adjusted EBITDA grew by $74 million year-on-year, with margin expanding by 380 basis points to 15%.

• Net income for Q1 was $17 million after accounting for depreciation, non-cash derivative gains, finance costs, and taxation.

• Net cash from operating activities was $51 million, despite a $163 million working capital build, expected to reverse later in the year.

• Capital expenditure totaled $76 million, and net debt was $632 million, with liquidity of $1.2 billion at period end.

• Free cash flow was negative $25 million, an improvement from negative $96 million in Q1 2024.

Outlook and guidance

• 2025 revenue guidance is $6.8–$7.2 billion, with adjusted EBITDA margin expected at 18–20%.

• Margins are anticipated to exceed 20% in 2026, supported by a firm backlog and strong tendering pipeline.

• Dividend payments totaling approximately $350 million are planned for 2025, with the first payment scheduled for May 22.

• Administrative expense forecast: $290–310 million; D&A: $700–720 million; net finance cost: $60–65 million.

• Effective tax rate expected at 30–35%; capital expenditure guidance: $360–380 million.