Innovex International has concluded its second quarter of 2026 with impressive financial results, marking a new phase of operational excellence and strategic expansion. The company achieved revenue and adjusted EBITDA at the upper limits of its projections, showcasing the effectiveness of its capital-light business approach and its successful integration of previous acquisitions. With a focus on innovative technologies and global market penetration, Innovex is poised for continued growth and enhanced shareholder value.
On August 4, 2026, Innovex International convened its second-quarter earnings call. Key participants included Eric Wells, Chief of Staff; Adam Anderson, Chief Executive Officer; and Kendal Reed, Chief Financial Officer. The company announced a revenue of $245 million, reflecting a 2% sequential increase and a 9% year-over-year growth, primarily fueled by international operations and advancements in subsea technology. Adjusted EBITDA reached $48 million, representing a healthy 20% margin. Free cash flow stood at $30 million, demonstrating a 63% conversion rate of adjusted EBITDA, largely due to Innovex's efficient, capital-light operating structure.
North American land revenue was recorded at $131 million, a 4% sequential dip, mainly attributed to seasonal slowdowns in Canada. Conversely, international and offshore revenue surged by 11% sequentially, reaching $113 million, bolstered by strong performance across its global portfolio. A significant development was the acquisition of TCO Group for a total consideration of $95 million, comprising $65 million in cash and $30 million in common stock, finalized on July 1. This strategic move is expected to contribute substantially to future revenues and operational efficiencies. Innovex projects third-quarter revenue between $260 million and $270 million, with adjusted EBITDA forecasted at $51 million to $57 million, incorporating the full contribution from the TCO acquisition. The TCO Group is anticipated to add $15 million in revenue and $3 million in adjusted EBITDA during the third quarter. Noteworthy subsea achievements included securing a $20 million tension riser package in Malaysia and the successful completion of the first XPak trial in Asia Pacific, a high-performance expandable liner hanger system.
Adam Anderson, CEO, highlighted the company's commitment to delivering an exceptional customer experience, fostering customer-centric innovation, and leveraging the Innovex platform for organic growth. He emphasized the successful integration of the TCO team and its pioneering laminated glass plug technology, which offers significant cost, time, and risk reductions for customers in both onshore and offshore drilling. This technology aligns perfectly with Innovex's strategy of acquiring differentiated, largely consumable technologies that require limited capital. The acquisition is expected to bolster Innovex's presence in key markets like Norway and the UAE, presenting considerable long-term opportunities. Anderson also pointed out the positive impact of the Drilling Innovative Solutions acquisition and the growing commercial momentum in the subsea sector, reinforcing Innovex's competitive edge in complex offshore projects. The company's innovative spirit was further exemplified by the first installation of the ArgoLATCH Subsea Release Plug in Brazil, an integrated solution combining capabilities from both legacy Innovex and Dril-Quip to streamline well construction.
Kendal Reed, CFO, elaborated on the financial performance, noting the resilience of NAM land revenue despite challenging market conditions and the robust growth in international and offshore segments. He underlined the company's strong gross margins, attributed to its product portfolio, strategic pricing, and operational discipline. Selling, general, and administrative expenses decreased, reflecting efficient integration of legacy operations. Innovex's robust free cash flow generation and solid cash position of $222 million, with no bank debt, underscore its financial health. Reed affirmed the company's disciplined M&A strategy, focusing on product and technology-driven businesses that enhance its portfolio and leverage its platform. The return on capital employed (ROCE) for the twelve months ending June 30, 2026, stood at 12%, with a long-term target in the high teens, achievable through margin expansion, high-return M&A, and shareholder returns. Reed acknowledged the impact of increased logistics costs in the Middle East due to regional conflicts, which slightly affected margins, but expressed optimism for margin improvement with potential resolution and increased operational efficiencies.
The second quarter of 2026 has been a period of significant achievement for Innovex International, marked by strong financial outcomes and strategic acquisitions that reinforce its market position. The company's commitment to innovation, customer satisfaction, and disciplined capital allocation has created a solid foundation for future growth. Innovex is well-positioned to capitalize on evolving market opportunities, particularly in the subsea and international sectors, driving sustainable profitability and creating enduring value for its stakeholders.
