The following is a summary of the Innovex International, Inc. (INVX) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Innovex International reported Q3 2024 revenue of $152 million, marking an increase of 9% year-over-year and 17% sequentially, largely driven by the merger with Dril-Quip.

• Adjusted EBITDA for Q3 2024 was $27.4 million, a decrease of $2.1 million sequentially and $5.8 million year-over-year.

• Q3 2024 net cash and equivalents approximately $100 million, maintaining a strong balance sheet.

Business Progress:

• Innovex completed a merger with Dril-Quip, enhancing its product offerings and market penetration, especially in the offshore and international markets.

• Shifted revenue recognition methodology for the subsea wellhead franchise to improve customer satisfaction and prioritize cash flow.

• Launched efficacious performance improvements post-acquisition, leveraging Innovex's 'No Barriers' operational ethos.

Opportunities:

• The merger provides enhanced capabilities and expands Innovex's geographical footprint, offering a significant potential to grow revenue by leveraging the strength of the combined portfolio.

• Due to the high margin and capital light nature of their business model, Innovex can fund growth through internally generated cash flow and pursue transformative acquisitions.

• Innovex's combined platform sees opportunities in the US Gulf, Brazil, and Mexico, projecting increased market share from 5% in 2018 to 30% today in the US land cementing tool market.

Risks:

• Innovex anticipates some short-term impact and possible choppiness in business results due to the transformation post-merger, particularly in offshore white space concerns which might affect the subsea business lines.

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