Expro’s (NYSE:XPRO) Q1 CY2026: Beats On Revenue

Oilfield services provider Expro (NYSE:XPRO) announced better-than-expected revenue in Q1 CY2026, but sales fell by 6% year on year to $367.6 million. Its non-GAAP profit of $0.09 per share was 27.5% above analysts’ consensus estimates.

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Michael Jardon, Chief Executive Officer, commented, “We are excited to announce the proposed acquisition of Enhanced Drilling and look forward to welcoming its employees into the Expro family. Enhanced Drilling will add industry leading managed pressure drilling technologies in both riserless and riser-based applications to Expro’s suite of innovative technologies and expand Expro’s service and solution offerings related to customers’ drilling and completion activities. We look forward to leveraging Enhanced Drilling’s expertise, technologies and customer relationships with our own to drive further growth in the future.

Company Overview

Operating in over 50 countries from deepwater offshore platforms to remote onshore fields, Expro (NYSE:XPRO) provides equipment and services that help oil and gas companies drill wells, measure production, and maintain well integrity.

Revenue Growth

A company’s long-term performance can give signals about its business quality. Even a bad business, especially in a cyclical industry, can shine for a year or so, but a top-tier one should exhibit resilience through cycles. Luckily, Expro’s sales grew at an incredible 26.9% compounded annual growth rate over the last five years. Its growth beat the average energy upstream and integrated energy company and shows its offerings resonate with customers.

Within Energy, a singular timeframe, even if it’s quite long-term, only sheds light on how well a company rode the last commodity cycle. To better assess whether a company compounds through cycles, we validate our view with an even longer, ten-year view. Expro’s annualized revenue growth of 6.4% over the last ten years is below its five-year trend, but we still think the results suggest decent demand.

This quarter, Expro’s revenue fell by 6% year on year to $367.6 million but beat Wall Street’s estimates by 2%.

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Adjusted EBITDA Margin

Adjusted EBITDA margin captures the true operating profitability of an energy producer by removing accounting noise around depletion and capitalized drilling costs. It reveals how much cash the asset base generates before capital structure and reinvestment requirements shape reported earnings.

Expro was profitable over the last five years but held back by its large cost base. Its average EBITDA margin of 18.6% was weak for an upstream and integrated energy business.

On the plus side, Expro’s EBITDA margin rose by 6.1 percentage points over the last year, as its sales growth gave it operating leverage.

In Q1, Expro generated an EBITDA margin profit margin of 17.1%, down 2.4 percentage points year on year. This contraction shows it was less efficient because its expenses increased relative to its revenue. This adjusted EBITDA fell short of Wall Street’s estimates.

Cash Is King

Adjusted EBITDA shows how profitable a company’s existing “rock” is before financing and reinvestment, while free cash flow shows how much value remains after paying to replace those wells. Because production declines over time, strong EBITDA can coexist with weak FCF if drilling is expensive or declines are steep. FCF therefore captures both operating efficiency and the cost of sustaining production.

Expro has shown weak cash profitability relative to peers over the last five years, giving the company fewer opportunities to return capital to shareholders. Its free cash flow margin averaged 1.3%, below what we’d expect for an upstream and integrated energy business.

Absolute FCF margin levels matter but so does stability of free cash flow. All else equal, we’d prefer a 25.0% average free cash flow margin that is quite steady no matter how commodity prices behave rather than extremely high margins when times are good and negative ones when they’re tough.

Expro’s ratio of quarterly free cash flow volatility to WTI crude price volatility over the past five years was 42.1 (lower is better), indicating that its cash generation is far more sensitive to commodity-price swings than most peers. This elevated volatility limits its access to capital in downturns and makes it unlikely to act as a consolidator when weaker competitors come under pressure.

You may be asking why we wait until the free cash flow line to perform this stability analysis versus commodity prices. Why not compare revenue or EBITDA to WTI in the case of Expro? Because what ultimately matters is not how much revenue or profit you earn when prices are high but how much cash you can generate when prices are low. Free cash flow is the superior metric because it includes everything from hedging prowess to growth and maintenance capex to management behavior during good times and bad.

Expro broke even from a free cash flow perspective in Q1. The company’s cash profitability regressed as it was 2.3 percentage points lower than in the same quarter last year, prompting us to pay closer attention. Short-term fluctuations typically aren’t a big deal because investment needs can be seasonal, but we’ll be watching to see if the trend extrapolates into future quarters.

Key Takeaways from Expro’s Q1 Results

It was good to see Expro beat analysts’ EPS expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, we think this was a decent quarter with some key metrics above expectations. The stock remained flat at $18.08 immediately following the results.

Expro may have had a good quarter, but does that mean you should invest right now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).