Innovex Q3 2025 Earnings Slides(11/03/2025 00:00

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Innovex International Q3 2025 Earnings Presentation



Disclaimer (Cont'd)

Industry Information

We obtained the industry, market and competitive position data used throughout this Presentation from our own internal estimates and research, as well as from independent industry publications, government publications and other published independent sources. Internal estimates are derived from publicly available information released by industry analysts and third-party sources, our internal research and our industry experience and are based on assumptions made by us based on such data and our knowledge of the industry and market, which we believe to be reasonable. In addition, while we believe the industry, market and competitive position data included in this Presentation is reliable and based on reasonable assumptions, we have not independently verified the accuracy or completeness of any third-party information. Some data is also based on our good faith estimates. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors. These and other factors could cause results to differ materially from those expressed in these publications. Forecasts and other forward-looking statements obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this Presentation. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information contained herein and no reliance should be placed on it. None of Innovex, the underwriters or any of their respective affiliates, advisers, connected persons or any other person accept any liability for any loss howsoever arising (in negligence or otherwise), directly or indirectly, from this Presentation or its contents or otherwise arising in connection with this Presentation. This shall not, however, restrict or exclude or limit any duty or liability to a person under any applicable law or regulation of any jurisdiction that may not lawfully be disclaimed.

The information contained in this Presentation is provided as at the date of this Presentation and is subject to change without notice.

Financial Information: Non-GAAP Financial Measures

This Presentation contains both financial measures prepared and presented in accordance with generally accepted accounting principles ("GAAP") and non-GAAP financial measures, which are measurements of financial performance that are not prepared and presented in accordance with GAAP. Accordingly, these measures should not be considered as a substitute for data prepared and presented in accordance with GAAP. These non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Return on Capital Employed ("ROCE") and Free Cash Flow, are or have been used by Innovex's management when evaluating results of operations and as otherwise described below. Non-GAAP financial measures should not be construed as being more important than comparable GAAP measures. Innovex's management believes these non-GAAP financial measures provide users of our financial statements with additional and useful comparisons of current results of operations with past and future periods. Although we use or have used these non-GAAP financial measures to assess the performance of our business and for the other purposes, the use of these non-GAAP financial measures as an analytical tool has limitations, and you should not consider them in isolation, or as a substitute for analysis of our results of operations as reported in accordance with GAAP. In addition, because not all companies use identical calculations, the non-GAAP financial measures included in this Presentation may not be comparable to similarly titled measures disclosed by other companies, including our peers or other companies in our industry. Please see "Appendix: GAAP Reconciliations" within the Presentation for reconciliations of the non-GAAP financial measures included in the Presentation to our most directly comparable financial measures calculated and presented in accordance with GAAP.

Management has provided outlook regarding Adjusted EBITDA, which is a non-GAAP financial measure and excludes certain charges. A reconciliation of this non-GAAP financial measure to the corresponding GAAP financial measure has not been provided because guidance for the various reconciling items is not provided. The Company is unable to provide guidance for these reconciling items because they cannot determine their probable significance, as certain items are outside of the Company's control and cannot be reasonably predicted since these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measures are not available without unreasonable effort.

Use of Website

Investors should note that Innovex announces material financial information in SEC filings, press releases and public conference calls. Innovex may use the Investors section of its website (wwwˌinnovex-incˌcom) to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. Information on Innovex's website is not part of this Presentation.

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Curated Portfolio of Complementary, Mission Critical Products

Big impact/small ticket

product proposition

High FCF1 Conversion

50-60% of Adjusted EBITDA2 is converted into free cash flow under normal business conditions

Resilient Gross Margins

32-34% LTM

INNOVEX

TODAY

Diversified Presence Across the Most Attractive Global Markets

Shorter cycle NAM Land and longer cycle International & Offshore

Capital Light, High Return (ROCE3) Model

Historically only 2-3% of revenue is reinvested into capex

Strong balance sheet

Net cash position provides ability to remain opportunistic across the cycle

1. Free Cash Flow is a non-GAAP measure. We define Free Cash Flow as cash provided by operations less capital expenditures.

2. Adjusted EBITDA is a non-GAAP measure. We define Adjusted EBITDA as net income before interest expense, income tax expense, depreciation and amortization, and other expense, net, further adjusted to exclude certain items which we believe are not

   4 reflective of our ongoing performance or which are non-cash in nature.

3. Return on Capital Employed ("ROCE") is a non-GAAP measure. We define ROCE as Income from Operations, before acquisition costs and after tax (resulting in Adjusted Income from Operations, after tax) divided by average capital employed. Capital employed is defined as the combined values of debt and stockholders' equity.

Innovex Today

Track record of successful, disciplined growth since inception

Proven and Successful Business Model Runway for Sustained Growth

• Disciplined Revenue Growth: 27% revenue CAGR since inception1 under a low leverage framework

• Returns Focused: ROCE2 outperformed S&P 500 from 2018 thru 2024

• Attractive Margin and Low Capex Profile: High margins with negligible sustaining capital requirements

• Through Cycle Playbook: Strategy performs well across all market environments

• Innovation: New product development drives revenue growth and expands our addressable market

• Geographic & Market Share Expansion: Continued organic market share growth within North America, with sizeable opportunities in International & Offshore markets

• Disciplined Curation: Qualitative and Quantitative framework applied to all investments and divestments

• Strong Market Tailwinds: Growing domestic service intensity coupled with sustained International & Offshore investment

  
  
  

  Nov. 2016

  Antelope Oil Tools, Team Oil Tools, and Isolation Technologies merge to form Innovex

  Mar. 2021

  Rubicon Oilfield International acquired by Innovex

  August 2022

  Pride Energy Services acquired by Innovex

  Transformational Merger

  November 2024

  Downhole Well Solutions acquired by Innovex

  June 2019

  QCI/Enerserv acquired by Innovex

  Aug. 2021

  Applied Oil Tools acquired by Innovex

  September 2024

  Innovex and Dril-Quip merge to form Innovex International

  May 2025

  Citadel Casing Solutions acquired by Innovex

  Source: FactSet, Public Disclosure. S&P 500 represents the median metric for current constituents. (1) Since inception of Legacy Innovex (2) ROCE is a non-GAAP measure and defined as operating income plus acquisition costs less income tax expense divided by average book equity, book debt, and noncontrolling interest. See appendix for reconciliation to Innovex's most comporable GAAP measure.

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  Innovex's No Barriers Culture

  No Barriers between our customers and our employees No Barriers to our ongoing success

  
  
  

  Big Impact, Small Ticket Products

  Customer Centric

  Disciplined Acquisitions & Divestitures

  Flat, Lean and Unbureaucratic Organization

  Empowered Employees

  Rapid Response to Market Needs

  Relentless Innovation

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  Q3 2025 Performance & Q4 2025 Outlook

  Q3 2025 Commentary Financial Performance(1)(2)

• Revenue of $240 million, up 7% sequentially

  $300

  Revenue Adj. EBITDA Adj. EBITDA Margin %

  80%

• Net income of $39 million

• Adjusted EBITDA(2) of $44 million and Adjusted EBITDA Margin (2) of 18%

• Net cash from operations of $48 million

• Free Cash Flow(3) of $37 million

  $250

  $224

  $152

  $49

  $44

  $27

  $47

  $46

  $200

  $150

  $100

  $50

  $-

  $251 $240

  $240

  70%

  60%

  50%

  40%

  30%

  20%

  10%

  0%

  Q4 2025 Guidance

  Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025

  Quarterly Free Cash Flow(3)

• Revenue: $235 - 245 million

• Adjusted EBITDA: $42 - 47 million

• Market Assumption: Flat to down activity levels, with product mix on subsea deliveries and facility consolidation costs continuing to weigh on margins

  $60

  52

  37

  29

  24

  $20

  $50

  $40

  $30

  $20

  $10

  1. Financial data for Q4 2023 through Q2 2024 shown on an "as reported" basis for Legacy Innovex.

     $-

     Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025

  2. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. We define Adjusted EBITDA as net income before interest expense, income tax expense, depreciation and amortization, and other expense, net, further adjusted to exclude certain items which we believe are not reflective of our ongoing performance or which are non-cash in nature. We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. See appendix for reconciliation to Innovex's most comparable GAAP measures.

  7 (3) Free Cash Flow is a non-GAAP measure. We define Free Cash Flow as cash provided by operations less capital expenditures. See appendix for reconciliation to Innovex's most comparable GAAP measures.

  
  
  No Barriers Culture Driving Operational Transformation

  Innovex's Proven Playbook in Action

  DRQ

Closed on $90 million sale of Eldridge Facility

• Net proceeds1 of $87 million

• 80% Footprint Reduction: from 113 acres to ~23 acres

• Significantly enhances an already net cash position

  Transforming operating model to drive higher margins and enhance the customer experience

• Optimize direct to indirect manufacturing personnel ratios

• Consolidate global manufacturing and operations facilities

• Smaller, more flexible supply chain model will improve on-time delivery

• Smaller footprint will improve collaboration through proximity, facilitating No Barriers Culture.

  - 80%

  INVX

INVX

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1. Net proceeds value is defined as final sale price less leaseback and real estate tax prorations, broker fees, and title/escrow fees.

Q3: Disciplined M&A framework and Cycle Playbook in Action

Early revenue synergies enhancing deal economics

Organic Growth

• Gaining Share in US Land: US land portfolio continues to outpace the underlying market

• Gaining Share in Subsea: Partnership with OneSubsea grows addressable market and market share

• International Expansion: Legacy Citadel products undergoing trials in key international markets

  Improving the Customer Experience

• On-Time Delivery: Subsea OTD continues to improve, now up to 76% in Q3 2025 from <50% in Q3 2024

• Value Add Technology: TrenchFootTM wet shoe solution grew share by increasing reservoir access and reducing cycle times. Adoption rate of this technology continues to increase

  Cash Generative and Capital Disciplined

• $90 Million Sale of Eldridge: Net proceeds1 of $87 million

• High FCF2 Yield: 84% of Adjusted EBITDA3 was converted into FCF in Q3

• Opportunistic: Large cash balance and $100mm buyback authorization, with approximately $90.7mm remaining

Clear Path to Margin Enhancement via Cost Synergies

25%

21%

18%

Adj. EBITDA Margin 1

Pro Forma 2023 INVX 2024 Long Term Target

Significant Adjusted EBITDA Margin Opportunity4

INVX

DRQ

30%

25%

20%

15%

10%

5%

-(5%)

(10%)

Mar-19 Dec-19 Sep-20 Jun-21 Mar-22 Dec-22 Sep-23 Jun-24

1. Net proceeds value is defined as final sale price less leaseback and real estate tax prorations, broker fees, and title/escrow fees.

2. Free Cash Flow is a non-GAAP measure. We define Free Cash Flow as cash provided by operations less capital expenditures.

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3. Adjusted EBITDA is a non-GAAP measure. We define Adjusted EBITDA as net income before interest expense, income tax expense, depreciation and amortization, and other expense, net, further adjusted to exclude certain items which we believe are not reflective of our ongoing performance or which are non-cash in nature.

4. Adj. EBITDA Margin is a non-GAAP measure. See appendix for reconciliation to Legacy Dril-Quip's and Legacy Innovex's most comparable GAAP measures. Legacy Dril-Quip's Adj. EBITDA margin was (14%) in Q1 2021 and (60%) in Q4 2021.

   
   
   We use the cycle to drive growth

   Current market conditions present opportunity

   Up-Cycle Mid-Cycle Down-Cycle

   • Prioritize execution to drive market share capture

   • Expand margins through strategic price increases

   • Invest in inventory to support customer needs

   • Maintain focused acquisition approach

     Cycles are a feature, not a bug of the business model.

     We maintain a fortress balance sheet to allow us to profit from volatility.

   • Divest underperforming or noncore product families

   • Maintain balance sheet strength

   • Optimize margins and focus on process improvement

   • Maintain focused acquisition approach

   • Continually prune non-core product lines from portfolio

   • Invest while competitors struggle

   • Unwind working capital to bolster liquidity

   • Evaluate transformative opportunities

   • Continually prune non-core product lines from portfolio

Cycles are a feature, not a bug of the business model.

We maintain a fortress balance sheet to allow us to profit from volatility.

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