Enerflex Ltd. Announces Fourth Quarter 2025 Financial and Operational Results, Agreement to Divest Non-Core Business and Provides Preliminary Outlook for 2026

Executive Summary

• Enerflex reported Q4 2025 adjusted EBITDA of $123 M, record free cash flow of $141 M and reduced net debt to $501 M (~1.0× TTM adjusted EBITDA).
• The company entered a definitive agreement to divest the majority of its Asia‑Pacific operations to INNIO Group, with expected closing in H2 2026.
• FY 2025 revenue rose 7% YoY to $2.57 B; ES backlog stands at $1.1 B and bookings at $377 M, providing strong visibility into 2026.

Key Details

• Financial Highlights (Q4 2025)
• Revenue: $627 M vs. $561 M YoY.
• Adjusted EBITDA: $123 M (down sequentially from $145 M in Q3 25).
• Free cash flow: $141 M (record, up from $76 M YoY).
• Net loss: $(57) M ($0.47 per share); normalized net income $24 M ($0.20 per share).
• SG&A expense: $83 M (down $9 M YoY).

• ROCE: 16.9% (up from 10.3% YoY).

• Balance Sheet & Liquidity

• Net debt: $501 M (down $115 M YoY).
• Refinanced $563 M of 9.0% senior secured notes due 2027 with $400 M of 6.875% unsecured notes due 2031 plus revolving credit facility.

• Bank‑adjusted net‑debt/EBITDA: ~1.0× (down from 1.5× YoY).

• Capital Allocation

• FY 2025 shareholder returns: $40 M total ($17 M dividends, $23 M share repurchases).
• Dividend increased 13% to CAD $0.0425 per share (payable March 25 2026).

• Share repurchase: 102,800 shares at CAD $15.10; cumulative 2.78 M shares since NCIB launch.

• Strategic Transaction

• Definitive agreement to sell majority of APAC operations (Australia, Indonesia, Thailand) to INNIO Group – primarily AMS business line.
• Closing subject to customary conditions; expected H2 2026.

• Post‑sale, Enerflex will retain ES solutions in APAC via local sales teams and North‑American manufacturing.

• Operational Highlights

• ES backlog: $1.1 B (steady visibility).
• Bookings Q4 25: $377 M vs. $301 M YoY.
• EI contract backlog: $1.321 B.
• Contract compression fleet utilization: 94% across ~483,000 hp; fleet grew 13% in 2025.
• New orders secured for large‑scale compression, processing, retrofit and power generation equipment in the U.S.; long‑term framework agreement signed with a diversified midstream partner.

• Power generation opportunities: data‑center project order received; FEED completed; contracts executed for two North American clients; >1.5 GW pipeline under evaluation.

• Outlook & 2026 Guidance

• Target 2026 capital expenditures: $175–$195 M (including $90–$100 M organic growth).
• Expect continued strong demand in EI and AMS lines; EI contracts to generate ~US$1.3 B of revenue over remaining terms.
• ES backlog expected to convert largely into revenue over next 12 months.

Notable Quotes

• Paul Mahoney, President & CEO: “Strong fourth‑quarter results cap off an excellent year… The divestiture underscores our commitment to simplifying and optimizing operations while sharpening focus on core regions.”
• Preet Dhindsa, CFO: “Record free cash flow enables disciplined growth, shareholder returns and further debt reduction; refinancing reduces interest costs and enhances tax efficiency.”