Innovex Enters a New Phase: TCO Acquisition and Subsea Momentum Anchor Strong Q2

Revenue and EBITDA land at high end; laminated glass plugs add a growth engine, while Middle East logistics remain the drag to watch.

INVX · Earnings Call · 2026-08-04

A Quarter at the High End

Innovex's second quarter delivered on its promises. Revenue of $245 million and adjusted EBITDA of $48 million both came in at the top of guidance, with the EBITDA margin at 20%. CEO Adam Anderson opened the call with a straightforward read: “These results were supported by improving activity levels across several international markets and growing commercial momentum within our subsea business.” — Adam Anderson, CEO · 2026-08-04 The subsea division has been on a roll—the company secured an additional $20 million tension riser package in Malaysia, completed the first XPak trial with a major international operator in Asia Pacific, and deployed its ArgoLATCH release plug in Brazil. That momentum, Anderson argued in Q&A, is not a fluke: “Across the board, we see both a really robust pipeline of activity. And then I'm really pleased with the commercial momentum of both our ability to convert some of these legacy contracts and get really nice awards, but then really taking market share.” — Adam Anderson, CEO · 2026-08-04 The broader market is paying attention to the same themes. A host of this earnings season's reporters—from BAX to GIL—have been flagging tariff refund benefits, and many are noting the persistent Middle East conflict as a supply-chain and logistics overhang. Innovex is no exception to the latter.

TCO: A New Growth Engine

On July 1, Innovex closed the $95 million acquisition of TCO Group, paying $65 million in cash and $30 million in stock. TCO brings laminated glass plug technology—gas-tight, intervention-free downhole barriers—that Anderson describes as a perfect fit for the company's "big impact, small ticket" model.

Stepping back, I believe the second quarter demonstrates that Innovex is entering a new phase.
Adam Anderson, CEO · 2026-08-04

The phase is defined by a growing ability to bolt on differentiated technologies and push them across geographies. The DIS acquisition from last quarter is already showing that playbook: a major North Sea operator that DIS could never have reached on its own has identified its technology as "critical" for a field development. CFO Kendal Reed guided to $15 million of TCO revenue and $3 million of EBITDA in Q3, a conservative start given that the business is nearly 100% international/offshore and carries the same project-timing variability as the rest of that segment. The cross-selling potential is immediate—TCO's products slot neatly into Brazil, where Innovex is already the #1 subsea wellhead provider, and Norway/UAE, where the company sees meaningful under-penetration.

Middle East Conflict: The Persistent Drag

The one sour note remains the Middle East. While activity in Saudi Arabia improved—the company gained share in expandable liner hangers and signed its first direct contract through its local entity—the conflict keeps forcing logistical workarounds. "We had around $1.5 million of increased freight expense related to air freight or just additional costs of moving things around," “Kendal Reed said,” — Kendal Reed, CFO · 2026-08-04 noting that the drag will continue into Q3. On tariff refunds, Reed was measured: Section 232 tariffs on steel are not part of the IEEPA refund program, but modest refunds are expected in Q3. The company's guidance for Q3—$260-270 million revenue and $51-57 million EBITDA—already embeds these frictions. The bigger opportunities lie ahead: the subsea awards that Anderson says will convert over the next 6 months, and the offshore energy cycle that is slowly turning. As he put it, the company is positioned "not just in a robust pipeline of activity, but really taking market share." The prior quarters laid the groundwork. Back in May, Anderson acknowledged the conflict's impact: “Yes, so we did have some impact in Q1, expect to have some impact in Q2 as well from the conflict.” — Adam Anderson, Chief Executive Officer · 2026-05-05 He also articulated the M&A philosophy that now is bearing fruit: “Yes, so really excited about the DIS deal. Like you said, it's very similar to the Citadel and DWS acquisitions...” — Adam Anderson, Chief Executive Officer · 2026-05-05 That consistent execution across acquisitions—DIS, TCO, and the legacy Dril-Quip work—is what makes this quarter feel like a genuine inflection.