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What changed in Innovex International, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Innovex International, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+548 added−366 removedSource: 10-K (2026-02-24) vs 10-K (2025-03-03)

Top changes in Innovex International, Inc.'s 2025 10-K

548 paragraphs added · 366 removed · 210 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

65 edited+17 added−53 removed57 unchanged
Biggest changeWe calculate TAM by multiplying the number of applicable wells (as provided by Rystad Energy) for each market where we expect it would be reasonable for Innovex to seek to sell products by an illustrative price per applicable product by geography. In markets where well data is unavailable, we provide an estimated market size for each such geography.
Biggest changeRefer to “ Item 1A. Risk Factors ” for additional information. Market Share Capture We believe that we are well positioned to capture market share across our applicable markets. We calculate TAM by multiplying the number of applicable wells (as provided by Rystad Energy) in each geography by an illustrative price per applicable product.
State and federal regulatory agencies have also recently focused on a possible connection between the operation of injection wells used for oil and natural gas wastewater disposal and seismic activity. Similar concerns have been raised that hydraulic fracturing may also contribute to seismic activity. When caused by human activity, such events are called induced seismicity.
State and federal regulatory agencies have also recently focused on a connection between the operation of injection wells used for oil and natural gas wastewater disposal and seismic activity. Similar concerns have been raised that hydraulic fracturing may also contribute to seismic activity. When caused by human activity, such events are called induced seismicity.
The engineering team is based in Houston, Texas 7 and has representatives that sit across our global offices. Having a presence near our customers enables us to better understand their challenges, which helps identify and prioritize our market opportunities and maximizes the value of our engineering resources. Our products are used across the lifecycle of our customers’ wells.
The engineering team is based in Houston, Texas and has representatives that sit across our global offices. Having a presence near our customers enables us to better understand their challenges, which helps identify and prioritize our market opportunities and maximizes the value of our engineering resources. Our products are used across the lifecycle of our customers’ wells.
Historically, insurance rates have been subject to various market fluctuations that may result in less coverage, increased premium costs, or higher deductibles or self-insured retentions. Facilities Our corporate headquarters are located in Humble, Texas. Please refer to “ Item 2 — Properties ” for information with respect to our other facilities.
Historically, insurance rates have been subject to various market fluctuations that may result in less coverage, increased premium costs, or higher deductibles or self-insured retentions. Facilities Our corporate headquarters are located in Humble, Texas. Refer to “ Item 2. Properties ” for information with respect to our other facilities.
Within the International and Offshore markets, we have well established sales and distribution channels across our geographic markets, such as the Middle East, Asia, Latin America, Europe, Africa, the Gulf of Mexico and throughout other global regions.
Within the International and Offshore markets, we have well established sales and distribution channels across our geographic markets, such as the Middle East, Asia, Latin America, Europe, Africa, the Gulf of America and throughout other global regions.
Offshore Drilling. Various new regulations intended to improve offshore safety systems and environmental protection have been issued since 2010 that have increased the complexity of the drilling permit process and may limit the opportunity for some operators to continue deepwater drilling in the Gulf of Mexico, which could have an adverse impact on our customers’ activities.
Offshore Drilling —Various new regulations intended to improve offshore safety systems and environmental protection have been issued since 2010 that have increased the complexity of the drilling permit process and may limit the opportunity for some operators to continue deepwater drilling in the Gulf of America, which could have an adverse impact on our customers’ activities.
Third-party challenges to industry operations in the Gulf of Mexico may also serve to further delay or restrict activities. For example, in August 2022, the District of Columbia Circuit Court of Appeals found two oil leases in the Gulf of Mexico were unlawful for failure to properly analyze risk under the National Environmental Policy Act.
Third-party challenges to industry operations in the Gulf of America may also serve to further delay or restrict activities. For example, in August 2022, the District of Columbia Circuit Court of Appeals found two oil leases in the Gulf of America were unlawful for failure to properly analyze risk under the National Environmental Policy Act.
Consideration of further legislation or regulation may be impacted by the Paris Agreement, which was announced by the parties to the United Nations Framework Convention on Climate Change in December 2015 and which calls on signatories to set progressive GHG emission reduction goals.
Consideration of such legislation or regulation may be impacted by the Paris Agreement, which was announced by the parties to the United Nations Framework Convention on Climate Change in December 2015 and which calls on signatories to set progressive GHG emission reduction goals.
An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition. 12 Hydraulic Fracturing. Many of our customers utilize hydraulic fracturing in their operations. Environmental concerns have been raised regarding the potential impact of hydraulic fracturing on underground water supplies.
An unfavorable ruling in any such case could significantly impact our operations and could have an adverse impact on our financial condition. x Hydraulic Fracturing —Many of our customers utilize hydraulic fracturing in their operations. Environmental concerns have been raised regarding the potential impact of hydraulic fracturing on underground water supplies.
East coast, the eastern Gulf of Mexico, the Pacific off the coasts of Washington, Oregon, and California, and additional portions of the Northern Bering Sea in Alaska, from 13 future oil and gas leasing, though President Trump reversed the plan with his own executive order on January 20, 2025.
East Coast, the eastern Gulf of America, the Pacific off the coasts of Washington, Oregon, and California, and additional portions of the Northern Bering Sea in Alaska, from future oil and gas leasing, though President Trump reversed the plan with his own executive order on January 20, 2025.
The number of shares of Company Common Stock received for each share of Legacy Innovex Common Stock by the Legacy Innovex shareholders was equal to 2.0125. On November 29, 2024, Innovex acquired 80% of the issued and outstanding equity securities of Downhole Well Solutions, LLC (“DWS”).
The number of shares of Company Common Stock received for each share of Legacy Innovex Common Stock by the Legacy Innovex stockholders was equal to 2.0125. On November 29, 2024, we acquired 80% of the issued and outstanding equity securities of Downhole Well Solutions, LLC (“DWS”).
As such, these new financial assurance requirements may increase our customers’ operating costs and impact our customers’ ability to obtain leases, thereby, reducing demand for our products. Additionally, on January 6, 2025, President Biden issued two Presidential Memoranda to ban new offshore oil and gas drilling in most U.S. coastal waters.
If implemented, these new financial assurance requirements may increase our customers’ operating costs and impact our customers’ ability to obtain leases, thereby, reducing demand for our products. Additionally, on January 6, 2025, President Biden issued two Presidential Memoranda to ban new offshore oil and gas drilling in most U.S. coastal waters.
We undertake a strategic intellectual property effort focused on building a leading and defensible portfolio. We have created a large portfolio of patent properties. As of December 31, 2024, we had approximately 829 U.S. and international patents. Our patent properties cover our inventions related to our products and other technologies. We complement our intellectual property portfolio with trade secrets.
We undertake a strategic intellectual property effort focused on building a leading and defensible portfolio. We have created a large portfolio of patent properties. As of December 31, 2025, we had approximately 769 U.S. and international patents. Our patent properties cover our inventions related to our products and other technologies. We complement our intellectual property portfolio with trade secrets.
Changes in or waivers to the Company’s Code of Business Conduct and Ethical Practices involving directors and executive officers of the Company will be posted on its website. Overview and Industry Outlook The NAM market is core to us, and we maintain a robust sales and distribution infrastructure across the region.
Changes in or waivers to our Code of Business Conduct and Ethical Practices involving directors and executive officers of the Company will be posted on our website. v Overview and Industry Outlook The NAM market is core to us, and we maintain a robust sales and distribution infrastructure across the region.
We have not experienced any material adverse effect from compliance with these requirements. This trend, however, may not continue in the future.
We have not experienced any material adverse effects from compliance with these requirements. This trend, however, may not continue in the future.
Additionally, on April 24, 2024, the Bureau of Ocean Energy Management (“BOEM”) published a final rule to modify the financial assurance requirements for offshore leaseholders. BOEM estimates that a total of $6.9 billion in new supplemental financial assurance will be required from lessees and grant holders under this final rule to cover potential costs of decommissioning activities.
Additionally, on April 24, 2024, the Bureau of Ocean Energy Management (“BOEM”) published a final rule to modify the financial assurance requirements for offshore leaseholders. At the time, BOEM estimated that a total of $6.9 billion in new supplemental financial assurance would be required from lessees and grant holders under this final rule to cover potential costs of decommissioning activities.
We view acquisitions as a core competency and have identified a rich opportunity set of acquisition targets that we believe are seeking to transact. We aim to execute a disciplined acquisition strategy for high-quality opportunities that meet our stringent investment criteria, as evidenced by the Merger with Dril-Quip and our acquisition of DWS.
We view acquisitions as a core competency and have identified a rich opportunity set of acquisition targets that we believe are seeking to transact. We aim to execute a disciplined acquisition strategy for high-quality opportunities that meet our stringent investment criteria, as evidenced by the Merger with Dril-Quip and our acquisitions carried out in recent years.
Over time our dedicated sales force, innovative engineering organization and responsive service culture have enabled us to capture more of our customers’ spend on their oil and natural gas well development, defined as “wallet share,” as well as gain new customers.
Over time, our dedicated sales force, innovative engineering organization and responsive service culture have enabled us to capture more of our customers’ spend on oil and natural gas well development, defined as “wallet share,” while also attracting new customers.
We continue to monitor the current global economic environment, specifically including inflationary pressures, the ability and/or desire of OPEC+ and other producing nations to set and maintain production levels and prices, and the macroeconomic impact of the conflicts in Ukraine and the Gaza Strip, and any resulting impacts on our financial position and results of operations. Refer to “Item 1A.
We continue to monitor the current global economic environment, specifically including inflationary pressures, the ability and/or desire of OPEC+ and other producing nations to set and maintain production levels and prices, and the macroeconomic impact of the conflicts in Ukraine and the Middle East, and any resulting impacts on our financial position and results of operations.
We believe that our facilities are adequate for our current operations. 14
We believe that our facilities are adequate for our current operations. xi
We believe that our products have a significant impact on a well’s performance and economic profile relative to the price we charge, creating a “Big Impact, Small Ticket” value proposition .
We believe that our products have a significant impact on a well’s performance and economic profile relative to the price we charge, creating a “ Big Impact, Small Ticket ” value proposition.
We believe that we are not dependent on any single technology. We are a single point of contact for many of our customers’ needs. Our product offerings position us to support our customers in solving a range of well-site challenges and diversify our revenue base. New product development is a key part of our organic growth strategy.
We believe that we are not dependent on any single technology. We are a single point of contact for many of our customers’ needs. Our product offerings position us to support our customers in solving a range of well-site challenges and diversify our revenue base.
However, on January 20, 2025, President Trump signed multiple executive orders seeking to reverse many of these climate rules and incentives, including pausing the disbursement of funds under the IRA and eliminating the “electric vehicle mandate.” Despite this shift, numerous proposals have been made and are likely to continue to be made at the international, regional and state levels of government that are intended to limit GHG emissions by enforceable requirements and voluntary measures.
While President Trump has signed multiple executive orders seeking to reverse many of these climate rules and incentives, including pausing the disbursement of funds under the IRA and eliminating the “electric vehicle mandate”, numerous proposals have been made and are likely to continue to be made at the international, regional and state levels of government that are intended to limit GHG emissions by enforceable requirements and voluntary measures.
We define our culture as “ No Barriers .” Our goal is to remove internal barriers that slow the pace of innovation and empower our employees to be responsive to our customers’ needs, while maintaining a focus on returns for the Company.
We define our culture as “ No Barriers .” Our goal is to remove internal barriers that slow the pace of innovation and empower our employees to be responsive to our customers’ needs, while maintaining a focus on returns for the Company. Our organic growth has been complemented by a disciplined acquisition strategy.
Global spending on oil and natural gas can be measured by the number of wells drilled and oil and natural gas production volumes. According to the global energy consulting firm Rystad Energy, global E&P capital spending (excluding Iran, Venezuela, Cuba, Russia and China) is expected to remain consistent in 2025 relative to 2024.
Global spending on oil and natural gas can be measured by the number of wells drilled and oil and natural gas production volumes. According to the global energy consulting firm Rystad Energy, global upstream capital spending (excluding Iran, Venezuela, Cuba, Russia and China) is expected to rise slightly by 0.5% in 2026 relative to 2025.
We provide employees the option to participate in health and welfare plans, including medical, dental, life, accidental death and dismemberment and short-term and long-term disability insurance plans.
The health, safety, and well-being of our employees is of the utmost importance. We provide employees the option to participate in health and welfare plans, including medical, dental, life, accidental death and dismemberment and short-term and long-term disability insurance plans.
The Company makes available, free of charge on its website, its Annual Report on Form 10-K and quarterly reports on Form 10-Q (in both HTML and iXBRL formats), current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practical after it electronically files such reports with, or furnishes them to, the SEC.
We make available, free of charge on our website, our Annual Report on Form 10-K and quarterly reports on Form 10-Q (in both HTML and iXBRL formats), current reports on Form 8-K and amendments to those reports, including related exhibits and supplemental schedules, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practical after we electronically file such reports with, or furnish them to, the SEC.
These incentives and regulations could accelerate the transition of the economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives, which could decrease demand for, and, in turn, the prices of, the oil and natural gas, which could have a material and adverse impact on demand for our products.
Though both the IRA and vehicle emissions standards have been scaled back or halted under the Trump Administration, these or similar incentives and regulations, if implemented, could accelerate the transition of the economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives, which could decrease demand for, and, in turn, the prices of the oil and natural gas, which could have a material and adverse impact on demand for our products.
We believe we are well positioned to continue to capture more of our growing TAM and increase our implied market share. Across both the United States and Canada, we believe that there are many opportunities to cross sell our products throughout our diverse customer base and enhance our presence in select oil and natural gas basins.
Across both the United States and Canada, we believe that there are many opportunities to cross sell our products throughout our diverse customer base and enhance our presence in select oil and natural gas basins.
Of our 2024 revenue, approximately 80% was generated from product sales, approximately 8% was generated from rental tools and approximately 12% was generated from services. 6 We believe that demand for our products is primarily activity-driven (i.e., correlated with global spending on exploration and production of oil and natural gas and with general industry activity), and we are not exposed to the highly cyclical capital equipment build cycle for the oil and natural gas industry.
We believe that demand for our products is primarily activity-driven (i.e., correlated with global spending on exploration and production of oil and natural gas and with general industry activity), and we are not exposed to the highly cyclical capital equipment build cycle for the oil and natural gas industry.
Many of our products can be used in a significant portion of our customers’ wells globally, with our most advanced products providing mission critical solutions for some of the most challenging and complex wells in the world.
Refer to “ Business—Market Share Capture ” for an explanation of how we calculate our TAM. Many of our products can be used in a significant portion of our customers’ wells globally, with our most advanced products providing mission critical solutions for some of the most challenging and complex wells in the world.
We seek to work with our customers to solve their operational challenges. We believe that these collaborations have been a source of growth as they have allowed us to develop new products with anchor customers that have served as an initial revenue base from which to scale.
We believe that these collaborations have been a source of growth as they have allowed us to develop new products with anchor customers that have served as an initial revenue base from which to scale. We have a unique culture that we view as having been critical to our success in the commercialization of new products.
In addition to benefiting from the Merger, we believe that we were able to grow our market share by utilizing our sales and distribution channels to capture wallet share and push further into geographies where we were underrepresented.
We estimate that we have grown our market share since inception and believe we have the potential to grow our market share by utilizing our sales and distribution channels to capture wallet share and push further into geographies where we were underrepresented.
We believe that our diverse product portfolio, operating track record and global footprint position us well to continue gaining market share. In the NAM market, Rystad Energy is forecasting a slight decline in E&P capital spending of 2% from 2024 through 2025.
We believe that our diverse product portfolio, operating track record and global footprint position us well to continue gaining market share. In the NA M market, Rystad Energy is forecasting a slight decline in upstream investments of approximately 8% in 2026 relative to 2025.
Our products are used across the lifecycle of the well (during the construction, completion, production and intervention phases) and are typically utilized downhole and consumable in nature. Our products perform a critical well function, and we believe they are chosen due to their reliability and capacity to save our customers time and lower costs during the well lifecycle.
Our products perform a critical well function, and we believe they are chosen due to their reliability and capacity to save our customers time and lower costs during the well lifecycle.
Although we do not conduct hydraulic fracturing, increased regulation and attention given to the hydraulic fracturing process could lead to greater opposition to oil and natural gas production activities using hydraulic fracturing techniques.
Developing research suggests that the link between seismic activity and wastewater disposal may vary by region. Although we do not conduct hydraulic fracturing, increased regulation and attention given to the hydraulic fracturing process could lead to greater opposition to oil and natural gas production activities using hydraulic fracturing techniques.
The Company’s website address is www.innovex-inc.com. Documents and information on the Company’s website, or on any other website, are not incorporated by reference into this Annual Report.
Our website address is www.innovex-inc.com. Documents and information on our website, or on any other website, are not incorporated by reference into this Annual Report. The SEC maintains a website (www.sec.gov) that contains reports we have filed with the SEC.
We also operate across Asia, Latin America, Europe and the Gulf of Mexico, among other region s. To enhance our global reach, we have complemented our locations across these markets with a network of strategic distribution, sales and manufacturing partners. We are an innovator and have a development process and culture focused on creating proprietary products for our customers.
To enhance our global reach, we have complemented our locations across these markets with a network of strategic distribution, sales and manufacturing partners. We are an innovator and have a development process and culture focused on creating proprietary products for our customers. We seek to work with our customers to solve their operational challenges.
We believe that our culture is unique for the oil and natural gas industry, and we will seek to remain an employer of choice for top talent. As of December 31, 2024, we had a total of 2,683 employees.
We believe that our culture is unique for the oil and natural gas industry, and we will seek to remain an employer of choice for top talent. As of December 31, 2025, we had a total of 2,160 employees. Substantially all of our employees are not covered by collective bargaining agreements, and we consider our employee relations to be good.
In 2024, our top ten accounts constituted 35% of revenue. Our to p ten customer list includes: NOCs such as Saudi Aramco (our largest end-user in 2024); IOCs such as Exxon, Chevron, BP and ConocoPhillips; leading independent E&P operators such as Occidental Petroleum, Hess Corporation and EOG Resources; and multinational oilfield service companies such as Schlumberger and Baker Hughes.
Our to p ten customer list includes: NOCs such as Saudi Aramco (our largest end-user in 2025) and Kuwait Oil Company; IOCs such as Petrobras, Chevron, BP and Shell; leading independent E&P operators such as Occidental Petroleum and Woodside Energy; and multinational oilfield service companies such as Schlumberger and Baker Hughes.
We view the NAM market as relatively service intensive and believe E&P operators are prone to adopt the latest technologies. In the International and Offshore markets, Rystad Energy is forecasting E&P capital spending to slightly grow by 2% from 2024 through 2025, excluding Iran, Venezuela, Cuba, Russia and China.
We view the NAM market as relatively service intensive and believe E&P operators are prone to adopt the latest technologies. In the International and Offshore markets, Rystad Energy is forecasting upstream investments to grow modestly by approximately 5% in 2026 relative to 2025.
The level of exploration, development and production activity is directly affected by trends in oil and natural gas prices, which historically have been volatile.
Cyclicality We are substantially dependent on conditions in the oil and natural gas industry, including the level of exploration, development and production activity of, and the corresponding capital spending by, E&P operators. The level of exploration, development and production activity is directly affected by trends in oil and natural gas prices, which historically have been volatile.
The SEC maintains a website (www.sec.gov) that contains reports the Company has filed with the SEC. 5 The Company also makes available free of charge on its website (https://investors.innovex-inc.com/governance/governance-documents/default.aspx) its Code of Business Conduct and Ethical Practices, Corporate Governance Guidelines, Audit Committee Charter, Nominating and Governance Committee Charter, and Compensation Committee Charter.
We also make available, free of charge on our website, (https://investors.innovex-inc.com/governance/governance-documents/default.aspx) our Code of Business Conduct and Ethical Practices, Corporate Governance Guidelines, Audit Committee Charter, Nominating and Governance Committee Charter, and Compensation Committee Charter.
We believe that the most significant factors influencing our customers’ decision to utilize our products and services are our technology, service quality, safety track record and price.
Our major competitors across our product lines include Baker Hughes, Halliburton, Schlumberger, TechnipFMC, Weatherford International, Aker Solutions, and NOV. We believe that the most significant factors influencing our customers’ decision to utilize our products and services are our technology, service quality, safety track record and price.
While we must be competitive in our pricing, we believe our customers select our products and services based on the technical attributes of our products and equipment, the level of technical and operational service we provide before, during and after the job and the know-how derived from our extensive operational track record. 9 Cyclicality We are substantially dependent on conditions in the oil and natural gas industry, including the level of exploration, development and production activity of, and the corresponding capital spending by, E&P operators.
While we must remain competitive in our pricing, we believe our customers select our products and services based on the technical attributes of our products and equipment, the level of technical and operational service we provide before, during and after the job and the know-how derived from our extensive operational track record.
We are subject to a number of federal and state laws and regulations, including OSHA and comparable state statutes, establishing requirements to protect the health and safety of workers.
Our environmental compliance expenditures, our capital costs for environmental control equipment and the market for our products may change accordingly. ix Employee Health and Safety —We are subject to a number of federal and state laws and regulations, including OSHA and comparable state statutes, establishing requirements to protect the health and safety of workers.
We are focused on significantly increasing our revenue in the International and Offshore markets as these regions are typically subject to long-cycle investment horizons and exhibit relatively less cyclicality than the NAM market. The Middle East, and in particular Saudi Arabia, has been a ke y source of growth for the Company.
We are focused on significantly increasing our revenue in the International and Offshore markets as these regions are typically subject to long-cycle investment horizons and exhibit relatively less cyclicality than the NAM market. We operate across the Middle East, Asia, Latin America, Europe, Africa and the Gulf of America, among other region s.
I nternational, national and state governments and agencies are currently evaluating and/or promulgating legislation and regulations that are focused on restricting GHG emissions. These regulatory measures include, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for renewable energy.
Some regulatory measures are focused on restricting GHG emissions (including, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for renewable energy) while other regulatory measures are focused on easing restrictions.
We maintain internal manufacturing and production facilities in Humble, Texas; Houston, Texas; Mineral Wells, Te xas; Amelia, Louisiana; Aberdeen, Scotland; Singapore; Macae, Brazil; Edmonton, Canada, Bac Ninh, Vietnam (acquired in February of 2025) an d Dammam, Saudi Arabia.
We maintain internal manufacturing and production facilities in Humble, Texas; Houston, Texas; Mineral Wells, Te xas; Amelia, Louisiana; Aberdeen, Scotland; Singapore; Macae, Brazil; Edmonton, Canada; Bac Ninh, Vietnam; an d Dammam, Saudi Arabia. These facilities are co-located with our engineering teams, where deemed appropriate, to enable rapid prototyping, testing and designing iterations of new products and enhancing our existing products.
We estimate that the TAM on a pro forma basis for our applicable products across these regions in 2024, including the impact of the Merger and the DWS acquisition, was approximately $4.7 billion and on a pro forma basis we generated approximately $548 million in revenue, implying a market share of approximately 12%.
We estimate that our TAM for our applicable products across these regions in 2025 was approximately $4.5 billion and we generated $467.1 million in revenue, implying a market share of approximately 10%.
The U.S. and Canadian onshore (“NAM”) market made up approximately 55% of our 2024 revenue, while the international and offshore (“International and Offshore”) markets constituted 45%. Within the NAM market, we have a strong presence in the United States and a growing presence in Canada. Revenue is based on the location where services are provided and products are sold.
Within the NAM market, we have a strong presence in the United States and a growing presence in Canada. Revenue is based on the location where services are provided and products are sold.
Substantial fines and penalties can be imposed and orders or injunctions limiting or prohibiting certain operations may be issued in connection with any failure to comply with laws and regulations relating to worker health and safety. As of December 31, 2024, we were in compliance with laws and regulations relating to worker health and safety. Climate Change.
Substantial fines and penalties can be imposed and orders or injunctions limiting or prohibiting certain operations may be issued in connection with any failure to comply with laws and regulations relating to worker health and safety. Climate Change —I nternational, national and state governments and agencies are currently evaluating and/or promulgating legislation and regulations related to greenhouse gas (“GHG”) emissions.
Marketing and Sales We principally sell or market directly to the ultimate end user of our products, the E&P operator. As of December 31, 2024 and December 31, 2023, we had 1,376 and 1,485, respectively, unique customers that have made at least one purchase in the preceding 12-month period, or active customers.
As of December 31, 2025 and December 31, 2024, we had 1,719 and 1,376, respectively, unique customers that have made at least one purchase in the preceding 12-month period, or active customers. In 2025, our top ten accounts constituted 26% of revenue.
Following the Merger, Legacy Innovex became a wholly owned subsidiary of Dril-Quip, and the name “Dril-Quip, Inc.” was changed to “Innovex International, Inc.”.
On September 6, 2024, the transactions contemplated in the Merger Agreement, dated as of March 18, 2024 (the "Merger Agreement"), between Innovex Downhole Solutions, Inc. (“Legacy Innovex”) and Dril-Quip, Inc. (“Dril-Quip”) (the “Merger”) were consummated. Following the Merger, Legacy Innovex became a wholly owned subsidiary of Dril-Quip, and the name “Dril-Quip, Inc.” was changed to “Innovex International, Inc.”.
On November 18, 2024, the EPA published final regulations to facilitate compliance with the methane emissions charge.
On November 18, 2024, the EPA published final regulations to facilitate compliance with the methane emissions charge. However, on March 14, 2025, President Trump signed a joint congressional resolution disapproving the federal regulations pursuant to the Congressional Review Act.
We also rely upon trademarks to build and maintain the integrity of our brand. We have trademarks registered in the U.S. and foreign jurisdictions. We protect our proprietary rights through a variety of methods, including confidentiality and assignment agreements with suppliers, employees, consultants and others who may have access to our proprietary information.
We protect our proprietary rights through a variety of methods, including confidentiality and assignment agreements with suppliers, employees, consultants and others who may have access to our proprietary information. Marketing and Sales We principally sell or market directly to the ultimate end user of our products, the E&P operator.
In most countries, including the United States, the patent term is generally 20 years from the earliest claimed filing date of a nonprovisional patent application in the applicable country. Once a patent expires, the protection ends, and the claimed invention enters the public domain; that is, anyone can commercially exploit the invention without infringing the patent.
The term of individual patents depends on the legal term for patents in the countries in which they are granted. In most countries, including the United States, the patent term is generally 20 years from the earliest claimed filing date of a nonprovisional patent application in the applicable country.
We compete in all areas of our operations with a number of companies, some of which have financial and other resources greater than or comparable to ours. Our major competitors across our product lines include Baker Hughes, Halliburton, Schlumberger, TechnipFMC, Weatherford International, Aker Solutions, and NOV.
To be successful, we must provide services and products that meet the specific needs of our customers at competitive prices. We compete in all areas of our operations with a number of companies, some of which have financial and other resources greater than or comparable to ours.
We estimate that our TAM for our applicable products across the NAM market in 2024, including the impact of the Merger and the DWS acquisition, was approximately $3.6 billion and on a pro forma basis we generated approximately $491 million in revenue during 2024, implying a market share of 13%.
In markets where well data is unavailable, we provide an estimated market size for each such geography. vi We estimate that our TAM for applicable products across the NAM market in 2025 was approximately $3.5 billion and we generated $511.2 million in revenue, implying a market share of approximately 15%.
We have a track record of developing proprietary products to address our customers’ evolving needs, and we maintain an active pipeline of potential new products across various stages of development. Our business is high margin and capital-light, enabling us to generate strong returns on invested capital. We have a disciplined history of successfully sourcing and integrating strategic acquisitions.
We have a track record of developing proprietary products to address our customers’ evolving needs, and we maintain an active pipeline of potential new products across various stages of development. The NAM market made up approximately 52% of our 2025 revenue, while the International and Offshore markets constituted 48%.
Pro forma for the Merger, we estimate that our TAM for our applicable products in 2024 was $8.3 billion, consisting of a $3.6 billion TAM for NAM and a $4.7 billion TAM for our applicable products across International & Offshore regions. Please see “Business—Market Share Capture” for an explanation of how we calculate our TAM.
For the year ended December 31, 2025, we estimate that our total addressable market for our applicable products (or "TAM") was approximately $8.0 billion, consisting of a $3.5 billion TAM for our onshore U.S. and Canadian (“NAM”) market and a $4.5 billion TAM across International and Offshore regions.
Intellectual Property and Trade Secrets Our success depends in part upon our ability to maintain and protect our proprietary technology and conduct our business without infringing the proprietary rights of others. We rely on a combination of patents, licensing agreements, trade secrets protections, trademarks, copyrights and contractual restrictions on disclosure to protect our intellectual property rights.
We provide products utilized to support effective cement placement between the wellbore and casing, including centralizers, float equipment, inflatable casing packers, stage cementing tools, and related well construction products. vii Intellectual Property and Trade Secrets We rely on a combination of patents, licensing agreements, trade secrets protections, trademarks, copyrights and contractual restrictions on disclosure to protect our intellectual property rights.
These facilities are co-located with our engineering teams, where deemed appropriate, to enable rapid prototyping, testing and designing iterations of new products and enhancing our existing products. We supplement our internal manufacturing with a responsive network of third-party machining resources in the United States to enhance our capital efficiency.
We supplement our internal manufacturing with a responsive network of third-party machining resources in the United States to enhance our capital efficiency. We also maintain strategic relationships with multiple, low-cost manufacturing partners outside of the United States. viii Competition The markets in which we operate are highly competitive.
The remaining 20% of the issued and outstanding equity securities of DWS were previously owned by Legacy Innovex, a wholly owned subsidiary of the Company. For information with respect to the Merger and DWS acquisition, see Note 3. Mergers and Acquisitions to our Consolidated Financial Statements included elsewhere in this Annual Report.
The remaining 20% of the issued and outstanding equity securities of DWS were previously owned by Legacy Innovex, a wholly owned subsidiary of the Company. On February 7, 2025, we acquired SCF Machining Corporation (“SCF”) in exchange for $17.7 million of cash, subject to post-closing adjustments.
The methane emissions charge could increase our customers’ operating costs, which could adversely impact our busi ness.
While the underlying Clean Air Act requirements still exist, there is no current regulatory process to assess, calculate, or collect the methane emissions charge. If the Clean Air Act provision is implemented in another form, a methane emissions charge could increase our customers’ operating costs, which could adversely impact our busi ness.
Removed
On September 6, 2024, the transactions contemplated in the Merger Agreement (as defined in “ Recent Developments ” within “Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations”) between Innovex Downhole Solutions, Inc. (“Legacy Innovex”) and Dril-Quip, Inc. (“Dril-Quip”) (the “Merger”) were consummated.
Added
SCF is a Canadian-domiciled entity and parent company to SCF Machining Corporation Vietnam Company Limited, a Vietnam-based company that was established to grow Innovex’s low-cost country supply chain by establishing an exclusive manufacturing vendor to provide Innovex with high quality, low price machined goods.
Removed
Prior to the Merger, we believe our total addressable market (or “TAM”) in 2023 was $4.5 billion, consisting of a $2.1 billion addressable market in NAM (as defined herein) and a $2.4 billion market in our International & Offshore regions.
Added
On May 30, 2025, we acquired Citadel Casing Solutions, LLC ("Citadel") for $69.7 million in cash, subject to post-closing adjustments, resulting in Citadel becoming a wholly owned subsidiary of Innovex.
Removed
Following the Merger, we were able to grow our addressable market both in our NAM and International and Offshore markets by expanding our product portfolio and gaining access to additional international markets.
Added
Citadel is a leading provider of differentiated downhole technologies, which are designed to improve its customers’ economics by driving reduced cycle times through improved operational efficiencies and production of high-quality, reliable tools that are used globally in the oil and gas sector. Refer to Note 3.
Removed
We have a unique culture that we view as having been critical to our success in the commercialization of new products.
Added
Mergers and Acquisitions of our Consolidated Financial Statements included elsewhere in this Annual Report for additional information with respect to our recent acquisitions. Our products are used across the lifecycle of the well (during the construction, completion, production and intervention phases) and are typically utilized downhole and consumable in nature.
Removed
As a result of our culture and our commitment to customer responsiveness, we believe that we are more agile and able to innovate faster than our larger competitors. Based on our TAM estimates, we believe that we are uniquely positioned to grow market share within larger addressable markets after the Merger with Dril-Quip .
Added
Of our 2025 revenue, approximately 70% was generated from product sales, approximately 17% was generated from rental tools and approximately 13% was generated from services.
Removed
On a pro forma basis, including both the revenue and additional market share relating to the Merger and the DWS acquisition, we estimate that our NAM market share in 2024 was 13% and that our International and Offshore market share was 12%.
Added
We define the well lifecycle phases and describe how our curated portfolio of principal product families are used below: Drilling Enhancement Our drilling enhancement tools are designed to optimize drilling performance, increase rate of penetration, and mitigate downhole challenges (including high weight-on-bit and stick-slip) typically faced by our customers in horizontal, extended reach, and other complex drilling applications.
Removed
We estimate that Innovex has grown market share since inception and believe we are well positioned to continue to capture market share across our geographic markets. In particular, we view the International and Offshore markets as a significant growth opportunity. Our organic growth has been complemented by a disciplined acquisition strategy.
Added
Fishing & Intervention Our fishing and intervention portfolio supports workover, intervention, drilling and completion activities, including operations to recover tools and debris from the wellbore, release stuck drill strings, and perform remedial and repair activities. We manufacture and sell products including external catch tools, internal catch tools, and other related fishing and remedial tools.
Removed
Risk Factors” for additional information. Market Share Capture We believe that we are well positioned to capture market share across our applicable markets.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe success of the Merger will depend – in large part – on the ability of the Company to realize the anticipated benefits, including cost savings, among others, from combining the businesses of Dril-Quip and Legacy Innovex. To realize these anticipated benefits, the businesses of Dril-Quip and Legacy Innovex must be successfully integrated. This integration will be complex and time-consuming.
Biggest changeOur recent mergers and acquisitions involve the integration of companies that, prior to the respective acquisition or merger date, operated independently. The success of these transactions will depend – in large part – on our ability to realize the anticipated benefits, including cost savings, among others, from combining the businesses.
If our assessments are incorrect, it could have an adverse effect on our business and financial condition. Moreover , the United States Congress, the Organization for Economic Co-operation and Development and other government agencies in the other jurisdictions where we and our subsidiaries do business have had an extended focus on issues related to the taxation of multinational corporations.
If our assessments are incorrect, it could have an adverse effect on our business and financial condition. Moreover , the United States Congress, the Organization for Economic Co-operation and Development (“OECD”) and other government agencies in the other jurisdictions where we and our subsidiaries do business have had an extended focus on issues related to the taxation of multinational corporations.
For example, one of our product families depends on alloying elements such as magnesium, with China providing the majority of the world supply. Prices for alloying elements like magnesium are subject to 20 constant volatility and may increase significantly from time to time.
For example, one of our product families depends on alloying elements such as magnesium, with China providing the majority of the world supply. Prices for alloying elements like magnesium are subject to constant volatility and may increase significantly from time to time.
Global inflation significantly increased in 2022 and 2021 related to the COVID-19 economic recovery and associated disruptions in global demand, supply chains/logistics, and labor markets, as well as the war in Ukraine and related significant increase 24 in energy costs.
Global inflation significantly increased in 2022 and 2021 related to the COVID-19 economic recovery and associated disruptions in global demand, supply chains/logistics, and labor markets, as well as the war in Ukraine and related significant increase in energy costs.
The significant decline in oil and natural gas prices that occurred in 2020 caused a reduction in our customers’ spending and associated drilling and completion activities, which had an adverse effect on our revenue.
The decline in oil and natural gas prices that occurred in 2020 caused a reduction in our customers’ spending and associated drilling and completion activities, which had an adverse effect on our revenue.
For example, we are experiencing and/or may experience in the future increased tariffs on certain of our products and product components from China, Mexico and Canada.
For example, we are experiencing and/or may experience in the future increased duties or tariffs on certain of our products and product components from China, Mexico and Canada.
In response to Russia’s military action in Ukraine in 2022, the United States, the European Union and the United Kingdom, among others, have imposed significant economic sanctions and export control measures on Russia and others supporting Russia’s military and political actions in Ukraine, including, blocking or “asset freezing” sanctions on designated entities and individuals; restrictions on the Russian energy and financial sectors; blocking economic activity in certain areas of Ukraine not controlled by the Ukrainian government; prohibitions in relation to investment in Russia; prohibitions and restrictions relating to Russian origin oil and oil products; and export controls limiting the export of a wide range of goods and technical assistance to Russia.
In response to Russia’s military action in Ukraine in 2022, the United States, the European Union and the United Kingdom, among others, have imposed significant economic sanctions and export control measures on Russia and others supporting Russia’s military and political actions in Ukraine, including, blocking or “asset freezing” sanctions on designated entities and individuals as well as secondary sanctions; restrictions on the Russian energy and financial sectors; blocking economic activity in certain areas of Ukraine not controlled by the Ukrainian government; prohibitions in relation to investment in Russia; prohibitions and restrictions relating to Russian origin oil and oil products; and export controls limiting the export of a wide range of goods and technical assistance to Russia.
Several of our competitors provide a broader array of products and services and have a stronger presence in more geographic markets. 19 Some jobs are awarded on a bid basis, which further increases competition based on price. Pricing is one of the primary factors in determining which qualified contractor is awarded a job.
Several of our competitors provide a broader array of products and services and have a stronger presence in more geographic markets. 5 Some jobs are awarded on a bid basis, which further increases competition based on price. Pricing is one of the primary factors in determining which qualified contractor is awarded a job.
Our import activities are governed by unique tariff and customs laws in each of the countries where we import. Further, we must comply with controls on the export or reexport of certain goods, services and technology, as well as economic sanctions that prohibit or restrict business activities in, with or involving certain persons, entities or countries.
Our import activities are governed by unique tariff and import controls in each of the countries where we import. Further, we must comply with controls on the export or reexport of certain goods, services and technology, as well as economic sanctions that prohibit or restrict business activities in, with or involving certain persons, entities or countries.
While the global inflation rate began to ease in 2023 and 2024 as a result of central bank policy tightening, core inflation has proved persistent as a result of the preceding factors, in addition to others such as the escalating number of significant geopolitical conflicts throughout the world.
While the global inflation rate began to ease in 2023 as a result of central bank policy tightening, core inflation has proved persistent as a result of the preceding factors, in addition to others such as the escalating number of significant geopolitical conflicts throughout the world.
Risks Related to Our Business Our business and financial performance depends primarily upon the general level of activity in the oil and natural gas industry, including the number of drilling rigs in operation, the number of oil and natural gas wells being drilled, the volume of production, the number of well completions and the level of well remediation activity and the corresponding capital expenditures by oil and natural gas companies within North America, the Middle East, Latin America and Europe, among other global markets.
R ISK FACTORS Risks Related to Our Business Our business and financial performance depends primarily upon the general level of activity in the oil and natural gas industry, including the number of drilling rigs in operation, the number of oil and natural gas wells being drilled, the volume of production, the number of well completions and the level of well remediation activity and the corresponding capital expenditures by oil and natural gas companies within North America, the Middle East, Latin America and Europe, among other global markets.
Our international operations and global expansion strategy are subject to general risks related to such operations, including: • political, social and economic instability and disruptions; • terrorist threats or acts, war and civil disturbances; • export controls, economic sanctions, embargoes, import controls, duties and tariffs, and other trade restrictions; • the imposition of duties and tariffs and other trade barriers; • limitations on ownership and on repatriation or dividend of earnings; • transportation delays and interruptions; • labor unrest and current and changing regulatory environments; • foreign taxation, including changes in laws or differing interpretations of existing laws; • foreign and domestic monetary policies; • increased compliance costs, including costs associated with disclosure requirements and related due diligence; 16 • difficulties in staffing and managing multi-national operations; • limitations on our ability to enforce legal rights and remedies; • access to or control of networks and confidential information due to local government controls and vulnerability of local networks to cyber risks; and • fluctuations in foreign currency exchange rates.
Our international operations and global expansion strategy are subject to general risks related to such operations, including: • political, social and economic instability and disruptions; • terrorist threats or acts, war, anti-boycott regulations, military conflicts and civil disturbances; • export controls, economic sanctions, embargoes, anti-boycott regulations, import controls, duties and tariffs, and other trade restrictions; • the imposition of duties and tariffs and other trade barriers; • limitations on ownership and on repatriation or dividend of earnings; • transportation delays and interruptions; • labor unrest and current and changing regulatory environments; • foreign taxation, including changes in laws or differing interpretations of existing laws; • foreign and domestic monetary policies; • increased compliance costs, including costs associated with disclosure requirements and related due diligence; • difficulties in staffing and managing multi-national operations; • limitations on our ability to enforce legal rights and remedies; • access to or control of networks and confidential information due to local government controls and vulnerability of local networks to cyber risks; and • fluctuations in foreign currency exchange rates.
Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. Additionally, there are a large number of processes, policies, procedures, operations, technologies and systems that must be integrated, including accounting and finance, asset management, benefits, billing, health, safety and environmental, human resources, maintenance, marketing, payroll and purchasing.
Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. Additionally, there are a large number of processes, policies, procedures, operations, technologies and systems that must be integrated, including accounting and finance, asset management, benefits, billing, international trade compliance, health, safety and environmental, human resources, maintenance, marketing, payroll and purchasing.
By selling our products at market pricing, we are exposed to the risks of a rapid reduction in prices and resulting volatility in our revenues. We are subject to risks relating to existing international operations and expansion into new geographical markets.
By selling our products at market pricing, we are exposed to the risks of a rapid reduction in prices and resulting volatility in our revenues. We are subject to risks relating to existing international operations and expansion into new geographic markets.
Trade restrictions, including embargoes, safeguards and customs restrictions against certain components and materials, as well as labor strikes and work stoppages or boycotts, could increase the cost or reduce or delay the supply of components and materials available to us and our vendors, which could delay or adversely affect the scope of our projects under develop mentor construction and adversely affect our business, financial condition or results of operations.
Trade restrictions, including embargoes, export and import controls, safeguards and customs restrictions against certain components and materials, as well as labor strikes and work stoppages or boycotts, could increase the cost or reduce or delay the supply of components and materials available to us and our vendors, which could delay or adversely affect the scope of our projects under develop mentor construction and adversely affect our business, financial condition or results of operations.
Many factors over which we have no control affect the supply of and demand for, and our customers’ willingness to explore, develop and produce oil and natural gas, and therefore, influence the volumes we can sell and the prices we can charge for our products and services, including: • the global supply of, and demand for, oil and natural gas; • the level of prices, and expectations about future prices, of oil and natural gas; • the level of global oil and natural gas exploration and production; • the cost of exploring for, developing, producing and delivering oil and natural gas; • the supply of and demand for our products and services; • global or national health concerns, including health epidemics such as the COVID-19 pandemic; • the expected decline rates of current production; • inability to acquire or maintain necessary permits or mining or water rights; • the price and quantity of foreign imports; • political and economic conditions in oil and natural gas producing countries and regions, including the United States, the Middle East, Africa, Europe, Latin America and Russia; • actions by the members of OPEC+ and other oil-producing countries with respect to oil production levels and announcements of potential changes in such levels; • speculative trading in crude oil and natural gas derivative contracts; • the level of consumer product demand; • the discovery rates of new oil and natural gas reserves; • contractions in the credit market; • the strength or weakness of the U.S. dollar; • available pipeline and other transportation capacity; • the levels of oil and natural gas storage; • the proximity and capacity of oil and natural gas pipelines and other transportation facilities; • adverse weather conditions and other natural disasters; 15 • U.S. and non-U.S. tax policy; • U.S. and non-U.S. governmental approvals and regulatory requirements and conditions; • the continued threat of terrorism and the impact of military and other action, including military action in the Middle East and the Russia-Ukraine war; • technical advances affecting energy consumption; • the price and availability of alternative fuels and energy sources; • uncertainty in commodities markets and the ability of oil and natural gas producers to raise equity capital and debt financing; • acquisition and divestiture activity among oil and natural gas producers; • cyclical/seasonal business and dependence upon spending of our customers; • competition among oilfield service and equipment providers; • changes in transportation regulations that result in increased costs or administrative burdens; and • overall domestic and global economic conditions.
Many factors over which we have no control affect the supply of and demand for, and our customers’ willingness to explore, develop and produce oil and natural gas, and therefore, influence the volumes we can sell and the prices we can charge for our products and services, including: • the global supply of, and demand for, oil and natural gas; • the level of prices, and expectations about future prices, of oil and natural gas; • the level of global oil and natural gas exploration and production; • the cost of exploring for, developing, producing and delivering oil and natural gas; • the supply of and demand for our products and services; • global or national health concerns, including health epidemics such as the COVID-19 pandemic; • the expected decline rates of current production; • inability to acquire or maintain necessary permits or mining or water rights; • the price and quantity of foreign imports; • political and economic conditions in oil and natural gas producing countries and regions, including the United States, the Middle East, Africa, Europe, Latin America and Russia; • actions by the members of OPEC+ and other oil-producing countries with respect to oil production levels and announcements of potential changes in such levels; • speculative trading in crude oil and natural gas derivative contracts; • the level of consumer product demand; • the discovery rates of new oil and natural gas reserves; • contractions in the credit market; • the strength or weakness of the U.S. dollar; • available pipeline and other transportation capacity; • the levels of oil and natural gas storage; • the proximity and capacity of oil and natural gas pipelines and other transportation facilities; • adverse weather conditions and other natural disasters; • U.S. and non-U.S. tax policy; • U.S. and non-U.S. trade policy, including the implementation of duties and tariffs and other trade barriers, and economic sanctions and export and import controls; • U.S. and non-U.S. governmental approvals and regulatory requirements and conditions; • the continued threat of terrorism and the impact of military and other action, including military action in the Middle East, the Russia-Ukraine war, and the current political situation in Venezuela; • technical advances affecting energy consumption; • the price and availability of alternative fuels and energy sources; • uncertainty in commodities markets and the ability of oil and natural gas producers to raise equity capital and debt financing; • acquisition and divestiture activity among oil and natural gas producers; 1 • cyclical/seasonal business and dependence upon spending of our customers; • competition among oilfield service and equipment providers; • changes in transportation regulations that result in increased costs or administrative burdens; and • overall domestic and global economic conditions.
Our business benefits from free trade agreements, and efforts to withdraw from, or substantially modify such agreements, in addition to the implementation of more restrictive trade policies, such as more detailed inspections, higher tariffs, 18 import or export licensing requirements, economic sanctions, anti-boycott laws, exchange controls or new barriers to entry, could have a material adverse effect on our results of operations, financial condition or cash flows.
Our business benefits from free trade agreements, and efforts to withdraw from, or substantially modify such agreements, in addition to the implementation of more restrictive trade policies, such as more detailed inspections, higher duties or tariffs, import or export licensing requirements, economic sanctions, anti-boycott laws, exchange controls or trade barriers, could have a material adverse effect on our results of operations, financial condition or cash flows.
These factors and the volatility of the energy markets make it extremely difficult to predict future oil and natural gas price movements with any certainty. A decline in oil and natural gas prices may have a material adverse effect on our business, results of operations and financial condition.
These factors and the volatility of energy markets make it extremely difficult to predict future oil and natural gas price movements with certainty. A decline in oil and natural gas prices could have a material adverse effect on our business, results of operations and financial condition.
For example, prolonged low commodity prices experienced by the oil and natural gas industry during 2015, 2016 and in 2020, combined with adverse changes in the capital and credit markets, caused many exploration and production companies to reduce their capital budgets and drilling activity.
For example, prolonged low commodity prices experienced by the oil and natural gas industry during 2015, 2016, 2020 and more recently in 2025, combined with adverse changes in the capital and credit markets, caused many exploration and production companies to reduce their capital budgets and drilling activity.
We have significant operations in several key International and Offshore markets, including the Middle East, Latin America and Europe, among others, where we earned approximately 45% of our revenues in 2024. Although not all revenue is priced in local currency, our financial results are affected by currency fluctuations, and the impact of those currency fluctuations on the underlying economies.
We have significant operations in several key International and Offshore markets, including the Middle East, Latin America and Europe, among others, where we earned approximately 48% of our revenues in 2025. Although not all revenue is priced in local currency, our financial results are affected by currency fluctuations, and the impact of those currency fluctuations on the underlying economies.
We have pursued and intend to continue to pursue selected, accretive acquisitions of complementary assets and businesses, such as the Merger and the acquisition of DWS.
We have pursued and intend to continue to pursue selected, accretive acquisitions of complementary assets and businesses, such as the Merger and the acquisition of DWS, SCF, and Citadel.
Commerce Department’s Export Administration Regulations and economic sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control and the U.S. Department of State. In addition, the movement of goods, services and technology subjects us to complex legal regimes governing international trade.
Commerce Department’s Export Administration Regulations, economic sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control and the U.S. Department of State, and import controls administered by the U.S. Customs and Border Protection. In addition, the movement of goods, services and technology subjects us to complex legal regimes governing international trade.
A significant price increase in or the unavailability of raw materials may result in a loss of customers and adversely impact our business, results of operations, financial condition and cash flows, and could result in asset impairments, including an impairment of the carrying value of our goodwill. We are exposed to counterparty credit risk.
A significant price increase in or the unavailability of raw materials may result in a loss of customers and adversely impact our business, results of operations, financial condition and cash flows, and could result in asset impairments, including an impairment of the carrying value of our goodwill. 6 We are exposed to counterparty credit risk, including nonpayment and nonperformance by our customers, suppliers or vendors, which could adversely impact our operations, cash flows and financial condition.
The Rubicon NOLs are subject to a significant limitation, however, we do not believe the Merger resulted in an ownership change under Section 382, so the $149.5 million of NOLs acquired from Dril-Quip are not limited. Future changes in our stock ownership, however, could result in an additional ownership change under Section 382.
However, we do not believe the Merger resulted in an ownership change under Section 382, so the $149.5 million of NOLs acquired from Dril-Quip are not limited. Future changes in our stock ownership, however, could result in an additional ownership change under Section 382.
While oil and natural gas prices have since increased, should prices again decline, similar declines in our customers’ spending would have an adverse effect on our revenue.
While oil and natural gas prices have since increased, they remain volatile, and should prices again continue to decline, similar declines in our customers’ spending would have an adverse effect on our revenue.
The expenses of integrating these systems could, particularly in the near term, exceed the savings that the Company expects to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings . Inflation could adversely impact our operating results and the global economy.
The expenses of integrating these systems could, particularly in the near term, exceed the savings that we expect to achieve from the elimination of duplicative expenses and the realization of economies of scale and cost savings . Inflation could adversely affect the global economy, which could adversely affect our operating results.
Moreover, they may be adopted, enacted, amended, enforced or interpreted in a manner that could materially impact our operations. Our business, financial condition and results of operations may be affected by economic sanctions and export controls, including those targeting Russia.
Moreover, they may be adopted, enacted, amended, enforced or interpreted in a manner that could materially impact our operations. Our business, financial condition and results of operations may be affected by economic sanctions, embargoes, anti-boycott regulations, export and import controls, and other trade restrictions, including those targeting Russia.
The loss or diminution of the services of our senior management or an inability to attract and retain additional senior management personnel could have a material adverse effect on our business, financial condition, results of operations and prospects.
In particular, the loss of the services of one or more members of our senior management team could disrupt our operations. The loss or diminution of the services of our senior management or an inability to attract and retain additional senior management personnel could have a material adverse effect on our business, financial condition, results of operations and prospects.
Nonpayment and nonperformance by our customers, suppliers or vendors could adversely impact our operations, cash flows and financial condition. Weak economic conditions, volatility in the banking sector and/or widespread financial distress could reduce the liquidity of our customers, suppliers or vendors making it more difficult for them to meet their obligations to us.
Weak economic conditions, volatility in the banking sector and/or widespread financial distress could reduce the liquidity of our customers, suppliers or vendors making it more difficult for them to meet their obligations to us.
Furthermore, competition for acquisitions may increase the cost of, or cause us to refrain from, completing acquisitions. In addition, we may not have sufficient capital resources to complete any additional acquisitions. Historically, we have financed our acquisitions primarily with funding from our equity investors, commercial borrowings and cash generated by operations, as well as equity consideration and debt financing arrangements.
In addition, we may not have sufficient capital resources to complete any additional acquisitions. Historically, we have financed our acquisitions primarily with funding from our equity investors, commercial borrowings and cash generated by operations, as well as equity consideration and debt financing arrangements.
Our manufacturing capacity is subject to equipment failures and the risk of catastrophic loss due to unanticipated events, such as fires, explosions and adverse weather conditions. Our manufacturing processes depend on critical pieces of equipment.
Equipment failures or production curtailments or shutdowns at our manufacturing and production facilities could adversely affect our manufacturing capability. Our manufacturing capacity is subject to equipment failures and the risk of catastrophic loss due to unanticipated events, such as fires, explosions and adverse weather conditions. Our manufacturing processes depend on critical pieces of equipment.
Any increase in the nonpayment and nonperformance by our customers could have an adverse impact on our operating results and could adversely affect our liquidity.In the event that any of our customers was to enter into bankruptcy, we could lose all or a portion of the amounts owed to us by such customer, and we may be forced to cancel all or a portion of our contracts with such customer at significant expense to us.
In the event that any of our customers was to enter into bankruptcy, we could lose all or a portion of the amounts owed to us by such customer, and we may be forced to cancel all or a portion of our contracts with such customer at significant expense to us.
Although we have minimal operational exposure in Russia with no revenue for the year ended December 31, 2024, and we do not intend to commit further capital towards 17 projects in Russia, the full impact of the invasion of Ukraine, including economic sanctions and export controls or additional war or military conflict, as well as potential responses to them by Russia, is currently unknown and they could adversely affect oil and gas companies, including many of which are our customers, as well as the global supply chain.
Although we have minimal operational exposure in Russia with no revenue for the year ended December 31, 2025, and we do not intend to commit further capital towards projects in Russia, the full impact of the invasion of Ukraine, including economic sanctions and export controls or additional war or military conflict, as well as potential responses to them by Russia, is currently unknown and they could adversely affect oil and gas companies, including many of which are our customers, as well as the global supply chain. 3 Our operations outside the United States must comply with a number of U.S. and other anti-corruption laws, violations of which could have a material adverse effect on our business, results of operations, and financial condition.
We have planned and begun to implement various efforts in conjunction with our supply chain and end market partners to mitigate the impact of the increased tariffs, but we cannot predict how the tariffs and trade policies may change over time.
We have planned and begun to implement various efforts in conjunction with our supply chain and end market partners to mitigate the impact of the increased duties and tariffs, but we cannot predict how the duties and tariffs and trade policies may change over time. 4 U.S. trade policy, including the implementation of duties and tariffs, and other trade barriers, could adversely affect our business and financial results.
While a substantial number of banks and financing sources remain active in investments related to the oil and natural gas and oilfield services industries, it is possible that the investment avoidance or limitation theme could expand in the future and restrict access to capital for our customers and for companies like us. 22 In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to environmental, social and governance matters.
While a substantial number of banks and financing sources remain active in investments related to the oil and natural gas and oilfield services industries, it is possible that the investment avoidance or limitation theme could expand in the future and restrict access to capital for our customers and for companies like us.
We are subject to taxation in many jurisdictions and there are inherent uncertainties in the final determination of our tax liabilities. As a result of our U.S. and international operations, we are subject to taxation in many jurisdictions.
Such conditions could have a material adverse impact on our business, results of operations and cash flows. We are subject to taxation in many jurisdictions and there are inherent uncertainties in the final determination of our tax liabilities. As a result of our U.S. and international operations, we are subject to taxation in many jurisdictions.
A sustained disruption to our business could also result in delays to or cancellations of customer orders and contractual penalties, which may also negatively impact our reputation among our customers. Any or all of these occurrences could have a material adverse effect on our business, results of operations, financial condition and prospects.
A sustained disruption to our business could also result in delays to or cancellations of customer orders and contractual penalties, which may also negatively impact our reputation among our customers.
Any unused annual limitation may be carried over to later years. As of December 31, 2024, we had an NOL carryforward of approximately $298.8 million, principally consisting of tax attributes acquired from Dril-Quip and Rubicon.
Any unused annual limitation may be carried over to later years. As of December 31, 2025, we had an NOL carryforward of $457.3 million, principally consisting of tax attributes acquired from Dril-Quip and Rubicon Oilfield International, LLC (“Rubicon”). The Rubicon NOLs are subject to a significant limitation.
Furthermore, some of our customers may be highly leveraged and subject to their own operating and regulatory risks, which increases the risk that they may default on their obligations to us.
Furthermore, some of our customers may be highly leveraged and subject to their own operating and regulatory risks, which increases the risk that they may default on their obligations to us. Any increase in the nonpayment and nonperformance by our customers could have an adverse impact on our operating results and could adversely affect our liquidity.
However, there can be no assurance that these individuals will continue to make their services available to us in the future. The loss of their services could adversely affect our business. In particular, the loss of the services of one or more members of our senior management team could disrupt our operations.
We depend on our current senior management for the implementation of our strategy and the supervision of our day-to-day activities. However, there can be no assurance that these individuals will continue to make their services available to us in the future. The loss of their services could adversely affect our business.
Significant price increases for these commodities could adversely affect our operating profits. Even if we have multiple suppliers of a particular raw material, there are occasionally shortages which lead to price increases.
Significant price increases for these commodities could adversely affect our operating profits. Even if we have multiple suppliers of a particular raw material, there are occasionally shortages which lead to price increases. The prices we pay for our raw materials may also be affected by, among other things, tariffs and duties on imported materials and foreign currency exchange rates.
We have identified and may in the future identify additional material weaknesses in internal controls over financial reporting, which may not be remedied in a timely manner and could affect the reliability of our financial statements and have other adverse consequences. As more fully disclosed in “
We may identify material weaknesses in internal controls over financial reporting, which may not be remedied in a timely manner and could affect the reliability of our financial statements and have other adverse consequences. Effective internal controls are necessary for us to provide reliable financial reports, prevent fraud and operate successfully.
However, achieving these goals requires, among other things, realization of the targeted cost synergies expected from the Merger. The anticipated benefits of the Merger and actual operating, technological, strategic and revenue opportunities may not be realized fully or at all, or may take longer to realize than expected.
The anticipated benefits of our recent mergers and acquisitions and actual operating, technological, strategic and revenue opportunities may not be realized fully or at all, or may take longer to realize than expected.
The growth of our business through recently completed acquisitions and potential future acquisitions may expose us to various risks, including those relating to difficulties in identifying suitable, accretive acquisition opportunities and integrating businesses, assets and personnel, as well as difficulties in obtaining financing for targeted acquisitions and the potential for increased leverage or debt service requirements.
No assurance can be given that we will be able to access capital or credit markets on terms acceptable to us when required to do so, which could have a material adverse impact on our business, financial condition and results of operations. 8 The growth of our business through recently completed acquisitions and potential future acquisitions may expose us to various risks, including those relating to difficulties in identifying suitable, accretive acquisition opportunities and integrating businesses, assets and personnel, as well as difficulties in obtaining financing for targeted acquisitions and the potential for increased leverage or debt service requirements.
Should significant constraints develop that materially impact the efficiency and economics of oil and natural gas producers, growth in drilling and completion activity could be adversely affected.
Should significant constraints develop that materially impact the efficiency and economics of oil and natural gas producers, growth in drilling and completion activity could be adversely affected. This would have an adverse impact on the demand for our products, which could have a material adverse effect on our business, results of operations and cash flows.
If we are unable to successfully integrate the operations of future acquired businesses with our business, we may be unable to achieve consolidation savings and may incur unanticipated costs and liabilities. 23 Our failure to incorporate acquired businesses and assets into our existing operations successfully or to minimize any unforeseen operational difficulties could have a material adverse effect on our business, liquidity position, financial condition, prospects and results of operations.
Our failure to incorporate acquired businesses and assets into our existing operations successfully or to minimize any unforeseen operational difficulties could have a material adverse effect on our business, liquidity position, financial condition, prospects and results of operations. Furthermore, competition for acquisitions may increase the cost of, or cause us to refrain from, completing acquisitions.
We must comply with export and import controls, economic sanctions and embargoes, anti-boycott, and other international trade laws and any failure to comply with such laws could subject us to liability and have a material adverse impact on our business, financial condition and results of operations.
We will seek to undergo these registration and qualification processes for our current and future products; however, there is no guarantee that our products will successfully complete these processes, or, if they do, that such IOCs or NOCs will purchase or rent such products in the future. 2 We must comply with export and import controls, economic sanctions and embargoes, anti-boycott, and other international trade laws and any failure to comply with such laws could subject us to liability and have a material adverse impact on our business, financial condition and results of operations.
We rely on a few key employees whose absence or loss could adversely affect our business. Many key responsibilities within our business have been assigned to a small number of employees. We depend on our current senior management for the implementation of our strategy and the supervision of our day-to-day activities.
Any or all of these occurrences could have a material adverse effect on our business, results of operations, financial condition and prospects. 7 We rely on a few key employees whose absence or loss could adversely affect our business. Many key responsibilities within our business have been assigned to a small number of employees.
The Company has also incurred and will continue to incur significant integration-related costs and there is potential for unknown liabilities, unforeseen expenses, delays associated with post-Merger integration activities and performance shortfalls of the Company as a result of the diversion of management’s attention caused by completing the Merger and integrating the companies’ operations.
If we are not able to achieve these objectives and realize the anticipated benefits and synergies expected from our recent mergers and acquisitions within the anticipated timing or at all, our business, financial condition and operating results may be adversely affected. 9 We have also incurred and will continue to incur significant integration-related costs and there is potential for unknown liabilities, unforeseen expenses, delays associated with post-acquisition integration activities and performance shortfalls of the Company as a result of the diversion of management’s attention caused by completing the mergers and acquisitions, and integrating the companies’ operations.
The integration process may involve unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources.
The integration process may involve unforeseen difficulties and may require a disproportionate amount of our managerial and financial resources. If we are unable to successfully integrate the operations of future acquired businesses with our business, we may be unable to achieve consolidation savings and may incur unanticipated costs and liabilities.
This would have an adverse impact on the demand for our products, which could have a material adverse effect on our business, results of operations and cash flows. 21 Equipment failures or production curtailments or shutdowns at our manufacturing and production facilities could adversely affect our manufacturing capability.
The impact of the changing demand for oil and natural gas services and products may have a material adverse effect on our business, financial condition, results of operations and cash flows.
Such ratings are used by some investors to inform their investment and voting decisions.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to environmental, social and governance matters. Such ratings are used by some investors to inform their investment and voting decisions.
Our operations outside the United States must comply with a number of U.S. and other anti-corruption laws, violations of which could have a material adverse effect on our business, results of operations, and financial condition. We must comply with the U.S.
One or more of these developments could have a material adverse effect on our business, financial condition and results of operations.
The failure to integrate successfully and to manage successfully the challenges presented by the integration process may result in the Company not achieving the anticipated benefits of the Merger. Company management believes that the Merger will provide operational and financial scale, increasing free cash flow and enhancing the Company’s corporate returns on invested capital.
To realize these anticipated benefits, the businesses must be successfully integrated. This integration will be complex and time-consuming. The failure to successfully integrate and manage the challenges presented by the integration process may result in the Company not achieving the anticipated benefits from these recent mergers and acquisitions.
Removed
We will seek to undergo these registration and qualification processes for our current and future products, and there is no guarantee our products will successfully complete these processes, or if they do, that such IOCs or NOCs will purchase or rent such products in the future.
Added
Moreover, we have a diverse supply chain that utilizes international vendors to provide certain services, including machining services, and source raw materials, component parts and finished products from countries other than that of the intended sale which can give rise to additional international trade risk.
Removed
No assurance can be given that we will be able to access capital or credit markets on terms acceptable to us when required to do so, which could have a material adverse impact on our business, financial condition and results of operations.
Added
The U.S. administration has implemented numerous duties and tariffs on imported materials and products and, in response, various countries have imposed new, or increased existing, duties and tariffs on imports.
Removed
The failure to integrate successfully the businesses of Dril-Quip and Legacy Innovex could adversely affect the Company’s future results. The Merger involves the integration of two companies that prior to September 6, 2024, operated independently.
Added
These duties and tariffs, to the extent that they continue to be imposed, and any new or increased duties and tariffs, may increase the cost of imported materials used by our suppliers and in our products. Duties and tariffs imposed by other countries may apply to our products sold internationally.
Removed
If the Company is not able to achieve these objectives and realize the anticipated benefits and synergies expected from the Merger within the anticipated timing or at all, the Company’s business, financial condition and operating results may be adversely affected.
Added
The ultimate impact of the announced duties and tariffs and any future duties and tariffs will depend on various factors, including the extent to which such duties and tariffs are implemented, the timing of implementation and the amount, scope and nature of such duties and tariffs.
Added
If we are unable to mitigate the impact of duties and tariffs, including through product pricing and supply arrangements, our business and financial results could be adversely affected.
Added
In addition, duties and tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S. and global financial and economic conditions and commodity markets, declining consumer confidence, significant inflation and diminished expectations for the economy, and ultimately reduced demand for our products and services and the demand for crude oil and gas.
Added
The failure to successfully integrate businesses acquired in our recent merger and acquisition transactions could adversely affect our future results. Strategic mergers and acquisitions are an important element of our growth strategy, and the success of any acquisition we make depends, in part, on our ability to integrate the acquired business and realize anticipated synergies.
Added
Management believes that our recent mergers and acquisitions will provide operational and financial scale, increasing free cash flow and enhancing our corporate returns on invested capital. However, achieving these goals requires, among other things, realization of the targeted cost synergies expected from these recent transactions.
Added
As previously disclosed, we identified material weaknesses in the past that have been remedied. We cannot assure that we will not, in the future, have additional material weaknesses. Should new material weaknesses arise or be discovered in the future, material misstatements could occur and go undetected in our interim or annual consolidated financial statements.
Added
If we fail to remediate any future material weaknesses or maintain proper and effective internal control over financial reporting in the future, we may be required to restate our financial statements, experience delays in satisfying our reporting obligations or fail to comply with SEC rules and regulations, which could result in investigations and sanctions by regulatory authorities.
Added
Any of these results could adversely affect our business and the value of our common stock. 10 Our indebtedness and liquidity needs could restrict our operations and make us more vulnerable to adverse economic conditions.
Added
Our indebtedness, whether incurred in connection with acquisitions, operations or otherwise, and limited access to liquidity may adversely affect our operations and limit our growth, and we may have difficulty making debt service payments on such indebtedness as payments become due.
Added
Our level of indebtedness may affect our operations in several ways, including the following: • increasing our vulnerability to general adverse economic and industry conditions; • the covenants that are contained in the agreements governing our indebtedness could limit our ability to borrow funds, dispose of assets, pay dividends and make certain investments; • our debt covenants could also affect our flexibility in planning for, and reacting to, changes in the economy and in our industry; • any failure to comply with the financial or other debt covenants, including covenants that impose requirements to maintain certain financial ratios, could result in an event of default, which could result in some or all of our indebtedness becoming immediately due and payable; • our level of debt could impair our ability to obtain additional financing, or obtain additional financing on favorable terms, in the future for working capital, capital expenditures, acquisitions or other general corporate purposes; and • our business may not generate sufficient cash flow from operations to enable us to meet our obligations under our indebtedness.
Added
Restrictions in our debt agreements and any future financing agreements may limit our ability to finance future operations, meet capital needs or capitalize on potential acquisitions and other business opportunities.
Added
The operating and financial restrictions and covenants in existing and future debt agreements could restrict our ability to finance future operations, meet capital needs or expand or pursue our business activities.
Added
For example, our debt agreements restrict or limit our ability to: • grant liens; • incur additional indebtedness; • engage in a merger, consolidation or dissolution; • enter into transactions with affiliates; • sell or otherwise dispose of assets, businesses and operations; • substantially change the nature of our business; and • make acquisitions, capital expenditures or other investments and make dividends or repurchase our stock.
Added
Furthermore, our debt agreements contain certain other operating and financial covenants, including the obligation to satisfy a certain fixed charge coverage ratio, a leverage ratio and a liquidity requirement. Our ability to comply with the covenants and restrictions contained in our debt agreements may be affected by events beyond our control, including prevailing economic, financial and industry conditions.
Added
If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired. If we violate any of the restrictions, covenants, ratios or tests in our debt agreements, all or a significant portion of our indebtedness may become immediately due and payable, and our lenders’ commitment to make further loans to us may terminate.
Added
We might not have, or be able to obtain, sufficient funds to make these accelerated payments.
Added
Our Credit Facility (as defined herein) is secured by liens on substantially all of our assets and certain of our future subsidiaries and guarantees from certain of our future subsidiaries, and any acceleration of our debt obligations could result in a foreclosure on the collateral securing such debt.
Added
Our debt agreements also require us to make mandatory prepayments in certain circumstances, including a requirement to make a prepayment of the term loans with a certain percentage of our excess cash flow each year. This excess cash flow payment, and other future required prepayments, will reduce our cash available for investment in our business.
Added
Any subsequent replacement of our debt agreements or any new indebtedness could have similar or greate r restrictions. Refer to “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreement ” for additional information.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn addition to the below properties, we also have several non-material properties which may be idle, sub-leased or undeveloped. 40 Location Description / Use Owned /Leased Size (sqft) North America Alice, TX Field District Leased 17,125 Amelia, LA Field District / Manufacturing Leased 41,992 Andrews, TX Field District Leased 6,480 Andrews, TX Field District Leased 10,000 Andrews, TX Field District Owned 5,652 Broussard, LA Field District Leased 10,000 Conroe, TX Field District Leased 28,345 Corpus Christi, TX Field District Leased 3,000 Denver, CO Sales Office Leased 2,178 Gilette, WY Field District Leased 2,000 Grove City, PA Field District Leased 12,400 Houston, TX Office Leased 20,212 Houston, TX Manufacturing Leased 20,925 Houston, TX Manufacturing Leased 56,660 Houston, TX Manufacturing Owned 131,980 Houston, TX HQ / Manufacturing Owned 1,490,516 Humble, TX Corporate HQ Leased 175,000 Johnstown, CO Field District Leased 9,050 Longview, TX Field District Leased 10,200 Midland, TX Field District Leased 15,000 Midland, TX Field District Leased 15,000 Midland, TX Field District Leased 15,000 Midland, TX Field District Leased 14,580 Midland, TX Field District Leased 5,000 Midland, TX Field District Leased 87,113 Mineral Wells, TX Manufacturing Owned 131,688 Odessa, TX Field District Leased 15,000 Odessa, TX Field District Leased 8,100 Oklahoma City, OK Field District Leased 11,850 Pleasanton, TX Field District Leased 9,000 Tulsa, OK Field District Leased 79,536 Tuttle, OK Field District Leased 9,200 Vernal (now Naples), UT Field District Leased 9,000 Weston, WV Field District Leased 10,000 Williston, ND Field District Leased 49,620 Edmonton, Canada Idle Leased 130,944 Edmonton, Canada Field District Leased 58,000 Red Deer, Alberta, Canada Field District Leased 18,360 Red Deer, Alberta, Canada Field District Leased 12,800 Lloydminister, Alberta, Canada Field District Leased 4,800 Kindersley, SK Field District Leased 10,080 Clairmont, Alberta, Canada Field District Leased 38,700 Edmonton, Alberta, Canada Field District Leased 11,710 Edmonton, Alberta, Canada Field District Leased 14,024 Edmonton, Alberta, Canada Field District Leased 72,088 Bonnyville, Alberta, Canada Field District Leased 11,200 Swift Current, SK Field District Leased 7,000 Calgary, Canada Field District Leased 3,565 Duchess, AB Field District Leased 8,800 International Aberdeen, Scotland Regional Office Leased 27,242 Aberdeen, UK Manufacturing Owned 215,500 Abu Dhabi, UAE Field District Leased 9,074 Alexandria, Egypt Warehouse Leased 2,153 Bogotá, Colombia Sales Office Leased 2,045 Bogotá, Colombia Field District Leased 14,128 Cipolletti, Argentina Sales Office Leased 1,313 Coca, Ecuador Camping Site Leased 116,981 Cote d'Ivoire, Ivory Coast Field District Leased 5,221 41 Dammam, Saudi Arabia Field District Leased 24,200 Dammam, Saudi Arabia Manufacturing Owned 54,000 Denmark Storage Leased 20,516 Dhara, Saudi Arabia Warehouse Leased 10,764 Dubai, UAE Regional Office Leased 4,000 Esbjerg, Denmark Warehouse Leased 12,600 Macaé, Rio de Janeiro, Brazil Warehouse, Regional Office Owned 454,452 Macaé, Rio de Janeiro, Brazil Warehouse Leased 11,000 Macaé, Rio de Janeiro, Brazil Field District Leased 15,285 Malaysia Storage Leased 2,153 Mexico City, Mexico House Staff Leased 2,260 Muscat, Oman Field District Leased 8,880 Neuquén, Argentina Field District Leased 11,302 Perth, Australia Sales Office Leased 1,615 Quito, Ecuador Warehouse Leased 4,100 Quito, Ecuador Sales Office Leased 2,691 Shenzhen, China Field District Leased 14,746 Shushufindi, Ecuador Field District Leased 50,478 Singapore, Singapore Field District / Manufacturing Leased 115,666 Stavanger, Norway Field District / Manufacturing Owned 42,216 Takoradi, Ghana Warehouse Leased 2,306 Villahermosa, Mexico Sales Office Leased 1,300 Villahermosa, Mexico Regional Office Leased 15,332 Villahermosa, Mexico House Staff Leased 1,399 Villahermosa, Mexico Field District Leased 27,274 Villahermosa, Mexico Sales office and field district Leased 124,574 Welshpool, Australia Warehouse Leased 34,445 Welshpool, WA Warehouse Leased 28,000
Biggest changeIn addition to the below properties, we also have several non-material properties which may be idle, sub-leased or undeveloped. 24 Location Description / Use Owned /Leased Size (sqft) North America Alice, TX Field District Leased 17,125 Amelia, LA Field District / Manufacturing Leased 7,200 Andrews, TX Field District Leased 16,480 Andrews, TX Field District Owned 5,652 Bonnyville, Alberta, Canada Warehouse Leased 11,200 Broussard, LA Field District Leased 10,000 Calgary, Alberta, Canada Office Space Leased 3,565 Clairmont, Alberta, Canada Warehouse Leased 38,700 Conroe, TX Field District Leased 28,345 Corpus Christi, TX Field District Leased 3,000 Denver, CO Sales Office Leased 2,178 Dickinson, ND Field District Leased 5,000 Duchess, Alberta, Canada Warehouse Leased 8,800 Edmonton, Alberta, Canada Field District Leased 201,061 Edmonton, Alberta, Canada Warehouse Leased 86,112 Estevan, CA Field District Owned 6,000 Grove City, PA Field District Leased 24,800 Houston, TX Field District Leased 72,000 Houston, TX Manufacturing Leased 76,872 Houston, TX Warehouse Leased 141,362 Humble, TX Corporate HQ, Mfg Leased 175,000 Humble, TX Warehouse Leased 92,764 Johnstown, CO Field District Leased 9,050 Kindersley, Saskatchewan, Canada Warehouse Leased 10,080 Longview, TX Field District Leased 10,200 Lucerne , TX Manufacturing Owned 165,000 Midland, TX Field District Leased 68,830 Mineral Wells , TX Manufacturing Owned 130,000 Naples, UT Field District Leased 6,000 Odessa, TX Field District Leased 16,800 Oklahoma City, OK Field District Leased 11,850 Pleasanton, TX Field District Leased 9,000 Red Deer, Alberta, Canada Office Space Leased 12,800 Red Deer, Alberta, Canada Warehouse Leased 18,360 Swift Current, Saskatchewan, Canada Warehouse Leased 6,000 Tuttle, OK Field District Leased 9,200 Williston, ND Field District Leased 49,620 International Aberdeen, Scotland Manufacturing Owned 215,500 Aberdeen, Scotland Regional Office Leased 27,242 Abu Dhabi, UAE Field District Leased 9,074 Bac Ninh Province, Vietnam Manufacturing Leased 137,239 Bogota, Colombia Office Space Leased 2,045 Cipolletti, Argentina Office Space Leased 1,313 Dammam, Saudi Arabia Field District Leased 53,560 Dammam, Saudi Arabia Manufacturing Owned 25,700 Dhahran, Saudi Arabia Warehouse Leased 10,764 Dubai, UAE Regional Office Leased 3,946 Esbjerg, Denmark Warehouse Leased 12,600 Funza, Colombia Warehouse Leased 15,985 Macaé, Rio de Janeiro, Brazil Field District / Manufacturing Owned 183,366 Muscat, Oman Field District Leased 8,880 Neuquen, Argentina Warehouse Leased 1,050 Nuevo Paraiso, Ecuador Field District Leased 112,483 Perth, Australia Field District Leased 1,615 Porthlethen, Scotland Field District Owned 40,251 Quito, Ecuador Office Space Leased 1,722 Shui Yang District, China Field District Leased 27,986 Stavanger, Norway Field District Owned 1,070 Stavanger, Norway Field District / Manufacturing Owned 42,216 Villahermosa, Mexico Office Space Leased 27,274 Villahermosa, Mexico Warehouse Leased 123,957 Welshpool, Australia Warehouse Leased 28,000 25
Item 2. Pr operties. Below is a list of active properties which we owned or leased as of December 31, 2024. Our facilities located in Andrews, Texas; Houston, Texas; Mineral Wells, Texas and Odessa, Texas secure our obligations under the Credit Facility.
ITEM 2. P ROPERTIES Below is a list of active properties which we owned or leased as of December 31, 2025. Our facilities secure our obligations under the Credit Facility.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+13 added−0 removed0 unchanged
Biggest changeCommitments and Contingencies to our Consolidated Financial Statements included elsewhere in this Annual Report for additional information regarding litigation, claims and other legal proceedings. Item 4. Mine Safe ty Disclosures. Not applicable. 42 PART II
Biggest changeCommitments and Contingencies of our Consolidated Financial Statements included elsewhere in this Annual Report for additional information regarding litigation, claims and other legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 26 PART II ITEM 5.
Item 3. Legal Proceedings. From time to time, we are a party to ongoing legal proceedings in the ordinary course of business. We do not believe the results of currently pending proceedings, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or liquidity. See Note 16.
ITEM 3. L EGAL PROCEEDINGS From time to time, we are a party to ongoing legal proceedings in the ordinary course of business. We do not believe the results of currently pending proceedings, individually or in the aggregate, will have a material adverse effect on our business, financial condition, results of operations or liquidity. Refer to Note 16.
Added
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The principal market for our common stock is the New York Stock Exchange (“NYSE”), where it is traded under the symbol “INVX.” As of February 18, 2026, we had 27 stockholders of record.
Added
The actual number of stockholders is considerably greater than the number of stockholders of record and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees. Dividend Policy We have not paid regular dividends in the past and do not currently anticipate paying any dividends in the foreseeable future.
Added
We intend to reinvest any retained earnings for the future operation and development of our business, or to use for potential stock repurchases or acquisition opportunities. The Board of Directors will review this policy on a regular basis in light of our earnings, financial position and market opportunities.
Added
Recent Sales of Unregistered Securities We did not have any sales of unregistered equity securities during the year ended December 31, 2025, other than as previously disclosed in our filings with the SEC.
Added
Issuer Purchases of Equity Securities On February 25, 2025, our Board of Directors approved a share repurchase program (the “New Share Repurchase Program”) that authorizes repurchases of up to an aggregate of $100 million of shares of common stock of the Company with no specified expiration date.
Added
There were no share repurchases during the three months ended December 31, 2025 under the New Share Repurchase Program. The remaining maximum dollar value of shares that may yet be purchased under the New Share Repurchase Program is approximately $90.7 million as of December 31, 2025.
Added
Three Months Ended December 31, 2025 Total Number of Shares Purchased (1) Average Price paid per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) Maximum Dollar Value of Shares that May Yet be Purchased (in millions) Under the Plans or Programs (3) October 1 - 31, 2025 — $ — — $ 90.70 November 1 - 30, 2025 — — — 90.70 December 1 - 31, 2025 23,774 22.77 — 90.70 23,774 $ 22.77 — (1) Includes the following transactions during the three months ended December 31, 2025: (i) the surrender of 23,774 shares of common stock to the Company to satisfy tax withholding obligations in connection with the vesting of restricted stock issued to employees and (ii) the repurchase of no shares of common stock under the New Share Repurchase Program.
Added
(2) The difference between the total number of shares purchased and the total number of shares purchased as part of publicly announced plans or programs represents shares deemed surrendered to the Company to satisfy certain employee elections under the Company's compensation and benefit programs. For the three months ended December 31, 2025, there were 23,774 shares withheld by the Company.
Added
(3) Includes approximate dollar value of shares that were available to be purchased under the publicly announced plans or programs that were in effect as of December 31, 2025.
Added
Performance Graph The following graph compares the cumulative total shareholder return on our common stock to the cumulative total shareholder return on the Standard & Poor’s 500 Stock Index, a broad stock index, and the VanEck Oil Services ETF Index (“OIH”), an index of oil and natural gas related companies that represents an industry composite of peers.
Added
This graph covers the period from December 31, 2020 through December 31, 2025 and assumes the investment of $100 on December 31, 2020 and the reinvestment of all dividends, if any.
Added
The shareholder return set forth is not necessarily indicative of future performance. 27 COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN Among Innovex International, Inc., the S&P 500 Index and the VanEck Oil Services ETF Index (OIH) The performance graph above is furnished and not filed for purposes of Section 18 of the Exchange Act and will not be incorporated by reference into any registration statement filed under the Securities Act, unless specifically identified therein as being incorporated therein by reference.
Added
The performance graph is not soliciting material subject to Regulation 14A.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

0 edited+23 added−14 removed0 unchanged
Removed
Item 5. Market for Registrant’s Common Equity, Related Stoc kholder Matters and Issuer Purchases of Equity Securities. Market Information The principal market for Innovex’s common stock is the New York Stock Exchange (“NYSE”), where it is traded under the symbol “INVX.” There were approximately 258 stockholders of record of Company Common Stock as of February 26, 2025.
Added
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities " for additional information.
Removed
This number includes the Company’s employees and directors that hold shares but does not include the number of security holders for whom shares are held in a “nominee” or “street” name. Dividend Policy The Company has not paid regular dividends in the past and does not currently anticipate paying any dividends in the foreseeable future.
Added
OFF-BALANCE SHEET ARRANGEMENTS Currently, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, cash requirements or capital resources.
Removed
The Company intends to reinvest any retained earnings for the future operation and development of its business, or to use for potential stock repurchases or acquisition opportunities. The Board of Directors will review this policy on a regular basis in light of the Company’s earnings, financial position and market opportunities.
Added
BUSINESS SEGMENTS We operate in one reportable segment as our chief operating decision maker ("CODM") assesses performance and allocates resources based on financial information presented at a consolidated level.
Removed
Recent Sales of Unregistered Securities We did not have any sales of unregistered equity securities during the year ended December 31, 2024, other than as previously disclosed in filings by the Company with the SEC. Issuer Purchases of Equity Securities For the three months ended December 31, 2024, the Company did not purchase any shares under the share repurchase plans.
Added
CRITICAL ACCOUNTING ESTIMATES The discussion and analysis of our financial condition and results of operations is derived from the review of our Consolidated Financial Statements prepared in accordance with GAAP, which includes our interpretation of accounting guidance and application through accounting policies. The preparation of financial statements requires the use of judgments and estimates.
Removed
The following table summarizes the repurchase and cancellation of our common stock during the three months ended December 31, 2024.
Added
Our critical accounting estimates are described below to provide a better understanding of how we develop our assumptions and judgments about future events and related estimates and how they can impact our Consolidated Financial Statements. A critical accounting estimate is one that requires our most difficult, subjective or complex judgments and assessments and is fundamental to our results of operations.
Removed
Three months ended December 31, 2024 Total Number of Shares Purchased Average Price paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Dollar Value (in millions) of Shares that May Yet be Purchased Under the Plans or Programs - $ - - $ 103.50 - $ - - $ 103.50 (1) In conjunction with the Merger, effective as of the Closing Date, the Company maintained the share repurchase plans authorized by the Dril-Quip board of directors.
Added
We base our estimates on historical experience and on various other assumptions we believe to be reasonable according to the current facts and circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
Removed
Under the share repurchase plans, we were authorized to repurchase up to an aggregate $200 million of our common stock. The repurchase plans had no set expiration date and any repurchased shares were expected to be cancelled. For the three months ended December 31, 2024, the Company did not purchase any shares under the share repurchase plans.
Added
We believe the following are the critical accounting estimates used in the preparation of our Consolidated Financial Statements, as well as the significant estimates and judgments affecting the application of these policies.
Removed
On February 25, 2025, our board of directors approved a new share repurchase program that authorizes repurchases of up to an aggregate of $100 million of our outstanding common stock and terminated all share repurchase plans previously authorized by the Dril-Quip board of directors. See Note 19.
Added
This discussion and analysis should be read in conjunction with our Consolidated Financial Statements and related notes thereto presented elsewhere in this Annual Report. 37 Income Taxes Deferred taxes are recorded using the asset and liability method, whereby tax assets and liabilities are determined based on the differences between the carrying amount and tax basis of assets and liabilities using enacted tax laws and rates expected to apply to taxable income in the year in which the differences are expected to reverse.
Removed
Subsequent Events to our Consolidated Financial Statements included elsewhere in this Annual Report for more details.
Added
We regularly evaluate the valuation allowances established against deferred tax assets for which future realization is uncertain. In assessing the realizability of deferred tax assets, we consider both positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax planning strategies and potential for benefits from attribute carrybacks.
Removed
Equity Compensation Plan Information The following table summarizes information for equity compensation plans in effect as of December 31, 2024: Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Equity compensation plans approved by security holders 887,794 $ 17.77 535,697 Total 887,794 $ 17.77 535,697 Information concerning securities authorized for issuance under equity compensation plans is included in Note 14.
Added
If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is recorded. As of December 31, 2025, the valuation allowance for deferred tax assets was $60.6 million.
Removed
Stock-Based Compensation to our Consolidated Financial Statements included elsewhere in this Annual Report. 43 Performance Graph The following graph compares the cumulative total shareholder return on our common stock to the cumulative total shareholder return on the Standard & Poor’s 500 Stock Index, a broad stock index, and the VanEck Oil Services ETF Index (“OIH”), an index of oil and natural gas related companies that represents an industry composite of peers.
Added
We recognize a tax benefit in our financial statements for an uncertain tax position only if management’s assessment is that the position is “more likely than not” (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position.
Removed
This graph covers the period from December 31, 2019 through December 31, 2024 and assume the investment of $100 on December 31, 2019 and the reinvestment of all dividends, if any. The shareholder return set forth is not necessarily indicative of future performance.
Added
The term “tax position” in the accounting standards for income taxes refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods.
Removed
COMPARISON OF 5 YEARS CUMULATIVE TOTAL RETURN Among Innovex International, Inc., the S&P 500 Index and the VanEck Oil Services ETF Index (OIH) The performance graph above is furnished and not filed for purposes of Section 18 of the Exchange Act and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), unless specifically identified therein as being incorporated therein by reference.
Added
Our financial statements could be materially affected if: (i) our actual results differ significantly from our forecast estimates; (ii) there are future changes in enacted tax laws with retroactive application; or (iii) tax authorities do not agree with our application of the tax law to our circumstances and the matter is not ultimately resolved in our favor.
Removed
The performance graph is not soliciting material subject to Regulation 14A. Item 6. [R eserved] 44
Added
Business Combinations and Goodwill We recognize and measure the assets acquired and liabilities assumed in a business combination based on their estimated fair values at the acquisition date. Goodwill represents the excess of purchase price paid by the Company over the fair market value of the net assets acquired.
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A bargain purchase occurs when the fair market value of net assets acquired is higher than the purchase price paid. Certain assumptions and estimates are employed in evaluating the fair value of assets acquired and liabilities assumed.
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These estimates may be affected by factors such as changing market conditions, technological advances in the oil and natural gas industry or changes in regulations governing that industry. The most significant assumptions requiring judgment involve identifying and estimating the fair value of inventory, fixed assets and intangible assets.
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To finalize purchase accounting for significant acquisitions, we utilize the services of independent valuation specialists to assist in the determination of the fair value of acquired assets.
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Impairments We evaluate our property and equipment and identifiable intangible assets for impairment whenever changes in circumstances indicate that the carrying amount of an asset group may not be recoverable or if there are potential indicators of impairment.
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We also perform an annual impairment analysis of goodwill as of December 31st, or whenever there is a triggering event that indicates an impairment loss may have been incurred. Estimating future net cash flows requires us to make judgments regarding long-term forecasts of future revenues and costs related to the assets subject to review.
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These forecasts are uncertain in that they require assumptions about our revenue growth, operating margins, capital expenditures, future market conditions and technological developments.
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In addition, if we are required to determine the fair value of our reporting unit to test goodwill for impairment, we must apply estimates, assumptions, and judgment regarding revenue growth, operating margins, capital expenditures, future market conditions, weighted average costs of capital and terminal growth rate, and we must evaluate the metrics of a deemed set of comparable companies and market earnings multiples.
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Actual results may not align with these assumptions, and our expectations regarding future net cash flows may change such that a material impairment could result. We believe that the estimates and assumptions used in our impairment assessments are reasonable.
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However, if market conditions change dramatically, the impact on our forecasts and projections may be significant which could result in future impairments for our reportable unit with long-term assets including goodwill. RECENT ACCOUNTING PRONOUNCEMENTS See Note 2. Summary of Significant Accounting Policies of our Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

84 edited+33 added−82 removed22 unchanged
Biggest changeThe primary reason for the change was higher net income primarily attributable to the impact of acquisitions, increased demand for our products and services and improved operating leverage . 52 ROCE The following table presents a reconciliation of the GAAP financial measure of income from operations to adjusted income from operations, after tax to ROCE for each of the periods indicated: Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Income from operations $ 49,075 $ 97,282 $ (48,207 ) (50 )% Plus: Acquisition costs 33,300 2,327 30,973 1331 % Less: Income tax expense (2,487 ) (20,440 ) 17,953 (88 )% Adjusted income from operations, after tax $ 79,888 $ 79,169 $ 719 1 % Beginning debt 50,390 89,119 (38,729 ) (43 )% Beginning equity 328,921 251,280 77,641 31 % Ending debt 35,368 50,390 (15,022 ) (30 )% Ending equity 958,156 328,921 629,235 191 % Average capital employed $ 686,418 $ 359,855 $ 326,563 91 % ROCE 12 % 22 % - - ROCE for the year ended December 31, 2024 was 12%, a decrease from 22% for the year ended December 31, 2023.
Biggest changeROCE The following table presents a reconciliation of the GAAP financial measure of income from operations to adjusted income from operations, after tax to ROCE for each of the periods indicated: Year Ended December 31, (in thousands) 2025 2024 $ Change % Change Income from operations $ 132,625 $ 49,075 $ 83,550 170 % Plus: Acquisition and integration costs 17,518 33,300 (15,782 ) (47 )% Less: Income tax expense (45,231 ) (2,487 ) (42,744 ) 1,719 % Adjusted Income from Operations, after tax $ 104,912 $ 79,888 $ 25,024 31 % Beginning debt 35,368 50,390 (15,022 ) (30 )% Beginning equity 958,156 328,921 629,235 191 % Ending debt 25,631 35,368 (9,737 ) (28 )% Ending equity 1,057,699 958,156 99,543 10 % Average capital employed $ 1,038,427 $ 686,418 $ 352,010 51 % ROCE 10 % 12 % — — ROCE for the year ended December 31, 2025 was 10%, a decrease from the year ended December 31, 2024 . 34 Free Cash Flow The following table presents a reconciliation of the GAAP financial measure of net cash provided by operating activities to Free Cash Flow for each of the periods indicated: Year Ended December 31, (in thousands) 2025 2024 $ Change % Change Net cash provided by operating activities $ 190,912 $ 93,439 $ 97,473 104 % Capital expenditures (35,132 ) (13,594 ) (21,538 ) 158 % Free cash flow $ 155,780 $ 79,845 $ 75,935 95 % Free Cash Flow for the year ended December 31, 2025 was $155.8 million, an increase of $75.9 million from the year ended December 31, 2024.
Repurchase of Equity Securities In conjunction with the Merger, effective as of the Closing Date, the Company maintained the share repurchase plans authorized by the Dril-Quip board of directors. Under the share repurchase plans, we were authorized to repurchase up to an aggregate $200 million of our common stock.
Repurchase of Equity Securities In conjunction with the Merger, effective as of the Closing Date, we maintained the share repurchase plans authorized by the Dril-Quip Board of Directors. Under the share repurchase plans, we were authorized to repurchase up to an aggregate $200 million of our common stock.
As a result of our acquisitions and the consolidation of our operating subsidiaries’ into the Company’s financial results, the periods presented in our historical financial statements may not be comparable to one another and our future results of operations and financial results may differ.
As a result of our acquisitions and the consolidation of our operating subsidiaries’ into our financial results, the periods presented in our historical financial statements may not be comparable to one another and our future results of operations and financial results may differ.
Our operations are subject to U.S. federal income tax at an entity level, as well as various state and franchise taxes. In addition, our operations located in international jurisdictions are subject to local country income taxes.
Income tax expense Our operations are subject to U.S. federal income tax at an entity level as well as various state income and franchise taxes. In addition, our operations located in international jurisdictions are subject to local country income taxes.
The New Credit Agreement, among other things, (i) extended the maturity of the agreement from June 2026 to February 2030, (ii) increased the maximum revolving amount from $110 million to $200 million, which may, subject to certain conditions, be increased to $250 million, (iii) eliminated the term loan commitment and (iv) provided for an applicable margin for interest on the loans to be based on availability, effective as of April 1, 2025.
The Credit Agreement, among other things, (i) extended the maturity of the agreement from June 2026 to February 2030, (ii) increased the maximum revolving advance amount from $110 million to $200 million, which may, subject to certain conditions, be increased to $250 million, (iii) eliminated the term loan commitment and (iv) provided for an applicable margin for interest on the loans to be based on availability, effective as of April 1, 2025.
The New Credit Agreement provides for a $200 million senior secured revolving credit facility, subject to a borrowing base. The New Credit Agreement matures on February 27, 2030.
The Credit Agreement provides for a $200 million senior secured revolving credit facility, subject to a borrowing base. The Credit Agreement matures on February 27, 2030.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following is management’s discussion and analysis of certain significant factors that have affected aspects of the Company’s financial position, results of operations, comprehensive income (loss) and cash flows during the periods included in the accompanying consolidated financial statements.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management’s discussion and analysis of certain significant factors that have affected aspects of our financial position, results of operations, comprehensive income (loss) and cash flows during the periods included in the accompanying consolidated financial statements.
This discussion should be read in conjunction with the Company’s consolidated financial statements and notes thereto presented elsewhere in this Annual Report. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance.
This discussion should be read in conjunction with our Consolidated Financial Statements and related notes thereto presented elsewhere in this Annual Report. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance.
We also operate across Asia, Latin America, Europe and the Gulf of Mexico, among other regions. To enhance our global reach, we have complemented our locations across these markets with a network of strategic distribution, sales and manufacturing partners. We are an innovator and have a development process and culture focused on creating proprietary products for our customers.
We also operate across A sia, Latin America, Europe and the Gulf of America, among other regions. To enhance our global reach, we have complemented our locations across these markets with a network of strategic distribution, sales and manufacturing partners. We are an innovator and have a development process and culture focused on creating proprietary products for our customers.
We view acquisitions as a core competency and have identified a rich opportunity set of acquisition targets that we believe are seeking to transact. We aim to execute a disciplined acquisition strategy for high-quality opportunities that meet our stringent investment criteria.
We view acquisitions as a core competency and have identified a rich opportunity set of acquisition targets that we believe are seeking to transact. We aim to execute a disciplined acquisition strategy fo r high-quality opportunities that meet our stringent investment criteria.
The manner, timing and amount of any purchase were to be determined by management based on an evaluation of market conditions, stock price, liquidity and other factors. The program did not obligate the Company to acquire any particular amount of common stock and may be modified or superseded at any time at the Company’s discretion.
The manner, timing and amount of any purchase were to be determined by management based on an evaluation of market conditions, stock price, liquidity and other factors. The program did not obligate us to acquire any particular amount of common stock and may be modified or superseded at any time at our discretion.
(2) For the year ended December 31, 2024, acquisition costs consisted of legal, accounting, advisory fees, and other integration costs associated with the Merger and the acquisition of the remaining equity interest in DWS.
For the year ended December 31, 2024, acquisition and integration costs consisted of legal, accounting, advisory fees, move, severance and other integration costs associated with the Merger and the acquisition of the remaining equity interest in DWS.
On February 27, 2025, we entered into the Third Amended and Restated Revolving Credit, Guaranty and Security Agreement, dated as of February 27, 2025, among the Company, and each party joined thereto from time to time as a guarantor, as guarantors, the financial institutions from time to time party thereto, as lenders, and PNC Bank, National Association, as the agent for lenders (the “New Credit Agreement”) to replace the Credit Agreement (as defined herein).
On February 27, 2025, we entered into the Third Amended and Restated Revolving Credit, Guaranty and Security Agreement among the Company, and each party joined thereto from time to time as a guarantor, as guarantors, the financial institutions from time to time party thereto, as lenders, and PNC Bank, National Association, as the agent for lenders (the “Credit Agreement”) to replace the Previous Credit Agreement (as defined herein).
For a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, see “— Non-GAAP Financial Measures” below. • Free Cash Flow. We utilize Free Cash Flow (a non-GAAP measure) to evaluate the cash generated by our operations and results of operations.
For a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP measure, refer to “ Non-GAAP Financial Measures ” below. • Free Cash Flow We utilize Free Cash Flow (a non-GAAP measure) to evaluate the cash generated by our operations and results of operations.
As a general matter, following an acquisition, our results of operations are affected by the results of the newly acquired business or operations, the purchase accounting 49 for the acquisition, any debt inc urred in connection with the acquisition and expenditures made to integrate the newly acquired business or operations.
As a general matter, following an acquisition, our results of operations are affected by the results of the newly acquired business or operations, the purchase accounting for the acquisition, any debt incurred in connection with the acquisition and expenditures made to integrate the newly acquired business or operations.
Amounts borrowed under the Credit Facility are subject to an interest rate per annum equal to, at the Company’s option, either (a) an alternate base rate determined as the highest of (i) the base commercial lending rate of PNC Bank, National Association, (ii) the overnight federal funds rate (subject to a 0% floor) plus 0.5% and (iii) Daily Simple SOFR (as defined in the Credit Agreement) plus 1% (such base rate to be subject to a 0% floor) or (b) the forward-looking term rate based on the secured overnight financing rate (“SOFR”) for the applicable interest period two business days before such interest period divided by a number equal to 1.00 minus any SOFR reserve percentage (such term rate to be subject to a 0% floor), plus, in each case of clauses (a) and (b) above, an applicable margin of 0.75% for swing loans and alternate base rate revolving loans, 1.75% for term SOFR revolving loans, 1.00% for alternate base rate term loans and 2.00% for term SOFR term loans.
Amounts borrowed under the Credit Agreement are subject to an interest rate per annum equal to, at our option, either (a) an alternate base rate determined as the highest of (i) the base commercial lending rate of PNC Bank, National Association, (ii) the overnight federal funds rate plus 0.5% and (iii) so long as available, Daily Simple SOFR (as defined in the Credit Agreement) plus 1% (such base rate to be subject to a 0% floor) or (b) the forward-looking term rate based on the secured overnight financing rate (“SOFR”) for the applicable interest period two business days before such interest period divided by a number equal to 1.00 minus any SOFR reserve percentage (such term rate to be subject to a 0% floor), plus, in each case of clauses (a) and (b) above, an applicable margin based upon availability of the revolving credit line, of 0.50% to 1.00% for swing loans and alternate base rate revolving loans and 1.50% to 2.00% for term SOFR revolving loans.
Our computation of Adjusted EBITDA, Free Cash Flow and ROCE may differ from computations of similarly titled measures of other companies. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure, see “Non-GAAP Financial Measures” below.
Our computation of Adjusted EBITDA, Free Cash Flow and ROCE may differ from computations of similarly titled measures of other companies. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure, refer to “ Non-GAAP Financial Measures ” below.
We have a unique culture that we view as having been critical to our success in the commercialization of new products.
We have a unique cultu re that we view as having been critical to our success in the commercialization of new products.
On September 6, 2024, the Company and TIW Corporation (collectively and together with the Original Borrowers, the “ Borrowers”) joined the Credit Agreement as borrowers thereunder.
On September 6, 2024, the Company and TIW Corporation (collectively and together with the Original Borrowers, the “Borrowers”) joined the Credit Agreement as borrowers thereunder.
Please see “ How We Evaluate our Results of Operations ” within this section for the definitions of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed, and see “Non-GAAP Financial Measures” within this section for a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed to our most directly comparable financial measures calculated and presented in accordance with GAAP.
Refer to “ How We Evaluate our Results of Operations ” within this section for the definitions of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed, and “ Non-GAAP Financial Measures ” within this section for a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, and Return on Capital Employed to our most directly comparable financial measures calculated and presented in accordance with GAAP.
We are a global company, a nd for the year ended December 31, 2024, the NAM market made up approximately 55% of our revenue while the International and Offshore markets constituted 45%. Within the NAM market, we have a strong presence in both the United States and Canada.
We are a global company, a nd for the year ended December 31, 2025, the NAM market made up approximately 52% of our revenue, while the International and Offshore markets constituted 48%. Within the NAM market, we have a strong presence in both the United States and Canada.
Over the same period, capital expenditures accounted for only 3% of revenue, and we earned approximately $97.3 million in income from operations. We believe that our global sales and distribution network, as well as our manufacturing capacity and vendor network, position us well to drive revenue growth and margin expansion.
Over the same period, capital expenditures accounted for 2% of revenue, and we earned $49.1 million in income from operations. We believe that our global sales and distribution network, as well as our manufacturing capacity and vendor network, position us well to drive revenue growth and margin expansion.
We have a broad customer base, ranging from the largest IOCs, NOCs, and E&P companies as well as multinati onal and regional oilfield service companies. Once a new product has been commercialized or acquired, our global sales and distribution infrastructure enables us to scale and drive customer adoption quickly. 45 Our business has produced strong returns on invested capital.
We have a broad customer base, ranging from IOCs, NOCs, and E&P companies to multinational and regional oilfield service companies. Once a new product has been commercialized or acquired, our global sales and distribution infrastructure enables us to scale and drive customer adoption quickly. 29 Our business has produced strong returns on invested capital.
The Credit Agreement provides for (i) a term loan tranche in a principal amount of the lesser of $25.0 million and a certain amount determined based, in part, on appraised values of certain assets of Legacy Innovex and certain of its subsidiaries (the “Term Loan”) and (ii) a revolving credit facility of up to $110.0 million with a $5.0 million sublimit for letters of credit and a $11.0 million swing loan (collectively, the “Revolver” and, together with the Term Loan, the “Credit Facility”).
The Previous Credit Agreement provided for (i) a term loan tranche in a principal amount of the lesser of $25.0 million and a certain amount determined based, in part, on appraised values of certain assets of Legacy Innovex and certain of its subsidiaries (the “Term Loan”) and (ii) a revolving credit facility of up to $110.0 million with a $5.0 million sublimit for letters of credit and an $11.0 million swing loan.
In addition to paying interest on outstanding borrowings under the Credit Facility, the Company is required to pay a quarterly commitment fee to the lenders under the Credit Agreement equal to 0.25% per annum on the amount by which $110.0 million exceeds the daily unpaid balance of the Revolver plus any swing loans plus any undrawn amount of outstanding letters of credit under the Credit Agreement on any day.
In addition to paying interest on outstanding borrowings under the Credit Agreement, we are required to pay a quarterly commitment fee to the lenders under the Credit Agreement equal to 0.25% per annum on the amount by which $200.0 million exceeds the daily unpaid balance of revolving loans under the Credit Agreement plus any swing loans plus any undrawn amount of outstanding letters of credit under the Credit Agreement on any day.
Equity method earnings consist of the net earnings in DWS, along with the amortization of our proportional ownership interest in the step up of the fair value of the intangible assets acquired, during the period that DWS was accounted for as an equity method investee.
Equity method earnings Equity method earnings for the year ended December 31, 2024 consisted of the net earnings in DWS, along with the amortization of our proportional ownership interest in the step up of the fair value of the intangible assets acquired, during the period that DWS was accounted for as an equity method investee.
This was offset by a reduction in drilling activity in North America due to a decline in the North America land rig count during the comparative periods.
This was offset by a continued reduction in drilling activity in North America due to a decline in the North America onshore rig count during the comparative period.
Our total indebtedness was $35.4 million as of December 31, 2024 . Our principal liquidity needs have been, and are expected to continue to be, working capital, capital expenditures, debt service and potential mergers and acquisitions. Historically, capital expenditures have been relatively modest, with working capital being the predominant use of cash for the Company during periods of growth.
Our principal liquidity needs have been, and are expected to continue to be, working capital, capital expenditures, debt service and potential mergers and acquisitions. Historically, capital expenditures have been relatively modest, with working capital being the predominant use of cash for the Company during periods of growth.
On February 25, 2025, our board of directors approved a new share repurchase program that authorizes repurchases of up to an aggregate of $100 million of our outstanding common stock and terminated all share repurchase plans previously authorized by the Dril-Quip board of directors. See Note 19.
On February 25, 2025, our Board of Directors approved a new share repurchase program (the “New Share Repurchase Program”) that authorizes repurchases of up to an aggregate of $100 million of shares of common stock of the Company with no specified expiration date and terminated all share repurchase plans previously authorized by the Dril-Quip Board of Directors.
Management uses Adjusted EBITDA (a non-GAAP measure) to assess the profitability of our business operations and to compare our operating performance to our competitors without regard to the impact of financing methods and capital structure and excluding costs that management believes do not reflect our ongoing operating performance, and for this reason we believe this measure will provide useful information to investors.
One of our measures of financial performance is the amount of net income generated quarterly and annually as net income is an indicator of overall profitability of the Company. • Adjusted EBITDA We utilize Adjusted EBITDA (a non-GAAP measure) to assess the profitability of our business operations and to compare our operating performance to our competitors without regard to the impact of financing methods and capital structure and excluding costs that management believes do not reflect our ongoing operating performance, and for this reason we believe this measure will provide useful information to investors.
However, if work activity increases, we expect further working capital investment will be required. Our ability to satisfy our liquidity requirements depends on our future operating performance, which is affected by prevailing economic conditions, market conditions in the oil and natural gas industry, availability and cost of raw materials, and other factors, many of which are beyond our control.
Our ability to satisfy our liquidity requirements depends on our future operating performance, which is affected by prevailing economic conditions, market conditions in the oil and natural gas industry, availability and cost of raw materials, and other factors, many of which are beyond our control.
How We Evaluate our Results of Operations We use a variety of financial and operating metrics to analyze our performance. These metrics are significant factors in assessing our results of operations and profitability and include: 48 • Revenues. Our revenues are generated from product sales, renting tools and from providing services related to the utilization of our products.
These metrics are significant factors in assessing our results of operations and profitability and include: • Revenues Our revenues are generated from product sales, renting tools and from providing services related to the utilization of our products.
Additionally, as a result of the Merger, we expect to incur recurring administrative expenses related to being a publicly traded corporation that are not reflected in the historical Legacy Innovex’s financial statements. Results of Operations In Item 7, we discuss fiscal 2024 and 2023 results and comparisons of fiscal 2024 results to fiscal 2023 results.
Additionally, as a result of the Merger, we expect to incur recurring administrative expenses related to being a publicly traded corporation that are not reflected in the historical Legacy Innovex’s financial statements. 31 RESULTS OF OPERATIONS This section of this Annual Report generally discusses fiscal year 2025 and 2024 results and year-to-year comparisons between fiscal year 2025 to fiscal year 2024.
Please see “Non-GAAP Financial Measures” within this section for Return on Capital Employed, which is how we assess the effectiveness of our capital allocation over time. For the year ended December 31, 2024, our net income, income from operations and Adjusted EBITDA were equivalent to approximately 21%, 7% and 21% of revenue, respectively.
Refer to “ Non-GAAP Financial Measures ” within this section for Return on Capital Employed, which is how we assess the effectiveness of our capital allocation over time. For the year ended December 31, 2025, our net income, income from operations and Adjusted EBITDA were equivalent to 9%, 14% and 19% of revenue, respectively.
Over the same period, capital expenditures accounted for 2% of revenue, and we earned approximately $49.1 million in income from operations. For the year ended December 31, 2023, our net income, income from operations, and Adjusted EBITDA were equivalent to approximately 13%, 18% and 24% of revenue, respectively.
Over the same period, capital expenditures accounted for 4% of revenue, and we earned $132.6 million in income from operations. For the year ended December 31, 2024, our net income, income from operations, and Adjusted EBITDA were equivalent to 21%, 7% and 21% of revenue, respectively.
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. For a reconciliation of ROCE to income from operations, the most directly comparable GAAP measure, see “Non-GAAP Financial Measures” below.
We define ROCE as income from operations, before acquisition and integration 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.
We utilize Return on Capital Employed (“ROCE”) (a non-GAAP measure) to assess the effectiveness of our capital allocation over time and to compare our capital efficiency to our competitors, and for this reason we believe this measure will provide useful information to investors.
For a reconciliation of Free Cash Flow to net cash provided by operating activities, the most directly comparable GAAP measure, refer to “ Non-GAAP Financial Measures ” below. • Return on Capital Employed We utilize Return on Capital Employed (“ROCE”) (a non-GAAP measure) to assess the effectiveness of our capital allocation over time and to compare our capital efficiency to our competitors, and for this reason we believe this measure will provide useful information to investors.
Interest is payable monthly for alternate base rate loans and at the end of the applicable interest period for term SOFR loans (or quarterly if the applicable interest period is longer than three months).
Interest is payable monthly for alternate base rate loans and at the end of the applicable interest period for term SOFR loans (or quarterly if the applicable interest period is longer than three months). The Credit Agreement provides for the issuance of letters of credit, limited to the lesser of total capacity or $10.0 million.
Non-GAAP Financial Measures See the section “ How We Evaluate our Results of Operations ” above for a definition of our non-GAAP financial measures.
NON -GAAP FINANCIAL MEASURES Refer to “ How We Evaluate our Results of Operations ” for the definitions of our non-GAAP financial measures.
Selling, general and administrative expense for the year ended December 31, 2024 was $116.2 million, an increase of $43.4 million from $72.8 million for the year ended December 31, 2023.
Selling, general and administrative expenses Selling, general and administrative expense for the year ended December 31, 2025 was $128.8 million, an increase of $12.6 million from the year ended December 31, 2024.
Long-lived asset impairment expense for the year ended December 31, 2024 was $3.5 million , an increase of $3.2 million from $0.3 million for the year ended December 31, 2023 .
Impairment of long-lived assets Long-lived asset impairment expense for the year ended December 31, 2025 was $3.4 million , a decrease of $0.1 million from the year ended December 31, 2024 .
Our products perform a critical well function, and we believe they are chosen due to their reliability and capacity to save our customers time and lower costs during the well lifecycle.
Our products are used across the life cycle of the well (during the construction, completion, production and intervention phases) and are typically utilized downhole and consumable in nature. Our products perform a critical well function, and we believe they are chosen due to their reliability and capacity to save our customers time and lower costs during the well lifecycle.
For the periods after 2025, we have an additional $61.3 million of minimum 53 non-cancelable lease obligations comprised of $5.2 million of finance lease maturities and $56.1 million of non-cancelable operating lease obligations. As of December 31, 2024 , interest rates on our lease obligations ranged from 2.08% to 13.09%. See Note 11.
We have an additional $74.1 million of minimum non-cancelable lease obligations for the periods after December 31, 2026, comprised of $24.2 million of finance lease maturities and $49.8 million of non-cancelable operating lease obligations. As of December 31, 2025, interest rates on our lease obligations range from 2.88% to 12.00%. Refer to Note 11.
Total other expense (income), net for the year ended December 31, 2024 was $0.3 million, a decrease of $0.1 million from $0.4 million for the year ended December 31, 2023 , with the change primarily being due to the net change in our foreign currency exchange gains (losses). Equity method earnings .
Other (income) expense, net Total other (income) expense, net for the year ended December 31, 2025 and 2024 was ($1.8) million and $0.3 million, respectively. The change was primarily attributable to the net change in our foreign currency exchange (gains) losses.
Net cash used in financing activities for the year ended December 31, 2024 was ($103.1) million, an increase in cash used of $58.5 million from ($44.6) million for the year ended December 31, 2023.
Financing Activities Net cash used in financing activities for the year ended December 31, 2025 was $44.9 million, a decrease of $58.2 million from the year ended December 31, 2024.
Gain on consolidation of equity method investment for the year ended December 31, 2024 and 2023 was $8.0 million and zero, respectively. The gain on consolidation of equity method investment for the year ended December 31, 2024 was related to the step acquisition of DWS.
Gain on consolidation of equity method investment Gain on consolidation of equity method investment for the year ended December 31, 2024 was $8.0 million, which was entirely related to the step acquisition of DWS that occurred on November 29, 2024. No activity was recognized in 2025.
As of December 31, 2024 , we had $19.7 million of minimum non-cancelable lease obligations during 2025, comprised of $6.0 million of finance lease maturities and $13.7 million of non-cancelable operating lease obligations.
As of December 31, 2025, we had $23.9 million of minimum non-cancelable lease obligations for 2026, comprised of $8.3 million of finance lease maturities and $15.6 million of non-cancelable operating lease obligations.
Total depreciation and amortization expense for the year ended December 31, 2024 was $31.2 million, an increase of $8.5 million from $22.7 million for the year ended December 31, 2023.
Cost of revenues, exclusive of depreciation and amortization Total cost of revenues for the year ended December 31, 2025 was $675.0 million, an increase of $246.8 million from the year ended December 31, 2024.
We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Statement Regarding Forward-Looking Statements” and “Part I, Item 1A. Risk Factors.” Overview Innovex designs, manufactures, sells and rents mission critical engineered products to the global oil and natural gas industry.
We caution that assumptions, expectations, projections, intentions or beliefs about future events may, and often do, vary from actual results and the differences can be material. See “ Cautionary Statement Regarding Forward-Looking Statements ” and “ Part I, Item 1A.
Net cash provided by (used in) investing activities for the year ended December 31, 2024 was $78.4 million, an increase of $110.9 million from ($32.4) million for the year ended December 31, 2023.
Investing Activities Net cash used in investing a ctivities for the year ended December 31, 2025 was $18.7 million, a decrease of $97.2 million from the net cash provided by investing activities for the year ended December 31, 2024.
Additionally, public E&P operators have adopted a more conservative approach to capital spending in response to stockholders’ desire for increased return of capital. We believe that these factors have laid a foundation to support oil and natural gas prices and will lead to a sustained spending cycle and stable activity levels by our customers in the near and medium-term.
We believe that these factors have laid a foundation to support oil and natural gas prices and will lead to a sustained spending cycle and stable activity levels by our customers in the near and medium-term. 30 HOW WE EVALUATE OUR RESULTS OF OPERATIONS We use a variety of financial and operating metrics to analyze our performance.
In August 2022, Legacy Innovex acquired Pride, a company that complemented our well production and intervention product group. In May 2023, Legacy Innovex acquired 20% of DWS, a company that manufactures and rents engineered downhole tools designed to improve the performance of directional and horizontal drilling operations.
In May 2023, Legacy Innovex acquired 20% of DWS, a company that manufactures and rents engineered downhole tools designed to improve the performance of directional and horizontal drilling operations. In March 2024, Legacy Innovex entered into the Merger Agreement with Dril-Quip, and the Merger was consummated on September 6, 2024.
Subsequent Events to our Consolidated Financial Statements included elsewhere in this Annual Report for more details.
Refer to Note 9. Debt of our Consolidated Financial Statements included elsewhere in this Annual Report for additional information.
Our NAM market revenue for the year ended December 31, 2024 was $361.1 million, a decrease of $5.0 million from $366.1 million for the year ended December 31, 2023, primarily driven by an increase in market share and incremental business operations due to the Merger and DWS acquisition.
Our International and Offshore market revenue for the year ended December 31, 2025 was $467.1 million, an increase of $167.4 million from the year ended December 31, 2024, primarily driven by increased business operations due to the aforementioned acquisitions.
Adjusted EBITDA and Adjusted EBITDA Margin The following table presents a reconciliation of the GAAP financial measure of net income (loss) and net income (loss) as a percentage of revenue to Adjusted EBITDA and Adjusted EBITDA Margin, respectively, for each of the periods indicated: Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Net income $ 140,325 $ 73,926 66,399 90 % Interest expense 2,430 5,506 (3,076 ) (56 )% Income tax expense, net 2,487 20,440 (17,953 ) (88 )% Depreciation and amortization 31,207 22,659 8,548 38 % EBITDA $ 176,449 $ 122,531 53,918 44 % Other non-operating expense, net (1) 298 385 (87 ) (23 )% (Gain) loss on sale of assets (654 ) 106 (760 ) (717 )% Impairment of long-lived assets 3,522 266 3,256 1224 % Acquisition costs (2) 33,300 2,327 30,973 1331 % Equity method investment adjustment (3) 3,202 1,735 1,467 85 % Gain on bargain purchase (85,812 ) - (85,812 ) N/A Gain on consolidation of equity method investment (8,037 ) - (8,037 ) N/A Stock-based compensation 13,248 1,962 11,286 575 % IPO preparation expenses (4) 2,985 2,442 543 22 % Adjusted EBITDA $ 138,501 $ 131,754 6,747 5 % Net income as a % of revenue 21 % 13 % - - Adjusted EBITDA Margin 21 % 24 % - - (1) Primarily represents foreign currency exchange gain/loss, gain/loss on lease terminations, and other non-operating items.
Adjusted EBITDA and Adjusted EBITDA Margin The following table presents a reconciliation of the GAAP financial measure of net income and net income as a percentage of revenue to Adjusted EBITDA and Adjusted EBITDA Margin, respectively, for each of the periods indicated: Year Ended December 31, (in thousands) 2025 2024 $ Change % Change Net income $ 83,298 $ 140,325 $ (57,027 ) (41 )% Interest expense 2,582 2,430 152 6 % Income tax expense 45,231 2,487 42,744 1,719 % Depreciation and amortization 60,742 31,207 29,535 95 % EBITDA 191,853 176,449 15,404 9 % Other non-operating (income) expense, net (1) (1,828 ) 298 (2,126 ) (713 )% Gain on sale of assets (39,825 ) (654 ) (39,171 ) 5,989 % Impairment of long-lived assets 3,427 3,522 (95 ) (3 )% Acquisition and integration costs (2) 17,518 33,300 (15,782 ) (47 )% Equity method investment adjustment (3) — 3,202 (3,202 ) (100 )% Bargain purchase loss (gain) 3,342 (85,812 ) 89,154 (104 )% Gain on consolidation of equity method investment — (8,037 ) 8,037 (100 )% Stock-based compensation 13,798 13,248 550 4 % IPO preparation expenses (4) — 2,985 (2,985 ) (100 )% Adjusted EBITDA 188,285 138,501 49,784 36 % Net income as a % of revenue 9 % 21 % — — Adjusted EBITDA Margin 19 % 21 % — — (1) Primarily represents foreign currency exchange (gain) loss, (gain) loss on lease terminations, and other non-operating items.
The Credit Facility is secured by liens on substantially all of the assets of the Borrowers and certain future subsidiaries of Innovex and guarantees from certain future subsidiaries of Innovex.
The obligations under the Credit Agreement are secured by liens on substantially all of the assets of the Company and certain current and future subsidiaries of the Company and guarantees from certain current and future subsidiaries of the Company (the Company together with such subsidiaries, the “Loan Parties”).
The applicable margin under the New Credit Agreement will range from 0.50% to 1.00% for swing loans and alternate base rate revolving loans and 1.50% to 2.00% for term SOFR revolving loans.
The applicable margin under the Credit Agreement will range from 0.50% to 1.00% for swing loans and alternate base rate revolving loans and 1.50% to 2.00% for term SOFR revolving loans. On May 30, 2025, we acquired Citadel for $69.7 million in cash, subject to post-closing adjustments, resulting in Citadel becoming a wholly owned subsidiary of Innovex.
The change in cash used in financing activities is primarily related to the payment of $75.0 million in dividends, offset by a decrease of $14.6 million in net repayments on the Revolver, despite its continued pay down, and the payment of $10.2 million of taxes related to net share settlement of equity awards during the third quarter of 2024. 54 Credit Agreement Legacy Innovex, Tercel Oilfield Products USA L.L.C., Top-Co Inc. and Pride (collectively, the “Original Borrowers”) entered into the Second Amended and Restated Revolving Credit, Term Loan, Guaranty and Security Agreement in June 2022 (as amended in November 2022, April 2023, December 2023, and June 2024, the “Credit Agreement”), with PNC Bank, National Association, as agent (the “ Agent”), and the lenders party thereto.
Credit Agreement Legacy Innovex, Tercel Oilfield Products USA L.L.C., Top-Co Inc. and Pride Energy Services, LLC (collectively, the “Original Borrowers”) entered into the Second Amended and Restated Revolving Credit, Term Loan, Guaranty and Security Agreement in June 2022 (as amended in November 2022, April 2023, December 2023, and June 2024, the “Previous Credit Agreement”), with PNC Bank, National Association, as agent, and the lenders party thereto.
Market Factors and Trends Our business is driven by the number of oil and natural gas wells drilled worldwide, which, in turn, is tied to the level of global spending of the oil and natural gas E&P industry.
The short-term lease allows for the completion of ongoing facility consolidation initiatives, ensuring no disruption to customer deliveries. Market Factors and Trends Our business is driven by the number of oil and natural gas wells drilled worldwide, which is closely tied to global exploration and production spending.
Adjusted EBITDA for the year ended December 31, 2024 was $138.5 million, an increase of $6.7 million from $131.8 million for the year ended December 31, 2023.
Income tax expense for the year ended December 31, 2025 was $45.2 million, an increase of $42.7 million from the year ended December 31, 2024.
(Gain) loss on sale of assets . (Gain) loss on sale of assets for the years ended December 31, 2024 and December 31, 2023 was ($0.7) million and $0.1 million, respectively. The change during the two periods was due normal variations in property and equipment sales activity. Depreciation and amortization .
Gain on sale of assets Gain on sale of assets for the years ended December 31, 2025 and December 31, 2024 was $39.8 million and $0.7 million, respectively.
We seek to maintain a conservative balance sheet to preserve operational and financial flexibility through the industry cycle.
We seek to maintain a conservative balance sheet to preserve operational and financial flexibility through the industry cycle. Recent Developments On February 7, 2025, we acquired SCF in exchange for $17.7 million of cash, subject to post-closing adjustments.
Our vision has been to create a global leader in well-centric products and technologies through organic, customer-linked innovations and disciplined acquisitions to drive leading returns for our investors. Our products are used across the life cycle of the well (during the construction, completion, production and intervention phases) and are typically utilized downhole and consumable in nature.
EXECUTIVE SUMMARY Overview Innovex designs, manufactures, sells and rents mission critical engineered products to the global oil and natural gas industry. Our vision has been to create a global leader in well-centric products and technologies through organic, customer-linked innovations and disciplined acquisitions to drive leading returns for our investors.
(3) Reflects the elimination of our percentage of interest expense, depreciation, amortization and other non-recurring expenses included within equity method earnings relating to our previously unconsolidated investment in DWS. (4) Reflects legal, consulting and accounting fees and expenses related to the preparation of Legacy Innovex’s initial public offering.
These acquisition and integration costs are one-time in nature and represent expenses that we do not view as normal operating expenses necessary to operate our business. (3) Reflects the elimination of our percentage of interest expense, depreciation, amortization and other non-recurring expenses included within equity method earnings relating to our previously unconsolidated investment in DWS.
As a result of our culture and our commitment to customer responsiveness, we believe that we are more agile and able to innovate faster than our larger competitors. Based on our TAM estimates, we believe that we are uniquely positioned to grow market share within larger addressable markets after the Merger with Dril-Quip.
As a result of our culture and our commitment to customer responsiveness, we believe that we are more agile and able to innovate faster than our larger competitors. Our organic growth has been complemented by a disciplined acquisition strategy.
Acquisition costs for the year ended December 31, 2024 was $33.3 million, an increase of $31.0 million from $2.3 million for the year ended December 31, 2023. The change in acquisition costs was primarily due to the costs incurred in connection with the Merger and the acquisition of DWS. Interest expense .
Acquisition and integration costs Acquisition and integration costs for the year ended December 31, 2025 were $17.5 million, a decrease of $15.8 million from the year ended December 31, 2024. The change was due to a reduction of costs incurred attributable to the Merger in 2024.
See Note 9. Debt to our Consolidated Financial Statements included elsewhere in this Annual Report for additional information. We believe that our existing cash on hand, cash generated from operations and available capacity under the Revolver will be sufficient to meet our liquidity needs in the short and long-term.
We believe that our exis ting cash on hand, cash generated from operations and available capacity under the Credit Agreement will be sufficient to meet our liquidity needs in the short and long-term. However, if work activity increases, we expect further working capital investment will be required.
As of December 31, 2024 and December 31, 2023, we had $11.4 million and $17.7 million, respectively, of borrowings outstanding under the Term Loan, and $14.0 million and $23.2 million, respectively, of borrowings under the Revolver. 55 The consummation of the transactions contemplated by the Merger Agreement constituted a Change of Control (as defined in the Credit Agreement).
As of December 31, 2024, we had $11.4 million and $14.0 million of borrowings outstanding under the Term Loan and applicable revolving credit facility, respectively. As of December 31, 2025, we had no borrowings outstanding under the Credit Agreement and borrowing capacity available under the Credit Facility was $138.0 million .
Net income for the year ended December 31, 2024 was $140.3 million, an increase of $66.4 million, from net income of $73.9 million for the year ended December 31, 2023, primarily as a result of the factors discussed above.
For the year ended December 31, 2025, income before taxes was $128.5 million, a decrease of $14.3 million from the year ended December 31, 2024 . 33 Net income Net income for the year ended December 31, 2025 was $83.3 million, a decrease of $57.0 million from the year ended December 31, 2024, as a result of both the bargain purchase gain recognized for the year ended December 31, 2024 and the factors discussed above.
The following table presents summary consolidated operating results for the periods presented: Year Ended December 31, (in thousands) 2024 2023 $ Change % Change Revenues $ 660,803 $ 555,539 $ 105,264 19 % Cost of revenues 428,172 360,102 68,070 19 % Selling, general and administrative expenses 116,181 72,797 43,384 60 % (Gain) loss on sale of assets (654 ) 106 (760 ) (717 )% Depreciation and amortization 31,207 22,659 8,548 38 % Impairment of long-lived assets 3,522 266 3,256 1224 % Acquisition costs 33,300 2,327 30,973 1331 % Total costs and expenses $ 611,728 $ 458,257 $ 153,471 33 % Income from operations 49,075 97,282 (48,207 ) (50 )% Interest expense 2,430 5,506 (3,076 ) (56 )% Other expense, net 298 385 (87 ) (23 )% Equity method earnings (2,616 ) (2,975 ) 359 (12 )% Gain on bargain purchase (85,812 ) - (85,812 ) N/A Gain on consolidation of equity method investment (8,037 ) - (8,037 ) N/A Income before income taxes 142,812 94,366 48,446 51 % Income tax expense, net 2,487 20,440 (17,953 ) (88 )% Net income $ 140,325 $ 73,926 $ 66,399 90 % Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Revenues .
The following table presents summary consolidated operating results for the periods presented: Year Ended December 31, (in thousands) 2025 2024 $ Change % Change Revenues $ 978,251 $ 660,803 $ 317,448 48 % Cost of revenues (a) 674,971 428,172 246,799 58 % Selling, general and administrative expenses 128,793 116,181 12,612 11 % Gain on sale of assets (39,825 ) (654 ) (39,171 ) 5,989 % Depreciation and amortization 60,742 31,207 29,535 95 % Impairment of long-lived assets 3,427 3,522 (95 ) (3 )% Acquisition and integration costs 17,518 33,300 (15,782 ) (47 )% Total costs and expenses $ 845,626 $ 611,728 $ 233,898 38 % Income from operations 132,625 49,075 83,550 170 % Interest expense 2,582 2,430 152 6 % Other (income) expense, net (1,828 ) 298 (2,126 ) (713 )% Equity method earnings — (2,616 ) 2,616 (100 )% Bargain purchase loss (gain) 3,342 (85,812 ) 89,154 (104 )% Gain on consolidation of equity method investment — (8,037 ) 8,037 (100 )% Income before income taxes 128,529 142,812 (14,283 ) (10 )% Income tax expense 45,231 2,487 42,744 1,719 % Net income $ 83,298 $ 140,325 $ (57,027 ) (41 )% (a) Cost of revenues excludes depreciation and amortization.
As of December 31, 2024, we were in compliance with all covenants under the Credit Facility. If an event of default exists under the Credit Agreement, the lenders will be able to accelerate the maturity of the Credit Facility and exercise other rights and remedies.
As defined by the Credit Agreement, the fixed charge coverage ratio represents the ratio of Adjusted EBITDA (as defined in the Credit Agreement), less certain capital expenditures, dividends and tax payments, to all scheduled debt payments during the applicable period. 36 If an event of default exists under the Credit Agreement, the lenders will be able to accelerate the maturity of the obligations outstanding under the Credit Agreement and exercise other rights and remedies.
Leases to our Consolidated Financial Statements included elsewhere in this Annual Report for the years ended December 31, 2024 and 2023 for additional information. In addition, as of December 31, 2024 , we had $5.0 million of debt maturities during 2025 comprised of $5.0 million of required amortization payments on our Term Loan (as defined herein).
Our effective interest rate on the Revolver for the years ended December 31, 2025 and December 31, 2024 was 8.92% and 9.34%, respectively; there were no borrowings on the Credit Agreement as of December 31, 2025. Refer to Note 9. Debt of our Consolidated Financial Statements included elsewhere in this Annual Report for additional information.
Income tax expense for the year ended December 31, 2024 was $2.5 million, a decrease of $17.9 million from $20.4 million for the year ended December 31, 2023. The change was primarily driven by changes in mix of income before income taxes by geography and tax jurisdiction, discrete items recorded in the year, and other non-deductible expenses.
The change was primarily driven by changes in (i) our mix of income before income taxes by geography and tax jurisdiction, (ii) changes in valuation allowances in foreign jurisdictions, (iii) foreign withholding taxes, and (iv) other non-deductible expenses.
See the description for the gain on consolidation of equity method investment within section titled "Description of Certain Components of Financial Data" for further details . Gain on bargain purchase . Gain on bargain purchase for the year ended December 31, 2024 and 2023 was $85.8 million and zero, respectively.
With the purchase of the remaining 80% equity interest in DWS on November 29, 2024, we did not recognize equity method earnings in 2025. Bargain purchase loss (gain) Bargain purchase loss (gain) for the year ended December 31, 2025 and 2024 was $3.3 million and $(85.8) million, respectively.
Liquidity and Capital Resources Our primary sources of liquidity are our existing cash, cash provided by operating activities, and borrowings under the Credit Facility. As of December 31, 2024 , we had cash and restricted cash of $73.3 million and availability under the Revolver (as defined herein) of $77.6 million.
As of December 31, 2025 , we had cash and restricted cash of $203.4 million and availability under the Credit Agreement (as defined herein) of $138.0 million. Our total indebtedness was $25.6 million as of December 31, 2025 .
Rystad Energy also estimates that the annual number of global wells drilled, excluding Iran, Venezuela, Cuba, Russia and China, will decrease 4% from approximately 34,000 in 2023 to approximately 32,600 in 2027.
As of January 23, 2026, Rystad Energy expects global upstream energy spending, excluding Iran, Venezuela, Cuba, Russia and China, to stay relatively flat over the next few years. Approximately 32,000 wells were drilled in 2025, which number is expected to slightly decline in 2026, and then recover to approximately 32,000 wells annually from 2027 through 2028.
For the year ended December 31, 2023, acquisition costs consisted of legal, accounting, and advisory fees associated with the acquisition of our prior minority ownership interest in DWS along with other integration related expenses. These acquisition costs are one-time in nature and represent expenses that we do not view as normal operating expenses necessary to operate our business.
(2) For the year ended December 31, 2025, acquisition and integration costs consisted of legal, accounting, advisory fees, move, severance and other integration costs associated with the Merger, the acquisition of the remaining equity interest in DWS, and the acquisitions of SCF and Citadel.
Our International and Offshore market revenue for the year ended December 31, 2024 was $299.7 million, an increase of $110.3 million from $189.4 million for the year ended December 31, 2023, primarily attributable to increased business operations as a result of the Merger and DWS acquisition. Cost of revenues .
Depreciation and amortization Total depreciation and amortization expense for the year ended December 31, 2025 was $60.7 million, an increase of $29.5 million from the year ended December 31, 2024. The change was primarily attributable to the additional depreciation on assets acquired as part of our acquisitions.
The change in cash provided by (used in) investing activities was primarily due to $154.3 million of cash acquired from the Merger, offset by a $65.5 million payment for the acquisition of DWS during the fourth quarter of 2024 .
The change was primarily attributable to the cash used to fund our acquisitions in 2025, offset by the proceeds from the Eldridge Facility sale in 2025 versus the cash acquired as part of the Merger for 2024.
The remaining 20% of the issued and outstanding equity securities of DWS were previously owned by Legacy Innovex, a wholly owned subsidiary of the Company. For information with respect to the Merger and DWS acquisition, see Note 3. Mergers and Acquisitions to our Consolidated Financial Statements included elsewhere in this Annual Report.
The bargain purchase gain recognized in 2024 was related to the Merger, while the bargain purchase loss recognized in 2025 was related to measurement period adjustments recognized subsequent to the Merger. Refer to Note 3. Mergers and Acquisitions of our Consolidated Financial Statements included elsewhere in this Annual Report for additional information.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+2 added−3 removed0 unchanged
Biggest changeRisk Factors — Risks Related to our Business” in this Annual Report for further details on our foreign currency exchange risk. Interest Rate Risk We are primarily exposed to interest rate risk through the Revolver and Term Loan.
Biggest changeRisk Factors—Risks Related to our Business—The scope of our international operations subjects us to risks from currency fluctuations that could adversely affect our liquidity, financial position and results of operations ” in this Annual Report for further discussion on our foreign currency exchange risk. 38 Interest Rate Risk We are primarily exposed to interest rate risk through the Credit Agreement, which bears interest at the alternate base rate plus an applicable margin or at an adjusted SOFR rate plus an applicable margin.
Foreign Currency Exchange Rate Risk A portion of our revenues are derived internationally and, accordingly, our competitiveness and financial results may be impacted by foreign currency fluctuations where revenues and costs are denominated in local currencies rather than U.S. dollars. See “Item 1A.
Foreign Currency Exchange Rate Risk A portion of our revenues are derived internationally and, accordingly, our competitiveness and financial results may be impacted by foreign currency fluctuations where revenues and costs are denominated in local currencies rather than U.S. dollars.
Item 7A. Quantitative and Qualitati ve Disclosures About Market Risk. Our financial position is exposed to a variety of risks, including commodity price risk, foreign currency exchange rate risk, and interest rate risk. The Company does not engage in any material hedging transactions, forward contracts or currency trading which could mitigate the market risks inherent in such transactions.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Our financial position is exposed to a variety of risks, including foreign currency exchange rate risk and interest rate risk. We do not engage in any material hedging transactions, forward contracts or currency trading which could mitigate the market risks inherent in such transactions.
Removed
Commodity Price Risk The market for our products and services is indirectly exposed to fluctuations in the prices of oil and natural gas to the extent such fluctuations impact drilling and completion activity levels and thus impact the activity levels of our customers in the exploration and production industry.
Added
For the year ended December 31, 2025, we derived 29% of our revenues from entities that primarily transacted in currencies other than the U.S. dollar. Refer to “ Item 1A.
Removed
Additionally, because we do not sell our products under long-term contracts, we believe that we are particularly exposed to short-term fluctuations in the prices of oil and natural gas.
Added
As of December 31, 2025, we had no debt outstanding under the Credit Agreement. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The information required hereunder is included in this Annual Report beginning on page F-1. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
Removed
As of December 31, 2024, we had variable rate debt outstanding consisting of $11.4 million under the Term Loan and $14.0 million under the Revolver which bear interest at an adjusted SOFR rate plus an applicable margin or at the alternate base rate plus an applicable margin.

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