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Operator: Good morning, and welcome to Innovex's Fourth Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this call is being recorded. I will now turn the call over to Eric Wells, Chief of Staff. Please go ahead.
Eric Wells: Good morning, everyone, and thank you for joining us. An updated investor presentation has been posted under the Investors tab on the company's website, along with the earnings press release. This call is being recorded, and a replay will be made available on the company's website following the call. Before we begin, I would like to remind you that Innovex's comments may include forward-looking statements and discuss non-GAAP financial measures. It should be noted that a variety of factors could cause Innovex's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Please refer to the fourth quarter and full year 2025 financial and operational results announcement that we released yesterday for a discussion of forward-looking statements and reconciliations of non-GAAP measures. Speaking on the call today from Innovex, we have Adam Anderson, Chief Executive Officer; and Kendal Reed, Chief Financial Officer. I will now turn the call over to Adam Anderson.
Adam Anderson: Good morning, and thanks for joining us today. First off, I want to recognize our team, which has worked tirelessly to deliver margin improvement, organic share growth, improved on-time performance and strong free cash flow since the merger with Dril-Quip in September of 2024. We've asked a lot of the organization, and I'm proud of what we've accomplished. In 2025, we made tangible progress against the goals we articulated at the time of the merger and the results we are discussing today are a direct reflection of the commitment and collaboration of our global teams. A defining characteristic of Innovex is our no Barriers Culture, the belief that to drive the best outcomes for our customers and shareholders, we must tear down barriers between ourselves, our customers and internally across the entire company. This mindset of working effortlessly across product lines, geographies and functions has enabled us to build a leading global oilfield service company from a standing start less than a decade ago. Our fourth quarter and full year results demonstrate the power of our no barriers approach. On today's call, I will discuss our fourth quarter and full year results and highlight the key developments shaping our performance, starting with continued market share gains, synergy capture from recent acquisitions, customer-led product innovation and progress against our key operational initiatives. After these operational and commercial updates, I will turn the call over to Kendal, who will discuss our financial results and provide more detail on our balance sheet, capital allocation priorities and our outlook for Q1. Turning to performance. We delivered a strong finish to 2025, exceeding the high end of our fourth quarter revenue guidance while generating substantial free cash flow and further strengthening our balance sheet. Fourth quarter revenue totaled $274 million, up 14% sequentially. That performance was driven by higher-than-expected subsea deliveries, continued momentum in our drilling enhancement and well construction portfolios and revenue synergies from recent acquisitions. Strong Q4 revenues reflected some pull forward of subsea deliveries that were previously expected for Q1 2026, which will impact sequential comparisons. As a reminder, we recognize revenues from those large subsea projects upon customer delivery, which can drive quarter-to-quarter volatility. Despite a softer macro environment, we grew market share across U.S. land, offshore and international markets. We continuously invest in innovation across our portfolio of big impact small ticket products. While our products represent just a small portion of the wells cost, they are critical to a wells function. And therefore, our customers' purchase decision is driven more by product performance than achieving the lowest possible price. We've curated a portfolio of primarily single-use technologies, which allows us to operate in a capital-light manner. We leverage a diverse and nimble supply chain, which combined with our product portfolio keeps CapEx low, historically less than 3% of revenue, which allows us to convert a significant proportion of our adjusted EBITDA to free cash flow. We generated strong free cash flow, which we plan to redeploy into disciplined M&A, customer-led innovation and shareholder returns. Operational execution was strong across the platform. In U.S. land, we outperformed underlying activity levels by realizing revenue synergies and introducing new technologies. The integration of Citadel and DWS provides a clear example of this execution in action. We acquired Citadel for its strong cultural alignment with our no barriers philosophy and its portfolio of highly engineered single-use technologies designed to reduce our customer cycle times and improve operational efficiency. At the time of the acquisition, we noted limited customer overlap between our legacy Innovex business and Citadels, creating a clear opportunity for revenue synergies, which we are now beginning to realize. Our drilling enhancement product line, which largely came to us through the acquisition of DWS has also driven cross-selling opportunities across the customer base. Together, these integrations demonstrate exactly how our M&A playbook is designed to work, disciplined acquisitions translating into execution, revenue synergies and market share gains. In offshore and international markets, execution remains solid. During the quarter, we delivered our first products under our global alliance with OneSubsea, validating the strategic importance of our partnership. The alliance enables us to supply OneSubsea with industry-leading wellheads for EPCI or bundled contracts, increasing our addressable market for subsea wellheads and improving OneSubsea's competitive offering. During the quarter, we also completed our 10 successful XPak expandable liner installation in Brazil's pre-salt fields. XPak is a differentiated technology that we acquired from Dril-Quip, which we believe has broader applicability across offshore basins. We also leveraged this technology onshore, an example of how we create value through innovation, customer relationships and distribution. In the quarter, we successfully delivered our first onshore XPak Express installation for a major independent in U.S. land, adapting this offshore expandable liner technology to support some of the most technically complex wells in the Permian. In Mexico, we substantially completed deliveries of subsea wellheads and large-diameter tubulars for a major offshore development, reflecting strong project execution and coordination across our global supply chain. In Saudi Arabia, we increased revenue sequentially and strengthened our local content position with the inauguration of our manufacturing facility in the Dammam industrial area. Overall, we exited 2025 with strong momentum, a differentiated and expanding technology portfolio and a clear runway for continued execution. I'm excited about the trajectory of our Subsea business with new orders in Q4 and at the start of Q1. We have been awarded significant projects for subsea wellheads and associated specialty items in Asia Pacific and the Mediterranean. In Brazil, we signed a landmark subsea contract with an IOC we have not worked for in over a decade. We have additional significant opportunities in the subsea pipeline we expect to win this year, setting up a strong outlook for our Subsea business. We plan to build on our commercial momentum this year while remaining focused on improving margins, enhancing the customer experience and unlocking long-term value for our shareholders. Our execution in 2025 gives me confidence that we're building a platform capable of delivering value for our employees, our customers and our shareholders. I will now turn the call over to Kendal, who will walk through our financial results and outlook in more detail.
Kendal Reed: Thanks, Adam, and good morning, everyone. I'd now like to review our fourth quarter and full year 2025 financial results. For the fourth quarter of 2025, revenue was $274 million, which is a 14% sequential increase from the third quarter and a 9% increase compared to Q4 2024. Adjusted EBITDA for the quarter totaled $52 million, resulting in an adjusted EBITDA margin of 19% and free cash flow for the quarter was $43 million. Our strong Q4 performance was driven primarily by our Subsea business, which over the past several years has seen a seasonally strong Q4 followed by a weaker Q1, an effect further amplified this year by some deliveries occurring prior to year-end, which we previously expected to fall in Q1, a credit to our team's ongoing efforts to improve manufacturing on-time delivery. From a geographic perspective, NAM land revenue increased sequentially by 5% to a record level of $139 million. Our NAM land business continues to outperform underlying activity levels, driven by market share gains, strong execution and increased cross-selling across the Innovex platform. Customers increasingly deployed multiple Innovex solutions together in the same wellbores, reflecting the value of our integrated sales approach and supporting strong margins and cash generation. We do expect slightly lower NAM land revenues in Q1 due to the impact of weather on U.S. land activity, but we continue to improve our market position and feel very positive about our organic and M&A growth opportunities. International and Offshore revenues increased sequentially by 25%, benefiting from significantly higher subsea deliveries during the quarter, including approximately $15 million of deliveries we previously expected to fall in Q1 2026. We want to thank our team for the incredible effort to meet our customers' needs in Q4, and we remain pleased with the long-term outlook of our International and Offshore business with significant orders building for late 2026 and 2027. As expected, Q4 margins were impacted by the completion of several lower-margin legacy subsea projects as well as costs associated with the ongoing exit of the Eldridge facility. These factors will continue to weigh on margins during the first half of 2026. Importantly, the planned exit of the Eldridge facility, which we expect to complete by the end of the second quarter, is a foundational element of our margin improvement plan. Our reduced manufacturing footprint, improved on-time delivery and more disciplined bidding practices are expected to drive meaningful margin expansion as we progress through 2026. Selling, general and administrative expenses for the full year 2025 were $129 million, representing 13% of revenue. This is a significant decrease from our 2024 level of 18% of revenue. This improved efficiency comes as a result of our focus throughout the year on fully realizing synergies from all recent acquisitions and improving our cost structure wherever possible. As a result of these cost savings, despite a challenging product mix in Q4 and ongoing Eldridge exit costs, adjusted EBITDA for full year 2025 was $188 million, resulting in margins of 19%. Capital expenditures in the fourth quarter of 2025 totaled $9 million, representing approximately 3.3% of revenue. Full year 2025 capital expenditures were $35 million, representing 3.6% of revenue. 2025 CapEx was slightly elevated relative to Innovex's historical range of 2% to 3% of revenue related primarily to facility integration efforts, and we expect this slightly elevated spending to continue through Q2 2026 as we complete the exit of Eldridge. However, we believe significant efficiency gains and long-term margin improvement will be unlocked by these onetime investments. Free cash flow was $43 million for the quarter and $156 million for full year 2025. We converted approximately 83% of our adjusted EBITDA into free cash flow in both the quarter and full year 2025, a phenomenal result, well above our normalized conversion target of 50% to 60%. This performance reflects our countercyclical cash conversion profile, which we have previously discussed. During periods of slower activity growth, we typically convert a higher percentage of our adjusted EBITDA into free cash flow as working capital unwinds. Conversely, during periods of accelerating activity, we see the opposite effect as we build inventory to meet growing customer demand. In addition to this dynamic, 2025 benefited from harvesting cash from the legacy Dril-Quip balance sheet, driving further outperformance. As a reminder, we do typically see our lowest seasonal free cash flow in the first quarter of each year due to timing of certain annualized cash payments. I'm thrilled with our cash flow performance in 2025 as our high free cash flow conversion reflects the through-cycle strength of our capital-light business model and our disciplined working capital management. We ended the year with approximately $203 million of cash and cash equivalents and no bank debt, providing significant financial flexibility. Our balance sheet strength supports continued execution of our disciplined capital allocation framework, including selective high-return M&A opportunities and opportunistic share repurchases. We continue to see numerous opportunities to enhance our portfolio and drive market share growth through accretive acquisitions of businesses that fit our big impact, small ticket engineered product thesis, and this remains our top capital allocation priority for 2026. Return on capital employed for the full year 2025 was 10%. While this remains below our long-term target, we expect ROCE to improve as margins expand, lower-margin legacy projects roll off, integration benefits are fully realized and we utilize cash for high-return M&A or return it to shareholders. Looking ahead to the first quarter of 2026, we expect revenue in the range of $225 million to $235 million and adjusted EBITDA of $38 million to $42 million, with the sequential decline in revenue driven by seasonality and delivery timing in our Subsea business and some weather-related impacts on U.S. land activity. Our ongoing share gains on U.S. land, further recovery in Saudi Arabia and Mexico as well as the subsea wins Adam mentioned should drive further growth in 2026. While subsea mix and remaining transition costs will continue to impact margins early in the year, we remain confident in our margin improvement trajectory as 2026 progresses. Our M&A pipeline also remains active with several high-quality capital-efficient businesses that align with our strategy under review. I'll now turn the call back to Adam.
Adam Anderson: Thanks, Kendal. To close, I want to again recognize the Innovex team for their execution and commitment throughout 2025. We strengthened our foundation, delivered strong financial results and positioned the company for the next phase of growth. We're building a business that can perform across cycles, leveraging our strong balance sheet, disciplined capital allocation and a differentiated portfolio of technology-driven, high-return products. As we move into 2026, we remain focused on continuing to enhance customer experience, capturing additional market share and driving sustained margin expansion towards our long-term target of 25%. Thank you once again to our employees, customers and investors for your trust and partnership. Operator, we can now open the line for questions.
Operator: [Operator Instructions] We'll take our first question from Derek Podhaizer at Piper Sandler.
Derek Podhaizer: Maybe just to start, hoping to unpack the first quarter margin guide a little bit further. You've talked about the Subsea margins weighing on company margins, these low-margin projects continue to weigh first half of the year. I know you have the exit costs associated with Eldridge. You talked about optimizing your bidding process. I'm just trying to get an understanding of what happened, what's causing these margins to be weighed upon? And how should we think about the improvement over time and just thinking about any structural headwinds to that long-term 25% target that you've laid out?
Adam Anderson: Derek, thanks for the question. So first, I would say, hey, point you to Q4, and we had a really strong result in the quarter. Some of that was a result of pulling forward. Some of the subsea deliveries that we were expecting in Q1 got pulled into Q4, which I think on balance is good for us, but makes Q1 a little bit lighter. We'll still have a couple of low-margin subsea deliveries Q1, Q2 that will weigh margins down a little bit. And then as you know, we're working on a lot of things around improving margins. The single biggest of that is the Eldridge exit, which has pushed back a little bit like we were originally forecasting that probably early-ish in Q1. That's probably going to slide into Q2 as we finish out some customer orders here for the Western Hemisphere. So I think all in all, like a very good Q4. Yes, Q1 is a little bit -- we're seeing a little bit of seasonal decline there and a little bit of that pull-through effect we mentioned earlier. But I don't think any of this impacts how we're thinking about the long-term margin progression, both seeing a little bit of improvement as you particularly as you get in the back half of this year as well as in '27 and beyond.
Derek Podhaizer: Got it. Okay. That's encouraging. I appreciate that. And then I guess on the integrated cross-selling opportunities, I mean, this is pretty exciting, just given this shows the unique platform that you guys have as far as bringing on these acquisitions and putting them on the larger Innovex platform. Maybe could you help us provide some maybe real tangible examples of how you've been able to expand the drilling enhancement well construction with DWS and Citadel because it feel like this sets the playbook for your future M&A opportunities that I know you guys are focused on as we move through the year.
Adam Anderson: Yes, I agree. I think we're really excited about that, both what we've accomplished in the couple of those really great acquisitions we've done over the last 1.5 years or so as well as our pipeline of M&A opportunities. So if you look at the drilling enhancement product line that came to us through the DWS acquisition, that business is performing great. And then we're seeing both benefits in U.S. land, where that team has some really strong relationships with a couple of larger independents Innovex historically hadn't worked for that we're seeing some product pull-through already. So that's exciting. And then conversely, we're seeing really good adoption of those products into the Middle East, which is going to be very difficult for that business to go attack on a stand-alone basis, like we're seeing really good uptake in Oman, UAE. We're doing some good work there with some of those independents coming in to do unconventional work there in the Middle East. And then a similar story, albeit a little bit earlier with respect to the Citadel deal, another business that's performing -- was performing great in the acquisition has continued to do well. And then we've seen some cross-selling opportunity in North America. And then we're really excited with what those -- that product set can do internationally and the likes of Argentina. We're in the middle of a trial test right now in Saudi with the trench foot wet shoe product that came to us through the Citadel acquisition. So yes, we're seeing a lot of good early tangible benefits from those deals, which gives us more confidence not only in where those deals are headed, but also executing on the string of other -- of really other attractive businesses that we see in front of us. And to be clear, we normally don't bake any of these revenue synergies into underwriting new deals. We look at them on a stand-alone basis and any kind of revenue synergies, we usually keep as upside.
Operator: Next, we'll move to Don Crist at Johnson Rice.
Donald Crist: It's been about 15 months or so since you closed Dril-Quip. And I know a lot of investors probably don't realize the kind of length of order schedule on the offshore side. So just kind of curious as to -- are you fully finalized all of the kind of Dril-Quip initiated orders on the Subsea side now and maybe that's the reason why your margins are coming in a little bit? And kind of when did your sales team really take over after the Dril-Quip merger to where you're actually driving the pencil versus inheriting some of those orders? Can you tell us where you are in that kind of structure?
Adam Anderson: Yes. Don, thanks for the question. Yes. So to be clear, like I wouldn't -- some of the contracts, these are long-term 4-, 5-year contracts, some of which are very attractive. Other -- some stuff comes in a little bit less margin. We're going to see margin improvement going forward, both through cost structure reduction, for example, not having as many really large under manufacturing plants and really consolidating a lot of that or all of that subsea demand into a singular manufacturing plant is going to be a really big benefit. We do have a couple of specific one in particular subsea project flowing through the books right now that's at lower margin than we expected. And to be perfectly frank, that was bid under our tenure. That was bid post the deal closing. We just made some assumptions we were too optimistic in some of our assumptions there. So we'll see that order still weigh a little bit in Q1, start to bleed off in Q2, and then we're rebidding that as we speak. And would expect both a little bit of incremental price improvement as well as a little bit of cost reduction on that specific one, but that's kind of the broader theme.
Donald Crist: Okay. And then can you give us an update kind of on the Far East manufacturing expansion, Vietnam and China and that kind of where you are in that process of kind of moving everything over? I mean, are we pretty much done with the CapEx on that and ready to kind of go full force there?
Adam Anderson: Yes. No, I would -- I think we're kind of mid-innings. I think we've got two big projects going on there. We're moving a lot of the subsea manufacturing to our existing footprint in Singapore. As Kendal said on the call, we saw some CapEx impact in Q4 of that. We'll probably see a little bit more in the first half of this year. Then to be clear, that's both for some manufacturing footprint in Singapore as well as repositioning our Gulf U.S. offshore operations here, we need some CapEx to probably sustain that as we move out of Eldridge. And then on the downhole world, we acquired a business, a manufacturing facility in Vietnam last year. That's still -- we're ramping slowly into that. I think that's one over the next year or 2, we'll see continued growth there. There will be a little bit of incremental CapEx there, but that's kind of baked -- again, kind of baked into our earlier comments. I think both of those, we really haven't started to see any of the impact of the efficiencies that will come with having lower overall footprint and then a really high-quality but low-cost, high-volume facilities there in the Far East that we can lean on. We'll maintain a pretty robust supply chain in many of the markets we operate like the U.S. We'll always have a pretty good-sized manufacturing capability to respond to our market needs here in the U.S. But as we channel some of the higher volume and some of the Eastern Hemisphere demand into these plants, we'll see some nice benefit over the next year or 2.
Donald Crist: Okay. That's very, very helpful as you expand around the world. And just one final one for me. We're -- as analysts, we're talking a lot about the broader Middle East and Northern Africa region. And can you just tell us just broadly speaking, kind of when you get brought into conversations if somebody is bidding on one of those big tenders? Is it 6 months before the project starts? Or is it kind of when the project starts? Because I know a lot of the guys from the U.S. are over there consulting and presumably, they like your equipment here in the U.S., they would bring it over there.
Adam Anderson: Yes. So it depends a lot based on the project and the operator. For example, if you look -- some of the quickest hit stuff, if you look at some of the IOCs that are putting rigs to work and like a Bahrain or the UAE, we're seeing some benefit from that right now and some guys that we work with in the U.S. have showed up over there, and we're seeing some of that. That's on the smaller side just because that's -- those are smaller dollars. When you look at some of these big, big contracts that are let across the Saudi or Kuwait, some of those, we don't -- the benefit of being these kind of big impact small ticket products is that we're not always included in those big, big tenders that can be pretty aggressively priced. And we have these niche products that are sold a little bit later than those big projects. So it can kind of run the gambit from we get them brought in right away to, hey, we're a little bit more just in time as the rigs are getting stood up and start to go to work.
Donald Crist: Okay. But you are seeing demand from friends over there that have moved from the U.S. that like your product?
Adam Anderson: Yes. Yes. We have definitely seen some of that. I mean to be -- it's not nearly as big. And these IOCs, you're not running nearly the same rig count as some of the big NOCs in the region. But yes, we're seeing a little bit of benefit from that. And then in general, we're seeing some of that reactivation of rigs in Saudi, continued growth in other countries in the Middle East. So we'll start to see the benefit of that as we progress throughout this year and go into '27.
Operator: We'll move next to Keith Beckmann at Pickering.
Keith Beckmann: I just kind of wanted to hit around the M&A side of things again. I wanted to know if you could give us a little bit of a better sense on maybe the current M&A landscape you see, whether it's private equity companies in the U.S. or are there even any opportunities internationally? And maybe what areas of the business do you think could be improved? You guys have a lot of products, but maybe is there any areas from an M&A perspective that you think you're missing that could help you improve?
Kendal Reed: Yes. Thanks, Keith. So as you know, M&A is definitely a core part of our strategy. So we're constantly looking for opportunities to grow and improve the business through acquisitions. And I would say right now, we're very excited about the opportunity set. Our M&A pipeline is probably as active right now as it's ever been. We mentioned on the call, we have multiple opportunities under review. Some of those are progressing nicely. And I think to your question on what are the most kind of actionable opportunities there. We have a handful of things, but I would say the most near-term impactful ones for us are probably going to be add-on style acquisitions where we can add kind of a specific differentiated product or a small portfolio of products to our overall portfolio and then look to grow those through the global distribution network. That could be private equity-backed, could be founder-backed, but generally speaking, more U.S.-based, a little bit smaller companies that have a lot of the abilities to both help us and we can help them kind of allow the DWS and Citadel playbook. I think that continues to be a really interesting space for us to play. We are looking at a few bigger, more transformative, more international style deals as well. But as you know, those tend to be take much longer or harder to handicap what's going to come to fruition there. But overall, I think based on what we're seeing, we really think M&A remains a great way for us to deploy capital in the near term. But as we've always said, we screen these deals against our buyback program and look to allocate capital in a way that drives the best long-term shareholder returns.
Keith Beckmann: Awesome. That's very helpful. And then my second question was just going to be kind of around free cash flow conversion. And I know you guys hit on this a little bit, but the free cash flow improvement, I mean, I think you guys had 83% free cash flow conversion for the year, which is just a substantial structural improvement, along with some help from working capital, I know. But I think you've described 50% to 60% is kind of the normal business run rate conditions. I just wanted to get an idea on throughout 2026, if we should expect some further structural improvement maybe with some self-help still or 50% to 60% is maybe a good way to think about a good chunk of this year?
Kendal Reed: Yes, it's a good question. I mean we're thrilled with the free cash flow conversion in 2025, and you kind of see it showing up on the balance sheet gives us a lot of capital to go look at some of these great accretive M&A opportunities as well as do some different things. So very pleased with how that's played out. I do think the 83% is probably on the high end, benefited from harvesting some cash off the Dril-Quip balance sheet, like we said. But that 50% to 60%, that's kind of our normalized through cycle number that we target. So in a year like 2026, I mean, we're not giving out full year guidance, but I think it probably in the market feels generally flattish, maybe some areas of growth, some areas of some slow decline. But if you're not expecting a huge ramp-up, we don't need to build the inventory to support the customer needs in that scenario. And I think we'd look to still continue to have a healthy free cash flow conversion. So yes, probably something more akin to that range, but maybe on the higher end of that 50% to 60% target.
Operator: We'll move next to Eddie Kim at Barclays.
Edward Kim: We don't get too much detail on the magnitude of your Subsea product bookings. But just curious if you could share even just directionally how 2025 Subsea product bookings trended versus '24 levels? And looking ahead to this year, do you expect Subsea orders will be up versus last year's levels? Or do you expect that to be more of a 2027 event?
Adam Anderson: Yes. Eddie, yes, fair question. We probably in '25 in aggregate subsea orders would have been down a little bit versus '24, but it's pretty lumpy. So the first half was down a little bit. What I would say, though, is in Q4 through the beginning part of this year, there's been a lot of projects that have kind of been a little bit slow to come that we've seen show up in Q4, Q1. So we have a number of big projects in the Far East that we've gotten contract awards on. We got a nice project in the Mediterranean awarded, and then we have a bunch of things we're waiting to see what happens in Asia. So I would think that our order volume for '26 is probably going to be up pretty nicely versus '25. And we're going to start to see a little bit of the fruit of that into this year and as we move into '27. So we're really happy with the trajectory of that, but there was a little bit of a lull there back half of '24, start of '25 on those orders, I would say.
Edward Kim: Got it. Got it. That's very helpful. And then just with the exit of the Eldridge facility at the end of 2Q, and the slide in your earnings deck is a good one and an 80% reduction in that footprint. I'm sure that facility was set up for an activity environment far beyond current levels. But to the extent we do get an offshore activity recovery here really in 2027 and for the next several years, how confident are you that your reduced footprint is going to be able to support an increase in subsea product demand?
Adam Anderson: Yes. We're very confident that we can serve that market even with the reduced footprint that we're seeing here that as you said, that Eldridge a wonderful facility just built for a different time in that market. I think from here forward, we can still sustain a very nice increase in activity levels across the Subsea business globally.
Operator: And we'll move next to Josh Jayne at Daniel Energy Partners.
Joshua Jayne: Adam, I feel like you've been one of the more balanced with respect to offshore outlooks as we work through this white space period over the last 12 to 18 months from a rig activity standpoint. But I'm curious if you've seen enough things announced recently with respect to term on some contracts and maybe the subsea tree awards that we've seen where you could provide more of an outlook outside of Q1 on the Subsea side and how you see the business going, maybe an international offshore walk-through sort of through the end of this year and into 2027 would be helpful.
Adam Anderson: Yes. Josh, Well, yes, fair question. We can be probably qualitative in how we respond to that. We're not putting out quantitative guidance beyond Q1. What I would say is I would -- I think we're seeing some nice project opportunities pop up for us, as I just referenced to Eddie's question that we -- things we've been waiting for a little while that came in, a couple of things that have been a little bit of a nice positive surprise in the offshore award world over the last few months for us that I do think, again, getting back half of this year into '27, we should see some nice growth there in the offshore -- our offshore business, our Subsea business. When you look at the other international markets, I would think the other really important places for us like Saudi and Mexico, which were down in '25, they have started to come back a little bit. They're still probably closer to a trough than a peak, but I think both of those markets will see some nice growth this year. And then we're seeing pockets of other countries in the Middle East that are admittedly smaller for us, but we're seeing some nice green shoots of growth there. So I think in general, yes, probably it will take a little bit of time. But I think, again, back half this year into '27, we'll see some nice overall international offshore growth.
Joshua Jayne: And then if you've referenced this before, I apologize what the cycle times you highlighted. But when you think about shortening your cycle times from order to delivery on the subsea side of the business, could you remind me what your initial targets were? So for example, from the time in which an order was placed right after the acquisition of Dril-Quip closed to ultimate delivery, what that time frame was like? And then how you see that playing out sort of for something ordered middle of this year or end of this year and how your targets on ultimately how much cycle times will compress and since you started this journey, if there was upside to your initial target would be helpful.
Kendal Reed: Yes. So I think with respect to specifically from the time line from order to delivery, that has not changed too much. I mean it varies to some extent, but rule of thumb, I would say, for a subsea order, we're generally getting that a year or so before delivery, plus or minus. I think the big thing we've really been focused on is improving that on-time delivery in that Subsea business, which we've continued to see really nice progress with that. I think it was very low when the deal started has kind of consistently ticked up and we're around 80% on-time delivery in that subsea product line in Q4 with the target, obviously, of getting that to 95-plus percent. So I think that's the big area we've been focused of really pulling that in, making that run efficiently and consistently hitting that delivery date that we schedule.
Adam Anderson: The other thing I would point out, and I don't know that we've talked about this a lot publicly, but it's definitely -- when you look internationally, it's definitely you get an order, you build it over x period of time and then deliver it and that model will probably persist. In the Gulf, the U.S. offshore, we're seeing some transition to more of a consignment model where, hey, we have a contract. We are built -- for example, we're building stuff right now against a contract that will really only recognize the revenue once we install it for the customer, whereas in prior subsea cycles, that would have been -- we've been recognizing revenue as we speak right now for that stuff. So that also is going to contribute to a little bit of this lag in revenue versus what you would historically have seen as the Gulf makes this transition, which ultimately will be good for us and good for our customers as we're able to standardize products, build more things in volume across a wider customer base versus just do one-off project stuff, but there's a little bit of an air pocket there on revenue as you make that transition, if that makes sense.
Joshua Jayne: It does.
Operator: And that concludes our question-and-answer session and today's conference call. We thank you for your participation. You may now disconnect.