EFXT · Enerflex Ltd.

Enerflex Ltd. delivered strong Q1 2026 results, with revenue up 6% year-over-year to $584 million, primarily from robust execution in the Engineered Systems (ES) product line amid high operational activity. Gross margin expanded to 24.8% (GAAP) and 30.7% before D&A, driven by favorable product mix in ES (up to 19%) and contributions from Energy Infrastructure (EI) and After-Market Services (AMS), which accounted for 65% of adjusted gross margin before D&A. Despite higher SG&A of $79 million due to elevated stock-based compensation, adjusted EBITDA climbed 21% to $137 million, and net earnings doubled to $43 million or $0.35 per share, aided by lower net finance costs. Management highlighted continued momentum in ES with $483 million bookings (1.5x book-to-bill) building a $1.3 billion backlog, plus emerging data center power generation opportunities exceeding five gigawatts in scope. U.S. contract compression utilization held at 94% on a 486,000 horsepower fleet, with growth capex focused there. Balance sheet strengthened with net debt down to $505 million and leverage at 0.9x, supporting record ROCE of 17.3%. Cash flow before working capital hit $95 million, though net operating cash was $32 million after $63 million working capital investment tied to strong activity. Outlook emphasizes steady ES and EI performance, with $175-195 million organic capex targeted, including $90-100 million growth. AGM results showed strong shareholder support for all director elections, auditor reappointment, compensation approach, and new incentive plan. A CAD $0.0425 quarterly dividend was declared, underscoring capital return commitment amid disciplined allocation.