Enerflex Ltd. Reports Strong Q3 2025 Earnings

Enerflex Ltd. ((TSE:EFX)) has held its Q3 earnings call. Read on for the main highlights of the call.

Enerflex Ltd. recently held its earnings call, revealing a generally positive sentiment with strong financial results. The company reported significant revenue growth and record adjusted EBITDA, driven by successful project execution and strategic contract wins. However, challenges such as working capital management, potential margin compression in the Engineered Systems business, and supply chain constraints affecting project timelines were also acknowledged.

Strong Financial Performance in Q3 2025

Enerflex demonstrated a robust financial performance in the third quarter of 2025, generating $777 million in revenue compared to $601 million in the same period in 2024. This substantial increase was primarily driven by the Bisat-C Expansion project and the strong execution of Engineered Systems projects.

Record Adjusted EBITDA

The company achieved a new quarterly record for adjusted EBITDA, reaching $145 million. This marks an increase from $120 million in Q3 2024 and $130 million in Q2 2025, highlighting Enerflex’s ability to enhance profitability through efficient operations.

Completion of Oman Project

Enerflex successfully completed the construction and start-up of the Block 60 Bisat-C Expansion Facility in Oman ahead of schedule. The project achieved first crude oil in less than 18 months, underscoring the company’s project management capabilities.

Dividend Increase

In a move to enhance shareholder value, Enerflex’s Board of Directors increased the company’s quarterly dividend by 13% to CAD 0.0425 per common share. This marks the second consecutive year of dividend increases, reflecting the company’s strong financial health.

Significant Contract Wins

Enerflex secured a contract to construct a 200 million cubic standard feet per day cryogenic gas processing facility in the Permian Basin. Additionally, the company received multiple orders for large compression equipment in the U.S., reinforcing its market position.

Recognition for Guyana Project

The company’s gas-to-energy project in Guyana received the Export-Import Bank of the U.S. Deal of the Year Award. This project will generate 300 megawatts of power, reducing Guyana’s dependence on imported fuels.

Working Capital Challenges

Enerflex faced working capital challenges, with free cash flow decreasing to $43 million in Q3 2025 from $78 million in Q3 2024. This was due to working capital investments related to project execution and higher growth capital spending.

Potential Margin Compression in Engineered Systems

Despite strong margins in Q3, Enerflex anticipates potential margin compression in its Engineered Systems business line due to expected shifts in project mix, guiding towards historical average margins.

Supply Chain Constraints

The company is experiencing increased lead times for certain engine configurations, with deliveries extending into 2027 and 2028. This is impacting project execution timelines, posing a challenge for future operations.

Forward-Looking Guidance

Looking ahead, Enerflex plans to maintain disciplined capital expenditures of approximately $120 million for 2025, with a focus on enhancing shareholder returns. The company aims to expand its North American fleet to approximately 485,000 horsepower by the end of 2025. Enerflex’s backlog for Engineered Systems stood at $1.1 billion, indicating a strong pipeline of future projects.

In conclusion, Enerflex Ltd.’s earnings call highlighted a strong financial performance with significant revenue growth and record adjusted EBITDA. The company is focused on strategic expansion and enhancing shareholder value, despite facing challenges such as working capital management and supply chain constraints. Enerflex’s forward-looking guidance suggests a disciplined approach to capital expenditures and a commitment to maintaining strong shareholder returns.