What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-23 compared with 2025-07-24 · 109 added, 103 removed, 251 unchanged (46% of the section changed)

73 unchanged sentences

Demand for our services is primarily influenced by the condition of the oil and gas and the renewable energy markets and, in particular, the level of spending of offshore energy companies on operational activities and capital projects.

The performance of our business is largely affected by the prevailing market prices for oil and natural gas, which are impacted by domestic and global economic conditions, hydrocarbon production and capacity, geopolitical issues, weather, global health, and various other factors.

The level of spending by our customers is significantly affected by the prevailing market prices for oil and natural gas, which are impacted by many factors including domestic and global economic conditions, hydrocarbon production and capacity, geopolitical issues, weather, global health, and various other factors.

Demand for decommissioning is affected by commodity prices as well as governmental regulations and political forces globally.

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Current volumes of work, rig utilization rates, the day rates quoted by drilling rig contractors and existing rig overhang affect the utilization and/or rates we can achieve for our well intervention assets and services.

Once end-of-life oil and gas wells have depleted their production, we decommission wells and infrastructure in our Well Intervention and Shallow Water Abandonment segments.

Our operations service the life cycle of an oil and gas field and provide P&A and decommissioning services at the end of the life of a field as required by governmental regulations.

We believe that our well intervention vessels have a competitive advantage in performing these services efficiently and with our suite of shallow water assets and capabilities, we are the only provider capable of providing all facets of decommissioning services in the Gulf of America shelf.

Once end-of-life oil and gas wells have depleted their production, we P&A and decommission wells and infrastructure in our Well Intervention and Shallow Water Abandonment segments.

We believe that our well intervention vessels have a competitive advantage in performing these services more efficiently than rigs, and with our suite of shallow water assets and capabilities, we are the only provider capable of providing all facets of decommissioning services in the Gulf of America shelf.

We support renewable energy primarily in our Robotics segment through our services in offshore wind farm developments, including subsea cable trenching and burial as well as seabed clearance and preparation services.

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Current Market Environment

Commodity prices continued to be volatile during the first half 2025 due to domestic and geopolitical events and uncertainties.

Oil prices dropped precipitously into the low $60s in early April 2025 following the U.S.

government’s enactment of record tariffs levied globally and the announcement of significant increases in oil production by members of the Organization of Petroleum Exporting Countries (“OPEC”) and other non-OPEC producer nations (collectively with OPEC members, “OPEC+”).

Oil prices recovered in June 2025 only to fall sharply once again following the escalation of the conflict between Israel and Iran.

The production increases, tariffs and resulting trade wars are expected to result in slower economic growth and substantially increase the risk of a recession, both of which would reduce global demand for oil.

Reduced global demand places further pressure on commodity prices, which is likely to result in lower customer spending for the industry.

Additionally, the industry continues to be threatened by decisions from OPEC+, governmental regulations and changes thereto, including the ongoing effects of the U.K.

government’s Energy Profits Levy (windfall tax), geopolitical instability and uncertainty, regional conflicts, unrest in the Middle East, customer spending declines following mergers in the U.K.

North Sea, various governmental and customer sustainability initiatives and continued shifting of resource allocation to renewable energy.

We expect these factors will continue to contribute to commodity price volatility and may prolong existing lower commodity prices with the potential to temper customer spending for offshore oil and gas projects.

Commodity prices remained volatile during the third quarter 2025 and averaged in the $60s during most of the quarter.

The current market environment is uncertain following the ongoing escalation of tariffs globally and the production increases by the Organization of Petroleum Exporting Countries (“OPEC”) and other non-OPEC producer nations (collectively with OPEC members, “OPEC+”).

The offshore oil and gas market continues to evaluate governmental regulations and changes thereto, including the ongoing effects of the U.K.

government’s Energy Profits Levy (windfall tax), geopolitical instability and uncertainty, regional conflicts, unrest in the Middle East, and customer spending declines following mergers in the U.K.

These factors have shifted spending decisions of our customers into 2026, which has caused a slow-down in activity levels in the second half of 2025.

These factors have also prolonged a supply and demand imbalance for offshore vessels, which has negatively impacted activity levels and rates in regions in which we operate.

The international wind market continues to be robust, with continued activity and sanctioned work primarily in Europe and Asia Pacific.

wind farm activity is expected to decline following the 2025 Wind Energy Ban, a Presidential Memorandum issued in the U.S.

wind farm activity is uncertain following the 2025 Wind Energy Ban, a Presidential Memorandum issued in the U.S.

in January 2025 temporarily withdrawing wind energy leasing in the U.S.

Outer Continental Shelf.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law.

We are in the process of evaluating the impact of the OBBBA legislation on our company.

We anticipate more uncertainty and expect a more challenging spot market for Well Intervention and Shallow Water Abandonment during the remainder of 2025, although our performance should be supported by our backlog from new contracting at improved rates and by increasing demand for our decommissioning services internationally, which should grow over mid- to long-term as the subsea tree base expands, as customers reduce their decommissioning obligations, and as customers shift resources to renewable energy.

We anticipate ongoing headwinds for our assets not under long-term contracts, namely in spot markets for our Well Intervention segment, specifically in the North Sea and on the Q4000 , and in our Shallow Water Abandonment segment during the remainder of 2025 and into 2026, during which time we expect a soft rate environment and low potential utilization of our vessels and systems.

Our performance should be supported by our backlog from new contracting and by increasing demand for our decommissioning services internationally, which should grow over mid- to long-term as the subsea tree base expands and as customers reduce their decommissioning obligations.

We expect the demand for shallow water decommissioning services in the Gulf of America to improve over time as former owners address their decommissioning obligations related to oil and gas properties that have reverted to them following bankruptcies.

We expect growth in our renewables services as the global demand for energy increases and the international energy market continues offshore renewable energy developments.

We expect long-term growth in our renewables services as the global demand for energy increases and the international energy market continues offshore renewable energy developments.

Our backlog is represented by signed contracts.

As of June 30, 2025, our consolidated backlog totaled approximately $1.3 billion, of which $425 million is expected to be performed over the remainder of 2025.

Our various contracts with Shell and Subsea 7 globally, our contracts with Trident Energy and Petrobras in Brazil, and our contracts with Talos in the Gulf of America represented approximately 87% of our total backlog as of June 30, 2025.

As of September 30, 2025, our consolidated backlog totaled approximately $1.3 billion, of which $208 million is expected to be performed over the remainder of 2025.

Our various contracts with Shell and Subsea 7 globally, our contracts with Petrobras in Brazil, and our new multi-year trenching agreement with NKT in the North Sea represented approximately 80% of our total backlog as of September 30, 2025.

Backlog is not necessarily a reliable indicator of revenues derived from our contracts as (i) services are often added but may sometimes be subtracted;

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Three Months Ended

Six Months Ended

Net income (loss)

Income tax provision (benefit)

Nine Months Ended

September 30,

Income tax provision

Net interest expense

Other (income) expense, net

Other expense, net

Depreciation and amortization

Loss on disposition of assets, net

General provision for (release of) current expected credit losses

(Gain) loss on disposition of assets, net

General provision for current expected credit losses

Losses related to convertible senior notes

1 unchanged sentence

The reconciliation of our cash flows from operating activities to Free Cash Flow is as follows (in thousands):

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

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The reconciliation of our long-term debt to Net Debt is as follows (in thousands):

September 30,

Long-term debt including current maturities

Cash and cash equivalents

Comparison of Three Months Ended June 30, 2025 and 2024

Comparison of Three Months Ended September 30, 2025 and 2024

We have four reportable business segments:

3 unchanged sentences

Three Months Ended

September 30,

Net revenues —

27 unchanged sentences

Three Months Ended

September 30,

Shallow Water Abandonment

Net Revenues.

Our consolidated net revenues for the three-month period ended June 30, 2025 decreased by 17% as compared to the same period in 2024, primarily reflecting lower revenues in our Well Intervention and Production Facilities business segments, offset in part by higher revenues in our Robotics segment.

Our Well Intervention revenues decreased by 28% for the three-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting lower utilization on the Seawell and in the Gulf of America, offset in part by higher rates in Brazil during the second quarter 2025.

Revenues decreased on the Seawell , which was warm-stacked during the second quarter 2025 as compared to being fully utilized during the second quarter 2024.

Revenues were lower on the Gulf of America vessels due to fewer operational days on the Q4000 , which incurred higher transit and demobilization days, and due to lower utilization on the Q5000 , which underwent an approximate 57-day planned regulatory dry dock during the second quarter 2025.

Revenues in Brazil increased during the second quarter 2025 as the Siem Helix 1 and the Siem Helix 2 operated at higher contractual rates as compared to the second quarter 2024.

Our Robotics revenues increased by 5% for the three-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting increased chartered vessel and site clearance activities, offset in part by a reduction in ROV and trencher utilization.

The second quarter 2025 included 537 chartered vessel days, which included 190 days of site clearance operations using three IROV boulder grabs, as compared to 528 chartered vessel days (including 91 spot vessel days at full utilization), which included 78 days of site clearance operations using two IROV boulder grabs, during the second quarter 2024.

The second quarter 2025 also included 91 days of trenching on a third-party vessel, whereas there was no trenching on a third-party vessel during the second quarter 2024.

Integrated vessel trenching decreased to 157 days during the second quarter 2025 as compared to 232 days during the second quarter 2024, and ROV utilization decreased to 64% during the second quarter 2025 as compared to 80% during the second quarter 2024.

Our Shallow Water Abandonment revenues were down slightly for the three-month period ended June 30, 2025 as compared to the same period in 2024, reflecting lower overall rates on our vessels and P&A systems as well as weaker contract performance during the second quarter 2025, almost entirely offset by higher system and vessel utilization.

Overall vessel utilization was 60% during the second quarter 2025 as compared to 58% during the second quarter 2024.

Utilization on P&A systems and CT systems increased to 798 days, or 34%, during the second quarter 2025 as compared to 632 days, or 27%, during the second quarter 2024.

Our Production Facilities revenues decreased by 33% for the three-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting lower oil and gas production and prices during the second quarter 2025.

The Thunder Hawk wells remained shut in for the entire second quarter 2025 and the Droshky wells were shut in for approximately one month, whereas both fields had a full quarter of production during the second quarter 2024.

Additionally, oil prices were approximately $15 per barrel lower during the second quarter 2025 as compared to the second quarter 2024.

Our consolidated net revenues for the three-month period ended September 30, 2025 increased by 10% as compared to the same period in 2024, primarily reflecting higher revenues in our Well Intervention, Robotics and Shallow Water Abandonment business segments, offset in part by lower revenues in our Production Facilities segment.

Our Well Intervention revenues increased by 11% for the three-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting fewer transit and mobilization days on the Q7000 and higher rates in Brazil, offset in part by lower utilization on the Seawell .

During the third quarter 2024, the Q7000 incurred approximately 38 days of paid transit and mobilization during which period revenues and costs were deferred and not recognized.

Revenues increased on the Siem Helix 1 and the Siem Helix 2 , which operated at higher contractual rates as compared to the third quarter 2024.

Revenues decreased on the Seawell , which was warm-stacked during the third quarter 2025 as compared to having near full utilization during the third quarter 2024.

Our Robotics revenues increased by 18% for the three-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting higher rates on our chartered vessels and increased site clearance and third-party trenching activities, offset in part by fewer integrated vessel trenching days and lower overall ROV utilization.

The third quarter 2025 included 536 chartered vessel days (including 28 spot vessel days at full utilization), which included 192 days of site clearance operations using three IROV boulder grabs, as compared to 532 chartered vessel days (including 92 spot vessel days at full utilization), which included 92 days of site clearance operations using one IROV boulder grab, during the third quarter 2024.

The third quarter 2025 also included 165 days of trenching on third-party vessels with the T-1400-1 and T-1400-2 jet trenchers as compared to 92 days with the i-Plough during the third quarter 2024.

Integrated vessel trenching decreased to 210 days during the third quarter 2025 as compared to 249 days during the third quarter 2024, and ROV utilization decreased to 63% during the third quarter 2025 as compared to 77% during the third quarter 2024.

Our Shallow Water Abandonment revenues increased by 4% for the three-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting higher utilization on our systems, offset in part by lower rates on our systems and lower overall utilization and rates on our vessels during the third quarter 2025.

Utilization on P&A systems and CT systems increased to 1,003 days, or 42%, during the third quarter 2025 as compared to 607 days, or 25%, during the third quarter 2024.

Overall vessel utilization was 67% during the third quarter 2025 as compared to 76% during the third quarter 2024.

Our Production Facilities revenues decreased by 11% for the three-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting lower oil and gas production and prices, offset in part by higher HFRS revenues during the third quarter 2025.

The Thunder Hawk field remained shut in during the entire third quarter 2025 whereas the field had one month of production prior to being shut in during the third quarter 2024.

Additionally, oil prices were approximately $10 per barrel lower during the third quarter 2025 as compared to the third quarter 2024.

HFRS rates were higher during the third quarter 2025 as compared to the third quarter 2024.

Gross Profit (Loss).

Our consolidated gross profit decreased by $60.5 million for the three-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting lower profitability from our Well Intervention, Robotics and Production Facilities business segments.

Our Well Intervention segment had a gross loss of $12.3 million for the three-month period ended June 30, 2025 as compared to a gross profit of $33.6 million for the same period in 2024, primarily reflecting lower revenues, offset in part by lower vessel costs from stacking the Seawell and cost deferrals on the Q5000 docking during the second quarter 2025.

Our Robotics gross profit decreased by $9.2 million for the three-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting higher vessel costs and lower margins during the second quarter 2025.

Our Shallow Water Abandonment gross profit was slightly lower for the three-month period ended June 30, 2025 as compared to the same period in 2024 primarily due to lower revenues during the second quarter 2025.

Our Production Facilities gross profit decreased by $5.1 million for the three-month period ended June 30, 2025 as compared to the same period in 2024 primarily due to the lower revenues, offset in part by lower production-related costs during the second quarter 2025.

Our consolidated gross profit increased slightly for the three-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting increased profitability from our Robotics and Shallow Water Abandonment business segments, offset in part by reduced profitability from our Well Intervention and Production Facilities segments.

Our Well Intervention gross profit decreased by $7.7 million for the three-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting higher costs during the third quarter 2025 due to acceleration of the amortization of deferred regulatory costs related to the Q4000 and a higher number of transit and mobilization days during the third quarter 2024 over which period costs were deferred, offset in part by higher revenues during the third quarter 2025.

Our Robotics gross profit increased by $3.8 million for the three-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting higher rates, offset in part by higher costs and lower margins on certain projects due to the mix of contracting during the third quarter 2025.

Our Shallow Water Abandonment gross profit increased by $6.9 million for the three-month period ended September 30, 2025 as compared to the same period in 2024 primarily due to higher revenues and lower costs during the third quarter 2025.

Our Production Facilities gross profit decreased by $2.8 million for the three-month period ended September 30, 2025 as compared to the same period in 2024 primarily due to lower revenues during the third quarter 2025.

Selling, General and Administrative Expenses.

Our selling, general and administrative expenses were $18.1 million for the three-month period ended June 30, 2025 as compared to $22.3 million for the same period in 2024, primarily reflecting lower employee compensation costs.

Other Income (Expense), Net.

Net other income was $0.4 million for the three-month period ended June 30, 2025 as compared to net other expense of $0.4 million for the same period in 2024, primarily reflecting net foreign currency gains and losses, respectively, related to the British pound on our U.K.

Our selling, general and administrative expenses were $18.2 million for the three-month period ended September 30, 2025 as compared to $21.1 million for the same period in 2024, primarily reflecting lower employee compensation costs.

Other Expense, Net.

Net other expense was $1.0 million for the three-month period ended September 30, 2025 as compared to a minimal net other expense for the same period in 2024.

Net other expense primarily includes net foreign currency losses related to the British pound on our U.K.

subsidiaries’ foreign currency positions.

Income Tax Provision (Benefit).

Income tax benefit was $6.0 million for the three-month period ended June 30, 2025 as compared to income tax provision of $14.7 million for the same period in 2024.

The effective tax rate for the second quarter 2025 was impacted by certain non-U.S.

discrete items and the jurisdictional mix of earnings.

The effective rate for the second quarter 2024 was impacted by certain non-deductible expenses and non-creditable foreign income taxes.

Comparison of Six Months Ended June 30, 2025 and 2024

Income Tax Provision.

Income tax provision was $19.2 million for the three-month period ended September 30, 2025 as compared to $9.5 million for the same period in 2024.

The effective tax rate for the third quarter 2025 was impacted by certain discrete items and the jurisdictional mix of earnings.

The effective rate for the third quarter 2024 was impacted by certain non-deductible expenses and non-creditable foreign income taxes.

Comparison of Nine Months Ended September 30, 2025 and 2024

We have four reportable business segments:

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The following table details our financial and operational highlights for the periods presented (dollars in thousands):

Six Months Ended

Nine Months Ended

September 30,

Net revenues —

26 unchanged sentences

Intercompany segment revenues are as follows (in thousands):

Six Months Ended

Nine Months Ended

September 30,

Well Intervention

1 unchanged sentence

Net Revenues.

Our consolidated net revenues for the six-month period ended June 30, 2025 decreased by 12% as compared to the same period in 2024, reflecting lower revenues in our Well Intervention, Shallow Water Abandonment and Production Facilities business segments, offset in part by higher revenues in our Robotics segment.

Our Well Intervention revenues decreased by 17% for the six-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting lower utilization on the Seawell , the Q5000 and the Q7000 , offset in part by higher rates on the Q4000 and in Brazil during the six-month period ended June 30, 2025.

Revenues decreased on the Seawell , which was idle during the first quarter 2025 and warm-stacked during the second quarter 2025 as compared to being nearly fully utilized during the six-month period ended June 30, 2024.

Our consolidated net revenues for the nine-month period ended September 30, 2025 decreased by 5% as compared to the same period in 2024, reflecting lower revenues in our Well Intervention, Shallow Water Abandonment and Production Facilities business segments, offset in part by higher revenues in our Robotics segment.

Our Well Intervention revenues decreased by 9% for the nine-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting lower utilization on the Seawell , the Q4000 , the Q5000 and the Q7000 , offset in part by higher rates on the Q4000 and in Brazil during the nine-month period ended September 30, 2025.

Revenues decreased on the Seawell , which has been warm-stacked during the nine-month period ended September 30, 2025 as compared to being nearly fully utilized during the nine-month period ended September 30, 2024.

Revenues on the Q4000 were lower as the vessel underwent an approximate 33-day docking following a 45-day demobilization during the nine-month period ended September 30, 2025 as compared to a 67-day mobilization during the nine-month period ended September 30, 2024.

Utilization on the Q5000 was lower as the vessel underwent an approximate 57-day planned regulatory dry dock during the second quarter 2025.

Revenues on the Q7000 were lower due to the vessel recognizing only six days of revenue in Brazil during the first quarter 2025 as compared to being fully utilized in Australia during the six-month period ended June 30, 2024.

The Q7000 completed its mobilization and regulatory docking and commenced its 400-day contract in Brazil at the end of March 2025.

During the six-month period ended June 30, 2025, the Q4000 completed its Nigeria campaign at higher integrated project rates and transited back to the Gulf of America.

Revenues in Brazil increased as the Siem Helix 1 and the Siem Helix 2 operated at higher contractual rates during the six-month period ended June 30, 2025.

Our Robotics revenues increased by 4% for the six-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting higher chartered vessel rate and increased site clearance activities, offset in part by a reduction in chartered vessel and ROV utilization.

The six-month period ended June 30, 2025 included 781 chartered vessel days, which included 211 days of site clearance operations using three IROV boulder grabs, as compared to 861 chartered vessel days (including 182 spot vessel days at full utilization), which included 168 days of site clearance operations using two IROV boulder grabs, during the six-month period ended June 30, 2024.

The six-month period ended June 30, 2025 also included 181 days of trenching on a third-party vessel, whereas there was no trenching on a third-party vessel during the six-month period ended June 30, 2024.

Integrated vessel trenching declined to 292 days during the second quarter 2025 as compared to 317 days during the second quarter 2024, and ROV utilization decreased to 59% during the second quarter 2025 as compared to 70% during the second quarter 2024.

Our Shallow Water Abandonment revenues decreased by 13% for the six-month period ended June 30, 2025 as compared to the same period in 2024 primarily due to lower utilization and overall rates on our vessels and systems.

Overall vessel utilization was 45% during the six-month period ended June 30, 2025 as compared to 49% during the same period in 2024.

Utilization on P&A systems and CT systems decreased to 1,062 days, or 23%, during the six-month period ended June 30, 2025 as compared to 1,258 days, or 27%, during the six-month period ended June 30, 2024.

Our Production Facilities revenues decreased by 25% for the six-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting lower oil and gas production and prices during the six-month period ended June 30, 2025.

The Thunder Hawk wells remained shut in for the entire six-month period in 2025 and the Droshky wells were shut in for approximately one month in the second quarter 2025, whereas both fields had a full six months of production in 2024.

Revenues on the Q7000 were lower due to the vessel recognizing only six days of revenue during the first quarter 2025 following the vessel’s completed mobilization and regulatory docking and commencement of its 400-day contract in Brazil as compared to being fully utilized in Australia during the nine-month period ended September 30, 2024.

During the nine-month period ended September 30, 2025, the Q4000 completed its Nigeria campaign at higher integrated project rates and transited back to the Gulf of America.

Revenues in Brazil increased as the Siem Helix 1 and the Siem Helix 2 operated under new contract terms at higher contractual rates during the nine-month period ended September 30, 2025.

Our Robotics revenues increased by 9% for the nine-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting higher chartered vessel rate and increased site clearance and third-party trenching activities, offset in part by a reduction in chartered vessel and ROV utilization.

The nine-month period ended September 30, 2025 included 1,317 chartered vessel days (including 75 spot vessel days at full utilization), which included 403 days of site clearance operations using three IROV boulder grabs, as compared to 1,393 chartered vessel days (including 274 spot vessel days at full utilization), which included 260 days of site clearance operations using two IROV boulder grabs, during the nine-month period ended September 30, 2024.

The nine-month period ended September 30, 2025 also included 346 days of trenching on third-party vessels as compared to 141 days during the nine-month period ended September 30, 2024.

Integrated vessel trenching declined to 502 days during the nine-month period ended September 30, 2025 as compared to 566 days during the nine-month period ended September 30, 2024, and ROV utilization decreased to 59% during the nine-month period ended September 30, 2025 as compared to 70% during the nine-month period ended September 30, 2024.

Our Shallow Water Abandonment revenues decreased by 5% for the nine-month period ended September 30, 2025 as compared to the same period in 2024 primarily due to lower rates on our vessels and systems and lower overall utilization on our vessels, offset in part by higher utilization on our systems.

Overall vessel utilization was 52% during the nine-month period ended September 30, 2025 as compared to 59% during the same period in 2024.

Utilization on P&A systems and CT systems increased to 2,065 days, or 29%, during the nine-month period ended September 30, 2025 as compared to 1,865 days, or 26%, during the nine-month period ended September 30, 2024.

Our Production Facilities revenues decreased by 21% for the nine-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting lower oil and gas production and prices during the nine-month period ended September 30, 2025.

The Thunder Hawk field remained shut in for the entire nine-month period in 2025 whereas the field had seven months of production prior to being shut in during the third quarter 2024.

The Droshky wells were shut in for approximately one month in the second quarter 2025 whereas the field had a full nine months of production in 2024.

Gross Profit (Loss).

Our consolidated gross profit decreased by $52.6 million for the six-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting reduced profitability from our Well Intervention, Robotics and Shallow Water Abandonment business segments, offset in part by increased profitability from our Production Facilities segment.

Our Well Intervention segment gross profit decreased by $44.7 million for the six-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting lower revenues, offset in part by lower idle vessel costs in the North Sea, cost deferrals on the Q7000 during its mobilization and regulatory docking during the first quarter 2025 and cost deferrals on the Q5000 docking during the second quarter 2025.

Our Robotics gross profit decreased by $9.4 million for the six-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting higher vessel costs and lower margins during the second quarter 2025.

Our Shallow Water Abandonment gross loss increased by $2.0 million for the six-month period ended June 30, 2025 as compared to the same period in 2024, primarily reflecting lower revenues, offset in part by lower costs during the six-month period ended June 30, 2025.

Our Production Facilities gross profit increased by $3.6 million for the six-month period ended June 30, 2025 as compared to the same period in 2024 primarily due to the incurrence of well workover costs related to the Thunder Hawk wells during the first quarter 2024.

Our consolidated gross profit decreased by $52.2 million for the nine-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting reduced profitability from our Well Intervention and Robotics business segments, offset in part by increased profitability from our Shallow Water Abandonment and Production Facilities segments.

Our Well Intervention segment gross profit decreased by $52.4 million for the nine-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting lower overall revenues during the nine-month period ended September 30, 2025 and higher vessel costs on the Q4000 during the third quarter 2025, offset in part by lower vessel costs on the Seawell due to the vessel being warm-stacked in 2025 and cost deferrals on the Q7000 during its mobilization and regulatory docking in the first quarter 2025.

Our Robotics gross profit decreased by $5.6 million for the nine-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting higher costs and lower margins on certain projects due to the mix of contracting during the nine-month period ended September 30, 2025.

Our Shallow Water Abandonment gross profit increased by $4.9 million for the nine-month period ended September 30, 2025 as compared to the same period in 2024, primarily reflecting lower costs, offset in part by lower overall revenues during the nine-month period ended September 30, 2025.

Our Production Facilities gross profit increased by $0.9 million for the nine-month period ended September 30, 2025 as compared to the same period in 2024 primarily due to the incurrence of well workover costs related to the Thunder Hawk wells during the first quarter 2024.

Selling, General and Administrative Expenses.

Our selling, general and administrative expenses were $37.5 million for the six-month period ended June 30, 2025 as compared to $43.0 million for the same period in 2024, primarily reflecting lower employee compensation costs.

Our selling, general and administrative expenses were $55.6 million for the nine-month period ended September 30, 2025 as compared to $64.1 million for the same period in 2024, primarily reflecting lower employee compensation costs.

Net Interest Expense.

Our net interest expense totaled $11.6 million for the six-month period ended June 30, 2025 as compared to $11.4 million for the same period in 2024, primarily reflecting lower interest income on our invested cash (Note 5).

Our net interest expense totaled $17.2 million for the nine-month period ended September 30, 2025 as compared to $17.1 million for the same period in 2024, primarily reflecting lower interest income on our invested cash (Note 5).

Losses Related to Convertible Senior Notes.

The losses during the six-month period ended June 30, 2024 were associated with the redemption of our 2026 Notes (Note 5).

Other Income (Expense), Net.

Net other income was $0.1 million for the six-month period ended June 30, 2025 as compared to net other expense of $2.6 million for the same period in 2024, primarily reflecting net foreign currency gains and losses, respectively, related to the British pound on our U.K.

The losses during the nine-month period ended September 30, 2024 were associated with the redemption of our 2026 Notes (Note 5).

Other Expense, Net.

Net other expense was $0.9 million for the nine-month period ended September 30, 2025 as compared to net other expense of $2.6 million for the same period in 2024.

Net other expense primarily includes net foreign currency losses related to the British pound on our U.K.

subsidiaries’ foreign currency positions.

Income Tax Provision (Benefit).

Income tax benefit was $5.5 million for the six-month period ended June 30, 2025 as compared to income tax provision of $13.0 million for the same period in 2024.

The effective tax rate for the six-month period ended June 30, 2025 was impacted by certain non-U.S.

discrete items and the jurisdictional mix of earnings.

The effective rate for the six-month period ended June 30, 2024 was impacted by the non-deductibility of certain losses associated with the 2026 Notes Redemptions, which was characterized as a discrete event.

Income Tax Provision.

Income tax provision was $13.6 million for the nine-month period ended September 30, 2025 as compared to $22.5 million for the same period in 2024.

The effective tax rate for the nine-month period ended September 30, 2025 was impacted by certain discrete items and the jurisdictional mix of earnings.

The effective rate for the nine-month period ended September 30, 2024 was impacted by the non-deductibility of certain losses associated with the 2026 Notes Redemptions, which was characterized as a discrete event.

LIQUIDITY AND CAPITAL RESOURCES

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The following table presents certain information useful in the analysis of our financial condition and liquidity (in thousands):

September 30,

Net working capital

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Long-Term Debt

Long-term debt in the table above, presented net of unamortized debt discount and debt issuance costs, includes the 2029 Notes and the MARAD Debt, excluding current maturities of $9.4 million at June 30, 2025 and $9.2 million at December 31, 2024.

Long-term debt in the table above, presented net of unamortized debt discount and debt issuance costs, includes the 2029 Notes and the MARAD Debt, excluding current maturities of $9.6 million at September 30, 2025 and $9.2 million at December 31, 2024.

See Note 5 for information relating to our long-term debt.

We define liquidity as cash and cash equivalents plus available capacity under our credit facility, but excluding cash pledged as collateral toward the Amended ABL Facility.

Our liquidity at June 30, 2025 included $319.7 million of cash and cash equivalents and $70.5 million of available borrowing capacity under the Amended ABL Facility (Note 5) and excluded $15.3 million of pledged cash.

Our liquidity at September 30, 2025 included $338.0 million of cash and cash equivalents and $94.3 million of available borrowing capacity under the Amended ABL Facility (Note 5) and excluded $2.5 million of pledged cash.

Our liquidity at December 31, 2024 included $368.0 million of cash and cash equivalents and $66.6 million of available borrowing capacity under the Amended ABL Facility and excluded $5.0 million of pledged cash.

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The following table provides summary data from our condensed consolidated statements of cash flows (in thousands):

Six Months Ended

Nine Months Ended

September 30,

Cash provided by (used in):

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Operating Activities

Our operating cash flows for the six-month period ended June 30, 2025 decreased as compared to the same period in 2024 despite the absence of an earnout payment, primarily reflecting lower earnings, higher regulatory recertification costs on our vessels and systems and higher working capital outflows.

Operating cash outflows during the six-month period ended June 30, 2024 included $58.3 million of the $85.0 million earnout payment on April 3, 2024.

Cash flows provided by operating activities for the nine-month period ended September 30, 2025 decreased as compared to the same period in 2024 despite the absence of an earnout payment, primarily reflecting lower earnings, higher regulatory recertification costs on our vessels and systems and higher working capital outflows.

Our operating cash outflows during the nine-month period ended September 30, 2024 included $58.3 million of the $85.0 million earnout payment on April 3, 2024.

Regulatory recertification spending on our vessels and systems was $48.3 million and $29.2 million, respectively, during the comparable year over year periods.

Investing Activities

Cash flows used in investing activities for the six-month period ended June 30, 2025 increased slightly as compared to the same period in 2024 primarily due to higher capital expenditures.

Cash flows used in investing activities for the nine-month period ended September 30, 2025 increased slightly as compared to the same period in 2024.

Our investing cash outflows during the nine-month period ended September 30, 2024 were offset in part by cash proceeds from the sale of assets and insurance recoveries.

Financing Activities

Net cash outflows from financing activities for the six-month period ended June 30, 2025 primarily reflect the repurchases of $30.2 million in our common stock under the 2023 Repurchase Program (including $0.2 million of excise tax paid), principal repayment of $4.5 million related to the MARAD Debt and payments in satisfaction of tax obligations upon vesting of share-based awards.

Net cash outflows from financing activities for the six-month period ended June 30, 2024 primarily reflect cash outflows of $60.7 million related to the 2026 Notes, $26.7 million of the $85.0 million earnout payment, the principal repayment of $4.3 million related to the MARAD Debt and $10.2 million in repurchases of our common stock under the 2023 Repurchase Program.

Net cash outflows from financing activities for the nine-month period ended September 30, 2025 primarily reflect the repurchases of $30.2 million in our common stock under the 2023 Repurchase Program (including $0.2 million of excise tax paid), principal repayment of $9.2 million related to the MARAD Debt and payments in satisfaction of tax obligations upon vesting of share-based awards.

Net cash outflows from financing activities for the nine-month period ended September 30, 2024 primarily reflect cash outflows of $60.7 million related to the 2026 Notes, $26.7 million of the $85.0 million earnout payment, the principal repayment of $8.7 million related to the MARAD Debt and $10.2 million in repurchases of our common stock under the 2023 Repurchase Program.

These outflows were offset in part by $4.4 million of cash inflows from the proportionate settlement of the 2026 Capped Calls.

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Long-term debt and other contractual commitments

The following table summarizes (in thousands) the principal amount of our long-term debt and related debt service costs as well as other contractual commitments, which include commitments for property and equipment and operating lease obligations, as of June 30, 2025 and the portions of those amounts that are short-term (due in less than one year) and long-term (due in one year or greater) based on their stated maturities.

Our property and equipment commitments include contractually committed amounts to purchase and service certain property and equipment (inclusive of commitments related to regulatory recertification and dry dock as discussed below) but do not include expected capital spending that is not contractually committed as of June 30, 2025.

The following table summarizes (in thousands) the principal amount of our long-term debt and related debt service costs as well as other contractual commitments, which include commitments for property and equipment and operating lease obligations, as of September 30, 2025 and the portions of those amounts that are short-term (due in less than one year) and long-term (due in one year or greater) based on their stated maturities.

Interest related to debt

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(1) Operating leases include vessel charters and facility and equipment leases, including commitments related to leases executed but not yet commenced.

At June 30, 2025, our commitment related to long-term vessel charters that have commenced totaled approximately $768.3 million, of which $390.9 million was related to the non-lease (services) components that are not included in operating lease liabilities in the condensed consolidated balance sheet as of June 30, 2025.

At September 30, 2025, our commitment related to long-term vessel charters that have commenced totaled approximately $719.8 million, of which $363.8 million was related to the non-lease (services) components that are not included in operating lease liabilities in the condensed consolidated balance sheet as of September 30, 2025.

Other material cash requirements

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We have decommissioning obligations associated with our oil and gas properties (Note 12).

Those obligations, which are presented on a discounted basis on the condensed consolidated balance sheets, approximate $80.9 million (undiscounted) for Thunder Hawk Field oil and gas properties and $37.1 million (undiscounted) for Droshky oil and gas properties as of June 30, 2025, none of which is expected to be paid during the next 12 months.

Those obligations, which are presented on a discounted basis on the condensed consolidated balance sheets, approximate $80.9 million (undiscounted) for Thunder Hawk Field oil and gas properties and $37.1 million (undiscounted) for Droshky oil and gas properties as of September 30, 2025, none of which is expected to be paid during the next 12 months.

We are entitled to receive $30.0 million (undiscounted) from Marathon Oil Corporation as certain decommissioning obligations associated with Droshky oil and gas properties are fulfilled.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis