[Management View]
Enerflex reported a record adjusted EBIT of $145 million, driven by cost-saving initiatives and higher gross margins. The company emphasized its strategic focus on core operations, disciplined capital deployment, and exploring growth in modular power generation and data center markets. The engineered systems backlog provides strong visibility into future revenue, with demand for engines in compression and power generation extending OEM lead times.

[Outlook]
Enerflex maintains its full-year 2025 capital expenditure guidance at approximately $120 million. The company is actively evaluating over 500 megawatts of power generation opportunities and expects to expand its North American contract compression fleet by year-end 2025. Management remains focused on enhancing core profitability and maximizing free cash flow for financial strength and targeted growth.

[Financial Performance]
Revenue increased to $777 million, up from $601 million in Q3 2024 and $615 million in Q2 2025, mainly due to the Oman BSAT C expansion. Gross margin before depreciation and amortization was $206 million or 27% of revenue. Free cash flow decreased to $43 million, impacted by net working capital investments. Net earnings improved to $37 million or $0.30 per share, benefiting from higher gross margin and lower SG&A.

[Q&A Highlights]
Question 1: What insights have you gained from your early tenure at Enerflex, and how does your prior experience inform your perspective?
Answer: Paul Mahoney highlighted the openness and transparency during his initial visits, noting opportunities to enhance core operations with digitization initiatives and investment discipline. He emphasized focusing on core competent areas and customer activity.

Question 2: Can you elaborate on the potential for Enerflex in mobile power generation and its revenue implications?
Answer: Mahoney described the power generation market as dynamic, with potential growth from 500 megawatts to over one gigawatt. He emphasized Enerflex's experience and cautious approach, noting the importance of speed and OEM delivery dates.

Question 3: How does Enerflex plan to participate in power generation across engineered systems and energy infrastructure?
Answer: Mahoney noted opportunities in engineered systems and aftermarket services, emphasizing partnerships with supply bases and power-related entities. He highlighted the importance of speed and OEM delivery in capitalizing on opportunities.

Question 4: What is Enerflex's readiness to capitalize on power generation opportunities, and how is the supply chain positioned?
Answer: Mahoney and Dhindsa discussed strategic inventory investments and engagement with OEM suppliers to manage lead times and support customer demand. They emphasized the importance of long lead time equipment bookings.

Question 5: Can you discuss the demand for natural gas compression and lead times for key components?
Answer: Mahoney noted production optimization and centralization of compression as key drivers, with lead times for certain engine configurations extending into 2027 and 2028.

Question 6: Why do you guide towards historical average margins despite strong performance?
Answer: Dhindsa explained that the mix of product backlog and bookings supports guiding towards mid-teen level historical averages, despite strong results.

Question 7: How much revenue was pulled forward from Q4 into Q3?
Answer: Fetterly indicated that the strength of Q3 execution led to accelerated revenue recognition, with some pull forward from Q4.

[Sentiment Analysis]
Analysts expressed interest in Enerflex's strategic direction and power generation opportunities. Management conveyed confidence in the company's growth prospects and operational efficiency, maintaining a positive and forward-looking tone.

[Quarterly Comparison]
| Metric | Q3 2025 | Q2 2025 | Q3 2024 |
|-------------------------------|---------|---------|---------|
| Revenue | $777M | $615M | $601M |
| Gross Margin | $206M | $175M | $176M |
| Adjusted EBIT | $145M | $130M | $120M |
| Free Cash Flow | $43M | N/A | $78M |
| Net Earnings | $37M | $60M | $30M |
| Net Debt | $584M | $608M | $692M |
| ROCE | 16.9% | 16.4% | 4.5% |

[Risks and Concerns]
Enerflex faces risks related to tariffs, commodity price volatility, and extended OEM lead times. The company is proactively managing these risks and monitoring market conditions.

[Final Takeaway]
Enerflex's Q3 2025 performance highlights its strategic focus on core operations and expansion into power generation. The company's record adjusted EBIT and strong engineered systems backlog provide a solid foundation for future growth. Management's emphasis on disciplined capital deployment and customer-focused initiatives positions Enerflex well to capitalize on emerging opportunities in the power generation market. Investors should monitor the company's ability to manage supply chain challenges and leverage its strategic partnerships to drive long-term value creation.