Good day, and thank you for standing by. Welcome to the Enerflex Fourth Quarter 2025 Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Jeff Fetterly, Vice President, Corporate Development and Capital Markets. Please go ahead.

Thank you, Jill, and good morning, everyone. With me today are Paul Mahoney, President and CEO; Preet Dhindsa, CFO; and Ben Park, Enerflex's Controller. During today's call, our prepared remarks will focus on three key areas: one, the continued strong performance of Enerflex's business; two, our outlook, priorities and capital spending guidance for 2026; and three, an update on operational and strategic initiatives, including a definitive agreement to divest the majority of our operations in the APAC region. Before I turn it over to Paul, I'll remind everyone that today's discussion will include non-IFRS and other financial measures as well as forward-looking statements regarding Enerflex's expectations for future performance and business prospects. Forward-looking information involves risks and uncertainties, and the stated expectations could differ materially from actual results or performance. For more information, refer to the advisory statements within our news release, MD&A and other regulatory filings, all available on our website and under our SEDAR and EDGAR profile. As part of our prepared remarks, we will be referring to slides in our investor presentation, which is available through a link on this webcast and on our website under the Investor Relations section. I'll now turn it over to Paul.

Thanks, Jeff, and thank you all for joining us on this morning's call. We are pleased to report another strong quarter that caps off an excellent year for Enerflex. The strength of our financial and operating results is a testament to the resilience, commitment and deep knowledge of our global team. Today, we will share more about the consistency of Enerflex's results, our growing and relentless focus on execution, and the strategic opportunities within a constructive natural gas market. Together, we believe these fundamentals position Enerflex for long-term value creation. Results during the fourth quarter reflect solid performance across our geographies and business lines as well as our ongoing efforts to optimize and streamline our business. The Energy Infrastructure and After-Market Services business lines continue to be the foundation of our results, contributing 65% of gross margin before depreciation and amortization in 2025. The Engineered Systems business line continued to demonstrate strong project execution, with visibility for this business line remaining solid, supported by a $1.1 billion backlog at the end of Q4 and healthy bidding prospects. Firstly, I would like to touch on our announcement related to Enerflex's operations in the Asia Pacific region. Enerflex has entered into a definitive agreement to divest the majority of its operations in the APAC region to the INNIO Group. This business operates principally in Australia, Indonesia, and Thailand and is primarily focused on the AMS product line. Completion of the transaction is subject to standard closing conditions and regulatory approvals and is expected to close in the second half of 2026. Following close, Enerflex will continue to deliver Engineered Systems solutions in APAC, including natural gas compression, processing, and electric power generation through local sales teams with equipment manufactured from the company's three facilities in North America. I would like to thank our strong team in the APAC region for their commitment to Enerflex and their contributions as we built a leading AMS business in the APAC region. This accretive divestiture underscores Enerflex's commitment to simplifying and optimizing our operations while sharpening our focus on our core regions of North America, Latin America, and the Middle East. Enerflex and INNIO share a long-standing global relationship, including Enerflex's role as a channel partner across our core regions, and we look forward to building on this partnership. Moving to other strategic and operational highlights that Enerflex achieved in the quarter, the company continues to expand and deepen relationships with upstream and midstream client partners across the U.S. through strategic collaboration and long-term partnership development. During Q4, this momentum contributed to Enerflex securing multiple orders for large-scale compression, natural gas processing, retrofits, and power generation equipment. Activity continues to be centered in the Permian, where increasing gas and NGL ratios are supportive of demand for Enerflex's solutions, but we are also seeing a broadening of opportunities, including in the Haynesville, where natural gas supply growth is expected to be connected with LNG export capacity expansion. In the fourth quarter, Enerflex established a long-term framework agreement for compression solutions with a large diversified integrated midstream client partner in the United States. Enerflex's U.S. Contract Compression business continues to perform well, led by increasing natural gas production in the Permian. Utilization remained stable at 94% during Q4 across a fleet size of approximately 483,000 horsepower. Enerflex increased its marketed fleet by 13% over the course of 2025, and we expect approved growth capital expenditures will deliver growth at a similar pace or greater during 2026. Enerflex is also securing long lead time components to further support growth in 2027. Enerflex continues to develop opportunities in the electric power generation part of our business, including projects associated with AI and data centers. In early 2026, Enerflex, one, received an order to supply power generation units for a large data center project in the U.S. with deliveries scheduled into 2027. Two, we've completed a front-end engineering and design study for a client partner related to a large data center power generation project in the U.S., advancing the opportunity toward potential future execution; and three, executed contracts to supply power generation equipment to two client partners in the North American market. Enerflex continues to evaluate over 1.5 gigawatts of opportunities across our Engineered Systems business line. And now a few comments on each of our business lines. Engineered Systems backlog as of December 31, '25, of $1.1 billion provides strong visibility into future revenue generation and business activity levels. Bookings of $377 million during Q4 compared to $301 million in Q4 of '24 and $339 million in Q3 of '25, as well as a trailing eight-quarter average of $336 million. ES book-to-bill ratio was 1.1x during Q4 and 1x on a trailing eight-quarter average, highlighting that the company is consistently replenishing its backlog in line with project execution. The outlook for ES products and services continues to be attractive, driven by expected increases in natural gas, associated liquids, and electric power generation across Enerflex's core operating countries. Turning to After-Market Services, this business line continued to benefit from strong activity levels and increased customer maintenance spending. We are particularly encouraged by the performance of our AMS business in countries where we also operate Energy Infrastructure assets, highlighting the strength of our integrated offering and competitive positioning in key markets. The Energy Infrastructure business continues to deliver solid performance, underpinned by approximately $1.3 billion of contracted revenue. Within this segment, our U.S. contract compression fleet remains a core component of our asset base, and the underlying fundamentals for that business continue to be constructive. You can find additional detail on operational KPIs for this segment on Slides 15 and 16 of our investor presentation. Turning to our international Energy Infrastructure operations, which are outlined on Slides 17 and 18. We currently operate 1.1 million horsepower of compression and have 24 build, own, operate and maintain or BOOM projects across Bahrain, Oman, and Latin America. This portfolio is supported by a strong contract position with a weighted average remaining term of approximately five years, providing durable and predictable cash flow that we expect will continue to support Enerflex's financial performance in the years ahead. I'd like to take a moment to touch on our strategic priorities. Since joining Enerflex at the end of September, I've had the opportunity to spend time across our global operations and interact extensively across all levels of the organization. Concurrent with this, we have been engaging with internal and external partners and a broader assessment of Enerflex's strategy, capabilities, and market opportunities. We expect to provide further insights into our strategic priorities, including capital allocation expectations in the coming months. At a high level, Enerflex's strategy will be anchored by a continued focus on Enerflex's strengths and areas of excellence, alignment with the values that have guided the company for decades, and emphasis on discipline, providing meaningful direct shareholder returns and making investments that support long-term shareholder value creation. During 2026, the company's priorities are focused on leveraging our leading position in core operating countries to capitalize on expected increases in demand for Enerflex' solutions, enhancing the profitability of our core operations, maximizing free cash flow, and positioning the company to invest in customer-supported growth opportunities and provide meaningful direct shareholder returns.

Thanks, Paul, and good morning, everyone. I'll start with highlights from the fourth quarter. We generated revenue of $627 million in the fourth quarter compared to $561 million in Q4 '24 and $777 million in Q3 '25. Higher revenue compared with the prior year reflects strong execution and a high level of operational activity in the Engineered Systems product line. The sequential decline relates primarily to the commencement of the Block 60 Bisat-C Expansion facility and the pull forward of certain projects into the third quarter. Gross margin before depreciation and amortization was $177 million or 28% of revenue compared to $174 million or 31% of revenue in Q4 '24 and $206 million or 27% of revenue during Q3 '25. The EI and AMS product lines generated 67% of consolidated gross margin before depreciation and amortization during Q4 '25. Energy Infrastructure performance continued to be strong with gross margin before D&A of $89 million compared to $86 million in Q4 '24 and $95 million in Q3 '25. After-Market Services gross margin before D&A was 22% in the quarter, benefiting from strong customer maintenance programs. SG&A was $83 million for the three months ended December 31, 2025, down $9 million from the prior year period, driven by cost savings initiatives, improved operational efficiencies, and lower depreciation and amortization. On a sequential basis, SG&A increased from $71 million due to higher stock-based compensation and third-party expenses. Adjusted EBITDA of $123 million compares to $121 million in Q4 '24 and $145 million during Q3 '25. The sequential decrease in adjusted EBITDA was primarily related to the pull forward of certain ES projects into Q3 '25 and higher core SG&A in the fourth quarter. Return on capital employed was 16.9% in Q4 '25, an increase compared to 10.3% in Q4 '24 and consistent with the record level during Q3 '25. Higher ROCE compared to Q4 '24 is a function of the increase in trailing 12-month EBIT and lower average capital employed, primarily due to a decline in net debt. Cash provided by operating activities before changes in working capital or FFO of $60 million compared to $74 million in Q4 '24 and $115 million in Q3 '25. FFO for the fourth quarter included $26 million of tax expense related to the refinancing of our high-yield notes. Free cash flow increased to a record $141 million in Q4 '25 compared to $76 million during Q4 '24 and $43 million in Q3 '25. Free cash flow included working capital recovery of $119 million, which benefited from collection and execution of projects in the ES business line. Net loss of $57 million or $0.47 per share in Q4 '25 compared to earnings of $15 million or $0.12 per share in Q4 '24 and earnings of $37 million or $0.30 per share in Q3 '25. Included in Q4 '25 was $81 million of expenses related to the redemption of the 2027 senior secured notes. On a normalized basis, net income was $24 million or $0.20 per share in the fourth quarter. The early redemption of Enerflex's 9% senior secured notes due 2027 resulted in debt redemption cost of $42 million, comprised of the redemption premium paid and derecognition of the unamortized original issue discount and deferred transaction costs. Additionally, the company incurred withholding taxes of $26 million for a total one-time cost of $68 million. The embedded derivative associated with the redemption options in the 2027 notes of $13 million was also fully derecognized during Q4 '25. While these costs impacted results in the fourth quarter, the redemption will reduce future financing and tax costs and improve capital structure. The company refinanced $563 million of 9% senior secured notes due 2027 with $400 million of 6.875% senior unsecured notes due 2031, along with availability under the company's secured revolving credit facility. The refinancing is expected to reduce annual interest costs and enhance the company's tax efficiency. Now I'll touch on our strong financial position. Enerflex exited Q4 '25 with net debt of $501 million, which included $81 million of cash and cash equivalents, a reduction of $115 million compared to Q4 '24 and $83 million compared to the third quarter of '25. Cash increased by $17 million on a quarter-over-quarter basis due to strong collections late in the fourth quarter, but we remain focused on optimizing cash balances held on a global basis. Enerflex's bank adjusted net debt-to-EBITDA ratio is approximately 1x at the end of Q4 '25, down from 1.5x at the end of Q4 '24 and 1.2x at the end of Q3 '25. Now let me shift to capital allocation. During Q4 '25, we invested $34 million in the business, comprised of $14 million for growth capital, primarily allocated to expand the company's contract compression fleet in the U.S. and $20 million for maintenance and PP&E. Capital expenditures for 2025 were $115 million, consistent with our previous guidance of $120 million. The company repurchased 102,800 common shares at an average price of CAD 15.10 per share during Q4 '25 and a total of approximately 2.8 million common shares at an average price of CAD 11.08 since its normal course issuer bid commenced on April 1 to December 31, 2025. Under the NCIB, which expires March 31, 2026, the company is authorized to acquire up to a maximum of approximately 6.2 million common shares or 5% of its public float as of the application date for cancellation. During 2025, Enerflex returned $40 million to shareholders through dividends of $17 million and share repurchases of $23 million. Now turning to 2026. Enerflex is targeting organic capital expenditures of $175 million to $195 million. This includes growth capital of $90 million to $100 million, maintenance capital of $70 million to $80 million and PP&E and infrastructure investments of approximately $15 million to support the company's ES business and activity in adjacent markets, including power generation. Organic growth capital spending will continue to focus on customer support opportunities and primarily allocated to expand the company's contract compression fleet in the U.S. Although not contemplated in the company's 2026 capital spending plan, Enerflex continues to evaluate opportunities to organically expand its business in the Middle East. And now direct shareholder returns. Going forward, capital allocation decisions will be based on delivering value to Enerflex shareholders and measured against Enerflex's ability to maintain balance sheet strength. In addition to disciplined growth capital spending, share repurchases, and dividends, Enerflex will also consider further debt reduction to strengthen its balance sheet and lower net finance costs. We remain focused on enhancing the profitability of our core operations, growing our business in a disciplined and structured way, and ensuring Enerflex generates sustained attractive returns for shareholders. I want to thank Enerflex employees for their efforts in continuing to deliver strong operational and financial results. With that, I'll turn the call back over to Paul for closing remarks.

Thanks, Preet. Over the course of 2025, we continued to advance our business, strengthened our financial position, and took meaningful steps to enhance long-term shareholder value. While there remains important work ahead to fully realize our ambitions, I'm encouraged by the momentum across our global operations and confident in our ability to build on this foundation. Once again, we believe the consistency of Enerflex's results, our growing and relentless focus on execution, and strategic opportunities within a constructive natural gas market position Enerflex for long-term value creation. We are excited about the path ahead for Enerflex and look forward to providing more detail in the coming months around Enerflex's strategy, capabilities, and market opportunities. And before I hand the call back over to the operator, I too want to thank the 4,400 employees around the world for their commitment, resilience, and focus on customers day in and day out. We will now hand the call back to the operator for questions.

Our first question comes from Aaron MacNeil with TD Cowen.

Yesterday, a large contract compression company in the U.S. noted that lead times on large engines have extended to 110 to 120 weeks. So I'm just hoping that you can speak to sort of the amount of the Engineered Systems backlog, potential orders, including power generation beyond the backlog and the sort of energy infrastructure organic growth that would have sort of an associated engine today? And then ultimately, do you see this as a constraint that would reduce your ability to execute on the business? And then maybe more directly as it relates to the 1.5 gigawatts of opportunities, like can you practically execute or like how much of it, I guess, could you practically execute on in the near term in light of those constraints?

Aaron, great question. First, I would say, the element of availability of engines and things is not a new phenomenon. This is something that we've been strategizing, grappling with for a bit now. I would say, our '26 is secure. We are currently positioning for 2027, given the light of the delivery constraints. And to answer the question relating to power generation, we did in Q4, if you remember, and even Q3, a small element of putting more of a speculative position to secure engines such that we could deliver on our commitments in '26.

Got you. Okay. And then maybe keeping with the lead times. Again, I know you said you had '26 sort of locked in, but if lead times are effectively two years, is it fair to assume that you sort of now have a multiyear growth outlook for the contract compression business specifically? Like I'm thinking about you upticked the capital spend for next year or I guess, for this year. Like should we expect sort of that cadence to continue into 2027? And sort of do you have visibility to that today? And do you have customers sort of lined up ready to take that equipment today?

Yes. Great question. As we've stated, our CapEx position in '26 demonstrates our commitment to further growth similar to what you've seen in '25. We do have customer-specific positions with that. I know there is some discussion around Permian Basin and what have you. But when it comes to gas processing, production of gas, and the outlook of gas, yes, I think the statement that you've made around two years of confidence on growth is accurate.

Our next question comes from Tim Monachello with ATB Cormark Capital Markets.

Just a quick one to follow up on Aaron's question. Do you think that lead time, as you stated, 110 to 120 weeks is accurate across your product lines that you're seeing? Or is there some variability in lead times based on, I guess, the size of engines that you're looking at and end markets?

The stated 120 weeks refers to a segment of the product line, particularly in the higher horsepower ranges, which presents a potential opportunity. Expansion and operations among key equipment manufacturers are quite active. Currently, the lead time for large horsepower is 120 weeks. However, as we move forward over the next several months, we expect to see some impact from capital expenditures with equipment manufacturers. Additionally, it's important to note that not all products have this lead time; it applies only to a select portion of the portfolio.

Got it. And then having 2026 sort of secured, would you say, I don't know, the majority or almost all of the new orders that you received today won't be delivered in '26? Or do you still have capacity to book and turn work in '26?

If you're referring to data center power generation-related items, yes, most of that would be 2027 and beyond. Do we find opportunities here or there for book-to-bill business to pursue? That certainly is the plan, and that certainly is something that we do. But when it comes to the data center world, that would be more of 2027 and on in terms of deliveries.

And I meant more for the compression processing piece?

In terms of...

Yes. Tim, it's Jeff. As Paul referenced in the remarks a minute ago, we've secured capacity to support our activity levels in '26, and that includes a book-and-bill as Paul referenced. And we also have a view for where activity and opportunities set for '26 going into '27 as well.

Okay. I apologize for asking this question again. Preet mentioned potential growth opportunities in the Middle East. Can you elaborate on what those opportunities look like and how you plan to pursue them in relation to your cost of capital and your growth opportunities in North America?

Yes, Tim. So I mean, as we mentioned, the growth capital noted in our outlook is largely earmarked for the U.S. contract compression fleet, call it, 60% to 65% greater than prior year. Currently, in the growth capital, we don't have anything directly allocated to, call it, Oman, Bahrain, the countries you're currently in, good GCC countries. But we still are active in that market. We've got a team on the ground based out of Abu Dhabi who are quite well versed in that region. And those projects, as you probably mentioned earlier, don't come around every year. And if they do, when they do hit, they usually straddle a couple of year ends. And so we're active in the market. There are often good quality assets, the BOOM assets, whether finance or operating leases we see on our balance sheet, great counterparties, good economics, take-or-pay without direct volumetric or commodity price risk. So we like the asset class. But right now, we just put a marker out there that nothing in our current growth capital guidance speaks to those potential projects, but we are active exploring good markets in those good countries.

Okay. And then around capital allocation, I appreciate your prepared remarks there, Preet. But just curious, in terms of the NCIB that you have outstanding for the year, do you expect to exhaust that NCIB? Or how should we be thinking about your share repurchase activity in '26?

Tim, I mean, all the capital allocation levers that we've spoken about in the past are relevant growth capital, we put markers out there now. The dividend, as you know, we've increased as at Q3 last couple of years. And we've been active in the NCIB since inception, April 1 last year, purchased just under 5%, that being half of 5% of the authorized float that we had. But what I would say is that we'll be a little more prescriptive on capital allocation in the coming months once the strategy work is done. And right now, the NCIB is open until the end of March, and we'll make a call accordingly at that time.

Our next question comes from the line of John Gibson with BMO Capital Markets.

First, just wondering if you could maybe expand on the customers associated with these power generation contracts, are they with the order you signed or future orders you're working on? Is there any counterparty risk? Or are they all pretty high-quality?

Yes, John, great question. In this market space, I think I used the word embryonic last quarter. So having a really strong disciplined approach on counterparties, on terms, on different conditions and whatnot is extremely important. But I would say that prime for us is counterparty risk, counterparty stability. So right now, in the recent win, very, very strong counterparty in the projects that we're pursuing here in the near term, very, very strong counterparty, well-developed relationships, well-developed understanding across the value stream, whether they're developers, real estate developers, power developers, and then the hyperscalers. So that's been a key piece of our strategy and why we've kind of metered and been conservative, if you will, on our approach.

Okay. Great. And then last one from me. Just given the recent disposition, is your business kind of where it's at in terms of kind of where you want it overall? Or are there any other geographies or areas you're continuing to evaluate here?

Yes. Maybe I'll just give an overview, and Preet, you can jump in here. Early on, we've deployed more of a residual cash earnings type of North Star metric. And we've looked at all geographies, all business lines, all countries, and certainly continue to stay focused on that, and that's around creating shareholder value. So we continue to look at it. And I would say that's just a part of our normal discipline, operating discipline, but I wouldn't go beyond that.

The only thing I'd add is at deal close three years ago, we were in 27 countries. Most recently and currently, we're in 17. We'll monetize Asia Pacific, getting down to likely 14 or so. And then we've got seven core Canada, U.S., Oman, Bahrain, Brazil, Argentina, and Mexico. To say, there's probably a few other non-core geographies we can get out of and free up some capital, working capital, close some bank accounts, and improve our tax compliance positions in these countries. So just overly simplify and optimize, but there's probably a few more non-core countries to look at.

Congrats on a great year here.

I'm showing no further questions at this time. I would now like to turn it back to Paul Mahoney for closing remarks.

Thank you. Well, thank you for joining today's call. We look forward to sharing our first quarter financial and operational results in early May.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.