Dril-Quip, Inc. (NYSE:DRQ) Q4 2022 Earnings Conference Call February 28, 2023 10:00 AM ET

Company Participants

Erin Fazio - Finance Director

Jeff Bird - President and Chief Executive Officer

Kyle McClure - VP & CFO

Conference Call Participants

Eddie Kim - Barclays

Operator

Good day, and thank you for standing by. Welcome to the Dril-Quip Q4 Full Year 2022 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference call is being recorded.

I'd now like to hand the conference call over to your speaker today, Erin Fazio, Director of Corporate Finance. Please go ahead.

Erin Fazio

Thank you, and good morning. Welcome to Dril-Quip's full year 2022 conference call. An updated investor presentation has been posted under the Investors tab on the company's website along with the earnings release. This call is being recorded, and a replay will be made available on the company's website following the call.

Before we begin, I would like to remind you that Dril-Quip's comments may include forward-looking statements and discuss non-GAAP financial measures. It should be noted that a variety of factors could cause Dril-Quip's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Please refer to the fourth quarter 2022 financial and operational results announcement we released yesterday for a full disclosure on forward-looking statements and reconciliations of non-GAAP measures.

Speaking on the call today from Dril-Quip, we have Jeff Bird, President and Chief Executive Officer; and Kyle McClure, Vice President and Chief Financial Officer.

I will now turn the call over to Jeff Bird.

Jeff Bird

Thank you, Erin, and thank you all for joining us today. Dril-Quip delivered an incredibly strong fourth quarter, capping an important year where we met or exceeded most of our targets and made significant progress along our longer-term financial, operational and strategic objectives.

Total revenue grew double digits year-over-year, and our fourth quarter revenue was the highest quarter achieved since pre-pandemic. This was partly driven by several factors such as aggressive investments from Brazil, offshore investments across multiple markets from large E&P customers and price increases to offset inflationary pressures.

Fourth quarter gross margin grew by over 15%, and our overall profitability improved with adjusted EBITDA reaching almost 11% in Q4 and improving 350 basis points year-over-year. Our improved margin profile, combined with our ongoing initiatives across the organization to drive operational efficiency, such as our investment in improved wellhead manufacturing and footprint optimization will continue to support our performance moving forward.