CGG sees robust Q1 with 30% revenue surge amid strategic shifts By Investing.com

CGG (CGG), a global geoscience company, reported a significant increase in its first-quarter revenue for 2024, citing strong activity across all business lines and regions. The company’s Q1 revenue soared to $273 million, marking a 30% rise year-over-year (YoY).

The financial results also included positive developments such as an upgrade in long-term debt rating and the resolution of a longstanding dispute in India, which netted approximately $30 million.

Key Takeaways

• CGG’s Q1 2024 revenue climbed 30% YoY to $273 million.
• Geoscience, Earth Data, and Sensing & Monitoring segments all reported strong YoY growth.
• The company generated $13 million in net cash flow and settled an Indian dispute for a net $30 million.
• CGG is developing carbon capture and storage solutions with Baker Hughes and an AI Cloud Solution for diverse industries.
• Sensing & Monitoring Optimization (SMO) plan is expected to yield long-term cost savings and efficiency improvements.

Company Outlook

• CGG anticipates Q2 volatility but remains positive about the full year, with further trajectory refinements after Q2.
• The SMO optimization plan aims to enhance profitability, with potential impacts on margins extending beyond 2024.

Bearish Highlights

• The company expects some volatility in Q2 due to the non-linear nature of after-sale sequencing and fluctuation of larger deals.

Bullish Highlights

• CGG’s alliance with Baker Hughes to develop integrated CCS offerings.
• Launch of an AI Cloud Solution targeting high-performance computing and infrastructure monitoring sectors.
• Positive client feedback for the company’s expansion into low carbon markets and other sectors.

Misses

• No specific misses were mentioned in the provided context.

Q&A Highlights

• CGG addressed the potential impact of the PGS-TGS merger, noting that some clients may prefer CGG due to competition concerns.
• The company discussed its comprehensive workflow in subsurface and reservoir characterization with Baker Hughes.
• CGG’s AI Cloud Solution is designed to offer outcome-as-a-service in niche markets, including the biosense life science and AI sectors.
• The SMO optimization plan includes inventory management and cost reduction measures, with expected benefits to EBITDA and cash flow.

In summary, CGG’s robust Q1 performance reflects the company’s strategic initiatives and focus on diversifying its offerings. While there is anticipation of short-term volatility,…