Full-year guidance remains unchanged, with full-year adjusted EBITDA to be in the range of $157 million to $177 million, with performance improving in this second half. Investments in CapEx, excluding development costs, are expected to be 2% of revenue for 2026. With that, I will turn the call back over to Eirik for closing remarks before Q&A.

Thank you, Tom. As we conclude, I want to emphasize that while our second quarter revenue reflected choppiness in product orders and repair intake, The underlying fundamentals of our business remain strong. We delivered year-over-year expansion in adjusted EBITDA margins, maintained disciplined cost execution, and continue to generate healthy commercial activity across our markets. Importantly, order momentum for digital technology upgrades remained robust during the quarter, reinforcing our confidence in the demand environment and providing further support for future revenue growth. This performance reflects both the strength of our customer relationships and the value customers place on our technology and service offerings. The offshore drilling market continues to evolve favorably. Closer contracting activities improving, customers securing longer duration awards, and many of the rigs winning work today are equipped with HMH technologies. At the same time, operators remain focused on enhancing operational performance through equipment upgrades, automation, digital solutions, and next-generation technologies. All areas where HMH is uniquely positioned to create value. Looking ahead, we remain confident in anticipated market acceleration through the second half of the year and into 2027, and in HMH's ability to capitalize on opportunities front of us. Finally, I want to thank our employees around the world for the dedication and outstanding execution this quarter. The commitment to our customers and our strategy continues to strengthen the foundation of HMH and position the company for success in the years ahead. Thank you for your continued support of HMH. We look forward to updating you on our progress next quarter. With that, I turn the call back to the operators for questions.

Thank you. We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Derek Pollizer with Piper Sandler. Please go ahead.

Good morning, guys. I wanted to start with the comment, Tom, you made in your remarks about the visibility that you have for your 27 Florida rig years. You said 80% up from 65% this time last year, obviously a great improvement there. So maybe just help us understand closing that 20% gap. And even if you could talk about the upside and downside scenarios for meeting those 2027 rig year estimates.

Yeah, just there's a lot of noise, obviously, you know, still in some of the, you know, the tail end of that, whether you've got rigs that may be rolling off contract, need to be recontracted, potential for reactivation. So I'd say, you know, again, if you look at the rig activity forecast and you re-forecast it, you know, from six months ago to today, you'd be at the same levels in terms of forecast, more certainty around it. And there is both upside and downside. I'd say you're starting to narrow the gap on the downside just by seeing the contract announcements that we've had. So we don't go rig by rig, but it's just trying to give comfort that what we see today is exactly what we expected to see. And we expect to see further strengthening throughout the year. And again, kind of comparing it to past cycles, we're ahead of where we'd be when looking at the forecast.

Let me add to that question. Let me add that for the first seven months in 26, contracted rig years was 50% higher than the same period in 25. That also gave an indication that 27 is up.

Right. Okay. Now that makes sense. That's helpful. And then, so obviously, it sounds like you're expecting an order inflection here in the back half of the year. Obviously, revenue came in a little bit light. You're expecting the inflection second half into 2027. Sounds like your customers had some delays just given the current geopolitical events. Maybe could you talk to us about your conversations with your customers, what they're waiting for, any specific clearing event? Is it just they need a resolution in the Middle East to kind of get back to things? Maybe just a little bit more color around the guidepost that we should be looking out for to then see that inflection that back has.

Yeah, let me separate that too. I'm glad to separate that into two. I'm glad you asked about the Middle East. So I think when you look at the Middle East, this is not true in the previous quarter. In this quarter, you had specific installation commissioning delays and order delays related to the situation that's obviously persisted longer than we thought. That in and of itself was about a $10 million revenue headwind in the quarter. So that is sort of a discrete item, although it does affect some purchasing elsewhere. What you did see, as Eirik alluded to, is an acceleration of digital. So you had significantly higher digital orders than we saw. As we saw customers making those longer-term decisions, Tom McGee We're speculating reactivation, you know, one without saying the name. You know, you've got 50 POs on reactivation that you're updating on a weekly or monthly basis. So, I mean, like it's been kind of like that. And historically, you've seen some of that spend occur ahead of contract. You're not seeing that. And even when they have contracts, you're seeing a little bit of a delay in terms of when that picks up.

Yeah, I think you mentioned it yourself, geopolitics situation that actually – drives the drillers to be a little bit more cautious about when they actually do the work on the upgrade they are planning to do. So they wait as long as they can.

Great. Thank you, Eirik and Tom. I'll turn it back. Thank you.

Your next question comes from Jason Kim with JP Morgan. Please go ahead.

Hey, Jason.

Good morning. Good morning, Eirik and Tom. Thank you for taking my question this morning. So, Tom, you just mentioned customers are making some of these longer-term digital decisions even a bit ahead of your expectations, while some shorter-cycle repair spend is being deferred. As that digital and automation mix grows within the services segment, how should we think about its contribution to margins and the stickiness of that revenue over the life of these longer contracts?

Yeah, it's kind of two parts. A lot of what that allows us to do is actually plan, so it's actually nice that it's happened. Got it. That's helpful.

As a follow-up to that, on the roughly 10 million Middle Eastern headwind you flagged, as those installation and commissioning activities resume, do you view that as largely recoverable revenue that shifts into the back half in 2027, or are you already seeing those delayed activities begin to unlock?

I'd split that into two. First of all, yes, it's all recoverable. Every bit of that, we think will be recovered. I think it In terms of the installation and commissioning, yes, I think you see that as soon as the situation kind of resolves itself. There's equipment, both our equipment and equipment that's needed for some of the installation and commissioning that's literally stuck on ships right now, as you would expect. On the new orders, I think we see, without getting into specifically on the customers, An acceleration of discussions, but just like I need to wait on this, I have to rebuild infrastructure. And so you have the order delays could extend further than this year would be my belief.

Wonderful. I'll turn it back.

Your next question comes from Steven Engaro with Stifel. Please go ahead. Good morning, everybody.

Morning. Morning, Steven. Steven, you're breaking up a little bit.

Sorry, you're breaking up a little bit.

I think that'd be helpful. We're having trouble hearing you. I apologize. We'll wait. We're patient. Yeah, he's coming back. we don't know if he's coming back on or not let's give him a minute he was trying to call back in Guys, I think I'll turn it back over to Eirik.

Steven, we'll catch up with Steven offline. Eirik, do you want to? Go ahead and wrap.

Yeah, okay. Thank you for your support and participation on today's call and we're looking forward to updating you on the third quarter results when that comes.

Thank you all.

This concludes today's call. Thank you for attending. You may now disconnect.