Innovex International, Inc (INVX)

Return on total capital

		Jun 30, 2025	Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	153,367	127,967	89,297	67,216	-17,271	-9,054	13,567	8,874	27,364	18,464	7,061	-65,335	-86,814	-98,119	-124,264	-64,426	-59,594	-51,845	-61,428	-42,474
Long-term debt	US$ in thousands	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—
Total stockholders’ equity	US$ in thousands	995,553	978,376	958,156	904,351	852,524	857,363	881,260	307,946	879,409	880,378	874,916	864,837	868,689	887,775	897,108	979,777	995,324	1,008,270	1,041,530	1,037,560
Return on total capital		15.41%	13.08%	9.32%	7.43%	-2.03%	-1.06%	1.54%	2.88%	3.11%	2.10%	0.81%	-7.55%	-9.99%	-11.05%	-13.85%	-6.58%	-5.99%	-5.14%	-5.90%	-4.09%

June 30, 2025 calculation

Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $153,367K ÷ ($—K + $995,553K)
= 15.41%

Innovex International, Inc.'s return on total capital (ROTC) experienced considerable fluctuations over the analyzed period. Starting in September 2020 at -4.09%, the company’s ROTC consistently declined through the end of 2021, reaching a low of -13.85% in December 2021. During this period, the negative ROTC indicated that the company was not sufficiently generating returns to cover its total capital costs, reflecting operational challenges or inefficiencies.

In 2022, a notable positive shift occurred: ROTC turned positive in December at 0.81%, and continued improving through the first quarter of 2023, reaching 2.10%, and further to 3.11% by June 2023. This transition from negative to positive ROTC suggests a period of operational recovery or strategic adjustments leading to better capitalization efficiency. The ratio remained positive into September 2023 at 2.88%, though it showed signs of potential decline toward the end of 2023, with a decrease to 1.54% in December.

In early 2024, ROTC reverted to negative territory, with -1.06% in March and -2.03% in June, indicating that recent operational performance was insufficient to sustain a positive return on total capital. However, by September 2024, the ratio rebounded sharply to 7.43%, demonstrating a significant improvement in the company's ability to generate returns. The positive trend continued into December 2024 at 9.32%, and further strengthening was observed in March 2025 with a value of 13.08%. As of June 2025, the ROTC advanced to 15.41%, reflecting substantial enhancements in the efficiency with which Innovex International, Inc. is utilizing its total capital to generate profits.

Overall, the company's trajectory illustrates a transition from initially negative performance through recovery phases, culminating in pronounced positive returns in the most recent periods. The fluctuations highlight periods of operational instability followed by strategic or operational improvements that significantly enhanced the company's capital efficiency.