The share price of Cactus, Inc. (NYSE:WHD) fell by 6.61% between September 5 and September 12, 2025, putting it among the Energy Stocks that Lost the Most This Week. Here is Why Cactus (WHD) Fell Recently Cactus, Inc. (NYSE:WHD) manufactures and services pressure control equipment for onshore and offshore oil and gas drilling, completion, and production. Cactus, Inc. (NYSE:WHD) faced downward pressure after it was revealed last week that William D. Marsh, the company’s Executive Vice President and Secre ...

TimesSquare Capital Management, an equity investment management company, released its “U.S. Small Cap Growth Strategy” second-quarter 2025 investor letter. A copy of the letter can be downloaded here. During the quarter, the fund returned 11.28% (gross) and 11.02% (net), compared to the Russell 2000 Growth Index by 11.97%. Equities posted double-digit returns in the second quarter as global economic activity measures lifted. In addition, please check the fund’s top five holdings to know its best picks in 20 ...

Cactus (WHD -9.59%), a key manufacturer of pressure control equipment and spoolable pipe for the oil and gas industry, released its second quarter results on July 30, 2025. The report showed the company missed analyst projections on both non-GAAP earnings and GAAP revenue, reflecting softness in North American oilfield activity and new pressures from tariffs. Earnings per share (non-GAAP) were $0.66 versus the $0.72 that analysts expected, while revenue (GAAP) was $273.6 million, falling short of the $278.8 ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Cactus, Inc.'s unaudited condensed consolidated financial statements as of June 30, 2025, including balance sheets, income statements, cash flows, and notes on accounting policies and segment performance [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$1.82 billion** by June 30, 2025, driven by cash growth, while total liabilities remained stable and equity rose to **$1.35 billion** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $405,177 | $342,843 | | Total current assets | $873,351 | $774,688 | | Total assets | $1,824,529 | $1,739,328 | | **Liabilities & Equity** | | | | Total current liabilities | $179,963 | $178,824 | | Total liabilities | $475,992 | $475,149 | | Total stockholders' equity | $1,348,537 | $1,264,179 | [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Total revenues and net income decreased for Q2 and H1 2025 compared to 2024, primarily due to lower product and rental revenues and increased expenses Statement of Income Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $273,575 | $290,389 | $553,894 | $564,512 | | Operating Income | $60,805 | $79,819 | $129,417 | $142,369 | | Net Income | $49,047 | $63,059 | $103,152 | $112,874 | | Diluted EPS | $0.59 | $0.75 | $1.23 | $1.35 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations decreased to **$124.4 million** in H1 2025 due to lower earnings, while investing cash outflows increased due to an affiliate investment Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $124,380 | $164,218 | | Net cash used in investing activities | ($26,507) | ($14,054) | | Net cash used in financing activities | ($36,546) | ($37,195) | | **Net increase in cash** | **$62,334** | **$112,711** | [Notes to Financial Statements](index=11&type=section&id=Notes%20to%20Financial%20Statements) Notes detail business segments, recent transactions, accounting policies, and financial line items, including two operating segments and a pending Baker Hughes acquisition - The company operates in two business segments: Pressure Control and Spoolable Technologies[27](index=27&type=chunk) - In June 2025, the company entered into an agreement to acquire a controlling interest in Baker Hughes Company's surface pressure control business[31](index=31&type=chunk) Revenue by Category for Six Months Ended June 30 (in thousands) | Revenue Category | 2025 | % of Total | 2024 | % of Total | | :--- | :--- | :--- | :--- | :--- | | Product revenue | $417,223 | 75% | $428,412 | 76% | | Rental revenue | $48,908 | 9% | $49,150 | 9% | | Field service and other | $87,763 | 16% | $86,950 | 15% | | **Total revenues** | **$553,894** | **100%** | **$564,512** | **100%** | - The company is involved in patent litigation with Cameron International Corporation regarding its SafeLink® frac flow system. The outcome is currently unpredictable[65](index=65&type=chunk)[66](index=66&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses H1 2025 financial performance, noting decreased revenues, segment trends, market factors, the Baker Hughes acquisition, and strong liquidity [Recent Developments and Trends](index=25&type=section&id=Recent%20Developments%20and%20Trends) Key market factors include declining oil prices and drilling activity, new tariffs, and the **$344.5 million** acquisition of Baker Hughes' surface pressure control business Key Market Indicators | Indicator | Q2 2025 | Q1 2025 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | WTI Oil Price ($/bbl) | $64.57 | $71.78 | $68.12 | $79.69 | | U.S. Land Drilling Rigs | 556 | 572 | 564 | 593 | - The company is facing elevated tariff expenses on goods from Vietnam and China and higher steel costs due to Section 232 tariffs, which could impact profitability[94](index=94&type=chunk) - Cactus will acquire a **65%** interest in Baker Hughes' surface pressure control business for a cash price of **$344.5 million**, creating a joint venture, expected to close in late 2025 or early 2026[97](index=97&type=chunk)[99](index=99&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) Total revenues decreased sequentially in Q2 2025 and year-over-year for H1 2025, with varied segment performance and increased corporate expenses Q2 2025 vs Q1 2025 Segment Performance (in thousands) | Segment | Q2 2025 Revenue | Q1 2025 Revenue | % Change | Q2 2025 Op. Income | Q1 2025 Op. Income | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Pressure Control | $179,772 | $190,277 | (5.5)% | $42,333 | $54,333 | (22.1)% | | Spoolable Technologies | $96,225 | $92,578 | 3.9% | $28,053 | $23,876 | 17.5% | H1 2025 vs H1 2024 Segment Performance (in thousands) | Segment | H1 2025 Revenue | H1 2024 Revenue | % Change | H1 2025 Op. Income | H1 2024 Op. Income | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Pressure Control | $370,049 | $362,220 | 2.2% | $96,666 | $107,344 | (9.9)% | | Spoolable Technologies | $188,803 | $202,811 | (6.9)% | $51,929 | $46,434 | 11.8% | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$405.2 million** cash and **$222.6 million** credit availability, sufficient to fund operations and the Baker Hughes acquisition - As of June 30, 2025, the company had **$405.2 million** in cash and cash equivalents and **$222.6 million** of available borrowing capacity[115](index=115&type=chunk) - The company expects to fund the Baker Hughes Transaction using cash on hand and its undrawn credit facility[117](index=117&type=chunk) - Estimated net capital expenditures for 2025 are projected to be between **$40 million** and **$45 million**[118](index=118&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's exposure to market risk has not materially changed since December 31, 2024 - There have been no material changes in the company's exposure to market risk since December 31, 2024[123](index=123&type=chunk) [Item 4. Controls and Procedures](index=30&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control during Q2 2025 - The principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of June 30, 2025[124](index=124&type=chunk) - No changes occurred in internal control over financial reporting during Q2 2025 that have materially affected, or are reasonably likely to materially affect, internal controls[125](index=125&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=31&type=section&id=Item%201.%20Legal%20Proceedings) The company is engaged in a patent infringement lawsuit with Cameron International Corporation regarding its SafeLink® frac flow system, with an unpredictable outcome - Cactus is in a legal dispute with Cameron International Corporation over alleged patent infringement by its SafeLink® frac flow system[129](index=129&type=chunk) - The jury trial, originally scheduled for June 9, 2025, has been delayed with no new date set. The company cannot predict the outcome of these claims[129](index=129&type=chunk) [Item 1A. Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) New risk factors primarily relate to the pending Baker Hughes Transaction, including integration challenges, unknown liabilities, and international expansion hurdles - New risks have been identified related to the Baker Hughes Transaction, including[131](index=131&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk) - Failure to realize anticipated strategic and financial benefits - Difficulties in integrating the Joint Venture's operations, which could disrupt business and lead to loss of key employees - Potential for unknown or underestimated liabilities from the acquired business - Obstacles related to expanding into new geographic regions like the Middle East, including geopolitical risks and unfamiliar regulatory environments [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased Class A common stock from employees for tax obligations in Q2 2025, with **$146.3 million** remaining authorized under its repurchase program Issuer Purchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Avg. Price Paid | Remaining Authorization | | :--- | :--- | :--- | :--- | | April 2025 | 1,197 | $37.81 | - | | May 2025 | 3,273 | $41.32 | - | | June 2025 | 717 | $44.10 | - | | **Total** | **5,187** | **$40.90** | **$146,302,153** | - The shares purchased were from employees to satisfy tax withholding obligations and were not part of the publicly announced repurchase program[138](index=138&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during Q2 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the three months ended June 30, 2025[139](index=139&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including agreements, corporate governance documents, and CEO/CFO certifications

Financial Data and Key Metrics Changes - Total Q2 revenue was $274 million, representing a sequential decline of 2.4% [8] - Adjusted EBITDA for Q2 was $87 million, down 7.6% sequentially, with adjusted EBITDA margins at 31.7% compared to 33.5% in Q1 [11][12] - GAAP income decreased to $49 million in Q2 from $54 million in Q1, primarily due to lower operating income [12] - Adjusted net income for Q2 was $53 million, or $0.66 per share, down from $59 million and $0.73 per share in Q1 [12] Business Line Data and Key Metrics Changes - Pressure Control segment revenues were $180 million, down 5.5% sequentially, mainly due to lower rental business revenue [8][9] - Spoolable Technologies segment revenues increased to $96 million, up 3.9% sequentially, driven by higher domestic customer activity [10] - Operating income for the Pressure Control segment declined by $12 million or 22.1% sequentially, while operating income for Spoolable Technologies increased by $4.2 million or 17.5% [9][10] Market Data and Key Metrics Changes - The U.S. Land rig count was reported at 526, which is 5% below the second quarter average [20] - The average rig count is expected to decline further, impacting pressure control revenue in Q3 [20] Company Strategy and Development Direction - The company announced a transformative acquisition of a controlling interest in Baker Hughes' surface pressure control business, aiming to diversify its footprint [6][23] - The focus remains on enhancing operational efficiencies and supply chain management, particularly in light of tariff impacts [17][46] Management's Comments on Operating Environment and Future Outlook - Management noted that the second quarter faced challenges due to tariff increases and commodity market weakness, but free cash flow remained strong [6][24] - The company anticipates that the sharpest domestic activity declines for 2025 are behind them, with expectations for a broader geographic footprint post-acquisition [24] Other Important Information - The Board approved an 8% increase in the quarterly dividend to $0.14 per share, reflecting confidence in cash flow durability [7][15] - Legal expenses related to ongoing litigation increased by approximately $2 million from the first quarter [9] Q&A Session Summary Question: Impact of tariffs on pressure control margins - Management acknowledged that the unexpected doubling of tariffs impacted margins, but cost recovery initiatives were paused due to falling oil prices [27][28] Question: Customer confidence in ramping activity - Management indicated that customers are focused on capital discipline and returning cash to shareholders, which has led to a cautious approach towards CapEx expansion despite favorable oil prices [31][32] Question: Trends in drilling, completions, and production - Management noted that completions activity is expected to decline more significantly than drilling, with production activity not suffering to the same degree [39][40] Question: Acquisition strategy in the Middle East - Management expressed optimism about turning around the acquired business, focusing on supply chain improvements and cultural changes [42][46] Question: Legal charges and ongoing litigation - Management confirmed that trial delays would lead to further legal expenses, but the nature of the dispute involves IP issues related to the SafeLink product [52][53]

Financial Data and Key Metrics Changes - Total Q2 revenues were $274 million, a sequential decline of 2.4% [8] - Adjusted EBITDA for Q2 was $87 million, down 7.6% sequentially, with adjusted EBITDA margins at 31.7% compared to 33.5% in Q1 [12] - GAAP income decreased to $49 million in Q2 from $54 million in Q1, primarily due to lower operating income [13] - Adjusted net income for Q2 was $53 million, or $0.66 per share, down from $59 million and $0.73 per share in Q1 [13][14] - Cash balance increased to $405 million, a sequential increase of approximately $58 million [14] Business Line Data and Key Metrics Changes - Pressure Control segment revenues were $180 million, down 5.5% sequentially, primarily due to lower rental business revenue [8] - Spoolable Technologies segment revenues increased by 3.9% sequentially to $96 million, driven by higher domestic customer activity [11] - Operating income for Pressure Control declined by $12 million or 22.1% sequentially, while operating income for Spoolable Technologies increased by $4.2 million or 17.5% [10][11] Market Data and Key Metrics Changes - The U.S. Land rig count was reported at 526, 5% below the second quarter average [21] - The company anticipates a mid to high single-digit decline in Pressure Control revenue for Q3 compared to Q2 [21] Company Strategy and Development Direction - The company announced a transformative acquisition of a controlling interest in Baker Hughes' surface pressure control business, expected to close in late 2025 or early 2026 [24] - The strategic rationale for the acquisition is to diversify the company's footprint and enhance its market position in the Middle East [24] - The company is focused on maintaining capital discipline and evaluating capital spending in light of domestic activity trends [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the tariff impact and commodity market weakness affected performance, particularly in June [17] - The company expects adjusted EBITDA margins in the Pressure Control segment to remain stable at 28% to 30% for Q3, despite lower operating leverage [21] - Management expressed optimism that the sharpest domestic activity declines are behind them and anticipates a broader geographic footprint post-acquisition [26] Other Important Information - The Board approved an 8% increase in the quarterly dividend to $0.14 per share, reflecting confidence in cash flow durability [15][26] - Legal expenses related to litigation claims increased by approximately $2 million from Q1, totaling $5.1 million in Q2 [10] Q&A Session Summary Question: Impact of tariffs on pressure control margins - Management acknowledged that the unexpected doubling of tariffs impacted margins, but they had also begun sourcing from higher-cost U.S. suppliers [29][30] Question: Customer confidence in ramping activity - Management noted that customers are focused on capital discipline and returning cash to shareholders, which has led to a cautious approach towards CapEx expansion despite favorable oil prices [34][35] Question: Trends in product lines across drilling, completions, and production - Management indicated that completions were the weakest, with a significant decline expected in frac activity, while production activity is expected to hold up better [41][42] Question: Plans for the Middle East acquisition - Management expressed excitement about turning around the acquired business, focusing on supply chain improvements and cultural changes [48][49] Question: Legal charges and ongoing litigation - Management confirmed that legal expenses were related to an IP dispute and that further expenses are expected in the back half of the year due to trial preparations [55][56]

Core Insights - Cactus, Inc. reported a revenue of $273.58 million for the quarter ended June 2025, reflecting a 5.8% decline year-over-year and falling short of the Zacks Consensus Estimate of $275.61 million by 0.74% [1] - The company's EPS was $0.66, down from $0.81 in the same quarter last year, and also slightly below the consensus estimate of $0.67, resulting in an EPS surprise of -1.49% [1] Revenue Breakdown - Spoolable Technologies generated revenues of $96.23 million, exceeding the average estimate of $94.13 million, but showing a year-over-year decline of 7.2% [4] - Pressure Control revenues were reported at $179.77 million, which was below the average estimate of $182.33 million, marking a 4% decrease year-over-year [4] Operating Income Analysis - Operating income for Pressure Control was $42.33 million, falling short of the average estimate of $50.05 million [4] - Corporate and other expenses resulted in an operating loss of $9.58 million, worse than the estimated loss of $7.5 million [4] - Spoolable Technologies reported an operating income of $28.05 million, surpassing the average estimate of $24.83 million [4] Stock Performance - Cactus shares have returned +4.7% over the past month, outperforming the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Company Performance - Cactus, Inc. reported quarterly earnings of $0.66 per share, missing the Zacks Consensus Estimate of $0.67 per share, and down from $0.81 per share a year ago, representing an earnings surprise of -1.49% [1] - The company posted revenues of $273.58 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.74%, and down from $290.39 million year-over-year [2] - Over the last four quarters, Cactus has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Outlook - Cactus shares have lost approximately 19.2% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The current consensus EPS estimate for the coming quarter is $0.66 on revenues of $275.8 million, and for the current fiscal year, it is $2.66 on revenues of $1.1 billion [7] - The estimate revisions trend for Cactus was unfavorable ahead of the earnings release, resulting in a Zacks Rank 5 (Strong Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Oil and Gas - Integrated - United States industry, to which Cactus belongs, is currently in the bottom 8% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor sentiment [5]

[Cactus Second Quarter 2025 Results](index=1&type=section&id=Cactus%20Announces%20Second%20Quarter%202025%20Results) The company reported Q2 2025 results, highlighting key financial metrics, strategic acquisitions, and segment performance [Financial & Operational Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) Cactus reported Q2 2025 revenue of $273.6 million, announced a key acquisition, and increased its quarterly dividend Q2 2025 Financial Summary (vs. Q1 2025 & Q2 2024) | Financial Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | **Revenues** | $273.6M | $280.3M | $290.4M | | **Operating Income** | $60.8M | $68.6M | $79.8M | | **Operating Margin** | 22.2% | 24.5% | 27.5% | | **Net Income** | $49.0M | $54.1M | $63.1M | | **Adjusted Net Income** | $53.2M | $58.8M | $65.2M | | **Adjusted EBITDA** | $86.7M | $93.8M | $103.6M | | **Adjusted EBITDA Margin** | 31.7% | 33.5% | 35.7% | - Diluted earnings per Class A share were **$0.59**, or **$0.66** on an adjusted basis for Q2 2025[5](index=5&type=chunk) - The company generated **$82.8 million** in cash flow from operations and ended the quarter with **$405.2 million** in cash and no bank debt[5](index=5&type=chunk) - Signed an agreement to acquire a **65% majority interest** in Baker Hughes' Surface Pressure Control business, a key strategic move for diversification[5](index=5&type=chunk) - The Board of Directors approved an **8% dividend increase** to $0.14 per Class A share per quarter[5](index=5&type=chunk) [Management Commentary](index=2&type=section&id=Management%20Commentary) Management attributed resilient performance to diversification while noting impacts from lower activity and tariffs, and highlighted a key strategic acquisition - The **FlexSteel acquisition** provided portfolio diversification, leading to resilient cash flows and revenues despite a decline in U.S. land activity[7](index=7&type=chunk) - The Pressure Control segment was **negatively impacted by tariffs**, particularly the unexpected doubling of the Section 232 tariff during the quarter[7](index=7&type=chunk) - The company expects revenues to be **down modestly** in both segments in Q3 2025, following lower average domestic activity levels[7](index=7&type=chunk) - The planned acquisition of Baker Hughes' Surface Pressure Control business is a strategic response to North American market softness and tariff uncertainty, aiming for **geographic and revenue diversification**[7](index=7&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) The Spoolable Technologies segment grew while the Pressure Control segment declined due to lower activity and tariff impacts [Pressure Control](index=2&type=section&id=Pressure%20Control) The Pressure Control segment's revenue and operating income declined sequentially due to lower rental activity and tariff impacts Pressure Control Q2 2025 Sequential Performance | Metric | Q2 2025 | Change from Q1 2025 | Reason | | :--- | :--- | :--- | :--- | | **Revenue** | $179.8M | -$10.5M (-5.5%) | Lower rental revenues and equipment sales | | **Operating Income** | $42.3M | -$12.0M (-22.1%) | Tariff impacts, increased legal expenses | | **Adj. Segment EBITDA** | $53.1M | -$11.7M (-18.0%) | N/A | | **Adj. Segment EBITDA Margin** | 29.5% | -450 bps | N/A | [Spoolable Technologies](index=2&type=section&id=Spoolable%20Technologies) The Spoolable Technologies segment saw sequential growth in revenue and operating income, driven by higher customer activity Spoolable Technologies Q2 2025 Sequential Performance | Metric | Q2 2025 | Change from Q1 2025 | Reason | | :--- | :--- | :--- | :--- | | **Revenue** | $96.2M | +$3.6M (+3.9%) | Higher customer activity levels | | **Operating Income** | $28.1M | +$4.2M (+17.5%) | Higher volume and operating leverage | | **Adj. Segment EBITDA** | $37.9M | +$4.4M (+13.2%) | N/A | | **Adj. Segment EBITDA Margin** | 39.4% | +320 bps | N/A | [Corporate and Other Expenses](index=3&type=section&id=Corporate%20and%20Other%20Expenses) Corporate expenses remained flat sequentially and included transaction costs related to the Baker Hughes acquisition - Second quarter Corporate and Other expenses were flat compared to the first quarter and included **$3.5 million** of transaction-related expenses for the Baker Hughes SPC business acquisition[11](index=11&type=chunk) [Financial Position and Shareholder Returns](index=3&type=section&id=Financial%20Position%20and%20Shareholder%20Returns) The company maintained a strong balance sheet with significant cash, no debt, and increased its quarterly dividend [Liquidity and Capital Expenditures](index=3&type=section&id=Liquidity%2C%20Capital%20Expenditures%20and%20Other) The company ended the quarter with a strong liquidity position and updated its full-year capital expenditure guidance - As of June 30, 2025, the company had **$405.2 million** in cash and cash equivalents with no bank debt outstanding[12](index=12&type=chunk) - Generated **$82.8 million** in operating cash flow during the second quarter of 2025[12](index=12&type=chunk) - The company now expects full-year 2025 net capital expenditures to be between **$40 million and $45 million**[13](index=13&type=chunk) [Shareholder Returns](index=3&type=section&id=Quarterly%20Dividend) The Board of Directors approved an 8% increase in the quarterly cash dividend to enhance shareholder returns - The Board of Directors approved a quarterly cash dividend of **$0.14 per share** of Class A common stock, representing an **8% increase**[5](index=5&type=chunk)[15](index=15&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) The condensed consolidated financial statements show year-over-year declines in revenue and net income but growth in total assets [Condensed Consolidated Statements of Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The income statement reflects a year-over-year decrease in total revenues, net income, and diluted earnings per share for Q2 2025 Income Statement Summary (Year-over-Year) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | **Total Revenues** | $273,575 | $290,389 | | **Total Operating Income** | $60,805 | $79,819 | | **Net Income** | $49,047 | $63,059 | | **Diluted EPS** | $0.59 | $0.75 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows an increase in total assets driven by higher cash balances, with liabilities remaining stable Balance Sheet Summary | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | **Cash and cash equivalents** | $405,177 | $342,843 | | **Total current assets** | $873,351 | $774,688 | | **Total assets** | $1,824,529 | $1,739,328 | | **Total liabilities** | $475,992 | $475,149 | | **Total equity** | $1,348,537 | $1,264,179 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities decreased for the first six months of 2025 compared to the prior year period Cash Flow Summary (Six Months Ended June 30) | Metric | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $124,380 | $164,218 | | **Net cash used in investing activities** | ($26,507) | ($14,054) | | **Net cash used in financing activities** | ($36,546) | ($37,195) | | **Net increase in cash** | $62,334 | $112,711 | [Supplemental Information (Non-GAAP Reconciliations)](index=8&type=section&id=Supplemental%20Information%20(Non-GAAP%20Reconciliations)) This section provides reconciliations of GAAP to non-GAAP measures like Adjusted Net Income and Adjusted EBITDA to clarify core performance [Reconciliation of Adjusted Net Income](index=8&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Income) Adjusted Net Income for Q2 2025 was $53.2 million after accounting for transaction expenses and intangible amortization Reconciliation of Net Income to Adjusted Net Income (Q2 2025) | Description | Amount (in thousands) | | :--- | :--- | | **Net income (GAAP)** | **$49,047** | | Transaction related expenses | $3,502 | | Intangible amortization expense | $3,997 | | Severance expenses | $177 | | Income tax expense differential | ($3,474) | | **Adjusted net income (Non-GAAP)** | **$53,249** | [Reconciliation of Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) Adjusted EBITDA for Q2 2025 was $86.7 million, reconciled from GAAP Net Income by adding back non-cash and non-recurring items Reconciliation of Net Income to Adjusted EBITDA (Q2 2025) | Description | Amount (in thousands) | | :--- | :--- | | **Net income (GAAP)** | **$49,047** | | Interest income, net | ($2,518) | | Income tax expense | $14,276 | | Depreciation and amortization | $15,886 | | **EBITDA** | **$76,691** | | Transaction related expenses | $3,502 | | Stock-based compensation | $6,307 | | Severance expenses | $177 | | **Adjusted EBITDA (Non-GAAP)** | **$86,677** | [Reconciliation of Adjusted Segment EBITDA](index=10&type=section&id=Reconciliation%20of%20Adjusted%20Segment%20EBITDA) Adjusted Segment EBITDA for Q2 2025 was $53.1 million for Pressure Control and $37.9 million for Spoolable Technologies Pressure Control Adjusted Segment EBITDA (Q2 2025) | Description | Amount (in thousands) | | :--- | :--- | | **Operating income** | **$42,333** | | Depreciation and amortization | $7,138 | | Stock-based compensation | $3,432 | | Severance expenses | $177 | | **Adjusted Segment EBITDA** | **$53,080** | Spoolable Technologies Adjusted Segment EBITDA (Q2 2025) | Description | Amount (in thousands) | | :--- | :--- | | **Operating income** | **$28,053** | | Depreciation and amortization | $8,748 | | Stock-based compensation | $1,146 | | **Adjusted Segment EBITDA** | **$37,947** |

Core Insights - Cactus Inc. has entered into an agreement to acquire 65% of Baker Hughes' Surface Pressure Control Business for approximately $344.5 million, establishing a joint venture where Cactus will assume operational control [1][8] Overview of the Baker Hughes SPC Business - The Baker Hughes Surface Pressure Control Business specializes in designing, manufacturing, and servicing surface pressure control solutions, primarily wellheads and production tree systems, with a strong international market presence [2] - Post-transaction, Baker Hughes will retain a 35% stake in the joint venture [2] Geographic Diversification and Revenue Stability - The acquisition allows Cactus to maintain its capital-light manufacturing model while benefiting from geographic diversification, as 85% of SPC's revenues are generated from the Middle East [3][5] - The limited dependence on the U.S. market for external sales enhances revenue resilience against domestic market fluctuations [3] Long-Term Growth Potential - The deal is expected to significantly enhance Cactus' financial metrics, including earnings and cash flow growth, with SPC having a backlog exceeding $600 million in product and aftermarket service orders as of year-end 2024 [4][8] - Cactus aims to maintain a conservative balance sheet while leveraging the acquisition for revenue and cash flow generation [4] Strategic Market Positioning - The geographic footprint of Baker Hughes' SPC Business complements Cactus' existing operations and provides access to new markets unaffected by tariffs, supporting growth and revenue stability across various market cycles [5]