Core Insights - Analysts expect Cactus, Inc. (WHD) to report quarterly earnings of $0.73 per share, reflecting a year-over-year decline of 9.9% [1] - Revenue projections stand at $275.89 million, indicating a slight increase of 0.4% from the previous year [1] - The consensus EPS estimate has been revised down by 1.5% over the last 30 days, showing a collective reevaluation by analysts [1][2] Revenue Projections - Revenue from Spoolable Technologies is projected to reach $100.73 million, representing a year-over-year increase of 6.7% [4] - Revenue from Pressure Control is estimated at $175.18 million, indicating a decline of 2.9% from the prior year [4] Operating Income Estimates - The consensus estimate for Operating Income from Spoolable Technologies is $27.35 million, down from $28.17 million in the previous year [4] - Analysts expect Operating Income from Pressure Control to be $50.62 million, compared to $56.05 million a year ago [5] Stock Performance - Cactus shares have decreased by 7.9% over the past month, contrasting with a minor decline of 0.5% in the Zacks S&P 500 composite [5] - Cactus holds a Zacks Rank 3 (Hold), suggesting it is expected to perform in line with the overall market in the near term [5]

Core Insights - The Lead-Lag Report aims to assist investors in outperforming in various market conditions through a tactical, data-driven investment approach [1] - The report emphasizes the importance of understanding risk-on/risk-off signals and identifying high-yield opportunities amidst increasing market volatility [1] Group 1 - The Lead-Lag Report is managed by Lead-Lag Publishing, LLC, and reflects the judgments of its authors as of the writing date, subject to change [2] - The report's trading signals are independent and may differ from other services provided by Lead-Lag Publishing, LLC [2] - The information provided is not intended as a primary basis for investment decisions and does not constitute personalized investment advice [2] Group 2 - The report highlights the necessity for investors to leverage award-winning research to maximize returns in uncertain market conditions [1] - The author, Michael A. Gayed, has a strong academic background and experience in market anomalies and investing [1] - The report does not guarantee future performance and emphasizes that past performance may not be indicative of future results [3]

Industry Overview - The Zacks Oil & Gas US Integrated industry includes companies involved in upstream and midstream energy businesses, focusing on oil and natural gas exploration and production, as well as transportation and storage [3] - The upstream business is positively correlated to oil and gas prices, while midstream operations generate stable fee-based revenues from long-term contracts [3] Current Market Conditions - Upstream companies are benefiting from favorable oil prices, with West Texas Intermediate (WTI) crude prices around $80 per barrel, which is advantageous for exploration and production activities [4] - The U.S. Energy Information Administration projects WTI and Brent average prices to be $70.31 and $74.31 per barrel, respectively, in 2025, indicating a continued favorable environment for integrated players [4] Revenue Stability - Integrated companies' midstream segments are less exposed to commodity price volatility due to long-term contracts securing stable fee-based revenues [5] Environmental Focus - Companies in the industry are increasingly focused on reducing greenhouse gas emissions and flaring rates, recognizing climate change as a significant risk [6] Industry Performance - The Zacks Oil & Gas US Integrated industry has a Zacks Industry Rank of 57, placing it in the top 23% of over 250 Zacks industries, indicating a bullish outlook [7][8] - However, the industry has underperformed compared to the broader Zacks Oil - Energy sector and the S&P 500, gaining only 1.2% over the past year compared to 16.8% and 25.4% for the sector and S&P 500, respectively [9] Valuation Metrics - The industry is currently trading at an EV/EBITDA ratio of 4.91X, lower than the S&P 500's 18.23X but higher than the sector's 3.86X [12] - Over the past five years, the industry's EV/EBITDA has ranged from 3.33X to 14.35X, with a median of 5.02X [12] Key Players - ConocoPhillips (COP) has a strong production outlook and lower debt exposure, positioning it well for adverse business scenarios [14] - Occidental Petroleum (OXY) is addressing its debt burden, reducing it from $47.6 billion in 2019 to $25.5 billion by 2024 [17] - Berry Corporation (BRY) operates in low-decline, long-lived reserves and has a strong balance sheet to navigate volatility [19] - Cactus Inc (WHD) benefits from high crude prices and is focused on minimizing environmental impact [21]

Financial Data and Key Metrics Changes - Total company revenue for Q3 2024 was $293 million, up 1% sequentially [11] - Adjusted EBITDA for Q3 2024 was $100 million, down 3% sequentially, with an adjusted EBITDA margin of 34.2% compared to 35.7% in Q2 2024 [9][16] - GAAP net income was $62 million in Q3 2024, slightly down from $63 million in Q2 2024 [18] - Cash balance increased to $303 million, up $57 million during the quarter [21] Business Segment Data and Key Metrics Changes - Pressure Control segment revenues were $185 million, down 1.1% sequentially, with operating income decreasing by $3.1 million or 5.6% [11][12] - Adjusted segment EBITDA for Pressure Control decreased by $3.3 million or 5.1% sequentially [13] - Spoolable Technology segment revenues increased by 4.3% sequentially, with adjusted segment EBITDA remaining flat at $42.5 million [13][15] Market Data and Key Metrics Changes - The U.S. land rig activity continued to decline, impacting the Pressure Control segment [7] - International revenue in spoolable Technologies for 2024 has already doubled compared to the full year performance of 2023 [30] Company Strategy and Development Direction - The company remains focused on international expansion, particularly in the Mideast, while also evaluating strategic opportunities [30] - The primary objective for the next year includes contributions from a new manufacturing facility to enhance the supply chain [33] - The company is optimistic about its market positioning and the introduction of new products and services [31] Management's Comments on Operating Environment and Future Outlook - Management noted that while the U.S. market is challenging, they are pleased with the positioning of the company and its high-margin products [31] - There is an expectation of a mid-single digit dip in Pressure Control revenue for Q4 due to lower drilling activity and seasonal factors [24] - Management anticipates adjusted EBITDA margins in the Pressure Control segment to be between 33% to 35% for Q4 [26] Other Important Information - The company paid a dividend of $0.13 per share, resulting in a cash outflow of approximately $11 million [20] - Capital expenditures for the full year 2024 have been reduced to a range of $32 million to $37 million [22] Q&A Session Summary Question: Thoughts on overall portfolio and strategic growth opportunities - Management indicated that the primary objective is international expansion, but they remain open to acquisition opportunities similar to Flexsteel [35] Question: General thoughts on tariffs and risk mitigation - Management believes they are in a strong position compared to competitors due to their manufacturing base and ongoing expansion efforts [37][38] Question: Cash balance and potential return to shareholders - Management acknowledged having excess cash and indicated that if no acquisitions occur, they would consider returning cash to shareholders by the end of the coming year [41] Question: Update on wellhead system qualification in the Middle East - Management confirmed ongoing testing and a cautious approach to decision-making regarding the facility [43] Question: Changes in customer dynamics and pricing - Management noted a shift towards technical buying among major operators, which could benefit the company [47] Question: Revenue per rig dynamics and customer caution - Management explained that revenue per rig is primarily impacted by production tree call-offs, which are difficult to predict [53] Question: International revenue contribution and future growth - Management stated that international revenue in spoolable Technologies is currently in the high single digits as a percentage and is expected to grow significantly [61][62]

Revenue Performance - For the nine months ended September 30, 2024, Cactus derived 76% of total revenues from product sales, 9% from rentals, and 15% from field services, compared to 74%, 10%, and 16% respectively for the same period in 2023[85]. - Total revenues for the third quarter of 2024 were $293.2 million, a 1.0% increase from $290.4 million in the second quarter of 2024[98]. - Total revenues for the first nine months of 2024 were $857.7 million, an increase of $35.6 million, or 4.3%, compared to $822.1 million in the same period of 2023[105]. Segment Performance - Pressure Control segment revenue for Q3 2024 was $185.1 million, a decrease of 1.1% from Q2 2024, while Spoolable Technologies revenue increased by 4.3% to $108.2 million[99][100]. - Pressure Control segment revenue decreased by $29.0 million, or 5.0%, to $547.3 million due to lower drilling and completion activity[105]. - Spoolable Technologies segment revenue increased by $65.1 million, or 26.5%, to $311.0 million, benefiting from the FlexSteel acquisition[106]. Operating Income - Operating income for the Pressure Control segment decreased by 5.6% to $52.5 million in Q3 2024, primarily due to miscellaneous charges[99]. - Spoolable Technologies operating income increased by 9.5% to $32.9 million in Q3 2024, attributed to decreased expenses related to the FlexSteel acquisition[100]. - Total operating income for the first nine months of 2024 was $219.2 million, an increase of $33.3 million, or 17.9%, compared to $185.8 million in 2023[105]. Net Income and Cash Flow - Net income attributable to Cactus Inc. was $138.7 million, an increase of $18.5 million, or 15.4%, from $120.2 million in the prior year[105]. - Cash provided by operating activities was $249.5 million, slightly up from $248.6 million in the same period last year[119]. Investment and Financing Activities - Net cash used in investing activities decreased significantly to $24.1 million from $645.2 million, primarily due to the non-recurrence of the FlexSteel acquisition[120]. - Net cash used in financing activities was $56.4 million, a decrease from net cash provided of $116.7 million in the prior year, mainly due to financing activities related to the FlexSteel acquisition[121]. Market Conditions - Average WTI oil price for Q3 2024 was $76.43 per barrel, while natural gas price was $2.11 per MMBtu, reflecting market volatility and geopolitical risks[92][93]. - U.S. land drilling rig count decreased to 565 in Q3 2024, down approximately 15% from the 2023 full year average, indicating a decline in industry activity levels[93]. Capital Expenditures - Estimated net capital expenditures for the year ending December 31, 2024, are projected to range from $32 million to $37 million, focusing on rental fleet investments and manufacturing enhancements[116]. Acquisition - Cactus completed the acquisition of FlexSteel on February 28, 2023, enhancing its position in the E&P industry and expanding its product offerings[82][91]. Cash Position - As of September 30, 2024, the company had $303.4 million in cash and cash equivalents and $220.7 million of available borrowing capacity under its Amended ABL Credit Facility[112].

Core Insights - Cactus, Inc. (WHD) reported third-quarter 2024 adjusted earnings of 79 cents per share, exceeding the Zacks Consensus Estimate of 74 cents, but down from 80 cents in the same quarter last year [1] - Total revenues for the quarter were $293.2 million, surpassing the Zacks Consensus Estimate of $283 million and increasing from $288 million year-over-year [1] Revenue Performance - The improved quarterly results were driven by increased revenues from both Pressure Control and Spoolable Technologies segments, although lower customer drilling activity in the Pressure Control segment partially offset this growth [2] - Pressure Control segment revenues reached $185.1 million, up from $182.5 million in the prior year, and exceeded the estimate of $178 million [3] - Spoolable Technologies segment revenues were $108.2 million, an increase from $103.7 million year-over-year, also above the estimate of $100.6 million [4] Segment EBITDA - Adjusted Segment EBITDA for Pressure Control was $61.9 million, down from $65.3 million in the prior year but above the estimate of $61.2 million [4] - Adjusted Segment EBITDA for Spoolable Technologies remained flat year-over-year at $42.5 million, exceeding the estimate of $40 million [5] Capital Expenditure and Cash Flow - Cactus' capital expenditure for the quarter totaled $10 million, while operating cash flow was reported at $85.3 million [6] Balance Sheet - At the end of Q3 2024, Cactus had cash and cash equivalents of $303.4 million and no outstanding bank debt [7] Outlook - The company anticipates subdued U.S. land drilling activity levels, with the U.S. land rig count expected to remain stable but may face reductions due to seasonal factors and budget constraints [8] - Cactus expects net capital expenditures for the full year 2024 to be in the range of $32-$37 million, down from the previous guidance of $35-$45 million [9]

Cactus, Inc. (WHD) came out with quarterly earnings of $0.79 per share, beating the Zacks Consensus Estimate of $0.74 per share. This compares to earnings of $0.80 per share a year ago. These figures are adjusted for nonrecurring items. This quarterly report represents an earnings surprise of 6.76%. A quarter ago, it was expected that this company would post earnings of $0.70 per share when it actually produced earnings of $0.81, delivering a surprise of 15.71%. Over the last four quarters, the company has ...

Exhibit 99.1 Cactus Announces Third Quarter 2024 Results HOUSTON – October 30, 2024 – Cactus, Inc. (NYSE: WHD) ("Cactus" or the "Company") today announced financial and operating results for the third quarter of 2024. Third Quarter Highlights • Revenue of $293.2 million and operating income of $76.8 million; • Net income of $62.4 million and diluted earnings per Class A share of $0.74; • Adjusted net income of $63.5 million and diluted earnings per share, as adjusted of $0.79; • Net income margin of 21.3% a ...

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $290 million, with adjusted EBITDA of $104 million, resulting in an adjusted EBITDA margin of 35.7% [4][10] - Cash balance increased to $247 million, and the Board approved an 8% increase in the quarterly dividend to $0.13 per share [4][13] - GAAP net income rose to $63 million from $50 million in the previous quarter, driven by stronger operational performance [9][10] Business Segment Data and Key Metrics Changes - **Pressure Control Segment**: Revenues increased by 6.9% sequentially to $187 million, with operating income up by 7.7% [6] - **Spoolable Technologies Segment**: Revenues rose by 4.7% sequentially, with operating income increasing by $13.6 million [7] Market Data and Key Metrics Changes - North American land activity has declined year-to-date, but the company reported improved revenues and margins in both segments despite this trend [4] - The average public ownership of the company was 83% and ended the quarter at 84% [9] Company Strategy and Development Direction - The company is focused on international expansion and enhancing its product offerings, including the rollout of a next-generation wellhead system [15][20] - The goal is to achieve 40% of revenue from international markets in the coming years [33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational outlook for the third quarter, expecting moderate revenue declines in the Pressure Control segment due to lower U.S. land drilling activity [14] - The company anticipates stable adjusted EBITDA margins in the Disposable Technology segment [16] Other Important Information - The company is reducing its full-year 2024 net CapEx outlook to $35 million to $45 million due to the timing of international expansion efforts [13] - The final payment of $37 million related to the Flexsteel earnout is expected in the third quarter [13] Q&A Session Summary Question: Expansion on international momentum in spoolable - Management noted increased quoting activity and the addition of installation equipment to facilitate growth in international markets [22] Question: Outlook for U.S. rig count in the back half of the year - Management believes the worst is behind regarding rig counts and expects stability around current levels [23][24] Question: Strategy for building out international business - The company is taking a holistic approach to grow its spoolable segment internationally, leveraging existing resources and relationships [30] Question: Impact of potential increased tariffs on manufacturing - Management indicated that they are well-positioned to handle potential tariff increases, as they manufacture more in the U.S. than competitors [35][36] Question: Drilling efficiencies and quantification - Management reported a 10% increase in wellhead shipments against the same number of rigs, indicating improved drilling efficiencies [39][40] Question: Details on significant orders from a large customer - Management highlighted optimism about growth in the production segment due to increased inquiries and a focus on quality and service [42][44] Question: Margin profile with new manufacturing facility and products - Management expressed confidence that margins will hold up well even in a challenging environment, with a responsible rollout of new products [46]

Revenue Performance - For the six months ended June 30, 2024, Cactus derived 76% of total revenues from product sales, 9% from rentals, and 15% from field service and other[76]. - Total revenues for the second quarter of 2024 were $290.4 million, an increase of $16.3 million, or 5.9%, from the first quarter of 2024[88]. - Total revenues for the first six months of 2024 were $564.5 million, an increase of $30.3 million, or 5.7%, compared to $534.2 million in the same period of 2023[94]. Segment Performance - Pressure Control segment revenue for Q2 2024 was $187.2 million, up 6.9% from Q1 2024, driven by increased customer activity[89]. - Spoolable Technologies segment revenue for Q2 2024 was $103.7 million, a 4.7% increase from Q1 2024, with operating income rising to $30.0 million[90]. - Pressure Control segment revenue decreased by $31.6 million, or 8.0%, to $362.2 million due to lower sales of wellhead and production-related equipment[94]. - Spoolable Technologies segment revenue increased by $62.4 million, or 44.4%, to $202.8 million, driven by the acquisition of FlexSteel[95]. Income and Expenses - Operating income for the second quarter of 2024 was $79.8 million, reflecting a 27.6% increase from the previous quarter[88]. - Total operating income for the first six months of 2024 was $142.4 million, an increase of $44.2 million, or 45.0%, from $98.2 million in 2023[94]. - Income tax expense for Q2 2024 was $18.2 million, an increase of 35.3% from $13.4 million in Q1 2024, primarily due to higher operating income[92]. - Net income attributable to Cactus Inc. was $88.8 million, an increase of $21.1 million, or 31.3%, compared to $67.6 million in the first half of 2023[94]. Cash Flow and Capital Expenditures - Cash and cash equivalents as of June 30, 2024, were $246.5 million, with $220.1 million available under the Amended ABL Credit Facility[99]. - Net cash provided by operating activities was $164.2 million, a decrease from $168.5 million in the same period of 2023, primarily due to increased working capital outflows[105]. - Net cash used in investing activities significantly decreased to $14.1 million from $639.5 million in 2023, mainly due to the prior year's acquisition of FlexSteel[106]. - Net cash used in financing activities was $37.2 million for the first half of 2024, compared to net cash provided of $190.7 million in 2023, reflecting changes related to the FlexSteel acquisition[107]. - Estimated net capital expenditures for 2024 are projected to range from $35 million to $45 million, focusing on rental fleet investments and manufacturing enhancements[102]. Market Conditions - Average WTI oil price for Q2 2024 was $81.81 per barrel, compared to $74.73 per barrel in Q2 2023, indicating a year-over-year increase[82]. - Average natural gas price for Q2 2024 was $2.06 per MMBtu, down from $2.40 per MMBtu in Q2 2023[82]. - U.S. land drilling rigs averaged 583 in Q2 2024, down approximately 13% from the 2023 full year average of 720[83]. Acquisitions - Cactus completed the acquisition of FlexSteel on February 28, 2023, enhancing its position in the E&P industry[73].