Oceaneering International(OII) - 2025 Q2 - Quarterly Results

Financial Performance Overview This section provides a comprehensive overview of Oceaneering's financial results for Q2 2025, detailing overall performance and segment-specific contributions Second Quarter 2025 Financial Highlights Oceaneering reported strong Q2 2025 financial results, with revenue increasing 4% to $698 million and net income surging 56% Q2 2025 Financial Highlights | Metric | Q2 2025 ($M) | Q2 2024 ($M) | % Change | | :--- | :--- | :--- | :--- | | Revenue | $698M | $668.8M | +4% | | Operating Income | $79.2M | $60.4M | +31% | | Net Income | $54.4M | $35.0M | +56% | | Adjusted EBITDA | $103M | $85.9M | +20% | - The strong quarterly performance was driven by new contracts in Aerospace and Defense Technologies (ADTech), favorable service mix in Offshore Projects Group (OPG), conversion of high-margin backlog in Manufactured Products, and higher day rates for remotely operated vehicles (ROVs)[3] - The company generated $77.2 million in cash flow from operations and $46.9 million in free cash flow, ending the quarter with a cash position of $434 million[5] - During the quarter, 471,759 shares were repurchased for approximately $10.0 million[5] Second Quarter 2025 Segment Performance All operating segments demonstrated year-over-year improvements in Q2 2025, with ADTech and OPG leading in operating income growth Q2 2025 Segment Performance | Segment | Revenue Growth (YoY) | Operating Income Growth (YoY) | Operating Margin Q2 2025 | | :--- | :--- | :--- | :--- | | Subsea Robotics (SSR) | +2% | +4% | 29% | | Manufactured Products | +4% | +31% | 13% | | Offshore Projects Group (OPG) | +4% | +64% | 15% | | Integrity Management & Digital Solutions (IMDS) | Flat | +34% | 6% | | Aerospace and Defense Technologies (ADTech) | +13% | +125% | 15% | - Subsea Robotics (SSR) EBITDA margin expanded to 35% due to improved ROV revenue per day utilized, which increased to $11,265, despite a slight dip in fleet utilization to 67%[6] - Manufactured Products backlog stood at $516 million as of June 30, 2025, with a book-to-bill ratio of 0.65 for the trailing 12 months[6] Future Outlook and Guidance This section outlines Oceaneering's financial projections and operational expectations for the third quarter and full year 2025 Third Quarter 2025 Guidance Oceaneering forecasts Q3 2025 consolidated EBITDA between $100 million and $110 million, with most segments anticipating improved profitability - Consolidated EBITDA for Q3 2025 is forecasted to be in the range of $100 million to $110 million[4] - Year-over-year expectations for Q3 2025 by segment: - SSR: Revenue and operating profitability to increase - Manufactured Products: Significant increase in operating profitability on higher revenue - OPG: Operating profitability to decrease on relatively flat revenue - IMDS: Significant increase in operating profitability on relatively flat revenue - ADTech: Significant increase in revenue and operating profitability[4][10] - Unallocated Expenses for Q3 2025 are expected to be in the $45 million to $50 million range[10] Updated Full-Year 2025 Guidance Oceaneering updated full-year 2025 guidance, projecting consolidated adjusted EBITDA between $390 million and $420 million and mid-single digit revenue growth Full-Year 2025 Guidance | Metric | Full-Year 2025 Guidance | | :--- | :--- | | Consolidated Revenue Growth | Mid-single digit % range | | Consolidated Adjusted EBITDA | $390M - $420M | | SSR Revenue Growth | Mid-single digit % range | | ROV Fleet Utilization | Mid- to high-60% range | | IMDS Operating Income Margin | Mid-single digit % range | - The guidance for SSR revenue growth was revised downward due to lower than expected contributions from the Survey business[10] Financial Statements This section presents Oceaneering's condensed consolidated balance sheets, statements of operations, and selected cash flow information Condensed Consolidated Balance Sheets As of June 30, 2025, total assets were $2.33 billion, cash decreased to $434 million, and total equity increased to $848 million Condensed Consolidated Balance Sheets | Balance Sheet Item | Jun 30, 2025 (in thousands) | Dec 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $434,048 | $497,516 | | Total Assets | $2,327,582 | $2,336,347 | | Total Liabilities | $1,479,458 | $1,616,025 | | Total Equity | $848,124 | $720,322 | Condensed Consolidated Statements of Operations Q2 2025 revenue increased to $698.2 million, gross margin improved, and net income significantly rose to $54.4 million Condensed Consolidated Statements of Operations | Income Statement Item | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | Revenue | $698,161 | $668,808 | | Gross Margin | $148,427 | $120,211 | | Operating Income | $79,189 | $60,364 | | Net Income | $54,442 | $34,997 | | Diluted EPS | $0.54 | $0.34 | Selected Cash Flow Information Q2 2025 capital expenditures increased to $32.8 million, while total depreciation and amortization slightly decreased to $25.4 million Selected Cash Flow Information | Cash Flow Item | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | Total Capital Expenditures | $32,808 | $22,858 | | Total Depreciation and Amortization | $25,400 | $25,980 | Segment Information This section provides a detailed breakdown of Oceaneering's financial performance across its various operating segments Detailed Segment Results Q2 2025 detailed segment results show SSR as the largest revenue contributor at $218.8 million, with ADTech and OPG demonstrating significant margin expansion Detailed Segment Results (Q2 2025) | Segment | Revenue ($M) | Operating Income ($M) | Operating Margin (%) | | :--- | :--- | :--- | :--- | | Subsea Robotics | 218.8 | 64.5 | 29% | | Manufactured Products | 145.1 | 18.8 | 13% | | Offshore Projects Group | 149.3 | 21.7 | 15% | | Integrity Management & Digital Solutions | 75.4 | 4.6 | 6% | | Aerospace and Defense Technologies | 109.6 | 16.3 | 15% | - ROV utilization for the SSR segment was 67% in Q2 2025, down from 70% in Q2 2024, but consistent with Q1 2025[18] - The backlog for the Manufactured Products segment decreased to $516 million at the end of Q2 2025, compared to $713 million at the end of Q2 2024[18] Reconciliation of Non-GAAP to GAAP Financial Information This section provides detailed reconciliations of non-GAAP financial measures, including adjusted net income, EBITDA, and free cash flow, to their most directly comparable GAAP measures Adjusted Net Income and EPS Reconciliation Q2 2025 GAAP Net Income of $54.4 million was adjusted to $49.8 million, or $0.49 per diluted share, after various adjustments Adjusted Net Income and EPS Reconciliation | Reconciliation | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | GAAP Net Income | $54,442 | $34,997 | | Total Adjustments | $(4,651) | $(6,431) | | Adjusted Net Income | $49,791 | $28,566 | | GAAP Diluted EPS | $0.54 | $0.34 | | Adjusted Diluted EPS | $0.49 | $0.28 | EBITDA and Adjusted EBITDA Reconciliation Q2 2025 EBITDA significantly increased to $108.7 million, with Adjusted EBITDA reaching $103.3 million, a 20% year-over-year increase EBITDA and Adjusted EBITDA Reconciliation | Reconciliation | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | Net Income | $54,442 | $34,997 | | EBITDA | $108,681 | $86,894 | | Adjustments (Foreign Currency) | $(5,430) | $(1,034) | | Adjusted EBITDA | $103,251 | $85,860 | | Adjusted EBITDA Margin | 15% | 13% | Free Cash Flow Reconciliation Q2 2025 cash flow from operations was $77.2 million, resulting in Free Cash Flow of $46.9 million after capital expenditures Free Cash Flow Reconciliation | Reconciliation | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | Cash flow from operating activities | $77,187 | $52,623 | | Purchases of property and equipment | $(30,272) | $(22,858) | | Free Cash Flow | $46,915 | $29,765 | 2025 EBITDA and Free Cash Flow Estimates Reconciliation Q3 2025 consolidated EBITDA is estimated at $100 million-$110 million, with full-year adjusted EBITDA projected at $390 million-$420 million 2025 Estimates | 2025 Estimates | Low (in thousands) | High (in thousands) | | :--- | :--- | :--- | | Q3 2025 Consolidated EBITDA | $100,000 | $110,000 | | Full Year 2025 Adj. EBITDA | $390,000 | $420,000 | | Full Year 2025 Free Cash Flow | $110,000 | $130,000 | Segment EBITDA and Adjusted EBITDA Reconciliation In Q2 2025, SSR was the largest Adjusted EBITDA contributor at $76.9 million, with all segments showing year-over-year growth Adjusted EBITDA by Segment (Q2 2025 vs Q2 2024) | Adjusted EBITDA by Segment | Q2 2025 (in thousands) | Q2 2024 (in thousands) | | :--- | :--- | :--- | | Subsea Robotics (SSR) | $76,890 | $73,731 | | Manufactured Products (MP) | $21,513 | $17,606 | | Offshore Projects Group (OPG) | $26,326 | $18,832 | | Integrity Management & Digital Solutions (IMDS) | $6,486 | $5,276 | | Aerospace and Defense Technologies (ADTech) | $17,199 | $7,860 |