Cactus(WHD) - 2025 Q2 - Quarterly Results

Cactus Second Quarter 2025 Results The company reported Q2 2025 results, highlighting key financial metrics, strategic acquisitions, and segment performance Financial & Operational Highlights 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] - 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] - Signed an agreement to acquire a 65% majority interest in Baker Hughes' Surface Pressure Control business, a key strategic move for diversification[5] - The Board of Directors approved an 8% dividend increase to $0.14 per Class A share per quarter[5] Management Commentary 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] - The Pressure Control segment was negatively impacted by tariffs, particularly the unexpected doubling of the Section 232 tariff during the quarter[7] - The company expects revenues to be down modestly in both segments in Q3 2025, following lower average domestic activity levels[7] - 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] Segment Performance The Spoolable Technologies segment grew while the Pressure Control segment declined due to lower activity and tariff impacts Pressure Control 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 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 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] Financial Position and Shareholder Returns The company maintained a strong balance sheet with significant cash, no debt, and increased its quarterly dividend Liquidity and Capital Expenditures 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] - Generated $82.8 million in operating cash flow during the second quarter of 2025[12] - The company now expects full-year 2025 net capital expenditures to be between $40 million and $45 million[13] Shareholder Returns 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][15] Financial Statements 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 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 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 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) 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 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 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 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 |