Oceaneering International(OII) - 2025 Q3 - Quarterly Results

Executive Summary & Business Outlook Third Quarter 2025 Performance Highlights Oceaneering reported strong Q3 2025 results, exceeding guidance with adjusted EBITDA of $111 million, driven by solid performance across all segments including higher-margin backlog conversion in Manufactured Products, favorable project mix in OPG, and improved ROV revenue per day in Subsea Robotics. The company also secured $854 million in new orders - Adjusted EBITDA in excess of guidance range and consensus estimates through solid performance across segments[4] - Secured total inbound orders of $854 million, with notable contract wins in SSR, Aerospace and Defense Technologies (ADTech), and Manufactured Products[4] Full-Year 2026 Outlook Oceaneering is optimistic about consolidated growth opportunities for 2026, primarily led by ADTech, with an initial full-year consolidated EBITDA guidance of $390 million to $440 million. Activity levels are expected to be seasonally lower in energy-focused businesses in Q1, increasing in Q2 and Q3 - Optimistic about consolidated growth opportunities for 2026, to be led by ADTech[5] Initial Full-Year 2026 Consolidated EBITDA Guidance | Metric | Range (Millions) | | :----------------------- | :--------------- | | Consolidated EBITDA | $390 - $440 | - Anticipate seasonally lower activity levels in energy-focused businesses in Q1 2026, with activity levels increasing in Q2 and Q3[5] Third Quarter 2025 Financial Results Consolidated Financial Performance In Q3 2025, Oceaneering achieved significant year-over-year growth in key financial metrics, with revenue up 9% to $743 million, operating income up 21% to $86.5 million, net income soaring 73% to $71.3 million, and adjusted EBITDA increasing 13% to $111 million. The company also generated strong cash flow from operations and free cash flow Q3 2025 Consolidated Financial Highlights (YoY vs Q3 2024) | Metric | Q3 2025 (Millions) | Q3 2024 (Millions) | Change (%) | | :-------------------------------- | :----------------- | :----------------- | :--------- | | Revenue | $743 | $680 | +9% | | Operating Income | $86.5 | $71.3 | +21% | | Net Income | $71.3 | $41.2 | +73% | | Adjusted EBITDA | $111 | $98.1 | +13% | | Cash flow from operating activities | $101 | $91.9 | +10% | | Free Cash Flow | $77.0 | $67.0 | +15% | - Ending cash position: $506 million[6] - Shares repurchased: 440,814 for approximately $10.1 million[6] Segment Performance Oceaneering's segments showed varied performance in Q3 2025. Manufactured Products and ADTech demonstrated strong growth in both revenue and operating income, while OPG also saw revenue and operating income increases. SSR's revenue and operating income were flat, and IMDS experienced a revenue decrease but a significant operating income improvement due to the absence of a prior-year charge Q3 2025 Segment Performance Overview (YoY vs Q3 2024) | Segment | Revenue Change (%) | Operating Income Change (%) | Operating Income Margin (Q3 2025) | | :-------------------------------- | :----------------- | :-------------------------- | :-------------------------- | | Subsea Robotics (SSR) | Flat | Flat | 30% | | Manufactured Products | +9% | +119% | 16% | | Offshore Projects Group (OPG) | +16% | +17% | 14% | | Integrity Management & Digital Solutions (IMDS) | -4% | Significantly increased | 4% | | Aerospace and Defense Technologies (ADTech) | +27% | +36% | 13% | | Unallocated Expenses | N/A | +19% (increase) | N/A | Subsea Robotics (SSR) - ROV revenue per day utilized increased 6% to $11,254[7] - ROV fleet utilization declined to 65%[7] - Operating income margin was 36%[7] Manufactured Products - Operating income improved 119% and operating income margin expanded to 16% on a 9% increase in revenue[7] - Backlog was $568 million on September 30, 2025[7] - The book-to-bill ratio was 0.82 for the 12-month period ending on September 30, 2025[7] Offshore Projects Group (OPG) - Operating income increased 17% on a 16% increase in revenue[7] - Operating income margin was flat at 14%[7] Integrity Management and Digital Solutions (IMDS) - Operating income increased significantly, and operating income margin improved on a 4% decrease in revenue[7] - Improvement due to the absence of a one-time, non-cash charge in Q3 2024 related to the divestiture of the Maritime Intelligence division[7] Aerospace and Defense Technologies (ADTech) - Operating income of $16.6 million represented an increase of 36% on a 27% increase in revenue[7] - Operating income margin improved to 13%[7] Unallocated Expenses - Unallocated Expenses increased 19% to $46.3 million[7] Financial Guidance Fourth Quarter 2025 Guidance Oceaneering anticipates lower consolidated revenue for Q4 2025 compared to Q4 2024, with consolidated EBITDA projected to be in the range of $80 million to $90 million. Segment-level expectations vary, with SSR and ADTech expecting increases, Manufactured Products expecting significant operating income increase on lower revenue, and OPG and IMDS expecting significant decreases - Consolidated fourth quarter 2025 revenue is expected to be lower compared to the fourth quarter of 2024[8] Q4 2025 Consolidated EBITDA Forecast | Metric | Range (Millions) | | :-------------------- | :--------------- | | Consolidated EBITDA | $80 - $90 | Q4 2025 Segment-Level Expectations (YoY vs Q4 2024) | Segment | Revenue Expectation | Operating Income Expectation | | :-------------------------------- | :------------------ | :--------------------------- | | Subsea Robotics (SSR) | Increase | Increase | | Manufactured Products | Lower | Significantly increase | | Offshore Projects Group (OPG) | Significantly decrease | Significantly decrease | | Integrity Management & Digital Solutions (IMDS) | Lower | Significantly decrease | | Aerospace and Defense Technologies (ADTech) | Significantly increase | Significantly increase | | Unallocated Expenses | N/A | $45M range | Full-Year 2026 Guidance Oceaneering has initiated full-year 2026 consolidated EBITDA guidance in the range of $390 million to $440 million. The company also expects free cash flow generation to be consistent with 2025 levels and anticipates continued share repurchase activity. More specific guidance will be provided in the Q4 2025 earnings release Full-Year 2026 Consolidated EBITDA Guidance | Metric | Range (Millions) | | :-------------------- | :--------------- | | Consolidated EBITDA | $390 - $440 | - Free cash flow generation is forecast to be consistent with 2025 levels[12] - Share repurchase activity is expected to continue[12] Company Information & Disclosures About Oceaneering Oceaneering is a global technology company that provides engineered services and products, along with robotic solutions, to various industries including offshore energy, defense, aerospace, and manufacturing - Oceaneering is a global technology company delivering engineered services and products and robotic solutions[15] - Serves the offshore energy, defense, aerospace, and manufacturing industries[15] Conference Call Details Oceaneering scheduled a conference call and webcast for October 23, 2025, at 10:00 a.m. Central Time to discuss Q3 2025 results, Q4 and full-year 2025 guidance, and initial 2026 guidance. A replay will be available on the Investor Relations section of their website - Conference call and webcast scheduled for Thursday, October 23, 2025, at 10:00 a.m. Central Time[10] - Topics include Q3 2025 results, guidance for Q4 and full year 2025, and initial guidance for full year 2026[10] - A replay of the conference call will be made available on the Investor Relations section of Oceaneering's website[10] Forward-Looking Statements The release contains forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995, regarding future business and financial performance, including guidance and market conditions. These statements are based on current expectations and are subject to risks, assumptions, trends, and uncertainties that could cause actual results to differ materially - This release contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995[11] - Statements concern Oceaneering's future expected business, financial performance, prospects, and market conditions[11][13] - Subject to certain risks, assumptions, trends, and uncertainties that could cause actual results to differ materially[14] Non-GAAP Financial Measures Explanation The report includes non-GAAP financial measures such as adjusted net income (loss), adjusted EPS, EBITDA, adjusted EBITDA, and free cash flow. These measures exclude certain identified items and are used by management and investors to assess underlying business performance and for valuation purposes, but should not be considered substitutes for GAAP measures - Non-GAAP measures include adjusted net income (loss) and earnings (loss) per share; EBITDA and adjusted EBITDA (and margins); and free cash flow[9][26] - These measures exclude the impacts of certain identified items to provide consistent measures of the underlying results of ongoing business[26] - Used by investors for valuation purposes and by management for evaluating financial performance, but should not be viewed as substitutes for GAAP measures[26] Condensed Consolidated Financial Statements (GAAP) Condensed Consolidated Balance Sheets As of September 30, 2025, Oceaneering's total assets increased to $2.54 billion from $2.34 billion at December 31, 2024. This was primarily driven by an increase in current assets, including cash and cash equivalents, and other assets. Total equity also increased significantly Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2025 | Dec 31, 2024 | Change | | :-------------------------- | :----------- | :----------- | :------- | | Total Assets | $2,539,318 | $2,336,347 | +$202,971 | | Current Assets | $1,501,843 | $1,387,896 | +$113,947 | | Cash and Cash Equivalents | $505,992 | $497,516 | +$8,476 | | Total Liabilities | $1,625,587 | $1,616,025 | +$9,562 | | Equity | $913,731 | $720,322 | +$193,409 | Condensed Consolidated Statements of Operations For Q3 2025, Oceaneering reported revenue of $742.9 million, a gross margin of $152.7 million, and net income of $71.3 million, resulting in diluted EPS of $0.71. For the nine months ended September 30, 2025, revenue was $2.12 billion and net income was $176.1 million, with diluted EPS of $1.74 Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | | Revenue | $742,898 | $679,811 | $2,115,582 | $1,947,711 | | Gross margin | $152,732 | $130,962 | $436,170 | $343,557 | | Operating income (loss) | $86,508 | $71,333 | $239,169 | $168,390 | | Net Income (Loss) | $71,289 | $41,237 | $176,108 | $91,369 | | Diluted earnings (loss) per share | $0.71 | $0.40 | $1.74 | $0.89 | Selected Cash Flow Information Oceaneering generated $101.3 million in cash flow from operating activities and $77.0 million in free cash flow for Q3 2025. Total capital expenditures for the quarter were $31.4 million, including $7.2 million for capitalized cloud-based service contract costs. For the nine months ended September 30, 2025, cash flow from operating activities was $97.7 million and free cash flow was $17.2 million Selected Cash Flow Information (in thousands) | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :------------------------------------ | :-------- | :-------- | :-------- | :-------- | | Cash flow provided by operating activities | $101,263 | $91,931 | $97,732 | $74,837 | | Purchases of property and equipment | $(24,215) | $(24,886) | $(80,575) | $(73,262) | | Capitalized cloud-based service contract costs | $7,161 | — | $11,424 | — | | Total Capital Expenditures | $31,376 | $24,886 | $91,999 | $73,262 | | Free Cash Flow | $77,048 | $67,045 | $17,157 | $1,575 | - Total Depreciation and Amortization for Q3 2025 was $26.1 million[25] Non-GAAP Financial Reconciliations & Estimates Adjusted Net Income (Loss) and Diluted EPS For Q3 2025, adjusted net income was $55.8 million, resulting in adjusted diluted EPS of $0.55, after adjustments primarily for foreign currency gains/losses and discrete tax items. For the nine months ended September 30, 2025, adjusted net income was $149.6 million, with adjusted diluted EPS of $1.47 Adjusted Net Income (Loss) and Diluted EPS (in thousands, except per share amounts) | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :-------------------------- | :-------- | :-------- | :-------- | :-------- | | Net income (loss) as reported | $71,289 | $41,237 | $176,108 | $91,369 | | Total of adjustments | $(15,528) | $(4,007) | $(26,539) | $(11,685) | | Adjusted Net Income (Loss) | $55,761 | $37,230 | $149,569 | $79,684 | | Diluted EPS as reported | $0.71 | $0.40 | $1.74 | $0.89 | | Adjusted Diluted EPS | $0.55 | $0.36 | $1.47 | $0.78 | Consolidated EBITDA and Adjusted EBITDA and Margins Consolidated EBITDA for Q3 2025 was $110.1 million, with an EBITDA margin of 15%. Adjusted EBITDA was $111.1 million, also with an adjusted EBITDA margin of 15%. For the nine months ended September 30, 2025, consolidated EBITDA was $316.5 million and adjusted EBITDA was $311.0 million Consolidated EBITDA and Adjusted EBITDA (in thousands) | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :----------------------- | :-------- | :-------- | :-------- | :-------- | | EBITDA | $110,080 | $98,515 | $316,462 | $249,330 | | Adjusted EBITDA | $111,079 | $98,091 | $310,981 | $245,675 | | EBITDA margin % | 15% | 14% | 15% | 13% | | Adjusted EBITDA margin % | 15% | 14% | 15% | 13% | Free Cash Flow Free cash flow for Q3 2025 was $77.0 million, an increase from $67.0 million in Q3 2024. For the nine months ended September 30, 2025, free cash flow was $17.2 million, significantly higher than $1.6 million in the same period of 2024 Free Cash Flow (in thousands) | Metric | Q3 2025 | Q3 2024 | 9M 2025 | 9M 2024 | | :-------------- | :-------- | :-------- | :-------- | :-------- | | Free Cash Flow | $77,048 | $67,045 | $17,157 | $1,575 | Fourth Quarter 2025 Consolidated EBITDA Estimate Oceaneering estimates consolidated EBITDA for the fourth quarter of 2025 to be between $80 million and $90 million Q4 2025 Consolidated EBITDA Estimate (in thousands) | Metric | Low | High | | :-------------------- | :-------- | :-------- | | Consolidated EBITDA | $80,000 | $90,000 | 2025 Free Cash Flow Estimate For the full year ending December 31, 2025, Oceaneering forecasts free cash flow to be in the range of $110 million to $130 million 2025 Free Cash Flow Estimate (in thousands) | Metric | Low | High | | :-------------- | :-------- | :-------- | | Free Cash Flow | $110,000 | $130,000 | 2026 Consolidated EBITDA Estimate Oceaneering's initial guidance for full-year 2026 consolidated EBITDA is projected to be between $390 million and $440 million 2026 Consolidated EBITDA Estimate (in thousands) | Metric | Low | High | | :-------------------- | :-------- | :-------- | | Consolidated EBITDA | $390,000 | $440,000 | EBITDA and Adjusted EBITDA and Margins by Segment Segment-wise, SSR maintained strong EBITDA margins at 36% in Q3 2025. Manufactured Products significantly improved its EBITDA margin to 18%, while OPG's EBITDA margin was 16%. ADTech also showed a healthy EBITDA margin of 14% Q3 2025 Segment EBITDA and Adjusted EBITDA Margins | Segment | EBITDA Margin % | Adjusted EBITDA Margin % | | :-------------------------------- | :-------------- | :----------------------- | | Subsea Robotics (SSR) | 36% | 36% | | Manufactured Products | 18% | 18% | | Offshore Projects Group (OPG) | 16% | 16% | | Integrity Management & Digital Solutions (IMDS) | 6% | 6% | | Aerospace and Defense Technologies (ADTech) | 14% | 14% | Nine Months Ended Sep 30, 2025 Segment EBITDA and Adjusted EBITDA Margins | Segment | EBITDA Margin % | Adjusted EBITDA Margin % | | :-------------------------------- | :-------------- | :----------------------- | | Subsea Robotics (SSR) | 35% | 35% | | Manufactured Products | 14% | 14% | | Offshore Projects Group (OPG) | 20% | 20% | | Integrity Management & Digital Solutions (IMDS) | 7% | 7% | | Aerospace and Defense Technologies (ADTech) | 14% | 14% |