TETRA Technologies(TTI) - 2025 Q3 - Quarterly Results

Financial Performance - Revenue for Q3 2025 was $153 million, an 8% increase year-over-year[6] - Adjusted EBITDA for Q3 2025 was $25.0 million, a 7% increase year-over-year, with adjusted EBITDA margins at 16.3%[6] - Completion Fluids & Products revenue increased 39% year-over-year, with adjusted EBITDA rising by $6.9 million[5] - Revenues for Q3 2025 were $153,239,000, a decrease of 11.9% from $173,872,000 in Q2 2025 and an increase of 8.1% from $141,700,000 in Q3 2024[36] - Gross profit for Q3 2025 was $36,370,000, down 24.6% from $48,244,000 in Q2 2025 but up 5.8% from $34,363,000 in Q3 2024[36] - Operating income for Q3 2025 was $11,130,000, a decline of 51.5% from $22,985,000 in Q2 2025 but consistent with $11,957,000 in Q3 2024[36] - Net income attributable to TETRA stockholders for Q3 2025 was $4,151,000, down 63.3% from $11,305,000 in Q2 2025 and a recovery from a loss of $2,998,000 in Q3 2024[36] - Adjusted net income for Q3 2025 was $5,437,000, compared to $12,618,000 in Q2 2025 and $3,343,000 in Q3 2024, reflecting a decrease of 57.0% quarter-over-quarter and an increase of 62.5% year-over-year[40] - Adjusted EBITDA for Q3 2025 was $25,038,000, representing 16.3% of total revenue, compared to $35,879,000 and 20.6% in Q2 2025, showing a decrease of 30.2%[41] Cash Flow and Liquidity - Total adjusted free cash flow for Q3 2025 was a use of cash of $0.6 million, while base business free cash flow was $5.4 million[29] - Liquidity at the end of Q3 2025 was $208 million, including $67 million in cash and cash equivalents[30] - Net cash provided by operating activities for Q3 2025 was $16,366,000, a decrease of 66.1% from $48,333,000 in Q2 2025 but an increase from $19,870,000 in Q3 2024[38] - Total adjusted free cash flow for Q3 2025 was $(628,000), compared to $26,492,000 in Q2 2025, indicating a significant decline[45] Assets and Liabilities - Total current assets increased to $313,880,000 as of September 30, 2025, compared to $269,628,000 at the end of 2024, reflecting a growth of 16.4%[37] - Cash and cash equivalents rose to $67,146,000 from $36,987,000 at the end of 2024, marking an increase of 81.8%[37] - Total assets reached $655,174,000 as of September 30, 2025, up from $605,195,000 at the end of 2024, indicating an increase of 8.3%[37] - The company reported a total long-term debt of $180,924,000 as of September 30, 2025, slightly up from $179,696,000 at the end of 2024[37] - Net debt as of September 30, 2025, was $113,778,000, down from $142,709,000 as of December 31, 2024, reflecting a reduction of 20.3%[47] - Total debt and commitments as of September 30, 2025, amounted to $196,615,000, with a net leverage ratio of 1.2[49] Future Guidance and Investments - Full year 2025 revenue guidance is between $620 million and $630 million, an increase from previous guidance[8] - The company aims to double revenue to over $1.2 billion and triple adjusted EBITDA to over $300 million by 2030[21] - The Arkansas bromine processing facility has received $28 million in investments, with Phase 1 expected to be operational by year-end 2027[7] - TETRA's new TDS water desalination technology is in the design phase for a 25,000 barrel per day facility, with commercial discussions ongoing[7] - Adjusted EBITDA for the projected year 2025 is estimated to be between $107,000,000 and $112,000,000, compared to the actual $99,403,000 for 2024[51] Operational Expenses - The company incurred transaction, restructuring, and other expenses of $1,188,000 in Q3 2025, compared to $1,242,000 in Q2 2025[41] - Interest expense for the twelve months ended September 30, 2025, was $18,598,000, with a projected interest expense for 2025 between $17,581,000 and $18,400,000[51] - The company expects to incur a non-cash charge of approximately $8 million related to the lease agreement for new corporate office space[51] - The company reported an unusual foreign currency loss of $9,516,000 for the twelve months ended September 30, 2025[49] - Equity-based compensation expense for the twelve months ended September 30, 2025, was $6,983,000, with a projected range for 2025 between $6,900,000 and $7,100,000[51] - The company anticipates a reduction in lease expenses of approximately $2 million per year in the new facility compared to the current office lease[51] Strategic Initiatives - TETRA is expanding into the low-carbon energy market, leveraging its chemistry expertise and global infrastructure to meet sustainable energy demands[34] - Management uses the net leverage ratio primarily to assess the company's ability to borrow, reduce debt, and fund investing and financing activities[49]