Financial Data and Key Metrics Changes - The company achieved record revenue of $484 million and adjusted EBITDA of $93 million over the past 10 years, with Q3 revenue at $153 million and adjusted EBITDA at $25 million, reflecting an 8% year-over-year increase in revenue and a 7% rise in adjusted EBITDA [6][7][19] - Adjusted EBITDA margins for Q3 were 16%, with completion fluids and products revenues increasing 39% year-over-year [7][8] - The company ended Q3 with $67 million in cash and a net leverage ratio of 1.2 times, with working capital at $113 million, only a $4 million increase from year-end [17][18] Business Line Data and Key Metrics Changes - Completion fluids and products saw a significant revenue increase, with adjusted EBITDA margins reaching 34.5%, a 500 basis point improvement compared to the same period in 2024 [8][9] - Water and flowback services revenue declined 2% sequentially and 18% year-over-year, but adjusted EBITDA rose 18% sequentially due to better cost controls [9][10] - The industrial calcium chloride business continues to perform well, with record quarters and expansion into new applications [48][49] Market Data and Key Metrics Changes - The deepwater rig count is currently 40% lower than it was 10 years ago, yet the company has achieved significant market penetration [6][7] - The company is experiencing increased unconventional activity in Argentina and the Middle East, with 100% utilization of automated SandStorm units in Argentina [10][11] - The outlook for the completion fluids and products business remains strong, driven by deepwater completion activity and increased demand for battery electrolyte revenue [9][12] Company Strategy and Development Direction - The company unveiled its "One TETRA 2030" strategy, aiming to leverage its core fluids chemistry expertise into high-growth markets, including battery electrolytes and produced water desalination solutions [12][13] - The goal is to more than double revenue to over $1.2 billion and triple adjusted EBITDA to over $300 million by 2030 [13][16] - The company is focused on generating over $100 million in annual adjusted free cash flow by 2030, driving meaningful cash returns to shareholders [16] Management's Comments on Operating Environment and Future Outlook - Management expressed strong conviction in the long-term outlook despite macroeconomic and energy market uncertainties, highlighting the company's ability to differentiate in its markets [23][62] - The company anticipates continued offshore activity growth, particularly in the Gulf of America, Brazil, and North Sea, with confidence in executing TETRA Neptune projects in 2026 [31][55] - The company is optimistic about the desalination market, expecting to sign its first commercial contract in the coming quarters [15][44] Other Important Information - Elijio Serrano, the CFO, announced his retirement at the end of March 2026, with Matthew Sanderson set to replace him [4][5] - The company is relocating to a new corporate office, expecting to reduce lease expenses by approximately $2 million per year [18][19] Q&A Session Summary Question: Update on Oasis Commercial Engineering and next steps - The FEED study has been completed, and discussions with customers are ongoing to socialize the economics and financials [25][26] Question: Factors behind sequential decline in CFP sales - The decline was primarily due to seasonal industrial calcium chloride sales and the absence of Neptune jobs, partially offset by increased activity in Brazil [27][28] Question: Confidence in offshore market for 2026 and 2027 - Management expressed strong confidence in the deepwater market's growth, with a robust pipeline for TETRA Neptune projects [31][32] Question: Update on desalination projects and capital costs - The core technology will remain owned by TETRA, with various commercial models being considered, and capital costs are estimated at $1 million per 1,000 barrels of desalination [33][34] Question: Outlook for 2026 compared to 2025 - The company expects significant growth in Argentina and the Middle East, with a strong outlook for deepwater projects [36][38] Question: Opportunities in Saudi Arabia and Sandstorm - The company sees potential for growth in Saudi Arabia, similar to the success experienced in Argentina [58][59]

Core Viewpoint - Tetra Technologies, Inc. reported solid financial results for Q3 2025, demonstrating growth in revenue and adjusted EBITDA despite challenges in the U.S. onshore oil and gas markets [2][3]. Financial Performance - Earnings per share (EPS) for Q3 2025 were $0.04, matching estimates and up from $0.03 in the same quarter last year [2][6]. - Revenue for the quarter reached $153.2 million, exceeding estimates of $144.4 million and representing an 8% increase from $141.7 million in the previous year [2][6]. - Adjusted EBITDA was $25 million, a 7% increase year-over-year, with a ten-year high of $93 million for the first nine months of 2025 [3][6]. Market Position and Valuation - Tetra has a price-to-earnings (P/E) ratio of approximately 9.00, indicating a relatively low valuation compared to its earnings [4]. - The price-to-sales ratio stands at about 1.71, and the enterprise value to sales ratio is around 1.95, reflecting the company's market valuation and cash flow efficiency [4]. Financial Stability - The company has a debt-to-equity ratio of 0.75, indicating moderate debt levels [5]. - A current ratio of 2.47 suggests a strong ability to cover short-term liabilities with short-term assets [5]. - Tetra reported net cash from operating activities of $16.4 million and a base business free cash flow of $5.4 million, underscoring its financial stability [5].

Summary of TETRA Technologies (TTI) Conference Call Company Overview - TETRA Technologies has been operating for over 40 years, providing diverse revenue streams from energy services and industrial chemicals across the United States and 23 other countries [3][4] - The company is recognized as an industry innovation leader, particularly in completion fluids, oil and gas water treatment, and water management services [4] Financial Performance - TETRA reported a strong first quarter with adjusted EBITDA margins of 36% for completion fluids and 13% for water and flowback services [5] - The industrial chemicals segment achieved its highest first-quarter revenue and adjusted EBITDA in history [5] - Trailing twelve months revenue reached $327 million, reflecting a nearly 50% growth since the second year of COVID in 2021 [7] - The company has a solid balance sheet with a leverage ratio of 1.5 times and no debt maturities until 2029 and 2030 [29] Market Position and Growth Strategies - TETRA is positioned in key markets, including deepwater and unconventional markets in North America, Latin America, and the Middle East [4] - The company is focusing on three emerging growth strategies: 1. **Electrolytes for Energy Storage**: TETRA has developed a zinc bromide-based electrolyte for long-duration energy storage, partnering with Eos Technologies [13][14] 2. **Produced Water Desalination**: The company is introducing a desalination solution for produced water, targeting markets such as agriculture and industry [18][20] 3. **Critical Minerals Production**: TETRA has secured over 40,000 acres of brine leases in Arkansas, rich in lithium, bromine, magnesium, and manganese [22][24] Industry Trends and Challenges - The deepwater market is projected to grow at a 7% CAGR through 2028, with TETRA maintaining a strong market share [9] - The company is addressing challenges in the Permian Basin, where produced water disposal capacity is becoming limited, necessitating innovative solutions [19][20] - TETRA's technology investments are expected to enhance margins and operational efficiency, particularly in the water and flowback segment [11][12] Key Collaborations and Innovations - TETRA has collaborated with EOG Resources for produced water beneficial reuse and desalination pilot projects, achieving a 92% desalination rate in initial tests [21][20] - The company is leveraging automation technologies to reduce manpower requirements in operations, enhancing efficiency [12] Conclusion - TETRA Technologies is well-positioned for growth with a solid financial foundation, innovative technologies, and strategic partnerships, despite facing industry challenges [30]

Financial Performance - TETRA Technologies reported a record first-quarter Adjusted EBITDA of $32.3 million, a 41% increase sequentially and year-over-year, driven by strong performance in Completion Fluids and Products [2][3] - Total revenue for the first quarter was $157 million, reflecting a 17% sequential increase and a 4% increase compared to the previous year [2][8] - Net income before taxes and discontinued operations was $5.1 million, down from $7.4 million in the prior quarter due to unrealized mark-to-market gains [8] Segment Performance - Completion Fluids & Products generated revenue of $93 million, with adjusted EBITDA margins increasing to 35.7% from 27.3% in the previous quarter, supported by stronger deepwater activity [3][9] - Water & Flowback Services experienced a 2% decline in revenue sequentially, but adjusted EBITDA margins improved year-over-year by 340 basis points despite lower frac activity levels [3][11] Outlook and Guidance - The company anticipates a strong second quarter, expecting to benefit from seasonal peaks in European industrial chemicals and the completion of multiple deepwater projects [4] - Adjusted EBITDA guidance for the first half of 2025 has been revised to between $57 million and $65 million, with revenue guidance adjusted to between $315 million and $345 million [4] Cash Flow and Capital Expenditures - TETRA generated $3.9 million in cash from operating activities and $4.2 million in free cash flow during the first quarter, after investing $11.2 million in the Arkansas bromine project [5][18] - Total capital expenditures for the quarter were $18 million, with significant investments directed towards the Arkansas bromine facility [18][20] Balance Sheet and Liquidity - As of March 31, 2025, the company had cash and cash equivalents of $41 million and long-term debt of $180 million, resulting in a net leverage ratio of 1.5X [20][19] - Liquidity improved to $220 million as of April 28, 2025, including an unused $75 million delayed draw feature under the Term Credit Agreement [19] Emerging Growth Initiatives - TETRA is advancing its desalination project, TETRA Oasis TDS, in collaboration with EOG Resources, targeting the recycling of produced water for beneficial reuse [13] - The company is positioned to benefit from increased sales of battery electrolytes to Eos Energy Enterprises as they ramp up production [14]