Financial Data and Key Metrics Changes - Total Q2 revenues were $274 million, a sequential decline of 2.4% [8] - Adjusted EBITDA for Q2 was $87 million, down 7.6% sequentially, with adjusted EBITDA margins at 31.7% compared to 33.5% in Q1 [12] - GAAP income decreased to $49 million in Q2 from $54 million in Q1, primarily due to lower operating income [13] - Adjusted net income for Q2 was $53 million, or $0.66 per share, down from $59 million and $0.73 per share in Q1 [13][14] - Cash balance increased to $405 million, a sequential increase of approximately $58 million [14] Business Line Data and Key Metrics Changes - Pressure Control segment revenues were $180 million, down 5.5% sequentially, primarily due to lower rental business revenue [8] - Spoolable Technologies segment revenues increased by 3.9% sequentially to $96 million, driven by higher domestic customer activity [11] - Operating income for Pressure Control declined by $12 million or 22.1% sequentially, while operating income for Spoolable Technologies increased by $4.2 million or 17.5% [10][11] Market Data and Key Metrics Changes - The U.S. Land rig count was reported at 526, 5% below the second quarter average [21] - The company anticipates a mid to high single-digit decline in Pressure Control revenue for Q3 compared to Q2 [21] Company Strategy and Development Direction - The company announced a transformative acquisition of a controlling interest in Baker Hughes' surface pressure control business, expected to close in late 2025 or early 2026 [24] - The strategic rationale for the acquisition is to diversify the company's footprint and enhance its market position in the Middle East [24] - The company is focused on maintaining capital discipline and evaluating capital spending in light of domestic activity trends [15] Management's Comments on Operating Environment and Future Outlook - Management noted that the tariff impact and commodity market weakness affected performance, particularly in June [17] - The company expects adjusted EBITDA margins in the Pressure Control segment to remain stable at 28% to 30% for Q3, despite lower operating leverage [21] - Management expressed optimism that the sharpest domestic activity declines are behind them and anticipates a broader geographic footprint post-acquisition [26] Other Important Information - The Board approved an 8% increase in the quarterly dividend to $0.14 per share, reflecting confidence in cash flow durability [15][26] - Legal expenses related to litigation claims increased by approximately $2 million from Q1, totaling $5.1 million in Q2 [10] Q&A Session Summary Question: Impact of tariffs on pressure control margins - Management acknowledged that the unexpected doubling of tariffs impacted margins, but they had also begun sourcing from higher-cost U.S. suppliers [29][30] Question: Customer confidence in ramping activity - Management noted that customers are focused on capital discipline and returning cash to shareholders, which has led to a cautious approach towards CapEx expansion despite favorable oil prices [34][35] Question: Trends in product lines across drilling, completions, and production - Management indicated that completions were the weakest, with a significant decline expected in frac activity, while production activity is expected to hold up better [41][42] Question: Plans for the Middle East acquisition - Management expressed excitement about turning around the acquired business, focusing on supply chain improvements and cultural changes [48][49] Question: Legal charges and ongoing litigation - Management confirmed that legal expenses were related to an IP dispute and that further expenses are expected in the back half of the year due to trial preparations [55][56]

Core Insights - Cactus, Inc. reported a revenue of $273.58 million for the quarter ended June 2025, reflecting a 5.8% decline year-over-year and falling short of the Zacks Consensus Estimate of $275.61 million by 0.74% [1] - The company's EPS was $0.66, down from $0.81 in the same quarter last year, and also slightly below the consensus estimate of $0.67, resulting in an EPS surprise of -1.49% [1] Revenue Breakdown - Spoolable Technologies generated revenues of $96.23 million, exceeding the average estimate of $94.13 million, but showing a year-over-year decline of 7.2% [4] - Pressure Control revenues were reported at $179.77 million, which was below the average estimate of $182.33 million, marking a 4% decrease year-over-year [4] Operating Income Analysis - Operating income for Pressure Control was $42.33 million, falling short of the average estimate of $50.05 million [4] - Corporate and other expenses resulted in an operating loss of $9.58 million, worse than the estimated loss of $7.5 million [4] - Spoolable Technologies reported an operating income of $28.05 million, surpassing the average estimate of $24.83 million [4] Stock Performance - Cactus shares have returned +4.7% over the past month, outperforming the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Core Insights - Cactus, Inc. reported revenue of $280.32 million for the quarter ended March 2025, reflecting a 2.3% increase year-over-year and a 4.67% surprise over the Zacks Consensus Estimate of $267.82 million [1] - The company's EPS was $0.73, down from $0.75 in the same quarter last year, with a surprise of 4.29% over the consensus estimate of $0.70 [1] Revenue Performance - Spoolable Technologies revenue was $92.58 million, exceeding the average estimate of $89.61 million, but showing a decline of 6.6% compared to the previous year [4] - Pressure Control revenue reached $190.28 million, surpassing the average estimate of $178.44 million, and increased by 8.7% year-over-year [4] Operating Income - Operating income for Pressure Control was $54.33 million, above the average estimate of $51.71 million [4] - Corporate and other expenses reported an operating loss of $9.60 million, worse than the average estimate of -$6.43 million [4] - Operating income for Spoolable Technologies was $23.88 million, slightly above the average estimate of $23.29 million [4] Stock Performance - Cactus shares have returned -2.3% over the past month, compared to a -0.5% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 4 (Sell), indicating potential underperformance relative to the broader market in the near term [3]

Financial Data and Key Metrics Changes - Total Q1 revenue was $280 million, up 3% sequentially, with adjusted EBITDA of $94 million, an increase of 1.2% sequentially [9][11] - GAAP net income for Q1 was $54 million, down from $57 million in the previous quarter, primarily due to professional fees incurred at corporate [12] - Adjusted net income and earnings per share were $59 million and $0.73 per share, respectively, compared to $57 million and $0.71 per share in the fourth quarter [12] Business Line Data and Key Metrics Changes - Pressure Control segment revenues were $190 million, up 7.7% sequentially, driven by customer drilling efficiencies [9][10] - Spoolable Technologies segment revenues were $93 million, down 3.6% sequentially due to lower domestic customer activity, partially offset by increased international shipments [10][11] - Operating income for Pressure Control increased by $3.5 million or 6.9% sequentially, while Spoolable Technologies saw a decrease of $1.6 million or 6.5% sequentially [10] Market Data and Key Metrics Changes - International sales in the Spoolable Technologies segment increased by 30% quarter over quarter, driven by robust demand in Canada [22] - The company expects U.S. land drilling activity to decline slightly in the second quarter, with approximately 30 fewer land rigs operating than at the end of Q1 [20] Company Strategy and Development Direction - The company is focused on mitigating tariff impacts by increasing alternative sourcing and ramping up production from its Vietnam facility [16][17] - There is a commitment to international expansion, although no specific updates were provided during the call [26] - The company plans to reduce full-year 2025 net CapEx outlook to a range of $40 million to $50 million while maintaining critical investments [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining profitability despite macroeconomic uncertainties and tariff impacts [27] - The company anticipates a decline in pressure control revenue in Q2 but expects spoolable technologies revenue to increase due to seasonal expansion [20][21] - Management noted that downturns historically create opportunities for new customer acquisition and that they are already seeing such opportunities [90] Other Important Information - The company paid a quarterly dividend of $0.13 per share, resulting in a cash outflow of approximately $11 million [13] - The cash balance at the end of the quarter was $348 million, reflecting a sequential increase of approximately $5 million [13] Q&A Session Summary Question: Transition to Vietnam and cost advantages - Management clarified that Bossier City is not a low-cost operation but offers fast turnaround and robust manufacturing, protecting market share [30] Question: Customer behavior regarding tariffs - Management confirmed that customers have requested to pull forward purchases, but these requests have been denied to maintain fairness among all customers [39] Question: Customer loyalty during downturns - Management indicated that major customers are sticking with the company, emphasizing the importance of supply chain sustainability [42] Question: M&A opportunities in the current environment - Management noted that private equity firms are willing to sell oil field service investments at attractive prices, but the focus remains on the current industry [46] Question: Impact of tariffs on margins - Management acknowledged that there will be some margin compression in the second half of the year due to tariffs, but diversification efforts will help mitigate impacts [68] Question: Ongoing Section 232 investigation - Management expressed that the U.S. lacks adequate steelmaking capacity, which could lead to inflationary pressures [81]