Cactus(US:WHD)2024-05-04 14:30Financial Data and Key Metrics Changes - Total Q1 2024 revenues were $274 million, with adjusted EBITDA of $95 million and adjusted EBITDA margins of 34.8% [6][7] - GAAP net income decreased to $50 million from $62 million in the previous quarter, largely due to increased remeasurement of the earn-out liability [8] - Adjusted net income and earnings per share were $60 million and $0.75 per share, respectively, compared to $65 million and $0.81 per share in the fourth quarter [8][9] Business Line Data and Key Metrics Changes - Pressure Control segment revenues were $175 million, down 3% sequentially, with operating income decreasing by $4.4 million or 7.8% [7] - Spoolable Technologies segment revenues increased by 5% sequentially to $99 million, driven by higher customer demand [7] - Adjusted segment EBITDA for Pressure Control decreased by 6.2% sequentially, while Spoolable Technologies saw a slight decrease of 1.1% [7] Market Data and Key Metrics Changes - The U.S. land rig count is expected to slightly decline, impacting Pressure Control revenue, which is anticipated to remain flat in Q2 2024 [10] - The market for surface pressure control equipment in Saudi Arabia is estimated to exceed $0.5 billion annually, indicating potential growth opportunities [10] Company Strategy and Development Direction - The company plans to introduce a new generation wellhead, which is expected to impact operating results later in the year [10] - Expansion plans in the Mid-East are being pursued, with two viable options currently under consideration [10] - The company is focusing on low-cost supply chain diversification and enhancing relationships with core customers to improve cash flows and returns [13] Management's Comments on Operating Environment and Future Outlook - Management expressed limited optimism regarding U.S. activity levels for 2024, anticipating a plateau in the second half of the year [13] - Increased inquiries related to CCUS and hydrogen transmission testing indicate potential growth in new applications [14] - The integration of Spoolable Technologies is progressing well, with increasing orders from a major new midstream customer [13][14] Other Important Information - The company paid a quarterly dividend of $0.12 per share, resulting in a cash outflow of approximately $10 million [9] - The cash balance increased to $194 million, a sequential increase of approximately $60 million [9] Q&A Session Summary Question: When will international opportunities start showing up on the income statement? - Management expects meaningful international contributions to begin next year [17] Question: What is the outlook for U.S. land market activity in the back half of the year? - Management anticipates a potential plateau in activity as gas production decreases and oil stabilizes [19]