TETRA Technologies (NYSE:TTI) FY Conference Transcript

TETRA Technologies (NYSE:TTI) FY Conference Summary Company Overview - TETRA Technologies is currently on a run rate of approximately $600 million in revenue and over $100 million in EBITDA, with EBITDA margins steadily increasing over the years, reaching 33% recently [1][3] - The company has divested from compression, offshore oil and gas, and decommissioning businesses to focus on water and flowback services and industrial chemicals in offshore oil and gas completion fluids [2] Financial Performance - Revenue for the trailing 12 months ended September was $362 million, the highest in a decade [3] - EBITDA margins have historically been in the mid- to high 20s, with a recent increase to 33% due to significant deep water wells completed in the Gulf of Mexico [3] - The calcium chloride business generated about $160 million in revenue with 30% EBITDA margins, which is not correlated to oil and gas [3] Strategic Focus and Growth Initiatives - TETRA is transitioning into sectors with higher growth opportunities beyond oil and gas, including battery storage and water treatment [5][14] - The company has seen a significant ramp-up in sales of a zinc bromide-based solution to EOS, increasing from $3 million in 2024 to approximately $20 million in 2025, with expectations of $50-$60 million in 2026 [5][6] - TETRA is developing technologies for water desalination and purification, targeting applications in crop irrigation and data center cooling [6][22] Market Dynamics and Competitive Position - TETRA is expanding its operations to extract bromine from the Smackover Formation in Arkansas to meet increasing demand from EOS and the offshore oil and gas market [7][27] - The company competes with larger firms like Schlumberger, Halliburton, and Baker Hughes, but maintains a market share of up to 30% due to its vertically integrated business model and unique chemistry know-how [11] Future Projections - TETRA aims to grow revenue from $600 million to $1.25 billion and EBITDA from over $100 million to about $325 million by 2030, with a balanced revenue mix from oil and gas, water treatment, and specialty chemicals [13][14] - The company plans to treat 500,000 barrels of produced water per day by 2030, translating to over $400 million in revenue and over $100 million in EBITDA [35] Operational Insights - TETRA's water treatment model involves cleaning produced water for beneficial reuse, with a focus on meeting the specifications required for data center operations [22][40] - The company has a solid balance sheet with a leverage ratio of 1.2 times and $50-$60 million in cash, positioning it well for future investments [28][29] Conclusion - TETRA Technologies is strategically repositioning itself to capitalize on high-growth markets in battery storage and water treatment while maintaining strong margins in its traditional oil and gas business, which is expected to create significant shareholder value [29][50]