Cactus (WHD) Q1 2025 Earnings Call May 01, 2025 10:00 AM ET Speaker0 Good day, everyone, and thank you for standing by. My name is RJ, and I will be your conference operator today. At this time, I would like to welcome everyone to the Cactus Q1 twenty twenty five Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Thank you. I would now like to turn the call over to Alan Boyd, Director of Corporate Devel ...

Cactus, Inc. (WHD) reported first-quarter 2025 adjusted earnings of 73 cents per share, which beat the Zacks Consensus Estimate of 70 cents. However, the bottom line declined from the year-ago quarter’s figure of 75 cents. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Total quarterly revenues of $280.3 million beat the Zacks Consensus Estimate of $268 million. The top line improved from the year-ago figure of $274 million.The better-than-expected quarterly earnings can be attribut ...

Cactus, Inc. (WHD) came out with quarterly earnings of $0.73 per share, beating the Zacks Consensus Estimate of $0.70 per share. This compares to earnings of $0.75 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 4.29%. A quarter ago, it was expected that this company would post earnings of $0.73 per share when it actually produced earnings of $0.71, delivering a surprise of -2.74%.Over the last four quarters, the company has s ...

Exhibit 99.1 Cactus Announces First Quarter 2025 Results HOUSTON – April 30, 2025 – Cactus, Inc. (NYSE: WHD) ("Cactus" or the "Company") today announced financial and operating results for the first quarter of 2025. First Quarter Highlights Financial Summary | | | | | Three Months Ended | | | | --- | --- | --- | --- | --- | --- | --- | | | | March 31, | | December 31, | | March 31, | | | | 2025 | | 2024 | | 2024 | | | | | | (in thousands) | | | | Revenues | $ | 280,319 | $ | 272,121 | $ | 274,123 | | (3) Op ...

Cactus, Inc. (WHD) reported fourth-quarter 2024 adjusted earnings of 71 cents per share, which missed the Zacks Consensus Estimate of 73 cents. The bottom line declined from the year-ago quarter’s figure of 81 cents.Total quarterly revenues of $272.1 million missed the Zacks Consensus Estimate of $276 million. The top line declined from the year-ago figure of $275 million.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.The weak quarterly results can be attributed to decreased revenues ...

Cactus Inc. (NYSE:WHD) Q4 2024 Earnings Conference Call February 27, 2025 10:00 AM ET Company Participants Alan Boyd - Director of Corporate Development & Investor Relations Scott Bender - Chief Executive Officer & Chairman of the Board Jay Nutt - Executive Vice President, Chief Financial Officer and Treasurer Steven Bender - Chief Operating Officer Conference Call Participants Stephen Gengaro - Stifel Arun Jayaram - J.P. Morgan Securities Scott Gruber - Citigroup Operator Good day, and thank you for standi ...

Customer Dependence and Revenue - The company serves over 300 customers, with one customer representing 15% of total revenues in 2024 and 10% in 2023[47]. - The company is dependent on a relatively small number of customers in the oil and natural gas E&P business, which could adversely affect its financial condition if an important customer is lost[87]. Manufacturing and Operations - The manufacturing facility in Bossier City, Louisiana, is designed for rapid turnaround of made-to-order equipment, while the Suzhou facility in China is optimized for higher-volume orders[42]. - The company has advanced manufacturing capabilities in Baytown, Texas, producing pipe products in accordance with industry standards and utilizing advanced CNC machines[43]. - The company operates through service centers and pipe yards located in the United States, Canada, Australia, and provides services in the Middle East and other international markets[260]. Industry Dependency and Market Conditions - The company is substantially dependent on the oil and gas industry, with exploration and production activity directly affected by oil and natural gas prices, which have historically been volatile[45]. - The company’s business is heavily influenced by trends in the demand for and price of crude oil and natural gas, which have historically been volatile[81]. - The oilfield services industry is highly competitive, and increased competition could lead to lower prices and utilization rates for the company's services[89]. - The introduction of new technologies in the oilfield services industry may cause the company to lose market share if it cannot keep up with competitors[90]. - Ongoing global conflicts, particularly in Ukraine and the Middle East, have resulted in volatility in oil and natural gas prices, potentially dampening demand for the company's products[109]. Environmental and Regulatory Compliance - The company has established proactive environmental and worker safety policies to manage compliance with stringent governmental laws and regulations[52]. - The company is subject to various environmental laws and regulations, and failure to comply could result in significant penalties and increased costs[100]. - Changes in regulations related to greenhouse gas emissions could negatively impact demand for the company's products and services[103]. - Increased regulation on hydraulic fracturing in Texas has led to suspensions of deep wastewater disposal wells in certain areas, potentially increasing costs for oil and gas production companies[104]. Financial Performance and Metrics - Total revenues for 2024 reached $1,129,814, an increase of 3% from $1,096,960 in 2023 and a significant rise of 64% compared to $688,369 in 2022[249]. - Net income attributable to Cactus Inc. for 2024 was $185,407, representing an increase of 10% from $169,171 in 2023 and a substantial increase of 68% from $110,174 in 2022[249]. - The total stockholders' equity attributable to Cactus Inc. rose to $1,071.1 million in 2024, up from $865.5 million in 2023, reflecting an increase of about 23.8%[247]. - The company reported a foreign currency translation adjustment loss of $1,974 in 2024, compared to a gain of $239 in 2023[252]. - The company completed the acquisition of the FlexSteel business on February 28, 2023, which has been reflected in the financial statements from the closing date of the acquisition[262]. Employee and Workforce Management - The company employed approximately 1,600 people worldwide as of December 31, 2024, with over 100 employees located outside the United States, primarily in Australia and China[61]. - The company has developed targeted strategies for recruitment and retention to maintain high retention rates among key managers and associates[62]. - The company is committed to fostering a diverse workforce, with approximately 10% women and 46% of the workforce representing a minority population[67]. Risk Management and Insurance - The company relies on customer indemnifications and third-party insurance for risk mitigation, but limitations on these could expose it to substantial liabilities[93]. - The company’s insurance includes coverage for various liabilities, including pollution liability and cyber insurance, but may not cover all losses[59]. - The company relies on information technology systems, and any failure or cyberattack could disrupt operations and adversely affect financial performance[132]. Tax and Financial Obligations - Payments under the Tax Receivable Agreement (TRA) could be substantial, as Cactus Inc. is obligated to pay 85% of net cash savings from tax benefits realized[120]. - The liability related to the Tax Receivable Agreement (TRA) was reported at $278.7 million as of December 31, 2024, indicating a significant financial obligation[242]. - The effective tax rate for 2024 was 22.2%, compared to 18.1% in 2023 and 17.8% in 2022[318]. Capital and Investment Activities - The company reported a net cash used in investing activities of $35,388,000 for 2024, a significant decrease from $654,793,000 in 2023[258]. - Capital expenditures for 2024 were $39,176,000, a decrease from $43,977,000 in 2023[258]. - The company had no outstanding debt as of December 31, 2024, and maintained compliance with all covenants under the Amended ABL Credit Facility[308]. Audit and Internal Controls - The independent auditor, PricewaterhouseCoopers, LLP, confirmed the effectiveness of the internal control over financial reporting as of December 31, 2024[230]. - The company maintained effective internal control over financial reporting based on the COSO framework, as stated in the management's assessment[229]. - The audit report highlighted a critical audit matter related to the TRA liability, emphasizing the complexity and subjectivity involved in its calculation[241].

Financial Data and Key Metrics Changes - Total Q4 revenue was $272 million, down 7.2% sequentially, with adjusted EBITDA of $93 million, also down 7.6% sequentially, resulting in adjusted EBITDA margins of 34.1% [9][12][16] - GAAP net income for the quarter was $57 million, compared to $62 million in the previous quarter, with adjusted net income and earnings per share at $57 million and $0.71 per share, respectively, down from $63 million and $0.79 per share [17][18] Business Line Data and Key Metrics Changes - Pressure control segment revenues were $177 million, down 4.5% sequentially, with operating income decreasing by $1.7 million or 3.3% [13] - Spoolable technology segment revenues were $96 million, down 11.2% sequentially, with operating income decreasing by $7.4 million or 22.4% [14] Market Data and Key Metrics Changes - The company ended the year with a cash balance of $343 million, an increase of approximately $39 million from the previous quarter [20] - The average public ownership of the company was 85% and ended the quarter at 86% [17] Company Strategy and Development Direction - The company is focused on ramping up production at its new facility in Vietnam and introducing new products to enhance value in both segments [29][37] - The strategy includes managing manufacturing costs and expanding internationally, with a long-term goal of achieving 40% of revenue from international markets [34][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming underlying activity levels in the US market despite trade policy uncertainties [43][44] - The company anticipates a rebound in customer activity in the second and third quarters of 2025, with expectations for increased international orders [31][37] Other Important Information - The company paid a quarterly dividend of $0.13 per share, resulting in a cash outflow of approximately $10 million [19] - Capital expenditures for Q4 were approximately $11 million, with full-year CapEx at around $35 million [21][23] Q&A Session Summary Question: Outlook for US activity in the next few quarters - Management is confident in their ability to outgrow underlying activity levels, anticipating a US rig count in the 550 to 560 range [43][44] Question: Margin headwind from Bossier City facility versus China - The cost comparison indicates that Bossier's costs are at least 35% higher than the Far East supply chain, with increasing tariffs impacting both [46][47] Question: Game plan for mitigating tariff impacts - The company has flexibility between its facilities in Vietnam and Bossier City to mitigate tariff impacts, with a focus on vertical manufacturing capabilities [58][61] Question: Commercialization of H2S solutions - The H2S product is commercialized, with shipments expected to begin in March or April, targeting the Middle East market [70][71] Question: International growth opportunities in pressure control - Management acknowledged progress in international growth but refrained from providing specific details due to ongoing developments [96][97]

Core Viewpoint - Cactus, Inc. reported quarterly earnings of $0.71 per share, missing the Zacks Consensus Estimate of $0.73 per share, and showing a decline from $0.81 per share a year ago, indicating a -2.74% earnings surprise [1][2] Financial Performance - The company posted revenues of $272.12 million for the quarter ended December 2024, which was 1.37% below the Zacks Consensus Estimate and a decrease from $274.87 million year-over-year [2] - Over the last four quarters, Cactus has surpassed consensus EPS estimates three times and has topped consensus revenue estimates three times as well [2] Stock Performance - Cactus shares have declined approximately 1.5% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [3] - The current consensus EPS estimate for the upcoming quarter is $0.78, with expected revenues of $283.66 million, and for the current fiscal year, the estimate is $3.22 on revenues of $1.17 billion [7] Industry Outlook - The Oil and Gas - Integrated - United States industry, to which Cactus belongs, is currently ranked in the top 16% of over 250 Zacks industries, suggesting a favorable outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Cactus's stock performance [5][6]

Financial Performance - Fourth quarter 2024 revenues were $272.1 million, a decrease of 1.0% from $274.9 million in the previous quarter[3]. - Operating income for the fourth quarter was $70.5 million, down 10.0% sequentially from $78.6 million[3]. - Net income for the fourth quarter was $57.4 million, resulting in a net income margin of 21.1%[3]. - Adjusted EBITDA for the fourth quarter was $92.7 million, with an adjusted EBITDA margin of 34.1%[3]. - For the twelve months ended December 31, 2024, net income increased to $232.8 million from $214.8 million in 2023, representing an 8.8% growth[34]. - Revenue for the twelve months ended December 31, 2024, was $1.13 billion, compared to $1.10 billion in 2023, reflecting a 3.1% increase[34]. - Adjusted net income for the twelve months ended December 31, 2024, was $245.1 million, slightly down from $253.1 million in 2023, a decrease of 3.2%[34]. - Diluted earnings per share, as adjusted, decreased to $3.07 for the twelve months ended December 31, 2024, from $3.19 in 2023, a decline of 3.8%[34]. - The net income margin for the three months ended December 31, 2024, was 21.1%, slightly lower than 21.3% in the previous quarter[39]. - Total operating income for the twelve months ended December 31, 2024, was $289,613,000, an increase from $264,366,000 in the previous year[45]. Segment Performance - Pressure Control segment revenue decreased by $8.4 million, or 4.5%, sequentially, while Spoolable Technologies revenue decreased by $12.1 million, or 11.2%[10][11]. - Pressure Control segment revenue for the three months ended December 31, 2024, was $176,719,000, down from $185,099,000 in the previous quarter[45]. - Spoolable Technologies segment revenue increased to $96,072,000 for the three months ended December 31, 2024, compared to $94,412,000 in the same period last year, representing a growth of approximately 1.8%[45]. - Adjusted Segment EBITDA margin for the Pressure Control segment was 34.8% for the three months ended December 31, 2024, compared to 33.5% in the previous quarter[45]. Cash Flow and Assets - Cash flow from operations for the fourth quarter was $66.6 million, with cash and cash equivalents totaling $342.8 million and no bank debt outstanding[7][13]. - Total assets as of December 31, 2024, reached $1.74 billion, up from $1.52 billion in 2023, indicating a 14.3% increase[30]. - Cash and cash equivalents significantly rose to $342.8 million in 2024, compared to $133.8 million in 2023, marking a 156.5% increase[31]. - The net cash provided by operating activities for the twelve months ended December 31, 2024, was $316.1 million, down from $340.3 million in 2023, a decrease of 7.1%[31]. - Total current liabilities increased to $178.8 million in 2024 from $175.7 million in 2023, a rise of 1.2%[30]. Future Outlook - The company expects net capital expenditures for 2025 to be in the range of $45 million to $55 million, focusing on supply chain diversification and efficiency improvements[14]. - The company anticipates U.S. land activity levels to remain unchanged in the first quarter of 2025, with expectations for Spoolable Technologies revenues to increase in the seasonally stronger second quarter[8]. - Cactus is implementing initiatives to grow its customer base and mitigate potential tariff impacts, including international sales growth and new product introductions[8]. Dividends and Expenses - In January 2025, the Board declared a quarterly cash dividend of $0.13 per Class A share[7][16]. - The company incurred transaction-related expenses of $2,793,000 in the three months ended December 31, 2024, related to growth initiatives including the FlexSteel acquisition[40].