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ChampionX Corp (CHX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $864.5M, diluted EPS $0.44 and adjusted EPS $0.50; adjusted EBITDA was $190.9M (22.1% margin). Sequential declines reflected normal seasonality in international operations, while margins remained resilient given productivity and mix .
  • Consolidated revenue fell 5% q/q and 6% y/y; adjusted EBITDA margin improved y/y to 22.1% from 20.8% despite lower volumes, underscoring cost discipline and pricing/productivity actions .
  • Company discontinued quarterly guidance and did not host an earnings call due to the pending all‑stock acquisition by SLB; US HSR review is complete and closing now targeted end-Q1/early Q2 2025, with a definitive agreement to divest US Synthetic at close .
  • Operational highlights included EPA approval of ChampionX Emissions Technologies’ Aerial Optical Gas Imaging (AOGI) platform under OOOOb, multiple Middle East first‑fill wins, and sustained digital product traction (XSPOC, SMARTEN XE/Lite) .
  • Wall Street consensus from S&P Global was unavailable for Q1 2025 due to a Capital IQ mapping issue; estimate comparison could not be performed. Note: Estimates unavailable via S&P Global (CIQ mapping) [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

  • Adjusted EBITDA margin reached 22.1%, the second-highest level as ChampionX, supported by productivity and profitability focus: “we delivered adjusted EBITDA of $191 million, representing a 22.1% adjusted EBITDA margin” .
  • Reservoir Chemical Technologies grew revenue 23% q/q to $26.9M; operating margin expanded 1008 bps q/q to 20.5% on higher volumes and favorable mix .
  • Strategic and regulatory milestones: EPA approval of AOGI as a Methane Alternative Test Method under OOOOb, enabling scalable methane detection for operators (component‑level platform approved) .

What Went Wrong

  • Consolidated revenue decreased 5% q/q to $864.5M, driven primarily by typical seasonal decline in international operations (notably impacting Production Chemical Technologies) .
  • Production Chemical Technologies margins compressed q/q (operating −248 bps to 15.7%; adjusted EBITDA −259 bps to 20.8%) on lower volumes .
  • Drilling Technologies margins contracted q/q (operating to 16.2% from 20.6%; adjusted EBITDA margin down 346 bps) due to lower North America volumes .

Financial Results

Consolidated Headline Metrics (oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$906.5 $912.0 $864.5
Diluted EPS ($)$0.37 $0.43 $0.44
Adjusted Diluted EPS ($)$0.44 $0.50 $0.50
Gross Profit ($USD Millions)$297.8 $311.9 $291.5
Income Before Income Taxes Margin (%)11.2% 13.0% 12.1%
Adjusted EBITDA ($USD Millions)$197.5 $212.3 $190.9
Adjusted EBITDA Margin (%)21.8% 23.3% 22.1%

Year-over-Year (Q1 2025 vs Q1 2024)

MetricQ1 2024Q1 2025YoY Change
Revenue ($USD Millions)$922.1 $864.5 −6.3%
Diluted EPS ($)$0.58 $0.44 −$0.14
Adjusted Diluted EPS ($)$0.50 $0.50 0.0
Adjusted EBITDA ($USD Millions)$191.7 $190.9 −$0.8

Segment Breakdown (Revenue and Margins)

SegmentQ3 2024 Revenue ($M)Q4 2024 Revenue ($M)Q1 2025 Revenue ($M)Q3 2024 Op Margin (%)Q4 2024 Op Margin (%)Q1 2025 Op Margin (%)Q3 2024 Adj EBITDA Margin (%)Q4 2024 Adj EBITDA Margin (%)Q1 2025 Adj EBITDA Margin (%)
Production Chemical Technologies$559.5 $569.7 $523.4 15.6% 18.2% 15.7% 21.6% 23.4% 20.8%
Production & Automation Technologies$275.7 $269.6 $264.4 12.4% 14.5% 14.2% 25.2% 26.2% 26.6%
Drilling Technologies$51.8 $51.9 $50.5 22.2% 20.6% 16.2% 24.8% 23.7% 20.3%
Reservoir Chemical Technologies$20.5 $21.9 $26.9 8.2% 10.5% 20.5% 16.0% 17.1% 23.6%

KPIs and Cash Flow

KPIQ3 2024Q4 2024Q1 2025
Cash from Operations ($M)$141.3 $207.3 $66.8
Free Cash Flow ($M)$108.1 $170.1 $38.6
CFO / Revenue (%)16% 23% 8%
FCF / Revenue (%)12% 19% 4%
Cash & Equivalents ($M)$389.1 $507.7 $526.6
Liquidity Commentary~$1.1B liquidity (Q3) ~$1.2B liquidity (Q4) ~$1.2B liquidity incl. $527M cash & $674M revolver capacity (Q1)
Digital Products Revenue ($M)$57.9 $62.3 $57.8

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Quarterly Guidance (All metrics)Q1 2025Provided prior to SLB dealDiscontinued; no call/webcastMaintained discontinuation due to pending SLB acquisition
Dividend per Share ($)Q1 2025$0.095 (prior cadence)$0.095 payable Apr 25, 2025; record Apr 4, 2025Maintained
Strategic Transactions2025 Close WindowClosing anticipated 1Q25 (prior)Expected end-Q1/early Q2 2025; HSR waiting periods expired; definitive agreement to divest US Synthetic at closeUpdated timeline and asset sale commitment

Earnings Call Themes & Trends

Note: Company did not host an earnings call for Q1 2025 due to pending SLB acquisition .

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Tariffs/MacroMention of Mexico weakness; cost/productivity actions Productivity improvements; segment mix Explicit tariff mitigation via pricing, flexible supply chain, productivity initiatives Increased focus on tariff mitigation
Digital/AI/TechLaunch of ALLY, PCS SMARTEN Unify; 7 new clients SMARTEN Lite rollout; XSPOC expansion; emissions monitoring deployments XSPOC migration of 4,000+ wells; SMARTEN XE/Lite traction; LOOKOUT services launched Continued adoption and expansion
Emissions/RegulatorySOOFIE deployments; emissions monitoring projects SOOFIE and Aura OGI expansion EPA approval of AOGI under OOOOb (Methane Alternative Test Method) Regulatory validation strengthens offering
Regional WinsMiddle East first‑fills; Asia‑Pacific FPSO; Canada programs Canada sole supply, SAGD wins; Qatar corrosion inhibitors Middle East first fills; Gulf of America offshore project; Canadian water treatment programs Sustained international contract momentum
Reservoir ChemistryQ3 softness (volume driven) Modest improvements Strong q/q rebound: +23% revenue; +647 bps adj EBITDA margin Positive inflection

Management Commentary

  • “We delivered strong adjusted EBITDA and adjusted EBITDA margin, and generated positive free cash flow… the resilience of our ChampionX portfolio” — Soma Somasundaram, President & CEO .
  • “Revenue of $864 million… decreased 5% sequentially… driven primarily by a typical seasonal decline in international operations” .
  • “We are leveraging our global and flexible supply chain footprint, long-standing supplier partnerships, pricing adjustments, and productivity initiatives to address tariff impacts” .
  • “Ending the first quarter with approximately $1.2 billion of liquidity, including $527 million of cash and $674 million of available capacity on our revolving credit facility” .

Q&A Highlights

  • No Q&A — company discontinued quarterly guidance and did not host a conference call or webcast due to the pending SLB acquisition .

Estimates Context

  • Wall Street consensus via S&P Global could not be retrieved for Q1 2025 due to a Capital IQ mapping issue; therefore, beat/miss vs consensus is not available. Note: Estimates unavailable via S&P Global (CIQ mapping) [GetEstimates error].
  • Given the absence of estimates, investors should focus on sequential and year‑over‑year trends: q/q −5% revenue on seasonality; y/y −6% revenue with flat adjusted EPS at $0.50 and slightly lower adjusted EBITDA .

Key Takeaways for Investors

  • Margin resilience despite volume headwinds: adjusted EBITDA margin 22.1% in Q1, up vs Q1 2024 (20.8%), reflecting productivity and pricing/mix execution .
  • Seasonal patterns matter: international seasonality drove the q/q revenue decline; watch 2H normalization potential in Production Chemical Technologies .
  • Strategic overhang and timeline: SLB acquisition progressing (HSR expired), closing now expected end‑Q1/early Q2; US Synthetic divestiture set to close in conjunction with the transaction — a key catalyst path .
  • Emissions tech portfolio strengthening: EPA approval of AOGI under OOOOb enhances regulatory credibility and could accelerate adoption of emissions monitoring solutions in 2025 .
  • Reservoir Chemical Technologies inflection: strong q/q revenue/margin expansion on higher volumes and favorable mix — monitor sustainability of this momentum .
  • Digital product traction persisted through seasonality: $57.8M Q1 digital revenue; continued deployments of XSPOC and SMARTEN solutions support recurring/attached revenue streams .
  • Cash generation intact though seasonal dip: FCF $38.6M and CFO $66.8M; liquidity remained robust at ~$1.2B, supporting dividends ($0.095/sh) and strategic flexibility into close .