Executive Summary

Revenue of $906.5M rose 1% sequentially but fell 4% y/y; adjusted EBITDA of $197.5M with a record 21.8% adjusted EBITDA margin; free cash flow of $108.1M, demonstrating strong cash conversion .
Segment mix: Production & Automation Technologies up 13% q/q on artificial lift demand and RMSpumptools; Production Chemical down 2% q/q on lower international volumes; Drilling and Reservoir weaker on volume/inventory dynamics .
Quarterly guidance discontinued and no earnings call due to pending all-stock acquisition by SLB; closing anticipated in Q1 2025, framing event-driven catalysts and limited near-term disclosures .
Liquidity remained robust at ~$1.1B (cash $389M plus revolver capacity), supporting continued dividends ($0.095/share declared for Jan 31, 2025) and cash returns while the deal is pending .

What Went Well and What Went Wrong

What Went Well

Record profitability: “adjusted EBITDA margin...21.8%, our highest level as ChampionX,” driven by productivity and profitability focus .
Strong cash generation: CFO $141.3M (16% of revenue) and FCF $108.1M (55% of adjusted EBITDA), sustaining confidence in ≥50% EBITDA-to-FCF conversion for 2024 .
PAT momentum: Revenue up 13% q/q to $275.7M on North America artificial lift demand and RMSpumptools; digital products revenue up 7% q/q to $57.9M .

What Went Wrong

Latin America softness centered in Mexico weighed on y/y top line (company-wide revenue -4% y/y), though non-Mexico regions grew 6% y/y; Production Chemical revenue declined 2% q/q on lower international sales volumes .
Reservoir Chemical revenue fell 24% q/q with margin compression (segment operating margin -793 bps q/q), reflecting lower volumes .
Drilling margin ticked down on lower bearings volumes and inventory management by customers; adjusted EBITDA margin -2 bps q/q .

Financial Results

Consolidated summary (Q1 → Q2 → Q3 2024)

Metric	Q1 2024	Q2 2024	Q3 2024
Revenue ($USD Millions)	$922.1	$893.3	$906.5
Net Income Attributable ($USD Millions)	$112.9	$52.6	$72.0
Diluted EPS ($)	$0.58	$0.27	$0.37
Adjusted Diluted EPS ($)	$0.50	$0.37	$0.44
Adjusted EBITDA ($USD Millions)	$191.7	$183.2	$197.5
Adjusted EBITDA Margin (%)	20.8%	20.5%	21.8%
Income Before Income Taxes Margin (%)	15.2%	9.3%	11.2%
Cash from Operating Activities ($USD Millions)	$173.5	$67.6	$141.3
Free Cash Flow ($USD Millions)	$144.0	$38.3	$108.1

Prior-year reference (Q3 2023 actuals)

Metric	Q3 2023
Revenue ($USD Millions)	$939.8
Diluted EPS ($)	$0.39
Adjusted Diluted EPS ($)	$0.44
Adjusted EBITDA ($USD Millions)	$197.5
Adjusted EBITDA Margin (%)	21.0%

Segment revenue (Q1 → Q2 → Q3 2024)

Segment	Q1 2024	Q2 2024	Q3 2024
Production Chemical Technologies ($USD Millions)	$590.1	$569.6	$559.5
Production & Automation Technologies ($USD Millions)	$252.6	$244.5	$275.7
Drilling Technologies ($USD Millions)	$55.2	$52.9	$51.8
Reservoir Chemical Technologies ($USD Millions)	$24.7	$27.1	$20.5
Corporate and other ($USD Millions)	($0.5)	($0.8)	($1.0)
Total Revenue ($USD Millions)	$922.1	$893.3	$906.5

KPIs and cash conversion (Q1 → Q2 → Q3 2024)

KPI	Q1 2024	Q2 2024	Q3 2024
Digital Products Revenue ($USD Millions)	$56.8	$54.1	$57.9
CFO-to-Revenue Ratio (%)	19%	8%	16%
FCF-to-Revenue Ratio (%)	16%	4%	12%
FCF-to-Adjusted EBITDA Ratio (%)	75%	21%	55%

Actuals vs Street estimates (Q3 2024)

Metric	Actual	Consensus	Outcome
Revenue ($USD Millions)	$906.5	Unavailable (S&P Global mapping not available for CHX)	N/A
Diluted EPS ($)	$0.37	Unavailable (S&P Global mapping not available for CHX)	N/A
Adjusted Diluted EPS ($)	$0.44	Unavailable (S&P Global mapping not available for CHX)	N/A
Adjusted EBITDA ($USD Millions)	$197.5	Unavailable (S&P Global mapping not available for CHX)	N/A

Note: We attempted to retrieve S&P Global consensus for CHX Q3 2024, but it was unavailable due to missing CIQ mapping in the SPGI dataset.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Quarterly Guidance	Q3 2024 onward	Provided historically	Discontinued due to pending SLB acquisition	Lowered/Discontinued
Earnings Call	Q3 2024	Held historically	Not hosted (no call/webcast)	Discontinued
Adjusted EBITDA-to-FCF Conversion	FY 2024	“At least 50%” confidence (Q1/Q2 commentary)	“Remain confident in at least 50% for 2024”	Maintained
Dividend per Share	Q4 2024 (paid Jan 31, 2025)	$0.095	$0.095	Maintained

Earnings Call Themes & Trends

Company did not host an earnings call for Q3 2024 due to the pending SLB transaction . Themes below reflect quarter disclosures and press releases.

Topic	Previous Mentions (Q1 2024)	Previous Mentions (Q2 2024)	Current Period (Q3 2024)	Trend
Mexico impact	Seasonal international decline; PAT up; overall revenue -2% q/q; commentary focused on mix and productivity	Mexico down ~$54M q/q; ~$61M y/y; orders expected to resume toward year end	Revenue -4% y/y; non-Mexico regions +6% y/y; sequential +1% overall	Improving non-Mexico; Mexico remains a headwind
Artificial lift demand	PAT +5% q/q; digital revenue +8% q/q	PAT soft -3% q/q; digital -5% q/q; set-up for RMSpumptools integration	PAT +13% q/q; digital +7% q/q; RMSpumptools contributed	Strengthening sequentially
Digital optimization software	XSPOC + Pump Checker combined offering; AI-enabled ESP control initiatives	Contracts in Indonesia (XSPOC), Permian pilots expanding; emissions tech subscriptions growth	Launch of ALLY production optimization; seven new clients in Q3	Building pipeline and adoption
International growth	Seasonal decline in Q1; pipeline of projects	Strength in non-Mexico international +6% q/q (ex-Mexico)	New contracts/APAC FPSO, Saudi, Qatar; CCUS order; Mountain Valley pipeline work	Broadening global footprint
M&A/event risk (SLB)	Deal announced Apr 2; expected closing before end-2024	Closing anticipated Q4’24/Q1’25	Closing anticipated Q1 2025; no guidance/call	Timeline pushed to Q1’25, disclosure curtailed

Management Commentary

“We delivered strong adjusted EBITDA and adjusted EBITDA margin, and generated robust free cash flow… revenue increased 1% sequentially… adjusted EBITDA margin…21.8%, our highest level as ChampionX…” — Soma Somasundaram, President & CEO .
Liquidity: “approximately $1.1 billion of liquidity, including $389 million of cash and $671 million of available capacity on our revolving credit facility” .
PAT and digital: “Production & Automation Technologies revenue... $275.7 million… Revenue from digital products was $57.9 million… increase of 7% sequentially” .
Event backdrop: quarterly guidance discontinued; no call due to SLB acquisition process .

Q&A Highlights

No Q3 2024 earnings call or webcast due to pending SLB acquisition; therefore no analyst Q&A or on-the-fly guidance clarifications were provided .
Management reiterated confidence in ≥50% EBITDA-to-FCF conversion for FY 2024 in prepared remarks and emphasized portfolio resiliency and productivity-driven profitability .

Estimates Context

S&P Global consensus estimates for CHX Q3 2024 were not available to us due to a missing CIQ mapping, so we cannot quantitatively benchmark revenue/EPS vs Street in this report. We attempted to fetch “Primary EPS Consensus Mean,” “Revenue Consensus Mean,” and “EBITDA Consensus Mean” for Q3 2024; the dataset returned a mapping error, and thus comparisons to consensus are unavailable.

Key Takeaways for Investors

Profitability resilience amid mixed volumes: consolidated adjusted EBITDA margin reached a record 21.8%; PAT mix and productivity improvements are key drivers even with Mexico headwinds .
Cash conversion remains strong: FCF of $108.1M (55% of adjusted EBITDA) and CFO-to-revenue ratio of 16% support ongoing cash returns and balance sheet flexibility .
PAT momentum and digital growth: artificial lift demand plus RMSpumptools contribution underpin sequential growth; digital software traction (ALLY launch, seven new clients) enhances recurring and optimization exposure .
International pipeline broadening: multiple wins across APAC FPSO, Saudi, Qatar, CCUS, and pipeline services, diversifying revenue away from Mexico volatility .
Event-driven setup: with guidance discontinued and no call, near-term stock drivers likely hinge on SLB deal progress, regulatory approvals, and closing timing (anticipated Q1 2025) .
Dividend maintained: $0.095/share declared for payment in January 2025; supports income profile during transaction period .
Tactical stance: given limited near-term disclosures and consensus unavailability, focus on transaction milestones and cash generation durability; watch for normalization in Mexico and incremental PAT/digital momentum as potential upside drivers .

ChampionX Corp (CHX)·Q3 2024 Earnings Summary