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OI

OCEANEERING INTERNATIONAL INC (OII)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was a clean beat: revenue $0.675B, GAAP EPS $0.49, adjusted EPS $0.43, and adjusted EBITDA $96.7M; management cited stronger SSR pricing and execution and robust OPG vessel activity in the Gulf of Mexico and West Africa as the key drivers .
  • Oceaneering reiterated FY 2025 EBITDA guidance of $380–$430M and guided Q2 2025 EBITDA to $95–$105M; Manufactured Products book-to-bill is now expected at 0.9–1.0 for the year .
  • S&P Global consensus context: Q1 beat across the board vs. Street—EPS $0.43 vs. $0.314*, revenue $675M vs. $651M*, EBITDA ~$98M vs. ~$78M*; prior quarters were mixed (Q4 EBITDA beat but adjusted EPS miss; Q3 slight misses) .
  • Watch items: $10.4M inventory reserve in Manufactured Products tied to theme park rides, and negative Q1 free cash flow (seasonal working capital draw) despite a $382M ending cash balance and no borrowings on the revolver .

What Went Well and What Went Wrong

What Went Well

  • SSR delivered margin expansion and pricing: SSR operating income up 35% YoY to $59.6M on 10% revenue growth; SSR EBITDA margin rose to 35% (up 413 bps), ROV revenue/day reached $10,788 and utilization 67% .
  • OPG profitability ramped on project mix and fewer dry docks: OPG operating income hit $35.7M with 22% margin as international projects continued from Q4, activity improved in the Gulf of Mexico, and dry dock headwinds abated vs. Q1 2024 .
  • Strategic contract wins underpin 2025: ADTech secured the largest initial U.S. DoD contract in company history; management reiterated this is foundational to significant YoY operating income growth in 2025 .

“ We outperformed expectations… with strong results across our energy services and products… SSR demonstrated resilient utilization… OPG achieved robust vessel activity, particularly in the Gulf of Mexico and West Africa.” — CEO Rod Larson .

What Went Wrong

  • Manufactured Products reserve weighed on margins: $10.4M inventory reserve related to theme park ride business reduced segment operating margin to 6% (would have been ~14% ex-reserve) .
  • Q1 free cash flow negative (seasonality): Operating cash flow used was $(80.7)M and free cash flow $(106.8)M given typical Q1 working capital draw and capex; cash ended at $382M .
  • ADTech margin softness from readiness costs: ADTech operating income declined to $10.7M (11% margin) due to costs to enable prime contractor role ahead of the large DoD program ramp .

Financial Results

Consolidated performance vs prior periods and consensus

MetricQ3 2024Q4 2024Q1 2025 ActualQ1 2025 Consensus
Revenue ($USD Millions)$679.8 $713.5 $674.5 $651.3*
GAAP Diluted EPS ($)$0.40 $0.55 $0.49 —
Adjusted Diluted EPS ($)$0.36 $0.37 $0.43 $0.314*
Adjusted EBITDA ($USD Millions)$98.1 $101.5 $96.7 $78.3*

Values with asterisks (*) are from S&P Global consensus. Values retrieved from S&P Global.

Notes: Management also reported adjusted EBITDA of $96.7M and highlighted beat vs guidance/consensus .

Segment performance

SegmentRevenue ($M) Q1’24Revenue ($M) Q4’24Revenue ($M) Q1’25Op Inc ($M) Q1’24Op Inc ($M) Q4’24Op Inc ($M) Q1’25Op Margin Q1’24Op Margin Q4’24Op Margin Q1’25
Subsea Robotics (SSR)186.9 212.2 206.0 44.2 63.5 59.6 24% 30% 29%
Manufactured Products129.5 143.0 135.0 13.2 4.2 8.7 10% 3% 6%
OPG115.1 184.4 164.9 0.8 39.3 35.7 1% 21% 22%
IMDS69.7 75.1 71.4 3.6 2.0 3.5 5% 3% 5%
ADTech98.0 98.8 97.2 12.8 9.9 10.7 13% 10% 11%

KPIs

KPIQ1 2024Q4 2024Q1 2025
ROV revenue/day utilized—$10,786 $10,788
ROV days utilized14,536 15,211 15,093
ROV utilization64% 66% 67%
Drill support vs vessel mix66% / 34% 64% / 36% 62% / 38%
SSR EBITDA margin31% 36% 35%
MP backlog ($M)597 604 543
Free cash flow ($M)(95.2) (Q1’24)94.5 (Q4’24)(106.8)
Cash balance ($M)—497.5 382.0

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated EBITDAFY 2025$380–$430M (revised low end in Q4 print) $380–$430M reiterated Maintained
Consolidated EBITDAQ2 2025—$95–$105M New
Free Cash FlowFY 2025$110–$130M $110–$130M Maintained
Capex (purchases of PP&E)FY 2025$130–$140M (incl. ERP $15–$20M) $115–$120M (per FCF estimate table) Lowered
Manufactured Products book-to-billFY 2025—0.9–1.0 New
SSR EBITDA marginFY 2025Mid-30% Mid-30% Maintained
OPG operating marginFY 2025Mid-teens Mid-teens Maintained
Unallocated expenseQ2 2025~$45M/quarter ~$45M Maintained
ROV utilizationFY 2025High 60s–low 70s; share 55–60% High 60s–low 70s; share 55–60% Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24, Q4’24)Current Period (Q1’25)Trend
ROV pricing/day rateExpect ongoing pricing progression despite flat days Sequentially flat in Q1; management still targets 5–10% exit rate increase, expects to “touch on $11,000/day” Still positive, moderated pace
Vessel-based activityTight MSV/DSV availability; OPG mix improving (LWI/installation) Higher vessel-based mix expected in 2025; global projects support utilization Improving
OPG intervention thesis (LWI)Emphasis on LWI as high-margin, vessel of opportunity model OPG margins 22% in Q1; management reiterates LWI economics Executing
Brazil exposure/ROV shareGrowing Brazil market share via driller-contracted ROVs Sustained share; 60% of contracted floating rig market overall (79/131 rigs) Stable to up
AI/data (GDi)Acquisition to enhance digital/inspection analytics Using AI/ML for predictive modeling; underwater laser scanning with ROVs in test phase Scaling
Macro/tariffsQ4 noted geopolitical/tariff risk; revised low end of 2025 EBITDA Reaffirmed guidance; Brent $60–$70 still supportive; continuing to monitor tariffs/OPEC+ Watch, but contained
ADTech/DefenseDIU Freedom AUV; ERP readiness to become prime Largest initial DoD contract in company history; readiness costs in Q1 Ramping

Management Commentary

  • “We outperformed expectations… SSR demonstrated resilient utilization… OPG achieved robust vessel activity, particularly in the Gulf of Mexico and West Africa.” — CEO Rod Larson .
  • “We reiterate our prior full‑year 2025 guidance of EBITDA in the range of $380 million to $430 million.” — CEO Rod Larson .
  • “ADTech… was awarded the largest initial contract value in the company history” — foundational to significant YoY OI growth in 2025 .
  • On GDi and AI/ML: “Data-driven approach… AI machine learning assessment… predictive modeling… underwater laser scanning… deploy on ROVs… create more dive hours for ROVs.” — CEO Rod Larson .
  • On commodity downside: OpEx-driven IMR/LWI work should be more resilient; SSR/OPG would feel pullback first if oil fell below $60, but customer dialogues indicate steady activity within 2025 guidance .

Q&A Highlights

  • ROV pricing trajectory: Sequentially flat in Q1, but management still expects 5–10% exit-rate pricing increase and to “touch on $11,000/day” later in 2025 .
  • Mix and vessel outlook: Higher vessel-based activity seen through 2025; large construction vessels “go where the work is,” supporting SSR tooling and OPG utilization .
  • Confidence in 2H activity: Pipeline and backlog diversification, OpEx-related work resiliency, and strong customer feedback underpin reiterated FY outlook despite macro noise .
  • GDi integration as ROV demand flywheel: Underwater scanning/analytics expected to generate incremental ROV days and pull through OPG/tooling work .
  • Oil downside sensitivity: SSR (drill support) and some OPG call-out work would likely soften first, but LWI/IMR work has high customer returns and is less likely to be cut early .

Estimates Context

  • Q1 2025 vs S&P Global consensus: EPS $0.43 vs $0.314*, revenue $674.5M vs $651.3M*, EBITDA ~$97.9M vs ~$78.3M* (beats across the board) .
  • Trailing two quarters:
    • Q4 2024: Revenue beat ($713.5M vs $681.6M*), Adjusted EBITDA beat (~$103.0M vs ~$96.0M*), Primary EPS miss ($0.37 vs $0.405*), while GAAP EPS was $0.55 .
    • Q3 2024: Slight revenue miss ($679.8M vs $692.1M*), EBITDA modest miss (~$96.6M vs ~$98.2M*), Primary EPS miss ($0.36 vs $0.425*) .

Values with asterisks (*) are from S&P Global consensus. Values retrieved from S&P Global.

Consensus vs Actual detail

MetricQ3 2024Q4 2024Q1 2025
Revenue Estimate ($M)*692.1681.6651.3
Revenue Actual ($M)679.8 713.5 674.5
Primary EPS Estimate ($)*0.4250.4050.314
Primary EPS Actual ($)0.36 0.37 0.43
EBITDA Estimate ($M)*98.296.078.3
EBITDA Actual ($M)96.6 103.0 97.7

Values with asterisks (*) are from S&P Global consensus. Values retrieved from S&P Global.

Key Takeaways for Investors

  • The beat-and-raise setup on Q1 (beats vs Street; FY EBITDA reiterated) supports a constructive near-term narrative; OPG/SSR execution and SSR pricing progression remain the stock’s near-term catalysts .
  • SSR structural margin story intact: mid-30% EBITDA margin guide holds, with pricing tailwinds and utilization mix skewing higher toward vessel work through 2025 .
  • OPG margin durability improving via intervention/installation mix and reduced dry dock costs; management sees full‑year mid‑teens OPG margin .
  • Manufactured Products is mixed: backlog declined to $543M and book‑to‑bill guided to 0.9–1.0, but ex-reserve profitability would have been meaningfully higher—watch for order cadence and conversion .
  • ADTech is a 2025 inflection contributor: largest initial DoD award in company history should drive segment growth; near-term readiness costs are a headwind but set up future prime-contractor economics .
  • Macro watchlist (tariffs/OPEC+, Brent $60–$70) acknowledged; OpEx-weighted IMR/LWI work provides some cycle resilience, supporting reiterated FY guidance .
  • Seasonal cash consumption in Q1 is typical; liquidity is strong ($382M cash, undrawn revolver). Expect FCF generation skew later in the year toward the $110–$130M FY target .

Additional Detail and Source Cross-Checks:

  • Consolidated Q1 2025 figures (revenue $674.5M, GAAP EPS $0.49, adj. EPS $0.43, adj. EBITDA $96.7M) and segment metrics are from the 8‑K/press release .
  • Segment tables and KPIs (ROV utilization, days, revenue/day; OPG margins; MP backlog) are from the Segment Information and KPI disclosures .
  • Q2/FY 2025 guidance and segment outlook details are from the 8‑K/press release and call .
  • DoD award (ADTech) is from the March 12, 2025 press release .