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OI

OCEANEERING INTERNATIONAL INC (OII)·Q3 2025 Earnings Summary

Executive Summary

  • Strong beat and sequential improvement: Revenue $742.9M and adjusted EBITDA $111.1M exceeded guidance and “consensus estimates,” with YoY growth of 9% and adj. EBITDA up 13% (also above the Q2 guide of $100–$110M) . Management cited higher‑margin backlog conversion in Manufactured Products, favorable OPG project mix, and higher ROV revenue/day in SSR as key drivers .
  • Estimates context: Q3 beat across EPS ($0.55* vs $0.43*), revenue ($742.9M* vs $712.5M*), and EBITDA ($112.6M* vs $102.9M*); sequentially higher vs Q2 on all three measures*. Values retrieved from S&P Global.
  • Guidance: Q4 2025 consolidated EBITDA guided to $80–$90M; unallocated expenses ~ $45M. FY26 initial EBITDA guide introduced at $390–$440M with FCF “consistent with 2025” and continued buybacks .
  • Mix shifts ahead: Management expects Q4 2025 declines in OPG on absence of 2024 international projects, but improvements in SSR, ADTech, and MP margins on lower revenue; sets 2026 growth led by ADTech, with energy businesses stable and SSR margins mid-to-upper 30s .

What Went Well and What Went Wrong

  • What Went Well

    • Delivered above guidance and consensus: “generated adjusted EBITDA in excess of our guidance range and consensus estimates,” reflecting strong segment execution .
    • Manufactured Products margin inflection: OI $24.7M (+119% YoY) on 9% revenue growth; backlog $568M; book-to-bill 0.82 TTM; pricing improvements in Grayloc/Rotator .
    • Commercial momentum: Total inbound orders $854M across SSR, ADTech, and MP; SSR ROV revenue/day up 6% to $11,254; ADTech revenue +27% with OI +36% .

  • What Went Wrong

    • SSR utilization softened: ROV fleet utilization 65% (down from 69% YoY); SSR revenue essentially flat YoY .
    • OPG outlook for Q4: Management guides significant YoY decreases in OPG revenue and OI due to absence of last year’s international projects and lower U.S. Gulf vessel activity .
    • Higher corporate costs: Unallocated expenses rose 19% YoY to $46.3M in Q3; Q4 expected near $45M .

Financial Results

Overall quarterly performance and trend

MetricQ1 2025Q2 2025Q3 2025
Revenue ($M)$674.5 $698.2 $742.9
Operating Income ($M)$73.5 $79.2 $86.5
Net Income ($M)$50.4 $54.4 $71.3
Diluted EPS ($)$0.49 $0.54 $0.71
Adjusted EPS ($)$0.43 $0.49 $0.55
EBITDA ($M)$97.7 $108.7 $110.1
Adjusted EBITDA ($M)$96.7 $103.3 $111.1
EBITDA Margin % (Adj)14% 15% 15%
Cash from Operations ($M)$(80.7) $77.2 $101.3
Free Cash Flow ($M)$(106.8) $46.9 $77.0

Q3 vs PY and vs PQ

MetricQ3 2024Q2 2025Q3 2025
Revenue ($M)$679.8 $698.2 $742.9
Net Income ($M)$41.2 $54.4 $71.3
Diluted EPS ($)$0.40 $0.54 $0.71
Adjusted EBITDA ($M)$98.1 $103.3 $111.1

Segment detail

SegmentQ3 2024 Revenue ($M)Q3 2024 OI ($M)Q2 2025 Revenue ($M)Q2 2025 OI ($M)Q3 2025 Revenue ($M)Q3 2025 OI ($M)
Subsea Robotics (SSR)$215.7 $65.7 $218.8 $64.5 $218.8 $65.1
Manufactured Products (MP)$143.7 $11.3 $145.1 $18.8 $156.4 $24.7
Offshore Projects Group (OPG)$147.5 $20.3 $149.3 $21.7 $171.0 $23.7
IMDS$73.6 $0.7 $75.4 $4.6 $70.8 $2.8
ADTech$99.2 $12.2 $109.6 $16.3 $125.9 $16.6
Unallocated—$(38.9) —$(46.7) —$(46.3)

KPIs and cash/uses

KPIQ3 2024Q2 2025Q3 2025
SSR ROV utilization (%)69% 67% 65%
SSR ROV revenue/day ($)$10,576 $11,265 $11,254
SSR ROV fleet count (units)——250
MP backlog ($M)$671 $516 $568
Book-to-bill (TTM)—0.65 0.82
Cash & equivalents ($M)—$434.0 $506.0
Share repurchases (QTD)—~$10.0M ~$10.1M
Capex (purchases of PP&E, $M)$24.9 $30.3 $24.2
Unallocated expenses ($M)$(38.9) $(46.7) $(46.3)

Estimates vs actuals (Q3 2025)

MetricConsensus*Actual*Surprise
Revenue ($M)$712.5*$742.9*+4.3%*
EPS ($)$0.43*$0.55*+28.3%*
EBITDA ($M)$102.9*$112.6*+9.4%*

Values retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated adjusted EBITDA ($M)FY 2025$390–$420 (Q2 guide) ~$391–$401 implied from YTD + Q4 guide (call) Narrowed/lowered high end
Consolidated EBITDA ($M)Q4 2025n/a$80–$90 New
Unallocated expenses ($M)Q4 2025$45–$50 (Q3 guide for Q3) ~$45 Maintained (midpoint)
Free cash flow ($M)FY 2025$110–$130 $110–$130 (maintained) Maintained
Consolidated EBITDA ($M)FY 2026n/a$390–$440 New
FCF qualitativeFY 2026n/aSimilar to 2025 levels New
Share repurchasesFY 2026n/a“expected to continue” New
SSR marginQ4 2025n/aMid–upper 30% EBITDA margin (segment) New
OPG outlookQ4 2025n/aRevenue & OI “decrease significantly” New
MP outlookQ4 2025n/aOI up significantly on lower revenue New
ADTech outlookQ4 2025n/aRevenue & OI up significantly New
IMDS outlookQ4 2025n/aOI down significantly on lower revenue New

Earnings Call Themes & Trends

TopicQ1 2025 (prior)Q2 2025 (prior)Q3 2025 (current)Trend
SSR pricing/utilizationROV utilization 67%; pricing progression; SSR OI +35% YoY Utilization 67%; ROV revenue/day $11,265 ROV revenue/day $11,254; utilization 65%; SSR EBITDA margin ~36% Pricing up, utilization slightly softer
OPG mix & vesselsStrong vessel activity in GoM/West Africa drove OI 22% margin OPG OI +64% YoY; margin 15% Q4 guide: significant YoY declines; do not renew one charter Near-term headwind
Manufactured ProductsInventory reserve hurt Q1; backlog $543M Backlog $516M; margin to 13% Margin 16% on 9% revenue growth; backlog $568M; continued high-margin backlog conversion Margin expansion
ADTech growthLargest initial contract in company history; ramp costs weighed on margin OI +125% YoY; margin 15% Revenue +27%, OI +36%, margin 13%; 2026 led by ADTech Structural growth
Robotics/automation efficiency——Ocean Intervention II enables simultaneous surveys, lower costs, better data quality Technology advantage emerging
Regional outlook (Brazil)——Petrobras market robust; $180M SSR award noted externally; Brazil market share rising Strengthening
Capital returns$10.0M buyback $10.0M buyback; cash $434M $10.1M buyback; cash $506M; repurchases to continue in 2026 Ongoing

Management Commentary

  • “We generated adjusted EBITDA in excess of our guidance range and consensus estimates through solid performance across our segments.” – Rod Larson, CEO .
  • “Ongoing conversion of higher-margin backlog in Manufactured Products… favorable project mix and steady vessel utilization in our Offshore Projects Group… improvement in average ROV revenue per day utilized in Subsea Robotics.” .
  • On Ocean Intervention II: simultaneous operations “decrease fuel usage [and] personnel… more efficient… cross‑checking data… more robust solution” .
  • Brazil outlook: “as big opportunities as we’ve probably ever seen in Brazil… they are first adopters” of technology; market share “continues to increase” .
  • On ADTech: “really low capital intensity… able to scale… without a lot of capital… seeing more international opportunities” (e.g., AUKUS, Taiwan) .

Q&A Highlights

  • Manufactured Products in Q4: Management expects higher OI on lower revenue; emphasis on “quality of earnings” from better‑priced backlog and cost actions; 2026 still benefits from throughput and backlog quality .
  • ADTech cadence: Continued onboarding of contractors; program ramps through 2026–2027; additional opportunities likely but not yet booked .
  • SSR outlook: Q4 EBITDA margin mid–upper 30%; improved survey utilization with projects in U.S. Gulf, Europe, West Africa .
  • Fleet/charter: One international vessel charter to expire and not be renewed to align costs with seasonally lower activity .
  • Regional: Brazil remains robust; technology‑led differentiation underpinning share gains .

Estimates Context

  • Q3 beats: EPS $0.55* vs $0.43*; revenue $742.9M* vs $712.5M*; EBITDA $112.6M* vs $102.9M*. Sequentially higher vs Q2 across all three metrics*. Values retrieved from S&P Global.
  • FY25 consensus implications: With Q4 guided to $80–$90M EBITDA and YTD adjusted EBITDA of ~$311.0M, management’s implied $391–$401M FY25 adjusted EBITDA narrows prior $390–$420M guidance .

Key Takeaways for Investors

  • Mix/margin story intact: Margin expansion in MP and resilient SSR pricing lifted adj. EBITDA above guidance; watch for continued conversion of high‑margin backlog through 2026 .
  • Near-term OPG headwinds: Q4 OPG down significantly on project timing and lack of last year’s international jobs; SSR and ADTech expected to offset partially .
  • 2026 visibility building: Initial FY26 EBITDA guide $390–$440M with FCF similar to 2025; growth led by ADTech, energy businesses stable; ongoing repurchases add support .
  • Brazil a multi‑year growth vector: Robust activity and tech adoption at Petrobras underpin SSR demand and potential share gains .
  • Cash generation and balance sheet: Q3 CFO $101.3M, FCF $77.0M; cash $506M; continued flexibility for buybacks and selective investment .
  • Watch survey and utilization: SSR utilization dipped to 65%, but survey projects and tech (Ocean Intervention II) may improve efficiency and margins into Q4 .
  • Setup: Q4 seasonal/OPG drag could temper prints, but estimate revisions likely move up on Q3 beat and initial FY26 guide; monitor execution on ADTech ramp and MP margin sustainment .