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OIL STATES INTERNATIONAL, INC (OIS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered resilient profitability amid softer revenues: revenue $159.9M (-3% q/q, -4% y/y), net income $3.2M ($0.05 diluted EPS), and adjusted EBITDA $18.7M (flat q/q) .
  • Backlog hit a decade-high $357M with bookings of $136M and a 1.5x book-to-bill, underpinned by Brazil deepwater awards; Offshore Manufactured Products revenue was seasonally lower on timing of backlog conversion .
  • Versus consensus: GAAP EPS beat by $0.01 ($0.05 vs $0.04*) and adjusted EBITDA beat; revenue missed ($159.9M vs $164.1M*) — mix and timing drove the shortfall while offshore/international strength supported margins .
  • Guidance held: FY25 revenue $700–$735M and EBITDA $88–$93M maintained; Q2 2025 guided to revenue $170–$180M and EBITDA $20–$22M; management highlighted tariff uncertainty and April WTI decline as macro headwinds but expects offshore/international to stay robust .
  • Cash flow catalyst: $9M operating cash flow despite usual Q1 seasonality; opportunistic buybacks ($5.3M in Q1) and low net debt position support capital returns and potential downside support .

What Went Well and What Went Wrong

What Went Well

  • Backlog and bookings strength: backlog $357M, bookings $136M, book-to-bill 1.5x; “Our backlog is at its highest level since September 2015,” driven by Brazil deepwater and growing Batam capacity .
  • CPS margin recovery and Gulf operations: CPS adjusted EBITDA margin rose to 25% from 12% on stronger Gulf activity and cost actions; “major driver of the improvement… strong recovery… in the Gulf operations” .
  • Positive operating cash flow in a seasonally weak quarter: $9M operating cash flow reversed typical Q1 working capital headwinds; “we reversed that trend this quarter” .

What Went Wrong

  • Revenue softness and offshore timing: consolidated revenue down 3% q/q and 4% y/y, with Offshore Manufactured Products revenue down 14% q/q due to timing of project conversion from backlog .
  • U.S. land demand still weak y/y: U.S. land revenue up 16% q/q but down 20% y/y, reflecting exit of underperforming service lines and softer domestic completions .
  • Tariffs and macro volatility: management flagged broad-based U.S. tariffs, retaliations, and OPEC+ production plans; April WTI fell ~20%, adding uncertainty to demand/supply; OIS is mitigating via sourcing/pricing but Downhole perforating inputs face cost increases .

Financial Results

Consolidated P&L vs prior year and prior quarter

MetricQ1 2024Q4 2024Q1 2025
Revenue ($M)$167.3 $164.6 $159.9
Net Income ($M)$(13.4) $15.2 $3.2
Adjusted Net Income ($M)$(1.9) $5.5 $3.9
Adjusted EBITDA ($M)$15.5 $18.7 $18.7
Diluted EPS ($)$(0.21) $0.24 $0.05
Adjusted Diluted EPS ($)$(0.03) $0.09 $0.06

Margins (consolidated)

MetricQ1 2024Q4 2024Q1 2025
Adjusted EBITDA Margin (%)9.2% (15.5/167.3) 11.4% (18.7/164.6) 11.7% (18.7/159.9)

Segment revenue and operating income

SegmentQ1 2024 Revenue ($M)Q4 2024 Revenue ($M)Q1 2025 Revenue ($M)Q1 2024 Op Inc ($M)Q4 2024 Op Inc ($M)Q1 2025 Op Inc ($M)
Offshore Manufactured Products$86.9 $107.3 $92.6 $10.6 $21.0 $14.3
Completion & Production Services$47.3 $30.1 $34.5 $(0.4) $(4.0) $3.5
Downhole Technologies$33.1 $27.3 $32.8 $(12.1) $(4.0) $(2.1)
Corporate———$(9.3) $5.5 $(10.0)

Revenue by destination (mix)

DestinationQ1 2024 ($M)Q4 2024 ($M)Q1 2025 ($M)
Offshore & International$100.2 $118.2 $106.2
U.S. Land$67.1 $46.4 $53.7

KPIs (backlog/bookings/book-to-bill)

KPIQ3 2024Q4 2024Q1 2025
Backlog ($M)$313 $311 $357
Bookings ($M)$112 $113 $136
Book-to-Bill (x)1.1x 1.1x 1.5x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($M)FY 2025$700–$735 $700–$735 Maintained
EBITDA ($M)FY 2025$88–$93 $88–$93 Maintained
Revenue ($M)Q2 2025N/A$170–$180 New
EBITDA ($M)Q2 2025N/A$20–$22 New
Cash from Operations ($M)FY 2025N/A$65–$75 New
Capital Expenditure ($M)FY 2025N/A~$25 New
Share Repurchase AuthorizationThrough Oct 2026$50M $50M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Offshore/international cycleBacklog + bookings rising; offshore resilience; MPD IRJ adoption Offshore resilience; backlog $311M; 1.1x book-to-bill Backlog at decade-high $357M; bookings $136M; deepwater Brazil award >$25M Strengthening
U.S. land optimizationFacility exits, impairments, patent defense; hurricane delays in Gulf Continued restructuring; exited commoditized lines CPS margins up; charges smaller; better Gulf activity Improving margins post-optimization
Gulf of America operationsStorm delays; recovery expected in Q4 Slow to recover in Q4 Strong recovery in Q1; supports CPS margins ~25% Recovering
Tariffs/macroNot a major themeMentioned as risk in cautionary language Detailed mitigation; April WTI down ~20%; pricing adjustments expected Heightened focus
Technology initiativesMPD IRJ acceptance MPD IRJ outlook strong TowerLok™ wins 2025 OTC Spotlight award; MPD IRJ progress incl. Seadrill collaboration Continuing innovation
Capacity expansion——Batam, Indonesia expansion to meet demand Expanding capacity
Capital allocationShare repurchases initiated; new $50M authorization Repurchased $9.1M; net debt reduced $5.3M repurchased; opportunistic buybacks; low net debt Active returns

Management Commentary

  • Cindy Taylor (CEO): “We reversed [seasonal] trend this quarter by generating $9 million of cash flow from operations… Our backlog is at its highest level since September 2015… we received a 2025 Spotlight on New Technology® Award for our TowerLok™ Wind Tower Connector.”
  • On tariffs and macro: “In April the spot price of WTI crude oil declined approximately 20%… we are closely monitoring and adjusting our material sourcing strategies and customer pricing decisions during this volatile trade environment.”
  • Lloyd Hajdik (CFO): “Adjusted consolidated EBITDA of $19 million… cash flows from operations expected to range between $65 million and $75 million for the full year and planned CapEx is expected to total $25 million… we plan to be very opportunistic regarding share repurchases.”
  • Q2 and FY25 guidance: “We are not changing our annual guidance… Our guidance for the upcoming quarter suggests revenue $170–$180 million with EBITDA $20–$22 million.”

Q&A Highlights

  • Offshore long-cycle demand: Management emphasized multiyear development programs (Brazil deepwater) less sensitive to short-term price swings; strong bookings early in the year increase guidance confidence .
  • CPS margin sustainability: Q1 CPS EBITDA margin ~25% driven by Gulf recovery and cost actions; targeting “20% or slightly above” for FY25 .
  • Capital allocation: With stock depressed and converts trading below par, priorities are share repurchases and debt reduction ahead of 2026 maturity .
  • Tariff impact quantification: Expected perforating-related input cost increases in a mid-single-digit to ~10% range, largely pass-throughable as competitors face similar inputs .

Estimates Context

  • Q1 2025 vs consensus:

    • GAAP Diluted EPS: $0.05 vs $0.04* → bold beat ($0.01)
    • Adjusted Diluted EPS: $0.06 vs $0.04* → bold beat ($0.02)
    • Revenue: $159.9M vs $164.1M* → bold miss ($4.2M)
    • Adjusted EBITDA: $18.7M vs $17.5M* → bold beat ($1.2M)

  • Q2 2025 guidance vs consensus:

    • Revenue guidance $170–$180M vs consensus $170.7M*
    • EBITDA guidance $20–$22M vs consensus $21.0M*

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Backlog and bookings momentum (Brazil deepwater, global offshore) provide multi-quarter visibility; supportive for valuation on a through-cycle basis .
  • CPS margin recovery to ~25% in Q1 and 20%+ target for FY25 improve consolidated margin profile; continued Gulf strength is a key driver to monitor .
  • Q1 print was mixed vs consensus (EPS/EBITDA beats; revenue miss) largely due to offshore project timing — watch conversion cadence and mix in coming quarters .
  • FY25 guidance maintained despite tariff and WTI volatility; management’s mitigation (bonds, sourcing shifts, pricing) suggests limited impact ex-Downhole perforating .
  • Cash generation and buybacks are tangible catalysts; $9M Q1 CFO in a seasonally weak quarter plus opportunistic repurchases support downside and potential multiple re-rating .
  • Capacity expansion in Batam and continued technology wins (TowerLok™, MPD IRJ with Seadrill) enhance competitive positioning in offshore .
  • Near-term trading: stock likely sensitive to tariff headlines and oil price moves; medium-term thesis rests on offshore cycle durability and margin uplift from optimized U.S. land footprint .