Sign in

You're signed outSign in or to get full access.

OS

OIL STATES INTERNATIONAL, INC (OIS)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered mixed results: GAAP net income of $15.2M ($0.24 diluted EPS) benefited from a $15.3M facility sale gain; adjusted net income was $5.5M ($0.09 EPS) with consolidated revenues of $164.6M and adjusted EBITDA of $18.7M. Sequential revenue declined 6% and adjusted EBITDA declined 13% due to lower U.S. land activity and exited service lines; offshore/international remained resilient .
  • Offshore Manufactured Products grew 5% QoQ to $107.3M revenue with 23% adjusted segment EBITDA margin; bookings rose to $113M and backlog ended at $311M, supporting strong 2025 visibility. U.S. land-driven segments (Completion & Production Services, Downhole) remained pressured but show margin improvement potential as restructuring actions take hold .
  • 2025 guidance introduced: revenue $700–$735M, EBITDA $88–$93M; Q1 2025 guidance: revenue $160–$170M, EBITDA $17.5–$18.5M. FY 2025 cash from operations $65–$75M and CapEx ~$25M, enabling ongoing share repurchases under the $50M authorization .
  • Stock-relevant narrative: offshore/international strength (Latin America, Asia, Africa), market adoption of MPD integrated riser joint, and cost/portfolio optimization in U.S. land; capital returns via buybacks favored over debt reduction per management, a potential sentiment tailwind .

What Went Well and What Went Wrong

  • What Went Well

    • Offshore Manufactured Products: revenue +5% QoQ to $107.3M, adjusted segment EBITDA +6% QoQ to $24.7M; bookings $113M, backlog $311M, book-to-bill 1.1x; “our offshore and international operations were very resilient” — Cindy Taylor .
    • Technology traction: managed pressure drilling integrated riser joint gained customer approval in South America; leadership highlighted FPSO connector opportunities (“$15–$25M order of magnitude”) and MPD demand .
    • Cash generation and capital returns: cash from operations $18.2M; free cash flow $29.3M in Q4; repurchased $9.1M of stock; facility sale delivered $24.8M proceeds and a $15.3M gain .

  • What Went Wrong

    • U.S. land weakness: consolidated revenues down 6% QoQ driven by lower land activity and exited service lines; CPS revenue fell 25% QoQ to $30.1M; Downhole revenue fell 15% QoQ to $27.3M .
    • Margin pressure: adjusted consolidated EBITDA down 13% QoQ to $18.7M; CPS adjusted segment EBITDA down 35% QoQ to $3.5M; Downhole near breakeven adjusted segment EBITDA ($0.1M) .
    • Non-GAAP headwinds/charges: Q4 included $3.1M of restructuring and other costs (and patent enforcement costs earlier in H2); GAAP earnings relied on a one-time $15.3M gain from facility sale .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$208.266 $174.348 $164.595
Net Income ($USD Millions)$5.963 $(14.349) $15.164
Diluted EPS (GAAP, $)$0.09 $(0.23) $0.24
Adjusted Net Income ($USD Millions)$7.071 $2.696 $5.537
Adjusted Diluted EPS ($)$0.11 $0.04 $0.09
Operating Income (EBIT) ($USD Millions)$7.830 $(11.041) $18.484
Adjusted EBITDA ($USD Millions)$23.978 $21.531 $18.734

Segment breakdown

Segment MetricQ4 2023Q3 2024Q4 2024
Offshore Manufactured Products Revenue ($USD Millions)$126.489 $102.234 $107.253
Offshore Operating Income ($USD Millions)$24.167 $19.310 $21.009
Offshore Adjusted Segment EBITDA ($USD Millions)$28.838 $23.303 $24.748
Offshore Adjusted Segment EBITDA Margin (%)23% 23% 23%
Completion & Production Services Revenue ($USD Millions)$51.208 $40.099 $30.090
CPS Operating Income (Loss) ($USD Millions)$(1.102) $(18.267) $(4.004)
CPS Adjusted Segment EBITDA ($USD Millions)$5.903 $5.413 $3.545
CPS Adjusted Segment EBITDA Margin (%)12–13% (13% Q3) 13% 12%
Downhole Technologies Revenue ($USD Millions)$30.569 $32.015 $27.252
Downhole Operating Income (Loss) ($USD Millions)$(5.726) $(3.653) $(4.031)
Downhole Adjusted Segment EBITDA ($USD Millions)$(1.420) $1.078 $0.131

Destination mix

Destination RevenueQ4 2023Q3 2024Q4 2024
Offshore & International ($USD Millions)$135.885 $113.856 $118.187
U.S. Land ($USD Millions)$72.381 $60.492 $46.408

KPIs and cash metrics

KPIQ2 2024Q3 2024Q4 2024
Bookings ($USD Millions)$101 $112 $113
Backlog ($USD Millions)$300 $313 $311
Book-to-Bill (x)1.0x 1.1x 1.1x
Cash from Operations ($USD Millions)—$28.8 $18.2
Free Cash Flow ($USD Millions)——$29.3
Share Repurchases ($USD Millions)—$3.0 $9.1

Notes:

  • Q4 GAAP EPS included a $15.3M facility sale gain ($12.1M after-tax, $0.20/share) and $3.1M restructuring charges ($2.5M after-tax, $0.04/share); adjusted EPS excludes these .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025—$700–$735 New
EBITDA ($USD Millions)FY 2025—$88–$93 New
Revenue ($USD Millions)Q1 2025—$160–$170 New
EBITDA ($USD Millions)Q1 2025—$17.5–$18.5 New
Cash from Operations ($USD Millions)FY 2025—$65–$75 New
CapEx ($USD Millions)FY 2025—~$25 New
Share Repurchase AuthorizationThrough Oct 2026Prior authorization replaced$50M authorization (Oct 2024) Raised/extended
Adjusted EBITDA ($USD Millions)Q4 2024$20–$23 (Q3 guide) Actual: $18.7 Miss vs guide

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 & Q3)Current Period (Q4)Trend
MPD technology & integrated riser jointCollaboration with Seadrill; initial deliveries; annual MPD revenue potential $35–$45M (Q3) Further market acceptance; customer approval in South America; incremental demand outlook (Q4) Strengthening adoption
Offshore/international demand & backlogBookings/backlog building; Latin America/Asia/Africa leadership; OMP margins targeted ~19–20% (Q2/Q3) Backlog $311M; bookings $113M; OMP margins 23% and planning revenue growth despite “flattish” macro (Q4) Solid growth & visibility
U.S. land restructuring/marginsExited underperforming sites; Well Site renamed; CPS low 20% EBITDA margins targeted (Q2) CPS EBITDA margins targeted ~19–20% in 2025; drag from exited operations quantified; patent disputes settled (Q4) Improving mix/margins
Regional trends (Gulf of Mexico)Q3 storms caused temporary delays; expected resumption (Q3) Gulf completions recovered early 2025; selective high-margin offshore work continues (Q4) Recovery underway
Cost optimization & manufacturing footprintSingapore→Batam relocation to lower costs (Q2) Baton/Batam facilities supporting market share gains; throughput quality and absorption key (Q4) Structural cost tailwinds
Capital allocation (FCF, buybacks vs debt)Deleveraging progress; new $50M buyback authorization (Q3) Preference for buybacks over debt paydown; net debt comfortable; FCF to fund returns (Q4) Return-focused stance
Legal/patent enforcementPatent defense costs in CPS (Q2/Q3) Patent disputes settled in Q4; residual costs noted (Q4) Headwind abating

Management Commentary

  • “Our offshore and international operations were very resilient in terms of revenue, Adjusted EBITDA and bookings during the fourth quarter... offset by ongoing declines in our U.S. land driven operations due to extensive holiday slowdowns.” — Cindy Taylor .
  • “Backlog totaled $311 million as of December 31, 2024... bookings increased 1% sequentially, totaling $113 million... book-to-bill ratio of 1.1x.” — Cindy Taylor .
  • “We favor share repurchases. No shareholder pays us to sit on cash... it is prudent to focus on shareholder returns.” — Cindy Taylor .
  • “Given a solid offshore and international outlook... we expect 2025 full year revenues to range between $700 million and $735 million and full year EBITDA to range between $88 million and $93 million.” — Cindy Taylor .
  • “During the quarter, we generated cash flows from operations totaling $18 million and repurchased $9 million of our common stock.” — Lloyd Hajdik .

Q&A Highlights

  • Free cash flow deployment: Management emphasized comfort with debt levels and a preference for buybacks over building cash or debt reduction, citing net debt around $45M in January after large collections .
  • Offshore FPSO opportunity sizing: For key connectors per FPSO, management framed a $15–$25M range, reinforcing production-infrastructure orientation and 2025 offshore revenue growth plans grounded in bidding/backlog .
  • CPS margin trajectory: Targeting ~19–20% 2025 EBITDA margin, driven by exits of low/no-margin lines and a more offshore/international mix (Middle East and Gulf of America) .
  • U.S. land activity outlook: Selective exposure (frac/isolation, extended reach) with new valve automation offerings; early 2025 saw incremental frac fleets; capital allocation remains targeted .
  • Backlog conversion and margins: OMP margins sustainable in low-20s with mix/throughput; ~75% of backlog typically converts within 12 months and service/repair work provides additional non-backlog revenue base (from prior quarter context) .

Estimates Context

  • S&P Global consensus estimates were not accessible at the time of request due to provider limits; therefore, numerical comparisons to Street estimates are unavailable. We anchor evaluation to company-reported results and guidance and note the lack of consensus data from S&P Global for this period [SPGI error].

Key Takeaways for Investors

  • Offshore/international strength is intact and building: OMP delivered 23% adjusted segment EBITDA margins, bookings rose, and backlog sustained at $311M — this underpins 2025 revenue/EBITDA guidance and supports multiple expansion if execution persists .
  • U.S. land drag likely moderates: CPS and Downhole saw sequential declines, but restructuring, exits, and product innovation (Active Seat valves, automation, EPIC perforating) are positioned to improve margins and mix through 2025 .
  • Capital returns are a focus: Q4 buybacks of $9.1M and reiterated preference for repurchases over debt reduction; $50M authorization provides an ongoing return lever alongside improved free cash generation .
  • One-time GAAP uplift: The $15.3M facility sale gain lifted GAAP EPS; adjusted EPS and EBITDA better reflect underlying performance trends; investors should focus on adjusted metrics and segment mix evolution .
  • Near-term setup: Q1 2025 guide (revenue $160–$170M; EBITDA $17.5–$18.5M) suggests a steady start, with offshore/international carrying momentum while land normalizes post-holiday; watch CPS margin cadence and Downhole breakeven/profitability .
  • Medium-term thesis: MPD adoption, FPSO/production connector demand in Latin America/Asia/Africa, lower-cost manufacturing footprint (Batam) and backlog conversion support revenue growth and margin resilience; execution on technology rollout and contract wins can be catalysts .
  • Risk watch: U.S. land activity volatility, tariff/macros, and timing of offshore orders; patent enforcement costs now settled, reducing a headwind; maintain attention to mix shifts and any backlog/pricing changes .