TIDEWATER INC (TDW) Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 delivered solid fundamentals: revenue $333.44M (+3.8% YoY), record average day rate $22,303, gross margin ~50.1%, and diluted EPS $0.83 . Against S&P Global consensus, TDW beat on revenue (+$7.5M) and EPS (+$0.25), but missed on EBITDA using SPGI’s definition (see Estimates Context; values from S&P Global).*
• FY25 guidance reiterated: revenue $1.32–$1.38B and gross margin 48–50%; management guided Q2 revenue down ~5% sequentially and Q2 gross margin to ~44% before a back‑half utilization uplift .
• Capital allocation: 2.3M shares repurchased YTD through Apr 14 for $90.0M and ~180k shares net‑settled for employee taxes ($7.5M); Feb 27 board authorization added $90.3M to buyback capacity, which the company has now fully utilized under bond limitations .
• Strategic setup: no project cancellations to date; OSV newbuild discussions have “largely ceased” with modest orderbook (<~3%) and deliveries pushed to late 2026–2027—supportive for intermediate‑term day rates as demand recovers (Brazil, subsea, FPSOs) .

What Went Well and What Went Wrong

• What Went Well

  • “First quarter came in nicely ahead of expectations,” with revenue $333.4M, record day rate $22,303, and gross margin 50.1% .
  • FX tailwind: $7.6M gain aided net income and Adjusted EBITDA in Q1 alongside lower‑than‑expected down‑for‑repair days .
  • Regional execution: day rates up in Americas (+~8%) and Middle East (+~5%) QoQ; vessel operating margin hovered ~50% .

• What Went Wrong

  • Near‑term “air pocket”: Q2 revenue guided ~5% QoQ lower and gross margin to 44% on seasonality and higher idle/repair/fuel costs tied to downtime .
  • Regional mixed picture: North Sea remains soft; Americas utilization weaker; Malaysia only gradually normalizing; PEMEX receivable stood at $35.1M, though no write‑offs expected historically .
  • Drydock drag remains H1‑weighted: 72% of 2025 drydock days expected in H1; Q1 cash drydock outlay was $43.3M .

Financial Results

Segment revenue ($M)

Key KPIs

Notes: Free cash flow is non‑GAAP as defined by the company .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “The first quarter of 2025 came in nicely ahead of expectations… average day rate… set a new quarterly day rate record at $22,303… we achieved a 50.1% gross margin” .
• “Offshore vessel supply remains in a favorable position… newbuild capacity largely inactive” .
• “Newbuild discussions have largely ceased… modest number of newbuilds… deliver until late‑2026… likely into 2027” .
• “We are reiterating our full year revenue guidance of $1.32 billion to $1.38 billion and a full year gross margin range of 48% to 50%… anticipate revenue to decline about 5% sequentially [in Q2]… Q2 gross margin of 44%” .
• “Our firm backlog and options represent $848 million of revenue for the remainder of 2025… ~70% of available days captured” .

Q&A Highlights

• Brazil tender and pricing: Some of the 18 Petrobras vessels are incremental; pricing could trend toward high‑$50Ks/day (newbuild references), tightening North Sea supply as PSVs exit .
• Stacking costs negligible: 6 stacked vessels (mostly small “Alicats”) in West Africa; non‑core class with “de minimis” stacking cost .
• Tendering timelines: Subsea contractors ~1 quarter ahead; Petrobras‑type large tenders can take 3–6 months; generally 2–3 quarters’ visibility on utilization .
• Receivables: PEMEX owed $35.1M at Mar 31; historically no write‑offs; monitoring continues .
• Debt structure: Shareholder distribution limited by Nordic bond indentures; first call price step‑down in July 2025; evaluating opportunistic refinancing .

Estimates Context

S&P Global consensus vs actuals (SPGI framework)*

Primary EPS

Revenue ($M)

EBITDA ($M, SPGI definition)

Notes: Company‑reported Adjusted EBITDA was $154.2M in Q1 2025 and $138.4M in Q4 2024, which differ from SPGI’s EBITDA definition . Actuals per company releases: revenue $333.44M (Q1’25), $345.09M (Q4’24); diluted EPS $0.83 (Q1’25), $0.70 (Q4’24) . Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

• Near‑term setup: Expect a Q2 margin and revenue dip (44% GM; −5% seq revenue) before a back‑half utilization rebound; positioning favors H2 print momentum if downtime/drydock normalizes .
• Demand drivers intact: No cancellations; Brazil tenders (up to 18 OSVs), robust subsea/FPSO pipeline, and tight Middle East support intermediate‑term day‑rate resilience .
• Supply‑side tailwind: Newbuild dialogue has “largely ceased”; limited orderbook with deliveries pushed to 2026–2027 underpins pricing power into a recovery .
• Capital return optionality: Buybacks constrained near‑term by bond covenants (capacity fully utilized), but allowance may rise intra‑year; potential refinancing after July first‑call step‑down could enhance flexibility .
• Watch regional cadence: North Sea softness persists until supply tightens; APAC/Malaysia improving into H2; West Africa strong; Americas mixed .
• Working capital watch: PEMEX receivable ($35.1M) bears monitoring, though history of collection is supportive .
• Sensitivities: Results remain levered to downtime (DFR), drydock timing (72% H1), and FX; management is using short‑term contracting to capture upside as markets tighten .

Additional data references

• Consolidated results and KPIs from the Q1 2025 press release and 8‑K exhibit .
• Q4 2024 baseline (for sequential comparisons) from Feb 27, 2025 8‑K .
• Q1 2025 earnings call transcript for guidance/backlog and regional color .

Disclaimer: Values marked with * are retrieved from S&P Global.