TIDEWATER INC (TDW) Q4 2024 Earnings Summary

Executive Summary

Q4 delivered revenue of $345.1m, diluted EPS of $0.70, Adjusted EBITDA of $138.4m, and vessel operating margin of 50.4%; FX losses of $14.3m reduced net income and EBITDA, partly masking record operational gross margin performance cresting 50% for the first time in ~16 years .
Sequentially, revenue rose ~1% vs Q3 ($340.4m), while diluted EPS fell to $0.70 from $0.87 on FX and higher taxes; average day rate held near flat at ~$22.24k/day .
2025 guide initiated: revenue $1.32–$1.38b and gross margin 48–50%; Q1 2025 expected ~6% revenue decline vs Q4 and ~46% gross margin before utilization lifts in H2; backlog/firm options support ~$973m or ~81% of 2025 midpoint with ~68% of available days covered .
Capital returns scaled: $44.1m Q4 buybacks (max under covenants) and new $90.3m authorization; management still sees repurchases as attractive vs M&A given market valuations .

What Went Well and What Went Wrong

What Went Well
- Gross margin crossed 50% for the first time in ~16 years; management emphasized continued pricing power despite a slow start to 2025: “gross margin cresting the 50% threshold for the first time in nearly 16 years” .
- West Africa and Middle East strengthened: West Africa revenue rose to $107.3m with vessel op margin 67.4% (up ~5 pts q/q); Middle East vessel op margin improved >10 pts q/q on higher day rates/utilization and fewer drydock days .
- Capital allocation: $44.1m buybacks in Q4 and new $90.3m authorization; “desire to repurchase shares at current trading levels remains strong” .
What Went Wrong
- FX headwind: $(14.3)m Q4 FX loss reduced net income and Adjusted EBITDA (with $12.1m non-cash), obscuring underlying operational gains .
- Regional pressure: UK regulatory/tax changes and seasonality pressured leading-edge day rates in the North Sea; Americas and APAC softened sequentially .
- Working capital/DSO: Receivables increased in Q4, mainly Mexico (Pemex); management expects normalization as collections resume .

Financial Results

Headline metrics (oldest → newest)

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Revenue ($mm)	$302.7	$339.2	$340.4	$345.1
Diluted EPS ($)	$0.70	$0.94	$0.87	$0.70
Average Day Rate ($/day)	$18,066	$21,130	$22,275	$22,236
Vessel Operating Margin ($mm)	$141.96	$160.49	$159.83	$173.08
Vessel Operating Margin (%)	47.2%	47.6%	47.2%	50.4%
Adjusted EBITDA ($mm)	$131.27	$139.74	$142.56	$138.39
Free Cash Flow ($mm)	$61.01	$87.57	$66.99	$107.03

Segment vessel revenue ($mm)

Region	Q4 2023	Q3 2024	Q4 2024
Americas	$68.4	$64.6	$60.2
Asia Pacific	$38.6	$56.3	$51.0
Middle East	$38.1	$36.9	$40.8
Europe/Mediterranean	$80.7	$85.3	$84.1
West Africa	$74.6	$95.3	$107.3
Total	$300.5	$338.5	$343.5

KPIs (worldwide, quarterly; oldest → newest)

KPI	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Utilization – Total Fleet (%)	81.5%	80.5%	76.2%	77.6%
Average Day Rate ($/day)	$18,066	$21,130	$22,275	$22,236
Vessel Operating Margin ($mm)	$141.96	$160.49	$159.83	$173.08
Adjusted EBITDA ($mm)	$131.27	$139.74	$142.56	$138.39
Free Cash Flow ($mm)	$61.01	$87.57	$66.99	$107.03

Context and drivers:

Q4 revenue modestly outperformed Q3 on higher utilization; EPS was pressured by FX losses and higher tax; average day rates were essentially flat sequentially .
West Africa and Middle East led growth; Americas and APAC softened due to project timing, seasonality and mix shifts .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	N/A (not provided on Q3)	$1.32–$1.38b	Initiated
Gross Margin	FY 2025	N/A	48%–50%	Initiated
Revenue (seq)	Q1 2025	N/A	~6% decline vs Q4 2024	New near-term outlook
Gross Margin	Q1 2025	N/A	~46%	New near-term outlook
Backlog/Options Coverage	FY 2025	N/A	~$973m; ~81% of midpoint; ~68% of avail. days covered	Initiated
Share Repurchase Authorization	N/A	$42.8m remaining as of Nov’24	New $90.3m authorization (max under covenants)	Increased capacity

Management color: Slow start to 2025 with improving demand into H2; subsea/FPSO activity and lower drydocks in H2 expected to lift utilization and margins; pricing resilience outside UK despite pockets of early-2025 pressure .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q4 2024)	Trend
OSV supply/demand, newbuilds	Contracting strategy short-duration to capture rising day rates; newbuild economics unattractive; orderbook very low	Still early in an inelastic demand stage; few newbuilds (~3% PSV supply); attrition offsets adds; confidence in multi-year tightness	Stable long-term bullish, near-term moderated
UK/North Sea rates, regulatory	Cautioned on visibility; highlighted utilization impacts from project delays	UK regulatory/tax and seasonality pressured leading-edge rates; other regions resilient	Temporary region-specific pressure
Regional dynamics	Q3 utilization declined on start-up delays; strong pricing progression	Strength in West Africa & Middle East; softer Americas & APAC; Malaysia retendering to ease APAC pressure in H2’25	Mixed near-term; improving into H2’25
Subsea/FPSO pipeline	Long-cycle conviction; subsea improvements emerging	Subsea strong; ~15 FPSO installs in 2025; demand accelerates beyond 2025	Positive multi-year driver
Capital allocation	Repurchases ongoing; capacity expected to rise in early 2025	$44.1m Q4 buybacks; new $90.3m authorization; buys favored vs M&A at current relative values	More firepower and bias to buybacks
Refinancing	No immediate need; evaluating options	Opportunistic refi likely after July 2025 as Solstad bonds’ make-whole lapses; targeting unsecured + RCF	Increased probability post July’25
Receivables/DSO	Not highlighted	DSO up mainly from Mexico (Pemex); expected to normalize	Manageable working capital headwind

Management Commentary

“The fourth quarter… came in slightly better than anticipated… gross margin cresting the 50% threshold for the first time in nearly 16 years… Adjusted EBITDA… and net income… adversely impacted by the $14.3 million foreign exchange loss” .
“Visibility for 2025 has improved… relatively slow start… We anticipate revenue, gross margin and free cash flow for 2025 to look similar to or slightly better than 2024” .
“Board has authorized a new share repurchase program… $90.3 million… [and] desire to repurchase shares at current trading levels remains strong” .
“We anticipate fewer offshore rigs working in 2025… Subsea demand remains very strong… FPSO delivery backlog remains an exciting growth driver… newbuild PSVs represent roughly 3% of existing PSV supply” .
“We did see some pressure on leading-edge day rates… in the U.K…. Outside of the U.K., term contracts for our largest PSVs… showing resilience” .

Q&A Highlights

Confidence in 2025 guidance: lessons from 2024; ~81% of revenue covered from backlog with contracting conversations underway for late 2025 .
Backlog cadence/coverage: ~81% revenue coverage and ~68% of days; nearer-term quarters more covered; Americas lighter, Africa/Asia higher .
Receivables: DSO uptick driven by Pemex; expectation for improvement as collections resume .
Drydock cadence: ~5% of vessel days in 2025; some carryover from 2024; engine overhauls higher in 2025 .
Contract strategy: 31 new term contracts in Q4 with ~12-month average duration; still favor short-term to preserve upside into 2026–2027 .
Supply/M&A vs newbuilds: prefer fleet acquisitions; attrition continues; newbuilds still unattractive vs economics/financing .
Debt markets: corporate markets constructive for TDW; newbuild project finance remains limited post-downcycle; contract terms do not justify newbuilds .
APAC/Malaysia: PETRONAS issues resolved; expect retendering post-holidays and normalization in H2’25 .

Estimates Context

We attempted to pull S&P Global consensus for Q4 2024 and FY 2024 (revenue, EPS, EBITDA) but the data was unavailable due to a rate limit at retrieval time. As a result, we cannot present vs-consensus comparisons in this recap. We will update this section when S&P Global data becomes accessible [Values retrieved from S&P Global were unavailable at query time].

Metric	Q4 2024 Consensus (S&P Global)	Actual	Surprise
Revenue ($mm)	Unavailable	$345.1	N/A
Diluted EPS ($)	Unavailable	$0.70	N/A
Adjusted EBITDA ($mm)	Unavailable	$138.4	N/A

Key Takeaways for Investors

Underlying operations are strong despite FX/tax noise: revenue and vessel operating margin improved sequentially; average day rates remain near record levels, and gross margin crossed 50%—a first in ~16 years .
Near-term softness; H2 setup improving: management guides a ~6% Q1 revenue dip and ~46% gross margin on seasonality and project timing, then better utilization/margins into H2 as subsea/FPSO work ramps and drydocks ease .
Regional bifurcation persists: UK/North Sea rates under pressure from regulatory/tax and seasonality; West Africa and Middle East continue to strengthen with higher day rates/utilization .
Structural supply tailwinds intact: newbuild PSVs ~3% of fleet with financing constraints; expected vessel attrition supports sustained pricing power through 2026–2027 .
Capital allocation remains shareholder-friendly: $44.1m Q4 repurchases and new $90.3m authorization; management prefers buybacks vs M&A at current relative values .
Balance sheet optionality expanding: potential refinancing post-July 2025 as make-whole lapses, targeting unsecured structure plus sizeable revolver; no near-term maturities .
Watch list: UK rate trends; Pemex collections; APAC Malaysia retendering; H2 utilization inflection; backlog conversion and incremental term pricing vs printed rates .