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TETRA TECHNOLOGIES INC (TTI)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue of $153.24M rose 8% YoY and beat S&P Global consensus by ~23% (estimate $124.7M); EPS matched consensus ($0.04 adjusted EPS vs estimate $0.04), while GAAP EPS was $0.03 [* Values retrieved from S&P Global].
  • Adjusted EBITDA was $25.0M (+7% YoY), with margin at 16.3% (down from 20.6% in Q2) as seasonal calcium chloride strength faded and deepwater project cadence normalized sequentially .
  • 2025 guidance raised for Adjusted EBITDA ($107–$112M from $100–$110M) and revenue ($620–$630M from $610–$630M); GAAP pre-tax income lowered to $19–$27M (from $21–$34M) due to an ~$8M expected non-cash office lease charge and resulting savings of ~$2M/year going forward .
  • Strategic catalysts: FEED completed for 25,000 bbl/day Oasis produced-water desalination plant (commercial discussions underway), Argentina wins to double 2026 revenue locally, Eos electrolyte volumes expected to materially ramp in early 2026, and continued deepwater strength across Gulf of America, Brazil, and Norway .

What Went Well and What Went Wrong

What Went Well

  • Completion Fluids & Products revenues up 39% YoY with 30.5% adjusted EBITDA margin; drivers include three CS Neptune wells, zinc-bromide demand, Brazil deepwater, and Northern Europe calcium chloride .
  • FEED completed for first commercial 25k bbl/day Oasis desalination facility; capital and operating cost assumptions validated, enabling contract discussions with multiple NDA customers; management “remain confident” in first contract in early 2026 .
  • Balance sheet and cash discipline: Q3 operating cash flow $16.4M; base business adjusted FCF $5.4M; liquidity $208M and net leverage 1.2x; CFO: “focus on generating cash from the base business by managing inventory and receivables” .

Quotes:

  • “Our employees delivered another strong quarter… adjusted EBITDA of $93 million for the first nine months of 2025” .
  • “We remain confident in signing our first [Oasis] contract in early 2026” .
  • “Working capital was $113 million… DSO has improved two days… highlights the focus we have on generating cash” .

What Went Wrong

  • Sequential margin compression: adjusted EBITDA margin fell to 16.3% from 20.6% in Q2 as seasonal calcium chloride strength waned and fewer Neptune completions in Q3 vs Q2 .
  • Water & Flowback Services revenue down 18% YoY amid continued U.S. frac activity declines; despite margin improvement to 11.9%, volume headwinds persist (Primary Vision frac spreads: -12% seq, -27% vs Q2’24) .
  • GAAP pre-tax income guidance lowered due to ~$8M non-cash office lease charge to facilitate a move (though future lease expense decreases by ~$2M/year) .

Financial Results

Consolidated Results vs Prior Periods

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$141.70 $157.14 $173.87 $153.24
GAAP EPS ($)($0.02) $0.03 $0.08 $0.03
Adjusted EPS ($)$0.03 $0.11 $0.09 $0.04
Adjusted EBITDA ($USD Millions)$23.50 $32.27 $35.88 $25.04
Adjusted EBITDA Margin (%)16.6% 20.5% 20.6% 16.3%
Net Cash from Operating Activities ($USD Millions)$19.87 $3.94 $48.33 $16.37
Base Business Adjusted FCF ($USD Millions)$14.99 $15.41 $37.35 $5.37

Notes:

  • Q3 2025 YoY growth: Revenue +8%, Adjusted EBITDA +7%; sequentially revenue -12% and margin -430 bps on seasonal and project timing .

Segment Performance

SegmentMetricQ3 2024Q2 2025Q3 2025
Completion Fluids & ProductsRevenue ($USD Millions)$65.13 $109.45 $90.26
Completion Fluids & ProductsAdjusted EBITDA ($USD Millions)$20.63 $40.11 $27.56
Completion Fluids & ProductsAdjusted EBITDA Margin (%)31.7% 36.7% 30.5%
Water & Flowback ServicesRevenue ($USD Millions)$76.57 $64.43 $62.98
Water & Flowback ServicesAdjusted EBITDA ($USD Millions)$11.20 $6.40 $7.52
Water & Flowback ServicesAdjusted EBITDA Margin (%)14.6% 9.9% 11.9%

KPIs and Balance Sheet

KPIQ3 2024Q1 2025Q2 2025Q3 2025
Cash & Equivalents ($USD Millions)$49.01 $41.05 $68.80 $67.20
Liquidity ($USD Millions)—$208 (as of quarter-end) $204 (quarter-end); $218 as of 7/28 $208 (quarter-end); $218 as of late Oct
Net Debt ($USD Millions)$142.71 $139.10 $111.76 $113.78
Net Leverage (Debt covenant, x)—1.5x 1.2x 1.2x
Capital Expenditure ($USD Millions)$14.57 $17.96 $19.49 $15.74

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP Income Before Taxes ($USD Millions)FY 2025$21–$34 $19–$27 Lowered (non-cash lease charge)
Adjusted EBITDA ($USD Millions)FY 2025$100–$110 $107–$112 Raised
Revenue ($USD Millions)FY 2025$610–$630 $620–$630 Raised lower bound
Office Lease ImpactFY 2025/ongoing—~$8M non-cash charge; ~$2M annual lease expense reduction thereafter New disclosure

Earnings Call Themes & Trends

TopicQ1 2025 (Apr 29)Q2 2025 (Jul 30)Q3 2025 (Oct 29)Trend
Deepwater completion activityFirst Neptune well; strong outlook; seasonality ahead Record H1 deepwater jobs; new 20K Gulf award; strong H2/Y26 outlook Confidence in 2026–2027 Neptune pipeline; Brazil, Gulf, Norway strength Positive multi‑year
Industrial calcium chlorideStart of Europe season; margin lift New high for 10th consecutive quarter Robust Northern Europe results continue Structural strength
Water & Flowback automationSandStorm/Auto-Drillout utilization; margins resilient Fully utilized; margins pressured by non-recurring costs Margins improved to 11.9%; tech penetration aiding Improving efficiency
Oasis produced-water desalinationCommercial launch; pilot with EOG; regulatory momentum First commercial plant design underway; FEED to enable contracting FEED completed; expect first contract early 2026 Execution milestones achieved
Regulatory support (EPA/Texas)EPA review; TX law enabling reuse (HB49) Reinforced regulatory tailwinds (EPA, TX HB49) Permitting facilitation via customers; constructive regulators Supportive tailwinds
Electrolytes/Eos (AI grid demand)Automation lines expected to drive volumes; PureFlow advantages Bulk tanker loading installed; material 2026 ramp expected Significant increase in 2026 volumes expected; weekly coordination 2026 inflection
Argentina/Middle East expansion—Ops wins in Argentina; SandStorm award in KSA Argentina contracts doubling 2026 revenue; KSA foothold International growth
CFO succession——Planned CFO retirement; Matt Sanderson to assume; advisory continuity Smooth transition

Management Commentary

  • “Third quarter Completion Fluids and Products revenues increased 39% compared to the previous year period… adjusted EBITDA margins were 30.5%” .
  • “We remain confident in signing our first [Oasis] contract in early 2026” .
  • “We ended the third quarter with $67 million of cash on hand and a net leverage ratio of 1.2 times” .
  • “We expect a significant increase in electrolyte volumes in early 2026” .
  • “Our goal is to more than double revenue to over $1.2 billion and triple adjusted EBITDA to over $300 million by 2030” .

Q&A Highlights

  • Oasis FEED next steps: detailed engineering likely to start ahead of contracts; customers evaluating economics with seven NDAs in place .
  • Completion Fluids sequential step-down drivers: primarily European calcium chloride seasonality and fewer Neptune jobs; Brazil activity offset part of the decline .
  • Offshore outlook: high confidence in deepwater across Gulf of America, Brazil, Norway; Neptune likely in 2026 with strong pipeline .
  • Eos electrolyte ramp: weekly coordination; 30-day PO fulfillment capability; bulk tanker logistics ready in West Memphis .
  • International growth catalysts: Argentina SandStorm/testing wins (expected to double 2026 revenue locally); initial SandStorm work in Saudi Arabia as a multi-year foothold .

Estimates Context

TTI vs S&P Global consensus (Q3 2025):

MetricConsensusActualSurprise
Revenue ($USD Millions)$124.70*$153.24 +22.8% (beat)
Primary EPS ($)$0.04*$0.04 In‑line
EBITDA ($USD Millions)$20.30*$20.62*+$0.32M (beat)

Notes:

  • Company-reported Adjusted EBITDA was $25.04M (non-GAAP), which differs from S&P Global’s EBITDA definition; consensus comparisons use S&P Global figures .
  • Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Strong top-line beat and in-line EPS indicate resilient demand in Completion Fluids, but sequential margin normalization highlights sensitivity to deepwater timing and seasonal calcium chloride patterns; watch Q4 project cadence .
  • Guidance lift for Adjusted EBITDA and revenue, with a non-cash lease charge depressing GAAP pre-tax guidance, suggests underlying operating strength; lease reset lowers run-rate corporate expenses by ~$2M/year .
  • Oasis desalination moved from R&D to commercialization readiness (FEED complete), with potential first contract early 2026 and modular scale (25k bbl/day trains), a material medium-term earnings driver .
  • 2026 setup improving: Argentina doubling local revenue, Middle East entry, full-year Brazil deepwater award, expected Eos electrolyte ramp; deepwater completion activity remains a multi-year growth theme .
  • Cash discipline and sub‑2x leverage goal intact; liquidity at $208–$218M and net leverage at 1.2x provide optionality to fund Arkansas bromine Phase 1 and growth without dilution per CFO remarks .
  • Monitor tariff impacts and frac activity weakness in U.S. onshore (headwind for Water & Flowback volumes); continued automation penetration is helping sustain double-digit margins .
  • Near-term trading: positive reaction likely tied to topline beat and guidance raise; medium-term thesis hinges on executed commercial contracts for desalination, electrolyte volumes materialization, and sustained deepwater project flow .