Executive Summary

Q4 2024 was in line with internal expectations: revenue fell 5% sequentially to $134.5M, Adjusted EBITDA was $22.8M (17.0% margin), and GAAP diluted EPS from continuing operations was $0.77, boosted by a $97.5M non‑cash deferred tax valuation allowance release; adjusted EPS was $0.03 .
Offshore strength (13 deepwater completion jobs vs. 11 in Q3) and record Industrial Chemicals performance offset a more severe-than-normal year-end slowdown in U.S. land; Water & Flowback delivered 13.6% segment EBITDA margin despite lower activity .
Management introduced first-half 2025 guidance: net income before taxes $19M–$34M and Adjusted EBITDA $55M–$65M, citing Gulf of Mexico CS Neptune, Brazil deepwater, seasonal chemicals peak, and EOS electrolyte ramp; full-year 2025 outlook calls for high single-digit to low double-digit revenue growth and >$50M base business free cash flow .
Catalysts into 1H25: execution on three-well CS Neptune, start of multi‑year Brazil heavy brine contract, multiple produced-water desalination pilots under Oasis TDS, and EOS electrolyte shipments scaling from totes to tanker trucks .

What Went Well and What Went Wrong

What Went Well

Offshore execution and backlog: “We executed 13 deepwater completion jobs compared to 11 in the third quarter,” supporting margin resilience despite lower revenue; Industrial Chemicals delivered record Q4 revenue and Adjusted EBITDA .
Produced-water processing scale: Achieved record 89 million barrels treated and recycled for frac reuse in Q4, underpinning mid-teens Water & Flowback margins and Oasis desalination momentum .
Strategic positioning for 2025: First-half guidance near/above 10‑year highs on Adjusted EBITDA ($55M–$65M) anchored by CS Neptune, Brazil, seasonal chemicals, and EOS electrolyte ramp; “levels approaching or exceeding a 10-year record high” .

What Went Wrong

U.S. land softness and seasonal slowdown pressured segment volumes; Water & Flowback revenue fell 14% sequentially to $66M (Adjusted EBITDA $8.9M vs. $11.0M in Q3) .
Lower utilization and production volumes reduced Completion Fluids & Products margins to 27.3% (from 31.7% in Q3), despite revenue growth to $69M; mark‑to‑market investment losses also weighed modestly .
Base-business free cash flow was negative in Q4 (–$9.3M total adjusted FCF) due to pre‑positioning inventory for CS Neptune/Brazil and capacity investments; monetization is expected in 1H25 .

Financial Results

Consolidated results vs prior quarters (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$171.9	$141.7	$134.5
GAAP Diluted EPS – Continuing Ops ($)	$0.06	$0.02	$0.77
Adjusted EPS – Continuing Ops ($)	$0.07	$0.03	$0.03
Adjusted EBITDA ($USD Millions)	$30.2	$23.5	$22.8
Adjusted EBITDA Margin (%)	17.6%	16.6%	17.0%
Net Cash Provided by Operating Activities ($USD Millions)	$24.8	$19.9	$5.6

Notes: Q4 GAAP EPS reflects a non‑cash $97.5M deferred tax valuation allowance adjustment; adjusted EPS excludes unusual items .

Year-over-year and sequential comparison (oldest → newest)

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$153.1	$141.7	$134.5
GAAP Diluted EPS – Continuing Ops ($)	($0.03)	$0.02	$0.77
Adjusted EBITDA ($USD Millions)	$24.1	$23.5	$22.8
Adjusted EBITDA Margin (%)	15.8%	16.6%	17.0%

Segment breakdown (Q3 2024 → Q4 2024)

Segment	Q3 2024 Revenue ($M)	Q4 2024 Revenue ($M)	Q3 2024 Adj. EBITDA ($M)	Q4 2024 Adj. EBITDA ($M)	Q3 2024 Adj. EBITDA Margin	Q4 2024 Adj. EBITDA Margin
Completion Fluids & Products	$65.1	$68.9	$20.6	$18.8	31.7%	27.3%
Water & Flowback Services	$76.6	$65.6	$11.2	$8.9	14.6%	13.6%

KPIs (Q4 2024)

Deepwater completion jobs executed: 13 (vs. 11 in Q3 2024) .
Produced water treated/recycled for frac reuse: 89 million barrels (record) .
Liquidity: $207M as of Feb 25; cash $37M; net debt $143M; net leverage 1.77x .

Non-GAAP and one-time items (Q4 2024)

Deferred tax valuation allowance adjustment: +$97.5M (non‑cash) to U.S. deferred tax assets; U.S. NOLs can offset ~$345M taxable income; modeled tax rate 31–33% with $6–$7M cash taxes (overseas) .
Mark-to-market gains on investments: ~$5M; FX losses: ~$1M (Latin America) .
Restructuring/other expenses: ~$0.9M in Q4 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Income Before Taxes ($M)	1H 2025	None	$19–$34	New
Adjusted EBITDA ($M)	1H 2025	None	$55–$65	New
Revenue ($M)	1H 2025	None	$325–$355 (range per Schedule K)	New
Revenue Growth (%)	FY 2025	None	High single-digit to low double-digit	New
Base Business Free Cash Flow ($M)	FY 2025	None	>$50	New
Interest Expense ($M)	FY 2025	None	~$20	New
Capital Expenditures – Base Business ($M)	FY 2025	None	$30–$35	New
Cash Taxes ($M)	FY 2025	None	~$6–$7 (overseas)	New
Modeled Tax Rate (%)	Ongoing	None	31–33	New

Management provided 1H25 guidance rather than quarterly, citing uncertain timing between Q1 and Q2 for CS Neptune wells; Water & Flowback expected flattish revenue with margin improvement via automation .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4)	Trend
CS Neptune deepwater pipeline	Q2: Awarded 3‑well Gulf of Mexico CS Neptune; pipeline discussions with multiple operators . Q3: Hurricanes delayed start to early 2025; visibility improving .	First of 3 wells completed; fluids shipping to second; cadence expected to increase vs pre‑COVID levels .	Improving visibility/execution.
Brazil deepwater heavy brine	Q2/Q3: Secured multi‑well, multi‑year deepwater award; capacity expanded in Brazil; start late Q1/Q2 2025 .	Two-year contract with evenly spaced wells this year/next; TETRA well-positioned as only heavy brine provider .	Multi‑year growth driver.
Produced-water desalination (Oasis TDS)	Q2: Permian pilot pivot; 7 NDAs; progressing pilots across regions . Q3: Multiple pilots; regulatory/permit path via TRRC; logistics challenges acknowledged .	Multiple pilots expected 1H25; data centers/industrial reuse interest; commercial plants more likely in 2026 .	Momentum building; commercialization 2026.
EOS Energy electrolyte ramp	Q2: Automation line nearing full production; shipments to scale from totes to tanker trucks . Q3: Increased West Memphis blending capacity .	Rolling forecasts; just‑in‑time production; fluid goes into batteries within ~1 month of shipping .	Ramping in 2025.
Arkansas bromine project & bridging supply	Q2: DFS with staged approach; exploring supplier agreements . Q3: Likely staged approach and supplemental bromine supply .	FEED completed; secured power/site prep; pursuing bridging supply to stage CapEx; may defer plant if supply adequate .	Capital-light staging.
Lithium venture & royalties	Q2: FEED progressing; awaiting +/–10% economics; royalty framework pending . Q3: AOGC royalty process; Equinor/DOE support for Standard Lithium noted .	FEED +/–10% completed; awaiting royalty decision and price review before publishing economics; longer-term rebound expected .	Strategic optionality.
Water & Flowback automation	Q2: Mid-teens margins target; BlueLinx/SandStorm/Auto Drillout rollout . Q3: Strong adoption; staged fleet automation .	Flattish revenue expected in 2025 with margin lift via automation and efficiency .	Margin-focused execution.

Management Commentary

“Adjusted EBITDA margins of 17% improved from 16.6% in the third quarter and from 15.8% in the fourth quarter of 2023 despite lower revenue quarter-on-quarter and year-on-year.” — Brady Murphy, CEO .
“In the fourth quarter, we achieved a record volume of 89 million barrels of treated and recycled produced water for frac reuse.” — Brady Murphy, CEO .
“We project net income before taxes between $19 million and $34 million and adjusted EBITDA between $55 million and $65 million for the first half of 2025, levels approaching or exceeding a 10-year record high for the company.” — Brady Murphy, CEO .
“Our NOLs can offset approximately $345 million of U.S. taxable income in the coming years and save us approximately $97.5 million of cash taxes… assume a tax rate of between 31% to 33%… cash taxes will only be around $6 million to $7 million per year for taxes we pay overseas.” — Elijio Serrano, CFO .

Q&A Highlights

1H25 earnings power and 2H variance: CFO noted best offshore backlog in company history for 1H25 and expects continued outperformance vs industry; full-year outlook high single-digit to low double-digit top-line growth, margins holding/slightly above current range .
Desalination pilots capacity and timing: TETRA ordering additional pilot units; several pilots expected to start 1H25; constraints largely tied to partner equipment lead times (KMX/Hyrec) .
Brazil revenue cadence: Two-year program with wells “pretty evenly spaced” over 2025–2026; positioning as only heavy brine provider in market .
Bromine project FID timing and staging: Significant engineering/site prep complete; final investment decision timing not disclosed; pursuing capital-light staged approach and bridging supply to fund via base-business FCF, keeping leverage <2x .
EOS revenue recognition: JIT production; revenue booked when product leaves West Memphis; fluid typically goes into batteries within ~1 month .

Estimates Context

Wall Street consensus via S&P Global (EPS, revenue, EBITDA) for Q4 2024 was unavailable at the time of analysis due to data access limits; therefore, comparisons to consensus estimates are not provided. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

Offshore cycle strength is translating to near-term earnings: CS Neptune (3 wells) and Brazil heavy brine contract underpin 1H25 guidance ($55M–$65M Adjusted EBITDA), with upside if execution timing tightens and additional Neptune awards materialize .
Industrial Chemicals is a dependable growth engine: record Q4 performance and ~22% of total revenue, with expected electrolyte volume ramp to EOS and diversified calcium chloride end-markets (incl. chip manufacturing) supporting mix and margins .
Oasis TDS desalination is progressing toward commercialization: multiple pilots in 1H25, broadening customer engagement (including midstream), and regulatory traction (TRRC standards, WET testing passed) point to 2026 commercialization path; watch permitting/logistics milestones .
Margin resilience despite lower revenue: consolidated Adjusted EBITDA margin improved to 17.0% (Q4), while Water & Flowback maintains mid-teens margins via automation; Completion Fluids margins normalized on lower utilization but should benefit from deepwater activity .
Tax shield enhances cash conversion: $345M of U.S. NOLs and 31–33% modeled tax rate with $6–$7M cash taxes (overseas) materially improve cash flow conversion in U.S. profit growth scenarios .
Balance sheet and liquidity support self-funded growth: liquidity $207M, net leverage 1.77x; management targets leverage <2x and intends to fund Arkansas bromine staging via base-business FCF and bridging supply rather than incremental debt/equity .
Near-term trading implications: focus on execution updates (CS Neptune well timing, Brazil mobilization), EOS shipment cadence, Oasis pilot announcements, and any bridging supply agreements for bromine—each are potential catalysts for estimate revisions and sentiment .

TETRA TECHNOLOGIES INC (TTI)·Q4 2024 Earnings Summary