Executive Summary

Q3 delivered a clean beat: revenue $264.0M vs S&P Global consensus ~$254.1M* and adjusted EPS $0.67 vs ~$0.58*, driven by Pressure Control (PC) margin expansion from cost actions/tariff mitigation and stronger international Spoolable sales .
PC margins improved 290 bps q/q despite lower volumes; total adjusted EBITDA margin rose to 32.9% (from 31.7% in Q2) on lower legal expense and swift right-sizing .
Q4 outlook: PC revenue “relatively flat” with adjusted EBITDA margin 31–33%; Spoolable revenue down low double digits with 34–36% margins; FY25 capex maintained at $40–45M; tax ~22% .
Strategic setup: integration planning for 65% Baker Hughes Surface Pressure Control (SPC) progressing; expected close moved to early 2026, while Vietnam ramp (API monogram pending) should increasingly displace China shipments and mitigate tariffs through 2026 .

What Went Well and What Went Wrong

What Went Well
- PC margin execution: margins up 290 bps q/q on cost reduction, tariff mitigation and lower legal expenses; adjusted segment EBITDA margin +320 bps q/q . “Pressure Control margins improved sequentially due to our tariff mitigation and cost reduction efforts” — Scott Bender .
- Spoolable international momentum: highest international revenue since acquisition; first gas service order from a major Middle East NOC, shipment to a new customer in Africa, and first sour service order for shipment 1H26 .
- Balance sheet strength and cash generation: OpCF $61.8M; cash $445.6M; no bank debt; dividend $0.14 declared .
What Went Wrong
- Top-line softness: revenue down 3.5% q/q and 10% y/y on lower PC volumes and softer domestic activity; Spoolable down 1% q/q .
- Input cost headwinds: Spoolable operating margin -210 bps q/q on higher input costs; tariffs remain a structural drag, with incremental 70% on China (95% total) and 50% on Vietnam .
- Macro/rig count: management sees a flat-to-down U.S. land rig count into Q4 and subdued domestic activity; CEO flags more downside than upside risk to oil and a “wait and see” customer posture .

Financial Results

Consolidated performance (oldest → newest)

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($M)	293.2	273.6	264.0
Operating Income ($M)	76.8	60.8	61.2
Net Income ($M)	62.4	49.0	50.2
Diluted EPS (GAAP)	$0.74	$0.59	$0.60
Adjusted Net Income ($M)	63.5	53.2	53.7
Adjusted Diluted EPS	$0.79	$0.66	$0.67
Adjusted EBITDA ($M)	100.4	86.7	86.9
Net Income Margin %	21.3%	17.9%	19.0%
Adjusted EBITDA Margin %	34.2%	31.7%	32.9%

Segment performance (oldest → newest)

Segment Metric	Q3 2024	Q2 2025	Q3 2025
Pressure Control Revenue ($M)	185.1	179.8	168.7
Pressure Control Operating Income ($M)	52.5	42.3	44.5
Pressure Control Operating Margin %	28.4%	23.5%	26.4%
Pressure Control Adjusted Segment EBITDA ($M)	62.0	53.1	55.2
Pressure Control Adjusted Segment EBITDA Margin %	33.5%	29.5%	32.7%
Spoolable Revenue ($M)	108.2	96.2	95.2
Spoolable Operating Income ($M)	32.9	28.1	25.8
Spoolable Operating Margin %	30.4%	29.2%	27.1%
Spoolable Adjusted Segment EBITDA ($M)	42.5	37.9	36.0
Spoolable Adjusted Segment EBITDA Margin %	39.3%	39.4%	37.8%

KPIs (Q3 2025 snapshot)

Cash from Operations: $61.8M
Cash & Cash Equivalents: $445.6M; no bank debt outstanding
Net CapEx: $8.2M
Dividend: $0.14 per Class A share (payable Dec 18; record Dec 1)

Non-GAAP and reconciliations

Adjusted EPS reflects add-backs for transaction expenses ($3.2M), amortization ($4.0M), severance, and TRA revaluation, offset by tax differential; weighted average adjusted shares 80.355M .
Adjusted EBITDA excludes stock-based comp ($6.1M), transaction-related expenses ($3.2M), severance and TRA revaluation .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Pressure Control revenue	Q4 2025	—	“Relatively flat vs Q3” (vs $169M baseline)	New
Pressure Control adj. EBITDA margin	Q4 2025	28–30% for Q3	31–33%	Raised vs prior quarter run-rate
Spoolable revenue	Q4 2025	Down high-single digits for Q3	Down low double digits	Lower sequential trajectory
Spoolable adj. EBITDA margin	Q4 2025	35–37% for Q3	34–36%	Slightly lowered
Corporate adjusted EBITDA (charge)	Q4 2025	≈$4M for Q3	≈$4M	Maintained
Effective tax rate	Q4 2025	~22%	~22%	Maintained
D&A expense	Q4 2025	≈$16M (PC ~$7M; Spoolable ~$9M)	≈$16M (same split)	Maintained
FY25 Net CapEx	FY 2025	$40–45M (reduced in Q2)	$40–45M (unchanged)	Maintained
Dividend	Q4 2025	$0.14 (Sept payment)	$0.14 (Dec 18 payment)	Maintained
SPC acquisition timing	Close	Late ’25 / early ’26	Early 2026	Shifted to early ’26

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Tariffs & mitigation	Section 232 doubled to 50% in June; incremental tariff on China rose; paused cost recovery; neutralize by mid-’26 with Vietnam shift	Paying incremental 70% on China (95% total); 50% on Vietnam; some potential reduction from China fentanyl-related tariff; 232 at 50% most impactful	Improving mitigation; headline rates still elevated
Supply chain (Vietnam)	Ramp under way; capex invested; “de minimis” start-up costs; goal to replace China for U.S.; API monogram gating	Increasing shipments; expect substantial displacement of China by mid next year; API audit targeted around early 2026 window; ~half of wellhead mix possible next year once monogram complete	Positive progress
Spoolable international	Record Q1 orders; Canada strong; sour service product introduced; less tariff impact	Highest international revenue to date; awards in Middle East/Africa; first sour service order for 1H26 shipment	Strengthening
PC margins	Q2 trough talk; Q3 guidance 28–30% despite headwinds	Q3 beat on margin; Q4 guided 31–33% on stable activity and mitigation	Improving
Litigation	Q2 legal expense increased; SafeLink/Cameron noted; trial delayed	Lower legal expense helped Q3 margins	Abating near-term
Macro/rig count	Expect declines through 2025; customers capital-disciplined; gas rig count rising off low base	U.S. land rig flat to slightly down in Q4; management cautious on oil ($55–$60) and sanction enforcement risk	Still subdued
SPC (Baker Hughes)	Strategic rationale and planning; close late ’25/early ’26	Integration planning “smooth”; close early ’26; cultural/supply chain improvements expected	On track; timing clarified
New wellhead system	Timing pushed amid soft market	Launch targeted “Q1” (management shorthand for early 2026)	Re-start in early ’26

Management Commentary

“Pressure Control margins improved sequentially due to our tariff mitigation and cost reduction efforts, while spoolable technology sales and margins exceeded expectations on higher international shipments.” — Scott Bender, CEO .
“We continue to pay an incremental 70% tariff on most goods imported from China for a 95% total tariff rate and a 50% tariff on most goods imported from Vietnam… the Section 232 tariff… remains at 50%.” — CEO .
“We achieved our highest [Spoolable] international revenue since the acquisition… first gas service order from a major Middle East NOC… large order… in Africa… first sour service order in the region for 1H26.” — CEO .
“Adjusted EBITDA was $87 million… effective tax rate of 22%… cash balance of $446 million… inventory build has represented a working capital headwind year to date, with most of the increase… due to tariffs.” — CFO .
“We expect Pressure Control revenue to be relatively flat [in Q4]… Adjusted EBITDA margins… 31% to 33%… Spoolable revenues to be down low double digits… margins ~34% to 36%.” — CEO .
“Integration planning… [SPC] is proceeding smoothly… expect that transaction will close in early 2026.” — CEO .

Q&A Highlights

PC margin drivers: Combination of supplier cooperation, customer support, organizational flex, and supply chain redirection; price comments limited, but mitigation plus right-sizing cited .
Macro/customer stance: Management sees oil risk skewed to downside ($55–$60); customers less transparent and in “wait and see” mode; large publics more resilient than privates .
Spoolable international pipeline: Middle East and Africa orders expanding; sour service opening new applications; personnel additions and references building demand flywheel .
SPC earnings power/timing: CEO recently in the Middle East; sees potential activity pickup in 2H26 but no orders yet; expects 2026 international somewhat weaker than 2025; U.S. customer entry supportive .
Vietnam/API: Audit targeted in ~90 days from call; plan to source wellheads early and gate valves later; once monogrammed, Vietnam to carry a large share of U.S. demand .
New wellhead system: Launch indicated for “Q1,” i.e., early 2026, as market stabilizes .

Estimates Context

Q3 2025 vs S&P Global consensus

Metric	Consensus*	Actual	Surprise
Revenue ($M)	254.1*	264.0	+$9.9M (beat)
EPS (Primary/Adjusted)	$0.584*	$0.67 (adjusted)	+$0.086 (beat)
EBITDA ($M)	75.2*	77.6 (EBITDA)	+$2.4M (beat)

Forward look (Q4 2025 consensus*)

Revenue ~$251.3M*, EPS ~$0.586*, EBITDA ~$76.1M* (company guides PC revenue flat and Spoolables down low double digits, implying mix/margin dynamics will drive the print) .

Note: S&P Global “Primary EPS” aligns with WHD’s adjusted EPS; GAAP diluted EPS in Q3 was $0.60 .

Values retrieved from S&P Global.

Key Takeaways for Investors

Execution > activity: WHD expanded PC margins q/q despite lower volumes, underscoring the variable-cost model and swift cost control—supportive for 2026 margin re-expansion as tariff mix improves .
Beat for the right reasons: Revenue/adjusted EPS/EBITDA beats were driven by margin work and international Spoolable strength, not one-offs (legal expense fell, but core mitigation actions were key) .
Near-term setup: Q4 guide suggests steady PC, seasonal Spoolable dip; watch how Vietnam/API timing and customer cost recovery progress into early 2026 .
Strategic optionality: SPC integration (early ’26 close) should broaden footprint, supply chain leverage, and cross-sell—potential 2026–27 catalyst as Middle East unconventionals scale .
Balance sheet flexibility: $446M cash, no bank debt, capex disciplined at $40–45M—supports continued dividend and selective M&A/organic initiatives .
Tariff path a swing factor: Section 232 at 50% is the big lever; Vietnam displacement by mid-’26 and potential China tariff tweaks could provide incremental margin upside .
Product innovation pipeline: New wellhead system re-timed to early 2026; monitor launch and attach rates with core customers as activity stabilizes .

Cactus, Inc. (WHD)·Q3 2025 Earnings Summary