Tetra Technologies ((TTI)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Tetra Technologies’ recent earnings call showcased a positive outlook, underscored by robust revenue and EBITDA growth. This optimism stems from the company’s successful ventures in deepwater completion fluids and international expansion, despite facing challenges in the U.S. onshore market and some uncertainties anticipated in the fourth quarter.
Record Revenue and EBITDA
Tetra Technologies achieved a remarkable milestone by recording the highest revenue of $484 million and an adjusted EBITDA of $93 million in the past decade. This achievement was primarily driven by the company’s chemicals and deepwater completion fluids segments, highlighting their significant contribution to overall growth.
Completion Fluids & Products Growth
The Completion Fluids & Products segment reported a substantial 39% increase in revenues compared to the previous year. This growth was accompanied by an impressive adjusted EBITDA margin of 34.5%, marking a 500 basis point improvement, which underscores the segment’s strong performance and profitability.
Argentina and Middle East Expansion
Tetra’s international expansion strategy is bearing fruit, with new contracts in Argentina poised to nearly double revenue next year. Additionally, the company secured SandStorm work in Saudi Arabia, further cementing its expanding presence in the Middle East.
Bromine Plant Progress
Progress on the bromine plant is on schedule and under budget for Phase 1. The plant is expected to reach operational capacity by the end of 2027, potentially adding $200-$250 million in revenue, reflecting a strategic investment in future growth.
Positive Feedback on One TETRA 2030 Strategy
The Investor Day presentation of the One TETRA 2030 strategy received overwhelmingly positive feedback. This strategy aims to more than double the company’s revenue to over $1.2 billion by 2030, reinforcing investor confidence in Tetra’s long-term vision.
Water & Flowback Services Revenue Decline
The Water & Flowback Services segment experienced a 2% sequential revenue decline and an 18% year-over-year drop. However, adjusted EBITDA rose 18% sequentially, thanks to improved cost controls, indicating effective management amidst declining revenues.
U.S. Onshore Challenges
Tetra faces a muted outlook in the U.S. onshore market, with a 12% sequential decline in frac crew count and a 27% decrease compared to the second quarter of 2024. This highlights ongoing challenges in the domestic market.
Fourth Quarter Uncertainty
The company anticipates a non-cash charge in the fourth quarter due to early lease termination, with deepwater project timing affecting the guidance range. This introduces some uncertainty into the near-term outlook.
Forward-Looking Guidance
Tetra Technologies provided updated guidance for 2025, projecting full-year EBITDA between $107 million and $112 million, an increase from previous estimates. This optimistic outlook is supported by strong offshore activity and strategic initiatives like the One TETRA 2030 strategy, which aims to double revenue by 2030. The company anticipates completion fluids reaching a 10-year high for the full year, driven by deepwater completion activity and increased battery electrolyte revenue.
In summary, Tetra Technologies’ earnings call reflected a positive sentiment, driven by record revenue and EBITDA achievements, international expansion, and strategic initiatives like the One TETRA 2030 strategy. Despite challenges in the U.S. onshore market and some fourth-quarter uncertainties, the company’s forward-looking guidance remains optimistic, with expectations of continued growth and profitability.