Cactus reports Q1 adjusted EPS 73c, consensus 69c

Reports Q1 revenue $280.3M, consensus $272.22M. CEO Scott Bender commented, “Q1 2025 revenues in both segments exceeded our expectations…Margins in both segments remained resilient. Cash flow conversion was lower than our usual cadence in the first quarter as working capital increased on particularly strong revenue performance in March in both segments. Additionally, as mentioned last quarter, we made a deferred cash tax payment in January and incurred elevated capex and investments largely due to a Vietnam supply chain investment. In Q2, we anticipate that the U.S. land rig count will decline from today’s levels as customers reset their operating budgets given lower commodity pricing and an increasingly uncertain global economic outlook. We anticipate exiting Q2 with the U.S. land rig count below today’s levels, with potential for further activity reductions to continue as the year progresses….Tariff policies and the associated uncertainty have led to a rapidly deteriorating global economic outlook, impacting our whole industry. We anticipate our results will face headwinds in the near-term as our input costs increase in both segments due to elevated tariff rates, though to a lesser degree in our Spoolable Technologies business. We are taking several actions to mitigate the current impacts of increased tariff rates, such as accelerating production from Vietnam, and we expect these actions to be largely complete within 12 months. We believe our strong balance sheet, diversifying supply chain, historically supportive customer base, and the capital-light nature of our business will enable us to successfully navigate this market, as we have proven in previous downcycles. As always, we intend to take appropriate and timely actions to protect margins, returns and cash flows.”