Cactus (WHD) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $290.4 million, with adjusted EBITDA of $104 million, operating income of $79.8 million, and net income of $63.1 million; margin performance was strong.

• Cash balance increased to $246.5 million, with no bank debt and robust cash flow from operations.

• Board approved an 8% dividend increase to $0.13 per share, payable in Q3 2024.

• Leadership transition included Jay Nutt joining as CFO, bringing global financial experience.

• The FlexSteel acquisition expanded product offerings and customer base, with the final $37 million earn-out payment due in Q3 2024.

Financial highlights

• Q2 2024 revenue was $290.4 million, up 5.9% sequentially; net income was $63.1 million, up 94% year-over-year.

• Adjusted net income was $65.2 million ($0.81/share); diluted EPS was $0.75.

• Adjusted EBITDA margin improved to 35.7% from 34.8% in Q1.

• Cash and cash equivalents at quarter-end were $246.5 million, with $220.1 million available under the credit facility.

• Aggregate cash dividends of $0.24 per share declared in the first half of 2024.

Outlook and guidance

• Q3 Pressure Control revenue expected to decline mid-single digits due to lower US land drilling activity; adjusted EBITDA margin guidance: 33%-35%.

• Spoolable Technologies Q3 revenue expected flat to slightly down; EBITDA margin guidance: 39%-41%.

• Full-year 2024 net CapEx outlook reduced to $35-$45 million.

• Management expects existing cash, operations, and credit to cover all obligations, including the FlexSteel earn-out.

• International expansion progressing, with product qualification and Middle East focus.