Tidewater (TDW) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $339.2 million, up 5.6% sequentially and 58% year-over-year, driven by record-high dayrates, fleet optimization, and the Solstad Acquisition, which added 37 vessels and expanded the fleet to 213 vessels with an average age of 12.1 years.

• Net income for Q2 2024 was $50.4 million, or $0.94 per share, a 7% increase sequentially and 123% higher year-over-year; net income for the first six months of 2024 was $97.4 million.

• Share repurchases totaled $33 million year-to-date, with $96 million used over three quarters to reduce share count by 1.3 million shares; board authorized an additional $13.9 million, bringing total capacity to $47.7 million.

• Delays in project commencements have shifted anticipated revenue and margin improvements from Q3 to Q4, but long-term demand remains robust and management remains committed to maximizing shareholder returns.

• The Solstad Acquisition and ongoing fleet optimization have positioned the company for sustained growth and higher margins.

Financial highlights

• Q2 2024 net income was $50.4 million, or $0.94 per share; operating income was $78.1 million, up 101% year-over-year.

• Revenue rose to $339.2 million, with average dayrates up 8% to $21,130 per day; gross margin increased to $161.9 million (47.7%), the highest in 15 years.

• Adjusted EBITDA for Q2 2024 was $139.7 million, up from $74.6 million in Q2 2023.

• Free cash flow for Q2 was $87.6 million, up $18.2 million from Q1; cash and cash equivalents at June 30, 2024 were $321.5 million.

• Vessel operating costs increased due to higher R&M, crew, and fuel costs, but are expected to decrease in coming quarters.

Outlook and guidance

• Full-year 2024 revenue guidance revised to $1.39–$1.41 billion, with a 51% gross margin.

• Q3 revenue expected to be flat sequentially, with a significant step-up in Q4 as delayed projects commence and dry dock days decline.

• Q4 gross margin exit rate expected at 58%, with further margin improvement anticipated in 2025 due to lighter dry dock schedule.

• Dayrate momentum expected to continue, with average annual increases of $3,500–$4,500 per day.

• Management expects continued strength in vessel demand and utilization into 2025.