TETRA Technologies, Inc. Q3 FY2025 earnings call

• Personnel change: Elijio will retire at the end of March 2026, and Matt Sanderson will replace him as CFO. Both Elijio and Matt will continue in existing duties until March 2026, with Elijio serving in an advisory role thereafter. - Quarter highlights: Third quarter revenue was $153 million, adjusted EBITDA was $25 million with a 16% margin. Combined with first half results, highest revenue and adjusted EBITDA in 10 years. - Strategic initiatives: One TETRA 2030 strategy aims to double revenue to over $1.2 billion and triple adjusted EBITDA to over $300 million by 2030. Progress on electrolyte front with Eos Energy's manufacturing expansion and bulk delivery system installation. Water Treatment & Desalination: TETRA Oasis commercial engineering FEED study completed, with commercial discussions underway for produced water treatment facility.

Completion Fluids & Products: Third quarter revenues increased 39% compared to the previous year period, with adjusted EBITDA rising by $6.9 million. Through the first 9 months of the year, adjusted EBITDA margin reached 34.5%, a 500 basis point improvement compared to the same period in 2024. Water & Flowback Services: Revenue declined 18% year-over-year. Adjusted EBITDA fell 33% from the same period last year on lower activity, but sequential adjusted EBITDA margins improved by 200 basis points to 12% due to higher utilization of automated units, efficiency gains and cost controls.

• 2025 full-year EBITDA expected between $107 million and $112 million, up from prior estimate. - Fourth quarter onshore business remains challenging; timing of deepwater projects affects guidance range. - Argentina wins and Eos, deepwater market will be tailwinds for 2026.

• Macro-economic and energy market uncertainty. - Uncertainty in timing of deepwater projects. - Uncertainty in onshore business activity.

Q: On the Oasis commercial engineering, are there any further engineering work needed or next steps?

A: The FEED study validated CapEx and OpEx. Next steps are socializing economics with engaged customers, and detailed engineering will be done to construct the final plant, with detailed engineering to start ahead of commercial contracts.

Q: On the CFP sales, break down the $90 million sequential step down and $15 million year-over-year increase?

A: Vast majority of sequential step down was European calcium chloride seasonality and absence of Neptune jobs; year-over-year increase was partially offset by ramp-up in Brazil activity.

Q: On offshore market and desalinization for 2026, talk about confidence and timing?

A: Confident in offshore market for 2026 and beyond. Deepwater work in key markets like Gulf of America, Brazil, North Sea has good visibility. Neptune projects' timing will be clearer as year starts. Argentina awards will ramp up and benefit 2026 first half compared to 2025 second half.

Q: On desalination regulatory milestones and Eos beneficial reuse ag?

A: Regulatory side is constructive with customers responsible for permitting. Eos beneficial reuse ag project is going very smoothly with a grasslands growth project, but details are limited due to NDA.

Q: On Eos Energy lead time visibility and calcium chloride business?

A: In constant dialogue with Eos, can turn around purchase orders within 30 days. Calcium chloride business has been outperforming, finding additional applications and expanding market share, outpacing GDP growth by over 300 basis points.