ChampionX (CHX) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $864.5 million, down 6% year-over-year and 5% sequentially, mainly due to lower international sales and seasonal declines.

• Net income attributable to ChampionX was $85.8 million, with diluted EPS at $0.44, down from $0.58 last year; adjusted EBITDA reached $190.9 million with a 22.1% margin.

• The company entered a definitive all-stock merger agreement with SLB, with each share to be converted into 0.735 shares of SLB, pending regulatory and shareholder approvals.

• A definitive agreement was signed to sell US Synthetic Corporation, the Drilling Technologies segment, for $300 million, pending closing conditions and the SLB merger.

• Strong liquidity position with $1.2 billion available, including $527 million in cash and $674 million in revolving credit capacity.

Financial highlights

• Gross profit for Q1 2025 was $291.5 million, with a gross margin of 33.7%.

• Operating cash flow was $66.8 million, down from $173.5 million in Q1 2024; free cash flow was $38.6 million.

• Capital expenditures were $31.3 million, in line with the prior year.

• Adjusted EBITDA margin was 22.1%, up from 20.8% a year ago.

• Free cash flow to adjusted EBITDA ratio was 20%.

Outlook and guidance

• No quarterly guidance provided due to the pending SLB acquisition.

• Management expects oil prices to remain under pressure for the remainder of 2025 due to OPEC+ production increases and tariffs, but anticipates long-term cyclicality.

• Inflation is moderating, but tariffs and trade measures may impact input costs; the company aims to offset these through price increases and productivity initiatives.

• The company projects 2025 capital spending at 4% of revenue and expects to fund capex and debt reduction through earnings and working capital improvements.

• Management expects positive performance relative to the oil and gas market in 2025, supported by a resilient production-oriented portfolio.