ChampionX (CHX) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $906.5 million, up 1% sequentially but down 4% year-over-year, driven by the RMSpumptools acquisition and offset by lower sales in Mexico.

• Net income attributable to ChampionX was $72.0 million; adjusted net income was $85.9 million.

• Gross profit increased 6% sequentially to $297.8 million, with improved margins and lower restructuring costs.

• Adjusted EBITDA reached $197.5 million, with a record 21.8% margin, reflecting strong productivity and profitability focus.

• The company entered into a merger agreement with Schlumberger (SLB), pending regulatory approvals and expected to close in Q1 2025.

Financial highlights

• Q3 2024 revenue: $906.5 million (down from $939.8 million in Q3 2023).

• Q3 2024 net income: $72.0 million; diluted EPS: $0.37; adjusted diluted EPS: $0.44.

• Gross margin improved to 32.8% in Q3 2024 from 31.1% in Q2 2024.

• Free cash flow was $108.1 million, representing 55% of adjusted EBITDA; cash from operations was $141.3 million.

• Cash and equivalents at quarter-end were $389.1 million; total liquidity was $1.1 billion.

Outlook and guidance

• Management expects continued volatility in oil prices due to geopolitical and supply-demand factors.

• U.S. rig count trended downward in 2024; capital discipline among E&P operators is expected to persist.

• Company projects 2024 capital spending at approximately 3.5% of revenue.

• Confident in ability to meet short- and long-term liquidity needs with cash, operations, and credit facility.

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