TETRA Technologies (TTI) Q3 2024 earnings summary

Executive summary

• Third quarter 2024 revenue was $142 million, down 6% year-over-year and impacted by Gulf of Mexico hurricanes and lower U.S. land activity, but adjusted EBITDA reached $23.5 million with strong free cash flow generation.

• Net loss for Q3 was $3.0 million, including a $5.8 million charge for discontinued operations; adjusted net income per share was $0.03.

• Major wins included a multi-year deepwater completion fluid award in Brazil and record produced water recycling volumes, positioning for momentum into 2025.

• Strategic initiatives advanced in water recycling, automation, and energy storage electrolyte supply, with continued investment in Arkansas bromine and lithium projects and a published feasibility study.

• Net income for the first nine months was $5.6 million, down sharply from $29.7 million in the prior year, impacted by lower gross profit and discontinued operations.

Financial highlights

• Q3 2024 revenue was $142 million, down 6% year-over-year and sequentially; adjusted EBITDA was $23.5 million (16.6% margin), $2.5 million lower than Q3 2023 but $700,000 higher than Q1 2024.

• Q3 adjusted free cash flow for continuing operations was $19.9 million, including $8.7 million in Arkansas project capex.

• Gross profit for Q3 2024 was $34.4 million (24.3% margin), down from $37.9 million (25.2% margin) in Q3 2023.

• Operating cash flow for the nine months ended September 30, 2024 was $30.9 million, down from $51.3 million in the prior year.

• Capital expenditures for the nine months were $45.8 million, with $22.6 million invested in Arkansas brine resource development.

Outlook and guidance

• Fourth quarter revenue and adjusted EBITDA expected to be similar to Q3, with a material ramp-up in Q1 2025 from Neptune and Brazil projects and Eos electrolyte shipments.

• Water and flowback services revenue expected to decline in Q4 due to seasonality, but margins to remain in the mid-teens.

• No formal 2025 guidance, but strong backlog and project pipeline support a positive outlook for next year.

• U.S. onshore activity expected to remain slow through Q4 and flat into 2025; cost reduction actions underway.

• Increasing bromine-based fluids inventory and expanding supplier access to meet anticipated demand in 2025 and beyond.