On August 1, 2024, Cactus Inc (WHD, Financial) released its 8-K filing detailing the financial results for the second quarter of 2024. The company, known for designing, manufacturing, and selling wellheads and pressure control equipment, reported impressive figures that surpassed analyst estimates.
Company Overview
Cactus Inc (WHD, Financial) is engaged in the design, manufacture, and sale of wellheads and pressure control equipment. Its principal products include Cactus SafeDrill wellhead systems, conventional wellheads, and production valves. The company also provides mission-critical field services, including installation, maintenance, and repair services for its equipment. Cactus Inc operates through two segments: Pressure Control and Spoolable Technologies.
Q2 2024 Financial Highlights
For the second quarter of 2024, Cactus Inc (WHD, Financial) reported:
- Revenue of $290.4 million, exceeding the estimated $276.99 million.
- Operating income of $79.8 million.
- Net income of $63.1 million, with diluted earnings per share of $0.75, surpassing the estimated $0.69.
- Adjusted net income of $65.2 million and adjusted diluted earnings per share of $0.81.
- Adjusted EBITDA of $103.6 million with an adjusted EBITDA margin of 35.7%.
- Cash flow from operations of $78.0 million.
- Cash and cash equivalents of $246.5 million with no bank debt outstanding as of June 30, 2024.
Segment Performance
Pressure Control: Revenue increased by $12.2 million, or 6.9%, sequentially, driven by higher sales of wellhead and production-related equipment. Operating income rose by $4.0 million, or 7.7%, with margins improving by 20 basis points.
Spoolable Technologies: Revenue increased by $4.6 million, or 4.7%, sequentially, due to higher customer activity levels. Operating income surged by $13.6 million, or 83.3%, primarily due to a lower expense booked from the remeasurement of the earn-out liability associated with the FlexSteel acquisition.
Financial Metrics and Analysis
Key financial metrics from the income statement, balance sheet, and cash flow statement include:
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Revenue | $290.4 million | $274.1 million | $305.8 million |
| Operating Income | $79.8 million | $62.6 million | $48.5 million |
| Net Income | $63.1 million | $49.8 million | $32.5 million |
| Adjusted EBITDA | $103.6 million | $95.3 million | $115.4 million |
Commentary and Future Outlook
"I am very proud of our Company's performance in the second quarter. Pressure Control revenues rose as customer drilling efficiency increased, and we shipped significant production equipment to a large customer who had not previously used Cactus. These events more than offset the impact of the softer U.S. land rig count through the quarter. Our Spoolable Technologies segment reported solid revenues with margins exceeding expectations." - Scott Bender, CEO and Chairman of the Board of Cactus.
Despite the challenges posed by a softer U.S. land rig count, Cactus Inc (WHD, Financial) demonstrated resilience and adaptability. The company's strong financial performance and strategic initiatives, such as the FlexSteel acquisition, have positioned it well for future growth. The Board's approval of an 8% increase in the quarterly dividend to $0.13 per share reflects confidence in the company's ability to generate sustainable cash flow and deliver long-term value to shareholders.
For more detailed insights and analysis, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from Cactus Inc for further details.
