Oil States International's Q1 2025: Navigating Contradictions in Capital Allocation, FPSO Revenue, and Margin Expectations

Capital allocation strategy, FPSO revenue opportunities, margin expectations for offshore/manufactured products, capital allocation priorities, and offshore/manufactured products revenue and margin trajectory are the key contradictions discussed in Oil States International's latest 2025Q1 earnings call.



Strong Financial Performance in Q1 2025:
- Oil States International reported revenues of $160 million and adjusted consolidated EBITDA of $19 million for Q1 2025.
- The strong performance was driven by increased demand in international and offshore regions, benefits from U.S. land-based optimization efforts, and recovery in Gulf of America operations.

Record Backlog and Book-to-Bill Ratio:
- The company achieved a record backlog totaling $136 million, with a book-to-bill ratio of 1.5 times for the quarter.
- This was attributed to strong bookings led by major subsea equipment and production equipment, particularly in Brazil.

Domestic Tariff Impact Mitigation:
- Oil States implemented strategic actions, such as temporary import bonds and alternate supply sources, to mitigate the impact of U.S. tariffs on domestic operations.
- The company expects to pass on cost increases from tariffs on imported steel tubing and other components to customers as these impacts are similar to other suppliers.

Cash Flow and Shareholder Returns:
- Oil States generated $9 million in cash flow from operations and received $9 million from asset sales, which were used to fund $9 million in CapEx and $5 million in share repurchases.
- The company aims to be opportunistic in share repurchases due to its currently low stock price and attractive free cash flow generation.