Cactus 2025 Q2 Earnings Misses Targets as Net Income Declines 22.2%

Cactus (WHD) reported its fiscal 2025 Q2 earnings on July 31, 2025. The company's revenue decreased by 5.8% to $273.57 million compared to Q2 2024. Earnings per share (EPS) also fell by 21.3% to $0.59, below expectations. The company anticipates a continued decline in U.S. land rig count in Q3 2025, with expected modest revenue decreases. Cactus remains optimistic about its strategic acquisition of Baker Hughes' Surface Pressure Control business, which aims to provide broader geographic reach and revenue diversification amid market challenges.

Revenue

The total revenue of Cactus fell by 5.8%, amounting to $273.57 million in Q2 2025, compared to $290.39 million in Q2 2024.

Earnings/Net Income

Cactus's EPS dropped 21.3% to $0.59 for Q2 2025 from $0.75 in Q2 2024, while net income declined by 22.2% to $49.05 million. This indicates a challenging financial period for the company.

Price Action

The stock price of Cactus declined by 6.77% during the latest trading day, fell 8.68% over the most recent full trading week, and decreased 3.23% month-to-date.

Post-Earnings Price Action Review

Over the past three years, the strategy of purchasing Cactus shares following a quarter-over-quarter revenue increase on the financial report release date and holding for 30 days has delivered moderate returns. This approach achieved a 64.46% return, slightly underperforming the benchmark by 21.11%. With a maximum drawdown of 0.00% and a Sharpe ratio of 0.23, the strategy revealed a low-risk profile with consistent returns. However, the recent decline in stock performance may indicate challenges to this strategy's effectiveness in the current market environment.

CEO Commentary

Scott Bender, CEO and Chairman of the Board of Cactus, highlighted the benefits of portfolio diversification through the FlexSteel acquisition. He noted that this has helped maintain cash flows and revenues despite declining U.S. land activity levels. Bender also expressed optimism about the integration of Baker Hughes' Surface Pressure Control business, emphasizing its potential for broader geographic reach and revenue diversification amid current market challenges.

Guidance

Cactus expects a continued decline in the U.S. land rig count in the third quarter of 2025. However, CEO Scott Bender is optimistic that most of the reductions for the year are behind them, provided commodity prices stabilize. He anticipates modest revenue decreases in both business segments as domestic activity levels drop. The company is aligning its organization with these expectations and highlights the strategic value of acquiring Baker Hughes' Surface Pressure Control business.

Additional News

Cactus has announced a significant move by acquiring a 65% controlling interest in Baker Hughes' Surface Pressure Control business, a strategic decision expected to diversify its footprint and enhance revenue streams. The acquisition aims to broaden Cactus's geographic reach, particularly during a time of market volatility and tariff uncertainties. In other developments, the company increased its quarterly dividend by 8% to $0.14 per share, signaling confidence in its cash flow durability and structural capital-light business model. This move reflects Cactus's ongoing commitment to returning value to shareholders despite current market challenges.