ChampionX 2025 Q1 Earnings Misses Targets as Net Income Drops 21%

ChampionX (CHX) reported its fiscal 2025 Q1 earnings on Apr 29th, 2025. The company posted earnings of $0.45 per share, missing estimates of $0.50 by $0.05. ChampionX also reported revenue of $864.46 million, falling short of the expected $904.9 million. Due to the pending acquisition by SLB, ChampionX has discontinued providing quarterly guidance. The company anticipates positive performance relative to the general oil and gas market in 2025, driven by global oil production growth.

Revenue
ChampionX's total revenue decreased by 6.3% to $864.46 million in Q1 2025, down from $922.14 million in Q1 2024. Production Chemical Technologies contributed $523.39 million, while Production & Automation Technologies added $264.38 million. Drilling Technologies recorded revenues of $50.53 million, and Reservoir Chemical Technologies brought in $26.93 million. The corporate segment registered a loss of $759,000.

Earnings/Net Income
EPS declined 23.7% to $0.45 in Q1 2025 from $0.59 in Q1 2024. Net income fell to $89.03 million, down 21.3% from $113.16 million in the same quarter last year. The decreased EPS signals financial challenges compared to the previous year.

Post-Earnings Price Action Review
The earnings report had a varied impact on ChampionX's stock price. Historically, the company has observed maximum returns of 9.54% within 30 days of earnings releases, although performance varies across metrics. Revenue reports tend to favor short-term stock price improvements, with win rates of 58.82% over 3 days and 64.71% over 10 days. Net income-related earnings reports show similar win rates, but returns are typically slower. EPS-related reports also trigger positive price reactions, comparable to those driven by revenue and net income. Investors might consider these metrics as catalysts for short-term buying opportunities, while keeping in mind that past performance doesn't guarantee future results, and market conditions can influence outcomes.

CEO Commentary
“The first quarter demonstrated the resilience of our ChampionX portfolio as we delivered strong adjusted EBITDA and adjusted EBITDA margin, and generated positive free cash flow. We generated revenue of $864 million, which decreased 5% sequentially, driven primarily by a typical seasonal decline in international operations. We delivered adjusted EBITDA of $191 million, representing a 22.1% adjusted EBITDA margin, our second-highest level as ChampionX. Cash flow from operating activities was $67 million, representing 78% of net income attributable to ChampionX. Our balance sheet remains strong, ending with approximately $1.2 billion of liquidity, including $527 million of cash.” Sivasankaran “Soma” Somasundaram, President and Chief Executive Officer.

Guidance
ChampionX has discontinued providing quarterly guidance due to the pending acquisition by SLB. The company anticipates that its differentiated and resilient production-oriented portfolio will drive positive performance relative to general oil and gas market activity in 2025, particularly as global oil production grows. The CEO emphasized leveraging a global supply chain and continuous improvement to address tariff impacts and drive efficiencies, but no specific quantitative guidance was provided for future performance.

Additional News
ChampionX is progressing with its acquisition by SLB in an all-stock transaction, unanimously approved by both boards and shareholders in June 2024. The acquisition awaits regulatory clearances. Additionally, ChampionX has awarded a multi-year contract for production optimization software in Indonesia, successfully migrating over 4,000 wells to its XSPOC platform. The company also continues to expand its Integrated Production Optimization business, demonstrating consistent production uplift and equipment reliability improvements in newly acquired Permian Basin operations. ChampionX's commitment to operational excellence is further underscored by its strategic initiatives in digital technology adoption and production optimization solutions.